Live Workshop Wednesday: What to Expect from Your New CRO/VPS with Zensai's CRO

We have a great one today. Kathy Lord, who is CRO of Zensai, and this is a topic that we've written about since the dawn of SaaStr, but is underdiscussed in so much content, which is what to really expect from your CRO in the first 90 days. I've written about it, but I was thinking about this topic before SaaStr Annual last year, and I reached out to Kathy because I've known Kathy in so many capacities. In my early days as a SaaS CEO, she was, I think, Director of Sales, VP of Sales, and CRO, then COO of Intact, which was acquired for $1 billion by Sage. And then I think stayed for a couple of years as a, as like a GM or CEO at Sage after billion-dollar acquisition. So I followed her from there. Obviously an incredible journey. I had a few other great SaaS companies. And then I was kind of surprised. I was kind of surprised maybe 6 or 8 months ago when I saw on the LinkedIn that she jumped into a mid-stage scale-up, right? I don't know the exact— how many employees at Zensai?

About 225.

225. Okay. So, so we might not call that— we might— I don't know what the line is between scale-up and startup. Certainly small compared to anyone that's worked at a big public company.

She's—

Kathy didn't decide to go in and be the first AE. But after everything that she's done, including being like a general manager, COO, I think, is that correct? At, at, at Intact. She'd done it all, right? She decided, frack, I'm gonna go back in and be a sales leader again. And I thought, not only is that interesting, I want to hear her thought process, her process with her CEO, why she picked this opportunity.

Yeah.

Why it's in this day and age, in this crazy world. Um, and everything that went through it on both sides, expectation setting. And maybe that's not everything we're gonna hear today. but hear from someone that I trust and have known for a long time in different roles what you should really expect realistically, realistically, because I find, and then I'm gonna let Kathy roll with this. I find that the biggest misalignment I see in the hiring process today for VP and C-level executives is just when you don't actually align on the goals when you start. I see this again and again and again. And In today's world, we've stopped reference checking. We do a lot of interviews over Zoom. We don't meet up sometimes until the end of an interview process. And one of the things I see us skip is a true, real 90-day plan. Not a fake one, not an aspirational one, but one where you really make sure, are we on the same page? And I see so many executives flame out weeks 2 through 20 or 50. And it's not that they weren't great, it's just they were never aligned with the CEO. They just never— and these are great executives. They just never truly aligned, said, this is what we can really get done. I'm gonna get it done. And it just leads to frustration on both sides. Not only does the CEO often get frustrated, but I see these days when there's so many veterans out there, folks that have done it before, they get frustrated because they're like, this is how I did it at Intact. I'm, I'm, I'm sort of making fun of it, but like every veteran had success at their last company. They had, wherever they are, they had success. And a veteran is naturally gonna wanna bring that playbook. Into the new company and never does that playbook work 100%. It never works 100%. And if you don't align for real, you're just gonna expect that that magic from GitHub or Intact or wherever it is, whatever great company they worked at, Notion, you're gonna expect that that fairy dust magically works at your startup. The CRO's gonna use the same playbook. The CEO isn't gonna know what to expect. And half the time there's tears. So that's what I wanted to, to get from the inside. I'll hand it off to Kathy, but I'll, I'll ask her questions near on and Load up your questions as you learn them in the chat, and we'll get to them with Amelia after these few slides.

Perfect. Awesome. Thank you, Jason M. Lemkin. And I'm going to say it because today is my last day. Happy New Year to everybody out there as well. Super excited to be here today. And I think one of the really interesting things about this topic is it's extremely relevant for all members of the executive team. Certainly the CEO or founder is, I think, a key person that you have to have this alignment with. But really, if you're going to drive commercial success, all of those other functions have to be aligned and on board with that too. So we're going to jump into 4 key areas today and really excited to get to the Q&A at the end as well. But understanding what do CEO or founders really want? What can CROs really accomplish during this 90-day window? And then how do you bridge that reality gap of what a CEO wants and what a CRO or VP of Sales can deliver? And then we'll wrap up with 3 actionable takeaways you can take back into your organization. So, you know, it's a little more difficult in a virtual audience, but would love to get a sense from the audience, just maybe in chat or with emojis. How many people are CEOs in the audience? Do we have a sense for that?

I'm gonna guess half, but unless, Amelia, we can magically get data, but we'll see.

I see a lot of people on camera raising their hands, so you get a lot.

Awesome.

Perfect.

Perfect. This is gonna be great. So you guys can all tell me afterwards if I've got this correct or not, but in my conversations with folks, whether they're ones I interviewed with, I've worked for, or just networking with, the number one thing that CEOs and founders want is sales, then revenue. And I went out to ChatGPT and I said, okay, create me a word cloud that says, um, what are the number one things that CEOs want, and this is what it came up with as well. So I validated my experience with ChatGPT for what that's worth. But the thing is, most CEOs and founders are looking for sales or revenue. And this a little bit depends on what stage you're at. But depending on your stage, what you need in order to drive the sales and revenue can be very different. If you're at a few million dollars ARR and you're trying to get to 5 or maybe to 10, you may still be working on product market fit and you may be trying to say, okay, who is our ideal customer profile? Where are we going to be targeting? What countries? What size? What verticals? What is the right feature set? And so what you're looking for that sales leader to do when you bring them on is very different than if you're at $20 million or $30 million and you have good product market fit, you have a good baseline process. What you're looking for there is how do I get to scalability and then predictability? And so really being clear at what stage is my organization at as the CEO founder. And if you're on the flip side looking to, you know, interview with the CEO founder, really understand where are you at, what do you need and what are your ambitions? What level are you trying to get to next? Because Understanding that and having the clarity around that and intellectual honesty around that is, is critical in order to gain that alignment. So if we think about the flip side of this, and what can a CRO or VP of Sales really accomplish, I'm going to split it out. And in my mind, this is where the first misalignment happens is because what a CRO is going to come in and just naturally do in the way they think about the opportunity is very different than where a VP of Sales mindset is going to be and what you can really expect them to do. And much of this is stage appropriateness, right? And so what size are you at to really determine, do I need a CRO or do I really need a VP of Sales? And so let's start with a CRO. And so if we're thinking about CRO's first 90 days, and I'm going to take you through my personal experience and I'm going to share some Zensai-specific materials that I've created over the last 90 days. And so I started my journey with them in August, kind of mid-August timeframe, and I just finished then, you could say, my first 120 days. And most of this was done within the first 90 to 95 days that I'm going to take you through today. But from a CRO perspective, they should be able to come in easily, have a strong understanding of the business and the market, and then I would frankly argue like they should have a good sense of that, at least, you know, at a, at a high to mid-level before they even start the job. Because if they're not doing the research on that and trying to understand that as part of making a decision, are you the next journey they want to take? They may or may not be the right person that is all in and curious about and has what it takes to help you scale up your organization. And that needs to be, you know, deep discussions with directs, skip-level one-on-ones with the revenue team, cross-functional leadership, and not just doing an assessment in the way a consultant would, but starting to build those relationships. And then externally, you know, having meetings with customers, partners, prospects, because it doesn't matter how many, you know, recorded videos of customer calls you give them or how many transcripts or how many times they talk to the sales or channel teams. Having the direct conversations with those customers or prospects is, is where the majority of the education comes from. When you hear that unfiltered, they should also have a strong understanding of pipeline and forecast. So really understanding what's the engagement in those deals to provide executive sponsorship, initial assessment of the funnel metrics and the friction points. And, and I'll tell you, depending on the size of the company that I've gone into, they may or may not have good clean data around this. Sometimes some organizations are very good from day one and others tend to work out of a spreadsheet instead of CRM. So their job is to go in and really figure out, you know, as much as they can, what is the baseline of those metrics? And then so you have something to build on from there. The, the other area is really an assessment of what I call the, the 4 swim lanes. And that's who are the people in the revenue organization? What are the processes that are there? What are the ones that are missing and which ones need to be reimagined? Same thing from a systems perspective. And as we know, it is no longer growth at all costs. It is very much a focus around being cash flow positive, both, you know, naturally, but also from an EBITDA perspective, much earlier in an organization. Organization's lifecycle. So you have to be able to have efficiencies as you continue to think about scaling your organization. And then one of the pieces that I find is often left out and, and not part of this scalable plan is around culture. And what is that in the organization? And is it a product-oriented culture? Is it a marketing-oriented culture? Is it a sales-oriented culture? Or maybe it's very, very, very focused on customer success and what we do to retain our customers, but we're not as aggressive about going to acquire new customers. So really understanding that so that you can understand what you have and then align the organization and the strategy for how you're organizing the revenue resources so that it matches your go-to-market strategy. And I can't tell you how many times I've gone into an organization And the way they have the sales and revenue resources aligned totally is, and maybe some cases direct opposite of what's required to really create a go-to-market strategy that scales and that produces efficient revenue growth. The other one is, you know, really starting to get a very consistent revenue or sales operating model that defines your ways of working depending on where you're at and your scale and early stages when you're trying to get product market fit. You're just going through a lot of different A/B testing. Does this work? Does this work? Does this work? And the likelihood of everybody doing exactly the same thing with the same milestones and the same approach and the exact same messaging is, is probably not very likely, especially if you have a global footprint early in your lifecycle, which is what we have at Zensai. So we're in 6 major countries, 3 major regions that those roll up to, direct and channel. And so you know, making everybody march to that same tune and same way of working, you know, was a big challenge for us that we had to attack. And I'll share a little more on that in a moment. And then the last one is it's one thing to get all this understanding of the business, you get an understanding of the forecast, the pipeline, you make that assessment across those 4 swim lanes. But it's all for naught if you don't have an action plan that's prioritized, that says, How are we going to now go take and attack those opportunities to reimagine ourselves, to set ourselves up for more effective scaling without a multi-quarter plan with alignment cross-functionally for how you're going to get that done? Because in my experience, the majority of actions that you want to take to drive improvement across the sales organization is going to require support from either product marketing, product marketing, finance. Etc. And so making sure that they're aligned and they have those changes prioritized in the same way in which we do. So if we think about contrasting what I just took you through from a CRO perspective, and we think about that from a VP of Sales, like, what are those differences? And how would we think about that? So the first are really the same. I mean, regardless of the role, you need to be able to come in and understand the business and the market and the forecast and the pipeline. But where the VP of Sales role is a little bit different is they need to be able to take and work within where the organization is at today. And what I mean by that is really saying, okay, what is the revenue cadence that we're on today? What are those inspection points of those different deals? And really define a consistent way in which we're executing deals to drive the most effective revenue. They are actively in the trenches and engaged in a majority of the key deals. They should be taking a look at an assessment of the revenue team and the processes with an action plan focused around how do we create more pipeline and how do we win more deals. And so The focus here is on how do I drive more revenue and how do I scale some of that, not how do I set up my organization to scale. And for example, at Sensai, we're at $35 million ARR. We want to be at $100 million ARR in the next 2 years. And so if we're going to do that, I can't just have a VP of sales mentality and say, okay, I'm going to be actively in the trenches with my team, just working to close deals, maybe tweak a little process. I need to make sure that fundamentally from a global perspective, we're set up with the right systems, processes, people, the way we're organized, what is the cultural stuff we're doing to make sure we can hit that ambition. And so really aligning those expectations around what you want and then what those roles can do. And so let's go into a couple of examples because I think this brings to life a little bit around some of the expectations that you should have when you hire a new CRO. So one of the first things I mentioned is really this having a focused go-to-market strategy. So ideally, and maybe if you're a younger stage company and you're still working on product market fit, you may not have your ideal customer profile as clearly defined. And that may be part of what you're looking this person to come in and do. Ideally, that's somebody you're bringing in from a VP of sales perspective and you have that figured out before you invest in a CRO. So we— I was fortunate when I came into Zensai and we had a very clearly defined ICP and market model, and we went through and said, okay, here's our top 15 countries, our top verticals based on success, and here's where we really focus on selling in the market. And then it was a matter of how do we attack and build that pipeline for those customers? Is it inbound? Is it outbound? And what is the nature of those sales cycles? Is that enterprise versus transactional? And so, you know, for us, you can see where our sweet spot is there in that upper SMB, mid-market to lower enterprise. And the way we were organized as a sales team was sort of one size fits all, right? Like everybody kind of sold to everything. And we were focused on wherever leads came in. So we have customers in like 50 countries. And we, we had developed the strategy for how we want to go to market and what our ICP is, but we weren't allocating and organizing our go-to-market resources around that. And so this was a big push of just getting this alignment and organization. Then we said, okay, so we know where we're going to focus our resources and where we're not going to focus resources, both channel and direct. Now, how do we start to align and standardize our ways of working? And we developed this revenue operating model where we deployed this globally, and it outlines everything from our vision and strategy, our behaviors and beliefs, to communications, the way we create pipeline and expectations there, the revenue cadences that we follow, both new logo acquisition, expansion, and managing retention. To how do we assess and adapt ourselves? How do we use data to drive getting that 1% better every day? And then also setting very clear performance expectations. So what does great look like? And if you're an individual contributor and you're performing below expectations, what should you expect? And because we're working on a global basis with this team, and again, we're in my revenue organization around 70 employees, You know, that's a fairly big group. So how do you bring everybody together into the standard way of working and have a standard way in which we hold people accountable and measure success? And so for us, this framework for the organization has been really effective in starting to drive those common ways of working. And then you think about, okay, we are organized to match our go-to-market strategy, we have developed our operating model and the way we work together and expectations and accountability. How do we measure if we're actually successful or not? And so this is the stage I'm actively in the middle of this project, but really starting to get very methodical around how do we measure the funnel and what does that look like and doing that on a regional basis and, and a global basis and starting to look at that and so becoming very data-driven on where do we invest resources or where should we not and Each of the regions, as you would expect, I give you an example of one region here in the Nordok region. They have issues in different places, right? So where one may be performing below plan, another is performing above plan. And so it really allows us to get everybody executing at a very consistent baseline level. And then the last thing I just wanted to share with you was an example of a 3/4 action plan. And this is what I put together when I started off after my initial 30 days in September. And this really took us through, you know, what are we going to do for the first 3 quarters to implement this transformation and help us achieve our ambitions we were looking to hit. And so, you know, it doesn't have to be exactly like this, but you need to have more than the 90-day plan developed in that first 90 days, right? So this is where it's really critical and it, and it really helps you make sure that you're focused on the things that are going to move the needles and that everybody has clarity in the organization, both within the sales or revenue teams, but also cross-functionally what changes they should expect, because those will have impacts across the rest of the organization. Alright, so we talked through what CEOs and founders tend to want, what we can really expect from a CRO or VP of Sales in that first 90 days. And then, you know, how do we bridge this reality gap and make sure that we have that alignment going into a new partnership, much to what Jason M. Lemkin was outlining when he kicked off the call and I think it comes down to 3 things. And the first one is really getting that clarity on what your organization needs today versus tomorrow. And, you know, if you're at, you know, $3 million, $4 million ARR and you're like, I want to invest in a sales leader now, you need to find somebody who can help you get to— maybe it only gets you to $10 million. Maybe if you're lucky, you get to $15. Maybe 20, but chances are they're probably going to get you to that $10 million and then you're going to realize you need a different set of skills and experience because it's really important to understand that role. Is it a leader? Is it a coach? Is it a player coach? Are they scaling? Are they building revenue streams or are they just trying to, you know, free you up as the CEO founder to go fundraise or do CEO job and they're there coaching the reps and driving that and understanding their priorities. And one of the things I've found is the highest indicator of success in bringing somebody in is do they have the pattern recognition for your next stage of growth? Because if you bring somebody in who's already been through that stage of growth that you're looking to achieve, then they're already going to know ahead of time what are some of those pitfalls that you're going to have, what to expect, maybe how to prevent them. And I can't tell you every time I go through another scale-up journey. And that's why I'm here is because I love the scale-up journey between $30 and $100 million. It's to me very rewarding and fun. I learn new things. And so if you're hiring somebody to take you on that journey and they've never done that journey before, could they be successful? Sure, they could. But chances are you're going to run into a lot of potholes along the way because they don't know what they don't know yet. So looking for the pattern recognition in that person you're looking to hire and making sure you have clarity on what your expectations are with them. The second thing is really then around ensuring alignment. And so this is where I think it becomes really important is that not only is the CEO or founder aligned with the new revenue leader you're bringing in, but that you have tight cross-functional alignment because It's important that not just go-to-market, like marketing, sales, services, RevOps are aligned with what the goals and objectives are and what this person is coming in to do to drive transformation for the commercial part of the organization. They all need to be marching to the same set of priorities or OKRs, goals, objectives, whatever your organization uses. You need to have alignment there. But it's also really important that you have that from the operational or G&A perspective because If HR isn't aligned with, we're looking to go from SMB to mid-market and go to enterprise, and now we need to go hire enterprise reps, and they, we know they get paid radically different. We know the ramp time is radically different. As you go to create comp plans for them, you're going to run into a lot of issues with your new sales leader. Similar thing on the finance side, etc. That can be really important. And the same thing around IT, especially if you're launching a new segment, etc., that may require different systems usage and different applications that you need to bring in to drive the efficiency of that group. And then really important is from a product perspective, as you're looking to bring in this person to drive the next level of scale, need to make sure that where the product is going, both from engineering and development perspective, but also from a product marketing and product management perspective, is are we aligned with where we're tasking this revenue leader to go and what we want them to go do with where they're investing and focused on their priorities too. So having every executive aligned around those top 3 short-term wins for your new revenue leader, and then ideally if you can get to mid and long-term as well, as far out as you can see, that will really help ensure that you have alignment beyond just the CEO founder and with the executive team that's going to make that success happen. And then lastly, the third one is empowering them. And I've experienced this painfully more times than I would like to say, but you get brought into a new organization. And, you know, you're told, okay, you know, we know we need to go transform, we know there's lots of opportunities for improvement. But then you run across those sacred people or processes or systems and say, yeah, it's all great. But yeah, we're not going to change that because the CTO really likes it. Or that person, they've been here forever, we don't want to get rid of them. So there can't be sacred people, processes, or systems, um, or else it's really difficult to drive the level of transformation that you want to scale your business. You also, as the CEO founder, cannot be the bottleneck for all decisions. And sometimes this is the hardest one because you're used to being involved in all things, and especially on the commercial side of the organization. If if you're a founder CEO, but you have to be able to step back and trust the revenue leader, but verify, but trust them and let them be empowered to make decisions. And you got to know that there are going to be mistakes. I mean, I'm not perfect. I make mistakes. Everyone who goes out and makes mistakes, because if you're not making at least a few mistakes, you're not moving fast enough. The goal is that when you make mistakes, You fail fast, you learn fast, and you minimize what's called that recovery gap from when you fail to when you fix it and get out there and drive it again, right? And that's, it's a lot if you think about, um, the sports analogy around that, right? Like you're gonna make a bad decision on whatever sport you're playing, but you fix it, you correct it, and you mitigate any, uh, impact from that. So empowering, um, your revenue leader and allowing them to go do their job and, and do it in a way in which they're not afraid to make mistakes, but they're also learning from those, correcting it, and driving the organization forward. So 3 key takeaways: clarity, alignment, and empowerment. If you can get those, um, as you think about what you need for your organization, you will have a much, much greater chance of having that successful new revenue leader on board and be aligned with what success looks like. So, Emilia, we can turn over for questions. Happy to do some Q&A.

Can I, can I steal the first 2 or 3, Kathy? Is that okay?

Absolutely, Kathy.

Okay, one, it sounds— you touched on this. It sounds so basic, but I think it's so important. The— for when you bring on a new revenue leader, how do you get aligned on the ARR plan, the revenue plan for the end of the year, for the next 12 months?

Yeah.

And what I mean is, I see there's, you know, first of all, I see two things. One, I see a lot of revenue leaders, no matter how experienced they are, um, they often don't quite have enough information to have an opinion, right? So you wanted to go— I forget what you said— you want to go from 30 to 100 in 2 years, right?

Yeah.

Let's say you didn't actually know for sure that inbound leads decelerated the last 2 quarters. You might agree to something that you shouldn't have agreed to, right? Or you might not. So, so it's maybe that that's an extreme example. But I find one, CROs don't always have enough data to know what they're agreeing to. So, and sometimes CEO, they feel like CEOs push them to sign up for numbers they're not comfortable with. Right. Um, but on the other hand, what's the point of hiring a revenue leader if revenue doesn't go up? Like what's the point of hiring a revenue leader and see, and see no improvement? There has to be improvement, right? By definition. Right. So how do you get that right? How do you make sure that you're not, that you're not, that you're setting yourself up to agree to a C60 number, something you at least have a 60% chance of hitting? How do you really do that when you start?

Yeah, no, that's a great question. And it, it, it truly is very situational. But I would say your statement around having enough data, it's rare that you would come into an organization and have all the data you need to say, okay, I'm 100% confident this is what we can go do. Because yeah, if they were there, they probably wouldn't be needing you and they'd already have somebody on board. But I think it comes down to a couple of things and it, it's really understanding What is that objective and what are the assumptions they're taking to get there? And so if it's, we're going to grow 20% a year, they're probably going to know, even if they don't have the detailed numbers, what have they historically been growing? And so if they're going to try to grow 20%, but they've been growing 15%, so now you say, okay, I've got a 5% increase in growth rate. I've got to go hit.

Yep.

So you can also kind of get some pretty good back of number math around how many customers you have and what the revenue was to come up with a pretty reasonable average sales price or ASP. So then you can start to say, okay, we're going to need about this many more deals and this much more revenue. And then it's just a matter of kind of peeling back layers of the onion and you say, okay, well, do we have more products we can sell? That we maybe just have launched or we just acquired that we can change the ASP so we require less deals? Or do we have a new segment we can go after? Maybe we have some new marketing demand gen programs or we're spinning up SDRs. So it's understanding what are the levers you can pull or push and what are the programs you could run to bridge that gap between our run rate's 15% and we got to get another 5%. How do we get there? And what could that look like? And the important piece is to align on what are the bets you're going to take for that. So there's a number of different things you could do, but getting alignment on what is the most likely or the lowest hanging fruit and then understanding, are there investments that the organization would need to make to make that happen? Because I've seen many situations where we need to get to 20% growth, we're at 15, but we're not willing to make any investments or changes to get there. And so just having clarity on what's really required to help bridge that gap. And, you know, first year you're going to be scrappy with the data and you're going to have to reverse engineer and be creative. But then at least you start to know where is my baseline. And then as you come to the next budget cycle, you're tracking the data at the level of granularity and what you need. So you can start to then even mid-year through the year, start to enhance and refresh what is that plan and what does that look like. And frankly, that should be part of the interview process and the discussion you have before you sign up and come on board.

It would be nice. Yeah, just one quick follow-up on that. Did you look— when you joined ZenSight, so you've done this before, did you build your own model where the revenue should be 12 months out? Did you talk about it with the CEO? Did you see that your revenue was aligned with theirs?

Yeah, so I was very fortunate. This is the only time I've run into this, but they have a 4-year strategy plan with a full revenue model associated with it that, yep, that they were working with. Now the challenge was due to some acquisitions and other things, they weren't executing to that revenue model for this year. So for me, it was a matter of I had that data, but I had to say, okay, they're not hitting that now. What needs to happen for them to get back on track and hit that? And what do we do in order to make that happen? And so, you know, that was the discussions I had during the interview process to understand what would it need to take and are we tracking or are they tracking already to some of those things? And are they committed to making the changes to get back on track? And for me, all those answers were yes, because I'm here. But, you know, that's the level of transparency I think you want to have. And if you're not able to get that under NDA and that, then you should be concerned about the organization.

Got it. And then I'll move on to the next one because I don't want to, but I just think this point's so, so important. They had a 4-year plan. They were behind on it. They brought you in to get them back on track or better, right? You looked at the plan and you went through it piece by piece and decided if you believed that those drivers to tilt the curve, you believe that you could execute those drivers, right? You, you spent that time before you started or signed the offer letter, right?

Yep.

Yeah. I just find, uh, most CEOs, especially slightly earlier stage, they don't go to that next level. I find actually what I do, especially for like investments or if I'm on the board, I actually try to do that in the last one. I try to be the last interview and I'm like, okay, Kathy, I'm so excited you're joining the company.

Yeah.

Let me just ask one question. Did you happen to talk with the CEO about how our SMBs in East Sub-Saharan Africa are shrinking? No, I didn't. Did, did you happen to talk about how 35% of our revenue comes from partners? And I think one of them's at risk and may leave us. No, I didn't know we had an indirect strategy. I, I can't tell you how many times folks don't know the amount of revenue that comes from partners or the ecosystem versus direct as a sales leader, as a revenue leader. If you don't know what's indirect, uh, it's a top. So anyhow, we could talk about it forever. I'm glad you did it, but my number one advice is to slow it down at the very end and make sure at both sides, but especially as a revenue leader, don't be nervous at the end. Be calm. The CEO want you. You know when you're wanted as a CRO, don't you?

Totally.

Totally.

It's not in the middle, is it? When a CEO wants a revenue leader, it— when it— they may not know in the first interview, but a line is crossed when like, I gotta have Kathy, right? Right or wrong, you know you gotta have that resource. Do you have that feeling, right? In an interview where they really want you?

Absolutely. Absolutely.

Yeah. So if you're a revenue leader on the other side, or if you're a CEO, take the time to slow it down to the end. Tell them you love them. I even say give them an unsigned— give them a signed offer letter, but don't ask them to countersign until they're all in. That way the pressure's off, right? Here's your comp, here's your title, here's your equity. It's signed. If you need 2 weeks to make sure you believe in the plan, if you need 2 weeks to go talk to a few more customers, to talk to the team, and you bail in 2 weeks out of it, that's okay. Like, as crazy as it sounds, I'd rather you bail with the signed offer letter then bail 90 days out.

Absolutely. Absolutely.

But no one does this. I try.

Yeah. Yeah.

Okay. Just 2 more and then I'll make sure we have time for others. This is a niche question, but a newish one that I'm wondering if you thought about at the CRO level, who should own demand gen?

Yeah. So it's a great question and I will say For startup to scale-up organizations, I think it's— well, I'm missing— in startup organizations, I think the CRO can, and that's a sub-$20 million, but they have to have somebody who is really an expert at demand gen, and that could be a highly functioning individual contributor that's driving that for you. I think as you're doing the scale-up journey, and you're really trying to build out that full function of demand gen and all the various channels, there's very few CROs, including myself, who are experts at that. And I need to understand it well so I can partner with them. But I think you dilute the focus of the CRO by having them own that demand gen piece. If you then at the other end of the spectrum become really big where you have somebody who's just overseeing some very senior people, Could they then roll up into somebody in, you know, like a CRO, but they're probably going to be more like a president title by then. So the short answer, sorry, is I took a long way to say it is I don't think it should be part of it because I think it's a different discipline and it changes the culture and focus of the revenue organization.

Yeah, that was always my view. I want closers closing. I want sellers selling. I don't know very many sales leaders that intuitively are detail or quant enough to understand demand gen marketing. That's always been my view. I also didn't want customer success to report to CRO, but I lost that battle, right? That ship has sailed. I think it's terrible. But what I've observed with a lot of the next generation of revenue leaders is they don't want to fuck around. And so they want— if they say they want marketing to report to them, but then when I talk to them, I say, okay, let's narrow it down. You don't really want to be working on product marketing or the website or you want demand, you want, you want, you want to say, listen, I want to control my destiny with leads. I want to hire Kathy or Jason on my team because I don't— as good as Jim is, like, he's not really delivering. And I'm done with that. I'm done with waiting for marketing to deliver me not enough pipe. I want to own it and I'll put my neck out there even if I'm not great at it. I'd rather own it. I'd rather hire my person that I trust and have them own it. And I'm— this is a quiet theme People are misdiscussing whether marketing should report to sales. I think it's more whether demand gen should report to an aggressive sales leader who says, I've had an alt of enough. And I used to be against it for the reasons, but now I'm seeing it work up to a point because at least they can get more results versus a lackadaisical marketing organization.

Yeah, for sure.

For sure. Okay. One more niche one that you touched on, and then I will make time for other questions, Amelia. But this one's so good because you touched on it. Zero, an existing VP of sales, one is topping a VP of sales. I know some people don't like this term top, but I think it's a simple, a simple way to summarize. Yeah.

It's a good way of explaining it. Yeah.

How do you, how should a CEO think about it? How should a new CRO think about it? Especially when the VP of sales that got you from 3 to 10 or 3 to 15 or 20, when they're great.

Yeah.

When they're great. When they're great.

Yeah, and I think this is one of the things, and I will say my CEO Rasmus Holst did an amazing job of this, and it's really helping that amazing VP of Sales understand, you know, where their pattern recognition and experiences and that the things that are going to take and get us from where we are today to that next milestone, whatever that is, requires a different set of activities, a different set of experiences. And we're as an organization, one, going to mitigate our risk by hiring somebody who has that pattern recognition experience. And then the second part of that is this is an opportunity for you as the VP of sales to basically ride shotgun and learn from that CRO. And so that you're now ready to take that next stage and that next step of growth when you move on to your next opportunity. And there needs to be that commitment that who you bring in will help coach and bring that person up so that they can become a CRO in their next role.

And do you— how much of a stakeholder do you think the VP, the first VP of Sales should be in that search? Do you give them, do you allow them a front row seat in the interview? Do you allow them a soft veto? Do you exclude them? Where do you, what do you do when you totally trust them, right? When they're great? Yeah.

And, and I think if you, if you totally trust them and you have a good relationship with them, I think they are a soft veto because The challenge is they can look for cultural and ability to maybe understand the product or market, but that's likely where their experience and expertise is going to end because if they haven't been on the journey, they don't know exactly what to look for and, and how to ask and articulate that. And so it's very few VP of sales or really anybody, very few folks that are comfortable enough in their own skin and where they're at to be unbiased in doing the interview for their new boss because they can't scale to the next level.

Yeah, the— I mean, I wrote this classic Saastr post I updated, which is never, never hire a CRO that everybody loves because there's so much bias across the team. There has to be some— like someone has to be threatened by the CRO or you're not making the right hire. Yeah, yeah, right. And it's tough for the VP of Sales. But, and yet you owe them too, don't you? At some sort of level, you owe them, even though they can't be unbiased. I always worried they would pick the nice person, the one that wouldn't threaten them, the one that wouldn't threaten them, right? And they don't know, but you have to involve them somehow in the process, right?

Yeah, you can't totally ignore them. They need to be a part of it. And and at least in some way participatory. Now, you also don't want to distract them from whatever you've got them doing as well, too, right? So it's, it's a balance that I think you, you have to work through, but they should not be, in my opinion, frontline leading the interview.

Yeah, two of the— I won't name names, but two of the top CROs that I know now at Decacorns where VPs of sales kept getting topped and topped and topped, and then the CRO would move on or not work out, and they stuck it out. Yeah, they stuck it out, and it took a while, and their time finally came, right?

Yeah, I know, I've seen it too. I've seen it too.

All right, one other— two other follow-up questions. I'm gonna monopolize it all, um, because I, I think I hit most, because I'm also taking some of the questions from the group. But, um, yeah, two related questions for your VP of sales. When you think you're going to need to bring in a CRO? Should you have that conversation with the VP of Sales?

And how—

I literally had this, this chat yesterday in a board meeting. Should you have that conversation? How frank should you be? How often should you have it? What's your thought on having the conversation about how far that VP of Sales can scale?

So assuming it's too— if they're not performing, I'm assuming that, and it's not just because they've been outgrown, you're going to manage that out through just normal performance management. But assuming they are performing, but you're starting to see that they just don't have that experience and pattern recognition to start to get to the next level that you're at. I think it's an ongoing part of that performance management and employee development discussions that you should be having with those folks of, you know, here's, here's our plan as an organization. Here's where you've been able to get us this far. Let's talk about, you know, maybe early before you think you're really there, you give them opportunities to, to grow, to change, to develop. Because when I was at Intact, I started when we were $3 million and I left when we were over $250 million. And I had—

crazy—

for all intents and purposes, the same role, right?

Yeah.

Uh, but that was a very intentional having to reinvent myself at each of those different milestones or pivot points for the company. And I happened to have a CEO who was really great about helping me do that. Um, you know, and they were an experienced CEO, so that was a different situation, right? But I think you need, you know, you're going to outgrow your, if you're a founder CEO, you should know you're going to outgrow your VPs of sales along the way. And so I think it's much better to have that upfront and frank discussion with them around. At some point, we're going to need to bring in somebody with a different level of experience. And it doesn't mean that you're no longer relevant. It's just your role is going to change. And this is a growth opportunity for you to learn from a world-class CRO. Yeah. And if you have that discussion along the way and upfront, it becomes a natural course of action. And I think you eliminate a lot of potential issues. It's just not everybody's comfortable having that level of transparency around that.

Yeah. One fun follow-up and then Emilio, you can bring up a question or two. Sam Blonde, who we all know and saster from Brexen, he was actually Kathy's SDR, his first job out of school was Kathy's SDR. Then he joined us. And when he first worked for Parker Conrad, who I introduced him, who's now you know, head of Rippling, Parker, every couple of weeks would grade him on whether he was going to be topped. I mean, Sam did an amazing job. He did. I mean, A+++, right? But they— my point is they had the conversation constantly, right? And it's great. But you got to be S-tier CEO and S-tier sales leader to have the honesty to have. I just find 95% of sales leaders especially, they can't be that honest. CEOs want to be really honest. Kathy, you're great. But if we don't hit the— but I'm seeing some cracks. You don't really understand the channel. You don't understand the distribution. You don't have experience international, right? So I'm going to thinking about bringing in this CRO over the next 12 months if for some reason you can't, if you can't build up all these skills. Yeah, that seems natural to CEOs. I find most, especially newer VP of Sales, melt. They can't have that Parker-Sam conversation. It seems just too— it's too hard on them.

Yeah, yeah, that's a whole different conversation, Jason M. Lemkin. Yeah.

All right, Emil, you want to try to get in one or two questions before we have to end?

Yeah, let me bring up a few folks if they're still here before we run out in the last couple minutes. Um, Russ, I'm gonna try and— oh, he might have left.

You can do him if he's not here.

Yeah, he just signed out, but yeah, okay, his question was, is it worth losing a great VP sales hire to hire a mediocre CRO instead?

It's, it's never okay to hire a mediocre, in my opinion, if you have ambitions of scale and growth. So if you are at a— it depends on why. If you can't afford to hire a great CRO, maybe you're not quite ready for it yet. So I would stretch your VP of sales a little bit and not just similar to what Jason M. Lemkin was just articulating about part marker and SAM of like, hey, can you scale? Can you do these things until you can afford to make the investment to get a great CRO? Yeah, for sure.

And then let's try and bring up Vishal to ask his question. Vishal, do you want to ask Kathy?

Yeah, I want to ask a question. So Kathy, my question was, how does someone, you know, and I'm taking Jason's example of Parker Conrad, someone who works in a founder mode, who has high visibility of whatever's going on, you know, so many levels deep down throughout the hierarchy, how does that kind of a founder who's used to working in the founder mode, you know, fit in or adapt to this environment where there's already a CRO and a VP of Sales? Like, where is the decision-making the, you know, how does, how does things work, you know, where the founder is really hands-on and very involved?

Yeah, no, and that's a great question. And I think it's one of those that can really go awry if there's not clear alignment between the CEO and that sales leader around roles and responsibilities and that, you know, the CEO founder needs to recognize that I have now brought in somebody I'm excited about that I, you know, think has the experience and I've got to trust them to go own these pieces of the business. And what I've found works really well for me is it's just, okay, what are the things that you've been doing to support commercial and drive that, that you are no longer going to do that I'm going to take over and do? And what level of communication and data do you need from me to feel comfortable that that's all happening. And so it's just sort of attacking that elephant in the room and making it very clear that they're going to have to have some behavioral changes. But you're willing to support them and give them the insight and visibility they need to know that it can all run like magic without them having to be involved day to day. And that's a fine balance. But unless you have that real live discussion around that and attack it, and it's going to change some over time, it becomes very frustrating, I think, for both sides.

Oh, Jason, you're muted.

Yeah.

Hey, maybe just one follow-up on this and then I think we have to end because we'll be over. But maybe you haven't had this experience in your career. But I find one issue is when a lot, especially a lot of product-focused CTOs hire their sales leader, they actually want to exit sales entirely. I don't want to do it. I got to get back to product. I hear this again and again. Kathy, I'm, I'm one of the re— I'm hiring you to increase sales, but also I'm hiring you so I can get— I gotta get back to the product. Yeah. Have you used any heuristics, mechanisms, meeting quotas to ensure that the CEO stays enough in sales that they don't leave sales too much? Have you seen that? And, and are there any tips and tricks you have to make sure you get the CEO to stay in sales?

Absolutely. And I think it's a little bit of, of stage and journey specific, but I— there's always the role for that CEO founder, and especially a product-oriented one. And as you're setting up the sales process and, and what that looks like, you should define a— it could be based on size, it could be based on, you know, maybe they fit a strategic new initiative, etc. But there's very clear situations when you bring in the CEO to be participatory in that meeting, and you define ahead of time What is that role? Do they give the vision talk? Do they give here's our future? Or in some cases, if you're earlier stage, they may do the demo, right? So it kind of depends on which stage you're at. But you should always, regardless of size, the CEO should be actively involved, you know, at least 10% of their time to 20% engaged with customers and partners.

That's a good one. I like— I think we've got to wrap. I love to just tell founders that when you hire a great sales leader, assign it You don't get any time back in sales. It's just used differently. You'll just be more efficient. You might become more of a middler or a demoer or a supporter or focused on big, but you don't get a minute back. If you, if you hire a mediocre leader, you get all your time back. But the great revenue leaders know they need the 10 to 20%, right? They're not gonna let you go. They know they need to bring you into the key deals, right? So don't, don't expect your time. It's a bad sign if you get 100% of your time back.

Yeah, it really is. It really is. And, and it's, it's how do you stay in touch with the customers in the market if you're not engaged either, right?

All right, Kathy, A+. Thank you for all your learnings.

Thank you.

We'll check back in at $100 million and then a billion in ARR and see how this all played out. And thanks everybody for joining Workshop Wednesday. See you