Fundamental Insights on Succeeding as a CRO, With Scott Stouffer

The CRO Spotlight Podcast, powered by the Sales IQ Network. Hi, and welcome to the CRO Spotlight Podcast. I'm Warren Zenna from the CRO Collective and I'm here with my co host, Lupe Feld. Hey, Lupe.

Hey, Warren. This is Lupe Feld and I'm glad to be here with you.

So this podcast is really for aspiring CROs and CEOs and current CROs whom are interested in learning from not only us, but the great guests that we're going to have.

We're here to tell you that there is other areas of the business that can drive revenue, and we're going to look and inspect and come up with some great ideas for us to bring in as much revenue as we can and drive some meaningful change for the business.

So tune in. We have some exciting opportunities coming up for really amazing conversations and any B2B leaders think you're really going to enjoy it. So thanks for tuning in and we look forward to seeing you. All right. Hello and welcome to the next episode of the CRO Spotlight Podcast. Hey, Lupe, how are you?

Doing great, Warren, how are you?

I'm good. You know, I was just at the Chief Revenue Officer Summit in San Francisco for the last two days. I was really happy they asked me to be the chairperson for the event. And it was just great. I mean, there was so many conversations that are so on point of what you and I have been talking about here for the last, like, year. The main ones are things like, first, there. There is still a big dialogue around what a CRO does.

Yeah.

And. And what. What a CRO oversees. There was an agreement, matter of fact, one guy, I had a bit of an argument with him.

Yeah.

I was sort of saying, as you know, my point of view, that the customer is a very key part of the role for many reasons. And he was saying I'd never let my CRO touch a customer.

Wow.

It was really interesting. It was. He had an interesting perspective on why I didn't agree and what it turned out. I think he was hearing maybe bundling together the idea of renewals and, you know, that sort of thing with customer support, which is. It's a totally different thing. But anyway, the other thing was also, how does someone become a Chief Revenue Officer? How do you break into the role when you never had one before and what do you look for? And it was just. It was a really good bunch of conversations with some good people. Anyway, I thought you'd be interested in knowing that there's still a lot of chatter about those Topics.

Yeah, you know, it's, it's still a fairly new role and it's complex in the fact that, you know, I think you and I have talked about this, that most people hire a CRO because they think it's the magic wand that will be waved over their business and just flood revenue in. And it's a little bit more complex than that. And so it's, it's. I would have loved to attend that.

Yeah, that's a perfect segue to the conversation we're going to have. So we have a great guest to talk about this exact thing, which is Scott Stouffer. Stouffer. See, I got it wrong already. Amazing. I got it right before Scott Stouffer. Scott has an amazing business called Scale Matters and I'm gonna read a little bit about his background before I formally say hello. So he's a five time CEO and three time founder. He's currently the CEO and founder of a company called Scale Matters. He's the co host of his own podcast called the Data Room Podcast. You should listen to it. He took his first company, which was called Visual Networks, public in 2001 and grew it to a peak market cap of 3 billion. And since 2011, Scott's focused much of his energy in early growth stage companies, building quantitative data and process models that uncover waste, inefficiency and friction in the go to market function. And his method of managing go to market was so effective, 71% CAC reduction in 47% faster sales cycles in six months at his last company, which was called Salsa Labs, that he started Scale Matters to help more B2B companies drive faster capital and efficient growth. So Scott, welcome and thank you for being here today.

Oh, thanks for having me. Really appreciate it.

Yeah. So I'm curious, like, what are your thoughts on that? Like when, when you, when you think of a company that's looking to hire a chief revenue officer, that's like maybe a 10 or 15 million in revenues. I'm curious what bells go off in your brain when you hear that someone said.

Well, first of all, I'd say the title, as Lupe correctly said, is fairly new, but I think it's already gotten quite bastardized as a title out there in those early stage companies. The CROs that I see are more likely than not just glorified head of sales. And you know, and from my way of thinking, chief revenue officer should be responsible for all of the things that drive revenue, which isn't just sales. And in fact, you could argue that sales really only drives revenue. In companies that are very enterprise focused and where the top of funnel is driven by salespeople out there creating their own pipeline. In the vast majority of companies today, particularly any that focus on SMB or mid market pipeline is driven by top of funnel activities, right? Marketing, investments, potentially outbound prospecting, SDR type investments, et cetera. And so if you are going to be overseeing revenue generation, I think it's critical that you be equally as facile in top of funnel understanding as you are in managing or building a sales team. And you know, I just think more often than not the people that I'm seeing, because our company focuses on early and growth stage B2B companies, probably the earliest we get involved with a company, they're 2 or 3 million in revenue. Our largest customers are a couple hundred million. Most of them are in the, you know, seven to $30 million range. And you know, to the extent we see people with CRO titles, they are, their understanding of the top of funnel part of generating revenue is pretty light.

Makes sense. So I guess you said something interesting before, which is how many CROs are just glorified salespeople? And I had this conversation a lot. What do you think it is that happened? Like why did this role sort of devolve this way when in fact, actually when I drill people on this, and I do all the time, people seem to know that it's not supposed to be that way, but yet that's the way the role is still deployed. What's your view on the forces that are kind of creating that outcome?

Certainly one of those forces is the fact that for the last number of years it's been a seller's market on the employment front. And in the same way that we often see what I would consider a VP of marketing or direct director of marketing, now called VP of Growth. Right. I mean there's, there have become these titles that were meant to imply, I believe, I'm not really sure who even invented them, but I, I believe they were meant to imply some broader set of responsibility than what the historical titles, you know, articulated. And you know, but now for whatever reason, and I think it's largely because if you feel like you want to hire this person and they currently are called a VP of Sales, you know, it looks like they can get an upward move if they actually demand a title that's CRO or something like that, you know, I don't know, I'm kind of speculating on that. Right. But you know, you often get title inflation, particularly in early and growth stage companies. Because you're. Well, usually you pay people less money than big companies do. Right. So there's things that are easy gives. Right, which are titles. Exactly. And I think that is some psychological compensation, for sure. Yeah, yeah. Easier to give a title than precious stock or even more precious cash. Right.

So I ask another question here, which pertains more to your business.

Right?

So you've started all these companies and you brought these companies to market. You're able to scale them. What would you say are some of the consistent things you've seen that you take away from that you can apply towards businesses that are in that earlier stage? I refer to as more like this chasm of complexity that they reach, you know, where they're.

The.

What we're doing, what we've done to get here won't get us there, so to speak. Right. What are the things that typically companies at that, let's say 8 to 30 million in business, in sales, do that seem to be almost repeated bad behaviors that if they stopped doing them or did something differently, they may see different outcomes? Sure.

Well, you know, I think there's a pretty repeatable playbook that you can put in place depending on the stage you're at. But when I think about it, let's focus on go to market in general, because that's what your podcast is related to. Of course, when I think about go to market, you've got to get a number of things right to be really effective. First, you have to have product market fit. And you know, and that's a term that's often used, but I like to include with that message fit. Right. Product market, message fit, which is you've got to have something that provides real value to some type of buyer, prospective buyer. Right. Your icp. And then you've got to message it in a way that they actually understand that. So you've got to get product market, market, message fit. Maybe not perfect, but at least to the point that it doesn't act as this latent friction on everything else that you do. And I see, you know, I see a lot of companies, early stage companies, you know, in their quest to not spend money, try to rely too heavily early on, on content marketing. Right. It's cheap. I can write a blog, we'll build a website, I'll do a blog, maybe, you know, be out there stalking on LinkedIn and try to put some interesting content out and people will come to our website. The problem is, and that's what I would generally consider unpaid inbound. Right. The problem is that just takes forever it takes forever for your little bit of content, no matter how good it is, to rise above the, the masses and the pollution and start to actually bring people in. And what you really need to do to get to product market message fit is get as many at bats as you can and do that early. And so we've been big proponents of companies spending money either on outbound prospecting, could be through a third party SDR type prospecting, or spend money on paid ads. Because you've got to get some initial people to talk to. And you know, in our experience you probably have to talk to 50 to 100 people to start, you know, working through the kinks of your messaging and positioning so that you actually have a product market message fit that's not going to hold you back. So that's the first thing is I think, you know, people aren't willing to invest up front to get enough at bats quickly to get the product market message fit quick enough, okay? And instead they just try to slow roll it with, you know, content driven marketing and everything else. And that just causes problems. You, you burn through a lot of capital because you're still spending during all that time, you're still spending all your money on R D and that sort of thing, right? So you all, you actually have to spend more money up front to shorten the, the overall time frame. So you get product mark message fit. Next thing you have to focus on is strategies, right? You have to optimize for the strategies you use to actually either create or capture demand from that icp for where you have ideal customer profile in case the acronym's not well understood for where you have product market fit. And you know, here again, I think people try a lot of stuff, right? Think about all the various. Let's assume it's not a PLG play, but it's a product led growth play. But instead it's a motion that has some kind of sales involvement in it. You might do events, you might do paid media, paid search ads, paid LinkedIn ads, paid Facebook. If you're an SMB focused company, you might do content syndication, you might do prospecting. Potentially there's a channel partner play. So there's all these different strategies you can choose from. And you need to go through a fairly methodical process to figure out which of these strategies. We like to think of them like a portfolio manager, right? An investment portfolio manager. You've got a bunch of money, you want to put allocate that money to the assets that are going to deliver the best return. Same concept in Terms of trying to figure out which of these strategies are going to be most effective or which are, are not effective. And I just don't think enough people consciously think about that's what they're trying to do, right? They're trying to be a portfolio manager instead they just sort of go through the motions and subsequently one of the things that they don't do particularly well is figure out a way to measure the effectiveness of these things. I mean there's a lot of, you know, there's a lot of interesting content out there and podcasts out there on metrics and KPI, KPIs and stuff like that, but they tend to be fairly high level. There's, there's a lot more or need to do very tactical and granular measurement of the things that you are doing so that you can figure out what levers work and what don't. So, so product market, message fit, you gotta nail first, then you gotta get these strategies. And then the third thing is you have to optimize around a set of processes and on the lead to deal process, if you will. Think of that as, okay, let's say a lead comes into the website, how does it get distributed? Right? Who's going to respond to it? Is it an SDR team? That's a first response team? Does it go directly to a salesperson? Is it round robin distribution? Right. What's the process for allocating these things so that we make sure that they get touched quick, what's the sales process, etc. And you know, you need to optimize those processes over time so that they're repeatable, then predictable, then scalable and ultimately efficient. So, so to me it's long winded answer, but I think it's a fairly standard sequence of things that you need to optimize around as you, you know, grow out this company. And you know, no company comes out of the womb and has all that stuff honed and instead it's just a continuous set of iterations that we all go through. And this is why, I mean, one of the things that our company promotes heavily is the notion of you've got to have data. Given that getting to an optimized state requires iteration after iteration after iteration. What we've seen without question is the companies that can do that the fastest and burn through the least amount of capital along that process are the ones that have good data available to inform those iterations. And we just see so many companies, I call it going through the motions, right? They go through the motions. You know, they talk about Experimenting. But. But they don't experiment like scientists do. Right. What is a science experiment? You have a hypothesis, you figure out how you're going to test it, which means, you know, you have to determine up front before you even start how are we going to measure this so we know whether the hypothesis proves out or not. That's the same concept of iterating and go to market is if you're going to try something before you go off and do it, you need a criteria how you measure whether it's successful or not, and you need a way to measure it. Right. And just so many companies don't consciously think about this process of iterating. And as a result, I'm sure you both have seen it. I've seen it a hundred times. I've actually contributed to it more times than I want to admit. But you hold on to things that aren't working forever, and so you just are throwing money away and it's largely because you don't have a good way to evaluate.

Yeah. You know, I think about what you just said and the process that you described. And if you're looking at a typical career path of a CRO who's kind of grown up and developed within a sales environment, they probably wouldn't have a lot of experience in building a process that you just described. And so that in itself, I think could be a hindrance for their success, is they're going to put in place things that they may not know a lot about, but they're also not going to have that discipline and that structure to measure and test.

Oh, I agree completely. I mean, I would actually say that the CROs I've experienced, who I think are legit CROs, may have come up through the sales path. Haven't necessarily, but whatever path they came up through, they're analytical, they're thoughtful, they are not engineers per se, but they think about how they have a. They have a very structured way for thinking about problems and then thinking about how to solve those problems. And again, this isn't meant derogatory or anything, but you don't often see that type of mindset with that structured, highly logical thinking, analytical approach to stuff the sales function.

Yeah, the word mindset was. I was going to throw that in there because what we're seeing is everything you're. Everything you're saying is a sort of, you know, I think. You know what I mean when I say it this way? I say it like it's a Monday morning quarterback sort of way of looking at things because, you know, We've done there, we've been there. We sort of look backwards. We can go, okay, this is probably what you should do next time, so to speak.

Right.

Because it really is sort of a repeatable process that while it's obviously going to be bespoke a bit for each organization, there still is one. There's some things you have to do, but I'm seeing is that organizations at that stage are typically have a number of characteristics. One being is that they're usually led by a founder who created the product, who has a very different sort of emotional relationship to the business than a commercial leader would.

Right.

So it's someone who's built some software or developed an idea and is smart enough to get that up off the ground. And people whom are in that sort of mindset, that type of person tends to be very dug in on a lot of ways in which they view how they want to do things. Maybe mainly because they're comfortable there. You know, it just. There isn't really a familiarity with thinking outside of their way of thinking. Maybe they think like engineers, they think like product people. And so they, in a way, sort of feel like, I get a sense that they'd rather learn the hard way than just take advice, you know? And so I see a lot of mistakes being made that are natural because the things you mentioned are all dynamics that companies have. They're all the same. Like you said, either. I'm not talking about this properly. People don't get what I'm saying. They're not resonating. I got to figure that out. Where. How do I get my people? All the problems are the same. And so without someone handing them a blueprint and saying, no, no, you're about to make, like, these 10 mistakes, because you all do, it's nothing. No offense. It's just what happens. Do this instead. It's almost like I'm hearing a lot of, I'd rather screw it up first and, you know, figure it out, you know? And I. I think there's a weird way that interrupting a mindset is a key to this, because it's. I. I make this analogy a lot. Probably Luke's tired of me doing this, but I look at it much like health and dieting. There is no end to the information we have about taking care of ourselves. No one doesn't know what to do to be healthy anymore. Yeah, no one doesn't know. It's like, of course we know, but we just don't do it.

Right.

Because knowing it isn't really the issue it's actually implementing it is the problem. And there is a mindset of an early stage company that's less ideas than a later one where the problems are graver, the stakes are higher. You know, they're willing to cry uncle at 50 million when the stakes are really high. Right. And I, the idea, I think, is how do you, in your world see making a impact on that earlier mindset to change it so that people are willing to kind of avoid the pain they have to go through of making their own mistakes before they take on outside counsel? What do you think is a formula for getting that?

Well, I'm not sure I know that, and I'll tell you why. First of all, if you're a person who is willing to try to start a company, you tend to have an outsized confidence in yourself to begin with, with. And I can, you know, look in the mirror and say that about myself.

For no doubt about that.

And so when you have an outsized confidence, whether justified or not, it very much shrinks the pool of people who you're willing to take advice from.

I understand. I get your point. Yeah. Yeah.

And so, you know, what it basically does is it raises the bar on everyone else to be so credible before I'm gonna listen to you, so to.

Speak, I have to be like, literally, my home needs to be on fire before I'm willing to call someone to come help me put the fire out.

Yeah, yeah. And you know, and it's too bad. I mean, quite honestly, when we started scale matters, you know, the interesting thing about our name is we were trying to do stuff for companies that aren't at scale because there's a lot of stuff they can't do well when they're subscale. And so when we initially started, we were going to be a outsourced sales and marketing engine for early stage companies. And we met with a lot of early stage CEOs. And these are people way less experienced than I am at this. Right. And we'd say, look, you're going to fail. Here are the reasons why you're going to have a really hard time building effective. Go to market at the scale that you're at and trying to tell someone who has the confidence of an entrepreneur that they're going to fail. I mean, they're just going to go, yeah. I mean, if I listened to everyone that always told me I was going to fail, I'd never try anything. Right. You just don't have an open mind to the notion that you might fail. And so, yes, to Your analogy of the house being on fire. You have to almost fail before. Many of these people have to almost fail before or feel like they're failing before they're willing to kind of take on the, A more receptive view to outside influence.

Yeah, I guess it's a certain degree of adventure. I think part of it is, honestly, I think there's a romanticized assessment of what doing a startup is. And part of it is getting your ass kicked a little bit and being able to come out of it with some bruises and have a great story to tell, you know, and when people are experiencing that stuff, I think there's a bit of a degree to which. Well, you know, this is what it's like. You know, when you do a startup, you get bruised a lot and, you know, it's part of the allure in a way. You know, if I just, Someone just handed me over a book that said, here's the problems to solve, what the hell am I doing? You know, I mean, I sort of. The journey is to kind of figure stuff out, but it comes with a big price. And I think there's a weird. You're right. I mean, I think it really does have to do with the mindset of the person. Your point earlier, which is brilliant about, you know. Yes. People who start businesses are a certain profile. They do have certain types of psychological profiles. And I guess it's a question of do I, am I, Do I want to go on a journey of discovery that's fraught with mistakes and errors and pain till I arrive, or do I want to just have someone hand me over a blueprint and I can get it done faster? I think there's, I think you're maybe possibly crashing into someone's sense of personal adventure in some respects. I see that.

I have maybe. Maybe. I mean, I can only speak for my thinking. I know myself a little bit, and that wouldn't have been it for me. It would have been more an unfounded view that I likely wouldn't fail.

So it's an outside ego that I.

Wouldn'T, I, I wouldn't fall. I wouldn't fall down.

Okay, I get it. So it's either one of those two things, probably. Either, you know, I'll do it because I'm smart. I'll figure it out. I don't need help from anybody, or I want to do it myself. I want to figure it out. I want to make the mistakes and get in the weeds, you know, I agree.

That's part of growing. Yeah, yeah.

I, I, I, I Say this, and I. I know that we probably, you know, there's a lot to get into related to things like data and measurement, and those things are not. Obviously, small things are critically important. But to get there, you have to change the way you think to open up your mind to that type of assessment and then receive the data such that you're willing to do things differently.

Yeah, well, you know, actually, that's one of the beauties of data for a lot, especially for a lot of the types of people that start companies, is they're more likely to trust data than other people.

You're 100% right.

Engineers. Right. Technical people. I mean, and so maybe data is the way you break through.

Yep. Prove it to me.

And get them earlier to see that maybe things aren't working as they. Yep. Thought they were.

You know, so often, though, I've seen data be manipulated. You know, years ago, you know, I heard this and I stole this. You know, tortured the data until it surrenders. You know, by focusing on things that are bright and shiny, you can hide a lot of different things and really continue to prove to yourself that you're on the right path.

And.

But there's so many companies that haven't done that first thing that you talked about, which is, what problem do I solve, what pain point do I relieve? And if you can just start there and not, this is cool. This is fun. This is something that's needed out there in the marketplace. But what pain point are you solving? And build kind of your story around that and then kind of take all the different steps. But so often data is celebrated as a success when it really, you know, sometimes is indicative of more failure than success.

Yeah. And I think. I mean, that's a good point. That reminds me a little bit of back when we were all in school and you sort of knew what the outcome of the lab was supposed to be, and so you just kept working on it until. Till it came out that way. Right. I do think, though, that most people, if they see data that suggests something's not going well, they probably won't dismiss it internally. They will certainly find a way to manipulate it to shine a better light when they have to talk to their board or investors or even customers. Right. But I think most of us are able to secretly understand what the data's telling us, even if we're not willing to acknowledge that to third parties. Right. Because there's a risk in acknowledging it to third parties, particularly if you're not at the point of knowing what you want to do about it yet, if that makes any sense.

Yeah, no, absolutely. And I think about even internally, and let's forget about the investors and the people that are funding a lot of this, but initially as a CRO, it takes a lot of courage to say, you know what, this isn't working. And you know, we're, we've invested in this process, whatever it is, whether it's inbound or you know, paid ads or what have you, and it's not working. And really having the courage to, to speak up while you are also trying to prove your worth and the value that you're bringing in, what you essentially sold during the interview. And I feel like, you know, as a CEO, that is part of the job of being a CEO and not so much entrusting, but aligning the expectations and aligning what your, you know, kind of attainment or achievement should be. And I think sometimes that piece is missing in some of the things that, in some of the businesses that I've seen that aren't doing so well. And eventually, you know, the rope runs out and the CRO is out and then a new one comes in and it's an even, even bigger mess because oh no, we've tried that. Let's not do that because we've tried that. Well, maybe you didn't try it the right way. And so that's, I think. And then of course, you know, you dress the pig and then you go to the board and you ask for more money. So that I think becomes a recurring cycle. And I think maybe how do you fix that? Is would be a question, Scott?

Well, yeah, a couple things. First, first kind of a smart ass comment, which is you said it takes a lot of courage for a CRO to step up and say things aren't working. Well, interestingly enough, that's the very first thing they do when they come on a job, right? So it takes no courage when you're first hired to say nothing's working. It's a year and a half later when it's still not working, that it takes a lot of courage, right? But you know, if you go back to this notion of iterating and in fact we've started to talk about it internally as Agile go to market, right? Because you're basically doing these bite sized experiments, right? So if you understand that that's actually the process everyone's going through, but you raise the level of consciousness about it to your CEO, to your board, to your team, then you're kind of all in it together, right? Because you communicate, here's the experiment we're trying to, you know, here's how much we're willing to give it, how many months we're going to give it, here's how we're going to measure whether it's effective or not. Right. And then everyone looks at it together and sees whether it's working or not. And if it doesn't work, I mean, nobody expects all the experiments to work. What they expect is that failed experiments provide insight that ultimately lead to successful experiments. And so the extent to which you can have all the relevant parties understand consciously that this is the process of getting good at, go to market, then I think everyone's got a lot more patience. It's when time is passing and you don't really understand what the CRO is doing. Right. Because there's nothing. Nobody's giving very good data. Yeah. They talk about their pipeline and you can see the overall end result and stuff, but you're not sharing any data about what's going on in the sausage making itself. That's what gets people uncomfortable. Right. Uncertainty breeds discomfort. And so my view is you fix it by being wholly more transparent. But you do that after you've raised the consciousness so everyone understands what this process of sausage making actually looks like.

I like it. I think it's a good recipe. You know, it actually reminds me of years and years ago I worked at Amex and one of our senior leaders dedicated a wall, and she called it the failure wall. And you were literally, you know, in this beautiful building, going up there with a marker and kind of writing down all your failures. And I think some people were a little bit shocked and taken aback by that. But what it forced you to do was to learn what you got out of that failure. You know, whether it was wisdom or, you know, eventually leading you to success. And it was, it was highly effective. But I think people just don't talk about, we tried this, it didn't work. We tried it again, and now it got a little bit better result. And now we've tried it again for the 10th time and we're successful. And kind of that iteration process made public makes a lot of sense.

Yeah. And there is a risk in celebrating failure. Like, I often hear, not often. I have occasionally heard marketing leaders talk about their mantra is fail fast. And I go, I'd rather your mantra be succeed fast. Right. Because failing is not to be celebrated. It's the learnings from failure are to be celebrated. And the problem is there's too many occasions when there is no learning from the failure again, either because it wasn't measured. There was no postmortem. Whatever it is. It's just so many people that go through motions. This doesn't work. They move on to the next thing. Never slow down enough to basically take those learnings as a feedback loop to inform the next iteration. So. So, yeah, I mean, I get a little bit uncomfortable when. When I hear about a failure wall, But. But you were clear, Lupe, that you said the real value came from the learnings out.

Yeah, absolutely. I mean, there was structure around it. You know, obviously, you know, Amex is a very successful company that's seen good and bad times, but I think that the whole message was, don't be afraid of failing. Just make sure you've learned something from it. And I think that was at the point of what you said, but interesting. I. Yeah. I wonder how, you know, how you approach kind of as you have the conversations with CEOs, how you approach. How do you bridge that providing data to somebody that already kind of has their mind made up, how do you make that happen?

Well, I don't know. I mean, I'm thinking tactically in terms of my company and how we sell. We actually start our conversation with prospective customers with this very thing we're talking about, which is trying to raise the consciousness of this notion of iterating. Right. Which none of them would ever argue that that's what they're going through. And they all actually find it kind of refreshing to see it captured in this fashion. And then when you say the companies that get through this process of iterating the fastest and with the least amount of capital burned are the ones that have the best data to inform that iterating process. Nobody argues it. Right? So it's a matter of having them understand how data can be really, really helpful to them. And it's not a big leap of faith. It's just simply pull your head out of the sand of the tactical stuff that's consuming every minute of your day for just 10 minutes and step back and look at the picture, look at what's going on and think about it more as a process designer or a organizational strategist or whatever than I have this long to do list type thing of all tactical stuff. A lot of people are smart and they're very able to understand this stuff. It's more a matter of just take a breath, time out. Let's look at it from this perspective. And I don't think it's hard to bridge that gap. By the way, going back to the thing about Failures. One other thing I meant to mention is the toughest part in my view of transparency, and I mean in particular the transparency of acknowledging this experiment's not working, et cetera, is there are a ton of people in this world who are irresponsible with negative information. Perfect example, a public company announced flat guidance and the stock tank. 30%. Right. That's stupid. Stupid companies. Same company was. Yeah, maybe. Okay, because of that, future cash flows might end up being a little less than what you thought. But it didn't go down 30%. Right. The future discounted cash flow did not go down 30%, which is what should drive the value of the stock. And board members can be this way, or investors. Right. I mean, they're so accustomed to wanting to having everything painted with rose colored glasses, if you will, that it's new to have anybody kind of lay it out and say, here's the situation, right. You know, dispassionately, here's the good, here's the bad. Or if you're raising money, for crying out loud, you certainly can't talk about the stuff that you know is not.

Working.

Because nobody does that. Everybody just talks about the positive stuff. And as a result, I think people have become conditioned and they don't know how to react when anyone starts sharing stuff that isn't completely positive. And I view it as sort of this level of immaturity or irresponsibility on the receiver's part. So there is that kind of cultural inhibitor to getting stuff as transparent as you would like. And that's why I think, trying to raise the consciousness of the process, this whole iterative process. Then when an experiment isn't working great, it doesn't really feel like bad news because you expect some of them not to. Right. So it's a way to navigate the natural inclination of people to react badly to anything that's not positive.

Yeah, that is so interesting because if you were to look at companies that burn through money and you were to link and label this process, they've all kind of had moments of failure or lack of success in different things that they've tried. It's just not being called out. And, and I think that's, that's an important thing. Transparency is great, but I don't think it exists to the level that everybody wants as well as the level that it actually needs to exist at.

Well, yeah, it has to be safe. I mean, the environment has to be safe in order to be. So you can be transparent.

Yep, yep.

And I think that's part of the Problem with, you know, coming full circle back to CROs and the classic short, short time frame of CROs is, you know, a lot of these environments and back to your original point where people think that's the silver bullet. Right. Things aren't going well. Okay, hire a CRO, you know, that'll solve everything. It doesn't solve everything because potentially the reason things weren't going well was product market message fit to begin with. Right. And it's just usually not safe. It's not after the first couple weeks on the job where the CRO can legitimately say everything's messed up from that point on. In most companies, it's not safe to be as fully transparent as would be helpful to the process of improving the company.

So you continue along and you're adding fuel to the existing fire by not being transparent. Sorry, I didn't mean to cut you off, Warren.

Not at all. No, no, no. I love this. We have a little few minutes left because where we're headed, and I think it's important maybe before we close out, Scott, would be really interesting to hear. You just speak to a couple of different people. So you've got the aspiring chief revenue officer, right. Who's looking at the job right now, maybe getting into this sort of, you know, situation that we're describing, right. This hell pit that they're going to be thrown into. What might be two or three things you'd say to somebody whom are on their first tour of duty becoming a chief revenue officer at like a 10 or $15 million company.

Well, I'm going to answer a little differently. I'm going to answer for the person who is interviewing for such a job.

Got it?

Yep. And I think far too many people do not ask these types of questions. You should absolutely understand what the capital picture of the company looks like, the fundraising picture, because that creates the Runway you have. Right. So that, that will help you understand kind of what the level of patience is or is not going to be. Right. So. So that's sort of a binding element that establishes a certain level of patience. Then you should, you should grill the CEO about the board members. You know, walk me through a board discussion. How's that go? What have you had to do? What have you had to talk to the board about that wasn't, you know, all, all rosy, how they react? Are there any people you know better or worse than others? Because I do think, I mean, you know, there are certainly some cases where there's a changing of the guard and things do improve overnight. And maybe you can give that credit to that new person. Right. But. But that's very rare. That's right.

I get very rare.

And more often than not, it's. It's going to take a while. Right. Because you got to change old behavior, you got to figure out what's wrong, put in new initiatives to fix that, et cetera. And so I just think it's critically important that somebody understand effectively the Runway and the safety of the environment to be able to.

How do you do that? How do you test the safety? The Runway I can get. That's data you can ascertain. But how do you find out whether the environment is one where they're open to new ideas and bad news?

Well, I think partially, like I said, during the interview process, ask about the dynamics in the board meetings. Ask the CEO if he's ever actually delivered any bad news. And of course, you're sort of counting on people telling you the truth.

They tell you the truth. That's right. Yeah.

But it's better than not asking. You at least have a chance of getting some information if you ask. So, you know, that's certainly one of the things I would do.

Great advice.

The other thing I would do is try to understand why they think they have a need for that role. Right. Because, I mean, as you said, and it's always what problem you're trying to solve, it's always the truth. You only create that role because you have a problem.

That's right.

If everything was working, why spend the extra two to seven hundred thousand bucks?

You wouldn't be hiring somebody. Yep, Yep. That's the red flare gun that I see go off, and I'm like, okay, something's going on and someone's ascertained that this is the solution. And I'm going to dig into this and find out what's really going on over there.

Right. And I think so. So to the aspiring CRO. Yeah, you know, they ought to try to find that out. Why did we decide at this time point in time that this role is necessary?

Well, I. Look, this is great. So how do people get a hold of you and what some ways they can find you?

Scottscalematters.com Pretty easy.

Okay. You said you have a podcast as well, is that correct?

Yeah, we do. It's called the Data Room and we talk. We actually have two different podcasts that we do as a company. One's called Go to Market Excellence, which is more like this interview. Dan Quirk, who's one of my co founders and runs our marketing, you know, Basically interviews go to market C level leaders and just kind of here's interesting anecdotes about what they're doing that's successful, what's not, that sort of thing. It's pretty interesting. And then the data room is, it tends to be more of a filibuster by me, specifically around topics related to revenue operations and particularly the tech stack. Go to market tech stack and go to market analytics. Right. Because I mean our company is all about helping these early and growth stage companies get more effective at go to market by better leveraging the tech and data. So that's what we talk about. I mean, there's some, you know, we don't do a lot of them because we try to make sure they have useful value to them. So when we do, we would encourage people to listen because they usually have some helpful stuff.

Great. Well, I'm sure the audience will now because it was really great. So this has been a really great conversation. You know, it helps to sort of reiterate some of the things that Lupe and I seem to be dancing around a lot. And thank you for being on and sharing your wisdom. And I'm sure the audience is going to find this all really, really valuable. So we appreciate your, your time and your, your expertise.

My pleasure. Warren Lupe, thank you very much.