Oscar Armas-Luy: Podcast: Turning Forecasting Odds in Your Favor

Welcome to Go to Market, a podcast for RevOps, sales, and marketing leaders to dive deep into industry insights and best practices. Go to Market is sponsored by Fulcast, the go-to-market cloud. My name is Dr. Amy Cook, and I am so excited to introduce to you today Oscar Armas-Lui, VP of RevOps at Beeline. How are you doing, Oscar?

I am doing fantastic. How are you, Amy?

Great, doing well. Thank you so much. Thank you so much for joining us today. It is such a pleasure to talk with leaders like yourself and get all the insights and the, the secret sauce and the inside scoop.

Yeah, I'm excited to be here. Long time fan of RevOps Podcast, so happy to share my two cents.

Well, thank you so much. Well, first, can you tell me a little bit about your background?

Yeah, absolutely. So I did my undergrad in finance and I did my MBA in innovation management. I bounced around doing a couple different things. I was in asset management for a little while. I was in digital marketing. I did a couple of other things and then I found my first role, which was working in demand gen for a Fortune 500 enterprise software company. And I did that for a little while. And then like most of us, I ended up falling into RevOps. A job opened up as an analyst in the sales operations organization. Someone said, uh, I thought you might be a good fit. I didn't know what sales ops was, what they did. I just knew that it looked interesting and I was kind of honored someone had thought of me. So I went in, worked in that organization and never looked back.

That's amazing. I love that you came in through marketing. I see some people coming in through sales, some coming in through marketing, some coming in through customer success, and some coming in through operations. And what I find is that this group of people, RevOps, it's very rich and very sophisticated. And so I love the fact that a fellow marketer fell into it like me.

Yeah, absolutely. And you know what I love about RevOps, but also about sort of the marketing role where I started, is that you have to be very data-driven, but there's also room to really let your creativity shine. And that's the part that keeps it fun for me.

I love that. You talk a little bit about creativity in RevOps. What does that mean?

Yeah, I think for me it means it's very easy to say, this is what the data shows, this is what the data is telling us, and kind of just look at it cut and dry. For me, creativity comes in two forms. Number one, it's how you really interpret the story around that data. The data never tells you the full story, right? So you really have to consider the context, the people, the business, the situation, and really think about what are the different things that this could truly mean. And then I think the second thing is there's never one way to solve a problem. So how can you be creative? Say, okay, the data's identified the problem for us. The data's identified some things that might work. Now, how do we look at all the different pieces and find a really viable solution that has a high chance of success?

I love that, and I love that you come from marketing and that you said that marketers have to be data-driven, because that to me is one of my pet peeves when people are like, oh, you're a marketer, fuzzy math. And I'm like, are you kidding me? We do, we do it all day, every day. And so I think that's really cool you brought that out. It's very true. And marketing has become so much more data-driven even, and so much more technologically focused. It It does not surprise me at all that you came in through digital marketing because you had to manage probably 10 platforms just as a digital marketing manager.

Yeah, absolutely. Right. And I think the old school world is you're either like a data-driven marketer or like a more creative marketer. I think to your point, right, you have to do both. The data-driven part is it enables the creativity. It enables the creative side of it. And so when you can do both, you're really dangerous.

I totally agree. And really the golden goose of that is being able to be predictable in your marketing, right? There's that old adage that says, I know that half of my marketing is working. I just don't know which half, right? And I think we're solving that problem with RevOps, right?

Absolutely.

Yes. So what do you think about that, that whole idea of predictability?

Yeah, absolutely. You know, I think that this is an idea that a lot of people are interested in. But I think we can sort of lose the thread on how multidimensional it is. So I think a common sort of conception is that predictability is all about the CFO, right? We want to be predictable so that the CFO can make his or her forecast and then make the CEO and the board happy. And part of that is true, right? You need a strong, reliable forecast so that you can plan your investments and sort of your business initiatives accordingly. I'm not discrediting that at all. But I think there's a piece that's missed, which is this idea of chance and luck and the role it plays in sales, right? So to me, predictability means that you are not relying on luck or chance in order to deliver on your number and on your commitments that you've made to the business. So when a business is not predictable, to me, that's another way of saying that the business makes its numbers when things go well, when chance or luck is on our side, But then when it's not, it can be unpredictable the other way, right? And I think this is the piece that's really critical for RevOps and marketers and everyone to understand.

I really love what you said just now. Can you say it one more time about predictability is taking the luck and chance out of your forecasting?

Absolutely. So at the end of the day, right, in sales and really everywhere in business, chance and luck play a huge role, right? Chance and luck are kind of the same thing. If it's chance you like, we call it luck. If it's chance you don't like, we call it unlucky. And there's always going to be things that happen as a matter of chance or outside of your control that will either win your deals, lose your deals, delay deals, accelerate them, so on. When you are running an unpredictable business, you are really relying on chance and things out of your control to go right in order to hit your target. A predictable business, on the other hand, is built in such a way that even if you don't get quote unquote lucky, you will still hit your number. And I think what's really special about this is that if you have a predictable business and you also get lucky, that's where you really blow your number out of the water and sort of reset expectations.

Wow. That's super interesting. I remember when I was in college, Mitt Romney came to our school. And this was back at the time when he was still at Bain Capital. And this is one of my core memories of college because I was sitting in this class ready to learn all of the business insights from one of the leaders, one of the greats, right? And he says, do not underestimate the importance of luck in business. And I thought that honestly blew my mind. I thought he was going to be like, no, I did it and I did it all deliberately and this is how you do it and whatever. And so I thought that was just very, very interesting. And so I'm recalling that as you're talking about that chance that is within. So how do you build a business where you can forecast? Obviously there's some chance in it, but what do you do strategically to minimize chance when you forecast?

Yeah, so I'll talk about this and then I'll give an example, right? So luck is outside of our control, but getting lucky is a lot more in our control than we might think. What do I mean by that? So for example, the chance aspects of any particular deal or any particular instance are outside of your control. But the more pipeline that you have for any given quarter, any given month, the less reliant you are on one particular deal going your way or one particular deal or getting lucky on one particular deal than you might think. So a really classic example is when we talk about things like pipeline coverage, conversion rates, things like that, building in a buffer so that if your conversion rate is, say, 50%, we would all love a 50% conversion rate, but let's go with it. You don't want to say that your target multiple is 2x. You probably want to say 2.3x, 2.4x to build in some of that redundancy.

Oh, that makes sense. So what do you build in, in terms of redundancy to account for the chance element?

Yeah, I think number one is I think it's a healthy sense of paranoia, right? I am always working with my teams and asking myself, what could go wrong in this deal? And what can I do ahead of time to mitigate it? You can never eliminate every risk, but you can mitigate it. And then I think number 2, I'm always thinking about backfill. So for every deal we have in our forecast, I'm thinking how much backfill do I have for it or how much upside potential do I have that could take its place that some, if something goes wrong.

Hmm. Interesting. Do you have any rules of thumb or standard benchmarks that you try to build in?

Yeah, I try to think that we all have the idea of the commit in our forecast. So my rule of thumb is anything in commit needs to have a backfill. Right? And what that is, you're committing to the dollar amount, not necessarily the deal, which I think is an opinion some people would disagree with, but I think works in this framework. And then I think the second thing is you, you have to look at pipeline multiples and your pipeline multiple should not be exactly tied to your conversion rate. You need to have some buffer in there. And then 3, you need to look at conversion rates over very long periods of time. Just look at the last couple months or even the last year, there's a lot of variability that could be introduced to have your conversion rate end up being lower for the given year.

So do you try to do last 5 years or do you try to do all time or what do you normally try to do?

Yeah. So the way I think about it is you have to look at sort of the period of time that's relevant to your current business. So let's say that you did a big reorg 3 years ago. 3 years ago is probably when you're going to want to start looking at your conversion rates moving forward.

Makes sense. So when there's a business-changing milestone, looking at that from then on.

Business or market changing, right? Because we don't want to make the mistake of having too long of a time horizon because look, 10 years ago, right? Especially in the technology industry, but everywhere, the world is not the same as it was 10 years ago. So that data loses a little bit of its relevance.

That's so true. And then also the pandemic just threw everything out the window.

Absolutely. 100%.

You're like, oh, here's all of your beautiful predictable modeling. Yeah. Yes. But since then, right? Post-pandemic, I'm sure now that we're a few years out, I'm sure that that predictability is starting to stabilize again. Is that right?

Yeah, absolutely. And I think you make a good point, which is that if you want to build predictability and you're going to build models, you have to get comfortable with outliers and how you handle them, right? So to your point, for many of us, the pandemic was an outlier year or couple of years. And so you want to make sure that that's not overrepresented in your models. And so getting really comfortable with understanding what an outlier means for your business and how you're going to manage those in the modeling, I think is important.

Yeah, I totally agree. I think that's very interesting. So you look at, you build a buffer for your conversion rates. You look at the big business or market milestones. You try to understand outliers and appropriately manage those. What else do you do?

Yeah, that's a good question. So I think when we think about process, we can look at process through this type of lens of predictability. So I try to think about process sort of through this lens of we don't have a sales process because something else wouldn't work. Right? We have a sales process because the sales process makes us much more consistent in working each time. And so I think this is really important to understand. Many of us have things that we know work because they have worked for us for a long time, but it doesn't just have to work. It has to work consistently. And I think that's the conversation leadership teams and RevOps folks need to be having when they design their process and, and use best practices in their sales organizations.

Yeah, that's just such a great point. It reminds me of my husband's golf swing. Sometimes he can hit a birdie, and very often he'll hit birdies, but he's not consistent enough to be able to be a pro, right? And that's the difference between a pro golfer and the rest of us is that consistency, right? So I think you could make that comparison in business.

100%, right? And I think for many of us, when we think about enabling, our sales teams, we all have the challenge of most of us or many of us have sales reps that have been wildly successful and have been doing this for a very long time. But like the pro athlete example, right? We're not looking to teach them how to sell. We're looking to use data-driven insights to make them more consistent so that they can blow out even more years. And I think that's a win for everybody.

I really love how you're, I love how you just reframed that. It's not about evaluating the salespeople. It's about being their body, so to speak, and saying, hey, these are your stats, this is where you perform the best, this is how you can continue to kill the game because we already know you're good at sales, that's why you're part of the team. I love that. That is a very, very cool way of reframing that.

Yeah, I think it served me well personally, and I think it's something we all have to keep in the back of our minds and even make sure that we're incorporating because it can really be a game changer, not just for how you work but also the relationship relationships that you build with some of these tenured folks.

Hmm. So interesting. I really love this. So predictability, it obviously matters to the CFO. It obviously matters to the CRO. It obviously matters to everyone in RevOps and the CEO, of course. Do you talk about predictability in different ways to each of the executives? When you talk about predictability to the CFO, to the CRO, and to the CEO, Is it any different?

It is, right? So I think it really matters also the level of seniority in the organization. So to a CFO, a CEO, it's going to be obvious why it's important to be, to have a credible forecast, for example. In many organizations, when you talk to VPs or SVPs or folks that don't necessarily have that board pressure or aren't in those meetings, it's a little less obvious why the forecast matters. So in the one hand, you can have the talk track of them, which you want to have predictable success. I think that's a little obvious, but why the forecast matters to someone like the CEO is not necessarily clear. So for them, I frame it more as like, there are investments that you need and want for your business. There are things that I know you want to do. Your forecast gives you the credibility to get those resources allocated by the folks that control those resources. And so I think not assuming that everyone understands why forecasting is important or what it enables in your business is sort of the key difference.

I love how you're talking about that. It's the what's in it for me, right? For the CEO and the CFO, it's being able to get the board on your side and get your next round of funding and killing the game, right? And for an individual salesperson, it's getting the credibility to be able to get those resources for them in the future. So This is mind-blowing today. This is really, really exciting. I never thought the discussion of predictability could be so exciting.

Yeah, and it's one of those things where I think my favorite part, or one of my favorite parts of being in RevOps, is that when you peel the layers back on some of this stuff, it gets so deep. It touches so many different areas of business, of your organization, of being a professional that you can really have fun with it.

Oh, I love this. So is there anything that is on your mind in terms of contrarian view or an unpopular opinion about RevOps?

Yeah, I think what's on my mind is that everything in RevOps is context dependent. And so we in RevOps are artists in the sense of we have to know the rules, but we also have to know when to break them. There's sort of sacred cows or things that are sort of best practices or standard practices in RevOps that don't make sense in every single context. Great RevOps people know all the best practices. Extraordinary RevOps people know all of the best practices and the ones to kind of ignore in their particular context. And I think that's what we really have to master.

That's so well said because that is really when you have achieved mastery over something, right? It's when you purposely deliberately break the rules in order to achieve a certain effect. I do I do it in English sometimes. My background is English and writing. Sometimes you don't want to write a full sentence, you want to emphasis on something to make something stand out, to make something work better. And that is the same in RevOps. I love that.

Very exactly.

All right, well, so clearly you were at the top of your RevOps game, and thank you so much for being willing to come on the show. For my final question, What do you do to stay on top?

Yeah, I think what's really worked well for me is having a mix of different modalities to consume RevOps content. For example, I love podcasts when I'm on the go or when I'm doing stuff around the house or when I don't really feel like sitting down and really digging into something. I think podcasts are great. There's other times where I'm feeling sort of more intellectual, more like I want to sit down, and that's where I love reading books and reading blog posts and publications, and then videos when I'm filling in between. The book that I'm thinking about right now, it's called Revenue Architecture from the folks over at Winning by Design. That's a book I feel like you could spend a lifetime going through, but I love just reading a couple pages and meditating on it, thinking about what it means for me.

That is one that I'm going to be reading very, very soon. You mentioned that before when we met earlier, and Fooled by Randomness is another one that you mentioned.

Yeah. Yeah, so—

I just bought it. I'm so excited to read it. So thank you so much for the recommendation.

That's a great one. And I'll actually double-click. So fair warning, this particular author, he tends to be very crass in his style. So be aware of that when you go in, but I also love reading books from outside of RevOps, specifically from Wall Street folks, financiers, bankers, just because I think the way they think about the world is very transferable and very interesting. And it also makes you more fluent in what makes the business run. So Nassim Taleb, he has a 5-book series that starts with Fooled by Randomness that has informed a lot of the opinions I've given today. So I think that's a great one if you can enjoy the sort of crass style.

So I'm very, very excited to read it. And what you've said just really brings home the point that I feel very strongly about, which is I believe that RevOps is truly the center of excellence for revenue. And there is the ability for a business to gain so much from elevating the RevOps function to that center of excellence. And it's just shown in the, in what you and I have talked about today. You are widely read, you are coming from another discipline and using your strategic insights to be able to inform the entire business. I just think it is so So awesome to be able to meet with people like you who really do understand all the ins and outs of how businesses run and how to make money.

Yeah, it's a really special opportunity. I feel really honored to have gotten it in my career, and I feel really honored and special that there's folks like you and Fulcast and everyone else in the community that's really helping us be better every day.

Well, thank you so much, and thanks again for joining the podcast. I really appreciate all of your advice.

Bye, guys!

Business. Is that business? Business. Is that business?