Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder | SaaStr Software Community

[FOREIGN LANGUAGE] What I was gonna talk about today is The Playbook for Reigniting or even Igniting Growth. And if you aren't familiar with me, like Ritu said, helped create a new outbound process at salesforce.com. Good job, guys. Thank you. And then since then, I left Salesforce a long time ago. Really have worked with lots of companies and really been fascinated with how do you repeat growth? How do you engineer growth? How do you make growth predictable? And then Jason and I did a book called Impossible to— that's again, too many syllables. Extending our little names. Impossible to Inevitable, which was just updated a couple months ago. Some of you might have gotten a copy this morning. He got 50 copies. So from the newest update of the Impossible book, I'm going to share the best practices for igniting and reigniting growth. So like the latest lessons learned. Yeah, I mentioned lots of kids, right? Okay, moving on. Not interesting at all, is it? By fun fact, gonna do another book or something about how to not balance, kind of integrate. How do you make more money while being a better parent? I guess I've done a lot of that. I don't feel like an expert, but growing a $5 million business while having 10 kids. So that's been an interesting journey over 8 years. So, From Impossible to Inevitable, Second Edition. Here's a couple of the highlights. And I'll share them today, right? How this company called SageMount, they're a $2 billion private equity firm, triples the valuations of their investments in 3 years. How Twilio nailed the billion-dollar niche, or niche if you're any from Canada. Or Europe, and uncommon practices of hypergrowth CMOs. Okay, before we dive in, by the way, anyone here from Scotland or the UK? Okay, couple. We're moving to Edinburgh in October, so yay, 'cause we don't have enough to do with that many kids. So one of the biggest trends, and if you were downstairs this morning, you would've heard me mention this, is this rise of overwhelm. There's more of everything. There's more apps, there's more content, more channels, more messages, more like, oh my God, my head's gonna explode. So what does that mean for everyone here, right? And this is gonna infect your customers, infect, affect your customers as well as your salespeople. They both have the same thing around, ah, like what do I sell? What do I do? I have too many apps. I'm a salesperson, I've got too many apps to use, or too many types of customers, or too many things. I'm a customer, there's too many apps. There's, I don't know, 10,000 sales apps now or 10,000 marketing apps. So that's, I think, the uber trend and that affects everything here. So really a lot of what comes down to growing is focus. So here's some reasons why growth stalls or it doesn't start in the first place. So for example, you're trying to skip a step and I'll explain that. I get this from David Skok. I loved it actually when he said it. Made so much sense. Companies don't have enough sales roles. Now, how many people here have read Predictable Revenue? Yeah, okay, pretty much everybody. It's funny, there's lots of cities you ask that and there's like a couple hands go up. I'm like, come on. But okay, there's not enough sales roles. People still have muddy lead generation metrics. We have this theoretical messaging. We haven't nailed our niche in terms of the messaging and the targeting that we really need to do to figure out who our ideal customer is. And the last one is a lot of times sales and marketing, if you're big enough to have sales and marketing, 'cause I know some of you aren't, they don't always work together. Anyway, skipping a step. Skipping a step, pretty simple. So, from David Skok, he has these big 3 things. It's a new presentation he's developing. First, you get product-market fit. Then you create predictable revenue, and then you scale. Now the problem is people keep trying to skip the second step. We got some customers who are buying, let's go. We've done that at predictablerevenue.com even. So it's like people, I think a lot of this is impatience to grow. So again, what David says, trying to, Force progress by jumping ahead before completing the current phase. It's kind of like 2 steps forward, 3 steps backward. 'Cause we're in such a rush. 'Cause we see all these stories around people launching and growing. So one of the ideas from Jason that I love that we put into the From Impossible book is this idea of a year of hell and some timeframes. Now, it often, for a SaaS company, takes 2 years before you know whether it's gonna work or not, or what you got. It could take longer, and it might be 5 or 10 years to exit, right? So I think our timeframes are so distorted by social media in terms of what to expect and how long it should take. Remember, what gets published is kind of what's exciting, which is typically things happening quickly or failing. And the really, the stuff that people do every day, which is all the long boring grind, doesn't get a lot of airtime, but that's really what it's about. Is anyone not going through a long boring grind? There might be one or two. Okay, that's natural. When you post in your social media, what do you post about? You're, you know, you're looking about your day. A lot of it can be kind of boring or busy, but you post the highlights typically, because who cares about you brushing your teeth really? And you're not going to post about if you're yelling at your kids, because first of all, it's totally inappropriate to be yelling at your teenager, 'cause I never do that, and start videoing it, and then to post it. You're not gonna do that. So there's these reasons why we're surrounded by an artificial distortion of our reality, which, again, I think feeds our impatience. It means we try to skip a step. Okay, so now I'm gonna get to more of the tactical things around sales and marketing that'll help drive growth. 'Cause again, first, I think it's our impatience and expectations. We shoot ourselves in the foot. Sagemount, and actually I missed, I just caught this beforehand. Sagemount, Briggolff Sagemount's a multi-billion dollar private equity fund that we do a lot with. And they were really kind enough to add a lot of details for one of the new case studies in the book. How do they triple their investments in 3 years in terms of valuation? So again, that's repeatable growth. So one of the interesting facts is they did this analysis and they said, okay, when we make an investment, We can, whether looking at M&A or process changes or pricing or sales growth, what they identified was 70% of the increase in valuation of their companies came from increasing organic sales growth. So not from merging companies together, which is part of it, or improvements. It was really that organic sales growth. More leads, more sales. So, kind of the 4 highlights, and there's a few other, these are the 4 big things they do. The 4 big things is really they specialize their sales roles, I'd say, all the way. We'll get to that. Ramp, lead gen, they focus on outbound, but everyone, I don't know, might be inbound at some point for you, but ramp, lead gen, nail a niche as part of that, which is really get smart and targeted around their type of customer messaging, and have sales and marketing really work together in alignment. And for them, Their rule of thumb is if they can get a company's revenue up by $1 million in ARR, they should expect a $12 million valuation increase. So that every revenue increase is a big deal. So here's an example. They spent $40, so it was a $40 billion investment in a services company. I think it was like Kansas, somewhere in the Midwest. IT services, and they were growing, made 10% a year. And again, pretty classic, they had half a dozen salespeople doing everything, and most of the leads were from word of mouth some channel partners, and they come in whenever they came in, and they wanted to triple that growth rate evaluation. So what they're hyper-focused on are really 3 main metrics, and again, I think it's so easy with all the technology now to get overwhelmed with too many metrics. You get dashboard clutter. Hopefully you have dashboards. Some people don't, but then it's too easy to put too much stuff on there, so it's really simple. More meetings, more qualified meetings, more proposals, more deals. Now, yours may be different, but pretty simple. At the end of— I was about to say end of the day, but you know, that gets overstated. All right, so one of the things around specializing sales, and this should not be new, but where people get this wrong, right, 'cause this is about focus. We're going back to the Uber trend. When salespeople are doing too many things, They struggle. They're targeting too many customers, too many apps, too many responsibilities to learn. So this is why specialization works so well. People doing fewer things better. So I think where we need to take it further is creating more roles. If you have one SDR, whatever you call them, BDR, SDR, da da, junior salesperson doing both inbound lead response and outbound prospecting, great. As soon as you get to, that needs to change. If you have 2 SDRs, sales development reps, you need dedicated— outbound will not work without dedicated people to it. It just won't. That's one example. And I guess I know there's so many gray areas. And the other one is, as soon as you can, again, split the new customer signing versus account management/customer success. So I think, again, people wait too long or they don't create enough roles. You really want usually more sales, more roles in your sales team. It's kind of the default. I don't think I've ever seen a company that had too many sales roles. I see them all the time that don't have enough. If you have all these, then add some interns, add some junior people in your operations or sales operations. It's a great place to bring people up when they're kind of moldable and not as expensive and they're getting sort of They can work in a job and they're getting paid. They're getting paid to be trained, to be ready for the next job. In lead generation, it's really hard to get accurate metrics that you can trust. It's easy to get metrics. Okay, let's stick to outbound for a second. Especially in outbound, I mean, I rarely, I never see dashboards that are completely accurate and trustworthy. When you dig below the metrics, there's always fudge factors. Outbound, there's a lot of subjectivity. One of the great unknown challenges or unrecognized challenges is that it's really hard to create a trustworthy outbound dashboard because of the subjectivity. Was this qualified or not? I don't know. If the salespeople receiving outbound appointments aren't trained, they're just like, "Okay, I'll do my CR favor, a favor, I'll upgrade it." They don't really know. Was it outbound or inbound? There's all these gray areas around attribution. We get inbound leads. Was it triggered by an outbound prospector sending emails or making, or something on social? But it came through the website. There's all these gray areas, right? This is probably the number one thing we work to clean up with clients is just clarity around metrics and lead gen, especially outbound. And if you don't have clear lead gen metrics, then you don't know where your leads are really coming from. So you don't know really where to invest or double down. It's just, so just a thing on outbound, right? Outbound, there's so many great apps, right? But it's not about the apps, the lists, AI, email templates, or anything else. Outbound is really about the dashboard. If you have an outbound program, whether it's in-house, remote, outsourced, whatever it is, I just, 98% of you will have inaccurate metrics. I can almost guarantee it. Okay, maybe 96%. Really? 'Cause I see this all day long. And if you don't know, how many times do people say, "Oh, we're getting $500,000 in pipeline a month from our outbound program." Okay, well, when you really look at it, it might be half that. Whether it's because it's inbound leads that got poached by outbound, whether on purpose or confusion, or a bunch of fluff that's being upgraded that's not real. Happens all the time. So this is our dashboard at home. This is, again, big kids. This is our family car. I like to say we have a Hummer H2, but that's our small family car. By the way, both are for sale 'cause we cannot take them to Scotland, if you're interested. All right, typical dashboard for outbound. Again, your inbound funnel, sorry, this is an outbound funnel. An inbound funnel will look different. Than outbound funnel. You have your activities at the top, and then those activities are resulting in positive email responses or social responses, meetings. Number 3, I think the place where people again miss the boat, and it's so, so important, are measuring the number of qualified audited opportunities. What that means is, okay, You're getting meetings if you have this program. Again, whether it's your internal team or if it's some sort of outsourced help. Meetings you're getting from your SDRs or people to salespeople. Okay. Then they're getting qualified. What does qualified mean to you? It's a little bit different to everyone else. I'm sorry, everyone has a bit different versions of what that means. So first you need to decide what that means to you. I'll give you a sample. And then you need to, especially for outbound, you need to audit and review every single opportunity. 'Cause I guarantee there's gonna be so much inconsistency. It's impossible to do it otherwise. I mean, that's what I dealt with from day one at Salesforce. So for outbound qualification, It's gonna be different typically than inbound criteria, 'cause outbound, you're reaching out to people who don't know you as well or don't know you at all. They're not thinking about you, and you're educating them. You're trying to get them excited about a new opportunity. Usually the 3 basic criteria for qualifying an outbound opportunity is, am I talking to someone of power or influence? Do they have a need that we can help them with? A real need. And are they interested in the next step? Okay. Some markets, like in advertising, you might talk about budget in a very kind of, 'cause it's so ingrained to that system. But usually with outbound, you don't deal with budget and you don't deal with timing. But if you're talking to someone who's high up enough and has enough of a need, they can make that happen. There's always exceptions. Let's not talk about government or schools. So they'll be looser than inbound criteria. All right, so again, you take that as your starting point, decide internally what that means, and then someone on the team has to check all those opportunities for consistency. And that's one way you start to get towards cleaner, more trustworthy metrics on outbound at least. 'Cause think about it, if you're, you know, there's a lot of CEOs here. If you're one or if you work for one, I need to decide, hey, we're getting X from different channels, partners, inbound. Of course, inbound is such a group of stuff. Partners, inbound, outbound. If I don't trust the metrics, I don't know what to invest in. Plus, if I don't trust the metrics, how does that reflect on the people creating the metrics? So I triple emphasize this because at salesforce.com with Marc Benioff, He didn't trust outbound metrics because at Oracle they were all fudged. So his starting point was, I'm skeptical this is gonna work. I don't think it's gonna add incremental revenue. And it took us 2 years before he switched, cuz there's 2 years of metrics and opportunities and deals that every time he had a question, I remember there'd be a company like What's a truck? What's a big trucking company? I don't know, I'll just say Citibank. Citibank, we closed Citibank, and he'll say, "Oh, where'd this come from?" A partner's saying they brought it in, but outbound's saying they sourced it. Oh crap. We always go back in and be able to prove without a shadow of a doubt that outbound was the source of it. We only took credit for what truly was something we sourced. And so after 2 years, he finally was like, "Yes, okay, I really believe you." believe this is incremental. Now that's an extreme case, but the point is if you don't have trustworthy metrics, you don't want hope, you want truth. Okay, did we beat this horse enough yet? Sample, so Zora is one of the new case studies in the Impossible book, and this is a summary of their outbound funnel. What's interesting about them, which I really wanted, why I wanted to include them in the new edition, was because they often take years to close a new customer. That nurturing process for, because they'll sell to companies like car companies. They have SaaS clients too, but they have a lot of older established businesses that are looking to get into SaaS or subscription. And it might take them years to decide to get into that business. So their funnel, again, this is in the book, but 10 new account plans and contacts and dials, but they wanna filter through. To getting about 1 customer a month, and they call them ZBRs, Zora Business Representatives, doing outbound, mostly outbound. So nailing a niche, this is number 4 out of the 5 points in terms of how do we reignite growth. This section, this is the stuff that wasn't in the Predictable Revenue book that later I realized, oh, when people struggle with, let's go back to outbound, but it's true of growth in general. The most common reason is because they haven't nailed a niche. Now Twilio, I love their story, right? They have a platform. And platforms are really hard to get off the ground because they can be used for anything. I mean, you know about the successful ones, but you don't know about all the unsuccessful ones where they couldn't get traction to people using it because, what do I do with this? It's like if Lego had just only sold boxes of pieces and never sold the kit. So Twilio has done an amazing job basically getting out of their cubes and ivory towers and like learning how to read their customers' minds. And 3 of the ways, there's actually 5 in the book, but 3 of the ways here that I thought were really interesting. One is, they talk about walking in their customers' shoes, and they repeat it, it's a value. They actually even go to the point of, they offer their customers a free pair of Twilio-branded Chucks, which are kind of, basically in the picture, but they put their logo on it. If the customer will give them their old dirty shoes. And they hang those old dirty shoes, maybe they clean them, I don't know, it doesn't matter, in the offices as reminders to the employees to, again, walk in your customer's shoes. 'Cause we always need to be reminded of that constantly. So that's more, but the second one, make your lawyers build apps. Like every employee at Twilio who starts, whether they're a lawyer or an HR, has to build a Twilio app. They eat their own dog food that way. That was one of the secrets of Salesforce. Salesforce, Salespeople use Salesforce, so they knew it. How can you get your own people to eat their own dog food? And the last one, again, something we talk about, I think we know this, but how often do we do it? Can we get feedback before we build it? So Twilio, they have an example where it's an API-based company. So they can do is they can write the documentation first, get feedback from customers before they write the actual APIs. There is a bit of a trick here because it is true, at least from my experience, you can get customer feedback and at some point though, they don't really know what they want. You do have to build something, of course, for them to see. If you're building something new, they know the problem, but they don't know what the solution is. But it's the same old thing, whether it's for a presentation, whether it's for a product, try to get customer feedback before you spend a lot of work to build it. Getting into the minds of your customers, here's a really tactical example. We had a client called Camberton who sells multi-hundred thousand dollar accounts receivables financial services to hospitals. They were building an outbound program and they were started off by reaching out to hospitals to ask, "Hey, who's in charge of receivables?" Yes, these emails still work and no, these aren't the only emails that work that we do, but it's just a great example. Who's in charge of receivables? Now hospitals are pretty complicated. There's like vendors, there's patients. Weren't getting responses. Doing some interviews and such. Interviews, highly underappreciated. They then switched to who handles patient cash? Right, it was internal jargon, internal language. It was instantly obvious to the people they were reaching out to who that person would be. Right, speaking their language. You wanna get into the minds of your customers to use their language. I mean, it's unbelievable because I see it so often is the kinds of emails and cold emails that get sent. They're so generic and so you-focused rather than customer-centric. It's hard, that copywriting skills, it takes practice. And as soon as you get it down, things change. But that practice of getting into their minds, whether it's through interviews, using the products they're using, reading the news sources they do. It just, it makes all the difference. You're really developing that empathy for them. Empathy is, I'm sure someone has some phrase around like, future skills you have to know, or mission-critical skills. Well, empathy is one of them. You're not gonna be able to be successful in marketing without empathy. All right, we're gonna get to, here's the last section. Create revenue team alignment. So revenue team, again, it's this whole migration from sales and marketing to revenue. How can you look at that? There were sales ops and marketing ops, now there's revenue ops. I don't know, but it's true. It's like you don't really care where it comes from. You want the revenue to work together. But sales versus marketing, I don't know. Revenue team alignment. And there's reasons why there's always been this gap between sales and marketing. They have different goals. There's often different backgrounds and experiences. There can be different systems. Maybe they're in different locations, different budgets. So how do you get them to work together? So here's 3, and I'll emphasize 1, but one of the key steps that makes such a big difference is having those SDRs, especially on the inbound side. The oldest complaint of marketing in the book is, "We generate all these leads that don't get followed up on." True, but you gotta realize that salespeople are busy and it's just, they're not gonna be good at it. They're just not. It's just, so if you have an inbound SDR team, again, you might call them MRRs, market response reps. It doesn't matter what you call them. It's the junior salespeople who are dedicated to responding to inbound leads, whether they're in website chats, whether they're down, whatever they are. That's how you ensure great follow-up, and that's how you ensure that bridge from marketing leads to sales sales is solid. Whether they sit under marketing, whether they sit under sales, really the most important thing isn't the function, it's which leader will be more passionate and dedicated to making them work well. That's how you know where they go. The second one, one revenue leader that speaks both languages. By the way, I know, hey, this kind of stuff actually, I mean, there's probably a bunch of you here that don't have a sales and marketing leader. They're just, they're both you. So I get that. This is a good problem to have once you actually have a dedicated salesperson, I mean, a sales leader and marketing leader. Some of you are like, "Ah, I wish I even had that. It's just me." But ultimately, you need one leader who speaks both languages. And here's when people go wrong. When there's a VP of sales and VP of marketing and the CEO. The revenue leader is the CEO. They need to work, put more time in to make sure that marketing and sales are synced up. There's usually too much delegation like, "Oh, marketing will do their thing, sales will do their thing." No, they need to be more hands-on. It's more common now to have a CRO or a VP of marketing. We have a VP— sorry, VP of revenue. We have a VP of revenue, Mina, who's great. We were hoping she could come down here for today, but she's at Burning Man. What are you gonna do? Although I guess nowadays she should be able to dial in, right? But you need that, who's that one revenue leader who ultimately will be in charge, not responsible just for the revenue, but also that the two groups are synced. And that's what's usually missing when you don't have a CRO or VP of revenue, VPR. And the last one, again, we emphasize in the book is marketing needs some kind of lead commit. The further along towards revenue, the better. Again, there's gonna be a lot of shades of gray depending on how advanced or mature you are as a company in your metrics. But typically, rather than MQLs or new leads, at least try to get to sales qualified leads, SQLs. There's so many terms, okay, SAL, sales accepted. Basically, it's the point where the lead gets into the hands of a salesperson and they accept it, whatever you call that. FBI, CIA, TLA, I don't know. MQL is just not far enough along. If all you can do is measure MQL, great, start there. To measure SQLs, it is harder because you have to have consistent definitions on what is an SQL. Are people actually logging things in their CRM according to that definition, right? So it's kind of a forcing function to clean up your act as well, to get to the point where you have a trustworthy metric. Because that's where marketing and sales, They agree, right? Sales wants SQLs. Anything earlier than that, it doesn't really serve them. Again, it's a waste of everybody's time to expect sales to do more follow-up on earlier leads. It just is. You have 1 out of 10 or 1 out of 20 or some rare unicorn salesperson that can do everything. They can do the follow-up, they can do prospecting, and they can close, and this, that, and the other, but you can't build a team out of that. So to wrap up here, to reignite growth— or again, if you don't have in the first place, get it going— that mindset. How long is it gonna take? You don't know. Have goals but not expectations, if that makes sense. Any emotional energy wasted on, oh, I'm not where I need to be yet, And we all feel that to some extent. That's a waste. Okay, where are you? What's next? And with sales, if you can add more roles, that usually helps. So again, the most common— I saw a report by Bridge Group that 75% of SDR/BDR teams, those SDRs do both. They juggle both inbound lead qualification and outbound prospecting. I'm like, no. What can you do to ramp lead gen? Whatever works for you, and again, the chances are your dashboards are inaccurate. Either they're not detailed enough in marketing. So the problem with marketing is there's so many types of campaigns, events, and those funnels and word of mouth. You have to really look at it campaign by campaign. So it's overwhelming. It's hard to figure that 'cause it's so complicated. In outbound, the problem is the subjectivity. You can't trust the metrics unless you've gone down there and there's someone who's actually auditing every single opportunity. Then nailing a niche, or niche, I keep, I'm getting into Scotland mode, nailing a niche. So what can you do to get into the minds of your customers? Usually that's more interviews. That's an easy place to start. And the last one, this revenue team, and probably the simplest place is looking at if you have a marketing person or marketing goals, how can you tie them mostly to sales qualified leads. But you do have to find that right balance as to where that, for where you are with your stage, what's gonna work. If you had a really fast sales cycle, you could tie marketing totally to, well, let's say a sales cycle of a few weeks, a month or two, you could tie marketing completely to revenue. But, and if you're totally new, you're still not sure what your sales stages are and your close rates, you probably have to stick to more like those new leads. So it's kind of, you gotta find that right balance where you are and then push forward as you can. So, that's how to reignite growth. Thanks very much. Enjoy your day here. I'm gonna be around for about an hour before I try to get back to Los Angeles where we're currently living. So thanks very much. Really a pleasure to be up here. And thanks to the Saastr team. Great job.