10 Tips: CMO + CRO = Love... Building Lasting Leadership with Gusto's CRO Tolithia Kornweibel

Hi, everyone. My name is Talithia, slightly different than the voice of God pronounces, but I don't mind because it's a little bit of a tricky name. People call me TK. I'm the chief revenue officer at a company called Gusto, which is a late-stage startup based in Denver, New York, and San Francisco, and like the rest of us, pretty much everywhere at this point. And we serve small and medium-sized businesses with everything they need to take care of their teams, to hire, onboard, reward, take care of the best possible teams so that they can have great businesses. So I was asked to come here today to talk to you about a topic I get asked about a lot, which is how to create high-performing and sustainable partnerships between your marketing leaders and your sales leaders. So prior to having the opportunity to be the chief revenue officer at Gusto, I was our CMO for about 4 years. Most of my background is actually in marketing, which tends to be a different path for a SaaS company CRO. But I want to talk to you today about opening your minds and thinking about how you can hire and empower great performing marketing and sales leaders. My goal in coming here today is the same goal I have when I take calls from CEOs, co-founders, VCs, investors who are interested in solving the same puzzle. And I have the opportunity to be asked for my advice on that quite frequently. So of course when I got asked to do it for a group of people at once, I thought, well, that is highly efficient marketing. Let me get right on that. I have no other ulterior motive here. But to help you find great marketing and sales leaders. Because my real motivation is to help them be seen, empowered, and make a difference in tech and in SaaS in particular. These opinions are mine. They're highly biased. They do come from some experience and a little bit of a track record of success. And they also come from a long, long career in which I have observed tech fumble quite a bit, if I'm honest, about having great operators in the mix alongside great innovators. So with that, what is the puzzle? Why do we hire marketing leaders and they flame out in 8 months to a year? For our sales leaders, why is she perpetually frustrated and in tension with her marketing counterpart? You can go online and read all about it. And this puzzle is something that I definitely want to help you not be burdened by. So I apologize in advance, but I'm going to do something completely predictable. I would like a hand-raising exercise, which obviously doesn't work great on the stream, but thanks, I'm glad you came, and so if you wouldn't mind, raise your hand if you're somebody who currently or in the near term has to hire a marketing or sales executive for your firm? Sweet. Awesome. OK, I'm going to really try to make this relevant to you. Now put your hand up of that group if you yourself have ever been a marketing or sales executive in the past. Sweet. That I didn't expect. Good job. That shows to me that SaaS is maturing. And you're going to be fine. And in fact, this talk may be boring for you. Everyone who has to hire those executives and wasn't in that last group with direct experience, you should network the folks that just raised their hands. You should buy them beverages and pick their brains. So I want to try to give you tips in two chunks. First, how to hire, and then how to empower. The hiring piece sucks right now. Let's be honest. The supply-demand quotient's a little bit off. So 10,000 on LinkedIn in the US, 10,000 open chief sales officer positions. I took this like a week ago. 433 brand new. I don't know what that means, but anyway, it's happening. I doubt that there's 10,000 good chief sales officers in the United States of America, if I'm honest. And on the marketing side, just as bad. So you're trying to de-risk your company's hiring decision, and part of the way you do that is you tell your recruiting firm, I want someone with a solid track record. If they've been hoppy in their marketing career, then I don't have any data evidence that they actually can drive impact and be a strategic contributor to my business. But that just shrinks your pool further, and it doesn't honor the fact that the problem of marketing leadership tenure and effectiveness is a two-way street, maybe a three-way street. When we talk about tips to better empower leaders, this is where I get really jazzed. I Googled why sales and marketing don't get along. First result, Harvard, of course, I'm sure it's brilliant because it's Harvard, good. But look up ahead of that. 7 billion results. One article for almost every human on the planet. About why we were destined to fight. Ridiculous. All right. Tip number 1. Hiring. Don't believe the hype. Don't believe the 7 billion pages. This problem is surmountable. If you start this hiring exercise, and if you empower your leadership team with the premise that you're going to have to make compromises— sometimes when we are hiring, we say, Well, what is the most important thing to solve for? And then we'll work around the rest. If you go into a recruiting exercise with that in mind, you will only attract candidates who expect to thrive in an environment of compromise. The whole theme of this talk, if you want a mnemonic to remember anything I've said today, is you get what you give. Your attitude going into it, your belief, And being able to find the most successful and sustainable partnership leading your marketing and sales organizations is critical to your success from the get-go. We can smell your fear. So don't give it to us. Number 2, if you're earlier stage, you might not be ready yet. That's cool. Start networking. Look in your network. If everyone you know is in engineering or product or finance, expand your network. The trick here is not— you're not looking for your future marketing or sales leader necessarily. You're not asking them how to find the right person and demand the right amount of effort and the right quality from them. You're asking your network how you need to change. How your company needs to change to attract the right talent and set them up for success. Tip 3. The recruiting environment is brutal. And I know a lot of excellent recruiters. But what I'm getting every week, and many of the talented candidates you want to attract are getting, is a slew of Mad Libs in our inbox. They almost all start exactly the same way. My CEO asked me to reach out to you. Well, if you think I'm strategic, CEO, you should reach out to me your damn self. He has an incredible track record of exits. I sort of am interested in that, but it's certainly not the place to start. Great marketing and sales talent, and again, we're looking for sustainability. And true company value creation, they don't want to exit. That's not success. Yes, do I like making money? 100%. Do I like companies having more of their own ability to control their own destiny and not be in a fundraising rat race? Of course. But we're not trying to get out of something that we haven't even built yet. The other thing to be careful about is saying that this is the first hire. It might, in fact, be. Like, don't lie, obviously. But it's not necessarily the most important qualifier for a good opportunity. We are pretty flexible for the most part, or at least the candidates you probably should be talking to are pretty flexible. If we have enough road behind us on our journey, we can adapt, and you want us to be gritty and adaptable. You might have a team. Are they the right team? Maybe, maybe not. That's okay. We don't know going in whether or not we'll have a seat at the table, so mention that, whether or not you will give us time to build what we need to build, so mention that, But us being the first is as risky as it is interesting. We've raised a ton of money, and we're worth a ton of money. Saastr may be the wrong place to say this, but a lot of people can raise a lot of money. Doesn't necessarily mean that's a good job for me. What I care much more about is growth rate. That's, that's our DNA. We want to grow revenue. We want to grow market share. We want to deepen wallet share. That's what gets us motivated. Tell me about that. Category creation is tossed around a lot. It's hard to know what we mean by that. Sometimes it sends a signal that we have no product market fit. That's not necessarily a red flag. Plenty of great marketing and sales leaders are interested in opportunities where we have to find fit. Remember, we're distribution specialists. Finding fit, reaching the market, that's what we like to do. The market is huge. Billions up for grabs. I would say if you really want to hire great, ambitious operators and business people into your firms, don't talk to them about TAM too much. 'Cause you don't sound like you've done the math actually. You're looking for us because you need help with distribution. When you're early as a startup, distribution is not tactics, it's strategy. You actually don't know necessarily, and your finance people don't know, and your investors certainly don't know how much of that TAM is serviceable, gettable, and what the economics are gonna look like. That's why you're hiring us. So cool it a little bit on the TAM. We're poised for disruption. We have these investors. One comment on investors that's really tricky, tricky, and I mean this with a lot of love, we have somewhere north of 450,000 investors in Gusto. We start to tune it out a little bit unless there's someone we know. And how do most of us professionals know VCs, investors? From working at companies that work with them. Or from reading the media. It can go either way. And a lot of times investors can be super helpful. At Gusto, I have our board on speed dial. When I need help, they're there for me. They challenge us. But that isn't always the case. It might be interesting, especially if some folks on your board or some of your investors, they themselves are previous executives running sales or marketing organizations. What that sends to me is a positive signal is that I'll have a voice of reason and a partner in helping the business understand whether or not I'm actually demonstrating progress towards results. Here are some suggestions instead. So reach out directly if you really care, sends an immediate signal that this is important to you. Talk about what you're doing for customers. Always lead with that. Always. So far, we've been able to reach so many customers. I'm going to be able to do a quick calc of where you are on the PMF spectrum. We are doing pretty well with this type of customer. I start to feel and believe what the opportunity is. But we can't get here, we're not doing there, we don't know why, we're not resonating with X. I'm starting to puzzle through whether or not I can make an impact. It's an incredible way to get me to want to know more. And this is just a general good practice. So reaching out to a candidate, what are the stats on it? It's not that they actually, each individual one is going to be your best long-term game changer, but they might know something that you don't know. So respect their time. Signal, you get what you give. Signal that you don't know everything. That they may know something you don't. And you would really benefit if they would donate 30 minutes of their time to you. Of course, that can lead to a referral as well. Now, tip number 4 in hiring, and this is the last hiring tip, is really to understand your model. So who's seen the weird animal thing here that I'm showing? People have seen that? Right. Okay. Classic. So there are some pretty standard conventional ideas. That are logical and I think are pretty guiding. So if you are a business where you're going to be product-led growth or you have a large market and a low ACV, marketing is very important. That's a strategic business leader. You should make them be responsible for revenue and you should have them really have some voting authority in how you build out your entire revenue organization, including sales and sales leadership. The flip side, chief sales officers and revenue officers are vital as you are going after elephants. In this case, that is a little bit of a flip. Same principles apply. But what do you do if you don't know? What if you don't know where you're going to land? And at Gusto, for example, we've got rabbits and mice and fleas. So how do we puzzle through that? There are some signs that cross models. These are my unmathematical opinions. First, for sales leaders, without getting into stereotyping, there excellent at relationships, typically individually and through how they lead their teams. Brilliant. Those relationship skills need to be repeatable, or you are dependent on individual humans. Related to that, one of the best methods for repeatability in sales greatness is to focus on moving the middle up. There is— a very lazy, sometimes effective intention folks have of putting a big egg out there and letting very competitive, very talented, very motivated sales folks chase it and get that Lambo. That, to me, has been debunked and outdated. You want your sales organization, just like every other team in your company, to be playing the long game in terms of your company value. So look for sales leaders that can balance their competitive nature and their interest in their own wealth creation with true company value as the mechanism by which they win those games. Related to that, Rule of 40 or something like it, the cost of revenue growth and the economics of revenue growth have to be the natural language of your sales leaders. If they're enamored by valuation, you've got the wrong leader. Now, we're experts in valuation, especially in SaaS, where for better or for worse, revenue growth ties directly to valuation almost 100% of the time. We are the experts. We do it every day. We know whether or not the company is creating value. I have a model. That I use to estimate my retirement date. I know that's pretty nerdy. But valuation will not be increased if we don't know how to economically get there from a revenue growth perspective. Inspiration goes without saying, but look for leaders who inspire customers. Of course, they have to inspire the team. And sales leaders can, should, and I would argue must be experimentally solid. Of course, we won't have A/B stats in all of our enterprise sales experiments that we do. It's the mindset of hypothesis identification and the good old-fashioned scientific method. How will I know? What signals will I use to triangulate? That we're headed in the right path. And you'll also then attract a sales leader who can speak the same language with a lot of your more technical engineering growth data science folks. Second, marketing leaders that are durable. We all know this. Everybody knows this. If they're only focused on budget, not ROI, goodbye. If they're only focused on getting leads and how many leads they can get, Goodbye. I suggest you look for marketing folks who talk to you consistently about LTV to CAC. We're in a recurring subscription business. Our customer value and the cohort of customers we acquire is going to change over time. We all want it to increase. How is your marketing leader looking at current investments' net present value as a ratio of the future revenue, and profit they will create for your firm. If they don't know what you're talking about, pass. Brand awareness has been super trendy among startups, especially CEOs, and especially more technical founders and CEOs lately. I get asked about it all the time. People may disagree with me, but for 8 years, I I studied the science of brand measurement. I had the opportunity to do this in a company that was spending $100 and $200 million a year on advertising against a consumer audience. And we were able to get scientific signals. We started being able to get those signals once we were spending more than $40 million consistently every year. If you're not anywhere near that scale, don't worry about it. Focus on your viral coefficients. How many of your customers are referring new business? How much business shows up at your front door that you didn't actively source? That's the volume that tells you that you're building awareness and affinity. And then for marketing leaders, same principle applies. They have to inspire customers and prospects. They also need to inspire the stakeholders within the business. You gotta get jazzed by somebody who's talking about spending a bunch of your money. And they also need to be experimentally solid. If you don't yet know what your model's gonna be, which little animal you're gonna chase, I have some potentially counterintuitive suggestions. You probably then actually need more experience. In the leaders that you hire. There's this concept of a full-stack marketer or an adaptable sales leader. The problem with full-stack is most likely, unless they're super high-level, they've never gone deep on much. So be wary of that concept. Of course you want someone who's going to get their hands dirty, but of course you don't want someone who's just regurgitating playbooks. Beware of them saying, we're going to implement this on an accelerated timeline. They're trying to get to motions, not impact. Output, not impact. Always backchannel your candidates for someone who flies at multiple altitudes simultaneously. If you don't know your model, you can solve for the chemistry between your marketing and sales leaders. And this isn't a bad strategy, because you actually have no idea going in where the divisions of roles and responsibilities will actually flow. And pay them a lot. I know this sounds crazy, like, why would you say that? We are offering, you know, fractions of percentage points and equity and upside and retirement and, you know, houseboats, or that's what I'm looking for. But the reality is to get a more experienced person to leave a lot of highly likely money on the table if they're at a public company or late-stage company right now, you gotta de-risk it. Because we know the tenure is 8 to 12 months. Why, why would any intelligent ROI calculator wanna take a risk that big unless you've helped me de-risk it? You can make it performance-based. You will attract talent that has confidence and has analyzed your business opportunity for their ability to make impact. But don't rely on equity alone. This, I hope, has become something that is well understood. For 10 or 15 years, we were in a period where tech companies, tech CEOs were really frustrated with the caliber of the marketing and sales talent they could get in the mix. A lot of it honestly had to do with an environment that I will call out as consisting of several microaggressions. So I have been in situations where I have been complimented to an engineering team, introduced as saying, "Talithia is a marketing person, but she speaks like a finance person." If your marketing people don't speak like finance people, path. We who can help you will want to be respected for the unique abilities we bring. This is logic. And yet sometimes still this gets missed. All right. So how do you empower great leaders? I'm going faster. I'm wordy, 25 minutes went fast. Expect impact. It's okay. You can demand of us that we are showing you progress. The excuse of the sales cycle is long. The excuse from the marketing leader that it's going to take time to build all these campaigns and get awareness in the market, that is not a valid excuse for avoiding showing progress month to month to month. We have a pipeline. How are we closing more of it? How are we closing it faster? We have some leads. How are we increasing velocity or success through the funnel? Demand every month positive progress. Make both own revenue. And ultimately measure to LTV. There is such a tendency for us as executives to want to simplify, to say, you know what? I'm going to hold you accountable for that and you accountable for that. Healthy tension. Duke it out. Maximum growth. Wrong. I believe wrong. You want leaders who co-own revenue, LTV, CAC performance. Both should be great pitchers. Both spend time with customers. Both influence product. Both can run experiments. and both can drive merchandising, and you should speak to them as a unit and hold them accountable for these things. And related to that, expect them to be experts. Let us be leaders if we have a seat at your leadership table. It's really simple. Expect greatness. Don't signal, just like you didn't when you were hiring us, that you have low expectations. Or you will find that you only have sustainable relationships with executives who can deliver against low expectations. Simple wording sometimes goes a long way. I've got an idea. Why don't we just— we hear this all the time as sales leaders and marketing leaders. How else might you say that? You might just say, I need us to get here Come back to me with a plan. Be careful about benchmarks. We are marketers and sellers, and when we put content on Medium, we are very calculated. When we talk about how brilliant we were, be skeptical. So as I said, start with the impact you want us to deliver. Let us work back to how, not the other direction. Excluding some of you who actually have done the deed. Let us be peers. So if you have marketing and sales stacked, which works in a lot of organizations, still set the table for both of us in your leadership team. Still have both in your planning and strategy sessions. This is so important. It's mostly because then you can see the chemistry, and you can hold both parties accountable for those shared outcomes. And yes, fire quickly. So the math sucks. It's so hard to hire. Tenures are short. Pretty soon into a job, 6 months usually is the freakout point. We know if things are going well or not. If you wait much longer than that, you're 18 months from any ramp of the next candidate you're going to hire. You've got to be aggressive when you're confident that there's a problem. A suggestion on how to save, or know that you can't, the marriage. Have a family meeting. Classic. Smallest group possible. Say you're concerned. Give them the combined shared partner opportunity to work it out and come back to you to your satisfaction. Best solutions always come from within the relationship. Number 2, let's say that doesn't work. Which function is performing better? If you have strong next line leaders, definitely keep that leader in place. They have built a high-performing team that will continue to scale. And lastly, take bold action. If they're assholes, fire them. Full stop. Because the current marriage being bumpy is just a predictor of the next one. All right. Last tip. I wrote this slide like whatever a couple weeks ago. And then I thought this is not what I really— I'm trying to be nice. My comms guy said, Be positive. If I could give you anything, I would give you this. Stop using go-to-market. It sends exactly the wrong signals. It gets you to hire and empower people who are going to wait for product to build something and then locally optimize. Go-to-market suggests to us that we're not part of the entire strategy of the company, that you didn't hire us because you need someone to help you figure out how to distribute, and every product team, I guarantee every product team is hungry for more feedback from those of us who spend time with customers and buyers regularly. This sounds like an activity that happens after a more important activity. Just retire it.