FormHero shows how startups can work with big banks

The ‘Startup Growth Series’ showcases stories of entrepreneurs that have overcome obstacles in order to expand their businesses in Canada and abroad.

At first glance, FormHero looks like many other Toronto startups: a DMZ alumnus and current member of OneEleven, with a small, but steadily growing, team. What sets the company apart from many other startups, regardless of product or service, is that FormHero has big enterprise clients. And not just any enterprise clients, but some of the largest banks and insurance companies in the country, including BMO.

Getting to the point where FormHero could sell to big enterprises required a thoughtful approach, but the process evolved over time. Speaking with BetaKit, FormHero co-founder and VP of business development, Art Harrison, shared the company’s pillars of enterprise sales and how it builds momentum so the deals close quickly.

Find your champions

When FormHero got started, the co-founding team had a new product that, through pretty forms that went out to employees or customers, simplified data collection on the backend for organizations. According to Harrison, however, venture capitalists didn’t understand their business, pigeonholing them as “just another forms startup.” The company’s fundraising journey was not successful.

Meetings with large enterprises provided FormHero the customer validation to continue. VCs didn’t quite get the business, but potential customers did.
 
 

Undeterred but in need of cash, Harrison and his co-founder Ryan Kimber continued to look for ways to connect with potential customers. This led them to many different startup communities in Toronto and Waterloo, namely Communitech and the DMZ. That’s when things began to change.

“We were fortunate enough, through some of our relationships like Communitech and the DMZ, to get exposure to actual leadership at some of the biggest organizations like BMO, TD, [and] Manulife,” said Harrison. “They have representation in these accelerators and incubators. Their leadership from day one was like ‘this is amazing, we need this.’”

The meetings with large enterprises provided FormHero the customer validation to continue. VCs didn’t quite get the business, but potential customers did, “and that’s what matters,” said Harrison.

The connections led BMO to suggest that FormHero join its Next Big Idea in FinTech Accelerator, run in partnership with the DMZ, which it did. Harrison said that FormHero didn’t win the “next big thing” title, but the company secured a paid pilot with BMO on credit card applications data collection, which Harrison considers the real win.

“We came third in the competition,” he said. “But during the four months of the actual accelerator, we built and went live with a paid POC [proof-of-concept] of actually running a credit card process.”

Recognize the real pain

FormHero is in the data collection business, and companies building data collection solutions for enterprise talk about the efficiencies their technology will bring. This should be – and is – attractive to enterprise customers, many of which are still using manual data collection methods. But the real issue for enterprise is not data collection, but data security.

With constant news of data breaches coming out in the financial world, financial institutions are more cautious than ever about who they partner with on data collection. Even encrypted secure data storage can be a cause for alarm, since some financial data is not allowed to be held by third parties due to regulations.

Recognizing the real pain for enterprises was around data security than data efficiency, FormHero built its platform to only transfer data, not hold it.

“The reason [enterprises] are so slow to make change is the risk of data and privacy and all those other aspects that go into them being able to make change and use external vendors,” Harrison said. “That’s what sets us apart: we found a way to build this as a ‘stateless’ platform where everything happens as an individual transaction and the data always returns to our clients. So they are able to protect it and leverage it instead of having a third party like us holding onto their most valuable asset.”

Elephant momentum

Enterprises frequently want to create better experiences for their employees and customers, but often run into a major challenge: changing one small element in the experience could lead to cascading changes that impact hundreds, if not thousands, of people and processes. As a result, enterprises are not able to be as nimble with changes, often favouring one massive solution that caters to all their needs in one platform.

Startups sometimes overlook this issue. It’s easy to move quickly when small and lament big enterprises for being slow-moving elephants, but the reality is that many enterprises still depend on infrastructure that might seem archaic by modern standards.

“They all know they want to make the change. But nobody owns that change internally.”
 

“The biggest impediment to selling to enterprise as a startup – I don’t know if it’s inertia or if it’s their own process,” said Harrison. “They all know they want to make the change. But nobody owns that change internally.”

FormHero, realizing it did not have the resources to build an entire enterprise platform, instead went another way and built its platform to fit within existing systems.

“We’re going to output paperwork if you’ve got 500 people in a back office,” said Harrison. We do that in our product by saying however you need the data, whatever your processes, we’re going to give it back to you in that format. And that’s a huge way for [enterprises] to say, ‘oh we could actually make this happen faster than we ever imagined.’”

The versatility leads to something else that’s necessary for enterprise sales: momentum and excitement. For FormHero, building momentum starts with a demo and continues with constant iteration.

“If you are showing up every day and progressing something closer to production, they start realizing that. They get excited because they’ve seen a lot of projects start and stop and go nowhere. So when they see [momentum] actually happening, then they get excited.”

Elephants might move slowly, but they also never forget, which means that the work doesn’t stop for startups once the contract is signed. Harrison told BetaKit that the most important thing to keep in mind is how deadlines can cascade just like tech: one missed deadline can set off reactions throughout whole departments, if not the whole organization. That means being late, even by a day, throws the system off.

“What we didn’t realize is with an elephant like that, how many things, once a date is set, are queued up after that,” he said.

Navigating these waters requires a startup to set the right expectations, then meet them. If an enterprise customer is expecting something in six months and you deliver in two, they will be ecstatic. But if you said you’d deliver it in one month, you’ve lost – even though you’re still four months ahead of their initial schedule.

“Selling to enterprise means recognizing [enterprise needs], building features to support that, but also building processes,” Harrison continued. “So you can be agile as a startup, but you have to be able to translate that back to waterfall, if that’s how they operate there. And that’s in technical terms, but you have to have a translation layer.”