“How to Create Longevity in a Sales Org & Why it Matters” with Justworks CRO and Director Sales

Like you just heard, my name is Jessica Hutchinson and I am the VP.

Of Product Marketing at paddle.

For those of you that have not been to our booth yet, we're in Hanger west or if you're not familiar with paddle, we have helped over 4,000.

Customers.

4,000 digital product customers operate and grow automatically and we fundamentally believe that SaaS is born global. But I'm going to share a little bit more about my PADDLE story later on in our presentation today. What I want to talk about is driving growth from within, specifically around what that means within a multi product strategy and what product marketing's influences on that. So what we're going to cover today is what is multi product, why it matters, when to do it, and then some key considerations, practical steps and our real world example of kind of what that looks like for us. So let's get started. So first I want to just quickly set the stage on multi product. This is really easy to kind of COVID A multi product approach is when you have multiple distinct products and they're all unified under one brand organization portfolio. But there is something else that you want to consider about that you think about the why multi product and kind of what is the intent? Why are you thinking about that? And there's a few different kind of strategies or intent signals to think about there. One can be are you trying to protect pricing, so protecting that core offering, so sort of essentially building a fence around it? Two, are you really thinking about how are you really thinking about different ways that you can build other products to move into that core product via other product on ramps? Or three, is it just revenue diversification? Do you have potentially a product that could potentially be subject to competitive or economic pressures of a single supply and demand.

Scenario?

So why multi product? And actually with this graphic, I should say really why expansion revenue, right? So generally what we see is that companies that grow fast are deriving a good chunk of their revenue, a good portion of their revenue through existing customers and they're doing that via Upsell or they're doing that by selling other products to them. And that expansion revenue comes at a lower cost and that lower cost is allowing you to be more efficient as a business. And that's a big topic right now, being efficient in a business or business efficiency. The other thing is that as you think about expansion revenue and you think about that, you're increasing your ltv, your lifetime total value. And what that's going to do is it's going to help improve your LTV to CAC customer acquisition cost ratio. Again Thinking about that, you have customers, your customers already know who you are. And it's a lot easier to talk to those customers and sell to those customers than it is to acquire new customers via sales and marketing. And the other thing to think about here, just as a, just as a quick data point is thinking about upsell. So you could either upsell or sell upsell plans or in cross sell across multiple products. Multi product is generally easier. I pulled a metric out of some of our profit well data that I had seen and what it says is only 25% of public single product software companies were able to generate greater than 20% of their revenue from outside their core offering. So how do you do it? Well, if you're small, stay focused on finding your core value prop and really identifying what those growth levers are. Single product companies grow faster below 10 million AAR, but you're not going to get from 10 million to 100 million AAR just on one product. But if you are below 10 million AAR, think about your core product and think about ways that you can create an add on or you can create maybe an enhancement to kind of that core offering that a subset of your customers are willing to pay for. Willing pay a lot for. If you're above 10 million AER, it is something to think about considering kind of that multi product scenario. But you will need one, you will need to think about multi product by the time you hit 100 million AAR. And it's hard. I can speak from experience here. So one of the things that you have to really think about here is really ensuring that seamless customer consistent user experience across the products. And that can be difficult. You have to be thinking about what that looks like not only individually, but what does that look like across the portfolio itself as well. Achieving product market fit, that's already hard for one product. So when you do that across multiple products, you're adding a whole other layer of complexity. And each product it needs to be able to address a specific market need, but it also needs to be able to demonstrate its value independently. One of the big considerations here too when you want to think about going multi product is really how you should segment your teams and when I mean that it's more than just a strategy of going multi product. There are a lot of considerations to take here when you think about actually how to think about this across all of your teams. Product engineering, sales, marketing, customer success. The other thing though is it's more than just the teams. How does this impact budget allocation? How does this impact decision Matrices. So there's a lot of, there's a lot of things to really think about when you think about kind of resource allocation and prioritization and really how that all is going to work. So, okay, I am getting into product marketing, I promise. How does that all fit into all of this? I set the stage for all of these things. Product marketing is really, I like to think of it as, it's the voice of the customer. It is our job as product marketers to really understand the pain points of our customers, really understand what they need, what they want, their outcome, what they, what their perceived outcome should be, what they think the value is. And it's our job to be able to take that and craft effective messaging from it. Something that can work across one product or multiple products. The other thing product marketing does do is we do work a lot with our customer, our customer teams, whether that's customer marketing, customer success, really to understand how are we educating our customers, how are you onboarding your customers? You really want to understand the behavior of the customers you have. Really, they're sort of kind of your most precious like resource. If you think about it in terms of what you're trying to get and what you're trying to learn from and from that customer, or excuse me, product marketing plays a big role in really trying to identify how do these products work together, what does that fit look like? What does the TAM look like? What does it look like across one of these individually, does it change across both? They're all questions that you need to be thinking about. And product marketing serves that purpose. I put this quick graph together. I don't know how well you can see it actually. It's just really to show you sort of where product marketing sits within kind of this world here, sort of right in the middle. And I like to think of product marketing as really setting the context right. They're really the ones that are there talking across all of these teams and making sure that all of these teams are aligned. All of these teams are talking and they have the context. So really thinking about it as that bridge across all of these, a lot of these teams. So along with doing that, we're the storytellers. We're helping our broader marketing team really think about these different strategies that we can use, use and try when we're thinking about our product approach. So considerations you need to know and understand your ICP across the portfolio. I know that seems like such a simple, like duh. But I'm just sometimes the obvious thing is the thing you need to make sure is stated. You need to do this before, before you start thinking about this, you need to understand what that looks like like and you need to be able to have an effective way to tell your company's story both within the company, within the brand itself, but also how do these products support that? How does that support your positioning? How do they all fit together? What does that look like? You need to develop a naming framework. Again, this is something that when you think about adding, when you think about products, when you think about adding a product, that it has to make sense across the portfolio, across your products has to feel like it belongs together. They're part of something. At paddle, we've done this through a framework of really trying to identify our challenges. What are we trying, what's the challenges we have, what are our objectives, what are we trying to do and then really what are our guiding principles when we think about this so that we don't have to reinvent the wheel every time we introduce a product or need to name a product. And we've actually applied this framework to our own selves when we've introduced some of our new products recently to make sure that they all do align and feel like they're part of something. Be considerate of the time that's allotted across your portfolio. Not all product products are equal. I think that sometimes there's some hard choice points to make there and you have to be really thinking about how that impacts not only your organization and the priorities there, but also the strategies themselves that you're trying to accomplish through product, through your marketing. Cross functional alignment on directions and priorities. Everybody needs to be aligned, otherwise you're running in different directions. Allows for clear focus. Super important. It's one of the big roles of product marketing actually I think and at Paddle we do do that. And you need to be okay with testing multiple approaches. We test things, we test messaging all the time across our website, across emails, across a lot of various things. We test it with events, we test it on talk tracks and we try to take that and really use that feedback and really learn from it. Not only learn from it, from marketing, but really learn from it across all of our teams and really try to just disseminate that across our teams. So don't be afraid to do that and it's going to take time.

I promise.

I'm almost done here. Ten minutes is hard. So I wanted to kind of go through just real briefly, just our multi product journey just to give you an idea of kind of what this story could look like. So at paddle. Over the last 18 months we've been through kind of a transformative journey. We acquired ProfitWell who had their own portfolio of products and brought them into Paddle. And each of our products offers something unique, but they're also all complementary to each other. And so really one of the things that we have to think about is like what does that story look like? And so I'm just going to kind of give you a brief overview of kind of what this looks like like for us. So at Paddle, we started with one company or with one product. Our product happened to be also the name of our company. It was paddle. That would have been our billing and payments product. We've since redone this by the way. We now have PADDLE Billing which is our payment subscription solution. Products handles a lot of things, but essentially taking all, taking care of all the things that slow down operations. That's essentially what this product does at its highest level. End to end payment solution. But when we were working with companies, we realized we were solving part of that picture because we had companies that were also looking to understand growth strategies and growth levers. So we needed to figure out are we going to build that or are we going to find someone that does that? And that's where ProfitWell came into play. So Profit. At ProfitWell we have our profit well metrics product. Many of you out there maybe use our metrics product but it's a really good way to understand growth within your company. We've got our retained product which is our churn management tool. Reduce churn automatically and then we've got our price intelligently solution which is really our package pricing and monetization experts that will really help you optimize against the goals of your business. So we with that sort of what from that one single product scenario to operating and growing growing as an integrated solution. So I want to go over some key takeaways real quick and then we're done. Expansion revenue one of the most effective ways to grow. Don't discount that. Establish your team structures early to determine how each product is going to be resourced. Have a clear understanding of your ICP across products and know where the overlaps are. The store PMM actually and will serve quite a. Serve you well. And as a multi product company your story needs to be able to support the strategy clear enough so that everybody can understand it from the newest person in your business to anybody else. And I think with that that's what I have. A little bit late. Thanks everyone. Please welcome to the stage Robert Lopez CRO at justworks and Valerie Avila, Director of Sales at justworks.

Hey, everyone. We are here today to speak to you about how to create longevity in a sales organization and why that's important. So picture this. You start the year, you have 38 Es, yet by the end of that same year, you lose 10 of them. 32%. That is the average attrition for AES in SaaS organizations. What if you could bring that down to 20%? What about 10%? How much more could you accomplish? My name is Valerie Avila, and I'm Director of sales at JustWorks.

Hi, and I'm Robert Lopez. I'm a CRO at JustWorks. JustWorks is HR tech company based in New York City. And we're really excited to be here today. But before we do that, I want to tell you a little bit about who we are. So I hired Val here back in 2014 as one of the first AES at the company. Just Works to give you a perspective. It's only been around about 11 years. So combined, we have almost two decades of experience at Just Works alone. And in a world today where you have turnover, average VP of sales at 18 months, average sales manager during AE, and a similar ballpark. We're here to talk about longevity, and we've done it here at justworks. And hopefully we can spend a little bit of time giving you some tactics that you can implement as soon as next week. When we started back in 2014, the business had about 30 customers. We're over 10,000 today, we had tens of thousands of revenue. Today, we have hundreds of millions in revenue. And so we've been a part of that, sitting in the seat that you all sit in today and punching through that first 10 million, 20 million, 100 million, 200 million. And some of these tactics, I think, will be really valuable in terms of how you can think about building an everlasting culture in your business. And when we reflected back on thinking about all the different ingredients, like, what has led to our success, what has helped us get to this scale that we are today, one thing really stuck out, and that was that aspect of longevity. Because when you think about that number 32%, it's like, would you rather be pushing a boulder uphill, or would you rather be having some tailwinds and thinking about how to build a meaningful culture over the long run? And so we have two themes today that we're going to talk through, and Val is going to hit on the first one.

All right, so those two themes are a sense of ownership that you want to curate within Your organization investing in team development. So if we think about a sense of ownership, Dale Carnegie has a study that shares employees that feel connected, that feel that sense of ownership to their organization. They tend to stay for longer periods of time, they have more productivity in less time and that overall reduces turnover costs for the business. But how do you build that? A lot of that stems with education, right? So you want to educate your people. How many of your sales orgs, how many of your AES know how your business operates? And I mean really operates how, how about how businesses operate in general? When you give out equity, that's some level of sense of ownership. But feeling like an owner is a lot more than that. So early on when I was in ae, Rob pulled me aside and broke down the concept of unit economics. I was an AE again. What did that have to do with my day to day? Nothing, right? Like it didn't really drive much of an impact in what I was actually doing in terms of closing business. However, it helped me gain perspective on the building blocks that it takes to build a successful and healthy business and it allowed me to co create okrs alongside Rob. And all of a sudden I felt like an owner. So you want to build the skills of your team and educate them on how to be successful within the skills that they need for their day to day. But on top of that, you always want to be thinking about how do you invest in their growth and in their knowledge as an owner. On top of when you do that, two things happen. Employees feel more invested and you start to build this bridge. People start to see the business as not just in their day to day, but how other teams are connected. And that starts to foster a connective tissue within the organization. So if you think about the company as a body, you have your bones, you have your muscles. If they're not connected, you don't go anywhere. Your departments are your bones and your muscles. As you're scaling, you go through rapid growth, people are heads down, silos are created, and all of a sudden your teams are working against each other. If you're not taking time to build them together, bring them together, you're, you're, that's an opportunity cost for the business. Isaac, our founder, had brought us all together to start this concept of a war room. Now what is a war room? It was all of us getting together to talk through blockers, inefficiencies, structure plans and actual different communication channels to chart a path forward that started to bridge more of that connection across the teams and started to create that Connective tissue. All of a sudden, your bones, your muscles, they were working together, and we could run faster. And on top of that, we would celebrate when employees went above and beyond from their scope to contribute in a bigger way to the business. So that started to build that, that cohesion, and we started to accelerate that growth. And all of that started to make everybody feel like they were part of a greater whole and created a sense of ownership. So build skills beyond what you need to know for your jobs. Teach about the business. And on top of that, start that war room. Build that connective tissue, right? Reward that moment when that, when that happens.

So that's how you kick it off, right? You got to have that sense of ownership, and that's the foundation that you really need to lie down. But once you have that, it's important that you make sure that people are running in the right direction. You got to make sure that you educate them. You got to make sure that you're really focused on instilling the right skills and where they're going to go. But once you have the right team, let an athlete run, let them go crazy and help them get out of the way. And so one example, so Val had an idea of New York tech ecosystem back in 2015 was a fraction of what it was today. And so there was female entrepreneurs that Val had met in terms of networking. And so what if we were to do a conference and an overall event focused on just women, like a women entrepreneurial group? It'd be good for them and help them build a community. It'd be good for just works in terms of helping us acquire new customers. And so we let her have it. We gave her a budget, we let her run with it, we put her in touch with a few investors, and a few years later, we had one of the marquee franchises that that has helped not only hundreds of women entrepreneurs meet one another and network, but has also brought dozens of new customers to justworks. And so when you actually see, when you actually have those folks that really are invested and have built that foundation, like, let them run with it and get out of their way. The second one is one that's extremely near and dear to my heart, and that's really all about aligning incentives and in terms of hiring internally, that balance of hiring internally and externally. And so there's no rule here, but I'm a big believer that you want to have about 60% of your leadership from internal promote and about another 40, 30 to 40% external. Now, internally, you got to make sure that they're tied to the culture of the business, they're ensuring that they're bought into the long term vision. But if you're not bringing folks in outside of the organization, you're never going to have, you're, you're always never going to get that outside perspective. And one of the more controversial things, if any investors are here in the room, we started to pay our account executives on their net book of business. So net of churn, net of retention, net of expansion over long periods of time. And that coupled with an AE progression plan that was highly quantifiable with very quantifiable metrics and scope that would expand in terms of tenure. What that has enabled us to do is to align incentives so they're only bringing on high quality business for just works over long periods of time. And so now we have A's that have been with us 3, 4, 5, 6, 7 years. And you see increased productivity as they grow. And if another company is going to go in and try to offer them 50k, another 75k from an OT perspective, it's really easy, right? It's a very competitive talent environment. And what we found is by paying them on their net book of business, it's increased our employee retention tension and decrease that overall turnover. Because at the end of the day, what they're getting is an incredible paycheck on an annual basis. Now we only do it assuming they continue to hit quota. But it's something that I would encourage you to think about. Although it would be a little bit of a battle in the boardroom, but it's something that you should really, really think about to drive those long term incentives outside of traditional compensation plans and outside of traditional equity plans. And so Val's gonna close it out with a few summary slides.

Yeah.

So what do we want you to take from today? Building longevity. In a sales organization and in an organization in general, it takes intentional steps. Ultimately you want to curate this sense of ownership that means you educate beyond the skills of the role. You educate on every aspect of the business. Help them feel like a part of what they're shaping and building and they're going to feel that sense of ownership. Build and maintain connective tissue across the organization. Organization. Launch the war room. Start to reward and recognize moments where people go beyond the scope of their responsibility to really contribute to the business in a meaningful way. Number two, invest in that team development. Rob called it. You gotta just get out of the way. If you're giving, if you're hiring great people and giving them the tools to be successful, let them do their thing, they're gonna step up. And then lastly is striking that balance between internal promotion and external hiring. And let me tell you, this guy over here, he hired somebody for a job that I wanted, but I'm better for it because I actually was given the opportunities to step up while still learning from somebody that had the skills that I didn't have yet when I was starting that journey into management. And striking that balance can be tough, but it is critical in order to ensure the longevity of that organization. So if you're able to start to implement some of these things and hopefully maybe you can even implement them tomorrow, you. You'll be well on your way to making that 32%, maybe even 10%, which is actually where we've been the past few years. If you want to learn more about this or talk about JustWorks, we're going to be at booth 2 11. So come and swing by and pick up some swag. Thank you all very much.

Thank you all very much.

Appreciate it.

Have a good one.

Please welcome to the stage Melanie Filet, CEO at Specket. Christina Ross, founder and CEO at Cube, Shiloh Johnson, founder and CEO at Compliant, and Brett Queener, partner at Bonfire Ventures.

What is up? Can you hear us? I want to introduce the crew we have here here today. My name is Brett Greener, a partner at Bonfire Ventures. And then prior to Bon, we're a seed stage VC company invest in B2B software companies at the seed stage. Prior to that I spent many years in software, including more than a decade@salesforce.com but to my left is Melanie Filet. Interesting, we got three amazing founders here. The olive are a certain type of. They were all practitioners in their craft, were so frustrated with the problem, they started a software company to solve that, which is an archetype that we love to invest in at Bonfire. So to my left is. You gotta yell ladies. Mel, who's a biz ops enablement enthusiast turned CEO of Speckit, which is a just in time enablement platform that delivers contextual, personalized coaching and enablement to revise revenue teams directly in their flow of work. After experiencing the pains firsthand of scattered resources across different repositories, ineffective onboarding, poor sales process, she decided to simplify and meet reps where they work with the answers they need. Launched in 2018, Specket has raised over $60 million and helped hundreds of teams transform how they enable their teams and fast track adoption of change. That's an intro just to spice things up. I'm going to ask each of the founders two questions. One, Mel, first question is, what is something about you we wouldn't know if we read about you online? Tell us something interesting.

Probably that I didn't live in the US until college, so I grew up in Geneva, Switzerland. I'm very Swiss and then moved to the Caribbean for my dad's job.

All right, so it's your first big user conference. It's spec it for lights go down. You're walking up on stage. What the hell is your walk up?

Music Not Afraid by Eminem.

Okay. Not Afraid by Eminem. It's a strong, strong call. Mine was Remember the Name by Fort Minor, but you have to cut it off at certain parts because there's some curse words in there. Directly to Melanie's left is Shiloh, CEO and founder of Compliant Cutting edge digital tax assistant, helping small business owners the simple way to manage all the business taxes in one place. She had a decade of experience as a cpa. She's seen firsthand the stresses and hassles that affect small business owners around managing their tax. Launched in 2020, Shiloh is one of less than 100 Black women to ever raise over $13 million in venture capital. Congrats, Shiloh. I also want to say I think it's for better, but Mel and Christina would say for worse. I am on the board of Christina and Mel's companies. Shiloh's the one that got away, so I'm still. I don't hold any grudges, though. She's here on stage. But Shiloh, tell us something about you I couldn't read online.

Oh, I despise chocolate. I'm certain it tastes like dirt.

You don't like chocolate?

Oh, no.

Mm.

Dark chocolate? Milk chocolate? White chocolate? Milk chocolate?

No.

All right. Tastes like dirt. It does. Walk up song.

Oh, Beyonce move.

Okay. All right. And then Christina. Serial cfo. Sounds weird. Serial cfo turn founder, CEO of Cube spreadsheet Native FPA platform helps companies hit their numbers. Two decade finance ventures veteran startups through public companies and was a former finance digital transfer lead transformation leader at Deloitte. After a disastrous personal experience with leading FP and a solution which is generally the case with most people, Christina set out to build the next generation of planning technology. Launched 2019, Christina has raised nearly $50 million and helped hundreds of companies around the globe go from numbers to narrative in record time. So, Christina, tell me something weird about you.

There are so many things, I don't know where to start, but I am the math nerd. And a family of artists. My dad played lead rock guitar in the 70s and 80s and he'll tell you he was one of the top bands in Buffalo. My mom writes poetry. I have a sibling who's a guitar player, another one who's a chef. And my first toy growing up was a cash register. So I did not get the creative genius at all in the family.

Wow. In my family, my parents were nice. It was a difference. So what's your walk up song?

This is from back from my CFO days, is our super bowl queen, Rihanna. Bitch better have my money.

Great. Nobody can hear us. We can curse as much as we want. It's awesome. We could sing. So I put this up here because my favorite quote working with founders is this one from Mark Twain, which is, you never learn from success. We only learn from failure. Right? You put your hand on the, on the grill, you burn your hand and hopefully you learn. You shouldn't do that again. All knowledge comes from, you know, the mistakes you've made in the past. And we think about startups especially sort of 0 to 25 million when early days, it's about 99 days, 99% failure, 1% success. And increasingly you want to get to some point of more success than failure. But the key is fast learning loops. How quickly can we learn? Did this work? Nope, that didn't work. That was stupid. Let's not do that again. Oh, that seemed to work. Let's do more of this. And so hopefully in this session we've got a fast learning loop for each of you. Each of these founders are amazing founders, but they're authentic and they're going to share what's worked and what's not worked for them. And hopefully you can get some knowledge that if you're a founder in the room, you can skip over some of these mistakes. So let's kind of get into it. So the number one thing that's come up in talking to these founders now, if you don't like this session, it's not my fault. You can blame Sam Altman. I asked each of them what are the top 10 mistakes they made? And I was sitting around like, what the hell am I going to do with these three lists? I threw them into ChatGPT and it came out and said these are the six most common ones. But I did go back and it didn't hallucinate. These are pretty common. So the first one is really about not hiring the right person at the right time. And the biggest difference between great founders and okay ones is their ability to attract amazing talent. It often feels like a full time job because it is a full time job. Founders are often like, well, I've got to do this, I've got to do this. I don't have time to recruit. And I try to tell them recruiting is a full time job. So. But getting this right is damn hard. It's been really hard of the last five to seven years with inflated salaries, people that don't want to work more than four days a week, that don't take instructive criticism, etc. Etc. And the other reality is who you need to hire changes dramatically when you're 1 million in revenue, 5 million, 10, 20. It's really hard to get that right. So I'm going to start with Mel. So let's start with you, right? You're an amazing team. Now, management team wasn't always this way and so you had a lot of fits of starts along the way. So can you speak to that journey with maybe some tips to the founders out here?

Absolutely.

Can everyone hear me? Okay, awesome. So just for a little bit of context, we didn't raise out the gate, we raised a little bit of angel funding, but it took us about two and a half years before we raised our seed round. And so the painful part of that was that I didn't have the luxury to hire execs early on. And so if you're in that boat as a founder, it's a painful process, but one that I look back that I think has really helped me now be able to have the kinds of conversations with our execs that are really, really important, being able to challenge their thinking and ask the right questions. But I'd say the biggest learning that I've had when it comes to hiring execs is one getting really clear on your own leadership style and the kind of execs that are going to work well with your style. And if you're a first time founder, you might be developing that leadership style as you go. And so that alone is going to kind of shift the kind of folks, especially execs, that you attract to the company. But a couple of the mistakes I've made is the desperate hire, right? So that's when you know someone unexpectedly leaves or there's a gap in the organization. You have an immediate need that you want to fill. And rather than going through the proper process of vetting and getting really clear on your problem and looking through a lot of candidates, the easy candidate shows up. Right. For us, that looked like, for example, a customer that loved Our product saw that I had just posted the job, and because they loved our product, I was like, oh, that's great. They get it, they'll be able to communicate it, et cetera. And in retrospect, they didn't have the skill set that we were really looking for to scale. And so that's the kind of mistake that you can kind of get into if you're really acting off of your gut and enthusiasm versus really getting clear on the hiring process. Another example of that that I think I did differently this time, and he's actually in the crowd, is last year in May, my co founder stepped away from the business for personal reasons and we'd really divided the business. I led go to market, she led R and D. And so now we had a void from a head of R and D standpoint. We were all set at the time in the company where we desperately needed help in that area. And I immediately spoke to our now head of R and D and it was. I got very excited out the gate. But I'd made the mistake before of hiring the first person I talked to and realizing that it wasn't necessarily the best fit. And so rather than repeating that same mistake, I told myself that I wanted to get to at least the final stage with a total of three candidates to really do right by the business and ensure that I'd properly vetted all the different kinds of skill sets and folks on the market. And so we went through that process. Press pause. We spent about two months continuing to have conversations, but eventually coming back to that same candidate. But I think it brought a lot of confidence in me that I was bringing in the right person. So I'd say the biggest piece is just getting really, really clear on what you're trying to solve and not acting too quickly based on your immediate need. And me spending that extra two months in the business continuing to get clear on our challenges and our problems ultimately led me to the right decision. So I'd say those are some of them great.

Christina, you've changed your process for how you hire new employees, especially your leaders. In fact, you asked to meet for lunch today, and you gave me like, a very detailed portfolio on a candidate and going through a process. But you've changed your process, especially how you vet your leaders. Can you speak more to that?

A few things that I learned that are very, very common mistakes. Number one, if you have the funds you've raised, venture capital, you want to invest in your people, which is the number one investment. Do not be cheap. Hire the recruiter. If we're talking about executive level hires, the worst thing we can do is say, I'm going to look through my network, have it take six months. You'll find out that the quality of people that will come through recruiting firms is substantially higher. I think from my own personal experience, I've certainly, certainly recruited people through my own network. But there's a reason they charge so much money. It's because it works. It also allows you to focus more time on the candidate themselves than the sourcing process. So that's, number one, is don't be cheap. Hire the recruiter if you can afford it, if you have the money. Number two, don't be afraid of the back channel. Basically, if you want to come to work for Cube, it's like we stick the CIA on you. I mean, not really, but we sort of go and make sure we talk to other people you may have worked with in the past. But you learn so much from these types of references versus direct references who may, you know, they came from the candidate. They may feel pressured to say only positive things. And then the third thing is once you, once you are checking references that you ask the really tough questions. In fact, I set up my own workbook in advance for doing back, not only back channels, but reference calls to ask the type of questions like how would you recommend I manage this person that will sometimes get some of the challenging answers around what this person needs to work on. Or if I saw you at a party in six months and I said it didn't work out with this candidate, what would be the reason why? And the reason why we go through all these lengths is because resumes and interviews are one thing, but you're really trying to see if they're the right fit for your stage company. And have they done it before? Do they have a history of promotion? Have they stayed at companies long enough to make an impact? Because we'd like for people to stick around for a little while. And so we go through a pretty robust process, but the folks that we have are just top tier. And bringing in great executive leaders means other great executive leaders want to join you as well.

Thank you, Christina. I'm going to go to the next question because I think I took 30 minutes to do intros. A big challenge, we see this across a lot of companies is in the, in the pace to like grow as fast as you can, quite frankly, to appease VCs, that we're asking all founders to just grow revenue at all cost, whether it made sense to or not, which is really Disconnecting from your customers. As you scale very early on, you're very focused on finding icp, narrowing down a customer, because it's really key. When you have. You've raised the seed stage to go to an A, you've got a limited amount of capital, so you kind of got to focus on one icp. But then you start getting success, you start adding a bunch of people and a bunch of money, and you start potentially taking on or building a lot. But then you sort of disconnect. And what I say is, you fail to protect the kernel. What makes you uniquely special? So, Shaila, let's start with you. Can you speak to instances at Compliant where you felt like your team was working in isolation? Your customer's voice and what led to that and how did you course correct and what tips would you have for other founders here?

So I think I was the one that was the most insightful about the customer and their voice because we serve very small businesses, and I am a practitioner, as you mentioned. And so that was my customer side. I knew them better than everybody in my company did. So there may have been people on the team that didn't know the customer. Oh, but I knew them, and I was speaking to them at conferences, webinars. That was our entire sales strategy, was me talking in rooms like this and teaching people about tax so that they wouldn't, you know, fall privy to some of the tax chaos that we have to deal with today. And that's ultimately how we sold the product for the first year. So the more we started to grow, I had to teach people on my team how to communicate with them the way that I did. And that's when I was like, okay, we have, like, a scaling communication issue that they don't understand the customer the way I do. So I literally set every single person in my company to get on the phone with a customer, and it became our customer discovery project. And it was like, you need to hear from their voices, the words they're saying and how they feel and think about tax, so that we can action our decisions. Whether you're on product engineering, cs, marketing, whatever, all of these folks need that language. And so all of the us need to get in front of the customers. It can't just be me. It can't be me knowing all the language and then me reciting it to you, because we're growing. I can't be there. And so I had to change our entire sort of customer communication model so that we could get to a place where we could scale and it became our regular practice even to this day.

Well, it's an interesting question, right? Because you were a CPA before. You were a CFO before. I've talked to both you, Christina and Shiloh about this, which is you guys are uniquely good at talking to your customers because you were that customer. Do you, do you feel the need to do a basic tax one on one because you can't hire all CPAs. That would be a boring ass firm. Right?

But like, yeah, we actually have this thing, it's called Taxapedia. It's literally like a notion page of like everything you could ever care about. That's like simple early education understanding of tax. We even teach this to our customers. There's a little bit of this problem is like we have to tell people they have a problem. Like you know, you have to pay a business license in the city of la, right? And they're like, oh, I didn't know that. So that serves as like our base. And then we say here's a software to help you manage it. And so it just works well for us. So our in house, we use the Taxopedia, we give it out to our customers. It just becomes how we think about and speak about tax.

Great. I mean when I look at metrics, if I see close rates dipping or retention slipping, I get a sense that maybe we're pulling away from the customer. What I'll say was I'll ask the CEO like, well, how many times a week are you talking to prospects customers? Like, well, not really anymore. I'm like, well that's a mistake. So Mal, can you speak? But founders are busy, so can you speak to how often every week you feel like founders should be talking to prospects and customers and what's the best way to do that?

I'll say early on I spoke to them all day long. And then once we started hiring a sales team, team and now our AES had managers and so I wasn't in calls anymore, that disconnect grew significantly. And so now I'm on three to four customer calls per day right now. And I kind of mix it up between customer QBRs and that's kind of a way for me to stay in touch with how our customers actually unlocking the value of our product. What feedback do they have? That's where I pressure test our roadmap and then I also join deals at the demo stage, basically where we're of kind of unveiling the solution and speaking to their challenges. I will say that one of the biggest mistakes that I made early on was, or I'd say when we were really growing post series A to series B was stop getting cc'd on all of our support tickets. There was a point in time where you're like, you know what? I don't need to be cc'd on all of our support tickets. I've got a support team. They've got it. And last May, I woke up one day and it's like, oh, crap. We've got all these, like, little paper slices across the product that I wasn't aware of, but in aggregate became a real problem. And so Now I'm back BCC'd on every ticket, you know, that we get through Zendesk. And it's just a way for me to really keep tabs on the quality of our products and identify the patterns that might not get surfaced to the top. And so there are certain small things like that that you can do to ensure that you're keeping the right kind of pulse on your product quality as well as on the voice of the customer.

Remember, Dan's in the audience at least the 12 years that I was at Salesforce now with Remote may be different. Outside of Benioff's office was always the SDRs. So every time he walked in and outside of his office, he could hear the cadence of the call track and how the conversations went, sort of kept him connected. Christina, how do you ensure your team, right, you're now north of 100 employees. How do you make sure your team, especially leadership, stays close to the voice of the customer?

We make sure that our employees understand our customer. So when you're hiring in certain functions, you need to hire experts in that function, not necessarily industry experts. So we evangelize FP&A into. So we have a campaign going on called FP& Slay, where we're training all of our team and providing education, showing customer videos, having customers talk to our teams to make sure that they not only understand the customer, but they fully empathize with them. And then the way that I ensure that this is happening is I stay very high level and then occasionally go very, very deep to sort of trust and verify that what the team is saying matches up with metrics.

All right, next one. If you're a founder, you know this, right? It feels like you are involved in every function, but you have to find the time to pull up and understand where you're going. It's really hard to do. So let's start. And getting this balance is not easy, but, Christina, it's a topic near and Dear to your heart. You love this stuff.

I love it.

You love being on the business, but you're also very good in the business. Can you speak to this balance between getting shit done and sharing your head on the right path? And what's the biggest impact you see when you don't?

I was talking to a fellow founder over drinks and I was complaining about like, how busy my calendar was, how much stuff I had to do, and he sort of checked me and was like, your job at CEO is to do a lot less than that. In theory. It means that you're. You're not working on the right things if you're that busy. So there's really three jobs for the CEO to work on the business versus in the business. The first is to set a very clear vision and strategy. Become the chief repeater officer and repeat it over and over again until people are rolling their eyes. And even then you're probably on the right path. So number one is make sure that you set a very clear vision and repeat it often. The second thing is to hire the right team. So back to the first. The first answer, making sure that you have the right people and you're bringing on the right people. And then the third one is repeat number one and two indefinitely. So you're always focusing on the people and making sure you have a very clear vision. Anything else? Diving too deep on the path. You know, post 2 million to 10.

Million means that you're probably working too.

Closely in versus on the business. We're always deep diving, especially if an executive leaves and there's an open function. But in general, staying at the 30,000 foot level ensures that your team can go deep. Another way I've heard this said before is as CEO, you're focused on the what and your team is focused on the how.

Great. I'm going to ask both of you this question. Cowbell. Somebody wants something exciting. So look, running a company, you could work 24 hours a day, seven days a week, but you probably shouldn't. So how do you manage your energy and time? How do you prioritize your own tasks? Ensure you're focused on the most critical areas, but also give yourself enough time because otherwise you just turn. People just turn into spazzes, right? They can't sort of reflect. So I'll start with you, Shiloh.

I am not as good as Christina about making sure I'm focused on the things that, you know, working on the business, but I think what I try to do is hyper focus on the tasks that matter in that moment. I'm very much moment to moment. I don't know if I can think too far past this week. In fact, I'm only looking at my calendar for today and then I try to time block and then I only focus on really the top three things I need to accomplish in that day and everything else I'm either delegating or moving on to another day.

Mel I'd say similar to Christina, I kind of look at the business each quarter and look at what part of the business do I really need to lean in on. This quarter is sales and marketing. And so I'm going to spend the majority of my time there with our go to market leaders, etc. And so I try and identify like what is the biggest problem that we're having in the company and where do I need to really spend my energy and time. And in terms of being intentional with my time, I'd say I'm very much a work in progress. Probably my background biz ops, like I just love the actual act of solving problems and getting my hands dirty. And I've. I feel like I've been challenged in the past and the CEO of MongoDB I think said it best. You know, when you think about your team and most people, they'll do what you inspect, not what you expect. And so I've tried to really find the balance of what is the right level of inspection that I need to have in different parts of the business to make sure that there aren't blind spots, that there aren't gaps, that there aren't things that are happening that you know, are going in a different direction so that I can sort of to the top and similar to you finding.

The right people, Melanie I mean, Christina, part of this working in and outside of the business is people get the balance if they have the right cadence. Right? Everybody should just use the V2 mom, but everybody refuses Dan to use the V2 mom. I don't know why, but what works best for you in setting the proper cadence and format with your management to review performance and decide on course corrections?

So we are very, very focused around a planning calendar. And if everyone doesn't have this in your business, I recommend you get one. Everything revolves around our cycles so that there's less thinking about the cycles that we need to have. So we have a quarterly board meeting. We have our quarterly OKR planning, we have our quarterly OKR reviews, we have department level reviews. It's all planned out in a calendar. There's an owner for it that'll help you take Time out from figuring out, oh, no, we have to do this thing. We haven't done it in a while and it sort of runs itself. So that's a very important part of being successful. Going back to planning, failing to plan is planning to fail. So have a plan, put it in a calendar.

Great. No one did this over the last five years. Chasing growth. I don't know. For sake of chasing growth. Look, founders are, you're focused on growing your top line as fast as possible. The venture capital industry tells you to go do that, right? Double, double, double. If you don't do double, double, triple, triple, triple, double, double, you're a loser. You know, it's like some weird show of like Talladega Nights, like if you're not first, you're last. It's actually not true. You know, there is second, third and fourth. In fact, at the Players Championship, the number two won $15 million at the PGA this year. But look, you, you want to make sure that your plan growth is achievable and sustainable. And going for growth before you do so sucks. Like, I'm sure it's never happened in this room. But you go, you raise money, you tell the VCs, I've got it figured out. You hire 10 reps, and then you realize, yeah, shoot, I don't have any pipeline for these people. And then everybody's sad and then they say the company's broken. And then every, you know, that never happens. So. But if you wait till everything's perfectly ready, you're never going to grow. So this is really, really hard. And this is hard at every stage. So let's start with you, Mel. What do you say is core for any founder to have confidence in before putting the pedal to the metal and say, investing in your sales teams?

Well, here's where we went wrong.

If you got to your 2 million number, you probably had one or two reps. Very involved founders, right? Your product went from baby product to evolve. They gradually learned you were doing a lot of co selling with them. You learned, they learned how to sell the way that you sell and how to position, etc. And once you raise your Series A or Series B or whatever that money is next, the conventional wisdom is great. Now if you want a 3X, right, we need to grow by let's say, 5 million. Let's assume because one rep we have was able to do a million dollar quota, let's assume that we need this many reps in this ramp schedule and boom, let's go higher. What we learned the hard way Is like, that's just not going to work that early. Once you have enough reps that have gone through the ramp schedule and that you've actually seen like, like what is their ability to create pipeline, right? Unless you're the exception, you have this like insane inflow of demand gen that's just fueling your reps with like ready to close deals. Maybe you can assume that, you know, your first two reps are model reps for the rest of the reps you're going to hire. But the reality is it's probably very different. And the amount of time and effort and enablement and coaching and everything else that goes into taking your next, you know, let's say 3 to 10 reps to productivity looks very different than your first view. And so what I'd recommend instead of kind of looking at the model and arbitrarily hiring reps based on, hey, this much quota, this ramp time, etc. Is like, look at their calendars, look at their calendars. How busy are your reps? Calendars? How many deals can a rep actually be working at once? And mix your top, you know, top down approach at modeling with your bottoms up and take a very kind of gradual approach at hiring. Because the problem is once you start hiring a bunch of reps, then you need managers and before you know it, you're completely disconnected from what's happening on the ground. You don't know if someone isn't ramping because of the market, the customer, the product, is it the bad fit rep. So I'd say I would take a much more bottoms up approach at hiring the next few reps beyond your first couple to get it right. And I'd also recommend, I got this advice early on, I can't remember from who, but always hiring reps in pairs because it helps you identify basically, like if there's something if someone's off, right? Because it's rare that every single rep you're going to hire is going to be the right fit. But hiring them in pairs helps you kind of gut check, right? If they're receiving the same training, if they're receiving the same kind of coaching, are they actually ramping at the same scale?

So it's a great answer.

Shiloh. How do you know in theory? Oh, I've got repeatability in marketing or I figured out this SEM strategy, or I figured out this. Okay, now we know, let's throw money in. How do you know? Or maybe you don't know. You have repeatability in a function, right?

Yeah, I think for us early days, we don't have sales folks. We are product led. So it was all sort of test and if they bite, we repeat, bite, repeat. And so early days, we were just trying to find, find models that work. So we were testing a lot of stuff and if anything even halfway signaled like it was going to be successful, we were jumping on it like, okay, let's go ten toes down on this thing. Let's double bid ad keywords, let's write a blog, let's do whatever. And so that just became our cycle. And so much so that the numbers started to become outlandishly obvious. So it was like, oh wait, we can clear 100 new users in one week because of this keyword strategy. Or this landing page is converting 30%. Great, let's shove money. So some of it became really obvious because the things that weren't working was like one. So we were like, okay, that doesn't work. That's not so that's the thing about product LED is a little bit different in the sense that you get to let the user or sort of the person like flag or sort of trigger when it's time to dump money into it versus having a sales structure where those folks are responsible for sale. It's really the user that's responsible for the sale. They're telling me when they want or like what they like about the message that they're willing to buy. And so we're just watching what messaging works and then shoving money into those things that work. I don't know how scientific that strategy is, but it worked.

So something worked. Let's do more of it. Yep. If it doesn't, let's stop, try and try again. What was the first five years of the Salesforce operating playbook? Kid you not. There were no blogs for us to read. 5. This is hard. So you set up your plan. We have our plan in our spreadsheet model. It looks perfect and it's beautiful. It's got all the magic number. Everything that you know David Sacks likes to see and then you miss. But the question is what to do? And we think that the founders that are the best in the industry are both agile is that they know when to respond to plan, under over performing performance and adaptive. And then how to operate must change at different inflection points of the company. So, Christina, I'll start with you. You're a former cfo. You are more than well versed in the world of planning variations and forecast. In fact, you're in the business of making that even far easier for companies. You've said before, failure to plan is planning to fail. So can you speak more to this?

I'll start with saying, I think the number one misconception or mistake that people make with planning is assuming it's the same as forecasting. Like a plan doesn't necessarily mean you're going to hit it perfectly. And if it were, I think all of us people who consider ourselves planners would be in Vegas and we'd be gambling. It's not the same as forecasting. What makes planning, what makes a good planner is the ability to respond to changes very quickly and having multiple plans for multiple scenarios. So even in our business, when we're slightly off plan, we'll know in advance of when that the end of the period hits. So we'll look at predictive measures and we're constantly measuring and able to adapt in real time to that speed. So one of the things we tell people when we're looking at plans is don't focus too much on whether your forecast was 100% right or wrong. Obviously that's very important. But you, but if it is off, respond very quickly so that you can get yourself back on course. The other thing is, I always tell all folks, when you're planning for revenue especially, you should always have three versions. You're most likely the version you tell the board and then what you have for your company plan. So there's a quota attainment, there's a company plan, that's the number that you evangelize to the company, and then a board plan. So you have a little bit of room in between for goal setting and also for in case you miss your plan, you don't necessarily run out of cash, you have a little bit of a hedge. So all this is about setting yourself up for success, knowing that no one is a perfect forecaster, no one knows what's going to happen in the market. We've all seen too many unforeseen events. It's about the ability to make changes quickly and constantly.

Thank you. So now let's assume you're going through, you decide we need to make a change. But making change is hard when you're north of 100 employees. How do you align everybody? Now, everybody's not in the same office, they're remote, etc. So do you have any advice for founders, like, they need to make a change. How do you make that change to get people rallied and execute against that?

I don't have a perfect answer. It's difficult. I will say that as a leadership team, I, I think We've gotten a lot more effective at working together all towards the same goals. I see our head of R and D nodding over there. I think in the past what was happening is that we'd set OKRs, but we very much took the department approach like, okay, sales doing this, marketing's doing this, R and D is doing this. And there was just natural misalignment that was happening as a result. And so now this year we've taken a different approach which is you've kind of got like these four core themes. So one of them, for example, this quarter is around driving the impact home of our solution spec it. How do you measure the ROI and impact that we drive? And under that goal we have sales, marketing and R and D each contributing to it. And that's really helped us just as an executive team, get rallied around it and then be able to translate that down to the rest of our teams in terms of big changes. I will say that erring on the side of transparency is really important, but also just knowing kind of the order of communications and how it needs to go down. I think in the past one of the mistakes we made is that some of the bigger changes were getting communicated to our managers like maybe hours before they were getting communicated to the broader team. Right. Even if our exec team was on board, managers were not given the proper amount of time to be able to really respond. And that's a big change that we've made, is to really try and bring managers more into the fold and give them a bit more advanced notice because ultimately they're going to be the ones on the ground. They're responding to questions of their team. So again, small, but trying to find ways to ultimately align the people because that's where it all starts.

I like that idea of aligning the functions under the themes. All right, we're going to leave some time for questions. The last one, and this is the hardest one for all founders, which is not trusting your own gut and expertise. Founders forget that venture capitalists invest in the founders first, business idea second. And you have this weird thing as a founder that as you scale, everyone's like, I need to hire a management team, I need an experienced management team. And so then you go and hire the pros and then you're in a meeting and you're like, I think the pro's friggin wrong. But you're supposed to delegate, you're supposed to empower. And getting that balance is really hard. And so I'm going to ask the same question to each of you. I'll start with Shiloh. Can you talk about a time when you should have listened to your gut and you didn't? And then second two part question. Do you have any tips for when you have a gut feeling? Because if you've got a gut feeling as a founder, it's going to eat you alive until you either validate it or dismiss it. So we'll start with you.

I think, for the first part of the question, it starts a little bit with determining what's your, like, gut and what's just negative self talk. So as long as you can differentiate what that is, if there's just something there and you're not quite sure what it is and you need to figure it out, that's one thing. But if it's just you telling yourself a story that probably doesn't really exist, that's a whole other thing. So it's making sure you can hear the difference between the two, I think has been important. I actually trust myself a lot. I trust myself a lot more than maybe I should, I don't know. So I will bet on things that I believe to be true that everybody in the room will say, like, you're crazy. Why are you doing that? And then later down the line, it will make sense. And then they're like, oh, we didn't see. So I think the one time I didn't do it, someone said to me early on was like, I had this thought how I was going to hire. I was going to hire all these ICs, because really, in my mind I was like, I just need people to do work. I don't care if you're a chief, whatever, you know, there's three people in this company. Figure it out. So I didn't think about it that way. But now that we've gotten so large so quickly, someone said, you need to hire ops. Like, that needs to be the first person. I'm like, I don't need ops. I need someone to code. No, no, no, you need ops. And I just did not listen. I did not trust, and I should have. And something in me was like, maybe they're right. And I went against it and we paid the price because now we need an OPS person. And I'm drowning. I'm so busy. But also just reminding, that was a reminder to me, like, you know what you need to do, and when you feel it and you believe in it and you can validate that to other people and explain that to your board, who's usually the ones that want you to justify why you're making whatever decision you're about to make. And if it makes sense to you and you've got a group of investors and backers that really support you in what you're doing, they'll believe you. They'll ride with you as long as you can make it make sense to them. Now, if it's not making sense to them or anybody else, you may want to reevaluate. But I think as long as I trust it and I can connect with the people that I trust and explain that reasoning and they see the logic in it and they're not poking holes in it. When people start to poke holes, then I'm like, okay, there might be. I need to rethink this. There's too many people thinking maybe this isn't a good idea. But for the most part, like, you've got to sleep with you. You've got to look in the mirror and be okay with the decisions you're making. And no one's going to say, like, oh, you get a pass because so and so told you to make that decision. You're the CEO, so you've got to own it. And part of that is trusting.

It's funny, I remember having a conversation with Christina when I was like, you need ops. She's like, we don't need no ops. But as a former OPS person, I was, you know, as a former OPS person, I was offended by that. But, Christina, that's a little unfair. So, Christina, how do you validate or dismiss your gut?

How do I validate or dismiss it? I think you told me this once, which is you have to trust it. It's usually right. That's why it's a gut feeling. I think the better question is, how do I validate or how do I push back or work with someone else who thinks something differently than my gut? So, number one, if it's someone on my team, I think it's really important to give the team trust. Even if, you know, maybe there's not necessarily right. And then what you can do with your team is, let's say you have, like, five silver bullets for the year. There may be five times this entire year where if I disagree with something, I'm going to say, okay, this is one I'm going to die on the hill for. And that way, at least you get a certain number of passes to trust your gut when it really means something. Otherwise, you give your team the opportunity to either succeed in or fail, because sometimes they need to learn that lesson for themselves. But you have to know how big of an issue it's going to be, which is why you get those silver bullets. And if it's a board, for example, you also have to remember that sometimes it's great advice coming from folks who have seen the space, but you're in the trenches every single day with your team and your customers, so figure out what's worth dying on a hill for and what isn't.

Yeah.

Mel, some parting thoughts.

I'll just say when I really think about the times that my gut was screaming I didn't listen. It's usually come down to people decisions. I think usually if your gut is telling you that someone's not going to work out, you should probably listen carefully and get clear on why that's the case. And I think the more people you hire, the more that becomes a little bit more black and white versus gray. I will say that there's two very specific people that are still on my team today, and I'm going to bring up one who was our original head of cs, where my gut was saying that, you know, I didn't think it was going to work out. I remember we had a conversation, I'm like, you know, I hired this person. I expected them to know all these things and do all these things, and it's just not, not working. And I remember, I think you gave me the advice, you're like, spend more time with them. And so rather than kind of make that fast decision, I ended up putting a two hour meeting on the calendar every week. And granted, we were smaller where we actually built the process together and doing that work together helped us kind of find that common ground. And to this day, he's still one of the best hires we've made. He's helped us grow our book of business. He's phenomenal. And so I will say that when it comes to people, trust your gut. But if you're not 100% sure, spend more time with them and really validate that your instincts are correct. Because they're either going to come out on the other side and surprise you, and it could be the best surprise possible, or it's going to become pretty clear that, you know, you should probably make that decision faster to part ways.

Awesome. So we got some takeaways here. So I want to. We're going to do a little bit of Q and A. But before that, I want to thank these amazing executives on stage here for joining us at Saster. All right, so how does this Q and A work? No Q and A. There's no Q and A, at Cantina, B. What a surprise. All right, well, good. Well, with that, we'll call it. Thank you so much.

Should I just press the button?

Okay.

Please welcome to the stage Shenzi Ding, CEO at Merge, and Andrew Schoen, partner at New Enterprise Associates, nea.

All right, all right. Can folks hear me okay?

Yes.

Fantastic. Thanks everyone for stopping by. Really appreciate it. See some friends here. That's fantastic. I see some Merge customers here. Thank you guys for showing up and showing some customer love. That's awesome. So my name is Andrew Schoen. I'm a partner at nea. For those who don't know us, NEA is a large global venture capital firm. We invest quite broadly into tech startups all the way from the seed stage through the growth stage. A few stats about us. We manage about $30 billion of committed capital across our funds, making us one of the larger firms out there. We've invested in roughly a thousand startups historically and have been lucky enough to see about 750 of those go on to achieve successful exits, which is actually the highest number of exits of any venture fund in history. We're really proud of that stat, and it's probably the highest consistency ratio of any scaled venture fund. But I would say the stat that we're most proud of is that almost half of those exits, so we crossed 300 not too long ago, were IPOs, which makes NEA by number the largest single backer of founders to take their companies public. And that's what I'm excited to talk to you guys about today with Chansey. So I was lucky enough to meet Shenzi in the boardroom of her prior company, which we backed. It was called Expanse. And just about two and a half years ago, Expanse was acquired by Palo Alto Networks for roughly a billion dollars. So not too shabby. But given the trajectory that Shence is on with Merge and the scale that they've already achieved, I can pretty confidently say this is going to be an even bigger outcome. So, Shenzi, why don't you take it away and tell folks a little bit about what you guys do at Merge?

Yeah, absolutely. Hi, everyone, I'm Shenzi, co founder at merge. We offer APIs, a lot of developers to integrate once, to offer full category of integrations to their customers. We currently cover hr, ats accounting, CRM, ticketing, file storage, and marketing automation, and soon three other categories that we'll announce as well. But yeah, really excited to talk today about how we've really approached our product roadmap during these tough macroeconomic times.

Awesome. So that's right. Our topic today is product roadmap against a challenging macro backdrop. So we're going to delve into four topics on that. The first one is pricing and packaging adjustments. What can you do in this type of market environment? The second one is customer onboarding and what can you do to optimize and streamline that process. The third one is infrastructure spend and the improvements that you can make in infrastructure infrastructure. And the fourth one, which is everybody's favorite topic is product integration offerings which merges a world class expert to talk about. So Shenzi, why don't you tell us a little bit about pricing and packaging adjustments.

Oh, absolutely.

Sorry, I clicked a little too hard.

So for pricing and packaging, I think especially right now, there's a lot of companies that just are not doing well and that includes some of our customers, especially in the tech space. A lot of later stage companies were in not able to fundraise, people were hiring less. And some companies were also struggling to sell. And so what we really valued from our board members was they really encouraged us to think long term about these customer relationships. Some of these logos that we've signed on in the past year are really iconic generational companies. And it was important for us to be understanding that even though they might not be doing super well, we had to prioritize the customer relationship and really try to make sure that we would be able to help them through these next few years. And prioritizing quality revenue is just a lot more important. Of course it'd be a lot easier for us to be like, no FPU, we're going to charge you 200% higher. But that's just not the right way to treat our customers. And we really, really wanted to make sure that during each conversation we wanted to show what our customers, what our value was and retain that relationship for the next few, for the next, you know, 10, 20 plus years. And another thing that was really important point about pricing and packaging was you always have to reassess how your pricing and packaging is working. And especially in certain different macroeconomic times, you have to think through, okay, what we were doing last year, is this still working right now? We actually hired a VP of Finance as like employee 10 and she ended up being a huge game changer for our company. And we've always been looking at these metrics over and over and over again. Every, every two weeks, every board meeting, every executive think, is this working? How are our metrics trending? What is the customer feedback? And it's just top of mind for us all the time.

Awesome. So it sounds like alignment is kind of the key word here. And when times are tough, making sure that your pricing is flexible and scales with the customer is kind of the key way to support those relationships for the long term. So one stat I'll share is that last year NEA and a couple other venture firms surveyed about 3,000 subs SaaS, startups and last year 46% of those companies were offering flexible usage based hybrid pricing model. And this year that number is looking more like 61%. So the advice to flex your pricing model to invest in those relationships for the long term is very, very timely. And so let's talk a little bit about customer onboarding.

Yes. So customer onboarding is really important for us as an API company. Actually a lot of customers onboard first and then sign a contract with us, especially since we have a self serve option. And what we've noticed is, especially since a lot of companies, if they test the product, they don't have great documentation, they don't have great support, they're not going to use the product. And so up front we really, really prioritize making sure the integrations work really fucking well. We also really tried to make sure our documentation was awesome. We built it completely in house and our designer just poured over every single detail. And we also wanted to guarantee that customer support was extremely responsive and that we the best customer support in the industry. So our team, we always try to respond to customers immediately. If there's a bug, we fix it immediately. If there's anything that anyone has a question about, we really try to make sure there's documentation or help center article or some automation that can help our customers as quickly as possible. And so this is especially important right now where there's fewer at bats because fewer companies are purchasing new vendors. And so every single time a customer has eyes on your product, we need to convert them. So we've invested a lot in our onboarding, we built it in house. We have a really amazing PM that's always looking at conversion metrics and also looking through where are people bouncing off, what is customer feedback, what are the intercom messages, what is, what are people saying? And it's paid off a lot for us.

Awesome. So seamless onboarding is really, really, really key. Let's talk a little bit about infrastructure spend, that's a hot topic today, especially with the chips shortage. How do you think about optimizing and improving the amount of money you're spending on infrastructure?

For sure. So we have a lot of customers when we first came out of stealth, we immediately had a couple thousand customers sign on and it probably would have been very easy for us to get to the point where AWS fan was just out of this world. But I think one thing that was really great was that our or my co founder and our VP Finance had a really strong partnership from the beginning to really make sure that Merge was a high quality business. Our metrics from the very first day matter. We couldn't have cogs. There are outlier horrible. We need to make sure gross margins look right, operating margins too. And so we've always really tried to like coordinate the partnership between R and D and finance. Looking at what our AWS spend is how we're slamming our servers, especially as a new customer onboards, how are these contracts structured? Are they efficient for us? Is this a good deal? And also making sure that when we are allocating engineering resources to optimizing the spend, is this worth it? Is this worth ROI of launching a new product or is it worth really trying to reduce what cost looks like? And my co founder is just really, really good at this. And I think we've been very, we've particularly been really good at this because we from day one want it to be a high quality business.

Yeah, I would say it's been a real delight to watch you guys scale. I mean Merge is a pretty unique company in that there's a high volume of customers, right? Thousands of customers, but there are also some massive enterprise logos in that customer cohort. You don't often see those two things together. And this is a very mission critical piece of technology. And so you need several nines of reliability and uptime. And you guys have managed to pull that off, right? Being probably an order of magnitude the most consistent, most reliable, most comprehensive vendor in your space. And you not only deliver that consistency and robustness to the enterprise, but all the companies that are mid market and startups and smaller, they benefit from that uptime as well. And then finally we should talk a little bit about everybody's favorite topic which is product integration offerings. And Shenzi as I mentioned, is a world class expert in this category. So we'd love to hear your insights on this space.

Yeah, I'm definitely not biased at all, course. But I do think integrations are revenue generating and especially if you use a third party provider, it can oftentimes be cost cutting. There's a lot of situations where you have to say no to a customer because they're using some, you know, random ATS or file storage system. That you don't currently integrate with. And saying no is so painful for the sales team, but saying yes means reallocating resources away from your core product towards something that you're probably not the best at. And so it's really interesting to be seeing how this industry is changing over time. But product integrations have such a huge impact, especially during this macroeconomic times. You can say yes to more deals and you can also reduce churn because someone is integrating every single system that they're using into your product, it's so much harder for them to unplug you and stop going to your product and stop using it. And so we've really been trying to encourage our customers to think long term about the impact of integration.

That's awesome. One of the cool things about Merge, and I'll say this, since you can't, is that it's a dual value prop.

Right.

So for folks who look at it conservatively, using a platform like Merge is a great way to save both cost and time.

Right.

So relative to allocating a team of developers to go and build your suite of integrations in house to probably take upwards of a year, you can do it efficiently and quickly with Merge. And then on the flip side, for people who kind of look at things more aggressively, using something like Merge is a way to accelerate your product roadmap. It's a way to stay competitive in an increasingly competitive marketplace, and it reduces friction in the sales process.

Right.

If you can already support all of the integrations that your customers want off the bat, that's a fabulous thing. And so for the small fraction of folks here that aren't already Merge customers, I would encourage you to check out what they do after our talk.

Yeah, and one great example of this is actually Drata. They were our first customer that ever signed with us, and for them, they became a unicorn in just one year. And it's really amazing to see how integrations made a big impact in not only the revenue growth, but also how they've continued to scale over time.

Awesome. So I hope we were able to share just a few things, you know, about how to adapt your product roadmap and strategy in a challenging macro environment. Hopefully, this was valuable and helpful. Shenzi, if folks have kind of questions about our talk about Merge, et cetera, how can they follow up?

Yes, absolutely. So you can find us at our booth in the other room. I'm there, my co founder's there. You can always come by and say hi. But you can also find us@merge.dev and I'm personally available at shenziemerge.dev and you can always reach reach out to me if you have any questions.

Cool.

Awesome.

Thanks, guys.

Thank you guys.

Sa.