From Zero to Hero: How to Dominate Outbound SaaS Sales with Rippling and Sam Blond

Saastr fans, welcome back to another episode of the CRO Confidential podcast. I'm your host, Sam Blond. Delighted to be back here with just an incredible guest in what I know is about to be an incredible episode. Today's guest is Ashley Kelly, better known as AK. I've had the pleasure of being both close friends and colleagues with Ashley now for a decade plus. And let's see, Ashley started as an SDR at Zenefits when I was the VP of sales. Out of 50+ SDRs, she was number 1 in the company. We wanted to keep her in the SDR organization, so we promoted her to an SDR manager. She was the number 1 SDR manager out of dozens. We promoted her again to SDR director. She's gone on to work with me again at Brex, where she came in as, I think, senior director Director of SDR. We're gonna talk a lot about that today, where she was able to scale the business from about $2 million in ARR is where Ashley joined and left it like $300 million plus in ARR. And now Ashley is the VP of SDR at Rippling. So delighted to have you, Ashley, and excited to jump in.

Thank you. I'm so excited to be here. Looking forward to the conversation today.

All right, let's do it. This is gonna be one of my favorite episodes because it's all about a topic I love, and I imagine Ashley does too. That topic is outbound sales. For context, um, about 80% of Brex's revenue came from sales outbound. Um, and that's not necessarily something that I would be prescriptive or set as a goal for other companies. It's more just whatever works for your business. You double and to triple down on. And for Brex, sales outbound worked, and so we doubled and tripled down on it. I'm going to spend a few minutes talking about the things that we did in the very early days at Brex to get outbound off the ground, and then Ashley's gonna talk a lot about really scaling what we had started, um, which was an effective outbound process. And then Ashley really owned it beyond that. So I'll talk here for just a couple minutes, and then Ashley will turn it over to you for much of the rest of the, the conversation. What we hope to do here is whatever stage of company you are, we can map to where you are with outbound and give you a bunch of tactical ideas on things to do to be more effective and continue progressing. So on day one, the way that I approached it at Brex, and I suggest others approach it, is you do not want to start with purchasing a sequencing tool, purchasing a system that gives you contact information, and blasting your ICP. I've talked about this before, but you really want to start with who you are targeting being in your own network. And so for Brex, what that meant was we started with things like first-degree LinkedIn connections that were in our ICP. So those are founders and people in finance at early-stage startups. We also leveraged our investor network that included YC, which was hugely beneficial because YC companies were squarely in our target market, but it also included the other non-YC investors where we were asking for introductions to their portfolio companies. We then, when we moved beyond people where there were like warm introductions and connections that we can leverage by saying we were a YC company, those sorts of things, We moved on to more creative outbound programs. I've talked a little bit or a lot about a champagne campaign that we ran where we picked a few hundred companies that were in the Bay Area, sent them a bottle of champagne and a handwritten note. That is outbound. It's very targeted outbound, and it has a much greater probability of working than this sort of like blasting of the universe in sequences. The next thing that we did was we put up a bunch of billboards throughout San Francisco, and we targeted the people that were in the areas that we put those billboards up. And again, the probability of people replying to an email after they had seen our billboards and knew what we did was significantly higher than the probability of somebody who has no idea who we are or what we do replying to an email that they received. There are a bunch of other things that you can do that are separate from billboards. These can be people that have some connection to the company where maybe they, uh, downloaded a white paper or visited a website, just some engagement with the business that you're really focused on beyond just blasting emails into the ether. So with that, Ashley, you join Brex when we are about $2 million in ARR. And I would say for a lot of businesses, if you're a software business, that maps to less ARR because Zenefits made money on interchange. Our gross margins were less than software gross margins. And so if think about it from a pure gross profit standpoint, we're still pretty early. And AK, we had some systems in place, we had some effective outbound in place, and your mandate was to take what existed and really scale it. So let's start there. We hired you as a senior director, which is a little bit unconventional, but you're an in-network hire. So that made a lot of sense. One of the first things you were tasked with doing was hiring SDRs. So let's start there and maybe I'll preface and, and finally I'll shut up, but maybe I'll preface this with, for me, SDR has always been the most challenging role for me to hire within the sales organization because people that are in AE roles, people that are in manager roles and more senior, you're really leaning on their historical performance, backchannel references. To help guide you in making those hires. SDRs are oftentimes fresh out of college or moving from a different career path. And so these are hard hires to make with a greater risk or greater probability of failure. Yet somehow you have been extremely successful, and I think your failure rate was near zero. So let's talk about that. Let's start with sourcing. How do you identify the right profile to recruit from given the limited experience, real-world experience?

First, you You mentioned the hiring me at the director level first. I think that really is very rare. I think hiring, if you can hire someone that you trust first, absolutely do that. But I'm, I came in as a director and I was actually making the cold calls, sending the sequences, things like that. So I, I do think it's really important to make sure that the level that you're bringing in, because if you just start with someone that's very junior, they're not gonna know how to do those things if you don't have the process in place yet. So like context of like wherever your business is at, like that's very important. When I think about the interview process of, of what you're saying as far as what is the profile that you look for and how do you make sure that someone is gonna be the right, the right person to bring on board in the very early days. Yeah, they're a lot of the times they're junior, they're, they're fresh out of school. And what's different is that you're not able to, like in an AE role or any other experienced role, you can't go back to their previous work experience and ask them, were you hitting quota? Were you doing these different milestones and were you top of the board or anything like that? So a lot of what we focused on in the very beginning was what are the key characteristics of what makes an SDR successful? And some of those things for, for me are, are they Are they coachable? Do they have the ability to navigate change and failure? Because that's, that's the name of the game in a startup. How organized are they? SDR work is like very structured and rigid day in and day out. And so if they don't have those types of skills to stay on top of their workload, like they're going to fail. And then like probably one of the most important is like the hunger and the motivation. And so like, why do they want to be in sales? And so those are the buckets that I've always thought through as far as what are the, what are the things that we look for in a successful SDR?

Makes sense. And then to, to take a step back, the first at least 3 and maybe more hires that you made at the individual contributor SDR level were all in-network hires that you had worked with at your previous company that you brought over. So I think maybe the, the first takeaway is, and this is true in SDR, this is true in AE, this is true, uh, in virtually any role. If you can make in-network hires, um, the probability of success there is significantly higher. With SDR in particular, that doesn't really scale because there are so many people that this is their first role out of school. And so then you talked about some characteristics that you look for when you're, when we think about sourcing candidates, when you work with the recruiting team or when you're reaching out to folks on LinkedIn, how does that map to any characteristics you're looking for? Are, are you basically saying target anyone with a 4-year degree? What are the things that you use at the very top of what I'll call the sourcing funnel to help identify potentially people that will be successful before you even get to the conversation stage?

Yeah. So when we're thinking about like the actual profile, which again is tough because you can't go plug in different logos that they've worked at, we look at a lot of schools that they've gone to. So I've had a lot of success over the years with— honestly, I'll call it like the work hard, play hard schools, like the Santa Barbaras, the Chico States of the world. But, but schools that have reputation of people that have to work hard, play hard, because that's how startup mentality is too. A lot of athletes I've seen be very successful. So I think people that have joined sports teams, that they understand what hard work looks like, they understand what being part of a team looks like, but that they also have that coachable factor. And also being a— I was not a college athlete, but I would imagine being one would require quite a bit of, uh, time management. And so we've seen a lot of them be successful in the role too. Sorority, fraternity backgrounds, Definitely people that have done internships. So people that were working and balancing both their school workload with having to make money on the side have all been like areas that we look at in on like their LinkedIn and stuff.

Really smart. Okay. So I went to University of Missouri, shout out to the Tigers. I think what you're saying is from an SDR recruiting standpoint, that's like the Stanford of the Midwest. And so you look for like big state social universities, you look for people who were collegiate athletes. Athletes. A number of those folks are coming to mind that have been top performers in organizations that I've worked with. You look for extracurricular activities that can be things like fraternities, sororities, and worked their way through college. And those are some signals that you can lean on from a sourcing standpoint.

Yeah. And then, and then I would say also, if you're not just hiring directly from, from college, if you're actually getting people that have some work experience, which I highly recommend, especially for first-time hires, if you don't have systems and process in place, I've had a ton of success with hiring, recruiting recruiters, because recruiting and sourcers have very transferable skills with having to manage a pipeline, having to call people out of the blue, sell them on a role, things like that. But yeah, those are probably my favorite to hire that have had experience.

Important point and very tactical takeaway, which is most people do not hire a senior director of SDR as their first SDR hire. They, they hire SDRs. And when you're hiring for that profile, rather than hiring fresh out of school, which may make sense when the business is much larger. You actually do want to hire someone with real-world experience and a recruiting background, or maybe even like a selling background that wasn't in tech sales. For somebody that's looking to break into tech sales, those are interesting profiles for very early hires. Is that the right way of thinking about it?

Yeah, I was an account manager at a staffing firm for a year and a half doing outside sales before I became an SDR. It's a weird rule of thumb that we have in tech sales for some reason is that you have to start as an SDR. But I'm so grateful that I did. And I think there's a lot of other people that would say the same thing because you really just start from the ground up learning the systems, the tools, the company, and you're able to grow from there.

Awesome. Makes sense. Okay, so we've determined a little bit of the profile that we want to hire for dedicated outbound folks, which are SDRs. You talked about some characteristics that you look for. Let's talk about the interview process itself and how you suss out, uh, the, the characteristics or intangibles that you just described. What, what's the interview process?

Yeah, pretty simple interview process. We do a hiring manager screen, so a, a phone screen at, at first, and then they go through an actual interview panel. So those buckets that I talked about as far as coach ability to navigate change, organization, hunger and motivation, like all of those have actual specific interview questions that roll up to that theme. And so each, whether it's an SDR manager or a peer or whoever you have on the panel, each person is going to be responsible for drilling into, to those themes and being able to, at the end of the interview process, like actually fill out the scorecard saying, yes, I think this person is coachable. Yes, I think, I think they're able to stay organized and be able to get the job done. I will say, I've maybe because I've been doing this for so long, I think I've hired over 1,000 SDRs in my career, but I can tell usually by the phone screen whether or not this person's going to be able to do the job. And a lot of that is because they, if they're driving the conversation, conversation and driving more of the interview in such a junior role, if they're able to do that, like more times than not, I have a lot of faith that they'll be able to do that when talking to prospects on the phone.

Do you have any favorite questions to ask or like conversation topics at this point? You said you've hired over 1,000 SDRs. You're one of very few, if none other, that have maybe ever done that. But this point, your intuition, is probably more sophisticated than most, if not all. And so then if you're a founder, if you're a first-time SDR manager, what, what are the types of things that you would be asking about or topics to include in the interview?

Yeah, so this one's kind of cheesy, but when I look back at all of the top performers I've ever had, like I know how they answer this question and it's, do you, do you love to win or hate to lose more? And if I look at anyone, like everyone loves to win, right? But I think the people that hate to lose even more and are like so fierce careful of losing and will make sure that they do— they stop at nothing to be successful— are the people that I want to hire. And so figuring out whether you actually specifically ask that question or not, figuring out when we talk about the hunger and motivation, it's not just, I want to be in sales because my dad was in sales, or I want to be— I want to make money. Like, it's really, I don't want to fail, I want to grow my career, I want to take this company to the next level. I think I found that in myself all the time too, is I want to be a VP and it was like I wasn't going to stop until that happened. And so I think figuring out like what truly motivates someone is the key to it. Okay.

One thing that comes to mind for me as you were talking is like people that have a little bit of clarity of thought around where they see their career progressing. I think sometimes sales can be a bit of a catch-all for people that just don't really know what to do and so sure, I'll try this sales thing out. But I think if someone is much more clear that this is what they want to do and can articulate why, and how they want their career progress to progress, what success looks like to them in the role, those sorts of things. It is, I think, better signal that they will be successful than somebody who's less clear around how they expect their career unfolding over the course of the next several years.

Yeah, I think that's super fair. And then also one like thing that always makes me nervous is when when junior people are asking, what does the company look like in 5 years from now? And you're like, the company's only been around for 1 year, so that's a little bit hard for me to answer for you. But it's, you can tell that's something they were taught in school to ask in an interview process. And so really like avoiding the textbook things and, and getting into like their, their business acumen too. Okay.

We've talked a little bit about hiring. If you can hire in network, that de-risks one's success in a major way. Otherwise, look for these qualities and characteristics. As we said, if it's your first SDR hires, make sure that they have some work experience because they will just likely be more successful. We talked about the different roles that maybe you look for if they do have that work experience. Now let's talk a little bit about, about an environment that sets these folks up for success. SDRs are the most junior employees in the company, and you really want to create an environment where there's some direction. I don't want to call this like micromanagement, but I want to call it— I do want to call it structure. And so you have done a phenomenal job when you hire people, just where they come in and they know exactly what to do. And so let's talk a little bit about that. How do you create an environment that sets up the most junior employees in the company for success?

Yeah, and I, I do think there's a fine line between micromanagement and process and structure. It's funny, we spend like, what, 13 years of our lives in school, more if you, when you go to college and you, you start and you have a syllabus, you have grades, you have all these things and you're in in such a structured environment and then they get outta school and it's go be successful in the workforce. And so I think there's like a huge shift that happens when people start in their, in their first careers. And so I do think it's really important to have that stuff in place. And I, and you don't have to be at a point where you have RevOps and enablement and all these like different resources around you to actually create that structure. But I think first and foremost, it's like figure like what does a successful day look like for a rep? And so giving them like almost like blocking off different calendar chunks of this is when you make your calls, this is when you actually are scrubbing your accounts and prospecting and adding the right contacts into sequences. And so they know exactly where to spend their time. Outbound is like definitely what you put in today doesn't show up until tomorrow. And so it can get really emotionally high and low for reps. And so it's really important to make sure celebrating the small wins every day. Did you get enough activities in? Did you, how many conversations did you have with prospects? Even if you're getting hung up on and not over able to overcome objections, what are the takeaways and how can you improve your process like the next day with that kind of stuff? But taking a step backwards, I'll say if you tell a rep to make 70 dials, guess what they're gonna make? 70 and have a very hard stop at 70. And so eliminating like the, the, what I'll call just like checking the box type of activities throughout the day and like truly getting to a point where you have what I'll call like a, an SDR sales equation and working backwards off of knowing what someone's quota is. But basically like how many meetings do they need to schedule for that to happen? How many accounts need to go into a sequence for that to happen? And truly defining like what working an account actually means. And so all of those things, if you can get the reps to buy in on them, is gonna allow you to continue to build out your structure and process too.

So what comes to mind is I'm hearing you two talk through some of these things. I think there's this, what I'll describe as a balance between structure and autonomy that you want to reach the right balance of. And in the early days, there's probably a bit more autonomy in that balance because what you wanna do is you wanna tell the new hires, look, like, here is what exists today. Hey, here is what has worked for us. Here is like how I would suggest spending your time. At the same time, we're still in learning mode. So if you have ideas, things you want to try, with the ultimate goal in mind of, in the early days, probably generating more opportunities, like the concept of generating demand. Um, so you provide structure, you provide education, but you also allow for an environment where ideas are supported and promoted. And Over time, Rippling today is several hundred million dollars in AR. There's probably a lot more structure that exists for a new SDR than the very first Rippling SDR who came in and was trying to figure out what that process should look like. Does that sound right?

Yeah, absolutely. I think it's even something new hires ask me all the time. They're like, if you were in my shoes starting as an SDR today, what would you do? And I say the same thing. Go, I say, go find the top performer, shadow them, replicate their process, and then add your own like special sauce to it. Don't come in trying to reinvent the wheel. And yeah, I, I definitely would say that. I, and really you do have to iterate on it every 6 months, every year. So we started outbound about a year ago and there was no structure in place. We now have some structure, but still, am I 100% confident that if I sat next to one rep compared to someone else that they're doing the exact same thing? No. And to me that's a big red flag. And that's something that we're investing a lot of time in right now is to revamp our playbook. Retrain the reps, make sure everyone is doing more consistent things. That way we're able to scale because otherwise if it's, if not, it's messy and like your foundation just crumbles.

Makes sense. One slight tangent that came to mind as you were talking that we didn't touch on, but you talked about one SDR doing something radically different from the other even today. When you do hire your first SDR, hire two because they will be able to share learnings with one another and really accelerate the time to effectiveness. Because they're trying and failing, they're trying and succeeding, and then they can share both the failures and the successes with their peer.

Yeah. And that's a really great way to pressure test your structure and process because is it the person or is it the process that's broken too?

Yep. Good segue. You talked about what I'll call activity metrics, which is like you don't want to say make 50 dials a day, send X number of emails a day because they're going to, they're going to focus on the activities themselves and not the outcomes. And so So with that in mind, let's talk about how we measure performance. So how do you determine what to measure? I think we could take this to two different directions in terms of performance. One is, what is the right performance metric? Sales qualified opportunities, pipeline activations, closed revenue, like number of different things that we could use. And then the second thing, which I think we actually shouldn't spend time on because it varies so greatly business by business, which is what should the What should the quota be? And the quota is going to greatly depend on the segment that you're selling into, the type of product that you're selling, how expensive it is. So let's pick— let's stick specifically to something that I think is more actionable, which is what, what should the quota be comprised of? What should we incentivize the outcomes for? And so you started at Brex. Where did we start?

We started with sales qualified opportunities. So more towards the top of the funnel. I think this is a very traditional place to start for SDRs, especially in the beginning. There's a few different schools of thought around it. First being, well, what are you solving for? A lot of the times what you're solving for in the beginning is volume and getting more demos on the calendar for AEs. The other piece too is thinking about what can the SDR control? And there's a lot of times that businesses will set them up for a revenue target, and that's really outside of an SDR's control. I know we did move into that at Brex, and we should talk through that. I'm glad that we did. It obviously tripled the amount of revenue that the org was bringing in, but I really do think it's dependent on where you're at as a of business. And if AEs have far too many demos on the calendar, you start to look at the quality threshold. Are we, do we need to be doing more discovery upfront or is there something wrong with our ICP or whatever it is? And like you're wanting to narrow in on specific industries. So I think it's really important to think about like where your business is before you swing the pendulum all the way down to the revenue side for an SDR org.

Makes sense. I agree. And so I think what we're both saying is in the early days, is the metric that SDRs should be measured, their performance should be measured off of, is sales qualified opportunities, some version of qualified opportunities. And I remember at Brex, we were, we had a clearly defined sales opportunity, like rubric. It was basically something like the level of seniority, the type of company, and type of company can mean both number of employees and which industry industry they were in. And I think it was like, they had to show up for the call. And if you got a director plus at a company that was over 50 employees in one of these 2 or 3 industries to show up and receive a demo, you received credit for a sales qualified opportunity. And so there was like no subjectivity. The one exception was maybe that if we reached out to a director, which was the qualifying level of seniority, and they passed it, to maybe a manager, like a finance manager, accounting manager, something like that, we would still schedule that call. And then I think it was at the rep's discretion whether or not to give credit for the opportunity.

Yeah. And then it was, is there plans to move forward with this? Is this, is there a follow-up meeting? Is it something that is actually viable for the business? And then, and that's exactly, so that's what we did at Brex. Yes. I think there's like other flavors of that too, where you hear about like BANT, which is budget, authority, need, and timeline. We have a version of that at Rippling. It does get a little hairy between the SDRs and AEs. And so as you start to scale, like it's something that you really have to pay attention to. That's the age-old thing that the like conflict between the two orgs that ends up happening. But in the early days, I think you just, you really gotta keep it simple. Okay.

So good segue. As we continue down this performance metric process, the way that I think about this is the further up the funnel you go, which sales qualified opportunity is towards the top. Top, what you're solving for is more quantity over quality. And the further down the funnel you make the SDR performance measurement, like what their quota is based off of, you are shifting that balance from quantity to quality. And so in the early days, there are two things that likely exist. The first is you really are solving for quantity, like the bottleneck for growing faster is getting more demos on calendars, more opportunities in the pipeline. And so it makes a lot of sense to incentivize more qualified opportunities and not necessarily further down the funnel. The other thing that doesn't exist in the very early days is sophisticated data around things like which type of companies convert, which type of personas convert, which companies spend more money or generate more revenue on the product. And so as the company progresses, you, these things change. One, you may actually start to have a bit of a quality problem. You may be getting demos on calendars that reps are like, this is bad. Why is it being scheduled?

I'm laughing because I like remember this day to a T where you told me the AE managers are complaining about the quality of your demos. You should take that personally. And I was like, roger that. I took, I just took it personally and now we, you must have. Yeah. Yeah. It's been years and I still remember it.

Okay. These things change. You may start to want to solve for more quality, not exclusively quality. And then the other thing is you start to have more data. And I remember one data point in particular that we used, Ashley, to help guide our decisioning around what the measurement of performance is. We started noticing that the opportunities that AEs were scheduling from their outbound activity activity were much higher quality, and higher quality both in terms of conversion rates and in terms of the revenue that the opportunities generated. And I think the number was something like the average AE outbound opportunity generated 3x the revenue of the average SDR opportunity. And that makes sense, right? Like, AEs are incentivized on closed revenue, they have a revenue quota, and SDRs are incentivized on quality qualified opportunities. And so they aren't incentivized to care how much revenue or the conversion rates that their opportunities are generating. And so over time, we made the decision to switch the incentive metric from sales qualified opportunities to revenue. I don't know if you have any thoughts there. I have lots, but anything just in terms of the impact that had and how maybe others should be thinking about making that transition?

Yeah, I'll say we were in a unique position because to your point, and I, it was like e-commerce that we saw that was really successful. And so that's where we started directing SDRs within their books that we had assigned them accounts or where wherever they were prospecting, they should focus on e-commerce. But you have to give SDRs enough direction of where to hunt in order for them to be successful. And so that's where a lot of that, the, the data pieces that you were talking about came into place. And so we did, we worked very closely with, with sales ops and we were able to come up with account scoring. We were able to come up with a few other like things that they could triangulate within the account, one being the Alexa ranking, which was huge for us, which showed us like how much traffic they had on the website, which would indicate that they would be a big spender. And so once we were able to give them like, here are the 3 things that you should look at the account level, and that will give us a good indication that this is going to be a good customer for Brex. It was like floodgates were open at that point. And, and of course we did incentivize them then on the revenue piece. There are some people that I don't want to let and like bring the numbers up, but I mean like millions monthly that they were bringing in from a revenue perspective, which was really cool to see. So yeah, we, we more than 3x what the SDR org was sourcing, um, previously when they were on an S2 quota. But again, like you need those data points in order for an SDR to be successful. Like today, if I were to tell one of my reps they're gonna go after tech, they're gonna go after like the main industry. So you have to know enough about your business in order to point them in the right direction.

Okay, so here's maybe the takeaway It is when you have confidence around lead scoring, around your ability to predict at the account and persona level, the likelihood of someone to convert and the amount of revenue that company will generate for your business. It's probably a good thought exercise to just go through what would happen if we changed the quota from from S2, sales qualified, to further down the funnel, like revenue. And for Brex, the answer was, we think we'll generate a lot more revenue. And the way that we made this decision, and I actually recommend folks make many decisions, is you solve for one very specific thing when making big decisions like the one that we're discussing. And that is, Which path do we believe generates the most revenue for the business? And then there may be some pushback and consequences for making that decision. The things that come up frequently with this one are, but the SDR doesn't have control over the opportunity once it goes to the AE. And what if an SDR is paired with an AE that has a lower conversion rate than a different AE, and that's outside of their control? And those types of decisions, what I'll call like second-order impacts, are things that you can solve for and design a process around separately. But the overarching way that the decision should be made is, is this going to generate more revenue for the business? And if the answer is yes, you probably want to make that change. And it certainly did for Brex and, and Ashley. I remember when we made that change, the perception of SDR within the business, um, your— the perception of Ashley, like the perception of you, these things like dramatically improved because SDR was having such a larger impact on the business, the company generating revenue because of this almost contrarian change. Because most people and companies are incentivizing SDRs on a top-of-the-funnel metric, and we went against the grain and tied folks to revenue, and everybody As you hired a bunch more SDRs, SDRs were making a bunch more money, the business was growing faster, and that was impactful to the business and, and certainly like a contrarian change that I applaud you for.

Thank you. Yeah, I think the only other thing I would say is a lot of it depends on, on the deal cycle too. We have, we had a pretty short one that was like very transactional. I think in when you're at a more enterprise company and it takes 6 to 9 months for a deal to close, it's really hard to put SDRs on a revenue quota because they're really only in the role for 9 months to a year and a half. And so you just don't get as much, like, per rep production out of them in that sense, because they're having to— they're not— let me say that differently. They typically, when you have an SDR on a monthly quota, you get more out of like performance. And if you have someone on a revenue quota, but they're only seeing that revenue every 6 to 9 months, it makes it really difficult.

Yeah, that sounds right. I think there's a lot of nuance with this specific decision, one of which being what are the average cycle times? I think sub-30 days, you do have this feedback loop that is more immediate. And so sub-30 days, you can tie the goal to revenue. I think greater than 30 days, you may be in this gray area where you can measure both something like qualified opportunities and revenue. So there's a balance between the two. But again, different, like, we're not going to go through every edge case. On the call. Okay, good segue. Let's talk about and maybe finish on scaling. So how do you think about scaling the team in terms of when it's time to hire more SDRs? And then we'll move on from there to how SDRs progress within the business. But what, do you have some sort of a rubric or something that you use to guide you in terms of how large the team should be, when it's time to hire, when it's time to pause? Talk us through your approach there?

Yeah, I think it always goes back to per rep production. So I think once you start seeing reps that are successful and they're hitting the numbers that you've set as quotas and hitting it consistently, and you have confidence that we can bring more people on and still be able to do that, I think that's like the first like gut check that, that I've always had. Um, obviously there's like the math component, which is the CAC and the payback periods, and does it financially make sense for the business to bring more on? I think you also have the risk of what is your TAM, and so making sure that you're not spreading it too thin and bringing on too too many people. I think both of us have seen over the years companies that have solved for scaling just by putting butts in seats, and that's obviously not the right way of doing that. So I think, yeah, making sure that your reps are, are productive and hitting the numbers that they need to. One of the ways that I, outside of the rep attainment that I look at, is really like our ability to penetrate our TAM. And so I look at metrics that are like account to stage 1, so the number of accounts that they're working that actually become demos, account to how many of those become stage 2, so qualified opportunities. And there's a percentage that we actually have to be able to maintain in order for outbound to scale. And so those are like the top of funnel metrics that I pay like very close attention to daily and weekly. And then as you do start to bring on more SDRs, you start thinking about the ramp time. How long does it actually take to ramp a rep and get them up to productivity? And then how do you improve that? And then the other piece I would say is the manager to SDR ratio, I think is, is super, super important. So as you start to scale your team, I remember at Zenefits at one point, I think I had 35 SDRs reporting to me as a manager, and that was terrible. So don't do that. But I think one thing that is like a blessing at Rippling is we actually are very conservative with the number of reps that report to managers. And that really helps from like a day-to-day coaching perspective, especially in this like remote environment when managers have a little bit more bandwidth to help coach their reps day in and day out, you're going to see their production increase. And so we, we keep around like the 8 SDRs to 1 manager ratio today.

Really insightful. The story that comes to mind that in hindsight seems just like an obvious and silly mistake is, and it reinforces your TAM points. At Zenefits, we had some historical data around SDR performance and effectiveness in terms of their ability to add close. And it was on a spreadsheet. It was like, we haven't really seen diminishing returns at the SDR level for the first 20 SDRs and then the 30 SDR and the 40 SDR. And one summer we decided we were gonna hire like 300. And I think we, I think we made some assumptions around out of these 300, only 200 of them are gonna make it through training and through their first month. And so we plugged in like a churn assumption and some diminishing performance assumptions. But the thing that we didn't really take into consideration, and it reinforces something that is a bit contrarian on the sales side, I've always said like more salespeople does not equal more sales. And the equivalent on the SDR side is more SDRs does not necessarily equal more opportunities, um, or more demand. And the thing that we didn't take into consideration is when you add so many new SDRs, you have to go further and further away from the core TAM where you've had success. And Zenefits could serve any company in the United States in terms of our ability to onboard and serve them, but there were industries, segments, personas that had much lower conversion rates and like much lower probability for success when we onboarded them. And when we added all of these new SDRs into the mix, not only were they less effective than the more tenured existing reps, they actually made the existing reps far less successful because we had to tap into this TAM customer base that people were less likely to convert. And so if you were an SDR previously at Zenovitz, you were going after mostly tech companies and like some companies on the fringe or whatever. And then all of a sudden, you're going after companies that are not in San Francisco or New York where you have some brand recognition, you're going after construction companies in Mobile, Alabama. And the existing SDRs that had already been successful weren't able to continue being successful because of that decision around continuing to scale. And so that's maybe just a story reinforcing the TAM consideration that you highlighted.

Mm-hmm.

Okay. Last thing, let's talk about on like the theme of scaling, how SDRs progress within the business. You started as an SDR. Let's talk a little bit about what SDRs move on to within companies, how you think about that, and we'll end on that positive note.

Yeah, I'm obviously super bullish on the SDR function. Spent my whole career focused on it. And outside of all like the amazing revenue things that, that it drives, there's also the career progression within the business. I look back now and the top AEs I've ever worked with all started as SDRs. Most of my managers, I'd say 20 of my 30 today were SDRs, uh, at Rippling. Same thing with all the previous companies I've worked at. I think making sure that you have some sort of career path and leveling and something set up for them to move through the company is, is really important. Important. I think every business should think about SDRs as being like the future leaders of their company. And so that's one of the first things that I did when I came to Rippling and was put that in place because I, like you said, I started as an SDR. I know how impactful it can be to continue to grow your career, staying whether they stay in the SDR or if they move into account executives. We've moved people into marketing, into recruiting, into customer success, obviously into management. And so I think there's really the possibilities are endless. I I think what I always find as a compliment and a problem for me is that people are constantly wanting to pluck people off the SDR team because they have the, the grit, the experience that they've done from the ground up, getting to know, and, and really like they've created a, uh, reputation for themselves as being successful too. And so that's to your point in the very, very beginning, if you can hire someone that you trust, like in network, like why not promote from within? Because there's a lot less risk.

Yeah, I think one thing that is missed in the sort of spreadsheets and, and something that came up periodically at Brex, um, before we made the change that we highlighted around D&Cs, incentive structure, we had AEs, our top AEs were generating more outbound revenue because we really focused on AE outbound in addition to SDR outbound. And our top AEs oftentimes were able to generate more outbound revenue than many of the SDRs. And so there was this conversation internally that should be had, which is like, why aren't we just hiring more AEs if they can both generate, they can both source the that the SDRs are sourcing and close it? And the answer wasn't in the spreadsheets, but the answer was like, but all of these people used to be SDRs at Brex. And when we move the best SDR that's generating the most outbound revenue to an AE, of course they're going to continue generating much of the outbound revenue that they were sourcing as an SDR because of that training that they realized. And not only does SDR SDRs contribute the sourced revenue. R contributes many of the best AEs, best sales leaders, and just like best people within the company. Because to your point, over time, it provides this recruiting ground where if you're an AE manager, you are— I remember, and I can think of the people— you are begging to hire, quote unquote, hire Ashley's best SDRs rather than what I'll describe as like people off the street that do not have the sort of like Brex outbound-specific context. So something to keep in mind. Um, I'm obviously a huge proponent of both the SDR function and the concept of outbound that SDR provides so much of. AK, with that, I think we have exhausted much of outbound scaling SDR, these things that you are world-class at. Thank you for joining the pod and see you soon. Thanks everybody for listening.

Bye. Thanks, y'all.