Simplifying Revenue Operations & Navigating PE Pressures with John E. Lepto IV

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. All right. Hey, welcome to this episode of the CRO Spotlight Podcast. I'm Warren Zenna. I'm the founder and the CEO of the CRO Collective. And today I'm real excited to have a guest on who I've been following on LinkedIn. Has amazing content on LinkedIn, really in depth and a great perspective on an aspect of the business that I'm interested in. And John and I have a couple of conversations, so I thought, let's get on podcast, let's talk about it. So, John, welcome. This is John E. Lepto, the fourth. I love that name, by the way.

Yeah, no, thank you for having me, Warren. I appreciate it. Yeah.

So tell us about yourself. Like, what's your background and you know, what are you. What are you up to?

Yeah, so, you know, I, I like to consider myself, as a lot of people do in this space, as, you know, a sales and go to market executive. So I hail from Akron, Ohio, just, you know, born and born and raised in Akron, Ohio. So big Ohio State fan, big Cleveland fan. We actually have the number two draft pick, so we'll see if they, they do well or don't screw it up. But anyways, went to Ohio State Fisher College of Business marketing degree. And as a lot of people with a marketing degree do, they go into some sort of sale. So I started my career in commercial lending on the acquisition side in the dental space at bank of America. Most to take a step back, my entire family is in healthcare. Dad was a director of pharmacy at Akron Children's Hospital. Mom was a med tech and then ended in home health and hospice and then my brother's a nurse, so it kind of made sense for me to follow that same track per se. But anyway, started started in healthcare banking and then the middle part of my career has all been healthcare tech and B2B SAS, mostly on the provider side. So focused on clinics all the way to hospitals, health systems, academic medical centers, etc. Number of different SaaS based platforms and then I did do a little bit of work on the pharma side and then I had a shift in my career where I figured, you know, where do I want to take this? I had worked for a couple PE backed portfolio companies and I had a pretty unique interest in the private equity space. So I went and worked for a management consulting firm within the space of the office of the cfo. That got me my real first exposure to private equity in their portfolio companies doing transformational finance projects. And then I leveraged that and just finished up a role as an operating partner focused on sales and commercial excellence and go to market at a lower middle market firm in the space. Now I'm hopefully on the end of my transition period, got a couple companies I'm looking at and I'm looking forward to even, or to either being a number two at, at a very large company or potentially even being a first time CRO.

Got it. So what attracted me to, you know, your content and to you in particular is you have a really in depth position on PE and how the PE community, let's say, or the, the PE sector is impacting the way businesses are being operated today. And because you have so much experience in that space, I thought we'd kind of unpack that a little bit. So, you know, I talk about this a bit. You know, I don't have, you know, direct PE experience. I never worked for a PE firm. I worked for a couple of PE backed companies and I was on the board of a couple companies that were PE backed. But my direct involvement with PE is not as extensive as yours, but working with a lot of founders and a lot of CROs and CEOs who are being funded through PE. I have immense insight into how their opinions are and the way that financing organizations and financing arrangements have impact on the way companies are run. And I've made that somewhat of a, you know, part of the way that I go to market with. One of the factors, you know, that companies have to deal with is the reality that when they're taking money from any lending organization, whether it be an investor or whomever it comes with, you know, conditions and agreements and expectations that many times can be conflicting with the mission of the business. And I'm just curious, you know, if you could expound a little bit on what your kind of thesis is on that and some of the ways in which you've been talking about it.

Yeah, I think, you know, the space is interesting. Right. And, and you, you stop me if you want to take a different route. But I think one of the things that is interesting within the PE space is this idea of value creation and I talk a lot about that. Value creation to me means going into a portfolio company and figuring out, even in the pre due diligence and due diligence phase, you're figuring out, okay, what is going to be our thesis, which is essentially how are we going to run this company, how are we going to grow it? I think there's two ways you can go about that. In a PE firm. They have many times operating partners and I've written about this on my blog. One can be a generalist, one can be a specialist. Of course I'm under the more specialist category of being a CRO or go to market and sales excellence operating partner. And I think when you are driving that thesis forward in the first, call it 100 day plan, and that's, that's a big thing that private equity does. And they, they first come up with their thesis of how they're going to run this company and then they come up with what was called the 100 Day Value Creation Plan. And a lot of time that can be operational value creation, but for us it's focused on revenue. And I think there's been a, there's been a big shift in the last couple years and this shift from call it GAAC to perg, which is the shift from growth at all costs to profitable, efficient revenue growth. And that's huge. So I think within the space of PE all the way from call it lower, lower middle market up to large cap, the old days of buying a company and leveraging it to, to the highest extent and figuring out how to cut costs and basically run the company for five years and then sell it for a profit with, you know, a higher ebitda. Those days are kind of gone, especially in today's economy. Now the market could shift and that could come back. But for now, what's very important, I think the way a private equity firm can separate itself in a very saturated market, tons of private equity firms going after companies is who is going to be operating these companies from the PE lens and how are they going to get underneath the hood of the portfolio company and start to really rev that engine in the right way, get everybody rowing in the same direction and figuring out, okay, we're not just going to cut costs, we're not just going to leverage this, we're not just going to run this from an operational perspective. We have to actually send people in that understand, go to market that understand how to operate a company and drive towards a uniform icp. Who are the buyer Personas and how can we get a true CRO, which you know a lot about and we can get into that is how do we get a true CRO that knows sales, marketing, customer success management, rev ops, sales ops, sales enablement, how do we get someone in to actually drive growth but at the same time focus on retention, expansion, et cetera. So I think that's a very interesting point in today's economy and market is how can we actually get people to go in, lift the hood up, figure out what's going on and then drive that value creation home?

Yeah, I love it. And I'm seeing similar things. I want to unpack some of these things you said. So the first thing I'd like to get your perspective on is this sort of switch from growth at all costs to profitable growth, which you know, I'm seeing too and I'm hearing a lot about. I ask this question a lot. I want your opinion on this. Is that I guess there's a two part question, right. One part is when your opinion why do you think that happened? Why did that shift take place? I have some thoughts on it. And the second one is, is it real? In other words, is this just sort of like a response to the market or are we going to shift back to another growth at all cost model down the road when money freeze up again? You know, because I think you know why I'm asking the question is, is this a permanent shift? Have we evolved? Or is it more like just a correction for a while? And we're all sort of in this moment, so we're talking about it. I'm curious what you think about those two things.

Yeah, I think that's a great question, Warren. I think many different people in the, in the revenue space will have a different answer. I think in a perfect world it would be more than just a correction and it would be something that's going to stay. I can't say that I'm for sure solid on that answer. I think this might be a correction in that once money starts flowing a little bit more, it, it might go back to that. But you never know. I guess, I guess time will tell. But I think right now, as you know and everyone else knows, there's a ton of dry capital out there. Yep. So it's, it's not a matter of if, it's a matter of when that's going to start being deployed.

Yeah. And we'll see.

We'll see. How the market reacts. But I think for now, it's at least a pretty good correction that's going to be around for a little time. And, you know, when you think about specifically in the B2B SaaS space, which is where I plan for years, that that growth at all costs was like the golden ticket.

Yep.

The playbook was know, for lack of better words, burn money, scale fast, dominate the market, and figure out profits later. I've worked in those companies and I'm sure you have, too.

I have.

If you weren't growing at 100% year over year.

In fact, there were no companies that I worked for for a while that had any other model than that. That's how they were built. That's why they were. That's why they were funded, because they were designed for that purpose. They were built specifically on a marketplace response mechanism which was, oh, the market likes businesses like this. Let's find companies we could scale quickly that are lenient regarding our profitability and our customer retention, but really love acquisitions and they love, you know, customer growth and they like sales numbers going up and they like stickiness. You know, I think the network effect businesses really kind of created a lot of this. So I guess my question is like, why was the shift just nothing more than just money dried up and so there was no choice but to go this way? Or is there a real sobriety going on where people realize that this is sort of a crappy model, it's not good for customers? Like, I'm curious to know if what the. I'm a bit cynical, as you could tell from my question, but I'm just curious to know what you think.

Yeah, no, I think I like the way you put that kind of a sobriety going on. And I agree with that. I think it's a sobriety or kind of like a reality has punched growth at all cost or the growth at all cost era in the face. It's like that quote from Mike Tyson.

Yeah, yeah. Everyone has a great plan until you get punched in the face.

Punched in the face. Right. And I think a lot of people didn't have a plan, so now they're. They're kind of figuring out as we go. But anyways, this new mandate, right. Of a lot of people will say, peg, profitable, efficient growth. I like to add in the revenue portion. So perg. Profitable, efficient revenue growth. But PE firms are now demanding this, and I think it's because of the correction that's happening, which there's the shift. Right. From just, let's focus on 100% year over year growth and net new to okay, let's land and expand. Let's focus on expansion, let's focus on retention. Let's focus on how we can come up with a sustainable, disciplined, capital, efficient way to grow our companies. And also I think a lot of it is driven by the lack of returns that are being delivered to the LPs. So investors, they're not just asking about growth rates anymore. They want efficient revenue operations, sustainable margins, and a clear path to EBITDA expansion. And I think a lot of that falls on people like you and I. CROs, CSOs, Rev Op leaders, we're all on the front lines of this transition. So if you are a CRO or a chief sales officer in a PE backed company, the job got a little bit harder. Not not doable, but it's harder and you just have to be more strategic. So it's no longer about raw revenue, it's about how can you efficiently generate.

Thank you so much again for listening to the CRO Spotlight podcast. This podcast is an important plank in the Sierra 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. A couple of things to note. If you're a aspiring CRO or a recently hired CRO or even a 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 five years now. It's the first CRO focused course that was out there. 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 number of years under their belt as a revenue leader, whether it be a sales leader or a marketing leader or even rev ops 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. The Serial Accelerator course, we kick off the next one in May mid May 2025. 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, that's a really good sort of segue, which is like, if I may just kind of put another accent mark on my earlier point before I get into that is, look, I'm a cynic, you know, I'm a bit of an older dog here. You know, I got gray hair and whatnot. And you know, I, you know, I, I just see people are very predictable in some respects, especially when it comes to economics. And, you know, there was a long period of time when the way that we deployed capital, it was free, it came with very few strings. So in a market like that, there's no, you know, hindrance to people just taking that money and investing it anywhere they can because it doesn't cost them anything to do. So, so we sort of created an environment where the worst of our nature is going to be, you know, exploited right, to some degree. And, you know, we see it all too often that when the conditions change back to that again, that it's rare that people have a memory and they go, well, it didn't work last time. They just do it again because they can. You know, it's like when the getting is good, you dig deeper in the dirt. When the getting is bad, you hoard what you catch. Right? And so I guess the bigger question, more it's an economics question, is like, are we really in a place where, you know, zero, you know, ZIRP is over, Are we ever going to get back to zero interest rates again? Are we? I don't know. I mean, maybe, you know, I can't. To say no would be sort of. I'd say maybe, likely not, but I don't know that's the case. And if we were, I guess it's philosophically, if we were, let's say to get like five years from now, let's just say it's probably too soon, say five years. Now we get to a place where all of a sudden we get back to zero interest rates, are we just going to see companies doing the same thing again? Because they can. Are they going to kind of get it while the getting is good again? Or are they going to have a memory and say, you know, well, it didn't work last time, so let's not do that again. Let's Invest this cheaper money into companies that are going to last, or is it going to start to create a whole other purge? And here's the reason why I ask. Aside from human nature, which, you know, obviously I'm, I'm not the faith in, sometimes it's also, you got AI coming out right now, which is a much, much easier product to get into the marketplace because you can give it to anybody and they can work on it. And, you know, even though the innovations are not just fulfilled themselves, they're being deployed at such a high rate and they're being implemented in ways that I just do think that you can make. I, I think the, the prospect of being able to make much, much, much cheaper businesses is going to become more of a reality. Right. I know one person who can build a AI model in their house with a couple of, you know, stuff and deploy it into the marketplace and get, you know, a million dollar revenue. And that would be easily something that be scooped up by somebody. And so I can turn this into a 15 or 20 million dollars revenue business. And that may exacerbate some different types of behaviors. Right. So these are all the factors that go into, you know, how PE and how other investment companies are going to be managing their companies and the kind of companies they're going to be looking to invest in. And the other implication is on CROs like you and I, whom now have to implement, be implemented into these companies and deploy strategies that accommodate the way in which these businesses are being operated. Because a big part of the what, what I'm doing right now is I'm taking a look at the companies that are hiring CROs, and I'm looking at the way in which those companies are organized as to whether or not they're set up properly for the right CRO to succeed in. So this is sort of like why the conversation that you're having is important to me and my audience, because those factors have such a huge impact on, on the success of a CRO who goes into a company is at the effect of these philosophies and these dynamics that are moving all the time. So I'm just sort of interested in, like, what your thoughts are on that particular role. Part of it for a CRO.

Yeah.

And I think.

Let me, let me go back to the one question that was kind of buried in that, that information you just talked about was do I think we're going to learn?

Right?

I think, I think the answer is yes, I do. I do. I think yes. And then I would say, which I hate this cliche saying, but I would say yes, but it depends.

Right?

Yeah, of course I think the majority of call it the PE space and even beyond the PE space, the VC space, maybe the public space. These people that are operating these businesses that, that are deploying capital into, into these businesses are going to learn from the mistakes they've made. And I think it's going to. This, this, this realm that we're in now is going to stay around for a little while. Call it maybe two to five years, maybe even less, but we'll see what happens. But I think they will learn and I think that eventually people are going to say, okay, look at the returns now, look what we've done. Look at the new strategies we've implemented. We've actually had to work. And that's the one thing, you know, I've, I've, I've worked for a PE backed port company, Port Cos. I've sold professional services into the private equity space and then I've worked at an actual PE firm. So I've kind of seen all aspects of pe and what you don't know, unless you've worked for one is that a lot of times in the past, right, this growth at all costs and just cost cutting and leveraging, et cetera, you know, private equity will pitch. They have an amazing playbook and a lot of them do. Some of them don't though. Some of them literally just run the company and instead of, you know, you probably heard there's two models of pe which is a push and a pool model and sometimes they will just push information on you and say good luck. And at the end of the day, right, they've in the past they were or they had the ability to grow this, grow profitability and grow EBITDA and sell it. That that day is done, at least for now. So, so I do think they're going to remember that and the shift is going to stick around for a little while, but. Right, but it depends. But on the other side, I think there's going to be some firms that say, well now money is flowing now, interest rates are extremely low now, capital is cheap, debt is cheap, we can leverage this. So it's probably going to end up being a mix. That's what I think is going to happen. I'm not a fortune teller, but I do think that there will be some sort of a mix and it will be better than it was. Maybe not as good as it is right now, but there will be a market shift where it will level out somewhere in the Middle, I guess you're.

Saying it's more going to be like two steps forward, one step back type thing, right? I think you're probably right. You know, it's interesting. I think that part of it is, you know, there's a difference between like perceived value from an investment standpoint, right. One is, you know, compound returns, which is, you know, get a company to get to 10 million and sell it for 100, right. And that's a huge wow, it's a great win for us from a financial perspective. And then the other value is, you know, customer value and equity value in the marketplace, which is, you know, we built something to last and you know, people are always going to be coming to us and we built this thing that has sustainability and really happy customers whom we've built a relationship with, that we can expand those relationships into other markets and other sectors that, you know, offers a much greater longer term opportunity. And it's harder to do that. You know, that's the problem is that it's just not easy to do it, I think for two reasons. One, building a company that's customer centric is harder, as you already said. And it's also, it forces investors to scrutinize on businesses that have that type of potential as opposed to a company that just has the potential to be bought in three years or four years. Because you're sort of looking at business with a different lens, right? Is this something that we think has long term value? Is this a brand that we think could stick around for a long time? Do these people have the ability to be able to create something like that? You know, and you know, it's, that's why we see so few sales forces, you know, and so, so many more of the smaller guys that just be grabbed up as an acquisition by a salesforce who sees them as an acquisitional, you know, component of their larger strategy. But you know, CROs are caught up in this, right? They get these jobs and you know, this is like sort of where I talk to my clients about is, you know, you got to know going in like what the environment you're being hired into is. And for two reasons. One is you just have to know. I mean, you have to do your due diligence because you have to know like the environment dynamics of what it is that you're being asked to do predicated against what their objectives are. And sometimes what they'll tell you is different. So when I talk to my clients, I'm like, don't just ask them like what their goals are. But ask them what their end goal is. Like, what. What is it that you're. Your sort of big North Star is here. And if you hear something like, well, we think that this will be an acquisition target in five years, that's a different conversation than, you know, well, we'd like to be, you know, the number one, you know, brand in this space in 20 years.

Exactly. Yeah. Yeah. And I think. Go.

I know, I'm good. I'm just curious what your thoughts are on. On the CRO sort of perspective on this, you know.

Yeah. And I think the one thing I'd like to touch. Touch base on, because you, you know, one of the couple conversations we had prior, you hit on this. And I think this is. This is really important.

Right.

And it's the fact that. And I might go off on a little tangent here, so please.

But tangents are welcome.

The fact that the CRO role and the CRO title. I don't think enough people talk about this. And you kind of put this in my head, and I did my research, you know. You know, CRO title, the CR role is relatively new.

Right. It's 15 years. About 15 years old.

Exactly.

Crazy, right?

It's relatively new. And the thing is, I think it's a baby.

It's a baby compared to other C suite roles.

It is. And, you know, if you're in this space, everyone has probably heard that the average tenure. The average tenure of a CRO is about 18 months or less, something like that. So the question is, we kind of talked about this. Why is that?

Right.

You have your thoughts, I have mine, and I think most of ours align.

Yep.

But I think what it comes down to is a couple things right now. Yes, a PE firm could have a turnaround situation where they drop in a CRO and it just doesn't work out. But I think it's beyond that because you and I agree on what makes a true CRO. Well, a true CRO is somebody that owns the entire revenue organization. Yep. And it's three buckets. Sales, marketing, customer success, and then, of course, sales enablement, rev ops, et cetera. Anything that's attached to the revenue organization is what the CRO should have purview over.

Yep.

But you know as well as I do, many times that's not true. Also, it's difficult.

Right.

Because what are. What is the path of a CRO most of the time? Some of that comes up through sales. I came up through sales. Yes. I have a marketing degree. But am I a cmo? No, I'm not So there's areas that someone has to grow into and that there's areas that someone lacks. So I think figuring out what stage of the company, where it's at, and understanding, do I really need a VP of sales? Do I need a SVP of sales? Do I need a chief sales or a head of sales? Or do I actually need a CRO that's going to set the strategy for the entire revenue organization, go in and effect change? So that's one thing I think we could probably talk about for entire hour or two.

But I'd love to, more than happy to.

You know, I'd love to hear your thoughts on that because.

Yeah, sure. I mean, this is like a big, big part of my whole, you know, sort of platform. Right. It comes down to a couple of things. If I would say, right. If I'm going to break it up into pieces, because I've sort of thought about this a lot. Right. You've got. You got a couple of things. You have. Let's say you said it already, right? Because the role is so new. There is still a lack of maturation in the way in which the role is being manifest in the. In the marketplace. Okay. So there's still. I. I've said this many times. I sort of bored to hear this already. But, you know, I look at the CRO role, unfortunately, it's sort of like tofu. You know, you can make it taste any way you want. And unfortunately, that's not a good thing, you know, so, you know, I can meet and I do this all the time. As you know, I have these CRO round tables and I get 30 of them come in a room, and they all have. Not all of them, but there's like four or five sort of representatives in that room that have different types of jobs with the same title. If I had a CMO round table, they'd all run marketing.

Yeah.

I mean, if a CMO came in the room and said they don't run marketing, I. It would be everyone. Look at them. Like, I don't get it. What are you talking about? But a CRO can kind of have like a lot of different. It's really weird, you know, And I think that that's something that absolutely not must change. Like, we need to be more resolute about being precise about the way we define this role so that no matter who has the role, there's no ambiguity about what that person does. And that's not the case today. So there's one thing. And then the other thing is you said the other second part is the role has been grounded in a sales orientation since its inception. And so most of the people that come into the role are coming from sales organizations where they have a specific type of personality, a specific type of competency that's relatively, you know, aligned with a sales driven function. And they bring that modality into the CRO role. And as a result, it has that sort of bias at times, not just from the person that comes into the role, but by the organization that hires a CRO because they're bringing in somebody from a sales orientation that tends to be almost a disproportionately part of the way the role is viewed. Even though they might give the person other things, you know, those are baubles that are on top of what I think is almost exclusively looked at too often like a sales role. Okay, that's the second thing. The third thing is the stage of the company that hires the CRO in the first place. This is probably the thing I think that is the on the side of the organization, it's the when the CRO, not how the CRO. And so if I'm hiring the CRO too soon, that's a problem for reasons we just talked about. And if you wait too long, you build up a monumental complexity that that CRO needs to solve, which makes that CRO job even harder to be successful. So there's this sweet spot, right? So, so I would say, like, if you get all those factors put together, if I'm listening to this as a founder of a company and I'm looking at this as a when do I need a chief Revenue officer? I'd say there's three things you need to think about. One is, what do I think one is? Is my definition accurate? What do I really need? In other words, like what, what specifically is it that I'm looking to bring this person to do? Am I honestly, am I looking for this person to come in and get us more logos and get more deals closed? Or am I looking for somebody to come in and actually kind of bring us to. What I say is like the post, you know, growth stage, you know, myopia, which is kind of organized my, my organization and turn it into a revenue engine? I need someone to do that. And then the second part is, am I at a stage where that's appropriate? Do I have enough operational complexity for a CRO to come in and actually make that happen? And then the third or fourth thing is, am I set up for that properly? Do I know how a CRO needs to be supported and is my organization ready to make the changes required for a CRO to succeed? And then the last part is identifying what a good CRO is and how I bring one in that knows how to do this. So that's the whole, like, model there, you know. And I think that if you don't think about it at all, that level of granularity, they likely are going to make a mistake. 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 Sierra 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, six 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 these are great conversations. I facilitate them. The CRO Master's Councils, again, they're twice a month and they last for at least six 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.

Yeah, that makes, that makes a lot of sense. And I think, you know, just kind of diving into the conversation here. One of the Things that, to kind of piggyback off that. One of the things that I've been talking about a little bit more on LinkedIn and the content I've been putting out is this mantra of getting back to the basics.

Right.

I think it's important in today's market is because I think specifically in the private equity space and the PE backed portfolio company space, complexity is celebrated. But simplicity is key and I think a lot of people are yearning for simplicity, especially in today. You know, for, for one example, you think about the tech stack and AI, you know, there are so many different tools that a CRO or a CSO or rev ops, people have to choose from, from every different facet of that revenue organization. And in AI today there's always that interesting dilemma between should I be a first mover or should I wait for the second round? And I think just overall, if we can get back to the basics, that's going to be a huge shift and it's going to be exponential for companies that need to grow in this profitable, efficient revenue growth space. So, you know, getting away from this complex market and going back into simplicity I think is key. I think sometimes complexity can get in the way. We add too many tools, processes, workflows, too many strategies thinking they'll prove performance. But I think really what is going to move the needle at the end is just keeping it simple, right? Kiss Keep it simple, stupid. The best revenue organizations focus on clear, streamlined processes, focus on what truly is going to drive results and eliminate those inefficiencies that complicate execution. And I think also, and one of the things I recently went through was a revenue architecture course by Winning by Design. Very good. I think if you're in the, the revenue space, you should take that, that class. It's very interesting and a couple of things I talked about that were of interest. One was this, this lean or agile revenue factory. I think that is important today and you can do that or, or kind of go through an agility through simplicity, which is just coming up with a more simpler process that's easier to scale, it's more flexible. If you focus on right, what are the top three, three okrs, what are our, our objectives and key results? When you have a clear strategy that's for lack of a word, simple, everyone can follow it. It has a true flow, it has the right process, the right strategy, the right feedback loops, it's easier to adapt and execute and then you can see those actionable results. So that's, that's one thing I've Been talking a lot more about, and I think it's important to mention.

Yeah, I agree. What are the, what do you think the. Are the enemies of simplicity?

So I think one of the things I just talked about was there's just so much we, and, and not to like, get into some sort of psychological conversation, but we just have so much at our disposal. Social media, LinkedIn. I mean, hell, you can go on LinkedIn and there's thousands and thousands and thousands of people putting out content. How do you know what's right? How do you know this person has done it? How do you know what. What to follow? There's so much. Right. So how do you, how do you get.

Really, really.

I think what it comes down to, how do you get focused? I think the way you do that is you start from the beginning. What is the strategy? What are we trying to accomplish? I guess would be the first thing. What are we trying to accomplish within our organization? And then you. That will affect the strategy. Once you have the strategy that will tie into the mission, then you can start to set the goals, whether big or small. And that's, that's really going to start helping you come up with the simplicity that's needed to scale that organization.

I agree. I think that there is like a overabundance of information, a lot of it good. Right. I mean, there's a lot of smart people who have really interesting things to say, and it's really easy to go, oh, shit, maybe I should do that. Maybe I should do that. You know, and it's sort of hard to, like, latch yourself onto something and have the confidence to feel like I'm going to stick with this and I'm going to do this. This thing because I committed to it and I'm going to make it work as opposed to being disrupted by an alternative position on something. And, you know, there's a lot of smart people in the marketplace and, you know, I'm within, within the space I'm in, even, right. There's like probably four or five good top voices that kind of have a. Although similarly, you know, sort of contextually similar message, they might have a different solution. Right. I think that's one thing. And the other thing too is I think that the software industry has really cleverly learned how to take advantage of complexity by trying to make the market even more complex. And, you know, with complexity comes doubt, and with doubt comes risk. And risk can be satiated by software, and software is created to mitigate risk. And so, you know, in an environment where there's not a lot of clarity. There's a lot of opportunity for companies to build products, to build clarity that also just clog up the marketplace with more complexity. And so I look at companies, they're, you know, I mean, it's too easy just to go online right now and click a button and buy a new piece of software for, you know, 15 bucks a month. And all of a sudden now you're like looking at another dashboard or you wasted money because you're not losing it. And you look back a year later and you see all these subscriptions that you have that you're not using because someone sort of just tantalize you in a moment that they're cleverly knowing you're kind of feeling a little doubtful. And the temptation not to do that and controlling those things with, like you said, well, these are the four things we're going to do, and this is how we're going to do them, and let's stick to those things. It's really, really hard to do. And I do agree, it's the CRO's job, in my view, is to kind of bring that sort of mantra to the organization, which is at the beginning, to your point, the CRO needs to be the person that brings in the simple strategy and the clear mission. And most companies, you can do that, like, if any. I talk to clients all day long and I can tell them, look, it sounds to me like you guys solve X for this person and you do it this way. So what are the ways that you're going to get their attention, and what are the ways you're going to get them to commit to you, and what are the ways you're going to do to keep them? Like, that's the conversation, right? And if I could build an organization that does all those mechanisms and those motions effectively, then we can start thinking about where the gaps in our opera operation, where we have inefficiencies or we have to scale, you know, and there's probably ways you can make decisions. But I think when you start to hire people, everybody comes into the organization with their own historical perspective on what worked for them, the softwares that they use and the people that they work with and the modalities that they invested in. And yeah, you have to get all these people in a room together. Everybody has a strong opinion about those things. You have to pick one and say, look, you know, I just had a conversation with a guy today. He told me very bluntly, he said, look, we decided we're going to do a salesforce Instance for our company. And I asked him, I just said, hey, I'm just curious. Why'd you choose Salesforce? And, you know, he paused, and his answer to me was, well, you know, I just. I used it in my past company, so I really understand it. That was it. And it might be a perfectly good reason. Right. I mean, that might be it. Like, I'm familiar with it, and, you know, I don't want to carve out a big hunk of my brain to go learn something new. I'd rather just take the knowledge I have and apply it. Whether or not this might be the right tool for us or not is sort of secondary. It's just really like, I don't have the freaking time to learn something different, so I'm just not going to. And that's a. That's a really sticky part of these sort of businesses that we're in, you know?

Yeah. And just to that point, just a quick thought on that is, you know, assuming this person was a. A revenue leader or maybe CRO. Yeah, CRO. So thing is, there's so many things that are bogging every C suite executive down, but at the end of the day, that's a crucial decision, right? That's a crucial decision that's going to affect the entire organization.

Huge decision. It's going to color the organization because companies like Salesforce are. They become like. I almost look at, like an organization like that has cleverly set themselves up to sort of be a. I'm gonna use an interesting analogy here. So did you see. You saw the original Jurassic park, right?

Yep.

Everyone saw that, right? The first one. How could you not go see a dinosaur movie? Everyone wants to go see a dinosaur. So anyway, there was a really interesting part of the movie where they did a nice job of talking to the lead scientist who was explaining how they extracted the insects from the amber and then they were able to take the DNA from the mosquitoes. Right. Blah, blah, blah. And he was talking about the fact that, like, even though they're able to extract the DNA from the mosquito, the DNA is not 100% intact. Like, there's pieces of it that are missing. So they decided cleverly to replace those pieces with frog DNA as a connector. Right. And I think a lot of technologies are frog DNA. I think they're just. You have a strategy, but there are holes in the strategy. And you fill that strategy with technology, and the technology becomes a part of your strategy. And if you buy a certain technology, it's going to color your strategy because now you're dependent on that technology for your strategy and that becomes a sort of a swampy hole you get stuck in. So I see this happen a lot, you know.

No, I agree completely with that. I mean, I, I was gonna. The point I was trying to make is with, you know, your CRM, it's. It's quote unquote, your single brain. Exactly.

So.

I guess in my opinion, right. If I'm a CRO in a company, I have to put way more thought into that, or at least that's what I'm doing. Because at the end of the day, that's going to come back on you. If it fails, it fails on you.

Right.

You're the one to blame and that's your job. So I guess, you know, in that specific case, I would put a lot more, more thought into it.

Yeah.

But one of the things I mentioned that I want to, want to expand upon because I'd like to get your thoughts is this, this thought process of.

Right.

This lean factory or lean revenue factory.

Yep.

And I think, I think it's really interesting because this is kind of expanding upon that kiss, right. In a world full of complexity, how can we keep it simple? So I think it's a simple concept, right, to operate a recurring revenue business as if it were a lean revenue factory. And this idea of seeing each go to market motion, which I think sometimes, right, there can be one, but most companies, especially mature company, there's going to be several go to market motions. You see these go to market motions as a revenue production line. This thought process that Winning by Design talks about is kind of rooted in the industrial revolution and how it customizes them to suit distinctive needs for each reoccurring or recurring revenue business. And I think there's a couple different things. So there's three goals of the lean revenue factory. Production efficiency and quality. Then you look at each one and say, okay, what is the actual. That's the goal. But what is the recurring revive factor? So production is tied to how can we accelerate growth? Efficiency is tied to how can we lower cost? And quality is tied to how can we deliver recurring impact. And as you continue to go on, each, you know, lie down on their production affects accelerating growth, which the operational directive is now how can we implement a proven process to help scalability with efficiency? How can we lower cost? That's going to apply unit economics, which is cost and affect sustainability. And then the quality piece is delivering recurring impact to instill quality management to help durability. So if you think about a revenue organization through this lens, I think it becomes much more easy to analyze each line. You can measure the direct inputs, the throughput the output and optimize processes to achieve your okrs and achieve your desired results. I just really like this idea of having an agile lean revenue factory for your revenue organization. So I'd be curious to see what your thoughts on that and if you've seen this with some of the CRL clients that you've worked with.

Yeah, I, I do. I, I think it's an interesting point because as you know, like one of the knee jerk, I think holdovers from the growth at all cost era is, you know, just hire more salespeople.

That's right, right.

It's just sales people. And it's amazing too. Like I've seen this actually looked at as a metric. Like we just got four more salespeople on board, you know, so all of a sudden they make their, they increase their projections like it's, it's nuts. You know, they just like, okay, great, that means we're going to get in this much. There's this really over amount of burden on the reliability of that as being like, oh wait, you know, well, we've got more people out in the marketplace, we're going to make more money. Now you know that's not true. But you know, it looks good and it does say that there's, it could happen, it might happen. Right, But I think that adds complexity, right? Because now I've added more cost, now I have to train four more people, I have to onboard four more people. I have to get them the technologies, I got to deploy them, blah blah, blah, train them and develop them and all the other things go with that, manage them. And your proposed model is the opposite, which I tend to look at is like, you know, how, how, what's the capacity of your salesforce? Are they actually working full time? Are they actually doing the things that they're supposed to be doing enough of the day? And even more importantly is, do you really know what they should be doing with their day? Like people make very general comments like well they should be on the phone, you should be talking to customers, right? No, but I mean which ones, which customers and what should they be talking about and at what stage should they be talking to them about that? And you know, there's so many other aspects of that that are much more important, right. Than just the basics. And when you can engineer like what the life cycle of the optimal salesperson is, which one of the partners I work with actually does this, they can look backwards and they can actually see the best salespeople, not just like their behaviors, but literally the entire engine around all the ways that they have their conversations and the nature of them and the stages that they have the conference and who they're talking to. And they can sort of like lean up and say, all right, this is what we need to replicate. You've identified like the four events or four things that need to be done that can, like you said, lean things down so significantly because now you can measure whether or not those things are being done or not and remove all the other things that aren't. That and it makes your organization a lot more efficient. And I think the same thing goes with marketing, right? I mean you test and test and test until once you figure out what works, just don't do anything else. You just do the stuff that works, right? And then you maybe do a little experimentation because you think you have some innovation there. But I see a lot of money being wasted because no one ever kind of doubles down on what needs to be done because everyone's guessing that it might be better somewhere else. So I, I agree. And I think like the, the, the profitability factor that we talked about earlier is going to be a big part of this is, you know, is your company not only effective, but is it doing it in a really cheap and less expensive way? So as a CRO, I think you sort of have to be a really big partner with your CFO to kind of know how to do that. And matter of fact, I think the financial component of the CRO role is going to become more and more important. And I think that's where I agree you're sort of managing the business as a business owner and not just a revenue generator.

Yeah, no, couldn't agree more. I think it, you know, kind of go back to this whole, what we started, the precipice of the conversation was this, this GAAC versus pg, right? Growth at all cost versus profitable efficient revenue growth. I think there's a couple, a couple main themes or main, call it strategies, revenue strategies that are going to be quote unquote winning moves in this era. I think a few just to call out. One that's been on my mind a lot lately is what I'm calling ABE or account based everything over mass prosp prospecting. So the old growth at all cost playbook is cold outbound at scale. You know, smile and dial, cast a wide net that's over. The new per playbook, for lack of better words, is focusing on high probability accounts that, that really Truly equate or, or match your ideal customer profile.

Right.

These are going to have the highest LTV potential. So there's a tactical shift and I think this is where it goes into this new era of AI is how can we find the right AI driven tool or intent tool that's going to signal which accounts are in the buying process and how do they match. Actually direct up with our, for lack of words, icp. That's one. I think another thing that kind of goes hand in hand with that is pipeline efficiency over sheer volume. So the old GAAC playbook is more pipeline equals better. And of course we know you need to have at least 3x in the pipeline to meet your goal, et cetera. We know that old adage. But the new playbook, I think what's more important over more pipeline is pipeline to quota coverage needs to be optimized or optimal. So the tactical shift here is instead of just filling the top of the funnel, I think what you can do as a CRO in a force strategy from a top down perspective it is enforcing the strict deal qualification. That could be medic, that could be bad, that could be spiced. Lots of different methodology frameworks where we could leave for a whole nother call. But I think, you know, without setting that goal or setting that overarching strategy for the entire sales team, your salespeople are going to go about it the way they know or the way they knew or what they were told in the past. So I think that's really important. And then last you call it top 3 in my opinion, last but not least is land and expand. I think in this era is king. The old playbook, obsession with net new. How many new logos can we put on our website? Whether they churn or not? I think the new playbook is all about expansion, account expansion, Upsell, cross, sell. Of course, how can we retain our customers? But upsell, cross, sell, land and expand. That's the fastest way to profitable, efficient revenue growth. And I think the tactical shift here is we really need to train our CS teams. And not saying that people aren't but I think they need to be trained properly on how to actually manage account manage. Right. It's in the name of the dang person. It's an account manager. How do you manage the account? But it's beyond that how do you manage the account properly, which means you service the client or the prospect, but also how can you find opportunities to grow. And I think one of the things that. And then I'll rest on this piece but how many times as a sales rep in my past was or were I brought into a deal that I sold and all of a sudden things went crazy awry and then I was getting pulled in at the very last minute when they're about to decal.

Right.

If you can get ahead of that, that shift or that curve where the account manager says, okay, I know the signals that are happening when a customer is having issues with xyz, I'm going to loop in the salesperson, loop in, you know, the customer, success manager, whoever, at the right times to avoid that conflict I think is crucial. And that's going to help with retention, et cetera. So those are just, I think those are the top three things that I've been thinking a lot about lately as opposed to just net new and logos is what's really going to create a difference in portfolio companies as we move throughout this era.

Yeah, I agree. And I think the, the key to what you just said there in my view, is the customer. Right. So you know, if you look at like any of these modalities, like Medpic or whatever you want to call them, I have no sort of particular love for any of them specifically. I think they're all perfectly fine whatever the company decides. And I know a lot of companies put forth their philosophies and their consulting around specific modalities because that's what they've determined make the most sense. It's fine, whatever. I do think there should be some consistency in the way we go to market. Right? Everyone should have a similar sort of profile, but those things should be driven by data. Right? Like every company's got their own market and different buyers and different things. And I think the first five, $10 million worth of business is going to be the experimental phase where we sort of figure that stuff out. Like, okay, we've identified the way in which or our customer buys from us. The more importantly is we identify how our customer responds to us in the marketplace and why they want us in the first place and then how we keep them and how we grow them and expand them. And I think that's the difference is not just looking at how we get them to sign on the dotted line or give them our credit card number. More importantly is, you know, what type of customer do we know is the one that's going to have a longer term value proposition from us that we can expand with and that changes your ICP dramatically. Right? To someone who's just going to kind of knee jerk sign a contract with you to at least someone Who I think is going to have the potential to be a longer term customer. And I think that's the way the organization in my view, should be set up today. Because you and I both know that once you fill your bucket up with customers in that model, you can get a lot more money out of them, a lot cheaper money out of the ones who you already have than going and getting new ones. Right. Because it's those, those opportunities become a lot more valuable to a company. And I do think that's what's happening. I think that's where the chief revenue officer, in my view, needs to be much more of a customer centric organizational leader than someone who's just about growing the business at all costs. And that's a different mindset, you know, so that's why I think marketers, frankly, who think this way naturally, are much more customer centric, are inclined, inclined to be really good CROs from that perspective because they bring a lot of intelligence around, you know, understanding customer research and knowing how people think and why they buy and what their value propositions are and what their need states are from a different perspective. And I think that that's where I think some of these disciplines come, come into play together.

Yeah. One of the things I was thinking about, Warren, is, you know, you, you've been a CRO many times. You have advised so many CROs. I'd love to get your thoughts and I'll give you mine as well. But what are the top three things that you are seeing? And it might be some of the things we talked about. What are the top three things that you're saying most CROs are dealing with today? What are the top three challenges? What's keeping them up at night? What are you saying that is affecting people within our space the most?

So the main thing that I'm hearing from my CRO clients are just the beginning thing that we talked about, which is just trying to what I call, right, size their role. Right. They're not really in the position, they have the title, but they're sort of not being given the what I, the four things that I say my clients need. They need authority, autonomy, resources and Runway to do their job. And they're not given that right. They're told that they're going to get it, but they don't really. And the way it manifests is typically they're being sort of marginalized to run the sales organization almost exclusively or you know, they're allowed to touch other parts of the revenue operation, but they're not really making decisions around it. So they don't have the level of authority. They have to make larger strategic implementations that day. The second thing they're struggling with is Runway. They don't have enough time to let the things that they implement manifest to get results. Right. I mean, you know, without getting into the political side of this, if you look at the general perspective around the whole, you know, tariff argument that's going on right now, yeah, this is something that'll take a long time for it to make a difference. But if it does, there's a good possibility that it'll make a huge difference in rebalancing the trade organizational, you know, relationships we have. But you could tell that's going to take probably two presidential cycles for that to take place, because you have to have it in market long enough for everything to recalibrate. But we don't have an organizational setup with our current government that allows things to fester for that long. It gets changed every four years. I think the same thing happens with CROs. They're in organizations where they don't have the time or the Runway to implement things so they could see them through, and so they don't get to fruition, and they're forced to have to deal with what they're dealing with. And then the last part is, I think it's a resource problem. It's really hard to find good people. And they know that ultimately, like, the people part of the business is so critical, like finding the right people. It's hard, you know, and I think, like, getting people in their seats who know the job and can do the job, keeping them in the job, developing them, it's. It's becoming a big problem. And the reason is because all the good people are either A, already working somewhere or B, they're starting their own businesses. You know, they're just. They realize the marketplace is like, I can go do my own thing. So I just see that it's a tough. It's a tough model for them. Those are the main things I see, and I see there's a lot more, but, you know, those are the three things I hear the most.

Yeah, I would say that's right. I agree with that. I think the three things that. To kind of piggyback off that are really all the things we talked about today. For me, it's aligning and optimizing the entire revenue team or revenue organization with sales, marketing and customer success and making sure. You've heard this, but making sure each. Each group is not acting in a silo.

Right.

You have to figure out a way to streamline those three groups and make sure they're all rowing in the same direction. Number two would be balancing growth with profitability.

Right.

We can't just make a complete shift from growth at all costs to only focusing on profitability. I think the best PE firms and the best companies are going to find a middle ground to balance both. That's number two. And then I think three is focusing or shifting some of, not all, but some of the focus away from net new and logos to figuring out how are we going to drive retention, how are we going to drive expansion, land and expand. So those are the three things that I think are top of mind for a ton of CROs and where I would start within an organization.

Got it. Well, look, I can tell you and I'll talk for four more hours. So we're out of time. So what are you up to? What are you doing and how can people get a hold of you and how can you help them?

Yeah, so I think at the beginning I mentioned, right, I'm in a transitionary period, just finished a role. I am hopefully, like I said, in the very end of that transition period, but we'll see. So now I am interviewing with a couple companies and I hope to land very soon where I can really start to affect change within the revenue organization. Where can they find me? They can find me on LinkedIn. But one of the things that I've been doing a lot is putting one article out a week on my blog. I have a blog on Substack, it's called Titans of Revenue. And I talk a lot about value creation, CRO, cso, revenue, et cetera. Anything that would be considered under the revenue organization are things that I care about, things that you care about, and things I'm writing about. So you can follow me on there. Other than that, you know, this has been great. This has been a good conversation. It's been insightful and enlightening and I'm just happy to be here.

Yeah, thank you.

I appreciate it. You brought a lot.

And as I said, I. I found you because of what you've been writing. I think it's great stuff. So. So definitely check out what John's or John has to say. It's really, really well thought out. A lot of detail in it, so. Well, anyway, well, thanks, man. It was good talking to you and I'm sure we'll be talking soon. I know there's some other things we talked about doing, so appreciate your time and we'll be seeing you around the neighborhood.

Thanks, Juan.

You got it. 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 the Croat. That's thecrocollective. Com, and we look forward to having you join us next time.