More Important Than the First Deal Is a Deal You Can Repeat Vol.3

When overseas companies enter the Japanese market, the first thing they tend to want is an initial logo. In practical terms, securing the first customer can raise internal expectations and create the sense that the market is beginning to respond.
Looking back, however, Nomura—who led the launch of nCino Japan—believes that this perception contains an important trap.

What matters is not simply winning the first deal. What matters is whether the company secures business in a way that reflects the value it is truly meant to deliver, with the appropriate scope, and in a form that can be repeated.
After winning its first few customers, nCino Japan went through a prolonged period of stagnation before fundamentally rethinking how it sold. We asked Nomura about that turning point and what it taught him about scaling in Japan.

Q: In our previous conversation, you explained that reference cases were critical in getting the market to move. Looking back, how do you view the way those early proposals were designed?

Nomura:
Looking back, securing those first deals was, in itself, a very important first step. At the same time, the experience that followed led us to take a much deeper look at how our proposals had been designed. In terms of the deal size we should truly have been pursuing, the value we were meant to deliver, and the scope we should properly have proposed, I believe there was still considerable room for improvement.

Q: What do you mean by that in concrete terms?

Nomura:
nCino, by design, is a product that can cover the lending process end to end. At the time, however, many customers were telling us that they could not replace their existing systems and that what they wanted, above all, was an improvement to the front-end user interface. In response, we shaped our proposals around those circumstances.
The structure was to leave the back-end systems in place and use nCino only on the front end. Given the realities our customers were facing, that was, at the time, a reasonable option. That said, through the work that followed, we gradually came to realize that there was another design—one that could deliver the product’s intended value more fully.

From the First Deals to a More Repeatable Form of Value Delivery

Q: But that approach ultimately had limitations?

Nomura:
Yes, it did. If the back-end systems remain unchanged, then the underlying cost structure hardly changes. On top of that, nCino is added as a new investment, which makes it difficult to build a convincing case for return on investment.
Moreover, the number of interfaces increases, while the complexity of the process is not fundamentally resolved. In other words, we were delivering at a much smaller scope than the value we were truly meant to provide. Naturally, the organizational impact on the customer side was also limited.

Q: Did the fact that you were able to sign as many as three banks so early on make it easier to misread the situation?

Nomura:
Yes, I believe so. As I mentioned earlier, within a year and a half of my joining the company, we had signed as many as three banks, and at the time I thought, “Perhaps we can build momentum more quickly than expected.”
However, what followed was a period in which we fundamentally revisited our approach in preparation for the market’s full-scale takeoff. Those early customers, in a sense, were banks with a strong willingness to lead the way. The broader majority of the market, however, still wanted to see success elsewhere before moving. That is why winning those early logos and truly opening up the market turned out to be two very different things.

The Turning Point Came Through a Major Deal Review

Q: What prompted you to change the way you were selling?

Nomura:
A major turning point came during the review process for one large deal, when senior management concluded that the proposal was “not realistic.”
That proposal was built on the same logic: the back-end systems would remain in place, and nCino would be introduced only on the front end. We had developed the ROI model very carefully, but in the end the proposal was judged “not realistic.”
Looking back now, I believe that decision was correct. If the back end remains unchanged and only a new investment is added on top, it becomes very difficult for management to make the case internally. That experience led me to reconsider our assumptions in a very significant way.

Q: How did your approach change after that?

Nomura:
I had extensive discussions with my managers at headquarters. In the course of those discussions, the issue was put very clearly: nCino is fundamentally designed to transform process and data through a single platform, so why are we preserving the old structure?
I felt that was absolutely right.

If a proposal is built on the premise of replacing the entire fragmented structure, then the deal size becomes larger, but the ROI also improves. Data becomes centralized. Processes become unified. The information management needs become easier to obtain. And the organization becomes better able to respond to future change.
In other words, the proposal shifts from something that asks, “Would you like to adopt this?” to something that asks, “Is there a compelling reason not to?”

Precisely Because This Is Japan, We Had to Reject Half Measures

Q: That sounds like a significant shift in direction. In the Japanese market, was it not a difficult decision to make?

Nomura:
Yes, it was. However, I came to believe that, if we were going to do this properly, we needed to move away from half measures. From that point on, when customers told us, “This particular system must remain,” we began responding differently: first, let us sit down together and clarify the value that can be created when the product is deployed at its intended scope. If the product is introduced only in a partial form, the underlying issues are not resolved, and that does not lead to strong outcomes for the customer. I believe that delivering the product’s full intended value is what ultimately leads to better long-term results for customers as well. That shift in approach carried great significance.

Q: Did the market response change after that?

Nomura:
Yes, it did. We conducted a comprehensive review of the pipeline, and we redesigned our proposals. As a result, the response from senior management at customer organizations changed quite visibly.
They moved into a mode of asking, “What is the reason not to do this?”

That, in my view, was when we entered a much steeper growth curve. Ultimately, I believe that if a company wants to scale in Japan, it cannot simply sell in the easiest form. It must sell in the form that communicates the product’s value correctly.