Forto was founded in Berlin in 2016 under the name FreightHub by Michael Wax, Ferry Heilemann, Erik Muttersbach and Fabian Heilemann. Forto stands for groundbreaking, scalable, digital logistics technology and services that go beyond transportation from point A to point B. With over 2,500 customers and 10 global offices, Forto currently employs more than 400 people and has raised over USD 366m of capital to date.
On sales as a craft:
Sales is somewhere between science and craft. There are phases where you need to solve issues analytically, like developing a pricing model, or designing a commission model. But on the other hand, it is also about human interaction: how do I create a sense for hiring people who have selling in their DNA?
Sales is like a good novel. Some basic elements are always the same: introduction, main part, closing, often including plot lines. You might be able to implement them. But to make the novel, or sales, truly great, it is essential to add an artistic, craft-like element that touches people on an emotional level.
The logistics market is very attractive because it’s so fragmented. The smallest of our buyers were 16-year-olds who were importing cat scratching trees from Thailand to sell them on Amazon. And on the other end of the continuum, we talked to IKEA, Volkswagen and Coca Cola. We worked our way up the long tail of the market: we started with the solopreneurs who imported one or two containers per year in order to prove traction and experiment with our services. Now more than 90% of our revenue comes from customers with more than 500 containers annually.
Our revenue comes from three clusters of customers:
Customers up to 10-20 containers/5-digit tickets: The extreme long tail, individual Amazon FBA sellers. Their priority is usability and customer experience. Some of them syndicate their shipping over social media groups. This is also where we found a lot of our first customers.
Customers from 10-500 containers/6-digit tickets: SMB customers, online shops. They are a slightly more price sensitive, but still value usability. You sometimes have to meet them in person to finalise the sale.
Customers from 500-10,000 containers/7-digit tickets: Mid-market upwards. Our biggest customer imports fridges, about 25,000 containers per year. This is traditional canvassing: We actually have to get into the car and drive around to build a personal relationship with the customer.
On product/market fit:
At the beginning of every B2B sales journey, there is a core business model. Who is the customer? What are their needs? How mature does the product need to be? What is the right process to address this customer? The plan needs to be completely thought through before approaching the customer..
If you want to build a sales organization that is scalable, you need to offer your employees not only a career path, but also the coaching they need in order for them to grow. Therefore, from early on, we have invested in cold calling coaches, in closing coaches and in people from the industry bringing outsiders up to speed. Today, we probably invest 3-5% of our sales budget in training.
No first-time founder knows exactly how to build and scale a sales organization. That is why you need to hire people who have been there and mastered the journey of scaling a venture. They can act as consultants when specific aspects of the sales process need to be improved. It is a craft you need to acquire on the job. You won’t be able to catch up on 5 years of real-world experience.
The big jumps forward always happened when we hired more experienced talent. If you don’t hire external people with experience, you don’t know whether you and your team are doing a great job or just an average one. Hiring people who have been there and done that helps to fill the gap of “we don’t know what we don’t know”. Besides that it is equally crucial to develop and grow talent and create positive showcases that also inspires people to grow within the organization.
On organizational evolution at Forto (Case):
Our revenue engine includes everything from outreach to implementation. Our sales organization of > 80 people is split into two core teams: Growth (with about 25 people) and Sales (about 55). Growth includes marketing and SDRs. Sales includes the key account management team and the implementation team for each of our sales regions or market segments.
Our first Head of Sales was Markus. He joined us 9-12 months after our founding, when we were about 10-20 people in sales, 50% of whom were interns. He had a lot of experience in selling, also internationally, and helped us set up our first professional sales organization. This included coaching and training of our employees, development conversations, and, very importantly, setting up a compensation system. On top, he’s a great people leader, who understands to pick the right type of talent - one core skill that helped us to grow such a stellar team.
We entered our second evolutionary level when Fabian became our VP Growth, 12-15 months later. At this time, we were about 20 people in sales, including 25% interns. He helped us to unlock the next customer bracket and grow from single-stakeholder sales to multi-stakeholder sales, and to solve our churn problem. Fabian has a unique talent to identify problems with the 50 tiny control levers in the sales process and then to optimize them one by one. He is able to determine what the right ratio of industry experts is versus hungry graduates? What are the right messages for our target groups? Are there persona-specific management objections? Where is the handover from SDRs to AEs and how is it mirrored in the CRM? Once we are in a meeting he is quickly able to decide what sales deck do we show? Who is in the meeting? Do we present ourselves as a startup, or as an SMB?
Our third evolutionary level began when we implemented a second line of sales leadership under the existing VP of Sales. We had noticed that we had reached a breaking point when our VP of Sales had about 15 direct reports. The employees became unhappy. Some left because they didn’t feel appreciated anymore. It is simply unsustainable to have more than 8-10 direct reports under a leader. That is why we introduced 2-3 Heads of Sales, who are responsible for different regions or customer segments under our VP of Sales.
Finally we hired Kenneth to head our growing revenue organization, and to get us from €10 million to €100 million ARR. He is a leader with yet another profile. We needed someone who had lived through the process of growth and international expansion and who can explain the fine details of sales and sales training to me. In addition to knowing the sales business and representing our company to external stakeholders, we noticed that leadership skills and internal communication had become more important, both upward to the board and downward to our team. Our sales leader needed to be able to articulate a vision, develop a strategy, stand in front of 200 people or a round of accomplished investors and convince and inspire them.
If you want to change the behavior of the sales team, you need to change the comp plan. Therefore we built measurable incentive systems based on clear targets that are transparent across the company. We also built a career framework. Today, everyone knows exactly how they can grow from an SDR to becoming an AE, Director of Sales, or Head of Sales and which salary levels are tied to these career steps. This was an extremely important step.