CRO Hiring Potholes & The Shift to RevOps with Mark Roberge

Hi, I'm Warren Zenna, founder and CEO of the CRO Collective, and welcome to the CRO Spotlight Podcast. This show is focused exclusively on the success of chief revenue officers. Each week we have an open, frank, and freeform conversation with top experts in the revenue space about the CRO role and its critical impact on B2B businesses. This podcast is the place to be for CROs, sales and marketing leaders who aspire to become CROs, and founders who are looking to appoint a CRO or want to support their CRO to succeed. Thanks for listening. Now let's go mix it up. Welcome to this episode of the CRO Spotlight Podcast. This is Warren Zenna, the founder of the CRO Collective. And I'm particularly thrilled today. I've got Mark Roberge here. Mark is, you know, everyone knows Mark. He wrote the book on the CRO role. Matter of fact, it was one of the first books I read about this role way back, his first book on HubSpot. And I thought, wow, what an amazing book. And he recently came out with The Science of Scaling, which is another amazing work. You should definitely read it. It's really interesting. And it lays out a really amazing codification of the way that the scale modality is gonna be looking in the next year, and he's predicted a lot. And I'm really glad he's here because there's so much you wanna talk about. And Mark, thank you so much for coming. I really appreciate it.

Thanks for having me, Warren.

I'm obviously very familiar with, with Stage 2, and it's really amazing. In fact, I spoke to one of your analysts about 3 years ago. Really smart guy. You could probably understand why. Really smart people there. And my, at the time, I would still think, and believe me, this is just weirdly opportunistic.

Yeah.

Is I was like, you know, whether it be stage 2 or a PE or whatever degree to which the CRO readiness idea is something that's codified as part of a due diligence model. When you bring on a new organization, what's the point at which we are able to create some sort of set way that we determine when a company is ready for a CRO, how the CRO and founder look at it that way so that they're building towards that future because we see the chief revenue officer role as sort of an inflection point in the maturity of an organization. And that when they bring one on, they're really ready for a different type of model for the company to be run that's different from startup and more going from the $50 to $100 million. So I'd love to get your thoughts on, like, how do you think about that?

Sure. Yeah. Yeah, that's a great question, Warren. And I've lived through it honestly, intimately in hundreds of companies, both between investments and independent board seats. A couple of ways I'd frame it. The first one would be the scale that we're at. The stage that we're at. And you know, we can go all the way down to grassroots. Like literally we don't even have a product yet. I know that's less applicable to your audience, but let's just like create a foundation there.

Go there. Yeah.

Like you, you could hire a salesperson. Like it's not crazy. I mean, if you're the best programmer in the world, you shouldn't be like spending all of your time setting up meetings with prospects and trying to figure out what the market wants. It's probably advisable to go Hire someone if you have the capital to go, and that's their role is to go out and have 10, 15 conversations a week, maybe more. Maybe bring you into some of them. So there, there's a first question of like, should I even hire someone there? And it just depends what your strengths are and your preferences and your capitalization. I think the biggest mistake there is the number one salesperson at Workday would be the worst hire ever. Then, because they, they like, when they joined Workday, they went through a month of training, all the objection handling, the battle cards, the discovery call guide, the persona information. Like, they had a manager that held their hand after. You don't even know what you're building, right? So like, you always need to align, especially at these stages, with the go-to-market hire, with what you're trying to achieve as a company. And at that point, you're trying to find product market fit. And so one of the most important skills is for that person to go talk to 15 potential customers a week and distill the results and communicate them to the product and engineering team.

Yep.

And that is not the number one rep at Workday.

I agree with you.

It's not. So, so that would be if we go all the way to grassroots to consider. Now let's say, let's fast forward and now you presumably have product market fit, which I define as like you're, you're confident that if you sign up 10 more customers this quarter, they'll see the value in your product. That's what I think of it as.

Okay.

Got it.

Got it.

Now we have to build go-to-market fit, which means like all we know is if I sign up 10 customers, they're gonna see value. I don't know if I can acquire and serve those customers profitably. That's when we have a business. And so now we need to work on that. And the next north star on the go-to-market side is build the first process, right? So like if I go find like, um, a sales director or manager from Salesforce who started there 5 years ago, unlikely the right person.

Agreed.

Like, they started when Salesforce was 25 years old. Like, they took a process or whatever. If I go find someone that was sort of like in the first 2 years at Zoom or, you know, let's see what's something like Harvey that's taking off right now.

Mm-hmm.

That's probably my person. They probably were involved in some of the process development, and I can take 2 or 3 reps and, and build them out. Um, and so like at that point, there's a, there's a tough question that you probably get sometimes, Warren, is like, okay, should I hire 2 or 3 salespeople or should I hire a sales leader? Yep. And part of that depends on your capitalization. Ability, like, because like if you, if you go the leader route, you're going to have a pretty significant investment cash trough because you have to hire that leader that could cost like $200,000, $300,000, $400,000. They're going to have to hire some salespeople that are going to cost like $150,000, $250,000 each. They're going to take 6 months to find and ramp at least. I mean, you're talking about pretty significant cash trough.

Yep.

So if you can afford it, yeah, we can go for that. Or you can just hire one or two salespeople directly and that just limits the cash trough. Part of that again comes down to your context as a founder. Have you ever managed a salesperson before? Or are you like the best programmer out of MIT?

Yep.

You know, so, so that's, that's part of the issue. So I'll stop there, Warren, if you, you know, or we can get all into the CRO level. Yeah.

Let's talk about that stuff cuz it's really helpful. So. You know, first I would say to you, yeah, we see this a lot, right? We see a lot of people say, I got, I got this guy from Salesforce. We're sort of pumped. First thing we think is, well, I mean, I don't understand what you're thinking about. You know, I think in a way, like that great scene in Jaws, you know, when Quint, you know, grabs Hooper and says, show me your hands. You know, he wants to see if he's got calluses on his hands.

Right.

Right. Because he's like, did you do this before? You know, like, so you sort of have to grab the hands of the person you're hiring and see that their fingers were on top of a lot of stuff because they're gonna be, you know, and I think that's really not the shiny object thing. Getting somebody from, you know, you don't get osmotically brilliant because you worked at a company. You get brilliant because you did a lot of shit yourself and you figured it out. Right?

Yeah.

And so, you know, you know that, right? You did it at HubSpot. You kind of built it from ground up. And you need that. So you're correct. I think stage appropriateness is important. And I do think this is sort of weird. I think there's an aspirational thing with founders are like, well, I wanna be this one day.

Right.

So if I hire somebody who's like who I want to be one day, they'll make us like them. And it's like, no, you have to find someone who was once like you are now, and they got you there. That's the right person.

I think that's the interesting part. And the investors make it even worse, Warren, to your point. It's so huge that you're out there like talking about this because I watch it. I'm in the boardroom and they're like, okay, we're at $700,000 in revenue. The company has 11 people. 10 of them are engineers. And like, they did great. They built an awesome product. The customers love it. There's a huge moat. They started at zero 6 months ago and they're at $700K. And, you know, someone comes in and says, here's $8 million, here's an $8 million Series A. Now go hire a sales leader. And by the way, Go find someone that took something from zero to IPO.

That's your person. That's a guy, dude.

That breaks for a variety of reasons. One, that person's job right now is managing a 1,000-person team. They haven't done the job you're hiring them for in maybe a decade.

Yep.

Issue number one. Issue number two is why does this make sense for that person in their career?

Who would want that job?

Who would want this? You're gonna have to grind. And so the, the gem, the gems. They're almost got it. The gems are go higher than number 2, 3, or 4 in command.

Yeah.

Maybe that were there early. Because now they have something to prove. They've never been Sierra. They've never run the sales team. They have something to prove and they've, especially if they were there in the early days, now you're getting closer to someone that's gonna work out.

Yep. So it's great. So, uh, spot on. And we, we see, I agree. We see this a lot. We see this a lot, and I think a lot of it is a lot of, you know, we refer to it as like the Tesla in the driveway sort of thing. You know, I want one of my neighbors to drive by, you know, if the right car's in the driveway, they'll have a perception of us in a way that I think matters, which it probably might at some clubs, country clubs, but at the end of the day, it doesn't matter at all. But there is a lot of that, you know, and I think the other part of it too is I think too, people sort of want to hire people that either they want to be like or that they feel are like them. And so if I've gotten to a point where I have a certain level of battle scars or I have a certain credential or I work at companies that have certain names or have a certain market cap, I want to be around people like that. And so I'm going to hire them as opposed to the guy who's got clam sauce on their hands because they're opening, shucking all day. But that person is probably better for what I need right now. I do think there's a lot of human stuff here and it's not talked about enough. So if I'm interviewing for a job, I'm inquiring about what these people's sort of worldview is about how do they view the way that they bring on people. What are the decision-making matrix that you use when you bring on a person to bring to a job of this type at the stage you're at? And that's gonna tell me a lot about the way that you think and whether I'm gonna fit in here or not. The second part of it too is from an organizational perspective. How does an organization, in your opinion, evaluate a CRO when they bring one on? Like, what do they think one does and how do they look for one? And what's the common either successes or mistakes you think they're making with that particular job?

Yeah, I mean, as you were talking, I was like blaring in my head a very common one. And I probably, in my annual experience, is most, um, seen and exacerbated is when I teach Exec Ed at Harvard Business School. So to paint the picture, it's a room of like 80 people, very accomplished individuals from all over the world, you know, and usually they're there because they have just been promoted into a GM role or president role of a large organization.

Gotcha.

And so they probably, most of them didn't come from go-to-market and now they are found themselves in a seat. That oversees go-to-market.

Yep.

Um, which is probably parallel to some of the founders we're talking about too. Yeah. Right.

For sure.

And I always say, what do you look for in your salesperson? What do you look for in your sales leader? They always say the same thing, which is 10 years experience in my industry, which is exactly what you're saying, Warren. It's like, so then my next follow-up question is, well, why do you even have to do an interview? Why don't you just look at their resume and hire them? Yep. Right. And they'll say something like culture fit. Right. And then, and then I show this study. I bring up this study of rigorous study of like hiring leadership success. And the whole point of the study shows that there's the biggest pothole is hiring exclusively for your industry experience. Right. To, to your point, it's like they fall in love with a brand. They fall in love with a resume. Now there's nothing against, like, listen, there's a lot of, like, in tech these days in the Valley, a lot of people love to hire folks outta Stripe. Great. Stripe built a great company. And that's gonna work in certain contexts, like depending on where that person joined the Stripe group, what are you hiring them into? Except you may get lucky, you may not, whatever. They, they certainly learn something very strong there, but like, you need to start with the organizational context and needs that you have today. And that, that's the problem that a lot of these folks have is like, you and I might look at it and say, okay, these folks are moving into like upstream and they need, they need to really uplevel their game around medic discovery and account-based marketing demand gen. Those are like foreign words to like someone that came from product and we know how to assess that.

Yep.

And that person, if I'm working in health tech, could come from industry, industrials. It's a lot easier to teach someone the nomenclature of my product than it is to teach them how to do medic discovery. Yep. It's like, it's like saying like, okay, you're about to hire a Java programmer. Would you like to hire someone that has 10 years of experience in your industry who was building websites with HTML and teach them Java? Or would you like to like hire a Java programmer that was writing code for a bank and teach him about your industry?

100%. Yep.

So, so that's the biggest problem, I think, you know, I agree.

I, I hear, here's the thing, I think it's, it's just a couple things that are going on there. If I would somewhat maybe talk more psychologically here.

Yeah.

So one is, we already discussed it, some, somewhat of tribalism. Right? There's this sort of idea of like, I want you to fit into my world and relate to me. There's also a degree of myopia, which is like, I see the world one way and I need someone that sees the world the same way. There's some of that. Then there's also risk aversion, which is like, okay, so if I hire a person based on my prescribed parameters, it's easier for me than if the person doesn't work out to say, hey, look, this is my criteria. What do you mean? I, how much more could I do? I mean, they had the experience I was looking for. They worked at a great place. Sort of like, not my fault, you know, as opposed to like, what did you do, Steve? You risked your ass on this person that never worked in our industry before. Are you stupid? Of course it wasn't gonna work out. So I think there is a bit of that too. Sure. There's like this perception that I'd rather be able to more easily justify what might be considered to be an orthodox hiring parameter than one that everyone is gonna just sort of like superficially naturally agree with because I sort of wanna fit in. There is this, there's no question.

You know, so yeah, can I, can I just, I think that's such an important point, Warren, is like, because people, another pothole is people define like who's going to be involved in the selection process at the beginning. Like, okay, we're going to hire a CRO. And then the next question is like, okay, who's going to be in the interview process? And it's like the CEO, of course, there's a board member involved. the head of marketing as a peer might be, maybe we have some advisor. Okay, that's the group. What is not— there's not enough effort put into aligning at the beginning of what we're looking for. Um, because you waste, you waste like months servicing this candidate. You're going through like 20 conversations, largely led by maybe this recruiter and the CEO. You spent, at the end of the day, you finally found someone that you've now spent 8 hours with. You flew out, had dinner with them, and now the board member has to like interview them. This literally happened to me last week. And the board member was like, I don't approve. And we're like, why? And they said, they were just meh. They didn't wow me. They had all the right answers, but they didn't wow me. That's dude, that's what we're dealing with.

Yep.

What a waste of time.

Yep. It's crazy. What do you mean?

Wow. You, and now I have to like fulfill, and this person's worked in finance their entire career. Like never, never had a team, never closed a deal outside, you know, it's like that. So the point is like, you gotta get upfront of like, what is the criteria? What are the questions we're asking? So we don't waste this time. And if at the end of the day we're like, they were met, like, let's put that in the attributes then. Let's put that in the hiring scorecard. What do you, can you write me 3 sentences on what met is? So we know what we're looking for and we're aligned.

Hey everyone. I want to thank you again for listening. Get great comments across LinkedIn and other channels about the show and it's Really, it's gratifying to see that we're having an impact on you. Another thing I wanted to let everybody know is that we also produce events. About 2 and a half years ago, we started these CRO roundtables predicated on the idea that, well, two premises. One is CROs are looking for other CROs to talk to, which is really true. It's a very lonely job. How do we get a bunch of CROs in a room where they're not being, let's say, disintermediated by panel discussions and sponsorship events and demos and stuff, and really give them a chance to talk to each other. So we created a roundtable event that is essentially that. It's a 3.5, 4-hour discussion between 20 and 30 chief revenue officers. And these are amazing events. The format took off, people love 'em. And I get requests all the time as to when is your next CRO event. So to that end, I just want to let y'all know that we have a number of roundtables coming up over the next year, over the next, like, 2026, and I want to share them with you so you can, if they're in your market, you can come. So the next one we're having is going to be in London, actually, in February, February 24th in London. So if you happen to be a chief revenue officer in the UK or even in Europe and you want to come by, You'll be hearing about it more on my website and my— and LinkedIn, but put it on your calendar. And then following that, we're probably going to be doing an event in San Francisco in March. There's going to be one in New York in March. I'm going to do another one in Chicago probably in April. And then I'm going to do an event in Boston. I'll do an event in Atlanta. I'm going to do an event in Salt Lake City. I'm going to do an event in Austin, and I'm going to do an event in Los Angeles or the Southern California area. So those dates are to be determined, but they'll be going across all, all next year. And these events are taking on huge momentum. They're the place to be if you're a chief revenue officer and you want to be in a room with no interruptions and have an opportunity to really share with each other in a sort of a private and confidential open discussion about everything that you want to talk about as a chief revenue officer and collaborate with great people. So thank you and thanks for supporting the show and I look forward to seeing you at the events. So I love it. And you're right. And here's the thing I think about that in what we see is the fact is they don't know what they want. So this is the problem, right? It's not, they're not aligning on it. It's that they don't know it. And so it's an opinion that has a lot of different viewpoints on it, right? So, so what we're, we're trying to do, and again, I, I really, I'm very clearly intentionally not trying to make this self-serving, but, you know, it's a perspective that we have. It's that we, we agree with you, right? That you first have to know what you're looking for and not just what you're looking for. More importantly than what is why, like, why do you want the person like that? Like, what's the way in which this, let's call it this piece of equipment that you're going to purchase, this like, you know, half a million or a million dollar piece of equipment you're going to buy. What is the outcome that you want this to produce as a result of the investment? What's the— what is it? And if they say something like, well, we need more leads or we need better account management or we need better pipeline, you know, okay, I would equate those outcomes to being someone who runs a sales organization as opposed to someone who oversees and builds a revenue engine. It's a different thing. So why are you looking for a CRO, which is another conversation you and I should have in terms of the definition of one because it's an important conversation. Ours is very strict. It's like someone who runs a revenue operation, like builds the system, not someone who runs a sales organization. It's a different thing. So we can get into that. We actually need to get your point of view on it. But my point is that they don't know. So what we're trying to do first with that CRO readiness part is what you said is, what is it that you're trying to accomplish with this hire? What's the outcome?

Beautiful.

And be more specific. Like the answers you get sometimes, like, well, we want the business to grow. You know, like, okay, it's not a very good answer. It's highly unsophisticated one, but be more specific. What do you mean like by that? And then we can get to that. Okay, fine. So then what are the attributes and qualifications that would be needed on that person's profile to hire that person? What do you need them to do? And then if it's meh, it's like, yeah, but look, they got all these things. So meh no longer has as much weight anymore, but you have to get pre-meh, right? Before to get to meh. That's the whole problem. And I just don't see a lot of this happening because two things. One is, again, the definition of the role is really undefined and loose. It's like tofu. It can taste like anything, unfortunately. Number two is there isn't a great deal of agreement on its scope, mainly because the authority and autonomy that a CRO really needs is something that people are very reluctant to give away. So I'd be curious to know what your thoughts are on that as well.

Yeah. I think you're ex— exactly right. I mean, I think that's what we're talking about is like when you, when you walk it through, it's so intuitive to say like, what are we trying to achieve? You know, same with like comp plan design. Like everyone's like, oh, let's just copy what Salesforce does. You know, it's like, no, let's start with the CEO office. What are we trying to achieve? And can we incent that in the rep's behavior through the way they're paid? And I think you're absolutely right, is like, why are we making this hire? What are they hoping to do? And then that naturally, you know, gravitates toward the assessment criteria. That naturally leads to how we're going to assess them. And that naturally leads to a pretty good definition of what each person's role is so that we push candidates through and don't waste time interviewing someone who's just gonna get shot down at the 2 months later at the final you know, interview. So it's just like, it's so intuitive and it's just, people hear like, oh yeah, yeah, sure. And then like, it's really hard to stay disciplined to that.

It is.

But you gotta do the work up front to stay aligned and to make sure you don't waste a ton of time. I always challenge my founders and CEOs. I'm like, okay, unfortunately, sometimes, you know, unfortunately it's like, okay, time to make a move on the sales leader. And so we have, you know, sit them down and Sorry, we're, we're going to make a change. And that just happens to everyone. It's like coaching football in the NFL. Like everyone, even the best get canned and you have to move on. Um, and then now it's like, okay, we got to go find someone else. And they always have like, the CEOs always have like way too optimistic timelines. They're like, I'll have this person in seat in 6 weeks. I'm like, dude, if we interviewed someone tomorrow for 8 hours and chose them, they still won't even be here in 6 weeks. They're going to have to give 3 weeks. 2 or 3 weeks notice, then their spouse is going to want to go away for 2 weeks with the kids to take a break. You know, like you're just not going to get them. I mean, if you crush it, this person will be in seat in 2 months. And if you suck, we're going to be sitting here 8 months later and we still don't have the person. And that, that puts the pressure on them. And then they start to see how hard it is because of the process you just outlined, Warren.

Yeah. So precisely. And I would be curious to know, like, again, Assuming, I don't know, I don't make the assumption, but I, for the purposes of this question, I'll make it. You can correct me if I'm wrong. And that is that, you know, the CRO is more of a transformative role. It's someone who is really running a larger transformational change in the organization as opposed to someone who's just running a function, right? And the reason why we feel that way is there's a lot of reasons. The main one being is that you ultimately need one. You need someone whom is ultimately going to come in and say, okay, This organization looks like it's on a tear. You're at $50 million. You've got a really good business. It's robust, but there are a lot of issues with it. And if you want to be at $100 million, it's, you're not going to do it this way. You're not going to, you're not going to get there the way you've been doing things. You need an architect to come in and know how to reorganize things, which means that person can't be worrying about quarters as much as they're really worried more about like more larger organizational shifts and structural things. The problem is, and I just had a conversation just literally before this call. Before this conversation, sometimes what I'll do, and I'm, I'll kind of admit a little sneakily, I get, I get inquiries sometimes if people want to hire me as a chief revenue officer, and I take the interview because I'm interested in hearing what, how people hire.

Yeah. Nice.

So I get on the phone with this one guy, really great, nice guy. And they're telling me about the situation without getting too much detail, but basically it's, it's very common where they want someone to come in and help fix the sales function because it's broken, but they really need a CRO that's going to build a better system. So they want sort of like a dual role. They want someone to do two things. And, you know, I was trying to explain that I understand that you want that, but one's gonna win and take a guess which one's gonna win, right? Which, which of those two things of those priorities are gonna win? It's gonna be the sales function's always gonna win 'cause it's the more immediate need that people have. So I'm just curious, like when you're thinking about the role itself and when to hire one, you're advising all these companies that are in your portfolio. I don't know to what degree this happens, but what would you be saying to them about the way they should be looking at the timing and how to bring one on properly?

Yeah, it's great. I think I'm gonna learn from this too, because I think you think about it more than I do, but I'll give you my answer and then you can evolve it for me and the audience. Um, so I guess the way I've looked at the CRO role is it orchestrates every aspect of the go-to-market system. And I think, um, we have to use the word go-to-market instead of sales here because oftentimes when we think about sales, we usually are talking about the meeting to the customer close.

Yep.

But the go-to-market is, it's marketing, it's sales, it's sales engineers, it's SDRs, it's customer success, it's customer support. Um, it's all this stuff. It's RevOps. A big, big important part too, right? Huge part of it. So let's just like, let's just talk about like 4 basic silos of like, you got marketing who probably plays a major role in the demand gen. You've got sales that's taking the demand gen, turning them into customers. You've got customer success that's onboarding customers and, and renewing them and expanding them. And then you have RevOps that's like owning the tech stack and the systems and process, right?

Yep.

And so usually when I'm advising a CEO, I'm like, well, do you come from sales or go-to-market? Because if you're not, you have a choice not to hire a CRO, but if you do that, you're partially playing CRO, which is each of those functions is going to solve what we call the local maximum, right? They're not going to solve for the company's revenue growth. Marketing is going to solve for like getting as much demand as possible. Sales is gonna solve for getting as many customers as possible. Customer success is gonna solve for getting as much retention and expansion as possible. And it very quickly be— people don't look at that holistically. And so if you wanna be CEO and not hire a CRO, you have to do that cross-functional management. But that's really what the CRO does is looks at more holistically, and I think to your point, Warren, that those 4 individuals running those silos are not going to— it's gonna be very difficult for them to bring you into a new market. It's gonna be very difficult for them to add a new product as a team. It's gonna be very difficult for them to expand your TAM through some new demand gen channels, because again, they're all focused on their function. Yep.

100%. You said it better than me. I appreciate it. And you're right. And this is the issue though, is that requires an incredible leap, which is a couple things, right? You already, we already went over, which is, okay, so now I have to completely change the way I think about the profile of this person, which is what I thought I wanted, mainly being driven by a lot of immediate needs that we have, which are being driven by a lot of economic factors that I need to deal with. And the other is, you know, I sort of really have this thing for CROs really being like salespeople or sales leaders because there's an element of that that I want that person to to have. But you and I, I know we agree that it's really more of a RevOps customer experience person than a sales leader is. Right?

It shifted in that direction. Definitivamente. The first 10 years, I always advise make this a former, you know, VP of sales that wants to get promoted up. And you still see that a lot. Because it's, I don't know. I don't know why that was. It was probably like, if you had to choose between having A+ in one domain and God forbid you had to settle for C+ in the others. So it's like you had A+ marketing, but C+ sales, C+ CS, or C+ marketing, A+ sales, C+ CS, or C+ marketing, C+ sales, A+ CS. If you had to compromise, I think you'd you'd probably be okay with the A+ sales and the C+ on the others. And now it's shifting to your point toward, you know, RevOps and CS. You're seeing your first generation of very successful CS leaders get moved up to RevOps, which is nice because it— that's ultimately who has the best local maximum is solving for the customer success and let marketing and sales serve that.

No question about that.

Yeah, and I think we're on the verge of a massive movement toward RevOps in this AI world, uh, because the potential of excellent tech stack data and process can make a C+ team perform at an A+ level. So I think we're going to start to see that trend.

Thanks again for listening to the CRO Spotlight podcast. We're excited about all the great guests we have, and more importantly, we're excited mostly about you. For being avid listeners and supporting the work that we do here. Feel free, please, to share the CRO Spotlight podcast with any of your colleagues. We just think there's a great wealth of information here and want to get the word out to as many people as possible. And your, your support of the show is really appreciated. I wanted to share information about a program that we offer called the CRO Masters Council. The CRO Masters Council is a bimonthly group of 6 seasoned chief revenue officers who are looking for a Chief Revenue Officer board of directors, so to speak, that they could share what's going on with them, collaborate with ideas, get some feedback on what's going on in their current role. And, um, these are great conversations. I facilitate them. The CRO Masters Councils, again, they're twice a month and, uh, they last for at least 6 months to a year. So if you're interested in having your own CRO suite, your own board of directors of Chief Revenue Officers, it's a private confidential conversation that we have. It's infinitely useful. Imagine having a room full of other Chief Revenue Officers you can talk to and say, hey, I'm working on this, or have you guys figured that out, or I'm having this issue right now with my business or my results. These are just invaluable conversations with Chief Revenue Officers. Chief Revenue Officers have a very, very unique role. It's a very lonely job and only other CROs understand what you're going through. So that's why we created this program. So if you're interested in being a member of the next CRO Masters Council, which we have a number of them being put together right now, just go to my LinkedIn and DM me Masters or Masters Council, and I'll follow up with you and set up a call or send you some more information about it. Looking forward to seeing you there and thank you. I agree. And I would say then that like, yes, my theory that I formulated after doing a lot of work on this is the reason that the CRO was relegated to being a sales leader for so long. It had to do with the repeatable business model that SaaS presented to the world, which is that we can make recurring revenue in ways that we didn't think of before because of software selling and how it works. And so if all of a sudden I know that if I drop a pellet in the marketplace, I'm gonna get back dopamine really quickly. I need someone that can do that repeatedly, and that's a salesperson who knows how to sort of create that repeatable engine. And it solves all problems because churn doesn't matter if I can get enough customers to, replace the people that we lose. So all of a sudden now we got someone who comes in that can build a machine that can create a lot of pellets really quick. And that got a lot of valuations and it got a lot of people billionaires and it created a lot of unicorns without profitability because there was free money. And so this role evolved at a really weird period of time where the needs of the marketplace demanded somebody who was really good at that and could do it successfully and was at given a lot of credit for it. And What ended up happening is that that model is a bubble. There's only 30,000 or so SaaS companies, and people don't realize it's like so few of them, but it creates a big market cap for people. So what happened was money became less free. Now all of a sudden money's not as cheap anymore. And all of a sudden now, wisely, we're looking at companies' profitability and efficiency as more of a measure of success than their ability to get new customers. And so all of a sudden now the customer centricity focus on the sales side is a much more important place. And the sales focus is feeding a machine that grows, not the machine that grows. And I think we need people who are really understanding that better. If I was a CRO today, I'd be looking at my customer conversations to find out which customers got value quickly and can attribute what we did to them so that I can repeat and find more people like that and have marketing find people like that so that I can get people in the customer bucket that are more likely to repeat than just get customers who are willing to pay. It's a different way of looking at the world. And I think that's a, that's a different shift in the way the CRO thinks today.

Totally agree. Totally agree. It's like, it took us a while and I still don't think we're there to understand that retention was probably the most important metric in our go-to-market org.

Yes.

You know, I think we got away with it in the 70 days and 90s in the on-prem world because If you, some of you were around then when you bought software, like when Siebel sold you Siebel, they handed you a floppy disk and said, here, install it. You know what I mean? Like in an exaggerated way, right? And we bought, we bought 50 servers. We put them in the basement of our office. We trained the whole team on it. It took, we hired Accenture and paid them $5 million to set it up and change, train them. And if the software wasn't good, it doesn't matter. You were stuck with it. That's why we had this word called shelfware. Because like people, he really liked the software. It was all about the good salespeople. But it took us a while to realize in the cloud world where, yeah, it's awesome because you could just turn it on. But guess what? You can also just turn it off.

Exactly.

Right. So we're getting there, but we still haven't fully gotten there in terms of like how to truly run a buyer-centric, customer-centric go-to-market org. And these movements of seeing this new generation of customer success leaders being put in the CRO suite is an amazing step in that direction.

Agreed. And I'm seeing like, Ron, honestly, when we first started doing this, we started this company in 2019, maybe like 10% of companies were hiring their CROs this way. I think now it's probably maybe a bit generously, probably closer to 30, maybe 30%. You know, which is a good number. I mean, it's doubled, right? But it's still not really the first way they think. Although I evaluate, uh, CRO job descriptions as part of my daily, I look at 'em to see what people are, and the job description has changed. The problem is the job description's right, but then they don't really live it when they get there. Like they, they look for this on the surface, but when they bring the person on, they kind of still hamper that CRO with lack of authority around things, or they, they they, maybe mitigate their ability to do it by putting them into a functionary position. But it, it's getting better. It's getting better. You know, I'd like to get your thoughts on, what's going— I'm sorry. Did you have a follow-up on that?

No. That's great. I'm psyched to hear that. It is.

It's about 30.

I think it's out of erection all the time. It's great.

Yeah. It's about 30%, I'd say. Again, it's not scientific, but I talk to so many people around 30% of people. Anyway. And the other, I tell you the truth too, you know, it's like this funny statistic. You know, they talk about marriages, like, failing, right? Half of them, right? You know, someone's great guy was talking to this podcast, this divorce lawyer. He's really smart, dude. Probably talks to more, you know, divorcees and divorced people than ever. And he said, you know, okay, fine. So half of marriages end in divorce, but the statistic is that there's still a 25% of the ones that aren't divorced that are miserable. So it's not like they're divorced. It's like they're just hanging on. So it's really like the success rates. I think it's sort of the same thing. I think like we see people hiring CROs properly, but when you look under the hood, they're really not running the playbook as they're supposed to be, that that still needs to be worked on.

Yeah. And I would say like I'll add because this had kept coming up in my mind and I hadn't mentioned it yet, Warren, aligned with some of your commentary is I ran into a woman that was on the faculty at London School of Economics. This was like 15 years ago. I wish I could find this study. I can't find it. Um, but she had basically analyzed, uh, a cohort of like 5,000 companies that had raised Series A funding 10 years prior and analyzed where they were. And of course the stats show that like 80, 80% of those plus have didn't work out. Like they never, they, they went sideways or whatever. And, you know, 20% worked out at different levels and some, you know, 1% worked out at phenomenal levels, right? That's usually the— and so she ran like a, um, she looked at 100 different attributes of those companies, both in this, what they were like at the Series A funding and how they operated through the journey. And I was— there was one attribute that stood out. That predicted success, and that was the CEO's ability to uplevel the team through the journey. Kind of exactly what you're saying. Yeah. It's like, and you hear that all the time. It's like, and you kind of come off as like a prick when you say this stuff, but it's kind of like, you know, you're 2, 3 years in, you know, you went, you know, you had the days when you were like 6 people in a room grinding it. Now you're like, you know, you're at $3 million, the plan is to go to $8 million this year. You got a real office. There's like all the different functions. There's a finance team, all that stuff. And you're just like, I mean, I know our sales leader is not the right person, but like, they were loyal to us. I need to be loyal to them. They got us here. And that's like, that's the beginning of the end right there. And you just have to be, and it's hard to do this and still feel human, but at the end of the day, as CEO, your job, is not your allegiance to that person. It's the allegiance to the mission of the company. And if you, if you're allegiant to that person, like everyone's gonna lose in the end.

I agree.

And so like, if you, you know, there's a couple of different ways to do it. Like there, there are sometimes ways to find other homes for them in the company. Yeah. Usually it's like when they're trying to open up new markets, they're actually a good fit. I don't love it cuz I don't want you to like have a, a cohort of employees that are just like the old, the, the, the has-been folks, not old, but just like the tenured people. It's almost like better just like let them go find the next one that they're good at, you know, but, but that, you know, as you were talking like that, that study kind of kept coming to mind and it's, you're right.

And this is a difficult discipline because loyalty is a really very desirable attribute. You know? I mean, I, I, I look back on my career and I've had my lucky instances where I've had really people who are really loyal to me, and I value them a great deal because of that. And I remember them fondly. But it also occurs to me as now I'm a bit of an old salt now that they might have actually hampered me by being loyal to me because they probably should have cut me loose and let me go do something else. And, you know, maybe they let our relationship get in the way of things and it wasn't good for either one of us. And, you know, this is a very, very mature way of looking at the world, but you sort of do have to look at it that way. And, um, you know, if you see Moneyball, you know, the way, you know, Billy was able to take somebody in a room and go, look, you know, we're, we're trading you to the Yankees.

Right.

Here's your paperwork. Call Martha and get up and walk outta the office. You know? And it's like, you know, man, like you gotta respect someone who knows how to do that because they're looking out for what their job is, which is they're putting together, they're trying to put together a team that works. And it's not easy. It takes someone who has a lot of balls. But the reality is that, yes, it's, it's, you know, holding onto a bunch of, of, of people could be a bad thing. And I think to the point why this conference, why it's relevant to this is that the, the CRO role is a very disruptive position because it displaces a lot of other people who own those functions, whom are now gonna have a boss that they didn't have before. And if you have too many sacred cows in the organization for whom that might be uncomfortable, you may not bring that person on and give them the authority they need simply because you don't want to upset other people. And that's the wrong reason to do this. That doesn't make sense. It feels good and it looks good, and there's no question about it that someone will feel better. But you just hampered your business by crippling your chief revenue officer, not giving them the authority that they're supposed to have because you're worried about hurting someone's feelings. That's not the way to run a business. It's cold. But it does matter.

You look at all the pro teams, is it's rare to find people on the bench that are still in that major league team, let's say in baseball, even because they bet they batted.350 8 years ago. Yeah. Have since then hit 1 home run a season and broke.200. I mean, sometimes you get the respect of that, like, you know, let's just pay him for 2 years. But like, that's very, very rare. Like, you always have to make the cut and you always have to reprove yourself every quarter.

Thank you so much again for listening to the CRO Spotlight podcast. This podcast is an important plank in the CRO Collective communication strategy, and we're really thrilled to have such great guests on here. So listening and sharing the podcast with other people is really vital because we want to get as many people listening to this great stuff as possible. Couple things to note, uh, if you're an aspiring CRO or a recently hired CRO or even an old salty CRO and you're looking to either become a Chief Revenue Officer or improve your chops and gain some more insights and improve your competencies as a Chief Revenue Officer, we offer the CRO Accelerator course. It's 5 years now. It's the first CRO-focused course that was out there. Uh, it's a 15-week course that is populated by aspiring chief revenue officers and CROs. We're pretty selective in terms of who can be a member of the CRO Accelerator course. It's people who are probably like more like ready to be a CRO right now. They have a number of years under their belt as a revenue leader, whether it be a sales leader or a marketing leader or even a RevOps leader, and they either want to move into the C-suite or they're CROs that want to just make sure that they win in the role. So if you are interested in being a member of the next cohort, please just write me a note on LinkedIn, just DM me, CRO Accelerator, and we'll set up a time to talk. And then I can send you more information, give you a brochure of the course. So again, CRO Accelerator course, 15-week program for aspiring and newly hired CROs. Take advantage of it. It's been great. And you'll see some more information about it on the website. Thanks. Yeah. And the game, baseball is a good analogy because it's so statistically driven. I mean, it's all so self-evident. I mean, you could look at this anytime you want and go look at your numbers. I'm sorry, but that's number to be up. And, you know, so it's, sports is a good analogy. Health is also another one too, which is, you know, I do this experiment a lot. I do a lot of speaking. And when I speak in audience, I ask people, I'm like, how many people in the room right now, if I were to hand you a piece of paper and a pen, and I asked you right now to write down your optimal health plan diet, they could all do it. They could all write it out. And then I'd say, how many of you are doing it? And, you know, like it's less than 5%, right? So it's not the knowledge many times, it's the discipline to implement it, right? So we know what to do, we just don't do it. And I think that, you know, you said it when you first started the conversation, it's like, why is it that you keep on doing the same stuff over and over again? A lot of it's just like comfortable habit, you know? And breaking that's not easy. You need to find good people. So you're, you're the report, the, uh, study you alluded to is actually really accurate. It's the ability to do that does make make the difference. But I wanna talk about something else before we get closed up here, and that is AI. You know, what just happened recently, you know, Benioff just announced doing a headless CMS, you know, it's almost like he invented it. It's kind of funny, you know?

Yeah.

But what are your thoughts on like how this is affecting things? I know you got a lot of thoughts on it, but particularly even around this role, right? So you look at someone who's doing all the things you and I are talking about, I'd be interested in just your general thoughts on it.

Yeah, sure. I had an opportunity to codify them. Um, I, as you know, and thank you for being a reader of it, I published a second book in February called Science of Scaling. It talks a lot about these principles, about how, you know, I guess the elevator pitch would be, it's shocking how many college classes there are with rigorous frameworks on how to account for and recognize your revenue. And there's next to no colleges, no, no classes on how to scale it. So that's been like accidentally the last 10 years of my life as a professor at Harvard Business School, as a former operator who's done it, and as someone who's just in the boardroom a lot as an investor and independent board member, um, you know, is having codified a, a solution that you can follow on the quantitative steps on when you're ready to scale and how fast. And I, you know, first off, I, I'm giving all the proceeds to mental health. So thank you, Warren, for the support and platform, et cetera. Um, and I had to write an appendix at the end because I'm like, damn, like in publishing, you, you wrote, you finished the book in July and they don't put it on the shelf till February. And I'm like, we're in this age of AI. I'm like, I gotta boom. I know. I gotta make sure we, We, so I had to take a stab at that and it's still relevant, fortunately, the framework around it. And I basically talked about 4 phases that I predicted go-to-market will evolve through as AI matures. The first phase we're in the heart of right now, and we weren't last summer when I wrote about it. And the first phase is really just a massive optimization of how we've done it, which is quantified as selling time, right? So like, just to define it for the audience, selling time is the percentage of a week that your reps are in front of a customer. And historically, the best companies, it's been like 25%. Like the rest of the time has been like meeting with a manager, preparing for the meeting, building out the demo wireframe, updating the CRM, updating the pipeline, you know, all the stuff that you gotta do. And AI today is really good at doing that stuff. And I do think that truly AI-enabled teams will reach 75% selling time, which is phenomenal. I think a similar metric today will be the improvement of the rep-to-manager ratio. So, you know, it does— the optimal, the historic level depends if you're outside or inside team. I think outside's been like 5 or 6 reps to 1. Inside's been like 7 to 10 reps to 1. I think those could easily double. And the best reps, the best teams will do that this year. AI is a better coach than most managers today. They can see patterns across 70 different calls. They can see patterns across 70 different coaching exercises to see how a rep is best coached and can do that. So that, that would be phase 1 is just an optimization of where we are today. Phase 2, I think, um, in some contexts, probably more than we think, The AI agent will lead the sales call, um, with, in a lot of cases, human in the loop. So the, the, the seller becomes an agent. There are some companies that are starting to, to experiment with this. And then in phase 3, the buyer becomes an agent as well. You know, imagine put together an RFP at Genzyme for a new ERP. Like it's like a 1,000-person committee. Like AI can do a phenomenal job at that and assess assess vendors without being, uh, uh, manipulated with like fancy golf outings and steak dinners, whatever. Um, and then I think the final phase, which gets really Star Trekky, is, and we're seeing some evidence of this, the functional boundaries start to blur. Um, you know, when we, if you just look at a standard software org today, you have finance, sales, marketing, engineering, product, HR. We have those because of limitations of humans. Like we don't see a lot of people who study finance and write code and vice versa. And that definition comes with a cost. Um, we're all, you talk about this sales and marketing alignment, um, you know, product to sales, finance to sales, finance to product, product to support. Like there's all these like desires. Inefficiencies because of this org structure. And AI will probably allow us to challenge those boundaries to make organizations run more functionally. So there, there's a mental map for you as what could potentially happen.

Love it. And I agree. It's all ready to go. I do think that we're going to be, agents are going to be buying. I totally get this. It makes perfect sense. I mean, buying is such a pain in the ass if I gotta have someone evaluate things for me. Without me being manipulated, it would be really good. And I think it's interesting, right? Because what happened was, was like during COVID all of those, you know, strip club, you know, steak dinners and stuff went out the window. And so sales flopped because people realized how much they were building their business based on being able to take guys out and get them really drunk. And once that went away, it kind of revealed like, how good is your product really? Because, you know, I got, I bought a product because I was taken to the Masters. I did. I've gotta be honest with you. You. Someone took me to the Masters and I was like, all right, okay, thanks. I'll buy this from you. Now it's gone because now I can't even be wooed. I can't even be applauded. I can't be complimented. Right? It's literally just some bot looking at nothing more than just, is this going to work or not? And I think that's actually not a bad thing.

I think it's great.

Yeah, I do too.

When an AI agent buyer buys from an AI agent seller, it's just a good, honest sale. Yeah, good, honest purchase. And just to capstone the point, Warren, to bring it back to today's theme on like how that influences the CRO.

Yeah, yeah.

I think today's CRO is extraordinarily skilled at people management, extraordinarily skilled at hiring, mobilizing hiring teams, ramping, coaching, you know, managing people. And if you believe the world we're talking about, that becomes a second seat. To, not that people go away, it's just the role's different and the systems and data and process and the AI agents are how they're designed and work is more important than the actual people. They, they're kind of like human in a loop. Um, so because of that, like you probably will see more of these leaders in charge that look like today's RevOps leaders than today's CROs.

Yeah, I get it. I do. It's fascinating. We're seeing the profile change so much right now. Um, but yeah, I want to talk just if you don't mind this, uh, you know, this, uh, mental health, uh, focus you have. I'm interested in it. If you could please expound on it.

Yeah. And I'm public about this for a decade. Uh, I've been a patient, a sufferer of it, and I've been blessed with certain attributes of my resume that society values. So, It's easier for me to talk openly about it that it's not for others. Um, there's a crazy stigma still. We're getting better, but like, if you interview a candidate and find out 10 years ago that they had cancer and they survived, you probably elevate your perception of them. But if you find out that they struggled with a mental health or a disease, you probably have concerns. And so we haven't gone as far as we could. Um, so, um, you know, I've been a caregiver. Um, it's better, you know, I've been attached to it from many different angles. Mm-hmm. And so I've just feel like I've been called, you know, with this book for the value, you know, a value to the ecosystem professionally, but I always want to have a cause that gives me purpose or purpose and motivation. So that's the reason I chose that cause.

Amazing. I love it. And you're 100% correct. You know, there is a stigma. And the reality is that every human being on the planet has had issues that they, you know, talk to people about, but they don't necessarily want to. So I, I think it's great and I love it. Thank you for that.

Thank you. Appreciate it.

And look, this is great. Like, I appreciate the amount of time you gave this. And as I suspected, it was a great conversation. You and I could probably talk for 3 more hours and maybe we will again. And now you're based where now? You live, where's your physical location these days?

Boston. I got brought back here for business school and then that yielded HubSpot and that yielded— my boys were teenagers at that moment and in love with their friends who couldn't, but they're going to college next year, so probably have a little more diversification. But I'm all low. I just counted it yesterday. Geez, it's April today and yesterday was my 24th flight of the year. I don't usually like to travel that much, but The book, you know, has, has brought me out there a bit more. So I've been, I've been a bit all over the place the last couple of months.

Well, great. And we do a bunch of roundtable events for CROs, and we're going to be doing one in Boston.

So I'll let you know what it is.

Yeah.

Awesome.

Yeah. Look, thank you, Mark. This is awesome. And I really appreciate it. Great episode. And thank you for coming. All right.

Good to meet you, Warren.

Thank you for listening to the CRO Spotlight podcast. The CRO Collective's mission is to help CROs succeed and help founders and CEOs build CRO-ready organizations. You can find out more information about our services at thecrocollective.com. That's thecrocollective.com. And we look forward to having you join us next time.