SaaStr 629: CRO Confidential: Sales Recruitment in 2023 For Candidates and Hiring Managers With Flexport's Ben Braverman

This is Saastr's CRO Confidential series, where you can hear some of the best of the best revenue leaders in sales and marketing, hosted by Sam Blond, partner at Founders Fund and former CRO at Brex.

Hey everybody, it's Jason Lemkin from Saastr, and I wanted to invite you to the first ever Saastr APAC 2023 in Singapore, February 22nd to 23rd. We'll be right in the heart of everything. We'll have almost 1,000 SaaS founders executives and VCs, Sequoia, Accel, Bessemer, so many leaders. We'll have 2 stages, over 100 mentorship sessions, dozens of unicorns and top speakers. It'll be great. I'll be there. The whole Saastr team will be there. And the first time we do an event, it's really special. It's really the most fun of all. So if you can make it, saastrapac.com, Singapore, February 22nd to 23rd.

See you there.

Up today, Sam chats with former Flexport CRO Ben Braverman about what characteristics job seekers should look for in a winning company and what founders can do to attract the best talent.

Hey, Saastr fans, welcome to another episode of the CRO Confidential podcast. I'm your host, Sam Blond. Delighted to be here. This is our first recording of 2023, despite it being the second pod that we will have released. Once again, we have an incredible guest joining us today. One interesting thing about this guest, he's actually the most commonly requested guest that we have had. So we're giving the fans what they would like. Today's guest is Ben Braverman. Ben has been at Flexport for the last 8 years. That's a hell of a run, Ben. 5.5 of those years as CRO, 1.5 of those years as Chief Customer Officer, another 1.5 of those years leading the Flexport Fund. So joined the dark side of investing. Ben joined Flexport like employee 5. This reminds me of Matt Blank at Rippling, very early sales leader, employee number 5, seed stage company. Flexport was most recently valued at $8 billion, several billion dollars of top line revenue, hundreds of millions of dollars of net revenue. Thrilled to have you here, Ben, and excited to jump into a conversation.

Uh, Sam, thank you so much for inviting me to do this. And speaking of joining the dark side, this is as hardcore as it gets. Good for you. Congratulations.

Thank you so much. I'm thrilled to be here and it's been an amazing 4 months. Let's jump right in. We're going to set some context. So Jason Lemkin, of course, founder and CEO of SaaStr. Had a tweet last week that resonated with me. It read, my entire LinkedIn feed is folks leaving their current role the first week of the new year. There are lots of reasons for high employee turnover right now. We're not gonna go into those on this pod, but it's happening. Last episode, Dini from Lattice and I talked about seeing more heads of sales positions open than ever. These new heads of sales are gonna be recruiting their teams. Given all of this turnover, today we're going to be talking about the characteristics folks should look for in a company that's going to be a winner. And if you're a founder or an exec at a startup, there should be a bunch of takeaways on things you can be doing to attract the best people in the world to your company. Ben, you and I have been fortunate to join some companies that have experienced a lot of success. You with Flexport that we just talked about, me with both Zenefits and Brex. Why don't we start there? What was it about Flexport 8 years ago that got you so excited to join as CRO?

Yeah, I love that you, you ended the sentence with 8 years ago because it's so hard to put yourself in the same frame of mind that you were in an entirely different phase of your life. And so when I'm trying to put myself back in the position of someone who is still a seller, like whether it's a— whether you're a head of sales at a smaller company, whether you're an individual contributor carrying a bag. I'm trying to transport myself back to how I felt when I met Ryan, which was— Ryan Peterson, Flexport's founder and CEO, very well known as the guy who toured CNN around the ports during the port crisis. When I met Ryan, I was a head of sales for a Series A stage company. I'd never seen anything like Flexport. Frankly, it was a different era in Silicon Valley where it was before Coinbase and Brex and Flexport and all these companies went on the runs we went on. It was sort of hard to conceive of companies that could get this big this fast. So like, what did I actually use to make my decision? Like, first to invest my life savings in Flexport, and then ultimately to make the bet to like, okay, let's, let's put every waking hour every day into this thing, go work for Ryan full-time as CRO. Like, how did I make the decision? So one, great founders are inherently compelling. Like, you know, Sam, you, you and Parker, like, I'll let you talk about Parker, but these guys are— when you meet them, you can just feel in your bones they are different kinds of human beings than most of the other people you've ever met, even in elite parts of your life. They just feel different. You learn in every conversation. You get energy from every conversation. And that's not important because it's important for you to feel good. It's important because that's what every candidate's going to feel. It's what every investor's going to feel. So much of this is— Jeff from Bedrock calls it vibe investing. So much of picking who you're going to go work for, who you're going to invest in, is how do they make you feel? And then the next thing is one of the things that Bill Trenchard talks a lot about, which is, founder-market fit. So in Ryan's case, he had already built a business. So first of all, he was not a first-time founder. His last business was a company called importgenius.com that was incredibly profitable. Again, if you rewind back to 2012, San Francisco, the idea of a profitable software company was unheard of. None of us had ever met a software company that made money. In many cases, some of us still haven't. Ryan had this company, Import Genius, that basically took public data, structured it, made it available for third parties, made it searchable, and they just sold access to it for $100 a month per seat. And the business absolutely printed and still does prints cash. And when I met Ryan, it was so compelling to hear, not only did he build this business that was so successful, he didn't care about it at all. His entire world was about this new thing, Flexport. And when I asked him why, he said, "Look, the terminal value of my current business is, at some point, it has to be zero. It's public data. At some point, someone will organize organize it better, make it cheaper, whatever. And by the way, this has not happened. Other people have tried. Turns out ImportGenius is a really good company. But he believed this new thing was going to be so much bigger. And this gets to the next thing that helped me factor into my decision. He explained to me the market size. He said, look, the top 10 of these incumbent providers, the folks that he intended to compete against with Flexport, they combined for a quarter trillion a year of annual turnover of revenue. That was a crazy number. And then he sent me to one of their websites and it was like, I think it was XPO Logistics, but I can't remember who it was at the time. But anyway, they had like 10 different logins on there. If you clicked customer portal, you just had 10 different logins because the business had been built by acquisition. They were all running on some version of Windows 95 or AS/400 mainframe. And every product you were going to buy from this company, you logged in with a different system. So then I sort of took Ryan's word for it when he explained to me, The NPS in this industry, right, which I just explained to you is like a whole number chunk of GDP. Everyone hates their vendor. Like every vendor is bad at running their business. Every vendor has no software to run their business. And therefore every customer is frustrated. And so it was like, okay, I have this insanely compelling founder who has incredible, to use Bill Trenchard's term, incredible founder market fit. I got so lucky that I met him at the moment where the business was real enough that I could learn all these things, but it was sort of new enough that he would take a chance on me as sort of an unproven, relatively early-stage sales leader. So yeah, those are all the things that factored into my decision. And I think if you can sort of use that combination of founder, sort of overall quality, founder market fit, and then ideally like a founder entering a market that is either growing really quickly, like Sam Altman likes to talk about, or as he just proved with OpenAI, or that is just totally ripe for disruption, like transportation was, If you find all those things, like, you know, maybe consider giving it a go.

Really interesting story. There's going to be a lot of consistencies. I'll talk a little bit about— I won't go super deep. I'll talk a little bit about joining Zenefits and joining Brex. Lots of— we'll hear the word founder a lot, I have a feeling, and that'll probably remain true throughout the rest of this call. When I joined Zenefits, Parker was introduced to me by Jason Lemkin. Jason was my CEO at EchoSign and had sort of moved on after the acquisition. Adobe had acquired EchoSign, and Jason was an incredible advocate for me personally in introducing me to a lot of early-stage founders. And before Jason introduced me to Parker, he prefaced it with, this is one of the best, like, this is one of the best founders I've ever met, and he's raising an insanely competitive round. I remember those two data points in particular from Jason prior to the Sam, meet Parker email went out. I met Parker, won't go super deep, was just blown away, similar sentiment to what you described with meeting Ryan. And one important characteristic here is I just really believed that he was going to build a massive business. He told me Zenivitz was going to be a $100 billion company, and I believed him. And I think, you know, I'll talk more about that later on when we get into what folks should look for in companies more in the abstract versus just like this one story. But that's important. Like the ambitions to build a really big business, I gravitate towards. With Brex, sort of a similar story, just different players. YC introduced me to Brex. They said it's the company they are most excited about from any batch in several years. And I met with Pedro, Enrique, Michael, who is the CFO, now COO of the company. Blown away by the team. One thing that I remember in particular, and this is sort of similar to Parker saying that he was going to build a $100 billion company. When I joined the Wi-Fi, when I was interviewing for Brex, I asked the password, or maybe there was like a card that said the password, and the password was Buy Amex 2024. Um, and so of course, I— this was, this was, this was 2018, so this was 5 years ago now. And, you know, we'll 6 years ago in 2014. And this was like, I mean, this was the definition of a startup at the time. There were probably like 10 or 12 employees. For all intents and purposes, it was out of like somebody's garage.

Yeah.

And of course, I inquired about the Wi-Fi password and like they actually had a plan like this. They wanted to buy American Express in 2024. And I walked away like, these guys are going to build a massive business. Whether or not they'll be successful buying American Express, that was attractive to me. And I'll flag one important point through this that hopefully is a takeaway for the audience. Based on my personal experience, I can't underestimate the importance of using your personal network, both as a candidate and as an employer. And for me, it was Jason with Zenefits, it was YC with Brex. And when I say personal network, I generally see this in one of three categories. So the first is investors. Jason at the time was, I think he was at Storm Ventures, but he was and remains with Saster Fund, a VC. And YC was the largest, it was and is the largest shareholder of Brex today. Brex was a YC company and then also follow-on investments through IC Continuity. And if your investors aren't helping recruit for you, I don't think they're doing their job. This is mostly reserved for senior hires. That said, I'm making AE intros left and right for portfolio companies, but leverage investors, to make introductions to— just to recruit for you, make introductions to prospective employees. The second category of this personal network is former colleagues. Many of the best founders that I talk with that are on the early-stage side, their entire company is built of folks from their prior company. And so they're just leveraging their personal network of former colleagues, and it can be cross-departmental. You have relationships there, find out who the best folks were depending on what, what what role you need to hire for, and leverage that reputation and network. And then the last one is social network. This is a little counterintuitive or counter maybe to traditional advice, which is like, don't mix friends and work or something like that. I've had two podcast guests on. One is Jameson Young, one is Matt Plank. These were my social friends back when we had just moved to San Francisco right out of college. We would hang out on the weekends, go to bars, and just became buddies. And they were two people that I brought into Echosign as AEs. They joined me ultimately at Zenefits, and like, it's worked out great. Um, and so I think leveraging your social network, counter to maybe other advice, at least in my experience, has worked well. But that's maybe the biggest takeaway that I would have from my personal experience with joining these companies is, man, like, when Jason told me about Parker and when YC told me about, uh, Pedro Enrique, Michael Brex, That heavily influenced my decision-making process because I trusted them so much.

[Speaker:BRYAN_LAWRENCE] Yeah, 100%. And you put yourself in a position where these folks are willing to give you their candid assessment of who their most interesting portfolio companies were, which is obviously an enviable position to be in. Not everybody will find themselves there. But yeah, if people are willing to give you their best 30 minutes, so to speak, the best company they've found, in years of searching, in the case of YC, through hundreds or thousands of companies, there's really nothing that's going to be higher signal than that. And it kind of feels like as a candidate, it's like, sure, if you get really lucky and you know someone building something amazing personally already, great, go work for them. You don't need to validate it much further if you really are confident they are the number one person in a given domain. But in many cases, it's easier to start with heat and go, okay, what companies have the most heat? What companies are the most people talking about? Getting them sort of law of attraction, whatever you want to call it. And then as your second step, like before you accept the offer, assess if the company has substance, because some of them don't. Like some of them are going to be that virtual meeting startup, the name which is escaping me, where the founder sold all that secondary and retired with one. Like that company had a ton of heat during COVID uh, and now it's gone. So like you have to— you do have to do that second step of assessing, is there real substance underneath? But in your case, like when you looked into what Zenefits was building, ultimately what Brex built, I mean, it was just obvious, like, these were special people building special things endorsed by the smartest people in the world. Like, if you try to think much more than that about what you're going to work on next, I think you'll probably make a worse decision.

We're obviously aligned, and I think really good segue. It's interesting, as our careers have evolved, we're now oftentimes in this position. I imagine you have lots of people coming to you. We talked about this is a time for transition. I imagine you're now in this position where folks are coming to you and saying, uh, do you know these— the companies that I should be speaking with? And maybe more high level, like, what are the things that I should be focused on when finding the next Flexport? And so I would love to hear some of the sort of like characteristics that you describe in hypergrowth, potentially next Flexport, super successful businesses.

Yeah. And from what, from what perspective is this coming from? Is this the candidate or is this as an investor? Like, what viewpoint are you looking for?

Well, I think, um, more so the candidate. If somebody comes to you and, and they say, I'm looking for my first VP of sales role, um, or they're a salesperson, I, I want to join an early stage startup, what have been like— tell me the things that I should be solving for in finding the next great tech business?

Yeah, okay, so this is— I love this question. There have been a ton of the folks that I love that we kind of came up together at Flexport. You know, for you, it's, it's Plank, the other folks. For me, it's, you know, some folks that have graduated out of Flexport recently that were sort of getting their first external sales leadership role. And I'd say there's sort of been two paths that I found really interesting. Um, one I'll give the name of what I So why is Julie Harris? So Julie Harris, who, you know, amazing sales leader, she joined Flexport and she basically built her career in mainland China, you know, did a joint MBA, I think, with Shanghai University and Columbia. So she was sort of behind in a sense when she came back to the US. So like, we were very fortunate that she had spent some time in China because it made her sort of have to start over in US tech sales. So she took an AE role at Flexport. Absolutely knocked it out of the park, built our enterprise segment, ran it full stop. Like, you know, enterprise for Flexport, so much of the revenue comes post-first sale that you have to run it as an integrated segment where it's like, if you're responsible for the revenue for enterprise, you pretty much have to be responsible for this, for the service, because you can't decouple the two in the eyes of the customer. So at any rate, Julie built this whole thing for us. After 6 years, she's ready to leave Flexport, and she, she was like, you know, this is a huge decision. This is someone who has built a sterling reputation, built an enormous book of business. I mean, hundreds and hundreds of millions of turnover, probably this year over a billion in turnover in the book that Julie directly managed, you know, by the time she, she left Flexport. And she had to figure out, okay, what do I do next? Which, like, you don't want to squander this amazing position she was in. And she met a ton of companies. To your point, I mean, I think most of her introductions came from VCs who were hoping to land her as a, as a CRO at their company. It came from other founders who she'd become friends with. Again, some of it came from recruiters, but I think a lot more of it came, at least the highest fidelity intros, came from the investors themselves. And ultimately, I think the way she made the decision is super interesting, which was founder first. To your point, it was all about finding a founder where she was like, "Yeah, I'm going to go to war with this person. I'm going to spend the better part of a half decade, a decade, whatever it may be." That was the key thing. And then it was, In this environment, I think you only want to go work for companies that are backed by the best. Like in this case, she went to a Founders Fund company called Seso, S-E-S-O. Shout out, Michael. I had a chance to meet him briefly and he explained what the business was. It was one of those businesses that like, as you're hearing about it, and I won't steal their thunder, you can go to their website and see what they do. It's an agriculture, basically labor management platform. When you hear what they do, you realize, okay, there's no one else on earth this smart that's going to build this product in this enormous category. All they need is someone like Julie to go roll up all the major employers in the space. Like, it required no imagination for her to go, okay, I'm gonna love working with this CEO. I know the business works. Like, there's no question about if this business works. There's all the evidence I need. They are backed by the best investors in the world, Founders Fund. And this is true, I didn't mean for this to be a plug for Founders Fund, uh, it just happens to be that Julie just went through this process. And, you know, when she posted that she had joined CISO as CRO last week, like 600 people liked it on LinkedIn, to give you a sense of like what a beloved person this is. And I think she navigated this process as well as anyone. So like, as a sales leader, I think you really, in this market, you have a lot of choice. Like, there's a guy named Joel May who runs a recruiting firm called Bridgegate out of Manhattan Beach, who told me 70% of the best CROs in the market retired after the last cycle. Like folks made so much money, they see how much harder the next 10 years is going to be than the previous 10 with higher interest rates. And so if you are sort of one of those top-tier candidates, you're coming out of a flex board of a hot run, make sure you— you— like, I think Julie spent 6 or 8 months consulting to nail down this killer role at CISO. And I, I think that's exactly what, what I would do as a senior candidate now as well. If you're, if you're a rep If you're like, if you are a salesperson who's an individual contributor, you know, you have so many more choices, which in some ways makes it harder and harder to stand out. And if you're going to join a company today as a seller, I think the most important question to ask is, has my category been negatively impacted by the new economic environment? For instance, like Salesforce reduced 10% of their staff yesterday or 2 days ago, whatever it was. And Benioff has signaled that he may do more. If you are in one of these businesses that is dependent on other businesses to grow, in order for you to sell Lightning. This potential recession we're heading into, it's just going to be super tough to thrive. Whereas conversely, there's a company out of France called Pigment. I can't remember if it's a benefit company or not. I really hope not for the sake of not sounding like a shill, but they basically do scenario planning and simulation. So if you want to figure out what your company would look like if you hired 50 more people in X region and reduced 12 staff in other regions, they simulate the financial reality of your business in real time. They are crushing it in this new reality where every company is trying to do more with less. So if you're a rep, I think so much of your success is going to be having the wind at your back. And a lot of what I would do right now is to try to make sure I was going somewhere where I was going to have the wind in my sails versus the opposite. Oh, I, I know I just said a lot of things, so what are your thoughts?

Well, it's, it's interesting. We, we got up the other day, what should we talk about today, Ben? And, uh, so we knew a little bit coming in what the topic was going to be. And so just sort of like thinking thinking about what I wanted to say, basically all the same, same points in sort of like different flavors or potentially different takeaways. So I'll talk through them. But at a minimum, it will reinforce a lot of what you talked about. But hopefully there's some potential takeaways contained with my thoughts that are a little different from yours. I love your sort of like, it's different for executives and individual contributors or AEs. There's some consistencies, but I'll just approach it from the, what are the signals that this is going to be a successful company or the type of company that you want to join? First and foremost, we're going to say it again. It's the founder, founders. No one will more heavily influence the success of the business than the founders. And so this is not an area to sacrifice in. Some things come to mind in terms of what makes a great founder. One of them is dream big mindset. They're ambitious to build a massive company. Parker told me Zenefits is going to be a $100 billion company, and I believed him. Brex's Wi-Fi password was buyamx2024. They actually had a plan. They had thought about how they were going to buy American Express in 2024. The second thing on the founder, and you've mentioned this before, they understand the space they're building in and the problem they are solving intimately. They've lived it. They know it better than anyone in the world. They are uniquely positioned to build a company in this space. Ryan, clearly with Import Genius, my experience with the folks at Zenefits and Rex, the same thing. Um, won't of course tell the stories, but like, they knew what they were building, they knew the space. And then the third thing that I'll flag, this like concept of chip on the shoulder, and this typically manifests through some form of intensity. And you know, you can just ask founders directly, like, why do you have a chip on your shoulder? I think it's a good question And it doesn't really matter the story behind it, as long as you believe that it's motivating them to the point where failure is not an option. And hopefully that resonates with some folks. Moving on from founders, because we've spent a lot of time here, the second thing, and interestingly, Peter Thiel, who leads Founders Fund, he spends a lot of time writing about this actually. Can this become a really big business? Peter's book, Zero to One, I encourage you to read it if you haven't. Is this business, the Monopoly business that is a British food restaurant in Palo Alto and the only British food restaurant in Palo Alto, it's probably not going to become a really big business. Now, I think it's totally fine and almost standard to begin with one segment of the market and expand from there, innovator's dilemma approach. Brex started as the first corporate card for startups. That's a pretty narrow market. But evidenced by the Wi-Fi password, had ambitions that were far greater than being a corporate card for startups. But again, like this concept of can this be a really big business either in its current form or sort of where the founders expect it to evolve? On both of these, I think there are some signals that you can look for to help both of these, being the founder quality and the ability to build a really big business. You mentioned it, Ben. An obvious one is who are the investors? Investors, if you look at returns based off of who the investors are, they're very lopsided to the best investors in the world. We're on Saster's podcast, Jason Lemkin, certainly in that category. Founders Fund, certainly in that category. You soon to be in that category with your Flexport Fund. The other one that comes to mind is there is data on how the business is performing. How quickly is this business growing month over month? Compare it with others. If you're an individual contributor, ask to see quota attainment. What percentage of the team is over quota? If they've got 10 reps and one of them hit quota last month, that's a negative signal. If 9 of them did, that's a positive signal. Ask what the average commission payout is. Ideally, you want the majority of reps over quota. You want the average commission over 100%. That's a positive signal for how the business is performing. Last thing that comes to mind, it's funny, you and I said before we joined this podcast that we each like, like to talk, um, and I think we're probably proving that. Um, last thing that I'll highlight, and maybe for non-execs, um, there are two things. One is who will you report to? Your manager influences— and this is true for execs as well, um, your manager influences so much from your ability to be promoted to who you'll be working alongside every day, to your everyday happiness level, just like the methodology or philosophy with which they manage the team. And for founders, this is a big part of why the hiring VP is so critical. And for ICs, this must be one of the most important criteria in making your decision. Do you trust this person, your manager, with your career? And just sort of expanding on that, that concept a little bit, which is an important one, which is your career. Joining a company where you have the opportunity to grow your career is absolutely critical. Is the business growing such that you can advance into more senior roles within that business that is growing? You shouldn't sacrifice joining an incredible company where you can move into more strategic and senior positions for like more OTE, more, more W-2 or theoretical W-2 compensation. You should be solving for a business that's growing and will have new leaders that are growing through the ranks within that business and a philosophy that we are going to promote people from within, not 100% of the time, and we're going to do it when they're ready to be promoted. But the idea is that if you join this company as an SDR, as an AE, over the next 5+ years, you're going— if you are good, you are going to leave this business ready to become Julie Harris or, you know, the next VP of sales or CRO at the next Flexport.

Yep. I love that. And I think people underestimate how important your manager is in pretty early in your career in sales. Like, the best sales leaders help you close. Like, truly, like, the best sales leaders are literally listening to your calls. If you're selling bigger deals, they are on the road with you. They see your quota as their quota. A bad sales leader sees your quota as a number in Salesforce. Like, that is the, that is the range of what you're going to get from your manager. Either someone who wants to help you close and will actively be on the road with you doing it, or someone who like doesn't give a shit, sees you as totally fungible and replaceable. Both of those kinds of managers exist and are hiring salespeople right now.

Yeah, couldn't agree more. We've talked a lot about the, the candidate's perspective. Um, maybe we'll finish on anything that we haven't highlighted that a business can be doing— founders, executives— anything that we haven't touched on that puts folks in a position to attract the best sales leader, the best sales reps in the world?

Yeah, I mean, one is simple, but it's unbelievable to me how many companies don't reward sales with equity. And this is probably less true at the executive level. You know, sales leaders tend to do very well. But we found we had incredible retention at Flexport when we paired career progression with meaningful equity grants when people progress in their careers. Like, it's, it's very hard to give people big equity grants when they join as sellers because there's just such a high failure rate. There's so much variability in outcomes. It's just hard to know what a seller's worth when they come in as an SDR in particular, and in many cases even as an AE. But if someone proves their worth, if someone shows that they are a top performer, if someone proves that they can be a hiring manager, if someone proves they can be a day-to-day leader, rewarding them with equity And making sure that they have real skin in the game for the long-term success of the business, that's the number one thing that I think companies get wrong about sales. They see it as every salesperson is coin-operated, totally not true. Salespeople are very smart for the most part, at least the good ones. They can do the math on deferred compensation in the form of equity versus high-tax compensation today in the form of cash. And I think companies that use the equity lever In particular, over the next 2 to 4 years, while belts are going to be a little tighter, you know, venture capital is not flowing as quickly as we might like. If you don't have cash to incentivize people, you have to use equity. And I think companies have to think of sellers like they would any other super scarce role like engineering talent and incentivize it with equity. So that's like, if I were, if I were a hiring leader right now, the number one thing I'd make sure my company was doing for sellers. The other thing is, it's so hard to stand out. Like, there's so many freaking companies now, like, in any sense, like, You didn't have to be as smart as someone has to be today to pick Brex when you did. I didn't have to be as smart to pick Flexport. YC was smaller. YC was more able to identify the Flexports and the Brexes as breakouts. Paul Graham had already identified Ryan and Flexport as a breakout from YC before he went into YC. And you know that because he got called on stage at Startup School by Paul before he was officially accepted into YC. So in many cases, I think the world was just smaller and it was easier to stand out as a company. Today, you've got to do whatever you can under the sun to stand out. I think one is raising from tier one investors. Two is riding the wave of PR. One of the lessons we learned from— First, this guy, Roy Bahat. Roy runs Bloomberg, which is Michael Bloomberg's philanthropic venture arm. So it's a big venture arm, but all the money goes back into the philanthropy. He basically told us, "Look, no one gives a shit about you or your story. No journalist wants to write about Flexport." Now, this is way back in 2014. He said, "But what they do care about is whatever the current thing is." This is Marc Andreessen verbiage now. Back then, it was like, "Whatever the media is obsessed with that week, that's all they're going to write about anyway. If you want them to care about your business, you've got to find some way to attach yourself to the current thing. You can't try to make yourself the current thing." It's literally impossible. I think that's the number one mistake, you know, first-time founders or first-time marketing leaders make is they try to get the world to care about them. When what they should be doing is trying to attach themselves to the thing the world already cares about. So if you are a founder, I think your homework tonight is to go home and think seriously about how your company relates to whatever the world is talking about on Twitter, on Instagram right now. And if you can't think of it, okay, bad luck, maybe right now there's nothing for you to latch on to. But I think in general, there's always sort of something. And another hack that we learned hilariously from— actually, I shouldn't say because I don't want to betray this. It was from a celebrity. They effectively told us if there's nothing in the current media cycle for you to talk about, the one thing that's always acceptable to talk about is your good deeds. So it's like, it's one of those funny things in life, like where if you do good, the universe really does reward you. If you have a philanthropic arm, if your company does something that makes the world a better place, it is the one thing that is acceptable to talk about. And then potentially you can self-promote and not have people totally hate you for it. So I think like the two lessons things that Flexport drew. Like, when Flexport built this enormous.org arm that does incredible work, uh, and I don't think the idea ever was to sort of attach it to the media cycle, but it is unbelievable how positively people perceive you if you are doing good in the world. So yeah, that sort of is the— if I were a founder, those are the things I'd be thinking about.

Lots of interesting points there. On the first one related to equity, the thing that's going through my mind— and Jason has a number tweets and posts and talks about this a lot, just this concept of like, you're almost certainly overpaying your worst employee and underpaying your best employee. And like, give your best employee a raise now.

Yeah.

Do it today. Like, make sure those people stay. And that can come in the form of equity, that can come in the form of, you know, career growth and title and whatever else. But it certainly like resonates with me within sales, Sales, I find that to be very true, and I'm sure it transcends other departments as well. And as you're talking about this, like, you know, make your company relevant with what is, uh, already relevant, or associate your company with what is already relevant— you talked earlier about Ryan doing the tour of the ports. Like, you know, that was a real blessing for Flexport that, uh, the hottest topic of the month, or, or maybe even year was this concept of like supply chain and, uh, shipping being backed up and the prices of it? I mean, like, man, was that free advertising or something like that for you guys?

Well, and Brian, this is really— he had been practicing for this moment for years. And I mean, but what I mean by that is he had been, for years, he had been the most generous human in the world with journalists, you know, when there were lesser stories. Like, for instance, like when we first started Flexport, Hanjin, which was a big shipping line, collapsed, and it left people's cargo stranded all over the world. If you were Nike, if you were any major Fortune 100, you literally didn't know where your stuff was. It wasn't clear who owned it because it was a vessel that had a Liberian flag that was owned by the Korean government. It was like, who knows who's actually going to take possession of this cargo at the end of the day? It was hard to understand the story, and it was hard if you're a journalist who's not from this world to understand what's going on. Ryan just spent hours showing people how to track vessels, walking through maritime law, just giving and giving and giving, and in many cases getting nothing out of it, or maybe getting a minor one-line mention, Ryan Petersen, one-line quote in a story. But it all culminated in, one, the Forbes cover last year, but that was ultimately the culmination to your point of him being the face of the port crisis and the COVID shipping rush. So it's like, yeah, a lot of these things are long game. Like, you're building a startup, as you know, it's like, it's a 10-year play. And I think, you know, Ryan laid the foundation for our PR strategy in years 0 to 4, and then it just started paying off enormous dividends in years, call it, 5 through 9.

Very cool. I'm going to flag one fairly tactical thing, and then let's wrap. The thing that comes to mind that I see folks make a mistake on, and you have to remember, when you're hiring, especially individual contributors, many of these folks, they're living month to month or close to month to month. Like, they don't have a bunch of reserves, and they've built expenses such that they're living nearly month to month off of their full salary— salary and commission, or base and commission. And so joining a new company as a sales rep can be daunting and potentially prohibitive in joining based off of the structure of the, the compensation during the first few months. One thing that we did at Brex, and that I suggest for founders, especially in the early days as you're hiring like the first couple folks where it's unclear what revenue contribution is going to look like and they're taking on a lot of risk, you can really de-risk that through either, um, you know, you're hiring your first 2 sales reps put them on a draw for 60 to 90 days. And a draw means pay them their full commission. If you're paying somebody like $150,000 a year, that means that their commission is going to be $75,000. That means each month they're going to be making something like $6,000 that you're going to draw them. And so in total, if you draw them for 60 days, that's $12,000 per rep. It's not going to break the bank and it can be the difference between hiring an incredible person and not. Sort of like continuing along with that methodology as the business grows, we had a ramping quota, uh, during the rep's first 3 months. And if the rep hit the ramping quota, they received their full OTE, so their full commission, during those first 90 days. Now, they couldn't exceed it. You couldn't have, you know, your first month is 10% of your fully ramped quota. If you get to 100%, you don't make 10x excess, your full— right, your full commission. Um, you were capped at 100%, but it made it so much like they didn't even have to think about it. Um, yeah, again, I think folks underestimate the importance of this for new individual contributor sales reps that, uh, don't have, you know, meaningful savings to get through this period that is the, uh, new hire ramp.

Yeah. And did you do it as a traditional draw where the rep effectively had to pay it back out of their future commissions? Once they were quote unquote ramped, or did you do it as like a more generous version of a draw where they just were basically at 100% while they were ramping?

You're getting too technical on me, and I may be misusing the draw language in its purest form, but the way that we did it was we had a ramping quota. Yeah, you attained that ramping quota. You received the full commission during the onboarding or ramping period. You did not.

Okay. Yeah, so that's it. This is, this is exactly what we did at Flexport. And what's, what some old school sales ops leaders explained to me, because I also didn't know this, is that in the, in the old school SaaS, and I think it's still in some companies, they actually make the rep effectively bank what they've been overpaid. And then once they're at full OTE, it comes out of their future commissions check. So it's a— which I hate. I was like, nothing is less motivating to me than the idea that the moment someone gets really good at their job, they make a little bit less money for a while. Like, it should be the opposite. So we never did it in Flexport, but when you said draw, I was very curious if that's what you guys did.

Yeah, the, the— what you just described, what comes to mind is like a little ticky-tacky. I don't need a loan. Like, I, I just want to make the, the amount of money that I have, uh, become accustomed to making and is sort of like market for my role. Something like that. Ben, awesome to see you. Uh, we, I'm sure, will hang out sometime very soon. Looking forward to that. Thank you for doing the pod today and let's catch up soon.

Wonderful to see you. Thank you for having me.

Hey everybody, it's Jason Lemkin from SaaStr and I wanted to invite you to the first ever SaaStr APAC 2023 in Singapore, February 22nd to 23rd. We'll be right in the heart of everything. We'll have almost 1,000 SaaS founders, executives, and VCs Sequoia, Accel, Bessemer, so many leaders. We'll have 2 stages, over 100 mentorship sessions, dozens of unicorns and top speakers. It'll be great. I'll be there. The whole Saastr team will be there. And the first time we do an event, it's really special. It's really the most fun of all. So if you can make it, saastrapac.com, Singapore, February 22nd to 23rd.

See you there.