Managing Change in Hyper Growth Mode

Please welcome, from Salesforce Ventures, VP Matt Garrett.

I'm really excited about this panel. We have 3 really amazing guests. Where are the slides showing up? Over here. So, 3 former Salesforce execs who were there from $22 million in revenue up past IPO to $5 billion in revenue, which is amazing, have gone on to join amazing companies such as Zendesk and Yammer and AppDynamics and have just really been transformative in the marketplace and really critical in how you grow and scale sales and marketing organizations. So we're gonna have a nice discussion about how do you manage change in hypergrowth mode. So without further ado, I would like to bring up Dave Oberon and Bill Maciatis and Kendall Collins. Alright, thanks guys. So I'll go down and introduce you. So we're sitting in chronological order in which they joined Salesforce. So we'll spend a bit of time talking about their experience at Salesforce. These are plush chairs, aren't they?

Yeah, it's lovely.

Very nice.

So we'll spend a bit of time talking about their experience at Salesforce, and then also how they grew and the change that they went through there personally, organizationally, and then some of the companies that they've been to subsequent. So David Oberyn, you joined in what year?

March of 2002.

So the company was at $22 million in revenue at the time.

Yeah.

So talk about what your first role was when you joined in the sales organization. What was the sales organization like at the time and like what, what was so exciting and prompted you to join the company?

Yeah, so we had at the time, I came in the first wave of field reps they had hired. Everyone would primarily been corporate before, worked out of San Francisco. 50 bucks a month, month-to-month contracts. And actually was, first day came on to get my territory, and they said, yeah, it was going to be the Bay Area, but now it's going to be Illinois, but not Chicago.

Ish.

But Tennessee. And here's your big, like, 60-pound desktop, and like, go to it. And so it was a really interesting company. You see companies that— grow up using the tool they build, and it really reflects in the culture. So obviously being a pipeline forecasting SFA tool at the time, we lived and breathed the product. So it was a very high-performing culture. I think one of the things we were talking about before, it was an incredibly progressive culture at the time and company. Mark really emphasized not only how he thought about the culture of the company and looked at every hire, But was really the first company that I can think of that didn't think about creating the identity around a department. Is it an engineering-driven company? Is it a sales-driven company? It really was a customer-driven company from the beginning. And I think that is what drove some of the great sort of cross-functional collaboration we had in the sales and marketing. But it was definitely a 12 sprints a year, high-performing, high-expectation culture.

And was that different than other companies you'd been at before?

It was, simply because the cadence was very different. Being one of the first real SaaS companies, we developed much faster. The sales cycles were much shorter. We were, at the time, selling to users and small teams rather than selling to a CIO, for example. I mean, the first couple years— I think it was gone by the time you were there— The homepage of the website had in huge red letters, "No IT required." So every time you'd go on a sales call, the CIO would come in and basically just yell at you for like 15 minutes and then leave. But the product was so good, you would end up selling to the users, and it was a great sort of bottoms-up movement.

Got it.

So I want to introduce Kendall in a second, but before I do, so Kendall came in, what year did you come in?

Beginning of '04.

'04, so company was about $95 million in revenue.

Yeah.

From the sales perspective, like what were the biggest changes from an organization or technology or that, you know, to get to $95 million in revenue? Like what were the biggest hurdles you had to get through?

Yeah, so between '22 and '95, and you came on, we had Enterprise Edition, right? So we were selling—

We just launched Enterprise Edition.

$125 a month. So, you know, in those 2 years we went from, I remember one of the first deals I did was $38K. And Mark actually came running out of his office and he was like so excited. And then one of the last deals we did was like $70 million and I got a one-line email that said, "Should have been $100." And it was like, you know, how 10 years sort of changes perspective. But, you know, we really had to grow up a lot. The infrastructure, security, at that point the product had evolved enough that we were now selling both to sales and marketing. We had to sell to CIOs at the time, so our messaging became much more nuanced. It was a much more sophisticated message, and the competencies that we looked for in the reps were very different in '04 than they were in '02.

And what were you looking for that was different?

So it was a combination of really strong intellectual horsepower. That was something that was always really important to Marc. And up until '04, and I think probably after you were there as well, Marc did almost every interview. I mean, at some point, he spent time with every single candidate.

Up to when he did every interview?

I think it was '04, wasn't it?

He was doing everything. He was everywhere. But he was definitely doing every interview for a while.

Yeah, I mean, I remember definitely back in late '03, at 7, 8 o'clock at night, he would be sitting with an individual contributor of product marketing, a person interviewing him. So technical aptitude was another big one. We really looked for genuine passion for customer success. That was something that, you know, I think Marc did such a good job of taking all the goodness when he left Oracle and thinking about how he wanted a different culture at Salesforce and really emphasizing that. And so, and it started, we started getting big deals, right? We started going the Merrill Lynch deal, the Cisco deal, the SunGard deal, all of those, and that required a bit different mindset, a little more delayed gratification and sort of consultative nature, how you thought about it.

So, Kendall, you joined the company, it was $95 million in revenue. You had, You've gone on, you had I think like 7 or 8 roles at Salesforce at least. You've gone on since at AppDynamics. But talk about the marketing organization when you joined. What was it like and what were some of the new and innovative things you thought Salesforce was doing at the time?

It was interesting. When I joined, I actually joined on the sales side, so I was in sales operations. And I had kind of previously done some product marketing, product management. But the thing that was incredible is Marc, You could never hope for a better evangelist, a better spokesperson, a personality who could just make the news. And he really pioneered, I think, a model of getting earned media in incredible ways. And Bill and I will talk about paid media and earned media, I'm sure, at some point in this. And Mark, we were just driving an incredible volume of people to the website organically. And they were trying the product.

[Speaker:BILL] Did you know what Mark was doing at the time?

[Speaker:JASON M. LEMKIN] Through PR. I mean, this is really before pay-per-click or anything.

Was that unique, you think, for an enterprise executive? 'Cause when you think of the enterprise SaaS executives now, most of them, the really successful CEOs, they're larger-than-life personalities. Do you think Marc was sort of at the forefront of that?

Absolutely. I think he had a big idea and a big vision, and the whole concept of no software was surprising. It was unexpected. It was provocative. And it was controversial, clearly, with a lot of IT people. I spent a lot of time walking into meetings with CIOs and saying, them going, of course there's software. I know there's software. And I would say, well, of course there's software. It would be like FedEx driving around with trucks that on the side of it said no trucks. The point is, you don't want to have to worry about the software and the complexity. And he found a different way to— go after that, he embraced salesforce.com. He would not drop the.com, and this is in 2001, 2002.

Just to emphasize, 2001.

It's like, we're going to keep going harder on the.com. And I think that's just such an antithetical position to where the market was and where the valuations were going.

Everyone was running away from.com at the point.

People were running..com was a 4-letter word at that point. And I think Marc drove that incredibly hard. People tried the product. They love the product, and I think for a long time, business people and sales people in particular, they felt just shackled by IT. They felt like, "I can't go fast enough, and the IT team can never keep up with me because they gotta stand up servers and databases and connect all this crap." It was very hard. So he found another way to the line of business, another way to the money, which I think is really important. And then, you know, I was in sales operations, and I kinda got in there and The fascinating thing was we were just saying, how fast can we hire salespeople? Because one of the biggest challenges was, I mean, we called it whack-a-mole. Literally, like, there were so many transactions. It was a very high-velocity, high-volume operation, which is what David's articulating. I think Allison, do you remember Allison from inside sales? She was our top rep like 2 years in a row. And I think the first year I was there, she did something like 370 transactions. Sales transactions with contracts and signatures, wet signatures. I mean, it's kind of amazing when you think about that volume and how all those small deals really add up.

How were you able to maintain that growth? 'Cause there really wasn't a model for that, of that high-velocity sales model continually bringing in salespeople. Like, what were operationally, how did you train the reps? How did you maintain that productivity?

I think one of the things that was interesting about Salesforce is that early days, All the sales team, we all sat on one floor.

Yeah.

And I think everybody benefited from hearing each other's sales calls, their prospecting calls, how they were handling objections around security or whatever it might be, how they were blaming WebEx if the app was slow in the demo they were giving. You know, oh, this WebEx, it must be the WebEx. I mean, it was kind of amazing, but I think the group sharing and collaboration was such an important part of finding best practices.

Yeah.

And then a lot of what we were doing, you know, from an operations and a product marketing perspective, was trying to find the best stories, find the best sales playbook, and just share what was working. Like, David's doing this over here, it's amazing. Whether it's customer stories or how to handle objections— I mean, objection handling was a big part of our sales training. Um, I taught the objection handling, I think, for like 6 or 7 years with a guy named Dan Deldeegan. We taught it literally every month in sales boot camp because we felt that, you know, if you could understand all the objections in a deal and you could really handle them and overcome them, you know, then there's no obstacle to a deal. So we really try to be maniacal about understanding all the objections and categorizing them and answering them and giving people the customer stories to kind of overcome that.

You guys also did a really good job though from a sales ops perspective of driving aptitude around the product. It was one of the first real enterprise products that the reps were expected to demo themselves. And I think that gave us a lot of credibility as a sales team. It was also sort of a common rallying cry, but that was one of, I think, the core values that we really drove.

It was a big Marc thing too. Marc loved to demo the product. And the sheer nature of what we were selling, it helped. I mean, we had an unfair advantage that the salespeople were using the product. But you know, Mark's favorite thing to do, and for a lot of reps their favorite thing to do, was they could go in and change the language, which at the time was revolutionary. It was like, oh, let me show you in setup. I click over here, I click over here, I can change it to Chinese, or I can change it to Japanese. Getting it back is the hard part.

I was gonna say, that was kind of the manual metadata.

Yeah, it was now changed, and you're looking at the UI, you're like, shit, I don't speak Japanese, how do I get this back? Yeah, so you have to be very good at memorizing like, you you know, what to click on. But the sheer fact that like you had a rep walking this like high wire, you know, of risk in a demo, doing it themselves, configuring things like, let me show you, I'm gonna add a field. Okay, well that looked pretty simple. Sure, but what's behind it's really complex. And that's where the key is in the product marketing, the explanation, which is I just added this field and I added that in the database, and it's dynamically described in the API, and you can report off that, you can search off that, you can drive a workflow off of that. So the fact that reps could show the product really showed the simplicity, I think, to business users that we were trying to get to.

[Speaker] Got it.

What do you think that you were doing in those, call it, around $100 to $200, $300 million in either sales or marketing that maybe would be antiquated now, or things that you were doing wrong, or do you think we just sort of hit on a revolutionary model and it's the same model as it is?

I think this is a great question for this guy. Am I right? Because we started working together. And he came in and was like, wow, you guys are doing all these things incredibly well, but you are completely insane doing some of this stuff this way.

So Bill Masaitis, he joined, the company was about $750 million in revenue. You came from Fox Media.

Yeah.

So bigger company coming in. So I guess, you know, talk about that and like, what was this? What did you notice? What was the biggest contrast from other companies you'd worked at from when you came in?

I think the biggest contrast was coming from a company where we had 170 million unique visitors, right? And we used every single trick, online trick, to get them there. And I came in and I mean, it was an amazing company. I love the customer first. I love the cloud SaaS. But I was like, wow, we're doing a lot of like dusty old B2B tactics here. You know, let's bring in conversion rate optimization and content marketing and start doing lead acquisition.

So at the time, that wasn't happening.

It was just at its infancy, right? And that was, I mean, that's why it was fun for me, and I think part of the reason that Kendall, Mark, and the team had kind of brought me in was I think they wanted to infuse the B2C into the B2B, and that's something I always respected about Mark was the customer centricity, and enterprise software was crap back then. I mean, it still is in a lot of cases, right? And Mark was always just inspired by Amazon, right? Enterprise software is easy to use and don't have these massive, it takes one year to train you up. And so I just thought that we had disrupted so much on the product standpoint, let's disrupt on the go-to-market standpoint too and bring in some of these best practices and leading engines to feed this massive sales engine, right? And we had to really think about how we could scale that and operationalize it and diversify our sources beyond PR, which was amazing in the word of mouth, but we needed to scale and diversify.

[Speaker] And do you think that B2C mindset was just new to the enterprise? Was anyone else doing that, or was Salesforce pretty new in doing that?

I don't think anybody was. I mean, we— so it was interesting. I was transitioning to run marketing from a guy named Clarence So. And Clarence had been interviewing Bill, and we were like, this guy is from the B2C world. He doesn't know anything about enterprise software. But he knows all these things about getting people to these websites. And we really tried to find somebody who was completely the opposite in many ways of who we were and what our skill sets were. And we were very lucky to find him, and he kind of saw the potential, which is like, how can this company be doing so well, yet still not be doing a lot of these things digitally at the level that a B2C company would?

[Speaker] Yeah, just the stuff we take for granted. So when you think about now Salesforce's billion dollars post-IPO company, David, what were the big innovations that happened in the sales organization in order to maintain that growth? The deals were getting bigger. The sales organization had to change. What were some of the biggest structural organizational changes that were required to go from, still continue to grow it north of 30% at a billion dollars in revenue?

A lot of it was harnessing the customer army, getting the stories in place. Onboarding really quickly, both on the tool, on the messaging, on the product. But there was a lot of infrastructure in play. So '07, we had the massive investment, brought Klaus Molt on and spent, I don't know, $50, $60 million on the data centers. That was a fun year. And, you know, but we had at the time, back in '04, right when you started, we had sold some of the first big global deals that we had done. And, you know, we— 24/7 support was expected and all that. We didn't have anybody in any other country doing support. So we had, uh, you know, we had, we had one guy basically on his cell phone doing support on the weekends, but his cell phone would only work in his apartment if he leaned up against the window. And so, I mean, these were the real issues we had. You know, we had to go talk to the CIO of Cisco about, you know, why we weren't answering the calls for like 48 hours because It was really cold, the guy didn't want to lean up against his window, so his phone wouldn't ring. And so there's a lot of infrastructure that we had to put in place there. We had to think about follow the sun support. Every year, Marc was really methodical about how we would evolve the customer success team. That went from being an account management team in the beginning to really actually being proactive, and I think by '04, '05, starting to get into the sales cycle early on. So we didn't have this natural sort of drop-off between selling a deal and implementing a deal, which again was very revolutionary. And so, you know, figuring out how we would build the AE army, which was in the V2MOM every year for 5 or 6 years.

It's probably still on there. I don't know.

Probably.

You're out there, you can raise your hands if it is.

I know Mike Creedon would know. I can see him back there. And so it was— a lot of it was just infrastructure and it was also Changing the messaging. The messaging had to evolve to CIOs of highly regulated businesses.

Yeah. Well, you talk about infrastructure, so that's making sure the product's reliable and then that the customers have good support. You're supporting them after the fact, but I mean, I'd like to hear from the rest of the panel. So there's still— you're starting to take off big accounts. You're selling in many cases directly to the CIO as opposed to the line of businesses. I mean, that probably requires bringing in a different set of sales executives and sales managers. I mean, what were some of the big changes as you're moving from $25,000-$30,000 deals to $100,000-$200,000-$500,000 deals, and it's probably still relevant today.

Yeah, it was, it was a huge change, I think, in the sales organization. I would say it was kind of fascinating, like if you look back at that time, you know, Mark was really focused on two numbers at a company level, like in terms of hiring. One was the number of developers and the other was the number of quota-carrying salespeople. And we looked at the ratio of people who could write code and the ratio of people to support them, UX, doc, QE, whatever it might be. And then the number of people who could carry quota, and there were people who would support them in marketing and SC and BDRs and all these other groups. And he was maniacally focused on building that army, which you were kind of articulating. And I think it was one of the most important things Salesforce did was it kept hitting those sales those hiring targets. But then I think Mark was also trying to bring in very different kinds of people. And I think this is where the company had a lot of experiments, let's just say. Some that worked and some that didn't work because we were in uncharted territory.

What were some of the things that didn't work?

I don't want to name any names, but there were some people that did not work.

But I mean, say strategies, not people, but maybe strategies.

I've got a good one.

Yeah, go ahead, Bill.

All right, so—

Good, save me.

We hit this point in the growth cycle, and we start to get into the enterprise and social. And Marc goes out with this positioning of the social enterprise, right? And which is great, because Marc's always like 5 years ahead, and he's pitching the press and the analysts, and they love it, and they're eating it up, because he can really go into it. Well, that ended up manifesting itself on the home page. It was Salesforce, the social enterprise. And so at that point, we had put in all this analytics, and we're doing feedback, and people coming to the home page, and we're starting to see drop-offs. We asked people, "What's going on?" They're like, "Well, you just sell software for nonprofits. I don't know what you do. What is this?" We had to just keep iterating off of that, but it was just something where we always kind of had that push and pull of that far-reaching vision and just when people came and actually explaining in words that they understood, so that was kind of a fun one.

Yeah, that was a fun experiment. The launch of Chatter was a fun experiment, whether it was buying a Super Bowl ad, which was the best B2B Super Bowl ad that year. It was the only— PDB Super Bowl out of that year. Um, but trying to explain something with even the analogy of Facebook at that time when Facebook was going through its own, you know, very difficult time in terms of privacy. And, you know, uh, it was under attack in the media and we were trying to use that metaphor. It was not a good experiment. Um, but some of the experiments I was talking about was different. I would say different types of field sales leaders.

Yeah.

We went through a lot of field sales leaders and the fascinating thing is that Over time, it just became clear that I think the people who had grown up inside the model, like had grown up in a high-transaction, high-volume, high-velocity sales cycle, high degree of technical competence in the product, those people, like, you know, you think about like the Warren Wicks, the Eric Eichensleiters, like these guys who came out of like the corporate business, they became the most senior field sales leaders. And we would keep trying to bring in a lot of these field sales leaders from the outside, but they just they just had never seen a model like this before. And some of them adapted better than others, but I would say, I don't know what you felt, but I felt like the homegrown talent and having this very strong pyramid, you know, of like qualifying reps, outbound kind of BDR reps, inside reps, outside reps, and having this really strong pyramid and career hierarchy, it's probably one of the most important things Salesforce ever built, because every time you tried to bring in different people who were kind of from another planet, they just couldn't really understand it or adapt to it. A couple did. I don't know what you think.

Yeah, I think, you know, for— there was that period of time where we started doing really big deals, but we didn't, you know, to Kendall's point, we didn't have a lot of people that had done big deals. So we would bring people in from other walks of life, but—

When you say other walks of life, other—

Traditional enterprise software companies. But what— it was a different unit of measure. We wanted big deals, but we wanted customers to be successful more than we wanted big deals. And we wanted both. And a lot of times you had to break a lot of glass in the traditional enterprise software companies to go get big deals. But once you got the big deals, it was sort of up to the customer to drive their own success. And that mindset did not exist in Salesforce. It was always on us to drive the customer success. Up until, I think, today still, you could email Marc at ceo@salesforce.com. And so— He will respond. He will. And if there was— we had times, even in '07, '08, '09, where he'd get an email from a 5-person shop. And he would be just as upset if we failed to deliver success than he would if it was 100,000-user deal. And that's a tough mindset for a salesperson coming from a traditional enterprise software company. And so there was a lot of tissue rejection.

These guys— well, Slack, you know, I mean, I think they're probably— I don't know if they were the first, but there's definitely one of the most successful to pay people on customer sat, like the salespeople. Yeah, I think it was huge, but it was a similar mindset even if we didn't necessarily have that built in at the time. We had it built in in the fact that you couldn't do add-on deals if they weren't successful with the first 5 seats. I mean, they weren't going to buy the next 10, they weren't going to upgrade, right? So success was kind of baked in from that perspective.

Well, you guys extended it even further at Slack, right? With the credits for usage and—

I mean, I was always just inspired by Mark and just his relentless focus on the customer. And one of the nice things about when you move on, you sometimes coming into these organizations, like Slack, I was kind of like first go-to-market employee, and Zendesk first go-to-market employee. So you have like an open greenfield and design it, and I just thought, as we start to build out our own AE teams, and Slack does have salespeople, I know sometimes they're referred to otherwise, but we do, Maybe rethink about, well, if customer success is our most important thing, why not think about alternative metrics? And maybe we comp them based on the average NPS or their score. Or we were one of the first ones, we actually do a post-survey after you buy from us. So we'll go to the owner and go, hey, was your salesperson, were they responsive? Were they intelligent? Were they knowledgeable? Did they help you out? Because we wanted to combat, we even tried iterating on pricing. So we would only, you basically only get charged if you actually use the product and you would get refunds back. Anyone that stopped using Slack in 14 days, you get a refund. I just think it was really inspired me though by kind of Marc and the roots of just customer success and always hearing that. We mentioned V2MOM earlier. I thought that was another great thing we did. It's vision, values, methods, obstacles, and metrics.

Measures.

Or measures.

But the awesome thing about that was it kept everyone on the exact same page as we went from 100 people to 1,000 to 3,000 to 10,000. Marc wrote at the very top, it was always customer success, and everyone on the entire organization had to fill one out with their priorities It was amazing for keeping us focused.

Talk about the importance of Dreamforce and how that aligned the company and what the product goals were for the year and the messaging. How influential do you think that was in the growth of the company?

It was huge. It created a movement. I think it was the catalyst that drove that user community. I think the first one we did was at St. Francis.

Yeah, I only missed one. I missed the very first one.

Okay. And it was, you know, we had, I think, 50 people in Exec Summit and 700 total or something like that. And we were giving tickets away at the end just to, like, fill up a ballroom. But it was— you could feel it was— the technology was such a break from what everyone had dealt with before. And it really did change the division of labor for lines of business to control their own destiny and not be tethered to IT and the slow changes that you saw there with traditional software. So it was really an empowering movement. And, you know, from the very beginning, Marc brought that compassionate capitalism into it. And so, you know, we were doing philanthropic work from the very first time. So I think it created this connection that people felt to a B2B product that they didn't have before.

Kendall, talk about how it was different from other, like, user conferences that you'd seen in the past, and particularly at like rallying customers?

I think it's unusual when you see grown men standing in line to have their picture taken with a mascot at any point.

Astro's here, by the way.

People— oh, oh, awesome. We'll get a pic with him. But it definitely is— it had that energy that I think people were really passionate. And I haven't been to that many user conferences where I've ever felt that, and I think by just putting the customers and their stories and their content at kind of the heart of it, I think it really, it made things personal, you know? And I think that event became as much about the personal connection as the corporate connection, and the connection that people had with each other, not just their connection with Salesforce, and that was really important. But I'll say something controversial, which is that I think, I think it has gone too far. Not just because the traffic, which everyone loves, you know, having like the city shut down for a week and you have to bring in like, you know, a cruise ship to like house people. But like, there's an important element of this, which is if part of your brand is like the intimacy, you know, and the personal connection and like knowing the people that you work with and that are your peers and your partners and your friends, it just becomes unnavigable at some point. Personally, I think that has gone off track. It's just become such a beast, whereas the essence of what makes it amazing maybe still happens in pockets. But I think it's hard for someone new to come in and even find the pocket.

Yeah.

Got it.

Bill, in the last few seconds, what did you take from Dreamforce that you've taken with you as you've gone on to to Slack or wherever?

I think the developments of personality for a B2B brand. You know, that's something I was inspired with Salesforce. Whether it was Sassy, I believe, back in the day, the little mascot. But just not being afraid to have some personality. And for most B2B organizations before that, the Oracles of the world, they were just completely devoid of any personality. When I went to Zendesk and Slack, that was a big part of it, was the personality. People have an affinity to that brand, and Dreamforce, encapsulated that. There was a personality to it. So I think that's something that definitely helped.

Well, great. Well, thank you all for coming, and thank you for attending.

Thank you, guys. Thanks.

Thanks, Jason.

Appreciate it.

Good talk.