Josh James & Domo: DoubleUnicorns How Things Are Different Now And Things That Never Change

Alright, let's give it up for Josh James. Very exciting. Thanks for coming, man. So we're gonna have a little bit of fun. If you haven't read it, Josh James has his own rules of sales, which basically is all of the 4,000 Quora posts and blog posts I've done distilled into 52 slides. So he should just be running SaaStr. Other than that, he's running his second unicorn. So I want to just spend 5 minutes chatting with Josh and then we'll spend the rest of the time having some fun going through his rules and getting some great war stories. But before I get into it, a couple things. First, tell everybody about what Domo does and sort of where it sits in the whole BI landscape so we can get up to speed.

Great. Yeah, so what we do, we change the way you run your business. We take all the data from every system you have in your company and put it on your phone. So if you want to get a text message that says your sales are up or an employee left or your Receivables have increased. You get a text message about those things and it's all right there on your phone. And the way we came up with it is I was running Omniture and Omniture, we were the fastest growing public software company all 3 years we were public. And we thought we knew a little bit and I'd go see Expedia or eBay and they're like, they know everything about their business 'cause it's all online.

Yeah.

And then they would be like, so how many employees you have? And I'd make up a number, 'cause I don't know specifically, I maybe know from the last quarterly update, and it just never made sense, like I know that number lives in like 3 different systems, why isn't that digitally transformed and on my phone in an app that I can see that plus how many Instagram followers we have and every other metric that we wanna see. And so just said if we did that for online marketing, let's see if we can do it for the entire business, so that's where it came from.

Got it. And any things that you thought, having had a huge first success, that you thought would be easier the second time that actually weren't?

Well, I thought it would be easier. Easier? And you guys all know, for starting companies, it's not easy. And I think you just get older and more tired, and still, like, no one's picking up the ball and running with it. You still, there's things you have to do.

Yeah.

I think there's higher expectations, so there's a different type of stress. You know, the first time around, no one has expectations. Everyone thinks you're going to fail. And so it's just kind of like—

It's comforting in the early days.

Yeah, it is. Like, you know, if you do, it's not a big deal. You get a badge of honor. This time around, people have expectations, and they throw money at you, and that's definitely nerve-wracking. I think the other big lesson, or big difference, is I figured, let's go get some of those same people that we worked with last time.

Yeah, getting the band back together.

Get the people that have been there, done that, and We'll upgrade in other places and get more people that have been there, done that. And then you lose that wonderful thing that happens in a brand new startup with brand new founders is everyone's trying to make a name for themselves. Everyone's putting everything on the line. And it's all been there, done that. And it all kind of ends at 6, 7 o'clock, and there's not the 11:30 text messages. And so we had to make sure we pulled some of those I mean, generally speaking, younger people in and promoting them and making it their life and having that kind of energy is extremely important.

And was it— so there's the energy, and then also sometimes everyone wants to get the band back together, right? It's the easiest way to repeat Lightning.

Sure.

But do you find that sometimes it's they only want to do things sort of the way that where they were successful? Was that an issue as well?

Yeah, and no—

That's what we want to do. We know how to crush it one way, and the world evolves.

Well, I mean, even with me, I mean, there's things that I was sure were gonna work the same way.

Yeah.

There were some things I knew that we screwed up, and I'm like, we've gotta improve those things. You know, and you definitely shoot people in the head a lot faster, because you've learned that lesson a million times. But, you know, there's things like, we at Omniture, it was really easy to sell. It's like, do you have a website? Okay, here, you need web analytics. Yeah. And Domo is not as easy. People don't understand. They're like, well, it's BI. We're like, no, no, no, no. And they're like, oh, it's BI 2.0. And I'm like, no, that's kind of like this sucks 2.0, because BI kind of sucked. And so it's understanding how to be much more consultative in the selling process and training the whole organization on that process is something we had to completely relearn. So that was different.

And you need different DNA in the team, you think?

Some DNA difference, yes. Yeah. And I think I'm really comfortable. I mean, if people come into my office, which they often do to come and complain about somebody else on the team.

Yeah.

First thing I do is call that person and say, "Hey, come in here. Okay, say it again." And you know, it makes people uncomfortable, but they learn real quick, like, we're not gonna walk around and complain about each other. We're gonna get in a room, we're gonna figure it out, we're gonna fight, and we're not gonna make it personal. But if you're gonna come in here and say something about somebody, then that person's gonna be walking in here 2 minutes later. But I think, I mean, that's what's fun. Fighting and trying to make things win and beating the heck out of competition, and that's fun.

Yeah, and what else, other learnings, 'cause that's fun, and then I wanna dig into some of your meta lessons learned. But what else is different today than in the Omniture days? What's different?

Well, I mean, at Omniture, we had, We were begging for money. It was my credit cards and my student loans.

Yeah.

And I have much better credit cards now.

Did you have to IPO to raise money? Was the IPO actually a financing event? Oh, yeah.

Yeah. I mean—

That's real old school, isn't it?

Yeah. It was $100,000 in credit cards and student loans. I mean, basically, I got as many credit cards as I could, applied for them all at the same time, and then ran them all for like 2 days before anyone knew it happened. And, you know, this one, yeah, people were throwing money. On the one hand, it was nerve-wracking, and I wasn't sure if we wanted to do it. I was like, "You know, it'd be cool if I went public, and I owned 95% of it, and that'd be pretty awesome." It has a certain appeal. It doesn't really work out that way, but the interesting thing is when we started bringing in investors, we started bringing in really smart investors, and it gave us the extra pressure, which was good, Because like Matt Kohler at Benchmark, he asked me first, he was our first VC in this one, and he said, he only had two questions, and one of his questions is, why are you doing this again?

Why are you doing it again, yeah.

And I said, I said, I sold to Adobe, and we left on okay terms. There was lawsuits afterwards, so read into it how you will. Still friends with them all, but it kind of pissed me off. And I was like, I'm going to— I want to go make them— I want to— I want to— this is what I told Matt. I'm like, I want to make Omniture look like that cute little thing we did when we were in elementary school.

Yeah.

And, you know, it's— you guys all— you guys have all met, you know, executives and CEOs of these big companies, and I've met them all, and you meet them, they're no different. And so then you look at the Michael Dells of the world, and they're all intelligent, they're smart people, but they're no different. If I was in high school class with them in calculus or something, I would've, I could've hung with them, you know? Um, and so I just think, what did they have? Well, they got the market opportunity right, and then they had decades in front of them. And so this time around, you know, wanna make sure that we can do it for decades and see how big of a company we can make.

So it, it, does it, it has to be an order of magnitude better the next time, right? It's gotta be at least 10x bigger than that.

That's another thing. Yeah. It's like, and I told people, they're like, There is exactly 0% chance this is going to be worth between $0 and $1.8 billion, which is what I thought.

It's not going to happen.

There's a 0% chance. It might be zero, or it's going to be more than $1.8, but it's not going to be in between. We're grateful for the opportunity, certainly, but at the same time, that's what the investors put the money in knowing. Yeah. We're going to swing big. And if you can't afford to lose money on this thing, don't put it in, because we're going to swing big. And that's what we've done with Domo. I mean, Domo is applicable to every single person at every single company in every single vertical. We've got the CEO of Target using Domo. He walks into any store, he pulls out his phone, picks a store, and literally up-to-the-second data about how that store is performing compared to the other stores, compared to how it was doing the previous year. Got the CEO of UHG, Fortune number 6, and the guy that runs analytics there told me, he said, "This is nirvana. I never thought this could happen in my life." And I was talking to the CMO of another Fortune 5 company just a few days ago, and he/she said, 'cause I don't wanna give it away, that it's been his/her dream to show their CEO a real-time dashboard of their business. And dang it, she's like, "You've done it right here." And it's already done and I can't wait to show this. So it's really fun to see, like, I mean, we've got the coolest data about— this is a software as a service conference, so magic number I got to invent with one of my VCs, and that's the way we ran our business. And there's so many other metrics now to think about, but the coolest one I think is magic number's really important, but retention's equally important. And revenue retention, Domo has 240% revenue retention of its customers.

That's the magic, isn't it?

And it's like, this thing's going to be crazy. And people still don't know what we do, and that's OK. I'm totally fine with that. But it's about to get crazy.

You got to be 3 to 4 years in until you feel the lift that you get from that, right?

Yeah. Yeah, you do.

And do you have the NPS religion that I've grown to have the last couple years? Is that part of net negative churn?

Well, you know, the first couple years of Domo, the NPS was really a depressing thing, so we didn't really adopt it too greatly.

And then— When it was low, when it was low in the beginning.

We kind of figured things out about 2 years ago and got the product really cranking. Drove it up. And yeah, and so now it's definitely a big part of what we're doing, and we use Qualtrics for that stuff, and it's been really good.

Is it a core metric for you?

Is it a core? Absolutely.

Absolutely. And so in the beginning, 'cause everyone wants to have a 70 MPS, but there are a lot of reasons you might not start there. I think the most important thing is driving it up over time. The most important thing.

Well, I mean, I'm not sure, we literally had 100% retention for the first 6 years of the company. We never lost a customer. It wasn't revenue retention, we had 100% nominal retention. And so they go from that to then, you know, we start this new product, we're like, "Hey, everyone's gonna like this." No, there's a million problems with it. That was really painful, and so working through that, working through that, and finally getting that to where retention's great now and customers are really happy, it's a much better place to be.

And Onmature, when you had that, was it all because you had the special sauce figured out, or was it because of your market position and the importance of the problem Onmature solved in its time?

We kind of got lucky in the architecture that we chose. We had a lot of competitors, cloud was not accepted yet, and then if they're like, oh, you're cloud, "why the hell are your costs of goods sold so screwed up?" We're like, "Well, we have 100 times the amount of data that Salesforce has, so we have a lot more expenses." So, you know, people could not comprehend that. So they're like, "You guys don't know how to run your technology." We're like, "What?" And, you know, I think the biggest thing we got right with Omniture was we couldn't afford to buy, at the time, Sun servers and Oracle databases, so we did MySQL, we did the LAMP stack. Because we had to, and that was by far the most efficient, and so we could scale up to, that's why Walmart, there was a board member that was on the board of Walmart, Doc, on the board of Walmart, and on the board of Coremetrics, my competitor. We never thought we'd get Walmart. Coremetrics goes down at Christmas, we get the phone call from Walmart, and we get them as a customer because we just scaled really, really well, and we got that part right.

Got it. So then, and then Domo, you had that step function where in the beginning you had to work it out and it's stronger now. Did, had any approach to customer success or being in the field with customers that's evolved over time?

That one we kind of, we got right at Omnisure and we just 10x'd. We just doubled down on that.

You doubled down on it early, right?

Which is—

That's the trick, the second one.

Anytime I hear any customer that's going to be a problem, like you talk to sales and marketing experts and they're like, you got to find the target customer and you only get that target customer. Customer, you shouldn't do it. You don't wanna get distracted and do all these things and jump all over the place just because the customer's telling you that. You'll never have a strategy. To a point, but like when I hear there's a customer that's breaking everybody, that's extremely complex, that says there's no way we're gonna handle their business, I'm like, take our 5 best people, put 'em on it, let's fix it. Let's make it work. And if we get that right, then we're gonna get dozens and dozens of other customers from that one example. So we look for the complexity.

That's my view. So you have a big customer that comes in that wants to push the limits on deal size and everything. If it's vaguely in your wheelhouse, you do it, and you just put a team on it and learn from it.

Yep, absolutely.

I think the advice of like, those are outliers and don't get distracted is often terrible advice.

And they can be distracting, and you do, I mean, it's like portfolio approach. There's some customers that you end up spending half a million bucks on, and you don't get anything out of it, and then the guy moves on and you lose the contract. I mean, it happens. but if you think about you doing 10 of those, maybe 3 of them don't work out, but 7 of them are gonna be amazing, and it's gonna be your long-term business.

Yeah, so let's hit, I wanna have some time, let's see if these are queued up for these slides, 'cause let's find some fun stories out of it. Are these, you guys got 'em? Oh, can you go back one I think maybe, or is this the first one? Roll back, is this the first one? It's all good, let's start with this one even if it's the second, 'cause I love this one. 'Cause I was, so go to, what's your blog, what's the URL? Everyone's gonna magically copy it.

It's joshjames.com.

I know how to get it on Google.

I got like 50-something start-ups, 50 Startup Rules. It's when we had no product at Domo, I was trying to make noise, we came up with Startup Rules.

Did it work as a content marketing strategy?

It did work, actually, yeah, it worked really well.

So this first one, I think it's pretty obvious, but I want to think about it. This is your second time, you're, sorry, recruiting, you can see it right there. No good employee will walk through the door, must recruit like you sell big customers. So you're in the, Utah, Salt Lake tech community, you're fairly well known. And I assume there's a—

I'm big in Japan.

You're big in Japan.

I'm big in Utah.

So what does this really mean? In home, in Hinokara.

I lived there for 2 years, so I actually am big in Japan.

So recruiting is, once you have traction, is all that really matters at the end of the day, isn't it?

It is, yeah. But you know, it's like it says, they don't walk through the door, and the best ones are always employed, and they're happily employed.

Happily employed.

And recruiting I think's a big deal, and I've noticed over the years, I remember being in college and hearing about a guy that got recruited from Microsoft, and he was so impressed, even though he had a business that was making him like $200,000 a year, Microsoft came and recruited him, rolled out the red carpet, gave him like a leather coat and a couple laptops to give to his wife and himself, and he just like couldn't help but take the job. And then 6 months later he quit, but he was so enamored.

That he did it?

With the process. and so we try to do the same thing. Like an employee comes in, roll out the red carpet, get them the drivers, make sure you, you know, send stuff to their house, to their spouse, um, you know, give them a bunch of gear and make sure that they are treated really, really well and everyone has the background on them. And, uh, an example of this, when I was recruiting my CFO, um, he was CFO of SuccessFactors. Yeah. And so every software as a service company wanted this guy.

He's number top 3 obvious list, right?

Yes, he is. He's amazing. I called Lars, the Ransomware Success Factors, and said, "How good is Bruce?" He said, "12." I didn't even finish my sentence. 12. Okay, Lars. Got it. Thanks. Done. We're recruiting him. Of course, he lets us know that he's going to take his time because he's cooking 8 things at the same time, and they were really hot startups. So we interviewed him and then we lined up methodically with all of my board members and my investors and my executives. I had like 14 people on the list because he said he was going to make a decision on Sunday. And we took like 16 hours of the day.

The whole team, yeah.

Including Bill Gurley walking over to his house and knocking on his door and Bruce is like, "Well, I have guests." He's like, "Oh, That's fine. And here comes Bill walking in your house and spending an hour with you. And it's Bill, so of course Bruce is gonna be like, well, I can't tell Bill to leave, so I guess I'm gonna spend an hour with Bill. But I think methodically going through these things and acting like it's a big deal you're trying to win is extremely important, and we all know, I mean, you get the right person and they really, they make 10x the difference of the next person.

Yeah, and how much of your time do you spend recruiting these days?

How much time do I spend recruiting? Recruiting.

Of your 80-hour workday.

I go through phases, certainly. I, you know, the last 12, 18 months, I spent, I'd say, 25 to 33% of my time just recruiting. Early on, I spent half my time. I wanted to meet every engineer. I was really protective of the culture. Yeah. And then, you know, pull back, and okay, I went and met every, manager, then okay, now I want to meet every director, and now we have certain people that have to meet, I know, every director, every VP, so just kind of pull back as it goes, but then personally recruiting, you know, I think makes a big difference on the VP level certainly. So do a lot of that.

And one, a lot of founder, first-time founders, they're crappy at recruiting. It's not a skill that—

They're crappy at recruiting?

I think they're pretty bad at recruiting. I don't think we all naturally learn that in college. What's that?

Highly technical term, crap recruiting. It is.

We're bad at it. I mean, I still struggle to get better at recruiting, right? Yeah. It's a huge effort. You have 15 people. So any great advice for the team to get better? What's one big learning? I like having every single person on the team go all in, but what else?

I like, I really like in recruiting saying something that's gonna throw 'em. I like when, like the guy that's president of my company now that I hired to run sales at Omniture, They come in thinking they're the big man on campus and they walk around like that and you gotta make sure that they're pitching you as well. That's the same thing with a VC. If you're going to talk to a VC, I don't go in and just pitch. I go in and pitch and I got 3 questions to ask including a couple things that are gonna make them uncomfortable. Yeah.

Even with your CFO from SuccessFactors, you made him uncomfortable? Absolutely.

Good. Absolutely. You know, I'm like, I heard you're an asshole. Talk to me about it.

Not judging, just asking, right?

Yeah, just asking. And that's actually the exact same question that I asked my president. He was, you know, I'm like, you know, I've interviewed you like 4 different times, and it seems like you've got a little bit of asshole potential. And you know, just, I don't know if you've gotten that feedback before or not, but talk to me about that. And he's like, he tells me afterwards, he's like spinning. He's like, what did I do? I want them to pitch me too, and I want to come across as a nice guy, and I want to make sure that they know that I'm going to take care of them, love them, and do everything I can to make sure that we go to the promised land together, but I want to make sure that they're pitching me as well, because when you feel like you can't have something, you want it more. I think that's an important part of pitching.

Your CFO and these others, did you lure them from the Bay Area to move to Utah?

Yeah, probably maybe a third of the management team over the years. That's the one thing we don't have in Utah is like software as a service CFOs. We don't have a stable to choose from. So you end up bringing some executives like that in. And for us, if we can get them on a plane, we can close them. And bring them in, and for us, there's a lot of companies here I know that aren't based here in Silicon Valley. We call Utah Silicon Slopes. We make sure that the other, like we use the other CEOs in town to help recruit my CMO or my CFO to make sure that they know everything else that's going on just in case they move there and their kid's going to high school, they don't wanna move away, they hate you, are there other opportunities? So we do a lot of that and then the other thing that we do is 'cause sometimes, and this happens in Utah too, we'll have Utah companies and they won't pick other Utah companies because we're like, "Oh, it's a Utah company, it can't be as smart as people in Silicon Valley." What? You kidding me? But that's what they think. So when we have people come in, we just show them customer use case after customer use case after customer use case. Because GE, Target, Walmart, that says something that maybe you can't say yourself.

So I have a super strong opinion, but let's say you're in your position, you're in Utah or anywhere, you're in Bangalore, and you find someone you think's a decent first VP of sales, but they're in the Bay Area. Does that ever work? What do you think about that remote sort of—

I hate remote.

Employees.

It's hard, right?

I hate it. But not everyone will move.

I hate all of it. I will only do it for just a few people, and I will only do it for a few people that have done it before and proven that they can make it work. Even my best ones, I still, even Bruce, my CFO, who I love to death, even if he tells me he's working, I don't believe that he's working on Thursday or Friday when he's not there. I just don't.

You need to feel that collaboration vibe.

I know what it's like. You don't really work the same.

I don't know about working from home either. So yeah, that is a tough one. So let's talk about this one, 'cause I wanted to unpack this little one. I almost get it, but it's pretty cool. I only care about sales. I get that. Don't talk to me about marketing even, right? Booth, HR, comp, legal, that being fixed later with dollars. This is about early-stage debt, right? What debt can I afford, can I fix later with money and time and what isn't? So even marketing?

Yeah, for me this is all throughout. It's like, it's so hard to get the whole company focused on sales. It's really easy to get a good sales team. It's easy to find people to support them, but to truly get everyone really focused on it. Anytime someone comes and brings me something, I'm, depending on the phase that we're at, but I've been through phases where I've said, okay, if you're gonna bring me $100,000 spend, tell me why that $100,000 spend is better than a rep. Because this is what a rep's gonna return to me.

Yeah.

Every rep I get in here, you know, because you're like, "Okay, we gotta hire 10 reps," and you think that might cash flow cost you $1.5 million before it starts paying itself off, but for some reason the next $1.5 million is not gonna be 10 reps. You're gonna end up spending $4 million because you're doing all this other crap along with it.

Yeah.

If you want to spend $100,000, tell me why I should spend it on that instead of another rep. I just make, I don't care, it's legal. Why do I need to spend it on this extra patent person or this extra contractor? Why can't I hire another rep instead? You got to justify it. It's for your own good. Help them understand that. We did things like we were trying to win a customer back in the day and I got 4,000 little squishy balls and put the customer's logo on it and put them all over the office and Everyone's throwing them at each other, but everyone's sitting there staring at that customer logo name. I gave everyone, we were trying to close Walmart that one time, I gave everyone, I think it was probably stingy, so it was probably $50, but it was $50.

Those spend at Walmart?

And when we got customer 100 here, passed out $100 to everybody and just get them really focused. And then at Domo, we were focused way too much on, all the other things 'cause we have all these people that have been there, done that, so they're trying to put all their systems in place. And so we put like Kmart Blue Light Special, blue lights from all the ceilings everywhere, no matter which building it is. We close a deal, lights are going off and we're playing music and then everyone comes in there and they're complaining about, I want a call and then like this music 'cause we let all the sales guys pick their own music. Welcome to the Jungle starts playing and you're trying to do a pitch.

I'm like, I don't freaking care.

You're gonna have to explain to the customer that a deal just closed. We were only able to sustain that for about a year, but it kind of really taught everyone how to think about things and how we think about things as a company.

Yeah, as you add a team, especially it can be confusing, especially if you raise funding. Like that multiplier effect of each rep. The rep costs this, but I need all this in marketing and all this other, and all of a sudden the fully burdened cost is like 3x the OT.

For every rep, For every 6 reps, we're going to have to hire another manager because there's no way you can manage more than 6 people. I'm like, I'm not really sure that's true. I like pushing on that a lot. I like having them screaming. I like when they come— this has happened to me— I like when 6, 7 reps come in my office at one time and do like a sit-in. Like, we really would be more effective if we had another manager to help us out. Like, OK, we've reached that point then. Until then, no, I'm not doing it.

Yeah. It's tough. It's good. But this is actually the way people spend all the money.

It is.

Right? They don't— they're actually capital efficient for a certain point, and then sales efficiency tends to plummet somewhere, whether it's $10 or $20 million in revenue or it's $10 or $20 million in fundraising, and they just bolt on all this stuff. They're not quite sure why they're spending what they're spending.

Yep.

Yeah.

Yep, for sure.

So next one, I know this sounds simplistic, but this is an important one. Because incentives matter, right?

I freaking love this one.

You love this one.

I love this one.

Spend a few days each year on detailed comp plans, the most powerful operation weapon you can have. One of the most popular things that I wrote in the early days was my hacky sales comp plan, and it's like top of natural search on Google. What have you learned here? What can you share with us?

Yeah, definitely I like sales plans, and then CFOs and other people come along, and this is too complex, and lawyers get involved and we're not gonna be able to be Sarbanes-Oxley compliant with all this stuff. I'm like, you know what, figure it out. That's what you're paid to freaking do. So, you know, well we can't do things on a spreadsheet. Well then go write some freaking software. Like I don't really care. If it moves the dial, then I'm really interested in it. But I think it goes beyond, it goes beyond this. So we were having trouble one time at Omniture where we had, I literally had my CFO walk into my office in a panic, shut the door, and he's like, "We can't take any more deals. We can't close any more deals. We need to stop." Yeah. Take a breath, bro, 'cause that's not the answer. So he's like, "Well, we need to get more money. We can't buy enough machines," 'cause AWS didn't exist back then. And I'm like, "Okay, we'll get more money. I think we can figure that out." And he's like, well, we need it now. I'm like, okay, well, let's go get some more now. He's like, and we can't install 'em. They're coming too fast, we can't install 'em. It all comes at the end of the quarter, we can't install 'em. And that was a legitimate problem. We were having a hell of a time getting client services do implementations. And this guy that I had running it is extremely anal about making sure that he's got the right people, and he will not budge on that. And so I love when you know their limiting factor. The limiting factor is, He's not gonna bring anybody other than quality. So I went and gave him a really stupid incentive. For every person you hire, uncapped, I'll give you $1,000. He hired 150 people. It worked.

It worked.

It worked. And every single one of them was good quality because he cannot live with himself if they're not good quality.

Yeah.

You know, and we had another problem. We went public at our Omniture, we had 55% gross margins.

Yeah.

And we knew we could get it higher, but it was, we were just keeping things on. And I tried so hard to get gross margin improved, and I went to my CTO and he's just, he's like, well, you know, salespeople wouldn't sell under price, if they wouldn't underprice their deals, then we'd have better pricing and that'd lead to better gross margins. I'm like, true, but I don't really wanna, and if the network operations guys didn't always feel like they need to have so much capacity, capacity, we'd be okay there and they won't push us. I'm like, you know what, Mr. CTO, I'm gonna give you $50,000 for every percentage point that you increase. Yeah. Every percent, and he's like, well, that's not really fair. I'm like, I know. And he became the czar, man. He's like, well, I have to get involved in pricing. I'm like, you go right ahead, get involved in pricing. And so he's making every, he put all these stipulations in place so that he was able to get, and he made $600,000 that year on gross margin increase, and the company made, I mean, 3 years later we made probably an extra $50 million in cash on that.

Yeah.

So it was a massive return, but it was just a comp plan.

Yeah. So you like, I love it too, you like incentives for as many folks as you can make it work across the company.

Yeah, just last quarter I paid my telesales guy and my enterprise sales guy, they both had about the same number of reps, And I needed to have a big quarter. We're getting ready to raise some money. And I said, "OK, jump ball. All or nothing. $100,000. Whoever sells more." And that's all any of us heard about for the next 3 months. And one of them won by about— it was about $60,000. You know? And it was a $10 million deal. So it was pretty fun.

That's awesome.

And what about—

you talked about getting the gross margins up with your CTO. What about incentives for other folks in the company? On the team, engineering, marketing, customer success. Have you evolved anything in there?

Yeah, engineering's really tricky. I'm sure there's some in here, your kind. You guys are motivated by different things.

We're about 20% in product and engineering.

You guys are motivated by different things. Be careful. Yeah. But, which is okay. I mean, I love finding the engineers that are motivated by money.

Yeah.

There are not as many of them, but you find some of them, and I love them. Then I think, but doing other really interesting things, whether it's like, we'll send you all to Disneyland if you get this thing done on time, or we'll rent out Star Wars and you can just invite your friends. So we definitely get creative in that stuff. Yeah, I love, it's fun. It's fun, and everyone's accomplishing it together. So I love it. I love incentives.

You may not have one, but any good stories of misincentives? 'Cause it can go the other way too, right? What you incent, you get.

You do. Yeah, I mean, salespeople are complete whores, and it's just true, they are, and I love 'em for it, and any way they can make a buck, they will.

Yeah.

And I've had my comp plans every single year, and this is funny actually, my CFO would get so mad. I remember he'd bring me in the office, he's like, "I can't believe you employ all these unethical people and you're okay with it." I'm like, "Take it easy, Mike. They're just doing what we asked them. They found a loophole. Pay it." He would close the loophole, sure enough. There's been tons of disincentives or misalignment in sales plans that I've created over the years. You know, where you start paying for, I mean even paying a dollar whether it's from renewal or from upsell, I mean that's the simplest one. And I mean upsell or a new contract, and if there's a bunch of upsells to be had and they can hit their number, your new logo growth might shut down completely. So moving those dials, even if it's mid-year, and saying sorry. I mean we just had a really embarrassing one, I'll tell you guys a horrible thing I cannot believe happened to me at this stage in my career. Cannot believe happened to me is we were struggling. We weren't being efficient enough in getting new leads. And so the marketing and finance got marketing to spend a little bit less because the efficiency wasn't there. So the leads were coming down. So the sales team wasn't being fed. So since the sales team wasn't being fed, sales came down, which is not the real problem. The real problem is then your sales guys aren't making quota, then they're not making their dollars, then they're like rats on a ship. They're the first ones runs off. So they start getting ready to run and I had 4 sales guys quit in the same week, 4 of my enterprise sales guys, and I almost had a heart attack. I'm like, if they leave, and they were the smart ones, if they leave, everyone here is gonna know that there's something wrong.

Canary in the coal mine.

And I'm like, I don't have time to fix it. So, you know, I went and I'm like, here's $100,000, here's $50,000, here's guaranteed comp next year, and I had to do it. And I did it, and then we're like, the rest of the sales team must feel the same, So we lowered quota for everybody. We brought quota down significantly by $150,000, which seems like, okay, we'll fix it again next year. I told the board, we're gonna have to, you know, we need these guys motivated and they're not gonna make the money anyway, but we need them motivated to get the accelerators. And they're like, okay. Well, the idiocy that happened in my company that I'm responsible for, but it's just, you look at it, you're like, how did these smart people do this? And how did I not catch this? We built out our entire model to the new quota. So we generated leads to the lower quota. So it was self-fulfilling. So all we did was just completely shoot ourselves in the foot. So we get in, you know, a quarter and a half in and we're like, "What is going on? Why aren't we selling what we used to be selling?" Yeah. "We don't have the freaking leads." "Well, why don't we have the leads?" Well, we hit the model number. Well, what's the effing model number? Oh, it's built to this quota. To the lower quota? You know, and it took us another 6 months to recover from that. So yeah, I mean, sometimes you have mass— that was entire company-wide misalignment that we just recovered from 2 quarters ago.

Wow.

So yeah, I mean, it's embarrassing, but you know, it happened.

It does happen to the very best of us, is the learning. All right, I want to get through all the slides, but we're over, but I want to hit one last thing. I want to go back to Domo. Just tell me one or two things for this year you're excited about Domo. What's going on that gets you jazzed?

I think Domo is going to be— Domo, by the time we're done, is going to be tens of billions of dollars in revenue. It's going to be one of the most significant software companies that's ever been created. We got lucky. I was just frustrated that as a CEO, I was not able to get my data. I didn't realize that in order to get the CEO the data, that means that all the VPs need to put the data in. In order for the VPs to put the data in, their people have to put the data in, and their people have to put the data in. Next thing you know, you gotta build something that works for everybody in the company, and we've done that. And we have customers that are Fortune 50 customers with every single employee in the company using our product and getting real-time data and saying things to me like, "I never thought that I was gonna be able to see this or have this or do this. I never thought this was possible." We just had one of our managers, one of the account, one of the guys, he bought $50,000 worth of Domo. Now it's a several million dollar account. He's been promoted 4 times in the last about 15 months. And he just sent me a text last week, Fortune 50 company, and he's like, "Never thought I'd be hanging out with the CEO," and sent us a picture of the CEO getting on the corporate plane with him getting on the plane right behind him. And he's like, "My one complaint is Domo over Wi-Fi on the corporate plane sucks." And I was like, "This is a good conversation to be having." So yeah, I think that's— We feel like the tipping point's not here because we still— people don't know what we do and they still gotta come and look for us and we still gotta go out and evangelize, but I mean, we're 100 million growing 100% and it's gonna get crazy. Crazy.

It's awesome. Alright everyone, give it up for Josh James. This was amazing. Thanks everybody.