In an age in which companies are increasingly using data and intelligence to inform every part of their operations, the manual and antiquated nature of designing, executing, and maintaining sales compensation plans is shocking. For large enterprises (100+ sales reps), refreshing annual sales plans typically starts 3-6 months prior to execution, and can require dozens of compensation analysts and consultants in order to design and codify the plans into spreadsheet-like software built 15-20 years ago. Even with all of these resources, sales leaders and reps have limited visibility during the year as to how they are performing and what incentives can drive the optimal behavior and results for the business.
Considering 10-15% of revenue is typically spent on incentive compensation to drive growth, this represents one of the largest costs for a business with little-to-no automation. In the consumer world, this dynamic would be equivalent to brand setting next year’s marketing budget in Q4 with no ability to adjust the spend or optimize across channels for the next 12 months. This is the dynamic for many of the largest enterprise companies and why Forma.ai has an incredible opportunity to set the new standard for the 15 million+ sales reps that exist in North America alone.
Nabeil Alazzam, founder and CEO of Forma.ai, experienced these visceral pain points first-hand as a sales consultant for ZS Associates, which helped to design sales compensation strategies and implement software (e.g., Xactly, Varicent, etc.) for Fortune 1000 companies. Nabeil founded Forma.ai to not only streamline the administrative burden of the existing sales compensation technology stack, but to develop a product that drives increased performance and visibility for sales and finance functions.
The core of Forma.aI’s differentiation is its data architecture. All customer compensation plans are built on a unified data platform. Compensation rules are added in layers and branching, similar to a Github repository, which gives Forma.ai the ability to run scenario analyses on how different incentive blocks can drive a specified business outcome. Over time, as the platform ingests additional data points and results across its customer base, its predictive modeling gets more robust, which drives additional business value. On average, Forma.ai customers are seeing a ~4% increase in sales performance in the first 12 months, and more importantly, an increased sense of transparency and flexibility with how these plans are optimized throughout the year.
We believe Forma.ai is at the inflection point of becoming a market leader in a massive enterprise segment that has seen little tech innovation over the past two decades. Customers are beginning to take note, with Forma.ai beginning to work with global companies as large as 4,500 sales reps (direct + channel). One large customer that we spoke with said that Forma.ai is “clearly 3-5 years ahead of the industry.” A company with this level of customer admiration (NRR of 195% and zero logo churn!) is extremely rare and we could not be more excited to partner with Nabeil and our friends at Golden Ventures, Crosslink, Uncork and XFund to build the market leader in enterprise sales performance.