Striking the Balance Between Happy Investors and Satisfied Customers with Lawrence Lanzilli

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. Welcome to this episode of the CRO Spotlight Podcast. I'm Warren Zenna, the founder of the CRO Collective. Real excited today. I've got a great guest with me. I met Lawrence Lanzilli at the recent CRO Summit in New York. He was a speaker and I was really impressed with him. He had a really unique perspective, very smart, very knowledgeable. He's an investor, He's a technologist. He's a CRO, a fractional CRO to a whole bunch of companies. And he's invested a lot of money and a lot of products and services that he oversees, and he's got some really cool clients, and he's got a really interesting perspective about the investment community and the role of the Chief Revenue Officer in the face of and dealing with boards and investors. And it was really great because I don't hear this a lot, so I thought, wow, what a great topic. So without further ado, I'm going to jump over and I'm going to have listen to the conversation about Larry. He's really great. He's really smart guy. Stay tuned. First, I want to thank you for doing this. I met Lawrence, Larry, as his friends call him. Right, yeah, right at. At the CRO Summit. He was a speaker there. And as you know, I chair that event. And it was great to hear Larry speak because he had a very unique perspective on the Chief Revenue Officer because he's an investor in companies and recognizes the importance of having a Chief Revenue Officer on the team and spoke a lot about that. So I thought, wow, first of all, great speaker, smart guy, we got along well. So I thought I'm gonna invite him onto the show. So, Lawrence, welcome very much for being here. Thank you very much for being here. And I'd love if maybe you could maybe expound a bit on, on your background and, and what you do and how you ended up there.

Yeah, no, thank you very much, Warren. Appreciate it. And that event was was fantastic, by the way. I, my expectations were definitely exceeded. I, I, I didn't know what to expect going into it, but it ended up being quite a, quite a good show. I'm still having a lot of conversations from that show and the, all the presentations were really good. So, yeah, so from a background perspective, I grew up in tech. You know, it's interesting. I have a degree in computer science. I'm technical, I do enjoy coding somewhat. I do a good amount of it. Just kind of not professionally, we'll say. But, but I, I got a degree in what I knew I wanted to sell and, and I was aware of that before going into college. I knew I was going to be in some sort of sales or growth type of career and it was just what do you want to, you know, what sector do I want to be in? I want to pay it, it's due respect and make sure that I'm a practitioner in IT as well. And so that's how I got, I ended up with my degree in computer science. From there I, I went into some sales support roles with Microsoft and another big firm or two, but quickly went out, started my own software company, ran that for eight or nine years, exited, built some, some, some good VC relationships who actually, you know, this is probably my late 20s, those guys are still my best mentors in business now. So I've, I've been involved in multiple businesses with them. They're investors in my current business still and current businesses, plural, they're behind a couple of them. And you know, it's, it's just build, sell, build, sell. And in order to do that you need to create value, right? You need to create value for the problem that you're solving and you need to create value for your investors. And I think that most CROs, and this was really the subject of my talk at the CRO summit, most CROs are really good at that first one, creating value for the problem that they're solving. Scaling teams, bringing in marketing, bringing in sales. I think it's, it's, it's a little bit of a lost art on CROs as far as creating value for the investor, right? Looking, looking up the chain to the CEO, to the board, and into the investors and say, what's going to get us more capital? What's the growth plan that's going to satisfy investors and really help the CEO, you know, obtain that capital to scale. So that was really what the talk was about at the CRO Summit.

Yeah, that's what interested me. I talk about this topic a lot. I think I have a different perspective on it. Not, not that it's different, contrarian, it's different angle. And that is. This is interesting. We talked about this and that is the, the danger that CROs have in trying to satisfy customers and investors. They're not always the same things. You know, sometimes if I'm going to pursue a happy customer base, there may be things that the investors may not want me to do because it won't satisfy their needs. And so I'd like to talk in this conversation about how does a CRO, I guess two things. One is just continuing to expound a bit more on the role you believe a CRO has in a company, which I think is great for it from here. But then how do they navigate that? So if I'm. It's a big problem. I see in my world, okay, so I have the CRO who as you said, is responsible for generating revenue and we talk about the larger scale revenue, all the things associated with that, how the marketing is being conducted, how the marketing is being connected to sales, how the sales organization is being run, how the customer success and renewals program is being. And then they also have to manage up upstream at the manager CEO who's usually being managed. If they're being invested by the board, the board's telling the CEO, you know, we gave you some money, now do these things and we'll give you more. And so this is usually when I see my clients call me and tell me that there's been, let's quote a quote unquote pivot and all of a sudden the company's asking him to do things or her to do things that are seem off mission because the investors are looking for metrics that aren't necessarily reflected in the marketplace in pursuit of the best customer outcomes. And you know, these, these sort of navigation, navigating these different things, they're not always the same. I think if I would say it happens more in SaaS businesses where there's like a, more of a recurring revenue model than there is with some sort of a service model. I see. And I'm just curious. So you know, there's two things you're saying, I think, correct me if I'm wrong. One is that CROs aren't good at understanding investors and there's a skill set that's needed there or maybe an upskilling there. And the other part is they're conflicted. I think there may be conflicted in terms of who's their master, who's in charge, who am I serving. So I'd be interested in just hearing your point of view on that sitting in the CRO seat.

Well, yeah, so both points well taken. It might not be that they're not good at it, it's just that they're underutilized. Right. That if, if you're going to put, if you're going to put a growth plan together. And, and yes, I want to hear it from the CEO. If I'm the investor, I want to hear it from the CEO, but I also want to hear it from the person that's going to execute. I, I, I need to hear it from the CRO. And I think, I think they're a little underutilized or maybe not good at it because they're underutilized and they don't get the reps. You know, they need to, they need to get the reps more at bats.

Yeah. Yep.

So, yeah, the pivot part was interesting too. I've been a part of those, well, I shouldn't say plural. I've been a part of it once where we had a really great SaaS product. So you hit the nail on the head there. We had a really great SaaS product. We were crushing it. Cloud started coming about and it's like, wait, we should be a cloud product. And then the model definitely changed. They were looking for other. I wasn't an investor in this company, so I was answering to their metrics. And yeah, we needed to pivot and whatnot. And sometimes it's just a case of having the right relationships with the board members and with the investors so that you can be part of articulating the plan.

Right.

Because otherwise it's going to be dictated.

Yep. And usually it's what happens. And your point is well taken in terms of expounding this issue. If the CRO is underutilized, which I agree that most of them are, they're kept in the closet or in the garage, so to speak. And so they don't have the reps Right. To understand like how to deal with the board and have the kind of access to them. And then as a result, then they don't have the ability to articulate or know how to navigate these difficult conversations where the CRO, in fact, probably has the most valuable perspective given their role in the company and it should be listened to, but they don't have the credibility they've ever been there before. And I think you're right. Leadership doesn't sort of like, they call it like the Ferrari and the garage. You know, he's not really taking the car out. Yeah.

And there's other aspects too that are going to make your opinion more valuable. Right. If you want to, if you want to talk to a, to a board and tell them this is what you should be looking for as an investor, it's really useful if you're also an investor. Right. So if you're sitting on boards and, and you've put your own money where your mouth is and it's like, hey, this is where things fell down prior, or this is what I should have been looking at, or this is what was successful for us in the past, then you become a little bit more of an advisor as well. If. And you get additional reps. Right. So it helps to also be out there and actually putting some money into, into the game.

So you're saying CROs should be investors so they have a, understand the experience of what a, what an investor is going through. Is that what you're saying?

If you feel, if you feel comfortable with it, you know, if you, if you do want to, you know, write a, write a windfall projection and stand in front of a board and say, this is why I think that this venture is investable. Yeah, definitely. It definitely helps to have, have been on a, been seating, sitting in a board seat and have your own money invested in saying, okay, how are we going to scale this company Prior?

How many. I apologize, I never heard that before. How many? I think it's a good point. How many CROs do you know that have investments in companies? I mean, I would say it's very few. Most of the CROs I talk to, they're just running sales teams. We. That's another conversation we can have. But, you know, they're not really at the point where they've got money, where they have a portfolio of companies they're investing in. I agree that it would be wise to have that credibility in front of a board, but most don't. I mean, I'm just curious to know what your thoughts are. How many, how many do that? They're an average or is there like a percentage I know of. Just in general. What are your thoughts? I mean, how many CROs right now you think are investing in companies right now?

Not. Yeah, definitely. Vast minority, I think, especially when you get to the bigger companies, you know, there's a little bit of an umbrella. It's comfy. So no need to take those risks. Maybe, but I just don't know if.

They'Re thinking that way. It's great.

I know of two. I know of two. I guess if you include me, I know of three.

Okay, got it.

But you know, I have my, I have my, my portfolio for sure. And I always have, you know, I started my first company two years out, one year out of school. So I always have.

Yeah, it's an interesting point of view. I mean there's no doubt that if you're, if you've sat in someone's pants, you know, while you're selling to them, it makes it more credible. But I just don't know many Sierra's even think that way. It's a really great insight. I think, you know, if I'm, if I'm looking at the people I work with, most of the CROs I work with, it's usually they're in their first or second CRO role. They're just trying to figure out how to navigate the damn thing. They don't, they're not investing in companies. I know a lot of CROs who I talk to more of an advisory level who are real senior level guys. They've been doing the CRO role for a long time and they're luminaries. You know, they probably are on a lot of boards because they acquired that credibility where they're being asked to be on boards and they probably toss some cash in because of that. But most are sort of trying to navigate a world they don't understand. Right. And they're confused by it. And I'll give you some examples. So what I'm talking about. So this is a common thing. So you look at the. I think it's ending. I hope this whole sort of craziness that was going on for about 10 years where just insane amount of money was being spent on customer acquisition was almost like that's it, it's all just about getting new customers. I still think that it lingers. The culture has lingered, you know, it's not like it's going to be gone. I mean, even though maybe my tooth was pulled out, it still hurts, you know. And so I think that there's going to be some time for us, hey, we're going to get this thing bought in three years. That's not a lot of time to nurture long term customer relationships. It really is just thinking about getting as many customers as possible that three year term comes up. So these create conflicts. Right? That I'm just trying to say, if you your thoughts on a CRO who's sitting there and dealing with investors, empathizing with their concerns in terms of their world and their objectives and looking at the way the company is being run and how they're sitting in between. Many times marketing people are like, I don't get this. You know, we're just trying to drag people across the finish line here. No one seems happy the product isn't really ready or blah, blah, blah, blah. What are your thoughts on a CRO who's in that situation?

Yeah, I definitely understand what the scenario you're painting. I haven't really experienced it though myself, but I'm aware of it. I have heard of it many times. For starters, there's got to be buckets. There has to be. We need a certain amount of success in the new logo category. We need a certain amount of success in the renewal category. Need a certain amount of success, success in professional services, so forth. Right. So you have to design your buckets well. And those buckets should obviously drive a value creation from a valuation perspective that investors are going to be happy with. Right. So I, I, and I also do think that you, you get frequently, you know, a company is designed to be flipped, especially as time goes on, right? We're looking at it used to be you have to realize revenues for a client. You have to provide a solution and have that client realize the value in 18 months. Then it was a year, now it's like six to nine months. Right. So the quicker these products are being expected to deliver for clients, the quicker they're able to be flipped. Right. So I think you are seeing a lot of that. So it's important that when you build the company, it's not designed around an individual's relationship. Yes, relationships sell, but the company as a whole needs to be able to provide value beyond that. And regardless of where it sits or who the parent company is or who's bought and sold equity, the framework needs to be strong, Right. Which you should inherently build if you design those correct buckets of where the revenue should come from. And the other thing I'll say to it is camaraderie, like the team, right. So that the team doesn't necessarily only mean down, it means up too. I want strategic investors. I want to be on the phone with my investors, you know, frequently. Maybe they're talking to clients. That's a little bit, that's a little much, I realize, but maybe they are, maybe they're not. Maybe they're helping to bring other investors on. It's a team. It really needs to be a team. Once you get an investor that says, here's money, you know, Friday, 3 o', clock, I'm calling and saying, what's the valuation every Friday. And that, you know, that's not going to drive same same thing with the VP of sales or CRO. Right. I hire a bunch of people, go find me deals. You're not building camaraderie. You're not, you know, it's, it's a team. I don't care if you sit above me or below me. We're all part of a team. We're not going to succeed unless we succeed together. So let's design these buckets, let's put the guardrails on and let's make sure the whole thing works. Yeah, right. Long term and short term. Yeah.

It makes. I agree. And I think that maybe the issue that I'm pointing to even underneath the one I'm Talking about is CROs are not empowered to have that kind of relationship. They're not brought into the table enough. They don't have a seat at the table. They're not listened to enough. They're being viewed primarily as a sales leader, maybe a strategic sales leader who covers one segment of the business that usually is about acquisitions only. All exclusively managing pipelines. Looking at a salesforce CRM as most of the time the dashboard as opposed to a CRO who has more of a strategic overview of the entire revenue function and has more like a larger perspective on the business and is someone whom the board speaks to a lot. And I think this goes to the way I talk to my clients is what kind of job do you want? Do you want the title of CRO just running a sales organization or do you want to really be the advisors of the company where you're really looking at the entire revenue operation and building a machine that creates value where you're, you're the one who's like you and I said we spoke. Has the ear to the ground value where you're, you're the one who's like you and I said we spoke has the ear to the ground and your point of view is probably the most valuable in the company because of you're executing on a day to day basis and you have the most valuable point of view. And if you can have that kind of a job, you can probably change the outcomes of these. If you're seeing the board is leaning too heavy in one of those buckets, you can be the person to, you know, persuade them that look and your point of view is probably the most valuable in the company because of you're executing on a day to day basis and you have the most valuable point of view and if you can have that Kind of a job. You can probably change the outcomes of these. If you're seeing the board is leaning too heavy in one of those buckets, you can be the person to, you know, persuade them that look, we need to diversify our buckets. And then they might listen to you because of your, your, your perspective. Need to diversify our buckets. And then they might listen to you because of your, your, your perspective on this. And I think that's an issue. So I guess my, that follow up question there is, in your experience, how does the CRO navigate through that? Right. Most CROs have a problem which is they're being hired by companies that don't really know what to do with them. We already covered this. Or an agreement that most of them, they're not underutilized, they're not even sometimes even identified or defined properly. And so they take the job because they want the job and they want the title. You know, maybe there's a way they could turn things around once they get the job. You know, we have people listening to this right now that are aspiring chief revenue officers, maybe ones that just got hired. What are your thoughts on a way that a CRO, a new CRO can navigate this process and become that advisor?

Well, you said an important word and.

I think that's an issue. So I guess my, that follow up question there is, in your experience, how does the Croat navigate through that? Right. Most CROs have a problem which is they're being hired by companies that don't really know what to do with them. We already covered this.

Or an agreement define you, you, you worded it as they're not defined appropriately or not correctly define yourself appropriately or correctly. Right. So when we start talking, I'm going straight.

Most of them, they're not underutilized. They're not even sometimes even identified or defined properly.

Right off the bat I'm going to tell you, listen, I've raised capital. I don't even know how many times are extra. I would have to estimate it right now or I could count it, but like you know, 10, something like that. And I understand how to structure a cap table. I understand how to make a venture be attractive for investors.

And so they take the job because they want the job and they want the title. You know, maybe there's a way they could turn things around once they get the job. You know, we have people listening to this right now that are aspiring chief revenue officers, maybe ones that just got hired. What are your thoughts on a way.

That a CRO, I understand how to help you raise capital. So I want to be. I want to be focused on a.

New CRO, can navigate this process and become that advisor.

Well, you said an important word. Not just as much as I am building out the team, and I want to be. I want to make sure that the two coincide. Because ultimately, if. If the growth plan doesn't match the capital plan, that's. That. That's. That's actually where most CROs and CEOs fall down. Define you. You worded it as. They're not defined appropriately. The growth plan and the capital plan are two separate documents that don't match, or it's okay if they're two separate documents, but that they don't match. So, you know, I understand that. Just state it, review it, state it, practice it, just express it up front. Define yourself as somebody that is good.

At that, and then they may or may not want that. Right. I mean, but I'm here seeing many cases. Is they, well, that's really great to hear, but we really need someone to run our sales department, which it just may not be the right job for you. You know, they're not looking for that type of leader. And I would say, and the way I advise my clients is the goal is to identify companies that are interested in that and they want that type of leader and they're looking for that kind of person. And by presenting yourself that way, and I'm in agreement with you here, you'll find out whether or not that's what they're looking for or not. Right. It's no different than you're on a date. You say you're looking for a marriage and kids, you know, and they say, well, I'm not, you know, okay, it's probably not going to work out. You know, it's. It's just sort of a similar type of dynamic. And I think what happens, though, people who are looking for the job, they want to ascend to this role. They see the role as valuable to them. They want to jump into that role. I think the psychology behind it is if I get a CRO role, well, now I have a CRO title on my resume, which will make it easier for me to get future CRO roles. I got to break into the, you know, break into that next level. You know, there is a little bit of that.

And then correctly define yourself appropriately or correctly. Right. So when we start talking, I'm going to, straight off the bat, I'm going to tell you, listen, I've. I've raised capital. I don't even Know how many times are extra? I would have to estimate it right now, or I could, I could count it, but like, you know, 10, something like that.

Only reason is because the market demands it. Sometimes they won't talk to you unless you've had that role before. So you sort of have to get that first one, you know, to kind of crank crack through. And the danger in that is you take that first job, it's a nightmare. You have the title, but you're not really doing the job. You don't do well at it, and then your reputation suffers, and now it's harder to get the second one. So, you know, the way I'm talking to my clients and the one that are in that situation are like, you're saying you have to know what the role is. You have to go out there ready to do it and express that this is the job you want and find out if in fact the company's looking for that or not. And you should be asking to meet with the investors when you're interviewing for the job, for sure. You know, um, so as an investor, that's. You do, right? How do you evaluate CROs? How do you know that they're the right ones?

And I understand how to structure cap table. I understand how to make a. A venture be attractive for investors. I understand how to help you raise capital. So I want to be, I want to be focused on that just as much as I am building out the team. And I want to be. I want to make sure that the two.

The job.

Oh, I mean, so, yeah, I mean, it's, it's twofold. So the answer to your question is I want to see the growth plan and I want to see how fluid and, you know, how confident they are in it. I want to see the details of it. But that also goes back to your previous point, you know, with, you know, maybe they just want somebody to run the sales department. You know, if I'm the CEO and I'm, I'm hiring you as the CRO, maybe you can sell me on your growth plan and maybe I'm going to hire you. But it's a. Isn't it much more hardcore, pretty hardcore proof if you can sell that growth plan to a team of VCs, right? Like I, I think a CRO, a CEO even should be using that as a vetting process to the quality of the CRO's growth plan and sales plan and scale plan. You know, I view that as, as more concrete.

It's.

It's valid, right? Leverage those investors to that if you.

Can get my board on board, pardon the pun, then, you know, coincide.

Because ultimately if the, if the growth plan doesn't match the capital plan, that's, that, that's, that's actually where most CROs and CEOs fall down. The growth plan and the capital plan are two separate documents that don't match. Or it's okay if they're two separate documents, but that they don't match. So, you know, I understand that you've.

Sort of, that's good. You've proven yourself. They're the toughest customers in the room, so to speak. That's a great point. And I think that that's an important skill set is the ability for a chief revenue officer when they're hired to lay out a plan that is bulletproof enough that they can confidently go speak in front of a board. And that leads me to the next question is what are the key things that an investment group are looking for? So if I'm an investing group, I'm a bunch of VCs and you're about to bring in a new CRO candidate. What am I evaluating? What are the things that specifically, not just generally speaking, but specific things that, you know, indicate, okay, this person is either a, wow, this person's probably a superstar, or this person is not ready yet.

Good question. And if you ask 10 different VCs, you might get 10 different answers on this.

I'm asking Larry, so go for it.

Yeah, so my, my opinion would be your ability to detail a scale plan. And, and you know, I want to see detail. So it's okay with the, the, the wide vision and saying, you know, here's where we're going to be in three years, but how are you going to get there? And you know, that's not a five page deck, that's probably a 50 deck, 50 slide deck, you know, and, and, and, and I want to see the details. I want to see historical proof of that, that you've done it before. And then I want to see personality and charisma. I mean, that's, that's really it. Like we're, we're gonna scale. You're gonna have 10, 20, 100 people within your organization. They need to be able to, you need to be able to lead them. So what are your leadership qualities? What, you know, how are you able to actually get everybody to go on board with the plan? We sign off on your plan, we say, okay, this is great. We, we, it's probably going to be in constantly, you know, evolving document, a living doctrine Anyway, but we sign off on something now you have to go implement it. And just because somebody reports to you, by all means, does not mean that they are on board with you. That's another big mistake that a lot of people in general make is, you know, you report to me, you're going to do what I say. Nobody reports to anybody in this world, if you want my opinion. So it's. It's all either either we're a team or we're not. So, so, so just because I just. Cause I write your paycheck, that doesn't necessarily mean that, that, you know, you're on board with me. So we have to. What are your leadership qualities? Do people want to be on your team? Are you able to get people onto your team? And if you are, then okay, let's go. Just state it, review it, state it, practice it. Just express it up front. Define yourself as somebody that is good at that.

And then they may or may not want that. Right. I mean, what I'm seeing many cases is they. Well, that's really great to hear, but we really need someone to run our sales department, which it just may not be the right job for you. You know, they're not looking for that type of leader. And I would say, and the way I advise my clients is the goal is to identify companies that are interested in that and they want that type of leader and they're looking for that kind of person. And by presenting yourself that way, and I'm in agreement with you here, you'll find out whether or not that's what they're looking for or not. Right. It's no different than you're on a date and you say you're looking for a marriage and kids, you know, and they say, well, I'm not. You know, okay, it's probably not going to work out. You know, it's. It's just sort of a similar type of dynamic. Dynamic. And I think what happens though, people.

Who are built, you know.

Yep. No, it's great. I like what you're saying. And I. We want to get into this a bit more. We do a CRO competency assessment in my CRO course, which is designed to help are looking for the job. They want to ascend to this role. They see the role as valuable to them. They want to be able to kind of get a sense of all the different components of their business. I mean, their personality and their skill sets that they need to master to get the job. And you mentioned a few. There. There's no doubt about the Fact that somebody needs to obviously have very good, like business acumen, jump into that role. I think the psychology behind it is if I get a CRO role and they need to be able to come and create a business plan that's sound and it backed up with data and has make sense and they can articulate it and they can really show how confident they are and they can demonstrate that they have a fluid understanding of the components that go into it, how they work together and how it's going to go well. Now I have a CRO title on my resume, which would make it easier for me to get future CRO roles. I got to break into the, you know, break into that next level. You know, there is a little bit of that and the main work and the financing behind it, how it's going to be paid for, but the profit margins are going to be, etc. You mentioned leadership skills. So I guess I, I say ask you a question. These are like the softer stuff, right? The stuff that you can't sort of like master in, like some school some people have that they don't. Some people generate them, they develop them. If you had, let's say it's kind of a weird, tricky way of asking a question. But someone came in front of you, you're an investor, only reason is because the market demands it. Sometimes they won't talk to you unless you've had that role before. So you sort of have to get that first one, you know, to kind of crack through. And the danger in that is you take that with a bunch of your B.C. cronies, you know, in a room and some candidate comes in, presents an amazing plan. Really impressive. You're like, wow, this is very cool. It's detailed really nicely. But he's sort of lackluster, you know, quiet, you know, you sort of think like, you know, if you probably screamed at him, he'd probably cave.

This is a founder.

No, this is your first job. It's a nightmare. You have the title, but you're not really doing the job. You don't do well at it and then your reputation suffers and now it's harder to get the second one. So, you know, the way I'm talking to my clients and the one that are the CRO candidate.

Okay, okay.

You're evaluating this person. Incredibly articulate in terms of their plan. Brilliant plan, actually one of the better ones you've seen, in fact. But just the personality is like, man, I just don't know if this person's gonna be able to stand up in a heavy Wind, you know, and then opposite, you have someone who's like really like magnanimous, like this person in that situation or like you're saying, it's like you have to know what the role is. You have to go out there ready to do it and express that this is the job you want and find out if in fact the company's looking for that or not. And you should be asking just holy crap. I, I think I, I do anything this person says. I really person impressive. I put this person in front of a thousand people right now. But the plan was meh, like working to meet with the investors when you're interviewing for the job for sure, you know, so where do you dial up and dial down on these two qualities? Because they're very. Just different things. They're not the same. You know, there's no unicorns out there. You know that. Right. So where's the way that you evaluate these things? Because I talk to my, my clients about this a lot.

Great question, great question. I would probably side with the former. I would.

As an investor, that's. You do, right? How do you evaluate CROs? How do you know that they're the right ones for the job?

Oh, I mean, so yeah, I mean it's twofold. So the more so want execution. Because with execution, with a good plan and good execution, you can build confidence and answer to your question is I want to see the growth plan and I want to see how fluid and, you know, how comp. You can help that person maybe become, you know, a little bit better from a public speaking perspective maybe where, you know, when it's really important, we put the CEO up there instead of the CRO. But having somebody who's a flashy CRO but really can't execute, that's, that's a slow death, maybe even worse. So I would probably, I would go with the former, I think.

Okay.

Am I answering your question too?

You are. I don't know if the answer is I don't know the right answer to that question. I've seen both work. You know, I think there's some people whom, you know, the organization can rally around and compensate for things based confident.

They are in it. I want to see the details of it. But that also goes back to your previous point, you know, with, you know, maybe they just want somebody to run the sales department. You know, if I'm the CEO and I'm, I'm hiring you as the CRO, maybe you can sell me on your growth plan and maybe I'm going to hire You. But it's. Isn't it much more hardcore, pretty hardcore proof if you can sell on what you have.

Right. So I've seen people who are incredibly good at being able to persuade people to do things and they're amazing. Like, you put it in front of a room that they don't need a script, they can just go. And it's wow, like, that was amazing. You know, answer every question really clearly. But, you know, they're probably not as proficient in, you know, some other things that, you know, executionally, but they have people on their teams that are. Right.

Yeah, you can. Exactly. You never want to be the growth plan to a team of VCs, right? Like I, I think it's the smartest person on your team. So that, that would be, you know, if you're gonna go with that person, then you definitely want to make sure they have a good support system.

Right? Right. Yeah. I say, I say so because, you know, people, not everyone. You don't sound, it sound like a very. You're a pragmatist. But you know, people are emotional. People like theater people like the hero. You know, we, we, we, we operate that way. You know, you have to be really, I'm really impressed with people that kind of avoid their, the emotional components of the way they evaluate things. And you know, you have someone who's really, really good at like building consensus. You know, you say, boy, this would be CRO.

A CEO even should be using that as a vetting process to the quality of the CRO's growth plan and sales plan and scale plan. You know, I view that as, as more concrete. It's valid. Right. Leverage those investors to that.

If you can get my board on board, pardon the pun, then you know, you really valuable thing. And I can, I could see how if you don't have the right systems in place, you can end up not having the right balance. I'm just saying is I don't usually see a lot of unicorns. I mean, there are plenty of them. You know, there are, there's some people that are amazing at good. A lot of stuff. But I see there's two different brains in a lot of ways. You know, there's two different kind of brains. And I bring this up, I'm harping on this a bit because you've sort of. It's good you've proven yourself. They're the toughest customers in the room, so to speak. That, that's a great point. And I think that that's a, an important skill set is it's a topic that comes up so much. I see a lot of people who come through my like the ability for a chief revenue officer when they're hired to lay out a plan that is bulletproof enough that they can confidently go speak in front of a board. And that leads me to the next question is what are the key clients, my courses, who I'm evaluating? I'm looking at them, I'm thinking I have to do this. I have to look at them and think if I'm going to recommend this person in the future to be a CRO, what's the way in which I think people are going to perceive this person? So some people are in my course are just amazingly talented in terms of the way they can put together plans and stuff. Just wow. But I just don't know if they'd be able to deliver it in a way that's clear to people and get people on board. I mean it's not easy, you know, if you're a CRO, it's not just being charming. I mean you have to know how to understand with people. You have to know how to persuade people. You have to know how to understand to empathize with people. You have to understand how to know how to deliver on their needs and make negotiations right and payoffs and compromises to make things happen and sometimes push things through or get people to do things that they don't understand. And you know, those are valuable skill sets that in many times a CRO is dealing with more on a day to day basis than the other things, you know. So I'm, I, I don't want to harp on this too long. I think it's a fascinating topic and being an investor, you might have an interesting perspective on it then maybe like a CEO, that's all.

Well, I think that, I think that they're all the same, you know, what, what an investor should do to, you know, to, to be successful there, what.

A things that an investment group are looking for. So if I'm an investing group, I'm a bunch of VCs and you're about to bring in a new CRO candidate. What am I evaluating? What are the things that specifically, not just generally speaking, but specific things that you know, indicate. Okay, this person is either a wow, this person is probably a superstar or this person is not ready yet.

Good question. And, and if you ask 10 different VCs, you might get 10 different answers on this.

I'm asking Larry.

So CEO should do what a CRO should do what anyone, what a person you Know, you just, you should, you need to care, you, you, you, you need to care about the people around you. You need to care about what their aspirations are and you care about what they're going through. They need to care about you too. Like I said, you know, if you really drive the hierarchy in a company in today, in today's day and age, the hierarchy, you really can't, you really shouldn't feel too much of the hierarchy in a, in a company today.

Go for it.

Yeah. So my, my opinion would be your ability to detail a scale plan and, and you know, I want to see details. So it's okay with the, the wide vision. Yes. There are different responsibilities and each other, you need to care about each other's responsibilities. That person is responsoring, is responsible for delivering, you know, the CEO and saying, you know, here's where we're going to be in three years, but how, how are you going to get there? And you know, that's not a five page deck, that's probably a 50 deck, 50 slide deck. He's responsible for delivering, you know, bottom line revenue to the board. I need to care about that and I need to help him. And the CEO needs to care that, you know, that person is responsible for delivering a marketing project. And I need to care about that and help him. What else do they have going on in their lives that are making that hard? I need to care about that stuff, you know, and, and, and I want to see the details, I want to see historical proof of that, that you've done it before. And then I want to see personality and charisma. I mean that's, that's really it. Like we're, we're gonna scale. You're gonna have two because the successful component is in the middle, what we're responsible for and everything can have 10, 20, 100 people within your organization.

I agree. I tend to think that even this conversation, and I'm of this belief, ultimately it's a people thing, really, these jobs. Yeah. So you're not sitting in some room with a spreadsheet, just with the computer. You're literally all my clients are dealing with incredible amount of interactions on a day to day basis with a lot of different people talking to marketing teams, consult customer success teams. They're talking to the board, they're talking to their boss, they're talking to a lot of executional people. It's a constant back and forth figuring out like how other people think and what they want, what's going to motivate them, you know, dealing with compensation and incentives and all sorts of things. And I think it's the people that I think I see succeed most certainly, you and I both know the unicorns that are just great at everything. Right. They're out there. But it's the ones that have those really amazing leadership skills that tend to thrive in this job. Because like you said, you have to keep everybody on the. On the bus. Everybody has to be excited. You know, you and I know we've worked for leaders whom we run through walls for, because there's just something about them that I say, I do anything for this person, you know, even if I don't want to, I do it because this person just is just so great, you know, or I'm willing to forego some of my needs or some of my preferences for this person because I believe them, that it'll be better, you know, making that sort of leap in faith in somebody else's. They've inspired something in me that has me put my own needs last. So do it for the bigger picture. And, you know, getting people to not do that is not easy, particularly today. It's a tough market for that. Right.

They need to be able to. You need to be able to lead them. So what are your leadership qualities? What, you know, how are you able to actually get everybody to go on board with a plan? We sign off on your plan, we say, okay, this is great. It's probably going to be in constantly, you know, evolving. Dr. Of course, a living doctrine anyway. But we sign off on something, now you have to go implement it. And just because somebody reports to you, by all means, does not mean that they are on board with you. That's another big mistake that a lot of people in general make is, you know, you report to me, you're going to do what I say. Nobody reports to anybody in this.

So I want to just make sure you're winding down here. I want to make sure people understand your. What you're doing right now. Because I know that you manage a bunch of different companies and you and I talked about it. You have an interesting business. You talk a bit about, like, what you're doing and the structure of your company and who your clients are, what you do for them and the kind of things you're looking for in the market. Market today. Sure.

So my main function right now is. Is operating these companies that, that I'm involved with. So think of it as fractional CRO. I'm basically doing some fractional CRO work with a handful of companies. Some of them, I'M invested into in that world, if you want my opinion. So it's, it's all either, either we're a team or we're not. So. So just because I, just because I write your paycheck, that doesn't necessarily mean that, you know, you're on board with me. So we have. What are your leadership qualities? Do people want to be on your team? Are you able to get people onto your team? And if you are, then, okay, let's go. That's why I'm doing it. Others, I'm contracted as the fractional CRO. So both, multiple of both. And you know, at the same time, I've had some, some exits in the past where, you know, let's, let's call it capital raising became prevalent for me. So you know, structuring clients to, to raise capital and build, you know.

Yep. No, that's great. I, I like what you're saying, and I be. We want to get into this or.

Helping them go to market to raise capital has also become something that I've, I've, I'm doing work with a few firms on. But, but, you know, one of the firms that I'm working with right now is fractional. They're a software company. And my role was more downward, right? It was more build out this infrastructure that could scale sales. They're a software company, you know, like 100 little over 100 developers. And you know, what, what came of it is actually, you know, we call it the sales machine. So it, it, it's a collection of 20 or 30, depending on exactly what would be needed. But it's a collection of about 20 or 30 different vendors and technologies all integrated. So this is a software firm, remember? So really everybody understood how to do this once it was working and it was working. It's, it's working really well. I mean, we're pulling in lead after lead after lead. It's, it's working really well. It's like, okay, let's put a front window on this. Let's put a UI on this. Keep all the vendors on the back and aggregate everything into, hey, input this, input this, input this, and allow these, these other firms to go to market with it. So it's basically, it's a collection of technologies that allow you to identify intent, right? Real intent. So you're not, you're not going to go out and market to a list of 30,000 people. You're going to market to 1,000 people who, you know, need your product or service, right? And then, and it is a timing Thing that list is going to be good for a month or two, right? And then you have to refresh that list and the software does that. It refreshes, goes out and it, it finds a bunch, it uses a bunch of different tools. Google, pay per, you know, pay per clicks, scraping of websites, LinkedIn, Reddit, tons of different blogs. We, we look for real intent and we put in, we, we put, we, then we cross reference with a whole bunch of contact databases. We make sure that the prospects actually have, we have good data and we, we go really deep. It's not just phone and email. We're looking for Twitter profiles, we're looking for Instagram profiles, LinkedIn, we're looking for probably 20 different points of contact up to. Right. We don't always get 20, but we get a lot. Usually in this day and age it's getting easier and easier.

Right.

And then, and then there's the typical sequence which is largely automated, not fully. Again, it depends on what you're doing. But those 20 points of contacts, right, it could be an Instagram message, it could be Twitter dm. It's not always just phone and email. It is frequently, but it's a, it's a big cycle that takes you through maybe a month worth of work. So we're automating the marketing of this and we actually have the marketing people on the back end as well that will write the 10 or 20 emails that you need for the month campaign, the 10 or 20 text messages that you need for the campaign. Right. So we're actually doing the marketing on the back end and putting it into this compiled software that's turning into SaaS. So we're now selling that externally as the sales machine. And, and that's kind of my latest thing that I'm, I'm starting to focus on as, as a fractional CRO of this company. I'm really jazzed about it because a.

Bit more we do a CRO competency assessment in my CRO course which is designed to help people kind of get a sense of all the different components of their business. I mean their personality and their skill sets that they need to master to get the job. And you mentioned a few there, there's no doubt about the fact that somebody needs to obviously have very good like business acumen. They need to be able to come and create a business plan that's sound and it backed up with data and has, makes sense and they can articulate it and they can really show how confident they are.

And the product they've basically taken what I did in the company and they've turned it into a SaaS, which is, which is awesome because it's, it's feeding the reps, the, the leads and the, the lead generation. That, it's, that it's, that it's kicking up is fantastic. It always is. I mean, I've, I've implemented this a number of times over the course of the last 25 years. The thing is, AI and automation have come to a point where smart developers, which these guys are very smart, they were able to say, hey, wait a second, we could do this and we could do this and we could do, we could put all this together into a SaaS. What do you think of that? I was like, yeah, do it. Great. Awesome. Now we have this SaaS product that's coming to market and, you know, if it, if it, if it has the exact same, the exact same result as what we've seen internally, as what I've seen over the years time and time again, and what the beta client who's using it right now will say, everybody.

Is seeing, they can demonstrate that they have a fluid understanding of the components that go into it and how they work together and how it's going to go work and the financing behind it, how it's going to be paid for, but the profit margins are going to be, et cetera. You mentioned leadership skills. So I guess I, I say ask you a question. These are like the softer stuff, right? The stuff that you can't sort of like master in, like some school some people have that they don't. Some people generate them, they develop them. If you had, let's say it's kind of a weird, tricky way of asking a question, but someone came in front of you, you're an investor with a bunch of your VC cronies, you know, in a room, and some candidate comes in, presents an amazing plan. Really impressive. You're like, wow, this is very cool. This detailed really nicely. But he's sort of lackluster, you know, quiet, you know, you sort of think.

Like, you know, really great results with it. It could be hugely successful. So that's kind of my latest and greatest project.

That's interesting. Well, probably talk more about that offline. And what are you looking for is a service.

That's what it is.

All right.

It's not the name. The name is the sales machine.

I understand. I get it. Cool. I like that idea. So what, what are you looking for right now? What, what are you looking for? Investors? Looking for people, looking for staff, looking for customers. Like what Sort of things are you up for. What's your pursuits right now?

You know, right now investors. Investors are, are a dime a dozen. There's a lot of dry powder out there. A lot.

If you probably screamed at him, he'd probably cave.

This is a founder.

No, this is the CRO candidate.

Okay.

Okay. You're evaluating this person.

You know, people. I'll challenge people to, you know, all the time. We'll hear like, oh, I've made 20 pitches. I've made 30 pitches. I made 200 pitches, 300 pitch.

Is.

Venture capital is just so hard right now? No, I mean, you're not doing it right if that, if that's the result you're getting, you're not doing it right. There's. There's a lot of dry powder out there right now. Good deals. That's the problem. Finding good deals are, is, Is the problem. So, you know, what am I looking for? You know, I don't want to say I'm looking for good deals. Just, just. That's the market right now. I think were short in good deals. Okay. To invest in. Personally, what I'm looking for, I don't know.

I mean, I'm, I'm not incredibly articulate in terms of their plan. Brilliant plan, actually. One of the better ones you've seen, in fact. But just the personality is like, man, I just don't know if this person's.

Gonna be able to stand up necessarily. You know, I'm, I'm looking to, just to, to be successful in the, in the, the, the, the. This, the handful of clients that I'm engaged in right now, I'm looking at.

A heavy wind, you know, and then opposite, you have someone who's like really like magnanimous. Like, this person's just, holy crap. I think I, I do anything this person says. I really person impressive. I put this person in front of a thousand people right now. But the plan was meh, like to.

Really be successful with them, whether it's rate, helping them raise capital, which, you know, is two or three of them. But even that, I think I know where we're getting. I think we're good there, but still ongoing. And then there's the software company, you know, I think that's getting ready to blow up. I wouldn't be surprised if, you know, the hundred developers that they have right now turns into. We double that to, you know, 100 sales and marketing over the next couple of years. They've got five offices around the globe, so they're going to scale them all.

Where do you dial up and dial down on these two qualities because they're very. Just different things. They're not the same. You know, there's no unicorns out there. You know that, right? So where's the way that you evaluate?

Yeah, I mean, you know, I'm just looking to, to be successful and do it with a, with a team of good people.

Great. And this particular product you're talking about, is this on? Is it market? Can people buy it? I mean, can people use it? Subscription model? I assume it's.

It is a subscription model. I would say right now it's beta. It's manual process on the back end and the UI is being built, so we're sort of beta ing. Beta ing. That sounds weird. With a few clients and even the beta, it's going really well. So it's just a question of implementing the right processes and getting them into a SaaS UI.

Well, as I suspected, man, this is a great conversation and I know you're busy, so I appreciate you giving the time. It was good meeting you. I hope that you end up speaking again at one of these things because it's fun hanging out with you. There's another Sierra Summit in San Francisco in September, and then I think there's another one in Chicago in November. In any event, it was good meeting you. Thanks for joining and thanks for a great conversation.

It was really great. It's great meeting you. I enjoyed the summit. I'd certainly welcome an invite to any of them. So. Yeah, that'd be great.

Right? Thanks. These things because I talk to my clients about this a lot.

Great question, great question. I would probably side with the former. I would more so want execution because with execution, with a good plan and good execution, you can build confidence and you can help that person maybe become, you know, a little bit.

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

Better from a public speaking perspective maybe where, you know, when it's really important, we put the CEO up there instead of the CRO. But having somebody who's a flashy CRO but really can't execute, that's. That's a slow death, maybe even worse. So I would probably, I would go with the former, I think.

Okay.

Am I answering your question too.

You are. I don't know if the answer is I don't know the right answer to that question. I've seen both work. You know, I think there's some people whom, you know, the organization can rally around and compensate for things based on what you have. Right. So I've seen people who are incredibly good at being able to persuade people to do things. And they're amazing. Like, you put it in front of a room, they don't need a script. They could just go. And it's wow. Like, that was amazing. You know, answer every question really clearly. But, you know, they're probably not as proficient in some other things that, you know, executionally, but they have people on their teams that are. Right.

Yeah, you can. Exactly. You never want to be the smartest person on your team. So that, that would be, you know, if you're going to go with that person, then you definitely want to make sure they have a good support system.

Right. Right. Yeah, I, I say, I say so because, you know, people, not everyone. You don't sound, it sound like a very, you're a pragmatist. But, you know, people are emotional. People like theater people like the hero. You know, we, we, we, we operate that way. You know, you have to be really, I'm really impressed with people that kind of avoid their, the emotional components of the way they evaluate things. And, you know, you have someone who's really, really good at, like, building consensus. You know, you say, boy, this would be a really valuable thing. And I can, I could see how if you don't have the right systems in place, you can end up not having the right balance. I'm just saying is, I don't usually see a lot of unicorns. I mean, there's, there are plenty of them. You know, there are, there's some people that are amazing, good at a lot of stuff, but I see there's two different brains in a lot of ways. You know, there's two different kind of brains. And I bring this up, I'm harping on this a bit because it's a topic that comes up so much. I see a lot of people who come through my, my clients, my, my courses, who I'm evaluating. I'm looking at them, I'm thinking, I have to do this. I have to look at them and think, if I'm going to recommend this person in the future to be a Croat, what's the way in which I think people are going to perceive this person? So some people are, in my course, are just amazingly talented in terms of the way they can put together plans and stuff. Just wow. But, you know, I just don't know if they'd be able to deliver it in a way that's clear to people and get people on board. I mean, it's not easy, you know, if you're a CRO, it's not just being charming. I mean, you have to know how to understand with people. You have to know how to persuade people. You have to know how to understand, to empathize with people. You have to understand how to know how to deliver on their needs and make negotiations right, and payoffs and compromises to make things happen and sometimes push things through or get people to do things that they don't understand. And you know, those are valuable skill sets that in many times a CRO is dealing with more on a day to day basis than the other things, you know. So I'm, I, I don't want to harp on this too long. I think it's a fascinating topic and being an investor, you might have an interesting perspective on it then maybe like a CEO, that's all.

Well, I think that, I think that they're all the same, you know, what, what an investor should do to, you know, to be successful there, what a CEO should do, what a CRO should do, what anyone, what a person, you know, you just, you should, you need to care, you, you, you, you need to care about the people or.