The Playbook for Going Upmarket with Stripe's CBO and Checkr's COO

It's not one of those things where you wake up one morning and are like, today I think I'll do enterprise, maybe particularly because a board member suggested you might want a bigger TAM or higher growth rate. That would not be the signal in my view. I think two good signals are one, your existing customer base is pulling you upmarket. So often we're starting, many folks in this room selling into a startup. Those startups mature and start to have more sophisticated requirements. The other one is that you start to get early wins in enterprise that are meaningful. So, we actually had a term at Stripe on that in particular, which was if you go into enterprise, you wanted to get the whale, not the fin. A fin was like our little derogatory term to mean like you didn't really get a legit workload at that company. So, I think a lot of times people will get a side project, an experimental business line, the innovation lab, and think you are in enterprise and you really aren't.

Please welcome Jean DeWitt Grocer, CBO at Stripe, and Lindsay Scrace, COO and former CRO at Checkr. It's good to be here with you all at SaaStr. I love SaaStr. Also so great to be here with you, Jean. We're going to kick it off. We have a lot to talk about. Before that, we're going to dive into introductions. And instead of introducing ourselves, Jean and I are going to introduce each other because we go way back. So a little bit about Jean. She started working on Gmail at Google right after Gmail launched in operations. And then in 2010, Jean moved to Google Enterprise, now known as Google Cloud, to help build out their SMB sales team for APAC as well as the Americas and ran that. Then in— from there she went to Dialpad, which is a SaaS communications platform company. And then from Dialpad she went to Stripe in 2016 where she was very early Stripe. She built out the sales team in the Americas. And just to put that into perspective, there were, what, 10, 10 salespeople when she joined. She scaled it to hundreds and hundreds of sellers, built out many functions from scratch, including SDRs, customer success, solutions engineering, architects. And now Jean is the Chief Business Officer at Stripe, where she runs all technology and financial partnerships as well as corporate strategy. So, Jean, excited to be here with you today.

Awesome. Thank you, Lindsay. Lindsay was the second female to join that group, and one of the things I remember immediately about her is how analytical she was. She's a hardcore operator, and she also really cared deeply about people. So she and I hit it off and basically have tracked each other's careers since then. Prior to Google, Lindsay started at AP Moller Maersk, where she was in a GM track doing all sorts of operating roles around the world. She joined the Google Workplace team where we were part of the leadership team and built out a number of functions there. She ended up running the entirety of Google Cloud for SMB, mid-market, and startups. So across Workplace, Google Cloud, GCP, etc. And then she transitioned over to Chekr 2 years ago as its CRO and within short order expanded that to become its COO. And she runs the bulk of the company's operations these days.

Similarly excited to be up here with you. Yeah, love it. All right, so we're going to kick it off. A lot of startups start focusing and targeting other tech companies. So early adopters of technology, this is the early wedge in how they start growing the company. But then there becomes a moment and like a second chapter of sorts where one needs to pivot into an additional new segment, often upmarket, often enterprise, like the holy grail of moving upmarket to enterprise to unlock a lot of TAM. A lot of value up there. Often people get this timing wrong, more often than not, probably. And it's really important to understand the signal. So let's talk about that. What have you seen in terms of signals of when to move upmarket, when to start tackling enterprise?

Yeah. So first of all, I would say it's not one of those things where you wake up one morning and are like, today I think I'll do enterprise, maybe particularly because a board member suggested you might want a bigger TAM or higher growth rate.

That would not be the signal in my view.

I think two good signals are one, your existing customer base is pulling you upmarket. So often we're starting— many folks in this room selling into a startup. Those startups mature and start to have more sophisticated requirements. The other one is that you start to get early wins in enterprise that are meaningful. So we actually had a term at Stripe on that in particular, which was if you go into enterprise, you wanted to get the whale, not the fin. A fin was like our little derogatory term to me. Like, you didn't really get a legit workload at that company. So, I think a lot of times people will get a side project, an experimental business line, the innovation lab, and think you are in enterprise and you really aren't. So, for Stripe in that first camp, this is back in 2017 that we started our foray into enterprise, and it was the Shopifys, the Lyfts, Squarespaces were all growing up, bringing in adult CFOs, contemplating IPOs. And so they had a bunch of demands. And then on the other side, we won Amazon's, Amazon.com in Singapore. So sure, not the US business, but if you go down in Singapore, I think Bezos is gonna notice. And so those were our signals. And what we did from there was look at all of the requests we were getting from these startups that were moving up market and try to understand the degree to which we thought those were generalizable to larger businesses and in general. And then similarly went really deep on the Amazon-like wins. Why did we actually win? Why did they buy us? And like truly wrote that down. The other thing that we did that I think is key is you have to understand what is your ideal customer profile today? Where do you just win constantly and why? And then with those three things, we were basically able to do like human heuristic lookalike modeling, not a fancy data science model, but just, okay, given those qualities, what's another sort of like set of the market that's bigger than those but looks almost exactly like where we've already won? And as a result, we're able to have a really focused enterprise strategy rather than scattershot of let's contact everyone and see who bites and creating a lot of roadmap schizophrenia for your eng team.

Absolutely. Yeah, and I love that point on the signal of your early customers pulling you up, seeing as they grow, you need to be able to get there with them. At Checkr, our first customer was DoorDash over 10 years ago, a smaller company than it is now, like a $10 billion run rate. And as they grow, as Lyft grew, we had the entire gig economy. As these players grew, we had to develop enterprise strategies for them. But then also there's a somewhat separate playbook for traditional enterprises. And really thinking about those two is both enterprise, but different tactics often, or different product strategies.

We've talked a little bit about signals, but just because you're getting signals doesn't mean you're actually going to do it well. There's definitely a graveyard of companies that have tried to move upmarket. So what are some of the things that have made Checkr more successful in your push into enterprise?

Yeah. So I would say the very first thing is that you can't dip your toe in, like a pilot enterprise. And Checkr years ago did this wrong. So there were all the signals Gina was mentioning there. Our customers are pulling us up, a lot of demand and interest, even like closing some early, kind of more innovative enterprise logos. And the team at the time before I was there built a go-to-market sales engine for enterprise. Got a lot of traction talking to customers, demand pipeline. But then as they were solutioning the deals, realized we have some really major gaps in what we need to deliver. And the product roadmap was not set up. There was not product capacity, engineering capacity to figure out how to build and be agile, to be able to do, to deliver what was needed. And so at that time I said, we got to pause on this. We get, we have a ton of other priorities, doing too many things. Let's retrench, go outside of enterprise and very successful, great momentum. And then now we have recommitted and as a leadership team or C-suite, we sat down and said we're going to lock arms, we're going after this in a meaningful way. And it's not just go-to-market. It is our product team, our engineering team are going to have dedicated people, dedicated capacity on the roadmap. And it's been incredibly successful in that way. I think the second thing I would say is, to your point earlier, you really have to focus. You can't spray and pray. You got to figure out what are your ICPs, your verticals where you win. And this can be gleaned through like the heuristic models you mentioned. You can look at downmarket, like the segment right below. Look at your win rate by industry. Look at your funnel conversion math by industry and see, hey, where are you winning and why are you winning? Where is there that strong product-market fit? So for Chekr, it was staffing, retail, manufacturing, hospitality, high-volume hiring industries where we could add a ton of value and make very strong differentiation and product-market fit. And then within those verticals, you got to be all over it. So attending industry conferences, not just tech conferences like retail, manufacturing, go where they go and you may have to manufacture some early logo wins, whether it's doing unnatural acts on pricing that aren't necessarily sustainable over the long haul. And make sure your sales teams are not trading away logo rights. You have to get those logos to be able to have them as referenceable customers. And often it takes one big lighthouse logo in an industry and then the dominoes start to fall and you start to be, to be able to go further. So that's the focus. And then the third thing is I'd say customer obsession, but with discernment. And so by that, often in tech, and we saw this at Google, there's this perception that our technology is just amazing. It's going to transform. Everyone should stop the way they're doing things and do things this way. I remember, I don't know if you remember this, it took like an act of Congress to get product to build page numbers into the G Suite portfolio. For years, no, we don't need page numbers. And we just think people don't use those anymore. I think that there was an evolution in learning. No, we have to really learn and understand what are core needs. And the discernment part I mentioned is as we're going into enterprise and seeing success at Checkr, we, every deal we list, what are product blockers that are like product gaps that are deal blockers and what are product gaps that are simply nice to haves for the customers but not blockers? And if you can't get those two columns it's going to be really hard because either you're going to underdevelop and invest or you're going to build every single thing for one customer and like completely bend your product roadmap. So that nuance is really important.

I wanted to reinforce the first point you made because it was key for us at Stripe and something I see a lot of companies get wrong, which is the decision to move upmarket is not a go-to-market decision. It's a company decision. So for us at Stripe, when we started having those early wins and saying, okay, I think it's time, I literally sat down with Patrick, our co-founder, and was like, all right, are we doing this? And we established a couple things. One was a lighthouse account list. It was 30 names that we all agreed to. These ones are gonna be worth winning and worth doing what it takes to win so that you didn't have a scenario where sales went out and talked to a company and got them interested, but we actually weren't gonna be willing to do the work. The second was we established a lighthouse engineering team. It was small, talking like 5 people, but 5 people who had been at the company for a long time, knew how to get things done and were really well respected. And I brought them into every single sales call that we had so that they could develop empathy for enterprise needs and it not just be, oh, sales isn't good at objection handling.

Excuse me.

So, I really think that sort of like this is a top-down company push has to be true in order to be able to cross the chasm into the second, into that segment at the companies. The second I would reinforce is you're going to need different functions in go-to-market. And so, for us, when Stripe was selling into developers, believe it or not, when I showed up to run the sales team, we didn't have a single sales engineer or solution architect, and I was shocked. I was like, how is this possible? We sell an API, you need technical resources. And then you figure out Stripe had world-class documentation. Our prospects were, were our own solution engineers. We didn't need it. But as we moved into enterprise, you're ripping something out typically, and there's a lot more risk associated with that. So, we had to really layer in solution architects from a presale perspective, and then your integration engineers to actually do that migration and get things live. But I also wanna reinforce there, you need to know what are the roles you need. I feel like people move into enterprise and you immediately say, okay, I need a 1-to-1 SCR to AE ratio, I need a CSM, I need a TAM, I need a— it's 10 TLA of roles, right? So thinking through which ones are right for you. And then lastly is you gotta have an aligned business plan for this. It's not going to print money overnight. So we put together a board-level plan with an operating model associated with it. We were clear about the payback period. We were clear about leading indicators of how we would know that we were tracking towards that outcome and could course correct accordingly. But another one that people really struggle with is this is a multi-year endeavor before you actually create an enterprise flywheel.

Love what you said on the alignment and having engineers like on— we have a certain engineers and product folks who are on every single call. Joint at the hip and then the solutioning and solutions engineering, solutions architects that is so critical before you close and sign a deal to ensure it's solutioned appropriately. And it's so easy to sign on the line and then down the line no one's happy if that's not working well. So I completely echo that. So, Jean, you talked about new roles, adjusting the go-to-market. Let's talk about pricing and packaging and how we've talked about this, how that evolves as you go upmarket into enterprise. What are you seeing at Stripe? What are you doing differently?

Yeah, this is a big one for us. So Stripe was always known for $2.9K and $30K, right? Super simple pricing for SMBs. Turns out enterprises don't love that. A lot of us, I think, start with simple pricing models, consumption-based, pay-as-you-go. A lot of founders love the purity of that, of I'm going to earn your business every single day. Enterprises like predictability. They also like a lot more modularity. They like more à la carte. And so we really had to do a lot to unbundle our pricing for enterprise, let them buy more subcomponents, and in some cases price fundamentally differently. That being said, we also then had to think through enterprises want to buy solutions. And so how do you then repackage some of those things into new bundles or solutions that you can sell from an enterprise perspective? So That's been a major journey for us as well.

You really have to think about how is this buyer buying today and map out and be able to at least translate your pricing into how they're doing it. And as you're thinking about commits upmarket with enterprises, it's really critical as well to make sure your sales teams are incented and comped according to that customer being successful. There can be a nuance there as well.

Gone are the days of growth at all costs. So let's talk about how to actually do this efficiently.

Yeah.

What are some of the things you guys are focused on?

Yeah, the free money days, as you all know, are, are somewhat behind us. And you see this playing out just as context. If you look at SaaS companies, the amount that they're spending on sales and marketing as a percentage of revenue, this was as high as over 50, 55% in 2019, the peak of spend, free money, investment, growth at all costs. That's down to 30% in 2024 just because it's not sustainable and investors won't tolerate that level of lack of return. Also, if you think about payback period, if you look at top quartile SaaS companies versus bottom quartile, top quartile have 3x shorter payback period than the bottom quartile and 7x higher valuation. This is really important now. And some of the things we're thinking about, or like how I think about managing this, first of all, is really getting crisp and clear on what are the metrics you're going to be looking at. And getting alignment across the entire company— CEO, CFO, sales organization— on those. For us, it's payback period, gross margin adjusted payback period, which takes into account all the costs, the cost of acquiring a customer. When are you getting that back, net of all costs to deliver the product? And then second is LTV CAC. That can be inflated because you can build out, blow up your LTV calculations, very sensitive on assumptions. The payback period for us is the key. And then we've gone in and looked at that. What are our expectations per channel, per segment? And to Jean's point earlier, for enterprise, that's going to be longer and really getting alignment upfront on what are the early signs of success you need to see and how do you build that over time? You need to be watching it closely. And then what we've done is break down for every segment, for every channel, giving visibility to my go-to-market teams. So sales, marketing, solutions engineering, customer success, operations. We break down for, let's say, SME channel partners or SM mid-market sales. What is the cost breakdown? How much of that is, is SE? How much of that is sales, CSM? And so they're feeling the tension. And before asking for another headcount or asking for another overlay resource, they're managing it themselves and acting like an owner. And we've gotten really creative to say, hey, maybe we can scale more instead of this ratio. We can expand the ratios to be more efficient and more scalable. And then holding people accountable. We look at this in every single revenue call I do, every forecast call. We're seeing the metrics if we're managing to them, which is critical to be able to allocate resources and make decisions.

So I think the, the number one thing to get right is an operating model. So often you start with your top-down, we'd like $10 million in ARR from the sales team or from this segment or whatever. Not enough folks are building very granular bottom-up versions of what actually needs to be true to hit get that. This is, it's just funnel math. We all know it. How many leads do you need? What's the conversion rate gonna be? What's the average opportunity size? What's your win rate? How long does revenue take to ramp, right? If you're in a consumption business, it's actually a, a long funnel, but you've gotta build that and you've gotta, to Lindsay's point, build it per segment. The key to this actually is it gives you a diagnostic either when things are going well or poorly. Particularly as you move upmarket, you, you're gonna have to make some assumptions. When we moved into enterprise, we were able to look at that segment below enterprise, what, what was our historical performance? And then we also looked at external market data of like, on average, what do you see in enterprise? And for year 1, we just had to make some reasonable assumptions. But then when we were deviating, and we definitely did, we knew exactly where. In Stripe's case, actually, it turned out that we were doing a lot more deals, but they were smaller and higher velocity in enterprise. In year 1. And so if you don't do that, then you don't know when, where to correct and where to potentially double down if things are going well. So that's, that's my number one thing is like massive spreadsheet, well understood again across CRO, CFO, CEO, and something that you're reviewing on a very regular basis. Exactly.

Like tracking that. And the other piece on efficient growth that, that I think is important to underscore as well is you want your teams and you want the math to be looking at both costs and conversion throughout the funnel, and then also maximizing the ACV of every deal. And at Google, we were religious about looking at average revenue per user, ARPU, for every single customer we signed up for G Suite or GCP. How are we layering on add-ons over time? Because that also can help if you're seeing, hey, the, the LTV CAC or the payback is not working. It could be you got to get your costs really tight in your belt, or it could be, hey, let's think about what are we layering on in the lifecycle of the customer, either at point of sale or through upsell down the line. And then, and then that kind of layering on is really important as you think about your model, your operating model, and then how to scale.

Yeah, the same has been really true for Stripe. So our enterprise customers on average buy at least 2 products for Stripe. So key for us to get efficiency has actually been the growth of our revenue and financial automation product. So Stripe Billing, Stripe Tax, RevRec. Et cetera, those layer in really well and drive up ACVs, as Lindsay's mentioned. Lindsay, I think you and I are two very action-oriented people, so I thought we might leave the audience with two things that you can leave here and maybe do differently. So for you, what would be that one?

It's really understanding the unit economics and the math of your sales team, making sure that you are not underinvesting or overinvesting and that you're getting that equation right and that you're tracking it, benchmarking it, and holding the team accountable to act as owners to drive results.

And as another sort of modern CRO, I am going to double down on math and reinforce the operating model. A lot of you are probably in planning periods right now. If you do not have a 100-line-item bottoms-up spreadsheet supporting your top-down revenue model, I think you will be less effective in 2025 than you would be otherwise. So strongly encourage that one.

100%.

Thank you everyone for coming.

Great to see standing room only and have a lovely day at SaaStr. Thank you.