David Connors, Co-Founder & CEO at The Swarm

For the last 10 to 15 years, the model to grow your company was growth at all costs. And that was because money was cheap or basically free, and the ability to just hire more humans to increase the touch points and the output of the company was a good model, and it worked really well. And, you know, Salesforce pioneered it. The predictable revenue playbook really came into being. What that meant was that as a company would get more funding, bit more revenue, they would hire more salespeople, SDR who was an appointment set up, doing cold outreach, hitting the phone, sending emails, going on social, and then ae, whose job it was really just to close those deals that were getting set up by the sdr. And, you know, the whole machine got built and scaled up to the point where it reached this really point of maturity and really saturation, where everyone then had access to the same playbook, the same tools, the same mass emailing, mass phone dialing systems that were generating this deluge of touch points to prospects. So if you were a potential buyer, then your inbox would be flooded with prospective, you know, tools and vendors and suppliers and people trying to heat you up to purchase whatever they were selling. Your voicemail would be drowning. You know, your phone would be ringing off the hook. So what ended up happening was that people just started switching off and prospects would just really not trust anything that came in cold anymore. And then there was this big shift in the market, this big paradigm shift, where growth at all costs stopped being the effective way to build a company because money got expensive again. And as interest rates went up, it then meant that the value of a dollar suddenly got a lot more expensive. So people had to shift. That's what we've been seeing kind of wash out over the last couple of years is this move from growth at all costs to efficient growth. And now every CEO, every sales leader, is focused on getting more for less. And how can we really make this an efficient, efficient growth engine and not just adding more humans necessarily, but increasing the efficiency and the productivity of the humans that we do have and really being super conscious of what are the different channels that are available to have the most efficient growth. So that's kind of bringing us up to today. I joined Sequoia when they acquired my last startup, which was called Automately, an outbound recruiting automation company, and basically applying a lot of the tools and tactics from growth in terms of doing outbound to prospects and taking that into the recruiting world. And Sequoia wanted it exclusively for their portfolio companies. So we joined, and I then stood up the sourcing platform, as it's now known. And they were pretty cool about it. Like, what else would you build if you had the budget? And my mandate was to increase the firm's productivity. So I had a small team of engineers and worked very closely initially with the talent team to build a suite of tools, including a talent CRM and workflow automation tools, and then working with the investors and the data science team to map Sequoia's extended network and understand who in that extended network we should invest the finite time and resources into getting to know and really understanding who was the top 1% in the extended network that we should be really tracking and monitoring and getting close to. And those could be prospective founders, those could be execs or talent for the portfolio. Those really the highest caliber quality people. And through that exercise, I learned the power of just mapping and understanding the network that a company has. And obviously it's super impactful for a vc. But I also saw that it was as important for startups in the portfolio to leverage their investors networks, their teams networks. And all the best founders that I interacted with had this superpower where they were able to really lean on the networks of everyone around them. And they were doing it pretty manually. It was a lot of spreadsheets, it was a lot of trying to download LinkedIn CSV files and merge them together. Some people, you know, a bit more sophisticated, had an airtable or a notion database, you know, running some scripts on top of it. But, you know, it was all very disjointed and manual and obviously the data would be stale almost immediately and it wouldn't have really full coverage of all the potential connections they could have. But it was the best that they could come up with, you know, given the tooling that was available on the market. So as I approached the end of my vest and shook off the golden handcuffs, I decided to leave Sequoia to start the Swarm. And the idea was that we could help every company to map their extended network and then give them the keys to the relationship data to accelerate their sales, their fundraising, their recruiting efforts, and seeing the importance of leaning on warm referrals and introductions and that the, you know, sort of understanding that it was now possible to do a lot of this more systematically. So how do you manage your network? Right. 1.0 was the Rolodex, the black book. You would write down everyone that you knew in, you know, in a little book or on paper. 2.0 was. Then when that moved into the virtual realm, that's where LinkedIn kind of first came about and people started managing their network online and you could then start connecting with people online as well. And these relationships started being a hybrid, some offline and some online. And the quality and the depth and the strength of those relationships were really then blurred and hard to figure out whether they were strong or a weak whether made online or offline. What we're now moving into is 3.0, we're calling it Goto Network, where you have all of your relationships mapped, whether they're online or offline, and the strength of that connection, all of the connections from across different sources from LinkedIn, from your email calendar, from different social media sites, from your phone, and from your offline world as well. You can have for the first time this unified view of all of your relationships. And as a company, you can then see all of the relationships that your company has to then use for these different use cases. So aside from the cost involved with setting up that message mass outbound machine to, you know, drive all those touch points to prospects, it's actually really damaging for the reputation and the brand of the company. And you think about all of these cold, undifferentiated touch points landing in a buyer's inbox or on their phone and it's actually a negative impact if that person isn't interested in buying what you're trying to sell and they might be ready in a year or later, or there might be another channel that might be more receptive if you're cold calling them or you're sending them a sequence of really aggressive touch points, emails and LinkedIn messages and phone calls. It can be really damaging for the reputation and brand of a company and actually turn that buyer off buying from you altogether in the future. In contrast, the benefit of a warm introduction really leans on the human relationship and the trust that already exists. So you're not trying to build something new, you're just tapping into something that's already being created. And the relationships that your company has is a gold mine of potential. You know, this potential asset that your company has that you should be fully leveraging so as you can then tap into the warm introduction to reach that buyer and then you can have a much higher chance of that converting into not just a meeting, which is anywhere from 5 to 10x higher than doing a cold outbound, but actually influencing that through the funnel to then close. And that can be anywhere from a 3 to 5x higher win rate because you're able to influence that lead through the funnel. When you start a company the first 20 to 100 customers are, are much more likely to close if they come from your network. And most founders are looking at how can I tap into my broader network? And what they might do is go on LinkedIn or look through the text or the emails, but really what you should be doing is systematically pulling in all of the networks of your team, your investors, your advisors, some of your key friends with great networks, and building this unified network of all of the potential relationships that your company has. And then at that point you want to filter it down to who is going to be in our ideal customer profile, who's going to be the best buyer to start with, someone that's an early adopter, that's willing to give us feedback and is up for sort of joining this journey when we're still early in the development of the product. And these folks are going to be way more likely to respond if they're introduced to you from someone they know and trust. So this is where you make your network's life really easy and you identify these prospects and you pre write an email that these folks can then send along to these prospective customers. So the way that might work is you identify a company that looks like a good fit and then you pre write an email and send it to an investor. And it says, hey, so you're connected to John, wondering if you could pass this along. And then it has information about your company, your product and why you think it's a good fit. That investor can then send that along with their endorsement and they say, hey, I'm an investor in this company. They're great. What they're working on should really solve a pain point for you. Open to a chat. That flow will convert 5 to 10 to 30x higher than if you as the founder had directly just reached out to that prospect. And that's why it's worth you spending 10 to 20 to 50 times more of your more time working your network and doing this warm outbound approach than trying to do cold outbound. You shouldn't touch any of these cold outbound tools really until you get to 100 paying customers. You should be fully mining your own network, your team network, your investors network, your advisors network, and then your customers network. Once you bring on those early customers, you should be really tapping into their networks and driving referrals. And that is the key to quickly scaling from 0 to 100 paying customers using only your network without touching anything to do with cold outbound. As an investor, whether you're a venture capital firm or a private equity firm, your network is One of the most valuable assets that you have. It's really one of the biggest differentiators of your firm in the market versus the product that you're offering, which is your capital. Right. So how can you differentiate your product? And one of the easiest ways is by tapping into your extended network that the firm has. The problem is a lot of companies just don't have their network mapped and it's very difficult to know who you know. A lot of investors try to tell founders and the folks they're working with that they have this amazing network and it may be true, but they can't operationalize it if they haven't mapped it. And they don't have the tooling in place to make those introductions seamless and easy to access. So for recruiters, there are three ways to find candidates. There's inbound, there's outbound, and there's referrals from your network. Inbound, you post a job, folks apply a lot of candidates, a lot of quantity, but not always the best quality. And it's very often you post a job and there just aren't enough qualified, high quality candidates that you really want to interview. Outbound, you go cold, you go direct, you head hunt, you know, and for execs and for certain roles, that makes total sense. You might engage a search agency or bring in some external support to help with those outbound efforts. And the results can be great. But it's very expensive, it's very time consuming. It's just not a good fit for every role that you do. That and also some execs, some folks just don't respond cold. They don't, they don't respond if they don't know who the person is that's reaching out to them. And we're seeing this become even more of a challenge for folks who are trying to do this outbound motion because their inbox and their voicemails are being flooded with recruiters trying to hit them up and they now just send it to the bin. Now, referrals from your network. Everyone knows that referrals often are the highest quality and really are very the best source of candidates. But it's been really hard to systematize that. It's been very manual, ad hoc. You ask for suggestions from your team or from your investors, and you might get a handful of suggestions every now and then. But there's been no way to build this predictable pipeline of referrals. And that is where the goto network approach really comes in. And the playbook might look something like this when you open up a new role. The first thing that hiring manager or recruiter does is look at who within your network is a good fit for that opportunity. And they identify 10, 20, 30, 50 potential names on a short list, review it with the hiring manager and then whittle it down to the ones that are seen more qualified. And then you engage your network to reach out to those folks, see if they're interested, see if there's a fit, and start lining up some initial interviews. And that actually might be enough to build a bench of candidates to get started before you even try those other methods of posting the job or doing outbound. And that is really the way forward in the future to get the highest quality candidates at the best cost directly from your network. When you first join the swarm, founders and sales leaders often ask me, how can I best use my network to close more paying customers? One playbook is you have got your target account list. Maybe this is sitting in your CRM, Salesforce or HubSpot and you've got 100 or 500 target accounts for that course. You're trying to figure out how can we crack into these target accounts. So what you can do is import those target accounts into the swarm and then see your warm intro paths into those accounts. Now, you might not have warm intro paths for 100%, but maybe you do for 20, 30, 50% and you carve out those warm target accounts to then run the relationship driven engagement play. You send a forwardable note to one of your investors or one of your partners or team members who has that relationship, who can then open up that account for you for that remaining 50% that's still cold. You just do cold like you normally would. You do phone, email, do social, and that's the way that you can really leverage your network to maximize your chances of of closing paying customers from the warm target accounts. For enterprise sales cycles and relationship driven sales cycles, there often is an internal buying committee at the customer. It's rarely just one person anymore that makes the final decision. There has to be multiple people involved. What the swarm is really great at is identifying your connectivity into an account and understanding who are all the different people that we can influence and that we can tap into. And this often sparks some really interesting plays like arming one of your investors who used to work with the CEO and going maybe to more someone more senior, or figuring out that you connected to other folks in the team that are in the buying committee and starting up new conversations with them and multi threading these conversations without having that understanding of the connectivity and the relationships that you have into these accounts, you're just driving blind. It's really hard to understand who you should be trying to influence and talk to. We've seen customers using the Swarm not just for sales and recruiting, but also for customer success. When customer renewal conversations come up, it can often be helpful for that customer success rep to understand the connectivity and influence that you have into that account. Now say for example, this account isn't doing as well and there are churn risk. You might want to then set up additional conversations with other folks at that account. Maybe you're talking to someone who's a junior or mid level employee. You can arm their someone that's a bit more senior than them, or maybe go to one of their investors and find that influence and connectivity to preserve the health of that customer and ensure that they don't churn. The other play is then expansion, right? This is a key with especially larger companies. Not just opening up new accounts, but expanding existing customers and identifying who you know at that account. Especially in other departments for other use cases, who can be buying, you know, other products that you offer or expanding the seats that you're trying to sell into that org. Understanding who you know and who you're connected to is instrumental in being able to set up those additional conversations.