Executive Summary

As a four-time company founder and experienced investor, Jeron Paul knows that the success of a startup depends on identifying a deep pain point and delivering an elegant solution. With his most recent company, Spiff, he felt that pain point first-hand: managing commissions for sales reps was complex, time-consuming, and error-prone. The process frustrated finance managers and annoyed salespeople. Spiff’s SaaS platform automates commission calculations, which dramatically reduces errors, saves time, and increases employee satisfaction.

An experienced company founder, Jeron Paul knows how important it is for a startup to have a clear understanding of the problem it aims to solve for customers. Each of the first three companies he founded came from observing pain points that people were experiencing in their jobs, and then talking to them to diagnose the problem in detail.

In the case of his latest venture, Spiff, the customer pain point was staring him right in the face.

“At Capshare [a company Paul helped start in 2013], we noticed that our sales reps always had two screens open in front of them,” Paul recalls. “One was Salesforce and the other was an Excel spreadsheet. Salesforce was an obvious application for a sales rep, but we wondered, ‘Why Excel?’ We discovered they wanted a tool to track their commissions. This ignited our decision to start a company to own that second screen.”

To find out if other executives had the same observation, Paul and his colleagues interviewed 140+ leaders who were responsible for managing commissions. The interview subjects included CFOs, VPs of finance, and sales managers. “We discovered that commissions were a huge pain point. In fact, the pain was so great that they had almost no time to focus on the motivational aspects of commissions – which is the main reason for offering commissions in the first place!”

The list of complaints was long. Managers found the process complex, time-consuming, and a source of never-ending questions and complaints. Salespeople on commission were also unhappy: errors and discrepancies were frequent, and there was no way to know the status of commissions at any given time. Most companies managed commissions with spreadsheets, while a small number used software programs that were outdated and cumbersome.

Building a Next-Generation Platform Welcomed by Sales and Finance Leaders 

Paul and his co-founders Matt Stapleton and Mike Ries had a clear vision for the solution they aimed to bring to market. “We wanted to create a SaaS platform that was motivating for reps and as easy for commission administrators to run as payroll,” Paul says. “The goal was simple: less time spent on administration and more time devoted to sales.”

Spiff was founded in late 2017 and had its first customers within 18 months. Initially most customers were small, fast-growing companies who found it especially difficult to track commissions as new employees were hired at a rapid pace.

Soon, however, the benefits of the Spiff platform drew interest from mid-size companies. “Today, we are frequently closing deals with enterprises that have 5,000-plus employees,” says Paul. “We’ve now processed over $2.5B in commissions and have over 400 customers.” The company estimates its total addressable market to be $5B+, with the opportunity for expansion via new features on the company’s roadmap into adjacent markets.  

Customers cite numerous benefits from moving onto the Spiff platform, including a sharp reduction in errors, fewer questions from reps, less time spent on administration, and the ability to scale quickly. Spiff integrates with all major tools already in use for calculating commissions, including CRM, ERP, HCM, and payroll systems. Reps particularly like the ability to see the status of their commission accounts in real-time, without having to contact administrators. Both reps and managers praise the platform’s ease of use.

Partnering with Norwest from Series A and Beyond 

Paul, Stapleton, and Ries initially bootstrapped Spiff.  By 2019 the growing business required additional capital, so Paul and his colleagues decided to raise venture capital. Having previously raised venture funding for his startups in addition to being an active angel investor, Paul had high standards.

“We received more than six term sheets for our Series A,” Paul recalls. “We chose Norwest to be the lead primarily because of our relationship with [Partner] Sean Jacobsohn and the reputation of Norwest among our earlier investors and the broader entrepreneurial community.” Jacobsohn helped Spiff with potential customer and partner introductions, and met with Jeron several times prior to pursuing a partnership together.

Norwest led Spiff’s $10 million Series A in 2020 and participated in the $46M Series B in 2021. Jacobsohn joined Spiff’s board and Elaine Dai, another member of Norwest’s investment team,  joined as a board observer.

“My thesis at Norwest is to invest in companies that are next-generation players with the potential to disrupt incumbent players, where people are using a solution not because they love the product, but because it’s the only option,” Jacobsohn says. “That is the case with sales commissions. 

“About 80 percent of the market is calculating commissions manually and 20 percent are using a legacy tool. But those legacy products were created 15-20 years ago and are difficult to configure. Today, people expect a consumer-like experience even for enterprise products. The software needs to be something you can configure yourself, and where employees can see their compensation in real-time.”

During their due-diligence process, the Norwest team found extensive validation for the problem Spiff had identified and the solution it offers.

“We talked to 40-plus companies that were active Spiff customers, using competitive solutions, or leveraging manual processes,” says Dai. “These companies ranged from SMBs to midmarket and enterprise companies. Across the board we heard that people were unhappy with their current approach and were looking for a next-generation solution. 

“In our research process we found that customers using Spiff were super happy. They loved the user interface, the ease of configuration, and the real-time reporting.”

Jacobsohn says another benefit of using Spiff is that it addresses a big problem. “There’s a dogfight between finance and sales over commissions,” he says. “Spiff not only automates the process, but also provides transparency. This has a profound impact on the employee experience. 

“In our conversations, we repeatedly heard that Spiff delights customers, who reduce the error rate in their compensation calculation from five percent to less than one percent.”

Tapping Norwest Expertise to Drive Spiff’s Growth

Paul is effusive in his assessment of the relationship with Norwest.

“Sean and Elaine are the best partners I could have imagined for Spiff. They have sourced and closed key deals and executives for us, focused us on non-linear growth strategies, and facilitated valuable introductions. They have provided strategic guidance at every board meeting.

“Norwest has shown me that the board can do real, roll-up-the-sleeves work that can massively impact a company’s trajectory. I consider it a competitive advantage. I don’t think the boards of our competitors are doing nearly what our board does for us.”

Paul also has made extensive use of Norwest’s Portfolio Services team, which provides companies with operational expertise in areas such as talent acquisition, human resources, finance/M&A, and marketing. He cites valuable assistance received from Teri McFadden (Principal, Talent) in talent acquisition, Lisa Ames (Principal, CMO and Operating Executive) for go-to-market strategies, and Laurie Tennant (Principal, People Advisory) in HR. 

“Norwest has been instrumental in every major executive hiring decision we have made,” says Paul.

Jacobsohn’s extensive industry connections also have benefited Spiff. “Sean has worked very hard at making prospect and partner introductions, recruiting candidates, attending conferences, and working the room at industry events for us.” He also was instrumental in inviting Leslie Stretch (CEO of Medallia and former CEO of Callidus, a legacy Spiff competitor) to join Spiff’s board of directors, as well as recruiting Matt Gahr, CRO of Spiff, as they worked together at Cornerstone.

“Being an entrepreneur is hard and lonely,” Paul reflects. “Sometimes a cheerleader is the thing you need most – someone who knows what you are going through because they’ve seen it over and over again. That’s what Sean does for me. He is unfailingly upbeat even when he’s giving me difficult feedback. He knows that no matter what, we are going to be successful. Coming from him, that’s been tremendously powerful for me. It’s infectious.”