Recruiting Your Sales Team with Brex Chief Sales Officer Sam Blond | SaaStr Software Community

¡Hola! So, my name's Sam Blond. I'm doing the playbook to recruiting your sales team. Before I start, what an awesome event. I attend these types of events periodically, and these SaaStr events are just always a cut above. Once again, amazing job to the SaaStr team. I'm really honored to share the stage with some really badass speakers. Several of my former bosses, Kathy Lord that was just up here, I actually started at Intact right outta college. She was my first VP of sales. Hi there. Brendan Cassidy, second VP of sales at EchoSign. Jason was the CEO at EchoSign, so pretty cool. So I'm doing the playbook to recruiting your sales team. Jason had emailed me a few months ago asking if I wanted to participate. And unlike other events where sometimes I sort of like have to really think about what I want to present on, this came really quickly to me. Um, and it's because he prefaced it with, we're doing the playbook too, and then you got to figure out what you want to talk about. And for me, I've sort of learned throughout my career that I can and probably do suck at like just about everything else. But if I'm okay at recruiting the sales team, everything's going to be okay. Like recruiting is kind of the only thing that matters. Um, and so we'll start off, this is a picture of, uh, our sales organization or some of our sales organization. This is why we are successful as a sales org. It's all about the people. And I wish that I could say I had like some silver bullet, uh, with regard to strategy or something like that, that, uh, has really taken the company off from a growth perspective. It, it's the people. That's it. Um, and so when I started putting this deck together, I wanted to see if my experience around people and recruiting being the most important thing was something that resonated with others. And so I was just Googling, like, recruiting quotes. And just about every major leader of a large business had something. And so I found a couple that I took out. The first one is, "Acquiring the right talent is the most important key to growth. Hiring was and still is the most important thing we do." That was Marc Benioff. The second one is, the secret to my success is that we've gone to exceptional lengths to hire the best people in the world. And that was Steve Jobs. And I just picked these two, but I could have done like 10 or 12 and just done a, a slide deck on quotes. But that would have been a little boring. And then, I was putting this deck together, it was actually last week. I think it was 3 weeks after the due date for the final draft. So sorry, team saster. And then Jason put Jason M. Lemkin posted this on Twitter, and it says, "In MBR, after $2 million in ARR or so, nothing matters but recruiting." So lots of social proof, people that I really look up to that have had sort of the same experience around recruiting being by far the most important thing that you can do to build a successful business. For today, I'm gonna start pretty high level, just with a few recruiting principles, and then get really tactical. Around like the evolution, who to hire, when to hire, interview strategy, uh, and some things that you can do to make recruiting easier. But starting with the recruiting principles, the first one is hiring the right people is the most important thing you can do to build a successful business. And this really hits home for me personally, uh, when I look at joining a company, the primary reason that I join is is the people, and really the leadership team. And I remember when I joined Zenefits a number of years ago, I met with Parker, who is the CEO, and I left that meeting just thinking, like, he's gonna build a really massive business. And that's why I joined. The same was true when I was meeting with Pedro and Enrique, and our CFO, Michael, at Brex. It didn't really matter what the company did. It was just like, these people are gonna build a massive business, and that's why I wanna join. And I think that transcends throughout the entire organization where even individual contributor sales reps and SDRs, they're joining the business in large part because of who that leader is. And so hiring the right people is the most important thing you can do to build a successful business. And you've sort of seen that as a recurring theme through the Steve Jobs and Marc Benioff quote. The next one is make recruiting part of everyone's job. So we don't pay, referral bonuses when somebody at the company refers somebody that we end up hiring. And oftentimes we'll get asked the question, do you pay for referrals on hires? And the answer is actually yes. It's your salary because it's part of everyone's job at the company to refer candidates and to recruit. And so that's sort of the second principle. Recruiting is part of everybody's job. It's one of two things that we sort of hammer home on a consistent basis. Around making recruiting part of everyone's job. The other one is customer focus. That's a different presentation for another day. And then the last one is hiring is all about mitigating risk. And so what I mean by this is what you're really trying to solve for is this risk-reward ratio where it's really low risk and high upside in the types of hires that you're making. There's a lot of things that you can do to find these types of people. And so we'll talk about some of those. So again, now we're sort of moving to the tactical stuff. What I'm gonna talk about is when you want to hire people on the sales team, and then who you want to hire, so the profiles of those different people. In the early days, what you really want as a CEO is to actually be the first sales rep. So you wanna find some sort of product market fit, You really wanna bring on several non-friends and family customers. And part of why you wanna do this is you wanna learn the type of profile that you will be looking for in your future sales rep. How long does it take to close these deals? How much can we sell the product for? And then you can use the information that you have sort of learned by educating yourself on selling the product, and you can design, like, a profile of who you then want to hire. And once you've done that, you are ready to hire your first salespeople. And so here I have, after a handful of customers, hire your first couple AEs. Emphasis on the couple, and we'll talk about that in just a minute. But we're gonna spend a fair amount of time on use your network. So, if there's a second major takeaway that you take home with from this presentation, the first being, like, nothing matters but recruiting, the second being, use your network. So, and this ties back to the mitigating risk. When you use your network, a lot of different things happen. You know from prior experience from working with this person, if it's an in-network hire that you've actually worked with, what their performance historically has been like. You don't take their word for it in an interview setting. You sort of know that they were a top performer. You know their strengths, you know their weaknesses, You know their probability of success, very differently from when you hire an unknown quantity that was sourced from a recruiter or from an applicant on your website. There's also this dynamic that exists when you hire somebody that's a referral, where they feel a personal responsibility to do everything that they can to be successful, because it's a reflection on the person that made that referral. When Jason M. Lemkin introduced me to Parker at Zenefits, I felt this personal obligation to just really work my ass off and do everything that I could to be successful because I knew that Parker and Jason were in constant communication. And my performance was actually a reflection on Jason, and I had this, like, sense of moral obligation to perform. And the same is true at the rep level. So if you have a referral from one of your top-performing reps, the referral wants to come in and perform because they know that their performance is a reflection on the person that made that referral. You also have the dynamic where the person that made the referral wants that person to be successful, so they're going out of their way to try and help the hire be successful in ways that somebody that's sourced from an external recruiter or somebody that applies on your website, that doesn't happen. And then the last thing is this concept of mitigating risk. It exists both ways. So the same way that the company wants to mitigate risk on the hires that they're making, the top performers want to mitigate their own risk on the companies that they are joining. And so what I mean by that is, if you're a top performer at a business, you've sort of earned this reputation, you know that the leaders within the company think that you are really great, you don't want to go start at a new company where you're an unknown quantity. So oftentimes you will follow the best leader, or you will get a recommendation to join a company, rather than doing something like applying on the website. Because you're not taking advantage of your past success if you become this unknown quantity within a company. And so I sort of can't overemphasize the importance of using your network and really forcing that indefinitely. We have about 60 people in the sales org at Brex today. Every single one of them has been sourced internally. We haven't used any external recruiters. We haven't used internal recruiters for sourcing. They are all in-network hires, and we've missed once out of all the hires that we've made. The next one is hire more than one AE. So the reason that you wanna do this, if you just hire one AE, you don't know if they are good, which is why the product, or you're really selling, and the product is taking off. If they're not successful, you don't know if it's product market fit. If you hire 2 people, they're able to leverage one another. Um, they're able to play off of each other, see what's working, what's not working. Uh, and then you also can see if the product is selling because they're successful. So we'll talk about a few scenarios. If both of them are, are really successful, you know, you've got something and you want to continue scaling the team. If one's successful, one's not successful, You know that one of them's probably pretty good, and you may have missed on the other hire. If both of the hires that you make are not successful, this is systemic, and you know that it's a problem with your product-market fit, and you probably wanna slow down and fix things and make it easier to sell. You don't get any of those insights by hiring one person, which is why when you make your first sales rep hire, you wanna hire two. And then lastly on this slide, Some things that you want to solve for, and then one that you don't. So solving for the stage of the company. So you want somebody that understands what it's like to work in a startup. You want somebody that knows the only constant is change. You want somebody that doesn't need a 4 to 8 week training program that tells them how to sell, that you may receive at a large company. Um, so you want them to sort of know what to expect at an early-stage startup. The next one is around deal size and cycle time. Um, so if you're selling a hyper-transactional product, you don't want to hire somebody that has done big data field sales to Fortune 500 organizations. You want somebody that has seen what hyper-transactional sales look like, and you want somebody that has seen what a deal size in your deal size range looks like. And then lastly, there's no better indicator of future performance than prior success. And so if you're hiring somebody that has been a top performer at a company historically, and you sort of confirmed that, their probability of being a top performer at your company is super high. So you wanna solve for people that have been at the top of the leaderboard in companies that they've previously worked at. And then lastly, one thing you don't wanna solve for is domain. So oftentimes judgment can be clouded if somebody understands the space pretty well. And the reality is, it's pretty easy to pick things up. I've sold electronic signature, HR software, QA, we're doing credit cards now, and it's just easy to learn this stuff. And so when you solve for domain, oftentimes you miss on what's really important. and it's not a sacrifice that is ultimately worthwhile. And oftentimes people that go and join their competitors, the top performers at, uh, fast-growing startups, they don't wanna leave and join the competitor. It's just, um, doesn't really happen. Okay, so scaling the team. After a couple reps are successful, it's time to hire your first sales leader. So first bullet point, again, recurring theme, use your network. Um, I've been a sales leader now at a few different companies. Jason's introduced me to two of them. The third one, YC introduced me to, Brex. And so, same dynamics exist with leaders as they do with AEs. You really want to use your network and hire somebody with all of the things that I talked about when we had this bullet point on the previous slide. The next one is you want somebody who has seen what great looks like at an early stage. So don't hire, the Salesforce director that inherited a team, um, and you want to bring them into your startup because Salesforce is this really amazing company. And so they probably really understand how to sell. It's just so totally different. You want somebody that has been part of a really fast-growing business at similar stages. They're likely not going to be the person that ran sales for the hottest company, but they might be somebody that was like a manager that progressed into director, and now they're ready for their own shot. The probability of that person being successful in an early-stage startup organization is so much greater than somebody that has seen this, like, large enterprise-scale sales, because they're just totally different. Again, mitigating risk. And then the first thing you want to solve for, and almost the only thing you want to solve for, is around recruiting. So I talked about, I probably suck at everything else, but we've built a really good team. And because of that, we've been able to be successful in sales. So if you go in with that mindset, where recruiting is the most important thing when you hire a leader, you'll want to ask them things like, who are you bringing with you? And be specific, like, show me those people, and why will they be successful here? How did they perform at your previous company? Like, specifics, names. When are they coming with you? Are they ready to come? Maybe even talk to those people. See why they want to follow that leader. And if all of those signals are positive, Almost nothing else matters. And so you come in, you have this sales rep, this sales leader. The first thing that they're gonna wanna solve for is prioritizing recruiting. So at this point, I probably spend 60% of my time on recruiting. I now do that naturally because I sort of understand the importance of it. If you're a new sales leader, you probably wanna block off time because nothing is more important. Is to spend a bunch of your time recruiting, finding people, talking to top-performing reps within the company. So if you join and there are two sales reps there, one of 'em is crushing it, spend a bunch of time with that person that's crushing it, asking them for referrals. Make recruiting part of their job. Again, that dynamic, if you refer your friend, you're gonna be bought into their success in ways that an unknown quantity or random person that you bring in that doesn't know anybody. So again, you're trying to solve for probabilities of success here and mitigating risk. And then lastly, on this slide, when you hire a sales leader, their skillset likely doesn't transcend. If they're really good at recruiting and motivating the team, their skillset likely doesn't transcend into things like sales operations. So this is systems, this is analyzing data. And so what you'll wanna do is you'll wanna backfill them there. They're gonna need that support and allow your sales leader to focus on, again, the most important thing when that's recruiting. I'll, I'll fly through these next couple slides. I'm showing 30 minutes, but I actually think I came on at 2:30, so maybe I have a little bit more time. So on interviewing, you want the candidates to be themselves. So a lot of people try and do these high-pressure interviews where you ask questions and try and throw people off and see how they react. I really don't like that style. And it's because when somebody is ramped and they may be talking on the phone, if it's an AE, They may be talking to candidates if they're a leader. They're gonna be comfortable in those scenarios because they will have learned the product. And so by throwing them off and seeing how they react in uncomfortable situations, that's not really applicable to how they're gonna perform once they're within the company. And so, you wanna start making them comfortable, just shooting the breeze for a little bit, talking about things that they're very comfortable with. And then you really wanna spend a bunch of time talking about them. So you want the interview to be about selling themselves, and asking them questions like, to find out about their strengths, where do they need support. If you ask a question about where they may need some backfill or some support and they give you like a real fluffy answer that's non-specific, I think that's a red flag. You want people that are self-aware enough that know where they need help, and you want them to identify that early on. You wanna talk about goals, you wanna talk about historical performance, all things that these people should be really comfortable talking about. And then the example that you probably don't wanna do, or at least my experience is that I don't wanna do, is like the tell me about a time when questions that like really see how people think on their toes. Oftentimes people will make up shit when you answer this, when you ask this question. And what you might solve for is somebody that is a good interviewer and not somebody that is a really good performer. So a few interview questions that I really like. So what does success look like for you personally in this role, or some variation of like what are your personal goals? If we were to hire you here? I think the kind of generic answer there is, I wanna hit my quota. Like, you know, for me, success looks like I'm gonna come in here and I'm gonna hit my quota for you. And the problem with that is like 90% of sales reps at Brex today hit their quota. And so what you're really saying when you answer the question that way is like, you're gonna be in the top 90%, which isn't that good. And so what I'm looking for, and I'd say like the better answer for this question is, um, I'm going to come in and I'm going to figure out what everybody on the team is doing really well. I'm going to learn from the top performers and I'm going to be number one on the team. Because unlike when you say, I'm going to hit my quota and you're saying, I'm going to be in the top 90% of people on the team, there's only one number one. And so you're looking for somebody that wants to be the best. Another question is, what do you do different from your peers that makes you a top performer? The reason I really like this question is there are answers that are more applicable for certain sale types. And what I mean by that is, if you have a hyper-transactional sale where success is determined by, like, at-bats, and somebody answers the question, they say, like, I grind harder than anybody else in the team. "Hey, I'm Jason M. Lemkin, I'm the first one in the office, I'm the last one to leave, and I will work harder for you than anybody else." Great for like a transactional, high-volume sale, lot of cold calling. If you have a really complex product that requires a deep understanding of how to sell it, and somebody answers the question to you, "What do you do differently?" It's like, "I go really deep on understanding our product, and understanding the pain points within the customers that I'm selling to." And I provide them solutions. Perfect answer for like a complex product. And so you ask this question, you're looking for answers that are applicable to your sale type. So I like the question. All right. There are a few things that you can do to make recruiting easier. The first one is draw during the ramp. We don't actually give a full draw. And to define draw, what I mean is sales reps will get a base compensation and a variable compensation. A draw is you just give them their full-on target while they're ramping. What we do is we actually set ramping targets for the first few months. Um, they're pretty attainable. Nobody ever really misses them. Uh, and if you hit the ramping targets or the milestones that you're supposed to be hitting during your ramp, we will pay you your full-on target. We won't pay you more. Um, but the thing is sales reps oftentimes, and, and specifically with junior sales reps, Joining a new company can be really stressful from a financial perspective because oftentimes they're using their commissions to live. And so you wanna create an environment where it's a lot less stressful and makes it easier for them to join, and they're not worried about financial obligations they may have during the first 3 months at the company, and instead they're worried about performing. The next one, um, maybe no surprise, sales reps care about compensation. Um, so pay top of market. Um, this is just a pretty easy thing to do. Oftentimes you pay for what you get. Uh, I really like to create a reputation within the companies that I work at for paying top of market. And when you do that, people want to work there. Um, 70+% of the team over quota. People talk about really high on-targets. And if only 20% of the team is hitting the OTE, it doesn't really matter what it is. And so what I do when I'm interviewing sales reps is I actually show them, without showing the names, commission checks from the previous months, what people are actually making. Um, on-targets are largely irrelevant. What actually matters is take-home. And we wanna show that you can, if you think that you will be in the top 70% of people on this team, and of course everybody thinks they will be, The baseline for what you can expect to make is the on-target that we're talking about here. It's very different in a lot of other organizations where, you know, maybe 50% or 30% of the team is hitting their quota. So you actually wanna pay what you sort of have promised to pay. The next one is promote from within. So in addition to compensation, salespeople really care about progressing their careers. And so when you can, you should try to promote your first-line management team from individual contributors that have been really successful. There are two things that I do to determine if I can promote from within. The first one is, I ask myself, would I like reporting to this person? I've made the mistake before where I've promoted people that I actually wouldn't like to report to, and it's been a nightmare. So ask yourself that question. If the answer is yes, that's good signaling. And then the second thing that you can do is you want to promote out of want and not out of need. And what I mean by that is if somebody has really killed it as an individual contributor and you want to put them in a more strategic position within the company because they're going to have a bigger impact, that's really good signaling to promote that person. If you are growing at a rate and you need to promote somebody into a management position, and somebody is the least bad option, that's not gonna work out. And so you may wanna look externally if you're promoting out of need and not out of want. Okay, so the next one is set attainable company revenue targets to develop a culture of winning. So we have been, we launched at Brex about 15 months ago. This month will be our 15th month in a row of just crushing revenue targets. And what that creates is an environment where we have 90% of the reps that are hitting their personal targets. We've never missed a company revenue target, and winning just becomes the expectation. Like, losing is not acceptable within our company. And so that becomes a really positive environment to work in and sort of leads to the last bullet point here that is obsess over employee happiness. People are happier when they're in an environment where they're successful, where the company is successful. And you can create that environment by setting targets that are challenging, but you will hit them. And you wanna solve for this, like, culture of winning, because losing becomes acceptable as soon as it is repeated. So I think just a few recap on the takeaways. The first one is, as Jason said it best, NMBR, nothing matters but recruiting. The one that, it would be sort of the second one that I think is really important is use your personal network. I can't emphasize that enough, because the probability of success with an in-network hire is just exponentially greater than somebody out of network. And then this last one around obsessing over employee happiness. When you create an environment where people can be successful and people want to be in the office, Good things just sort of happen. So it looks like I have 4 minutes left. I did do a slide for Q&A. I don't know if anybody has any questions. We can spend— yeah, there's somebody over in the back. And what guidelines you use to set the targets earlier? Yeah. So the question is, what guidelines do you use to set the targets? So at inception, What you wanna do is you wanna create very conservative revenue targets, because the possible outcomes are you crush that target, which is a good problem to have, or you meet the target and you just sort of continue pacing. What you don't wanna do is set these unrealistically high targets and miss them, because that then becomes ingrained in the culture, where you're missing targets. So I think you wanna be conservative up front, and I mean, the real answer is like, you know, You kind of figure it out like that. Then over time, you set the targets through data. And so you have some historical performance in previous months that you use to set targets. One thing that we, we still today are really setting targets, and this is company-level targets on a quarterly basis. We have an idea of what we wanna do. At the beginning of this year, we kind of knew directionally where we wanted to finish. this year. Same thing is true going into next year, but we're really setting the company-level targets as we go quarter over quarter, um, because we have the most recent data available that we can use to decide what that sort of dynamic of, uh, not easy, but, um, sort of challenging, but something that we're gonna hit. Yeah. Yeah.

Uh, so one question I wanna ask you is, I know at EchoSign you were an AE and then you You came out of college, you moved up and became a director and then a VP. At Brex, what's the percentage of college kids you're hiring for the inside sales and moving them up to be closers, or versus hiring people who've done SaaS sales before, for example?

Yeah, it's a really good question. So just to repeat, it was around— I was fortunate enough to have the opportunity. I started at EchoSign as an SDR and then sort of worked my way up and was in an environment where those opportunities were were given to me to move into more strategic positions. At Brex, how much are we hiring at an early stage and then promoting from within compared to just hiring senior leaders externally? On the, well, so we've only really been around at this point for like 15 or 16 months when we really started scaling the team. We had 2 sales reps 16 months ago. And I think there needs to be some period of time that people remain in roles. For them to really learn the role and be prepared for success in the next level. That period of time at an early stage startup can be as little as 6 months, but more likely it's probably 9 to 12. And so we're just now reaching that milestone where people internally have been in their roles long enough that we are ready to promote them. But going back to the, the concept of hiring is all about mitigating risk, That couldn't be more true when you are promoting somebody that has been successful within your company, selling your product, into a more strategic role, compared to an external hire. And again, talked about, like, there's no better indication of future success than past performance. The top performers that you're creating in this funnel system, their probability of success is just super high. So the top performing SDRs that become AEs, We're now starting to have those. They're going to crush it. All first-line managers within our company right now, and I think there's maybe 6 of them, were promoted from within. And they all passed this sort of test of, would I like working for them, and are we promoting them out of want and not out of need. So, yeah. [Speaker] Thank you.

[Speaker] Yeah.

[Speaker] Apart from the network referrals, what sort of sources or sites or channels that work from a recruiting point of view, like LinkedIn, AngelList, or is it just traditional recruiters? What works? So the question is, outside of using in-network hires, what are other sources of hiring that you've used? I feel really strongly about this. I think it's possible for people to just rely on personal network. And people that apply on the website or sourcing candidates from LinkedIn, that you're just really risking the probability of success there. And so I think if you really prioritize recruiting and force yourself to use your personal network, and if it's not somebody that you have worked directly with before, talk to somebody that you really respect. Talk to a bunch of people that you really respect. Get referrals from them. Just try and stay as close to in-network as you possibly can, 'cause each layer you sort of move out, I think the more risk you insert into the process. So that isn't an answer to the question, because we don't really use anything besides personal networks. So thanks so much for having me. This was a blast. Really appreciate everybody attending, and hope it was good.