Founder-led sales | Pete Kazanjy (Founding Sales, Atrium)

The thing that I just like to encourage founders and product managers, what have you, is just don't be afraid of sales. There's a lot of people out there who would love to tell you a story that it's magical or like, oh, you gotta be a born seller, things like that. And it's really not, right? Those people are just talking their book, if you will. And so just getting good at those behaviors is gonna benefit you in a myriad of ways.

Welcome to Lenny's podcast. I'm Lenny, and my goal here is to help you get better at the craft of building and growing Today, my guest is Pete Kazanjy. Pete is the author of my single favorite book on sales called Founding Sales, which I point every B2B founder to. He also runs a huge community of salespeople called Modern Sales Pros. He's also the CEO and founder of Atrium, which is a SaaS product that helps you make your sales team more efficient through analytics and data. In our conversation, we focus on three things. One, why founders should be doing sales themselves for a long time before hiring your first salesperson, and also when it's time to hire that first salesperson, we get into how to hire for your first salesperson, what to look for in their profile, and the most common mistakes people make. And finally, we cover a bunch of tactical tips for getting better at sales. Pete didn't come from a sales background, and he learned everything by just doing it, learning, researching, and repeating. I know that you'll learn a ton from this conversation. With that, I bring you Pete Kazanjy. This episode is brought to you by Vanta. helping you streamline your security compliance to accelerate growth. If your business stores any data in the cloud, then you've likely been asked or you're gonna be asked about your SOC 2 compliance. SOC 2 is a way to prove your company's taking proper security measures to protect customer data and builds trust with customers and partners, especially those with serious security requirements. Also, if you wanna sell to the enterprise, proving security is essential. SOC 2 can either open the door for bigger and better deals, or it can put your business on hold. If you don't have a SOC 2, there's a good chance you won't even get a seat at the table. But getting a SOC to your port can be a huge burden, especially for startups. It's time consuming, tedious, and expensive. Enter Vanta. Over 3,000 fast-growing companies use Vanta to automate up to 90% of the work involved with SOC 2. Vanta can get you ready for security audits in weeks instead of months, less than a third of the time that it usually takes. For a limited time, Lenny's podcast listeners get $1,000 off Vanta. Just go to vanta.com/lenny. That's V-A-N-T-A.com/lenny to learn more and to claim your discount. Get started today. Hey, Ashley, head of marketing at Flatfile. How many B2B SaaS companies would you estimate need to import CSV files from their customers?

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If you'd like to learn more or get started, check out Flat File and flatfile.com/lenny. Pete, welcome to the podcast.

Hey, Lenny, super awesome to see you.

Even more awesome on my part. Ever since I launched this podcast, I have always wanted to have you on it. We're finally here. We've been online buddies for a few years now. Ever since I discovered your book on founding sales, which we're gonna talk about. And it's just been a lot of fun knowing you. So thank you again for being here.

The quick story was Lenny had shipped his different genres of marketplaces and how to like start the liquidity and growth and whatever. And I was obsessed with it. And then somehow I ran into you at Breanne Kimmel's SaaS school. And I was like, after I gave a presentation on Founder Led Selling, and there was like a scrum of people around me, and I was talking about like amazing writers and amazing content online, and I referenced the series. And then you raised your hand, you're like, that was me. And I was like, what? You're amazing. And then we got beers and like.

You know, and now happily ever after. Look at us now. And then you encouraged me to make a book out of that post, which I had not yet done. maybe one day, eventually.

Eventually.

So we're gonna be talking a lot about sales and a lot of the stuff that you cover in your book. Before we get into it, could you just take a minute to share a little bit about your background and some of the wonderful things you've done to kind of give folks a sense of.

Your experience in the sales world? I think probably the most important thing to characterize for folks is that I don't actually have a background in sales, like originally, which is where most sales leaders and, and sellers come from. You know, they, they graduate from school or BDR, become an AE, AE manager or BDR manager, and then go on to sales leadership. My background is actually in product and product management. I started my tech career at VMware back in the day, tons of amazing, fun VMware diaspora. And then I started a software company called TalentBin. It was a recruiting software company in, geez Louise, 2009. And just we quickly realized that man, this B2B software stuff doesn't sell itself. Irrespective of maybe what people say on the internet, at least back then. And so I had to be our first seller, our first sales manager, our first sales leader. And that's where I learn how to do sales and also just kind of like realize like, man, this isn't this isn't rocket surgery. Like anyone can learn this, like if I can learn this, like other people can learn this, even though there's like not documentation on it. And so the software company was eventually acquired by Monster Worldwide in 2014. And then I wrote I wrote a book on on sales for founders and other kind of first time sellers called founding sales mainly was like the book that I wish I had.

Right.

So rather than like, you know, having to learn by a narrative from, you know, the rest of the first round capital portfolio and what have you. And then subsequent to that, I started the, what became the nation's largest sales operations leadership community. It's called Modern Sales Pros. It's 30,000 sales operations, sales leaders, et cetera, and then started a new software company called Atrium that makes data-driven sales management software. And then here I am. So I think a little bit about sales turns out modern sales, right?

Not that old sales, modern sales. Oh, I'm curious to hear what that is, but before I ask you that question, I just wanted to mention the book, your book, Founding Sales, is like the book I give every founder that is trying to figure out sales. And every time I give it to them or point them to your even your site that has all for free, they're always just like, holy shit, this is exactly what I needed. So we're gonna be covering a lot of that stuff in our little chat. Rad. Can you actually just briefly talk about what is modern sales versus what you.

Called traditional sales or old sales? Oh, I just think that like, you know, there's a little bit of like a mindset change. It's kind of, it's a little bit related to, some of the reasons why founders and kind of other folks maybe have like this perception of sales to be like, eww, sales, eww. And it's because like people are like, you know, their only experience with sales is like Glengarry Glen Ross or like, you know, movies with sleazy card salesmen and stuff like that. Whereas the way to kind of think about like what sellers are is they're kind of like the microeconomic agents in the market that bring supply to demand rather than waiting for demand to find supply. Like they have supply in their back pocket and they run around trying to find people who ought to have the demand, maybe they have right now, maybe they don't realize that they have the demand and then they elucidate to them why they ought to have the demand. So like A, that process is very important from a technology deployment standpoint and also B, it's very measurable, especially in a modern environment where like, you know, with modern CRMs and also kind of like all the digital activity that we do, email, calendar, phone, Zoom, et cetera, like all this information is now being recorded such that you can then like measure, manage and improve behavior. So very similar to how like back in the day you do product analytics by licking your fingers and sticking in the wind. And then mix panels showed up, then amplitude showed up, then so on and so forth. And the same is kind of the case in sales as well. And so modern sales is a more thoughtful, operational, rigorous, analytical kind of bent. It's been around for a while. It's kind of like one of those things like the future is here. It's just wasn't widely distributed, but now it's like, much more distributed and much more embraced. Kind of like the pre-money ball moment in sports and baseball to kind of the post-money ball moment, we're now kind of like just flipping over there. So that's kind of the delta.

Awesome. I definitely want to talk about ways to get better at sales and things you've learned about just how to improve at sales, but to set a little bit foundation for that conversation, I want to talk about founder led sales. You touched on this topic. Your book is basically named after this concept of founder led sales. Can you talk about what that is, why it's so important and maybe why founders often get this wrong?

The way that I kind of think about founding sales, the book founding sales, it's kind of like the, I like to think of it as like the sequel to Eric Reese's, like the lean startup or like Steve Blank's four steps to the epiphany or like startup owner's manual or whatever. where if you think about the stages of, you know, that like, and this is all B2B, right? If you think about the stages that a product goes through, it's one, you got to like know what problem you're solving, right? And validate that. And it's got to be real. You can't be like, oh, I thought I had this problem. Got to be validated. And that's like customer development. That's customer research, right? And that's more of like a product management function. And then there's, you know, building the minimum feature set in order to prove that, like, maybe technology can fit to this, this problem and, like, solve it. Like, and that's how, like, we create to create value as technologists is like piecing together, you know, technology and code or, like, bits and atoms and what have you in order to solve a problem that people have. But then the next step is like, okay, cool. Now I got to get someone to pay for this, and I got to do that in a reliable fashion, and I got to do it in a scalable fashion. And so, like, there's kind of, like, a little bit of a loop there.

Right?

It's not like, all right, the product's done. Throw it over the wall. Have fun, kids. It's more like a, it's a loop, right? Where like the minimum, like the minimum viable version of your product is probably going to suck, right? And then in order to get to the minimum valuable step, like you got to be interfacing with a lot of customers with a lot of, you know, and that's, and that's like, that's a sales behavior, right? Like get in front of people and be like, Hey, I think you probably have this problem if you look like these other folks right here. And the point is, is that like you can't outsource that behavior. Right? The founder's got to do that stuff. And a lot of people kind of ask me that questions like, well, I suck at sales or like, I'm afraid to talk to people or, you know, like interfacing with non-friendly parties is like, makes me uncomfortable. And the way to kind of think about it is like, it's, I forget who the person was who said, startups versus incumbents is a race between, like, can innovation get to distribution before distribution can get to innovation? And so this is kind of related concept where as a founder, It's going to be way easier for you to get good or like minimally viable good at selling by having like interactions with like non-friendly parties and like, you know, having commercial conversations and asking for money in exchange for their in exchange for the value delivered. It's going to be easier for you to do that than it is for some third party to become as expert at the subject matter that you're tackling that you are. Because as a founder early on, like use Atrium as an example. We make data driven sales management software. which it exists to help sales managers and teams use metrics and data to improve the performance of their reps. I mean, the way to kind of think about it is kind of like amplitude-y, kind of data doggy amplitude-y, but like for your sales reps, I'm probably the expert in sales analytics in the world, right? And so like back in 2016 and 2017 when we were doing this, if I had like, you know, put aside the fact that like, I already know how to do minimum viable selling. If I try to get somebody else expert at that in order for them to go out and do that in the market, like that would have been not good, right? And then this is why Steve Blank always talks about like startups can't get through, can't get to scale without firing their first VP of sales. It's oftentimes because they skip that step. And so the founder is like, Hey man, I'm gonna like pour a little bit of sales on this, hire some, you know, sales leader or whatever, some sort of seller and outsource this. And you really just can't do that. not for the first couple dozen customers. It's just not tenable. You lose that feedback loop, you lose the learnings of whether or not your message fits the market, all that sort of stuff. You're playing a game of telephone with that, with a third party seller versus you. And you just want to keep that in one brain to start, then package it. And then when you have a repeatable while loop, like a selling while loop, then package it. and hand it to someone else. So that's kind of like my diatribe on like why founders have to do this.

I was gonna try to summarize the reasons that you should be doing this and it sounds like there's so many. One is figure out what you should actually be building. That's the reason founders should be selling. Two is learn how to position and pitch and sell. Three is figure out what you could teach your salesperson when you hire them. Is that kind of the summary of why you should be selling as a.

Founder for a while? Yeah, for sure. I mean like one, it's gonna help you with your product development because you're not gonna have that abstracted. for sure. Two, it's going to help, like you're going to be the person who's going to figure out how to talk about it in an effective way. And then three, it's going to make it such that you can package that up such that other human, because like that's the way that B2B startups scale is like, it's not like WhatsApp or, or like, you know, Twitter or like, Airbnb or whatever, where you have like this kind of like scalability via marketing. The way that B2B organizations scale primarily is by adding more sales people. who then have customer facing meetings with prospects. And then you cap out with like the number of meeting, the number of hours that are in the week, like there's only 40 or 50 hours in the week, especially like as a seller, because you interface with other people during business hours. And so the way that you scale up is by just adding more salespeople, right? And so that's why packaging that up is really important because then you're gonna shove it into the brains of, you know, two more salespeople. And then once they're successful, you're gonna go to four. And then once they're successful, you're gonna go to eight.

And then once they're successful, you're gonna go to 16. You talk about this while loop concept, which I love. What are signs that it's time to hire your first salesperson? It's kind of like begs the question, when do I do this?

Yeah, I'm not a software engineer, but like, I like to use technical metaphors with technical audiences when I'm, because I think it's like helpful. And so it's kind of like when it runs on your local, right? Now it's time to like see if it reproduces over here, right? So if it reliably runs on your local and it doesn't like error out, Right. And so then what would the definition of like not erroring out look like? And so generally speaking, it's like, it kind of is contingent on your sales motion, but it's gonna be like, you know that you can reliably at a pretty okay win rate, so like maybe 15% or 20% or 25% turn first meetings into eventual customers, right? And like do that in a reliable fashion. It's not like, you know, I engage 10 arm's length parties and I got two customers close. It's like, hey, that's great. That's a good start. Do that five, like 5x that, 10x that. Right? So, you know, take 50 at bats, take 100 at bats. And now that you know that you reliably for every, you know, for every cohort of 10 first meetings, that what's known in, in sales land is opportunities for every cohort of, of 10 that you engage. are you closing, you know, are you closing one? Are you closing 1.5? Are you closing two? Are you closing 2.5? If you're in there, but if you're at like, yeah, for every 30 I interact with, I close one. Well, it seems like that's probably like pretty inefficient unless, you know, you're selling $500,000 deals or something like that. So it's, it's at the point where you like, you have the, like, it feels like it's statistically significant. It feels like it's repeatable because what you're going to then do is like now it feels like it's a bet to try to abstract that out to somebody else. Because the only way we're going to get to success is like we're not going to have Lenny go and like sell from morning, noon to night, right? What we're going to do is we're going to take the information out of Lenny's brain and we're going to put it in the slides and we're going to put it in the scripts and we're going to put it into email templates and all that sort of stuff. And then we're going to shove that into the brain of two more reps and see if we now we can get it to like run in the cloud, right? In the sales cloud here. And then to start out, like you may, it may fail, like the same way. You're like, all right, cool. Like it runs on my local. Uh-oh, it breaks over here. Okay, why? Right? And then that's like the sec, the next stage is now you're figuring out how to get those other folks to sell as successfully as you have. And that becomes like the next job. And this is a, actually, this is the presentation I gave at Brianne's SAS school. was there's, if you Google it, it's just called like founder-led selling. It's like available online. It's essentially there's like a bunch of stages in the B2B maturity journey and like you have to go through them in order to get to the next one. If you jump stages, like you're kind of hosed. And so in this case, like if you know that you can reliably sell this yourself, that's great. Then the next thing to do is get, you know, at least a couple people reliably selling as well as you. Not 10, because you're never going to get too successful if you're trying to onboard 10 concurrently. And then if you get those two successful, now you've earned the right to go to four, eight, et cetera.

I love this heuristic that you shared that you want to get to about 15 to 25% of contacts closing to a customer. Yeah, I see you shaking your thumb. I think that's a really useful. So it's like a third, a bit less than a third, and doing like 50 to 100 attempts. Bats is roughly where you want to go.

And importantly, what you don't want to do is, and I think probably a lot of the product managers who like to listen to Lenny's podcast here might appreciate this, is like, you want to bring on cohorts of users and then kind of like see what's going on, then learn, and then bring on new cohorts of users, right? So going and doing a hundred at bats and then being like, okay, did it work or not versus like, Hey, let's have 10 for prospect and try to get 10 first meetings. have all those interactions, see how your conversations land, see how the discovery questions are evoking the right response or not the right response, see how your slides land, see how your demo lands, all that sort of stuff. If it's working well and you're getting to the next stage, yeah, this is great. I would love to introduce you to my boss. Ah, that's a good sign. This is like, yeah, I'm just not getting it. All right, cool. Back to the drawing board, right? Versus doing like 100, like 100 all at once and been like, all right, now Did it work?

Right?

We want to like break it up and then like constantly just be iterating, iterating, iterating. And like again, for your, I think your audience might appreciate this, the way to kind of think of a sales motion. So sales motion is like a fancy pants way of describing just like all the things that you do in order to take a prospect and like, you know, bring them through the sales process and then eventually close them. And one helpful way to think about it is kind of like software, right? And like what you want to be doing is like constantly updating it. Like, oh, that was a really interesting question that, that the prospect asked right there. I didn't have a good answer for it. And moreover, I didn't have a slide for it. You know what I should do? I should make a slide that handles that objection, right? So that, so I can show it to them visually. And also it'll help, it'll help give me a guardrails and a talk track and that'll be nice. So I'm going to do that. I'm going to like, and then I'm going to update the, I'm going to update the source code, right? And like now my sales motion has been updated.

Right.

And then the next loop through, ideally, the next time that person says like, oh, I don't know, Lenny, it doesn't really sound like, you know, XYZ. You're like, oh, you know, a lot of people say that, but here, if you, if you look over here, you can see this. Oh, yeah, that's a really good point. Wonderful. So as the next step, let's go ahead and talk to your boss, right? And so like now your sales motion has been updated and the collateral has been updated. And now we're like, we're being more effective sellers and you're just going to do that. So it dozens and dozens and dozens and dozens and dozens and dozens of time before you're like, you have a.

A repeatable sales motion. What's interesting is with this heuristic, like two thirds of the time, it's not gonna work out. And so a lot of times they're gonna be like, yeah, I don't get this. Leave me alone. Is there other leading indicators that tell you you're improving knowing that like only a third or maybe a fifth of.

The time it'll work out? Is it like talking to the boss off more often? What else do you look for? Yeah, yeah, exactly. Totally. It's right. So like what are the leading indicators of success? Because if you're only looking at like lagging indicators, So again, it's probably like a funnel on a new feature, right? So the opportunity is like an at-bat, right? Or a potential transaction. And so usually what you do is you model out the stages in your opportunity. And so generally, like there will be kind of different stages depending on the sales motion. So like use Atrium as an example. We sell on customer data. It takes like five minutes to turn on an Atrium account. It's really, really helpful for folks. They just sign in, they Oauth with Salesforce, great. So a really important part, like staged in our sales motion is, did we, we call it data light, right? Has data been lit up? And so that's a stage, right? We have a discovery stage, we have a data light stage, we have like a, what we call a preview stage, like are we previewing it with the staff? Then we get to a commercial discussion. And so you can measure how you're getting to those stages, which is kind of like, you know, somebody lands on like whatever page that Lenny was in charge of at Airbnb and like, did they click on the right thing? And do they get to the next thing and they get to the next thing and the next thing? And so in sales, it's kind of the same thing. And so the more sophisticated version of this is looking at stage conversions, what have you, the less sophisticated version of it, which early on I think is an appropriate way of doing it is like, Hey man, are we getting second dates? Right? So like just Just, you know, just metaphorize it to hinge or coffee meets bagel or whatever the more recent one is. It's like, all right, are we getting the second dates? Are we getting the third dates? Because if we're not getting the second dates, probably something's amiss there. And so what we want to do is we want to say, great, of all of our 10 first meetings, how many get to second meetings? It would be great. The lagging indicator is two wins out of 10 or what have you. I'm going to come into these conversations and I want out of my 10 first meetings, like I want seven of them to get to a second meeting. Right? And then I want of those seven, maybe I want like, you know, I want 4.5 of them to get to, to get to the third meeting. And then ultimately I want like two or three to, to win. And that's the way to kind of think about that. Like those are the leading indicators. And so like as those conversions get better, like, man, I'm not getting any second dates. Oh, okay, cool. You need a haircut.

Right?

Or need the shower. Right? And the same applies to your, to your sales motion as well. Like your message is not landing.

Right?

You're targeting the wrong people. Why? Like what's going on here?

You need to, you know, you need.

To think about it. You need a better pickup line. There you go.

Right?

Now you're not even getting first dates, man. You're just like, man, like, yeah, go all the way up to, like, you need a better hinge profile picture.

Right? You're just like, not getting any matches. Ooh. As a founder, Do you have to get good at sales? You know, a lot of founders are like, oh my God, we're gonna do PLG, we're gonna be self-serve freemium, we don't need sales. I'm just gonna let people figure it out. Like, is that a requirement of a.

B2B business to get good at sales as a founder? I would say you don't have to get good at it. You just have to get non-zero at it. Right? There's this really great article on Lenny's newsletter on adding a sales organization to a self-serve product that Lenny had me write, and then, he edited the heck out of it. And it's really a fantastic asset. But what I would say there is that there are a lot of PLG or self-serve motions out there that have really kind of like, they stagnated themselves because they didn't add the sales piece to it. And I would encourage people to read that article. I forget what it's called. You added a really cool name.

Oh, the transition layering on sales to product-led growth. Yeah.

See, you have a, You're good at naming things, right?

I was inspired by David Sachs' the Cadence, which I love for how to operate.

There you go. Yeah, that is a great article. So it's not that you have to be great, you just have to recognize that it's important. And so like a good example of this would be probably like the most famous example of an organization that like maybe didn't get sales religion as quickly as they should have would be Dropbox. And Dropbox has phenomenal early sales leadership. So like, One of our investors here at Atrium is a gentleman named Mike Marg. He's a partner at Craft Ventures. He was an early sales manager and leader there. Kyle Parrish was the head of sales at Figma. Marissa Furr is over at Figma as well. There's all these just like absolutely fantastic Dropbox folks. But the problem was, is that like the organization from a product standpoint never kind of like put all their calorie as many calories behind product development that would like support the ability to sell to you across an entire organization. And so the way that I kind of like try to succinctly describe that is like never mistake your lead gen for your business. And I think the good news is, is that like a lot, like a lot of people took a lot of lumps there and folks have learned that, like maybe Slack almost like missed that. But then they brought in a bunch of like Salesforce, Salesforce folks and other folks. Actually Mike Mark was also an early sales manager at Slack as well. And like really got religion around that because it turns out that that people paying 19 bucks a month or 29 bucks a month or what have you is really great. But getting to a 50,000 or 100,000 or 250,000 dollar contract, that's where big ARR numbers start racking up. And organizations want to talk to a human in order to navigate that. So PLG is great for landing and permeating an organization. There's a bunch of great craft investing that's crazy. Scratchpad is a great example of like very bottoms up. I mean, Atrium is pretty bottoms up as well. It's like, what is the Robin, what is the Silicon Valley joke, middle out or whatever? Because we land with like sales managers and SDR managers, but it's still like what you're doing is you're solving the problem that the user has. But the problem is like the user doesn't necessarily have like large budgetary authority. So you can get them stoked up, but then you got to talk to the person who's got the perf strings. And so that's going to require sales. That's okay.

And just to punctuate that, basically 100% of B2B companies end up building a sales team, right?

I would say that's the case. I mean, it's more of a question of when versus if. So even the really famous ones like Atlassian, right? And Atlassian, they had a sales organization. They just didn't call it sales organization. And they went pretty pretty far without a lot. But instead what they did was they just like priced the product like breathtakingly low. And I think developer tools can oftentimes do this where because like developers are like pretty technical, they can adopt products. They don't need like hand holding in order to adopt like a product that is like complicated enough to be valuable. Like Datadog's good example or New Relic or Appt. But even those guys, like, you know, very early on had, had meaningful sales organizations. And one of the reasons why Datadog really, I mean, there's a lot of reasons why Datadog ended up winning that market, but their sales organization is no joke, right? So even developer tools, you might think, okay, cool. Well, developers can just swipe their credit cards. Yeah, they can, but then you're going to be eventually capped there. I mean, look at Snowflake. Snowflake has, I don't know, 500 salespeople.

You're going to need a sales org. Let's shift a bit to talking about just how to get better at sales, at the skill of sales. And I think it's interesting because you don't have a sales background and so you've had to learn how to do this and you did a lot of research and building your business, you've had to get really good at sales. So maybe a first question, what's like the number one tip that you have for getting better at sales?

The first chapter of Founding Sales talks about what I, what I call sales mindset changes. because I think the big thing is it's just so weird, right? It's just like such a weird shift in behavior. Because if you think about as a product manager or as a sale, like as an engineer or whatever, like how many people do you interact with day to day? Six, 10, maybe.

Not too many, right?

And it's always the same people, right? And so it's like super comfortable, whereas in sales or anything customer facing, what ends up happening is like you're meeting multiple new humans. every day if you're doing it right. And that just is like such a mindset shift. Like you're not going to be able to remember everybody. You're gonna have to write it all down. You're gonna have to use the CRM for that. You're kind of like in the starting blocks, like, you know, on the track, like you're in the starting blocks and like you have 90 seconds or like a couple minutes to like form report or make to make somebody feel like they should trust you and they want to be honest with you, right? You have to be very focused on activity orientation. Whereas like engineering and product manager, there's a lot of like super deep work. It's kind of like Paul Graham's like maker versus manager schedule. Sales people have manager schedules, interestingly enough, where what you're doing is you're constantly context switching, right? Like an ideal salesperson's calendar or a founder who's doing sales is like two, three, four, maybe five customer facing meetings a day with different humans. And then moreover, you're like, Then you're having incremental interactions with those folks later on, like later that week or the next week or what have you. So then you have to keep continuity of these multiple parallel conversations, right? So it's like, it's a totally different set of skills. And so it feels super weird to start out, but what ends up happening is it's just a skill. And so you just start doing, you start doing, you start doing it, and you just kind of become used to it. You become calloused, right? It's like, I'm in college, now, like you put me in an elevator, I can talk to anyone, right? And one of the things that, so like one, just recognizing it's going to be a pretty big mindset change. And then the second thing you can do is then once you know that there's going to be a mindset change, you can focus in on making those behaviors be better. So as an example, one of the things I challenge my staff to do is I call it Turbo Rapport. It means a better name, but like think about people that you interact with in the world who maybe are like a little shields up, Right? Like they're probably used to interacting with people who are like not going to be super nice to them. Like maybe it's bartenders or a flight attendant or like barista or fill in the blank, right? Think about how quickly you can become friends with them, right? Like how you can break that down because like that's going to be a really good skill for you to have when you're interacting with a prospect. And then what that's going to allow you to do is then ask them candid questions about their current situation that either A, they may know about or B, you ask provocative questions that make them think about the world in a way that like maybe that you want them to and realize that they have pain they didn't want or that they didn't know that they had. So it's kind of like my friend Brett Berson had this great tweet at one point where he said, Think about the things that you do in your day to day that are like a pianist, like a piano player playing scales. Like, da-da-da-da-da-da-da-da-da-da-da-da. What is the version of that for selling? And that's like, you know, Rapid Rapport building, asking good questions, asking follow-up questions, being willing to ask uncomfortable questions, right? All those sort of things and like asking for money and then shutting up and waiting for them to answer. All these are very uncomfortable things, but the more you do them, the better. You'll just get good at them.

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Yeah.

Can you talk a bit about that?

I think this is kind of like the, remember the mod, the, like the modern sales versus like old school sales thing. Like the old school sales thing is like, all right, I'm gonna sell something to a mark.

Right?

Or like the best example is like, man, that guy's a great sales guy. He can sell ice to an Eskimo. It's like, man, if you're selling ice to an Eskimo, you're an asshole, right? Like, what is wrong with you? They don't need ice. I mean, unless they're like, you know, they're, they're visiting Southern California. And so, like, as a seller, that what you should be doing, the way that I like to frame it to people is that you're a consultant that has a particular predilection for A given solution, your solution, right? But we're not trying to like, use Atrium as an example, right? Like Atrium's minimum ICP is probably like SDRs plus AEs in an organization should probably be like at 10 all the way up to like 300, right? So if someone shows up and they're like, man, I gotta get really good at sales. I need to buy your software, Pete. And I'm like, okay, cool. Like how many, how many salespeople do you have? Like, oh, I'm like one. I'm like, man, I'm not gonna sell you Atrium. Like you're just gonna be unhappy. It's gonna be dumb. Like it's gonna be a waste of our customer success resources. resources, you're going to churn all those sort of things, right? But if instead what you're doing is you're saying, Hey, I'm going to go out in the market and I'm going to find the people that match, that have a high proclivity that our technology solves. And then I'm going to talk with them about how they're solving that problem right now. And ideally through, you know, a series of questions, I'm going to reveal that to them that they're doing it probably not great, right? And then once I've revealed to them the fact, through kind of this, you know, directed questioning what's known as discovery, that they're not solving the problem. Like they have this high magnitude problem that it is costing them lots of money, that it is a pain in their ass. And that and then I reveal to them that there is a better way of approaching it. And magically, magically enough, I happen to be a representative of that of that solution. Well, now, like that's an ideal transaction and everybody, everybody wins. And so like that's and then scale that up across an entire economy. And you can kind of see why I was saying that that sales is kind of the grease that makes the economy work like that. And also importantly, brings new technology to the market in a way that makes everything better.

If someone's listening to this and they're like, I want to get better at sales, what's one thing I could do differently tomorrow, this week to improve my ability to sell my product? What would that be?

There's the non-complicated version and there's complicated version. I think the non-complicated version would be just walking down the street, make eye contact with everybody, and then every Every person that you, like every person that you stop next to at like Starbucks or the, or like, you know, the crosswalk or whatever, just like strike, strike up a conversation with them. Like figure out a mechanism by which you can start a conversation with them. Like, look, like compliment their, their shirt or their shoes or remark on something. Don't use the weather because that's lazy, but like figure that out because like, so like that's the, the first version. Probably the more sophisticated version is like, you know, just be very, very tight on your ICP. Just get very, very, very crisp around who has your problem and why. So being more crisp around that and then having that understood is a great way of making sure that you're not wasting time on people who don't have your problem and that you're doing more of those loops with people who are right in the white hot center. So one is a behavioral thing and one is a more thoughtful thing.

That's great. Can you actually explain ICP briefly? Because a lot of people may not know that term.

Yeah, thank you. So ICP stands for ideal customer profile. And actually it's important to kind of think about there's two things in a B2B sales motion. There's like the account, the characteristics of the account, which is like the company that's going to buy. And then there's the characteristics of the human and the personas that you're going to be interacting with. And so let's use like Amplitude as an example. Amplitude's ICP would probably be organizations that make software products. that probably have at least a couple of product managers, because if there's like a single product manager, it might be like too much. Like they might be at the point where they don't need a full blown enterprise analytics suite, and that's probably it, right? And then on the human side, who are the people who participate in that conversation? Well, the product manager is going to be the ones who are going to be the users, but engineering is probably involved in order to make sure that Amplitude can talk to the cloud data warehouse and so on and so forth. And then moreover, the person who owns the budget might be the VP of product, not the product manager, or it might be the VP of engineering or the CTO. Right? So there's three different folks that we talked about there. It's like different humans. And so ideal customer profile is understanding what those kind of like parameters look like for looking at an organization or to say, man, that's an awesome op. Let's go get in front of them versus, I don't know if that's a very good opportunity. Like maybe that's a good Let's pass on it. And then the personas are, great, that's an awesome op right there. All right, I know that I'm going to have my first conversation with Lenny, but with an intention that I'm eventually going to get to the VP of product at Airbnb, and that's Susie over here. And then, you know, once we get validation from her, then we're probably like, I know that the VPE over here is Frank and like, so like knowing who the personas are. So that's what ICP and personas are. Awesome.

There's a template that you've created that helps you kind of lay out your, ICP and so we'll try to link to it in the show notes. I have to find it again.

Nice. Sounds good.

So we've talked about founder led sales and how founders should be starting sales. We've talked about just how to get better at sales as a founder as anyone. I want to talk now about hiring sales people and sure and great mug by the way. Coffee is for closers. I love it. Right. Can people buy that online or is that just a one off?

This is like a modern sales pros. Perfect. Modern sales pros mugs. We have like a bunch of Yetis that we give away for Atrium as well. But like, yeah, we're big under like sales jokes here because you have to, it's like we, we, we stole this from New Relic, right? Like being very user centric and you're in your swag, right? So like I got my, my sales nerd jacket on here. I've got my let's get it hat here. I've got my coffees for closers mug. Like these are all inside. sales jokes that maybe your audience won't necessarily get or maybe they will, but our audience very much gets them. They're like, oh man, your hat's so funny.

Can you send me on? I'm like, no problem. You should buy our software. Love it. So hiring sales people, we've talked a bit about a lot of these things, like maybe when it's time to hire a salesperson, when you're closing like a fourth, a fifth of your opportunities, when this while loop is kicking in. So in terms of the who to find for this first sales role, and you mentioned that but VP of sales are often let go. It's like a very high rate of not working out. Is that true? Yeah. Yeah.

I mean, the way to, again, this is kind of mapped out in the founder-led selling presentation and then also in founding sales, the book. I mean, generally what you want to do is you probably don't want to start with like a VP of sales to start like a sales leader. And there's a couple of reasons why they're like, even if you figured it out yourself, that's required, right? You gotta, you have to get to that minimum sufficiency of 10, 20, you know, 30 customers yourself first, right? But then the reason why I advocate for folks that like hire a couple of sellers, a couple of AEs to start is because again, you have that like software in your brain. Like unfortunately there is no GitHub for sales motions. So it's in your brain, it's in your documents, et cetera. And so now you're gonna teach these other these other folks. So what you want to do is you want to hire a couple like early stage kind of pioneer sellers to take that sales version. The downside of hiring, like seeking to hire a VP of sales or like a head of sales or what have you, who actually is a head of sales, like is coming out of an organization where maybe he or she is a manager of managers or like manages like, you know, 10, like eight reps or something like that is that person hasn't been selling for a hot second, right? And I think actually Jason Lemkin had a pretty funny tweet about this the other day where he was like, you know, hiring the VP of sales who's like been there and done that before. Like, why exactly does she want to do it again?

Right?

Like, oh, you scaled up, you know, Datadog or like Figma or whatever. You should come to my like crappy little startup. It's like, yeah, I'm professionally rich. And, and so instead the, the of great folks to look at are like the deputies, right? Or like those early stage sellers. So the example I always use here, my last software company was in recruiting. So if you have like a new recruiting technology, so, you know, my buddy Troy runs this recruiting software company called Guide, right? They make this like really cool guided, hey, hiring process for candidates, whatever, but they sell to recruiting organizations. So the kind of early, the early stage sellers that he would be interested in would probably be like early people at lever or greenhouse, right? Who sell to the same persona, probably around the same, like, average selling price. But ideally, like, not an AE who joined greenhouse, like, last year or like two years ago. So, like, Greenhouse, greenhouses has a phenomenal sales organization. Their sales leadership is, is absolutely fantastic. The gentleman who's the CRO over there is a good friend of mine, Sean Murray, but, like, early stage selling takes early stage sellers or people who have been there because you're not going to have all the collateral slides and scripts and whatever aren't going to be all buttoned up and with a bow around them. And so looking for those early stage kind of like grimier, grittier sellers is a more effective way of going about that. So those are the folks that you want to look for once you've gotten to that statistical significance of your own selling capacity.

To make that just even clearer, the suggestion is if you're like, say, a Series A founder, what's like a profile of a person you look for? You said it's like a deputy at a successful sales org.

I'll give you a couple examples. So, like, I don't know, say you're doing some sort of design tool, right? Like, I would go look at the Figma sales organization, and I would look at some of the earlier sellers who were there maybe two years ago or three years ago or what have you. Right? Maybe you could consider getting a sales manager there who's like not super far from selling, right? Like a great example of this is there's this woman, Marissa Fuhrer, who works at Figma. She's absolutely fantastic. She works on the enterprise team there. Like she and she was at Dropbox previously as a seller for a long time. Like she would be a great profile for someone who's not too far from having sold. and is like willing to like, you know, roll up her sleeves. But ideally what you're doing is you're like, that would probably be the person who you'd want to hire after you've hired those couple of sellers and gotten them to success. Because the other thing too, with like Marissa, she's probably going to look at your organization and be like, cool, prove to me that your product fits the market because like, I don't want to necessarily take a bet on you. And then you would say, well, in addition to having a 25% win rate with me, I have these two sellers right here and they both have 20% win rates. And you can see that they're both closing $50,000 of bookings a month. All I need you to do is scale it up, in which case that early stage head of sales is like, all right, let's do it.

She's about to get a bunch of LinkedIn requests.

Which is great. This is one of the things that we really love at Atrium is we have really great customers. I mean, we're creating a new category of software. And so it's one of those things where more advanced, more modern sales managers and leaders really get it. It's kind of how it always is in category creation. But when you find the people who like really get it and like really get it, they turn out to be like awesome. And like that's one of the things that just makes startups fantastic.

What's a sign that maybe it's not working out when you hire your either first sales person, either, or maybe like first five, what are signs? Because you said it's often does not work out. What are like early signals? Like, I should rethink this.

Presuming that you have, and this is another reason why it's really important to do it yourself to start, but presuming that you've done that, like that you've been able to close business on a reliable basis, again, with like arms length prospects, like it can't be, you know, it can't be Lenny's mother-in-law buying my, buying my software.

HTRN for real, actually.

Yeah, but like, I mean, God bless, but like she's not ICP for, for ATRM, right? So like you can't, this is like kind of the danger of like, you know, doing revenue trades in your accelerator or whatever, it's not real. So if you have done that and you've sold 20 or 30 deals, you know it can be done. We have an existence proof of this. So if someone else can't do it the way that you do it, and this is why hiring two folks to start is effective, right? You don't want to hire just one, maybe three, but four, it's like, oh, that's a lot to manage, at least to start. And so if you have done that and the person's like, their win rates Right? Or that their activity levels are poor, things like that. Those are usually indicators that it's like not gonna, that it's not gonna work out, that they're not getting those second dates, they're not getting those third dates. But importantly, they have to have the materials in question, right? Like did, did you create the slide deck that you take people through and did you give this to them? Did you take all the discovery questions that were in your brain and write them down into, you know, a Google doc or a, notion page or what have you? Do you have a demo script? for them. If those things are not present, then probably no one's going to be successful, or at least they're going to have to rederive all that stuff that you already did. But if you have all those precursors and it's not sticking for someone, that's probably a good leading indicator that they're not going to work out.

How much time do you give these folks before you make a decision?

This is why it's so, so, so important to look at leading indicators. And this is something that we just think about all the time here at Atrium from instrumentation and data-driven sales management is like, if someone's not having customer-facing meetings, if they're like low activity, you're never gonna win anything, right? Like if you have a 50% win rate on two opportunities in a month, that's probably still not gonna be super helpful unless you have a very, very, very high deal size, right? And so looking at those leading indicators, like, are they having first meetings, right? Are they having second meetings? What does their email volume look like? are they getting, are they progressing things through? Are they getting things to proposal? And then eventually are things closing? And so that's why bird dogging, I do a bunch of like master classes for Atrium on data driven sales management. And one of them is on ramping. It's called like, you know, ramping for success. I forget the name of the master class, but like looking at those leading indicators, like opportunity inflow, is a person putting time, like putting meetings on their calendar, are they progressing them? Are they being active in the meantime? those are all really good leading indicators. And so, I mean, if somebody's like not getting first meetings on the calendar, like, you know, within a month, it's like, okay, cool, this isn't working out right now. If they're not getting to second or third meetings, but they are getting those first things, well, now you know you've got a different problem, right? Which like they're getting, they're getting those first dates, but they're not getting in a second date and they're not getting a second date the same way that you were. Okay, maybe that's a coaching issue. Or maybe it's just like a behavioral problem that's that you're not going to be able to surmount. But the point is, is it's like having instrumentation on the most leading indicator possible gives you eyes onto whether or not things are working or not. And you can make judgments because the worst possible situation is like nine months in, you're like, man, it's not working. It's like, man, I bet if you looked at the leading indicators, you probably knew you would have known like two months in, like this wasn't working.

I like they gave us kind of a bottom end of the range, like in a month you should be able to know a lot of times what would be like the max by which like, if things are going okay by, like, six months, you're probably, it's probably going to be good. Or, or what is that time frame?

Oh, like, where, you know, you're successful.

Yeah. Like, it's like, it sounds like maybe from a month to some future month, this is a period where you can get a sense of this, this person is going to work out.

What's, like, that range in mind? It's almost kind of like you're, you're kind of continuously monitoring. Right. So, like, in the first month, maybe you spend that time, like, onboarding the, the teaching them, you know, going through mock discovery conversations, mock demos, et cetera, having them ride along with you. In the second month, we would expect them to have like, you know, 10 first meetings or maybe 20 first meetings, and we would expect 50% of those to get the second meeting. So we'd measure those things. In the third month, we would expect some subset of the month of those first meetings, the second meetings that happened in the second month to get to a proposal, right? To get to a commercial conversation. And then maybe we would expect some of the deals in the in that month to close, right? To close when or maybe the next month. And so it's essentially, like you're looking at the leading indicators in the appropriate timeframe such that if someone is in month three and they're getting a bunch of their deals to proposal, you can't declare victory yet because the money is not in the bank. However, things are looking good. So if you get to month four and then lots of things are getting to proposal, but nothing's closing in month four, nothing closing in month five, you should still, we still can't say all the olly oxen free, you should still be very concerned, right? But if you if, like the leading indicator is at the right level for the right period, or right interval in ramp, then you can like, you can feel confident but not declare victory yet.

Got it. Something that this reminded me of as we were chatting ahead of this call, and you mentioned that work from home is really bad for salespeole in your experience Can you talk about that?

Yeah, it's primarily bad for junior salespeople. Like senior salespeople have been selling out in what's known as the field for a long time. But when you think about the behavior that we're talking about, which is learning, right? So what needs to happen? The new sellers, they need to learn the sales motion, and then they need to be audited, right? Like instrumented. And so the faster the loops are, on that, the better off you're going to be. And so if the loops are once a day of like, you know, listening to their calls or maybe even like a, like a, a longer interval, then just like the correction loops are just going to be way too slow. Versus if you're sitting next to somebody, if you're sitting amongst like three or four people and like listening to all their calls concurrently, and then they get off of a call and it's like, Hey, that was really good. you know, correction here, correction here, correction here, correction here, here. Run it back to me. Now the loops, right? The speed with which you're able to like update their software and making sure that the sales motion is running appropriately on them is quite high. And like in early stage startups, that's the only thing that matters. It's like how it's a race against time to make sure that you get to success so you can raise your next round of financing or get to profitability or what have you. So having distance, having asynchronous distance is really problematic for that, especially for junior folks like SDRs, junior AEs, all of that. It really is problematic. Once that sales motion is baked and can be distributed, okay, that's potentially a different situation, but very early on, having someone sitting, being able to sit side by side with your sellers is really pretty, it's hard to beat.

So it's the solution, is it? If you're starting now a B2B company, your advice is don't be remote, work in an office.

My point of view on that is, especially at early stage, you cert, from a founder standpoint, being shoulder to shoulder with your co-founders, certainly. But even with a founder who has a couple of sellers that they're working with, being side by side with them in order to help them learn faster, teach them more, have accountability, and then have training loops is really what you need to do. Because the alternative is there's a whole generation of SDRs who are kind of like learning loss, if you will. There's a bunch of 24-year-olds who have never cut, like never learned the skills that are needed at the same way, at the same clip that they would have sitting amongst like 10 others with a, with an SDR manager sitting in the middle of them or an AE manager sitting in the middle of them.

Any last pieces of wisdom before we get to our very exciting lightning round?

I think probably like the biggest thing is the thing that I just like to encourage founders and product managers, what have you, is just don't be afraid of sales. There's a lot of people out there who are like, who would love to tell you a story that it's, you know, it's magical or like, oh, you got to be a born seller, things like that. And it's really not right. Like those people are just talking their, their book, if you will. And so just like getting good at, at those behaviors is going to, you know, it's going to benefit you in a myriad of ways, even if you don't want to necessarily be an early stage founder, even as like a product manager within an enterprise organization or even a, you know, a consumer organization selling behaviors and good communication and persuasion and thinking about what's in it for them, et cetera. Those are really good skills for internal selling, for external selling, for you want to interface with customers, et cetera. All these skills are very important and impactful for a myriad of personas.

Amazing. Well, with that, we've reached the very exciting lightning round. I've got five questions for you. We're going to go through it pretty fast. Are you ready?

I am.

Question one, what are two or three books that you recommend most to other people?

The books that I recommend the most there would be the Goal by Eli Goldratt. There are two books that inspired Atrium. One is the Goal, which essentially is a novelization of the Toyota lean manufacturing system. So it's like a process engineering book written as a novel. It's like really fantastic. And sales organizations are just revenue factories. So it's a really if you want to think about systems thinking and processes, but in a way that's not a textbook, it's absolutely fantastic. And then the other one is a book by Bill Walsh called the Score Takes Care of Itself. Bill Walsh is a really famous football coach for Stanford Cardinal and the San Francisco 49ers. And he just broke down how you can't worry about the score in the football game. You can only worry about the things that are in front of you you can control. and that if you do a high quantity of high quality actions, like whatever your position is, as a quarterback or a linebacker or running back or whatever, then the score will take care of itself. And, and that's very applicable to sales as well. Like if you focus on those leading indicators and make sure that you're doing it in a high quantity of high quality way, then the score score will take care of itself. So those are two, two great books.

I like to recommend to folks.

Favorite other podcast. Oh, boy, I don't listen to too many. I listen to Lenny's and I listen to, the all in podcast. just, you know, so I can get my fill of like doom and gloom.

And knowledge with this one. Favorite recent movie or TV show that you've really enjoyed?

I've got a five-year-old, so like we're all Disney all the time. So I think probably like the one that's been on repeat recently has been Encanto. So yeah, love that one.

Favorite interview question that you like to ask folks?

So I'm going to change this up on you. It's less about interview questions. One of the things I'm a really big fan of is job simulation, especially in sales. And so I'm a big fan of doing screens. So we actually have a written screen that we do with folks where it's just a Google Doc that has like a dozen or so biographical questions that we allow people to answer. And you'd be shocked at the way it, how well it screens people. Like, you know, 50% of people won't do it. And these are not complicated questions, right? It's like, Lenny, tell me about something that you've built that you're proud of. Right? Like it's a dozen of those questions. And so like one, you can filter out people who are not serious. You can filter out people who, you know, have low levels of give a shit. You also can see whether or not people can communicate in a compelling fashion, right? With a beginning and a middle and an end. You can also see their attention to detail, whether or not they, like they, it's like ridden with typos or they like forget to answer some of them or what have you. So it's not an interview question thing.

But like that's a huge hiring hack.

From my perspective.

And this is a form that folks fill out when they're trying to apply.

To work at Atrium, is that right? Yeah, yeah. Or it's just something that I, I mean, I, for all my portfolio companies as well, I, that people just use it. It's a Google Sheet, right? I'm sorry, not a Google Sheet, a Google Doc, right? It's just like, and you just clone it, give it to them. All right, you have edit rights. Let me know when it's done and you'd be shocked.

Like, you know, people are like, oh, I forgot to do it. Okay, great. You told me everything I need. Amazing. Final question. Do you have a favorite story of you or a salesperson closing an awesome deal, something that seemed impossible, something that you're proud of?

There's a gentleman in our sales organization named Sean who's an early seller here. He's now a sales manager. He's absolutely fantastic. And I think one of the things that early stage founders and also sellers have to remember is like, You're, you're not gonna, you're generally speaking, not gonna close the deal on the first time through the pipe. Like as we discussed earlier, if you have a 30% win rate, that's pretty great. If you have a 20% win rate, that's like pretty solid, but that still means that like four out of, you know, four out of five are not gonna close, but the next time around they might, right? So like win rate on the second time through the pipeline. And so Sean, you know, closed one of our biggest customers is a company called Grin. They're absolutely fantastic. They make, influencer management software for brands, very cool stuff. And, you know, I think Sean probably ran like three or four ops with them before they were able to get a toehold in the account a couple of years ago. They were much smaller. And so now, you know, I think they have like 100 SDRs, like 88s that are being managed using Atrium. And so I think there's a good lesson there, which is, you know, it's not going to be the first, it's not necessarily going to be the first time through the pipe, and it's maybe not the second time, but You just have to keep pushing that boulder up the hill. And eventually when you do, good things happen.

What a great lesson to leave us with. Very empowering. Pete, this was everything I hoped it would be. Two final questions. Where can folks find you online if they want to learn more? Learn more about Atrium, the book, and then how can folks be useful to you?

I'm pretty easy to find online. I'm the only Pete Kazanjy in the United States, as far as I can tell, and Google will autocorrect my name. if you Google it wrong. So that's pretty helpful. Yeah, find me on LinkedIn, find me on Twitter. You can also find foundingsales@foundingsales.com as Lenny notes. The whole book is available online as hypertext. I mean, you can buy a physical copy as well, but the reason why my wife put it into a Squarespace site was because we wanted people to be able to search it and come back to it and use it as a reference and so on and so forth. And then in terms of focusing How folks can be helpful to me, if you work for an organization that has between 10 and 300 salespeople and you're looking to make them more like manage them better by a metric, make them more efficient, right? That's a big watchword these days is efficient sales organizations through better management. Atrium is fantastic for that. If you just Google, atriumhq.com is the domain, but you can also just Google Atrium Sales and we'll be the top result as well. as well.

Amazing. Pete, thank you for being here.

Yeah, it was awesome.

Thanks, Lenny. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com.

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