Building and Scaling Enterprise Sales Teams From 0 to $1 Billion with Craig Nile, Codat

The only way to deliver a message to an organization, especially a complex enterprise organization, is to do great discovery and find what will be transformational for them and the person you're selling to. Or the people would be emotionally rewarding for them and connected and have positive benefit and ROI that they could stand behind to their CFO and say we need to make this purchase and here's why.

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Sales organization is super, super hard. And it's like the holy grail, I guess, in B2B SaaS. And our fantastic speaker here today has done it a few times. Craig Nile, VP Sales at Kodat, or over 70 million in funding, and previously head of enterprise sales at Slack, is going to give us the playbook for building and scaling enterprise sales teams from zero to billion. Craig, welcome to Traction. Thanks for joining us.

Thank you, Lloyd. Pleasure to be here.

Yeah. So before we dive into the sales playbook and building and scaling enterprise sales teams from zero to billion, you've driven rapid growth for some of the biggest names in SaaS like Salesforce, Slack, now Kodat. So you've seen it all. Give us your backstory. How did you get into sales? How did you get to where you are today?

Sure. So I originally didn't think I would be in sales. I had a love for math and science. I was born to two math majors that worked at IBM and I studied programming at first and the more I did that the more I realized that coding in isolation wasn't really well aligned with the nature of my personality. So I pivoted. I got a business degree in the end and I cut my teeth at some startups doing sales. I was a headhunter for a short period of time, but the rest were all really like tech sales jobs, BDR roles. I joined Salesforce in 2006 and stepped into that organization and it just, it really showed me what the machine, the model, the culture really could look like when it's done. And learned a ton there. I started as an account executive about halfway through, moved into leadership roles and there was, let's see, there were 1200 or so employees when I joined and about 500 million of ARR. So definitely not that zero range in terms of revenue, but on their way. And when I left there was about 25,000 employees. So massive scale and $8.5 billion in revenue. I left to join Slack. First thought, I can't leave a company like Salesforce and go sell emojis and chat. And that doesn't sound that interesting. And the more I learned about the way they were transforming organizations, the more appealing it clearly was. And I joined when they were about 100 million in ARR and 700 or so employees. And that was right after the CEO Stuart was quoted saying, we'll never hire salespeople. We don't need sales. So had the interesting task of building out the enterprise sales team for them and really starting to embed a sales motion there after the success they'd had with the product and product led growth for so long. But that is the story of how I got to Slack.

But a lot of folks like the slacks and the dropboxes all said, you know what, we never need a salesperson. But like you start to stall out and eventually you do need a salesperson and salespeople and sales leadership and teams. But before we get into that, tell us more about Kodot. What took you to Kodak? What does Kodot do?

So I think we've all had a really interesting couple of years. Just the nature of the world these days, but in combination. And it sounds like you just went through this too. We had the birth of our second child. Covid was upon us. Is it great? If there is a silver lining of all of that in terms of COVID it was a good chance to reflect on what's important and what I wanted to do and where I was in my career. And it became clear. Joining a smaller company, it was the right time. It seemed like a fun Adventure and I looked at a lot of different options, talked to a lot of founders and CEOs and different roles in different industries. All tech, but really many different forms. Kodat stood out based on the people, just a great executive team. I talked to a couple of the board members. It was a very strong foundation, excellent product market fit, really poised for growth and a chance to double down, especially up market. Their primary customers were large enterprises. The selling was not straightforward which really matched the way that I liked to get things done at Slack and Salesforce. And then it just really stood out in terms of the opportunity for my experience to be really helpful at the stage of company code at was it was about 70 employees or so and needing to scale to that 10 to 100 range in terms of revenue. I'll introduce you to what Kodak does. So code that's a single universal API which connects to over 30 systems used by small businesses. So a lot of Lloyd's customers would fall into this range. Anyone using QuickBooks or Zoho Systems like that. And we provide access to their consented data. So they would put in their password and authorize access to Lloyd so that he can analyze their R&DAC crediting. We standardize that data across all the different systems that we connect to and then layer insights on top of that so that you can start to spot irregularities and discrepancies. But primarily it's access to and standardization of that data. Fully white labeled. So we're behind the scenes at Companies like Amex, PayPal, Brex, Pipe, Clearco, lots of hot companies up and down the market, including. We're proud to be working with Boast and fueling some of their efforts both to provide a seamless experience for those looking for R and D tax crediting, but also make a smoother process for instant access to loans so that you can get paid before the government releases the check for your tax credits.

Kodat is the best way to integrate financials into your platform. And I feel like this is a separate discussion, but I feel every company will become a fintech company. Fintech is another layer like the Internet, the cloud, mobile, AI and now it's fintech.

Right?

And you guys are enabling that along with us and many others in the space. We alluded to this. Dropbox, Slack, they all said they didn't need sales teams and then they all now have massive sales teams. When is the right time to bring in a sales leader?

The right time to bring in a sales leader? I think a lot of them probably did have some form of sales. Even Atlassian, they said we don't need sales, but they've got this weird little team called accounts and now they have sales. I think more overtly, one of the great leaders from Slack is now head of enterprise accounts or something. But it really is sales just done in a very specific way. And at Slack there was sales, it was just called accounts. To your point, at some point, most companies will reach that maximum point you can get to without a true selling effort, without a team that's dedicated to understanding the needs of a particular customer and moving them proactively beyond where they currently are. Whether that's no spend with your organization or whether that's like at Slack, we found that the product, the design and the engineering teams really understood Slack and didn't need a lot of selling or encouragement. And then the rest of the team, the go to market team, the legal team, operations, they weren't really prone to just picking up Slack and starting to use it. And so we needed to pour a little bit of attention and proactive love on those parts of the business to get them to see the light and use the tool across the whole organization. So the right time to bring in a sales leader is when you've recognized the need for some kind of a proactive outreach for your organization. And then it's really hiring someone that can scale the organization well beyond where you are today and build the right functions in the right way.

Yeah, and one of those elements, a lot of founders, they've not hit product market fit and they want to start bringing sales leaders and whatnot. And I've seen for me personally been a part of two failures before that that doesn't work out very well because nothing replaces the founder's vision of going and selling. And if you bring a sales leader when you haven't sold maybe five, six, when you don't have product market fit, it just creates a lot of stress. Is there any truth to that? Or maybe that's just my experience.

I think if you don't have product market fit, that's a tough place to operate. In general, I think I've only worked in places for the most part that have product market fit. I've definitely worked prior to Salesforce, companies that didn't have the products we needed to have to really win a lot of the market. But it was, they were in a pretty clear place that there was a fit. But I can't speak to that from experience, but I imagine that's really hard and it would require more tinkering and testing. And getting your product in the hands of people, that could become a place where you do have product market fit. I would definitely not just try and force it with a sales team. If you don't have it though, if you don't have willing participants in the selling process, that's a tough road to hoe.

Yeah, because you have an idea, your first job is validate the market, get five, 10 people to try it out. Then it's like product market fit. Can the founder or somebody on the founding team go and sell it? And oftentimes what you sell brings a lot of feedback based on usage and you're driving for high retention. And my last company, we went and hired salespeople and nobody made quota. They were extremely pissed off. The product didn't work. All the feedback was like we released something but there was feedback to make it better, et cetera. So I think that product market fit, I agree with you, is the right phase to get started. So now you're a new sales leader, whether at Slack or at Kodak. Where do you start? What are the first 30, 60, 90 days look like?

So I was fortunate to step into a pretty well firing organization. We had revenue, we had big clients, we had some salespeople. The first thing that I did was start to analyze where we were winning, what the team looked like, get feedback. Obviously just start to put my ear to the ground. I was a bit shocked to learn that we didn't have things in place like accounts, like addresses were not populated in the CRM system. So coming from Salesforce that just, that blew my mind a little bit. So we had to do some things to get our house in order to really analyze where we were winning geographically from a size of account perspective and then start to build out a hiring plan that really matched what we were seeing both in pipeline and revenue and just the forward looking projections we had for different parts of the business. And after that, set about really trying to find the right talent. We built scorecards and did things to make sure that we knew what type of people we were looking for, the characteristics, the experiences. And then it's really been about half of my time focused on recruiting, interviewing, onboarding, building out the team.

And then a lot of founders, they raise money. And founders like myself, who are not engineers, or rather who are engineers, don't come from big sales or go to market backgrounds. They tend to have misaligned expectations. Sometimes I'm going to hire a sales leader, they're going to build us. You're going to hit this financial model that I presented to VCs. So how do you manage those expectations when you're coming in as a sales leader?

I think it's sanity checking some of that. And we did some analysis on what the projections were and they seemed reasonable based on the size of opportunity that we saw with some of especially the big banks is a very obvious place for us to sell things. But we did analyze what the quota numbers were. We matched that to the hiring plan. I will say that I overestimated how quickly we could staff up in an environment like this. I think a lot of dry powder was deployed into fintech companies that look a bit like us. They're a white labeled solution. So we're not out there, we're not a known brand. It's not like some of these companies that are consumer facing where you'd see their brand out there who's used to this big army of recruiters, a big brand at Slack and Salesforce and building teams at a bit higher velocity. So that did catch me off guard. But we've brought in some amazing people and they are closing really fantastic deals. Validating the quota is a really difficult thing to do as you enter an organization from the outside.

How do you think about it though? How should us or smaller companies or companies just trying to figure it out, how should they think about sales quarters? Is there a magic formula? Is it more gut?

I think a lot of it is gut. I think it's look at the growth you put up last year. And I will say build the model to show some seasonality and if you're just adding sales to the machine for the first time, anticipate these spikes. Probably end of quarters Q4. At Salesforce that was a known thing and we had a monthly drive and at Slack when we really turned on quotas there was this huge spike in Q4 for the first time and in the Slack channels the engineers were like what is happening? What is going on? Why are all these deals closing? And they just didn't understand the dynamic. I'd say build your models with some aggressive goals but make them just a bit of a reach, not demoralizingly high. And then if you're off, recalibrate, don't try and pick the five year plan and stick to it, call it for six months, recalibrate, see where you are. And I think there's a lot of effort that you can put a lot of emphasis you can put on the effort, the behaviors, the early indications that are pre revenue to show you whether you're on the right track.

What Are some of those behaviors and early indications?

Obviously pipegen looking at pipe gen by sector, by region, by team isn't an easy thing to focus on. But meeting generation some of the anecdotal feedback about where we're seeing interest again regionally by product by segment and then just starting to match that to where you're seeing the revenue actually come in. But keep the long view. Know that a small seed deal in most companies like ours this year yields big returns next year when we do the right work.

And maybe there's a direct answer here. How should people think about quotas? Because I think that's the first step, right? Let's say you've got product market fit, you're at a million in ARR founder has been selling and they bring in someone like yourself external leader should the quota next year and let's say this company has raised I don't know, 5, 10 million. I've just hypothetical scenario here. Should the quota the next year be going from 1 to 5? Should it be going from 1 to 10? Like how should they think about quotas? Now this is the scenario where the founder has been selling sold the first maybe half a million to a million ARR maybe that's 50 deals. So new sales leader comes in. How do you think about it?

As a sales leader I would always want my quarter to be smaller probably but as a with an owner mentality I would think again make it a stretch. This is so individual. Really hard to give you something scientific here but I would look at all the data you can as as objectively as you can and try not to make it emotional. Of course you want to go from 1 million to 5 or 10 but can you get there? And if you put your fingerprints on the right part of the business what sort of trajectory change could you really enact? What could you and if the sales team doubles their quota because they do better than you anticipated, maybe that's fine. You if you have a comp plan that's tied to revenue, you're paying people for performance. So it's still just it's part of your the margin that you anticipated bank. So I think acceleration is probably a tougher thing in an early stage company you don't need to double cop or over 100% if you're not sure what the line should be for 100% as you mature and grow you've got a lot more science to build a comp plan. So that territory with reasonable effort should yield that much revenue over the course of this year you just have so much more evidence for that dirt, that patch year on year in terms of what it was producing. So that an outsized result is really obvious when we're talking about this early. There's so many variables that go into that equation that are unique to each business. It's really hard to give you perfect science but I'd say make it a stretch but allow them to blow it out and be really happy. And especially your sales leaders are such a high point of leverage it's important to keep them happy and fed and rewarded.

I want to get into the team now. What are the key hires you'd make as a sales leader? Say you come into company that's product market fit, couple million in revenue. Now you need to build a sales team the founder has been selling. There's product market fit because there's high retention. Like who do you hire? Sales ops, SDRs, sales engineers, account executives. What does that mix of people do you hire? And then the second thing is about piggybacking off of that. How do you identify the right candidates and what does a comp look like?

And again not to dodge the question, but this one's individual. So I can speak to especially what we're doing at Kodak and what I saw work well at Slack and Salesforce. But in companies like that, BDRs are really important and I'd get them in probably earlier than you think. If we're talking to an early stage founder, just starting to build awareness, starting to build pipelines, starting to soften the ground for the team that you'll hire after them is important and they're often young early in their career and need a lot of care and feeding. But that's a really important function to bring in especially if you're like Kodak where a lot of our customers are these bigger enterprises we're selling to all the top banks.

And you're a high ACV product, right? Say 20,000 and up.

ARR. You're not going to like it Lloyd but we're really expensive. No I know, but we're worth it. But yeah, it's a high ACD product. But we also work with very small fintechs that are just starting up and have entry point products for them. But BDRs are a huge part of our machine and important to bring in early.

So for people's benefit here BDR is a business development rep or a sales development rep and their whole job is to generate qualified meetings for salespeople by a combination of social selling and email and cold calling and whatever means Necessary.

They can do whatever they want. They have full free reign at Kodot to to get attention however they can. But they build awareness. So they're used interchangeably sometimes with SDRs. I think about the two as kind of discreet but similar. BDRs are outbound. So you point them to big accounts and say, I need to get into the technology team at that bank or the business banking like the relationship managers at that bank, and just point them in the right direction, give them some of the messaging that might work and let them go. SDRs would be inbound. So people that hit your website qualifying leads in lots of organizations, they'd be promoted into BDRs and then they'd become your junior salespeople. And so when you think about the organization, that's one of your questions. Further on is 10xing. Think about a destination company eventually, when you're 10x the size, when you have new college grads enter your company that have the right DNA, the right attitude, the drive, the hunger, and you give them an entry point where they learn they're just picking up the phone and answering soft inbound leads and then they're getting outbound and breaking into companies you never thought you'd have any conversations with. And then they start closing deals, smaller deals, high velocity, and grow into leadership or other roles in your company. But gone off road a little bit, you're like, do you want to go back to the roles?

I think that is perfect, right? Like whenever you hire somebody, hire them with a path is what I got out of it. Like SDRs are inbound. Then they get promoted to BDR, which is outbound. We call them the same thing, BDR, SDR. But yeah, inbound rep, because it's a little easier outbound rep than like you get into AE and then leadership. And it's a great path. People should feel like they're always growing in a company and they don't have to chase for that growth. You have the path laid out based on metrics. So let's talk about the BDR metrics for a second here. But from a BDR perspective, you recommend hiring them before you have salespeople on the ground or you.

No, I would. Sorry, I would hire them sooner than you think. You probably need them. That's different for every company. And if you have a lot of inbound and you're a brand that's visible, Maybe you need SDRs to qualify inbound leads more.

Let's say you don't have a lot of inbound because inbound is also hard to build. Then what is your. What is the ideal ratio of BDR to salesperson to AE?

1 to 3, 1 to 5 it depends on the size of your deals. Probably you'd look at your acquisition costs in that sort of model pretty closely. I would think if you've got a high value product and you're selling it up market like for my enterprise reps I'll cover them much more closely like 1 to 2, 1 to 3 because the revenue that those reps can yield is pretty high. The smaller team you might do 1 to 4, 1 to 5 and just help them get into some of these accounts.

And so that BDR to AE ratio, let's say it's shy of or it's lower than 50k, let's call it 10 to 50k deals. One BDR is giving coverage to 2 to 3 reps north of 50k. One BDR is giving coverage To 1 to 2 reps. What percentage of quota is a BDR responsible for generating for those reps? 100%. 50%. What is ideal that you've seen out there?

It's pretty high contribution for us. The metrics we pay based on are it's primarily meetings, meeting set here it may shift to opportunities created so there's a tighter connection to pipeline. I think the industry would favor that. The amount of opportunities created, not the dollar value necessarily but just create 10 opportunities for the sale in a given month. So they would. With us it's probably 50%. The AES create a lot of the pipe themselves as well and then marketing kicks in with events and demand gen.

So like 30 to 50%. And how do you comp them? I guess you comp them based on like they have a base and then they have to hit a certain OT. What does the BDR comp ideal comp look like?

Ideal comp is some percent base and then maybe 30% variable. 20 to 30% variable for meeting set or opportunities created and then some would pay based on the deals closed. A percent of the revenue I've seen.

In organizations and maybe you can speak to this as well. Like some pay for meetings booked but some pay for sales accepted lead which is budget, need, authority, time frame. Fed is the right kind of lead that's moving from like a sort of investigate to the next stage and then they comp them based on that. Any thoughts on that? What you optimize for accepted lead or you optimize for just a meeting?

Book our current model. My team's going to watch this and say oh we're probably going to shift it. But our current model is meeting set. I would rather have opportunity creation and sales accepted leads. So Salesforce and Slack was always stage one created by the bdr. When the meeting's held and the salesperson talks to them and says great opportunity boast is going to be a great customer, move it to stage two. That triggers crediting for the BDR team.

And then some organizations. What I've seen them do is to keep people motivated. They comp on meetings booked and then tighten the controls as their ramp increases. What is the ramp time on BDR that people should expect?

Ideal tend to ramp pretty quickly because they can often learn from each other, grab scripts and just, you know, align with the AES that they're with. I think they ramp much more quickly than senior account executives tend to. But three months, they're pretty good around that.

I thought when you said quick, I thought you meant like 30 days or.

15 days, but that sounds impossible, maybe faster than that. So 30, 30 to 90 days for real proficiency. Around 90 days.

And what are the key traits of a BDR that you're looking for?

Yeah, for BDRs it's way more about the DNA than it is the experience, obviously. And so business acumen for us is really important because the way what I didn't mention is our API is bidirectional, so the banking use case, your use case pulling information is pretty obvious. But then when you look at pushing information like a point of sale system at a clothing store, reconciling payments back into QuickBooks for that business owner, it gets really complicated really fast and it goes in a lot of different directions. So curiosity and business acumen are really high for us in particular, if you've got more of a point solution, those will probably be indexed lower than just passion and drive and scrappiness. But those are the things I tend to look for is curiosity. Business acumen coupled with passion and drive and scrappiness. D1 sports players, people who have shown that they have a real like light in their eye for a topic when you all you have to do is ask them what they're passionate about or proudest moment from school and you'll see the lights go on around something that maybe you didn't anticipate recapping this side.

Of things we said hire BDR sooner than you think you need them. They're great at generating pipe ramp time one to three months and should be generating 30 to 50% of pipe and you compensate them 50% base and then the rest can be variable. 30% is variable.

I think BDRs are usually like 70% base and then a smaller variable than account executive.

Yes. So 70% base, 30% variable and the preference is copying them on the variable on the qualified opportunities. But maybe you start off by compensating on meetings to keep them motivated. Now let's move to the AE and we said one BDR should be able to funnel three anywhere from two to four AES at peak and depending on the deal size it may be less or more. So let's move into AES then. What is the ideal AE profile? What are their quotas like, what is the comp, what look like?

So ideal profile, it's really similar to the BDR but you then couple it with experience. And so for a junior account executive, index more on those characteristics and couple it with a bit of experience where they've proven that they could be successful in a selling role. I've hired people even at Kodak who didn't have traditional selling experience. So I think it's important to continue to index more heavily on the characteristics than necessarily a perfect set of experience. For senior reps, it's really about people that have proven that they can get it done in a selling environment with a direct selling quota and really able to sell value and a solution in a bunch of different ways. So not the one trick pony where you could just show up and deliver the same deck every time and just there's no variation in the way that the product is used. And there are lots of great companies out there that work a lot like that. But even Slack it was very different to get people to buy and spend a lot to do to make organizational change happen and revamp parts of their operation. And at Kodak we need to index on people that can do great discovery, come up with a unique solution for the business that's going to use the data supplied by or sent through our API. So we really need to focus on people who have proven that they can handle complexity, do some solution oriented selling and aren't just in a like a rinse and repeat type of model.

When you're hiring AES, what I found is from failures and successes is hiring people who've sold. There has to be some similarity. The experience brings a lot of value, particularly if they've sold the same deal size into similar markets or whatever. Have you what is the ideal experience after which you find like diminishing returns?

You would say for an ae we've got two teams. One team's focused on selling into banks and just if you Think about where the mothballs are in the industry. That's the team that's focused on like the old school industries and the bigger accounts. And there I want people who have sold ideally to financial institutions or insurance or government. I just need to know that they can stick in it for the long haul, deal with lots of maybe unnecessary complexity, be able to navigate that complexity and just not get discouraged if it takes a long time to get a big bank to purchase something. The other team is focused on everything else that would be selling our product to Amazon and Shopify and Stripe and Apple. And so that's a really different skill set. And so for them the ideal skills are being adaptive, being curious, being creative and like a rep that sold BI software or Salesforce where you have to like their product portfolio is huge. So if you sell all those products, you have to be very adaptive and able to pull a bunch of different stories together to come up with a solution for a different type of company. So I test for that and I do our interview process.

Speaking of interview process, what are your top two favorite questions that you ask everyone in interviews? The salespeople?

I can't give away my favorite ones to stump people. I love to ask people about their proudest moment. I think I highlighted that earlier. But you just, I try and really get to understand people and we in our interview process we go way back and that's not a surprise or a secret. We try and get to know people's origin story and just understand what makes them and the decisions they've made and like truly why they made different. You graduated from college, where was your head instead of oh Lloyd, how did you choose to start boast. But like really, where was your head? What were your options? What were you thinking about at that stage? And just trying to be ruthlessly open ended in our questions as we take someone through their career journey and try and truly understand what makes them and why they made the choices they made.

And then the AE comp before I move to the next role, ideally it's.

5050 or yeah, I like the 50 50. It can be 50 to 70% base. This is what I've seen. I like 5050 because you get people who will bet on themselves and if they're good they're going to blow it out and make more and more. They're not looking for that security. You want AES that are willing to step into a little bit of risk and back themselves.

Definitely. And then what is as you're going from let's say 10 million to 2030, 40 million. What is the ideal team size and at what point do you need like sales operations? So let's look at the ideal team design and structure and then let's look at some of the support functions that you can't do without.

I would say sales enablement and sales operations, slash strategy are really important to add around 10 million for most organizations and it's probably one of those things that's sooner than you think you might want to make that investment. But it's critical especially if you're about to go into hyper growth or significant growth like we are. It's an indispensable partner for me, both of those to come up with the onboarding program and train the team we already have and get a baseline and then really analyze like how we're doing. Help me see around corners from a strategy perspective and then just bed down the systems and the process. Those two functions are really critical for any enterprise SaaS company and they go from a position and a role to a function pretty quickly. As you go through that 10 to 100 million range, you'd have a function. By the time you get halfway through that probably 50 million, you've got a few people handling both of those roles.

And the AE side, I forgot to ask, what's the ideal ramp time?

That depends on the seniority. It totally depends on your product, your sales cycle, things like that. The pipeline they'd walk into. I'm a big fan of black and white versus gray. If things are gray, I'm the arbiter of all kinds of weird questions about account things. And so I would move a territory like it's equitable with a lot of the deals. Meaning they get some pipeline. Yeah. When they step into the organization, it's not just barren ground. They've got something to work on that's got a little life in it and that aids their ramp time. It allows them a softer landing into the organization and they're able to get their feet under them more quickly. So I for a mid market SMB rep, probably within three months, they're pretty self sufficient. We're always a collaborative team, we work really closely with one another, but they can do their own demos, they're closing deals, they're up and running. And an enterprise rep, when you get to scale, you hand them a dozen accounts. Some of them might take a while to really get things going, but same mentality where we probably rip good accounts off of other seasoned reps and hand them to someone that comes in the organization. It's not just cold One, cold accounts, some of them would probably have some momentum.

And then quota attainment is just probably a lagging indicator.

Right.

What are some leading indicators you watch out for to make sure that these BDRs are going to hit their numbers? AES are going to hit their numbers. Enterprise reps are going to hit their numbers.

Yeah, activity level. So I think it's formulaic. You can have the really baseline activity level like email sent, calls placed and then meetings. And it used to be really interesting at Slack where we could say VP or director plus meetings. It's hard to get those right. That's pretty indicative of doing good work. And you can separate the team pretty categorically and say all right, look how many director level meetings they have. Pipe gen to close revenue. You can stitch those metrics together in a pretty clean line. Selling into banks. There are lots of VPs. There's like title proliferation. So it's not as easy to see at code at I've found in the data it's on his butt. If you can do that with your organization, with your type of technology, that's a nice way to say you're not just emailing a bunch of people, but you're getting the senior level contacts and having meetings with them, then it should yield pipe generation or not. If not, you can diagnose what's happening there which should yield closed revenue after a reasonable sales cycle.

Yeah, and there are some questions around ramp here, but this generally ties into onboarding.

Right.

So you hired these reps. AES have three to six months ramp. Let's say enterprise AES may be longer. BDRs one to three months. You have their quotas. What does that ramp period that onboarding look like? Rob's asking if you have a certification period.

We do. So one of the things that I hired, I've been at Kodak less than a year. I told you, I spent a few months just figuring things out, trying to get accounts and getting accounts on the account addresses and the accounts cleaned up was a big effort making sense of all of it. And so we hired Sales Enablement four months ago. I've got a great partner who actually came from Salesforce and is building that out globally across all the functions. And we don't have a certification program yet, but we are moving in the direction of having baseline onboarding program for everybody that's customer facing that comes into the organization and then eventually building curriculum that would splinter off based on role because there's definitely things you train an enterprise salesperson on that you wouldn't train a BDR on there's definitely training for A We haven't talked about SES but solution engineer customer success. There are all these tangential roles that have really different learning paths and baseline.

Curriculums and so what are some key elements of those for bdr AE enterprise A key elements that you need to touch on. You don't have to be like there's not things that are going to be specific for CODAD and Slack. But really what are some key things people should put in there? A lot of people tend to put very theoretical playbooks that people don't retain.

Sounds like you have a visitor so that will depend on your company. But they're obviously just like the core building blocks of any organization. You have to understand and we do a lot of training for just broad employees across the company like a product training and you know CEO welcome things like that for go to market particular in particular it's operational things like how to operate in Salesforce, how to build a quote if you're an account executive. Messaging positioning Objection. Handling very specific things for BDRs and account executives for SES and AES demoing. How do you even begin to find the demo account? How do you set one up? What level of customization do you have? So those are just table stakes for anyone that comes into the organization that you can train them on and get them ramped up much more quickly.

What's your favorite way to help Enterprise A's have a chance to hit OT during ramp with 6 to 9 month sales cycles?

Favorite way as soon as we give them accounts to tier the accounts and meet with them and say take me through your top three to five and let's just rip the COVID off of them and let's partner on them or bring in people from the extended team and just help them go farther faster. And if it doesn't seem like they've chosen the right top focus accounts to help them recalibrate that but I think that's a nice way to show where their head is, show how much they're picking up, what they are going to be focused on and then have a meaningful discussion about a subset of those accounts.

Let's talk about like org design, right? Like how do you organize territories? Is it revenue based? Is it territory based? Is it like how do you think about that? Let's say you have a North America wide coverage territories.

That's an interesting one. That answer probably looks different today than it did three years ago for most companies because now we have an interesting opportunity if we try and find silver linings in this catastrophe. The ability to worry less about region and think more about product vertical, that sort of specificity. Like I've got a leader based in New York who covers the banks and he has people spread out all over the place that cover the banks. But it's less about the region in which you live and it's more about your ability to articulate the solution for a particular product, for a particular subset of the customer base. At this point, I believe at some point people are going to come back and want to shake hands and kiss babies. We'll be somewhat more normal. And I've been to a couple of conferences in some places they're really happy to have face to face meeting and we're doing a little bit of it and I'm in our office in New York today. Then once we get a bit more of that or meeting face to face with customers, especially with the big accounts, I think regional focus makes a lot of sense for us, especially with big deals with big customers being able to see them and walk the halls. There's something magic that happens that you don't get between back to back zoom calls.

So you got to get on planes, trains and automobiles.

I could be wrong. I could be totally wrong. But I think for selling to big banks, they'll still want us to show up and put in the effort and have a meal with them.

We host so many events, right? Hundreds of events. And I fundamentally believe that anytime you incorporate more than two senses, they were like sound and sight right now, but taste, touch, smell, you have the opportunity to build stronger connections. Like breaking bread with people is one great way. And so there's data that proves that is the case. Get on flights, meet people. There is data to prove that. Greg asks here any suggested ratios of BDR's account executives to the number of enterprise prospects? Does that factor in?

No, I don't think about that as much as like the ratios of number of accounts to the tier of account executive personally where if you just can't like I can't give one account executive, bank of America and Wells Fargo and JP Morgan and Goldman and have them do those justice. So it's more. My brain is more focused on how much could that account executive reasonably cover when I look at accounts of that size in terms of the level of care we should provide them. And then the level of importance is where I think about the mapping of BDR to the account executives and what the revenue is we could expect to generate out of the set of account executives we Map the BDR to.

And then one thing we missed on the comp model here is like when you comp these AES, you're paying them on the initial agreement. What is the best practice? Or you're paying them on recurring mrr?

It depends. So at a lot of organizations you'd be paid primarily like 90% on the net new or growth or upgrade revenue. So any expansion, which lots of companies confusingly called acv, I actually like the acronym but annual contract value which is really NET or incremental ACV, but that's the primary driver for most of us SaaS companies is the growth that an AE drives in an existing account and a new account, what have you and then some renewal focus because I know both Lloyd and I are big believers in doing the right thing for your customer and exceeding expectations. Not because it sounds nice, but because it's the right thing to do and you'll probably have better outcomes and live longer. But renewals are important. Implementation is important, success is important. So some orientation for those that are really money driven in the comp plan, maybe 10% of their comp plan, 20% of their variable around renewal is helpful. So whatever that percentage means for you, some way to keep them focused on implementation success, renewal is important.

What are the different selling styles and when to use each? For example, what works with complex products? Talk about that discovery in challenging selling environments.

Yeah, so there are lots of selling styles and frameworks like transactional selling is overtly selling your product. That's what we all think of salespeople. That's why a lot of people try and get out of sales because they're used to that used car salesman type of sales. There's a really respectable form of sales. I'm very proud to have it in my title. But it's because consultative or solution based selling, that style of selling where you truly seek to understand before you seek to pitch or provide a solution and you really try and understand how important it is, what your other priorities are. You get to know things way beyond the context of how your product fits into that organization because it better helps you say something and position something that will really provide. There's a great trainer from Salesforce, Eli Cohen, who is now doing his own sales enablement. I'd encourage you to look at saleshood but he always talked about transformational, emotional and quantifiable. And the only way to deliver a message to a organization, especially a complex enterprise organization, is to do great discovery and find what will be transformational for them and the person you're selling to or the people would be emotionally rewarding for them and connected and have positive benefit and ROI that they could stand behind to their CFO and say, we need to make this purchase and here's why. And if you align all three of those things, you've done great work, asked a lot of the right questions, you've connected with them. And you can only do that with some form of solution selling, I believe. And they're all kind of variations on the same theme, whether it's Spin or Solution or Sandler. I like Sandler. And I think coupling that with Challenger, some Challenger mentality is important because otherwise you just ask a bunch of questions. And we ran into this at Slack where people are like, why are you asking me these questions about my operation and how this department works with that department? Like, I don't understand where you're going. And we realized we had to reset the team and start with a point of view, a perspective, a hypothesis for how we would transform them. So we had to do research before we got to those calls and come up with a real understanding or guess that we would challenge and test and let them rip apart and say, no, you're wrong, but I like where your head is. Here's what we really care about and how you might be able to help us. But that just helped us set context for Discovery. And they sometimes it was wrong, but that's okay. And we would rebuild it stronger. Definitely.

What's the most complex sales discovery call you've been in and what were some key learnings there?

We sold Slack to semiconductor companies. We sold Slack like we had. Netflix was a great account and they were using it on the corporate side without us doing too much. And then we expanded it to the production side of Netflix and that was like a huge effort. And our team was down in LA helping the tech teams and the production teams and every part of that production side of Netflix that makes all the shows we love, Ozark, the documentaries. Think about how Slack could help them pick the right scripts, cast the shoot locations and catering and everything through to post production and getting things onto the site. And that was a really interesting, challenging, multifaceted discovery session, which wasn't just a Discovery call. It's not a moment in time. Discovery, it's a process. And Discovery was part of every one of those touch points we had as we went through the journey of helping them see how Slack could play a role. They already had a lot of systems they'd built, but as a layer on top of all that technology, Slack was a ribbon that ran through from picking the script to pushing it out onto the Netflix site. That was a fun one.

And in the ideal world, right at a company that's at scale what percentage of opportunities should be inbound versus outbound that you find?

Any sales leader will tell you they want more inbound. I don't have enough inbound but that's. Yeah, I don't know if there's a magic percentage but it's usually a lot to outbound. For enterprise sales teams there's always a lot that's outbound. If you get 10 to 20% inbound you're doing well. I would caveat that and say there's marketing generated and there's marketing influenced and there's a lot of attribution that's lost along the way that's really helpful. There's ground softening from pr. There's a demand gen that may be like the lead that turns into the opportunity isn't accredited back to that original lead. But then they come to an event, they've touched through a bunch of different campaigns, they read some white papers and all of that is marketing. And there's a great feature in Salesforce called campaign influence. It's on the opportunity and you can attach a whole bunch of marketing touches to a deal and then show attribution amongst the sales efforts and the marketing efforts and try and bridge the gap between what part was truly sales driven and what part was was influenced by the marketing team.

There's a missing product in the market and maybe let's call it sales glue or whatever but like multi channel attribution is the hardest thing and sales reps usually put last touch or most organization do last touch attribution versus this influence by PR or events and whatnot. So that's interesting to note but I'll share example from us in a sense we went from we bootstrapped the company. We're north of 8 figures ARR growing 2x year over year up until last year a good 40, 50% came from referrals because of course we run this big traction community and maybe it was like something like 60 I think. And we had four sales reps. They were all called business directors of business development. They were all hitting quota. They were closing more like community a version of community management plus sales. This year we started adding sales development and for the last couple of months sales development is or BDR outbound is contributing to 50% of our new logos. And so I've formulated this thesis that you can build a sizable company Servicing one kind of customer, coming through one kind of channel, getting one kind of service. A lot of people try to think, oh, inbound, outbound and whatnot. But if you're crushing it with outbound, just double down on that. Why go and try to figure out inbound? Because it's not easy. And so now our mix is like probably 30, 40% BDR, probably another 30 or so percent referrals, and then like a small percent inbound. And we're trying to figure out inbound. But I think if you've nailed one thing, like you said in larger enterprise.

Companies, just do that maybe. But just to challenge that, might your drive towards inbound just soften the ground for your outbound? I don't know how you separate the two. You just, you're gonna. In doing inbound and demand gen, you're gonna get a lot of people more aware of who you are, and then your BDRs will have an easier time.

And it's also definitions. Yeah, it's also definitions. Right? What is the definition of inbound? Most organizations look at inbound as, oh, somebody found you on Google. To me, like, that's not inbound. Inbound is also like, we do like a hundred webinars a year. Hundreds of people are joining. To me, that's a form of inbound because it creates brand awareness for sure, and then it drives PR everything. Right. So that marketing influenced, I think is key versus marketing totally generated. What's in your tech sales? Tech stack? I mean, you're a veteran of sales. Of course. You work at Salesforce, and Salesforce is table stakes. Everyone needs to have Salesforce. But how do you enable your team? What's the. What does the tech stack look like?

You won't be surprised. Salesforce, Slack, obviously. Is Navigator indispensable? Sales navigator, sure. When Microsoft picked that up, I was like, mortified because I thought this indispensable tool. I'm in there, my wife's in Instagram, I'm in LinkedIn all the time. And I just. It's such a great way to form true connections. And it's. I actually, a lot of BDRs will send out an invite to link when they've never met anyone. I actually don't think that's the right method. And I'd be surprised if many of us would accept a random link just because it's a tax. And my team's like, oh, I see this person who I don't really know. It's just some BDR that sent me a nice message. And I Accepted their connection anyway. So LinkedIn, of course, is great sales navigator. We have Zoom Info to enrich the accounts. I talked a lot about how painful that was. Zoom Info is great for appending a lot of interesting information so we can slice and dice and dissect the territories. Pardot we have. We're currently implementing that to try to amplify our efforts and get some automation and outreach. Sales Loft, we use that mostly. The BDRs set up a cadence so it's like a drip feed at Adloy to the campaign. It'll send you the right message at just the right time that hopefully looks like I was thinking of you at the right time. But it's really an automated drip feed.

It's got a dialer too for calls.

I don't know who dials calls. I think we do have probably a prompt to dial the phone, but we. It's. The calls are part of the sequencing. But I think a lot more of it is LinkedIn messaging and emails than other outreach. But people do dial the phone. I think it's more prompt to. It might have a dollar. I'm not sure. We just bought Work Ramp.

What is Work Ramp?

That's an lms. So that'll help with onboarding and scaling so we don't have to do live classes for all the hires we're making. But we can build curriculum and that will help us with forking it so that we have curriculum for everyone that's customer facing. And then depending on your role, you'll get a different set of trainings that are delivered by people across the team.

And then you said you use GONG as well or.

No, we don't have GONG yet. We're looking at gong and chorus. Chorus, which was just picked up by ZoomInfo. The challenge we're having, frankly, with that is if we're calling a bank and we're talking to the underwriting team at a bank, are they going to be open? Would they change their behavior based on it being recorded? Or would they always tell us to turn it off and it's contempt before investigation? Or that's the discussion we're having with these teams to say, what do you see from highly regulated organ, highly regulated software like those who sell into finance. Does it work? Do the customers receive it well, but the benefits to that are undisputed. So if you're not selling the banks. I think we rolled it out at Slack. I didn't think it would go very well with our enterprise team. I was like, yeah, BDRs, of course, enterprise Will see our enterprise team loved it. The AES loved it because they learned from each other. When they had a great call and they crushed the objection handling they'd get shared around. A lot of people are fed by that. Not just the commission, the recognition and reward from a system like Gong. It's real. It just you don't want to flag the bad calls and send them out to the team and say never do this. I think that would diminish the participation. And then we're also looking at clarity and insight squared at some point to help us get a better handle on just the all the different signal that's in the machine that is hard to pick up on in manual reports.

Sales tech is getting more and more expensive and it's almost probably going to be at some point the same as the rep comp.

Maybe.

I hope not. There's a lot of buzz about account based marketing. How do you guys think about it? What is the ideal way to leverage that for companies?

That's an interesting one. Salesforce is just a content machine. They're a machine in so many ways to account based marketing there like when I led teams in Australia and I had someone that would ghost write stuff for me where you have a chat like this and then an article would appear in Australian English and they would release that. And so that makes ABM easier because you can create hyper targeted content for stakeholder, a niche stakeholder and a niche account and go right for one of your top accounts. Then there's like broad based demand gen that's on the other end of the spectrum that's trying to catch as many people with one message and it's super diluted and not specific. I think there's something in the middle that's really helpful where it's know the cohort, the profiles of the key stakeholders. What does that underwriter at the bank care about? What is the transformation oriented person at the bank? What do they really care about? What keeps them up at night? What are their priorities? And can we write things that will be pretty good for a broad set of that Persona? Like I think that's a better way to think for me to think about account based marketing. Especially with the lean team we have, we're still only 170 people globally. We've got the scrappy marketing team but to saddle them with getting just the right message to Lloyd Lobo, that's a tough way to go. Versus all right, if we've got the CEOs of these super innovative great companies, what might they be tuned into? And how can we raise their awareness and get just the flicker so that they answer the phone if we're dialing them or respond to the email and and just begin that conversation.

Actually I want to take a couple more. As companies now, you park market fit, you've got, you figure out one repeatable scalable channel. So you figured out outbound, you figured out the sales team. It's working. How do you strive towards revenue growth of 10x? What are some elements you need to have in place?

I love the 10xing mentality. So the Alan Shim from Slack, their CFO was always thinking this way and he from an operational perspective, a systems perspective, whenever when I chatted with him was always about like how do we 10x what we're doing? And in some ways it's really about just manifesting destiny, like plan for that and think about the interdependencies and the barriers to getting to 10x. And it's not just revenue. If you're 10x the size and you've got a totally different structure, structure, different org chart, different like needs from a technology perspective, from a systems perspective, there's so much that would break on your path from where you are today to 10x that size and think about the steps, the logical steps and breakpoints to get from where you are to 10x where you are and then start to build the machine that takes you on that journey. And I, you can I'm sure, pick the brains of people who are double your size and have seen it and like they've lived through and have scars on their back and you don't need to waste their pain. You can talk.

How big is your sales team right.

Now at Kodak we have a team of almost 15 or so in the US and about the same size in EMEA, so 30 or so, but lots of tangential roles in customer success and other functions.

And is it set up like a POD structure? Is it a self directed team? Like how do you look at it? Like you have two BDR, like a BDR and four AES and that's a pod. How is it actually structured?

I'm curious. The BDRs have discrete mapping to account executives to get the partnership going and the collaboration. Some do POD structures and other organizations, but that will continue to be one BDR to three or four account executives with more specificity as we grow the teams so that you'd have a few BDRs mapped to a single team. And in terms of the pod structure the SES are for now as we're small and growing. They cover everything. And we have one that's a bit more junior and a couple that are a bit more senior and those that are more senior are covering all sorts of accounts. We got one in the UK that's really focused on selling into commerce and payments. Who's just a weapon and knows that really well who we leverage in the us. So one of your questions was around like international. I would say don't go physically until you've proven it remotely. And we did a lot from the UK where we're headquartered before we put feet on the ground in the United States.

That's amazing.

As we had wins. Yeah.

I would imagine that you guys are a US company unless you told me that. And then do you have sales managers within you who are managing these A's or is there room for that or.

Yeah, sales directors and managers, depending on the seniority of the team members. So mid market and then two directors in the US for the banking and the other accounts.

And then what is the reporting ideal reporting structure.

Things tend to break around for direct in terms of leaders. And so as the organization scales, 3 to 5, 5 directs from a leadership perspective is probably where you want to start scaling and layering and putting in some other functions. But I think five to seven AES depending on the seniority is a good.

Ratio to one manager.

One manager? Yeah.

And then do BDRs have a dedicated manager or do you recommend they report into the sales manager?

I would not report them into the sales manager. If you're an enterprise sales manager and you're chasing big deals, how are you going to onboard a bdr? Not all of them will onboard a bdr, I'll just say that much. But that's a special skill. You've got someone that knows how to coach and get people fired up. And it's a really different type of leadership. So I would put them under one BDR leader who knows how to just break into organizations, work with core skills. It's like really different skillset than doing an org chart and an account plan for a very strategic account.

Makes sense. And your BDR is reporting to sales, not marketing.

Right.

I've seen it both ways.

Sales, that's your talent feeder. So you want them. They won't all stay in sales. I'm a big believer in them going wherever suits their interest and their career choice. But lots of them, if you do it right, will turn into the best AES you have in the organization. So you want that same mentality, that same profile and you want to Groom them into amazing contributors to your leadership team or senior AE positions.

What's the one piece of advice, maybe unconventional, that you have for founders and sales leaders that doesn't get enough recognition?

There's not enough focus on just have fun and be fun. Be fun to work with, be fun to buy from. And I think we get so wrapped up in what we think is very serious stuff. And it's not like we're not curing disease here in most cases. Maybe some of the founders and leaders on this call are curing disease and God bless. We're not. We're helping make SMB life better as they interact with services. But it just be fun to work with inside of the organization and with your customers instead of taking it all so seriously. I think authenticity just goes a long way and that's probably not news to anyone that's on this call. But I think that genuine nature and just keeping things fun is really important for scaling what you're doing because it gets more serious and warped sometimes as you get bigger.

Some resources books. What do you recommend? What do you give to your team as sales leaders or new sales guys?

There's a book I love that's old school called Selling to the C Suite and it's all about just like becoming a trusted advisor. And really it's just, it's not. It's like Dale Carnegie stuff. It's just it's oldest time but it doesn't change. And it's about how to be ready for a CEO conversation, how to ask for a repeat visit when you go do a lot of work with the people that work for them. It's just how to operate at that level of an organization. Great book. And then never split. The difference is a great one. It's a hostage negotiator for the FBI that talks about just core negotiation skills. So those two books are top of mind ones that I think are pretty. They're worth a read.

When you say Dale Carnegie, I have to mention how to win Friends and influence people.

That's what I was referring to.

Yeah, it's the first book I read.

Classic.

It's a classic. It's like how people should behave. Craig, what a great pleasure. I learned a ton, took some notes. Love and peace. Wishing you great success.

Lloyd, thanks so much. Talk to you soon.

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