Live from SaaStr Europa 2022: Stage A with Balderton Capital, Bill Binch, Payfit, Miro and SaaStr

Sam.

Please welcome saster founder and CEO jason lemkin.

Everybody. Thank you for coming.

For who?

Is this your first Astro event ever? Oh, probably more than half. Well, thank you for coming. I think you picked a good one to do it. I just want to. For now. Hold on, Sorry, let me go back, kick this off, give you some background on the day where we're going. Thanks for everyone for coming here and coming here early. We had actually almost 900 people come for day zero yesterday, which is pretty cool. In the States, no one shows up early, so I love it. Maybe it's Barcelona, but let me just walk you through how the two days will work. And then I want to talk just a little bit, maybe briefly, about what's going on in SAS and Cloud and what's so interesting. Every year we plan SASTER Annual, now SAS Europa, and it seems kind of normal and then something happens at a macro level that's just different. Right? And there's two big things this year to chat about next. But before we get there, these are some fun numbers for Europa attendance. We did. We've been doing SAASTR Annual in the States since 2015. It was a lark. We planned it on about 60 days of notice. I just asked some CEOs that I knew to come. Aaron Levy box had just IPO'd. Stuart Butterfield Slack had just crossed 12 million in revenue. He came. David Sachs came when he was retired after Yammer. Too many dudes. But it was a good first annual and almost 2,000 people came in the States in the first year. So we had something. But SAS clearly back then was big in Europe. I'd invested early. My first three investments were all Europe. Pipedrive in Estonia, Algolia in France, talkdesk in Portugal. But I think you can see in these numbers how Europe has really come alive in sas. And I think being distributed in Covid has only helped because everyone here should feel that they can hire VPs from anywhere in the world now. That's one of the biggest differences. It's amazing. That was one of the biggest struggles about coming to the us. And I know Christophe Jantz from Point Nine. That'll talk tomorrow. We used to talk about it, but now I see the fact that you can hire folks anywhere in the world and that the best of the best will work for the best startups anywhere is one of the most disruptive things ever to come out of COVID So it's neat to see this grow. We had 1800 come to the first Europa. One day in Paris, we came back to Paris and we maxed out our venue on the Left bank for almost 2000. And then things were looking really good for 2020. And then there was some minor changes in the world. We had to stop selling tickets at 804, but this was 2714 about when I wrote the slide. But I think we'll be at about 3,000 here and considering it's Barcelona, it's pretty cool. So again, thanks for everyone for coming. It's pretty, pretty cool. So we'll work on it next year, but hopefully next year we'll really blow it out. So I wanted to talk about two things. One, just to make an important point and it's pretty crazy to me that we're sitting here at the beach and we're 100 something days into a war in Ukraine. I mean, I can't get my arms around it a lot we could talk about. I wanted to make two small notes. One, we've put together two 50k donations, thanks to you, to the 1k Project. They've worked with a lot of tech companies to help families get out. And both Stuart Butterfield, I think donated several million and Alex from 2048 Ventures got it started. But we did a first 50k donation when we got this going and then there's some percent of tickets after that. So at least we'll be doing 100k something and helping 100 something families out and we'll do more here during the year and just say hi. I put this together two weeks ago, so it's early. We had about 25 founders and execs from Ukraine a couple weeks ago. I think we're a little over 50. I'm not exactly sure how they got here. Maybe they were already out of here, but there obviously are VIP guests this year and next year. But thank you for coming. I hope it's all long in the distant past, but by the next Europa annual, and again, everyone from Ukraine will be our guests, at least for the next year, our guests on us. So thank you for that. And then the one thing before I talk about the event, I just really wanted to talk about. I've been talking about this a lot. I've been tweeting about it. Folks have written up. TechCrunch wrote it up yesterday, which is like there's a lot of Debbie Downers and negativism on the Twitter and social media, especially from VCs about SaaS and cloud. But these, like, I'm not one of them. These are the best of times. And I wanted to just spend a couple minutes Drawing a few contrasts and talking about this and maybe. And if you look at the left and then we'll dig in a little more. Here's just growth of the cloud leaders aws, Azure and Google Cloud. Look how much they've Grown just since 2018, right? This is tripling the amount of spend in public cloud. It's crazy. And I'll show you some more data. But then look at the right. The right is at least as a week ago in the slide the stock market, right? So if you go all the way back, this is the Bessemer NASDAQ cloud index. If you go back all the way to 2014, you'll see things are still up 548%. So if you put all your money into the smaller number of public SaaS companies back then you'd be pretty good. You'd be up 5.5x. But look at the chart. What you did at the peak of January last year, you've just hemorrhaged in the market, right? Some of you may feel it, some of you may not. So these things are completely disconnected at the moment. They're completely disconnected. And I really want to dig into that because even though the stock market went nuts during peak Covid during Shopify went crazy, we got a little drunk during COVID and got drunk because everyone thought slope would continue forever but everyone from Zoom said it couldn't. And Toby Shopify five months into Covid but hey, hey, E commerce growing like crazy. But it can't grow like this. Like jewelry stores and shoe stores are going to reopen again but stock market never believes so we do have a head over to deal with on the markets but I'm really not so sure. And the challenge I want to give you all and we'll hit for a few more slides is my challenge to the founders and executives. Don't use this as an excuse. Don't use this as an excuse. For every company struggling a bit, there's another that's growing even faster. And find your customer. These are the best days for B2B. And don't don't want an excuse to miss a quarter. If you want an excuse to give a whole year. If you want an excuse to call it all, you have one use chart on the on the right. Use stock market. If you want unicorn and get a billion revenue, use the chart. A few we'll talk about because people are buying far more volumes than 12 months ago.

Far more.

And more than twice what they were buying just three years ago. More than twice in 10 times what they were 19 years ago. So let's just look at a couple. Here's just some recent quarters, just picking some outliers, but still Snowflake's growing 85%. At a billion. At a billion.

ARR.

So that's not just AWS and Azure. So if you're on the infrastructure side, look at Snowflake before you. Before you quit, before you give yourself an excuse. On the right, look at Asana. And Asana is like. I mean, Asana is an iconic company and they're their sponsor. Thank you. But Asana is very similar. Project management is one of the richest spaces in cloud. We have Ocean. How does Asana do? 500 million revenue. GitLab announced earnings yesterday at 400 million in revenue. They're growing 75%. Okay. And Salesforce, because I named this before, but Salesforce announced last week Salesforce accelerated at 30 billion in revenue. At 20 billion. At 30 billion, it's growing 30%. Think about acceleration for a minute. Like, think about it. 20 billion. Okay, growth now 30 billion. That means Salesforce, 10 billion of new revenue a year. So Salesforce seems to be doing Asana Snowflake again. I know some parts of the economy are harder. We can dive into that. I wrote down about certain stresses and pieces of consumer. You can look at Snap and others that have some stress. But you know, we have 3% unemployment in the U.S. i'm not sure what it is in Europe. And the buy is crazy. So again, these are the best times. Maybe venture fundraising is a little bit harder. And we'll talk about that ad nauseam tomorrow. So many great of the top VC funds. You can ask all the questions. You can meet with all the VCs we get to get in their heads. We can talk about the downturn in the market makes venture harder. I'm not talking about that today. I'm going to talk about what really matters is selling product. There's never been anything like numbers on the left From Gardner in 2020, according to Gardner, we're buying $120 billion of SaaS. Next year we'll buy 288 billion. 200 billion. So what you want as founders and executives is to find tailwind, right? To find little things that boost you. And don't get me wrong, there are economies that are doing worse than others. But look at SaaS. Attach yourself to this. You should grow faster than SaaS is growing. This should be a boost. Like you should be going to get a 20 to 30% boost to your growth every year. Just because SaaS growing just because SaaS self help growing the number of customers. It's true in nb, it's true in enterprise on fire. So don't give yourself an out now when the markets are so big. Another way to look at data is overall software. So overall software, not just SaaS predicted to grow in two years. 6147-540000-00000.

Right.

Another 20% next year, another 20% next year. Attach this way. It's crazy and I think I may have more than one white. I guess that's it. So again, slight data. Some of it's on SaaS or reposted it and I know it's hard. And also even when there's little tremor in the market for some sort of product, this idea of whether you're. What's the expression? Are you a medicine or what's the expression? I mean come on, we're all B vitamins. I mean let's step back for a minute.

The world will survive.

The world's okay with software that existed.

Last year and the year before.

We're all painkillers. It's never, never easy. No one needs yet to get another CRM yet get another field sales tool. No one needs another note taking tool or project management tool. But yet every year break out. So let it be no excuses, focus on where things are good. It may mean focus on bigger customers rather than smaller. It may mean that focusing on over funding unicorns is not the best thing for a few months. But everything except it's doing pretty good. So just a few minutes on how things work. I think more folks have navigated the venue than I thought. This is the formal kickoff even though we've had a bunch of sessions and then for the rest of the day we'll load out basically all four stages. Let me come back in a minute. If you haven't seen in it, there's this stage of the day, there's the one outdoors which is going to be much more popular than we thought. More stages and more volume shortly. And then this is a huge venue. We want open air and outside, so we packed it. So we take the two best parts of the venue, taking this floor and then the fourth floor was conveniently called P2.

P2.

So P2 is the fourth floor and conveniently make floor zero. So it's a little confusing. But if you have been upstairs, you go out right behind, take the escalators up a couple flights and get to top and one. It's about the most amazing views you'll see. We took the best View your jaw drop seeing the ocean. And there's three more areas for content. Upstairs there's State B, which is about this size but with breathtaking views of the ocean. There's a big workshop room which was packed. There's a lot of engineering workshops there and more later today. And then there's a room for super brain dates all the way on the fourth floor again called P2. But go up there and check out that content. And related to that, if you haven't signed up yet, one of the most fun things we do is brain dates. There's small sessions, 111-141-on8, and then there's bigger ones for like 16 and 32 people. The small ones are right out here where it says brain dates there's a session. And the big ones, we've broken up to the fourth floor, but if you have, you can sign up in the mobile app, you can sign up online, but don't worry if you haven't, just walk to the Brain Date booth here or on the top flight and just ask them what sessions you want to sign up. And if you are a CEO or a VP and you want to do a mini mentoring session yourself, you can also sign up right? Then sign up. It's a great way. Not only is it a great way if you're a founder, to share some of your micro learnings, but I've bumped into like 10 CEOs since I've been here that want to meet more VPs and executives. So do a little session on, you know, how you create the type of leads, how you do abm, how you segment your customers. If you want, sign up for one right out there and you'll find a few great people that want to meet with you informally and chat outside here. So they're always it. And you can sign up at the cantina and that mostly be it. Oh, just a couple other notes and then I'll break perfectly on time. If you were here yesterday, you saw that we broke out for a great day zero cocktail party. But we'll go full today and then both tomorrow and outside we'll fill this all up, this whole area with cocktail parties. So stay to the end of the day. We don't put on any later night evening events, but you can look at the email we sent out. We've got about six different folks sponsoring their own evening events. You can sign up, but we'll have big cocktail parties out here. And on the fourth floor there's this amazing deck that you see here. You can overlook the Ocean and there'll be cocktails and stuff upstairs on the fourth floor and you can chill there all day long. There's workstations and lounge areas upstairs too. We've got again the bottom and the top, which are the next pieces. So that's the agenda. If for some reason you want to hear more from me, I'm going over some deep learnings from 20 of our surveys that we've done. I think at 4 o' clock this afternoon and then two great sessions tomorrow. But if for some reason you haven't heard enough from me, come back in this room. It said it was outside but it's so big. We'll be back here for 20 top Lorraines to grow faster in 2022 and then we'll take a quick break, but we'll kick off the core content right now. Let me see if I can read this. Right on this stage we have David Kellogg, a good friend of mine and ours that's been doing like parallel SaaS blogging to Saster for many years. He's always a fan favorite. If you've read him or haven't heard of him, he'll be right here in just a few minutes talking about scale up mistakes. So more and more content after 10, 20, 30 million and beyond. Up on the fourth floor in the big workshop we'll have the head of revenue marketing at Asana. So revenue marketing is a great topic. It's something to learn a lot about and we haven't done as much here as we could. So go hear from Jessica. Stage B on the fourth floor, the one that looks out the ocean. PJ from Showpad. Pj. I've known, I think PJ and his co founder, I was almost the first person they met when they came to the States from Belgium. So a lot of joint learnings together from 2 million to 100 million. PJs just become chairman of Showpad. From CEO, they've gone from an SMB to mid market and more journey. He'll be honest, I think they've made every mistake as we all have in the journey to get there. And if you really want to talk to someone that's done the journey to 100 million, that's now chairman and we'll just give you the honest story. I would go listen to PJ up there and then this one is super packed outside. Payock's one of the. They're also one of our sponsors, but one of the fastest growing, growing unicorns ever. The numbers are kind of crazy and both the CEO who's Terrific. And the VP of marketing will be out there sharing again their mistakes. And if you're doing anything, especially if you're doing anything on the fintech side with payments, I'm still learning. I've done a few good investments there, but I'm still learning. This is the A team, so I'd go to that. So with that I'll break, but I'll be back at 4 for as long as folks want for these 20 learnings. And again, thank you everyone for coming. This is really appreciated.

Ram. Sa. It, Sam. It.

Please welcome executive in residence at Balderton Capital, Dave Kellogg. Morning. Well, thanks for joining me today. My name is Dave Kellogg. I currently work as an EIR at Balderton Capital out of London. And today we're going to talk about the top five mistakes in scaling up a startup. And do I have a slide clicker? How do I get clicked? Uh oh, this is a problem. Houston. One second guys. You. Hey, Jason, if you can hear me, I need a slide clicker. I'm gonna do the presentation anyway, so first I'll tell you about myself while they find me a clicker. I have a bunch of operating experience. I've been CEO of two startups. Ah, there we go. I've been CMO of three startups for a combined 30 years in operating experience, including companies like Business Objects where I was CMO as we scaled from 30 million to a billion in revenue. So that was a nine year journey. I've been CEO of two startups. One I scaled from 8 million to 50 million, the other I scaled from 0 to 80 million. So I have a lot of experience in growing startups as an operating person. And then on the advising side, I'm an angel investor in about 20 companies, I've advised about 20 companies, I've sat on the board of directors of seven companies and I think it gives me kind of a 360 degree view on a software company because I've been in the chair as a CMO or CEO and I've been on the board, so you can kind of see it from both sides, which is hard to do. And some of the companies I've advised include in Europe, Nuxeo out of Paris, Pigment out of Paris as well that does performance management. And their CEO Eleanor is speaking today at 2:00 clock plug for her recorded future. A Swedish American company. I was advising Scoro, an Estonian company, in work management where I'm on the board of directors as well as some bigger, more global names after that. So that's who I am in Addition to all that, I also write a blog. And if you've not visited, I hope you do. It's called Kel Blog. In French, it accidentally means what a blog. Quell blog. So in any case, that was an accident and I will be posting the slides to this presentation on the blog later today. So if you're here, congratulations. First, it's wonderful to be in Barcelona. And second, it means you're thinking about scale up, which is great because scale up is what happens really after you hit product market fit. And so much of a startup, you know, Marc Andreessen breaks the life of a startup in two. At product market Fit, there's kind of, you know, ad and you know, whatever it is, CE and ca, whatever is common era. And before common era, that's the way we think about startups. And a lot of content and a lot of energy is spent on figuring out, do we have product market fit? Right. And Mark Andreessen has blogged about it. Those are all links in the slides, so if you download them, you can link to these articles. Andreessen has written great stuff on product market Fit. A guy named Sean Ellis has a test that I like, which is you survey your users and a 40% or more would be very disappointed if you took away your software. That's how he defines product market Fit. Kind of a clever definition, you know, My definition is more typical. It's have you found someone to sell something to solve some problem? Right? That's it. Someone, something, some problem and sell, Right? It can't just be, oh, you solve a problem for me, it has to be. You solve a problem for me that I'm willing to pay to be solved. But if you have that, if you have someone to sell something to solve some problem, then you have pmf, in my opinion. And you enter scale up somewhere between 2 and 10 million in ARR and you're no longer in founder led sales. The founder isn't out on every sales call and the product is really no longer minimum viable. So this is what it means to me to be entering scale up. And when you enter scale up, you might think, wow, we solved all the hard questions. Because establishing product market fit is hard, right? Trying to figure out who that buyer Persona is and what problem you're going to solve and how much they'll pay for it, right? And how to talk about the problem you're solving. That's all really hard. So you might go, whew, the hard stuff is behind us. But that's not true. In fact, there's A lot of hard questions as you enter scale up, right? Questions like, how hard should we step on the gas in growing our go to market? Do we have the right people on the team? Do we have a repeatable sales formula? We'll spend a lot of time today talking about repeatability because it's such a core concept and it's so undefined, right? Everyone goes, do you have a repeatable sales model? You'll go, yeah, yeah, I do. And. And then you say, well, what do you mean by that? How do you define repeatability? And the answer is, most people don't have a good definition. And that causes a lot of trouble because if you think you have repeatability, you step on the gas hard, right? And if you're wrong, you can burn a lot of money. So we'll talk about repeatability. Do you have the right support and enablement? What's your plan for international? What shape will the company be at 100 million? How much will come from which segments of your business? Or if you have multiple products, which products? But at a high level, you know, I worked at one company, but we hit 100 million. We were actually two $50 million businesses. There was one vertical practice in government, one vertical practice in media, and it was if we had two $50 million businesses. When I joined Business Objects, we were like three $10 million businesses. A UK, a US and a French operation. So what shape will you have? And if you think about the shape you want to have now, that will help you going forward. How do you stay focused in an idea du jour environment, right, where board members with all good intentions are asking you, are we gonna have a run rate business? Are we gonna do plg? Are we gonna have a second product? Right. All these people who are trying to help you are asking you a lot of questions that can cause you to lose focus, and that's really hard to manage. Should you make a second album? You know, Jason Lemkin has done an interesting series of blog posts and tweets about when a startup needs its second product. And that's a question you're going to be asking yourselves the entire journey from 10 to 100. When do I need and do I need a second product? In my opinion, most people start too early, right? If. If you really have a $5 billion TAM for the thing that you just built and pitched, why do we need a second product? And the answer is someday we will. But in his research for enterprise companies, it's between 1 and 300 million. It's a long ways off. We'll talk more about that. And, and this one's my personal favorite. When should you start worrying about technical debt? Because it takes 13 years to get a company from inception to IPO. That's enough time to accumulate a staggering amount of technical debt. If all you do is have product managers prioritize features and keep adding features to the house of cards, it may tip over one day. So how do we think about that? So those are some of the questions you have when you enter scale up. So we still have questions and they're still hard, but they're different. It's not about product market fit anymore. So that said, here are the top five mistakes that I think companies make. And because I knew this was a European audience, I've dialed it a little bit for kind of European companies, but mostly just companies make in scaling up. So one, prematurely accelerating go to market number two, putting or more likely keeping people in the wrong roles, three, losing focus, four, messing up US Expansion and five, accumulating debilitating technical debt. So we're going to talk about those five things in this presentation and let's jump in to the first one. So this is in my opinion, by far, by far the number one mistake. You've just raised a lot of money. You just put out a very aggressive financial plan to raise that money. You're feeling a lot of pressure to grow fast and you're hoping you have repeatability. You're not sure, but you kind of just hope you do because not having it is kind of too scary and defining it is too hard. So we kind of say, okay, I hope I have a repeatable model, but I know I have an aggressive expectation from my investors. So I'm going to step on the go to market gas hard. And when you do that, if you do so prematurely, it looks something like you go from three salespeople to 13 salespeople in two months and a year later you're back down to three. Right? That's what this looks like because you've hired 10 people, tried to ramp them up, nobody was successful and the whole thing fell apart and then a few million dollars wasted. You say, I wonder if I had a repeatable model. Or maybe we didn't do enough to define repeatability. Right? So that's this problem. And it happens, first, as I said, because you prematurely think you have repeatability, second, because you're under board pressure, and third, because you've, I call this a spreadsheet induced hallucination, but you spent enough time with some spreadsheet and played with the numbers enough and you've convinced yourself that you have repeatability based on the spreadsheet. So you know, the world's worst reason to hire a salesperson is what I have on the slide there. If I don't hire one, we have no chance of making plan, so I may as well hire one. And a lot of salespeople have been hired on that logic. And that's terrible, terrible logic, right, because that salesperson, as we'll see in a minute, will be deceptively expensive. And if the only you should want to hire them because you think they can be productive. Right, that's the correct reason to hire a seller. The incorrect reason is, oh my gosh, I won't have enough capacity according to the spreadsheet if I don't hire three now. So I'll hire these three even though I don't love them and even though I'm not sure if the marketing has generated enough pipeline for them. And even though, and even though, and we do it anyway. And this mistake, if you get it wrong, it will cost you millions of dollars because it will most certainly cost the head of sales their job. It will wound the founder, CEO, you'll lose millions. The investors will have reduced cost confidence in you and employees, they'll have watched the whole train wreck that they will have reduced confidence in the company and its future direction, all because we stepped on the gas too hard. And one of the ways I try to convince people to be careful of this is to remind them how much it costs to hire a salesperson. Because the wrong way to think about it is, oh, if they cost 300k and they're 150k base, 150k variable, if they don't sell anything, well, they only cost me 150k. Right. That's kind of the myopic way of looking at things. The right way to look at it is holistically and say, wait, their OTE, their own target earnings is 300k, they're going to cost 180k for two thirds. And you could adjust these numbers to your local market, but do the exercise right. So I'm hiring a seller, I'm hiring 2/3 of an SC, I'm hiring 2/3of an SDR to work with them, a sixth of a sales manager and probably 100k in marketing. A typical opportunity in enterprise and mid market costs between 2 and $4,000 to generate. So if we're going to generate between 20 and 50 of those, we're going to spend $100,000 in marketing to support this seller. So all in that person cost me $700,000 to make that bet. And that's the way you should think about it, because you should be pretty sure you're going to get something back for your 700k. And by the way, the worst part about hiring bad ones, to me it's not. It's not the fact that you waste a few million dollars that's bad. But the heartbreaking part is watching the deal you lost speak at your competitors user conference. Right? That's heartbreaking. Seeing them on their website knowing you were in that deal and you were competing for that business and you could have solved that problem, but you sent a bad team in and you lost. And now for the next four years, you're going to have to look at that person on your competitor's website. That's the part that kills me. So the way I think, the wrong way to think about this is impaired. But contributing, oh, they're not that productive, but at least they're selling something and that's better than nothing. So we'll keep them limping along, right? That's bad logic. The better logic is the opportunity cost. What if you had someone good in that slot who would have won that deal and that big reference would be on your website, not the other guy's website. So the test I have for this is simple. As those who read my blog know, I'm very quantitative. And we'll talk about quantitative ways to measure this. But I also like listening to your gut sometimes. And the gut test on this is simple. Are you proud they represent your company? That was always the test for me. If a seller was having trouble hitting their numbers, I would go on calls with them and watch them and say, this person understands our product. They ask good questions to the customer. I'm proud they represent my company, they can keep trying. And conversely, right. If you're not proud they represent your company, you should probably get rid of them tomorrow. Right? So try to use that as a test. We'll talk about numbers as well, but go with your gut. Listen to some gong calls, go on some sales meetings with them, and if they're not the right person, remember the old venture capital adage, you can never fire someone too early, right? Because by the time you're even thinking about it, there's been a lot of damage done. So first time I heard this, I was young and I thought it was really mean. And the older I get, the more I believe it. I'm like, no, no, they were right. Because especially as CEO by the time you know about a problem, there's been a lot of things going wrong for a long time. Right. It takes a while for you to find out. So if you have one of those people you're not proud of, move on them now. How do we avoid this mistake? And the answer is we need to be realistic in self assessment. I do think that advisors and directors can help you. If you have good people on your board or good advisors you work with, you should grab them and just say, I'm trying to figure out how hard to accelerate right now and let them ask you questions. Right? Because they will tend to be more honest than you are, especially if they're independent. So they're not bringing pressure. Right. An investor may pressure you more because they really want you to hit that plan. But an independent advisor or director will usually be more objective and say, okay, let's talk about repeatability. That's the first thing. Second, hire according to empirical indicators, not the financing plan. Super important, right? Especially if you just raised money, which I hope you did, because it was a lot easier in the last 12 months and it's going to be in the next 12 months. But if you just raise money, you've got a pretty aggressive plan out there and in your head you want to go hit that. And that plan says you need to spend this much on marketing and this much on sales. And that plan is a terrible reason to go spend money. Right? So think of the plan as a tool to help you raise money and establish a direction you want to go in. But once you have the money, in my opinion, unless you're PE backed, which is a whole different deal, you put the plan away. And then you look at empirical indicators. You say, is now the right time to hire a salesperson or to invest more in marketing? So look at empirical indicators like quota attainment, what percent of your sellers are hitting their quota? Forecast accuracy. Are you coming in where you think you're going to come in? Pipeline growth and coverage. Right. Because sellers need pipeline to be successful. Second, beware pipeline discipline and what I call the pipeline chicken and egg problem. That is what comes first, the pipeline or the sellers. Because sometimes CEOs wait for the pipeline to build before hiring sellers. And I think that's a mistake. I think they should do both in parallel. That once you're sure you can make use, productive use of resources, that you should hire the sellers at the same time as you deploy dollars from pipeline. So the next thing to do is to learn what repeatability looks like. Because the essence of all this in the end is repeatability. And repeatability is like a holy grail in enterprise software. Everyone's seeking it, but no one's really quite sure what it is. And I want to give you a simple definition of repeatability, which is if you take a standard input and you apply a standard process, do you get a standard output? So, standard input, standard process, standard output. What's the input look like? Well, that's a hiring profile. What kind of background do we want our sellers to have? It's hiring criteria. What yardstick do we measure them against? And it's onboarding. So we're gonna take a person who looks like this and we're gonna put them through this onboarding class and then standard process, we're gonna give them our standard sales methodology and tools, we're gonna give them our standard sales management and we're gonna give them our sales process and methodology. So we take a standard person, put them through a standard training and tooling and do we get a standard result? And the best way to measure that result is attainment. What percent of them hit their number? The problem is it takes about a year to know that. Right. So we're going to need to find indicators along the way. But really the true measure of this is you take the cohort of reps you hired a year ago and you say today, how many of them are productive? We can look at them as they ramp, right? Because most people will put them against a ramp to target. And we can look at their productivity. How much are they selling per person? But the real key to repeatability is if we take someone who looks like this, put them through our program, there's an 80% chance they'll be selling a million or more a year in ARR. That's repeatability. If you have that, then you push all the accelerators forward. If you don't have that, then we have to figure out how to get that. So I do want to talk about attainment for a minute because there's a lot of nostalgia on attainment. And when I was an executive at software companies, we'd have these old board members and they'd say, well back in the day that if somebody missed their quota two quarters in a row, we'd fire them. I can't believe that you guys have all these people who've missed their number two quarters in a row. Or they'd say back in the day we had 80% of our sellers at quota every quarter. And the answer is probably no you didn't first, you did not have on a quarterly basis in an enterprise company, 80% of your reps every quarter. You might have had 80% every year. You might. Right. 80% at 100% of quota on an annual basis is very good on a quarterly basis. It's almost impossible in enterprise because it tends to be backloaded. It's very hard to hit your number every quarter. So I would just say beware of these comments because while you're out trying to find repeatability, that's noise. That hurts you, it doesn't help you. So my take personally, if you can get 80% and 80% annually, you're doing pretty darn well. And by the way, you should also be on your financial model. I won't do the math, but if you, if you have 80 at 80, there's a very, very good chance you're at or ahead of plan. We can talk about why later. So that was our first topic. We spent most of our time on it because I think it's so important that we don't want to step on the gas too hard, too early because we're under pressure. We want to step on the gas because we think we can make resources productive. And if we do that, we'll avoid premature go to market acceleration. The second mistake is wrong people in the wrong roles. And the easiest way to think of this one is one day, I think it was a recruiter said to me, he goes, dave, you're really a figured out person, figured out guy. And I said well what's the other type? And he goes, well there's two types. There's figured outers and there's scale it uppers. And you're more figured outer. You like figuring it out. You like working with companies at a really early stage. For example, to find MVP and define sorry PMF product market fit. He's like, yeah, I do like that. I like figuring it out. And if you look at your startup and if you've worked at different companies across your career, if you look at people, you can start to say, oh, that's a figure doubter, that's a scale it upper, right? They're different animals. And the people who got you from 0 to 10 are almost by definition figure it outers, right? If a scale it upper joined your company at $0 million, they probably quit. Quit pretty quickly because they're like, oh, I'm in the wrong place. I was at a very successful startup where we were 5 million in ARR and we hired a scale it upper, a now pretty famous scale it upper sales VP and He quit in like six months because he's like, I'm sorry, you guys aren't ready for me. I come with checklists and clipboards, and I want to put boots down in every NFL city. So every city that has a football team, we want to have sales reps and I want to do my process. You guys aren't ready for that. So the best thing I can do is quit, which was actually excellent of him to do because he was the wrong person for that job. We needed to figure it out, right? Who do we call on? What do we tell them? What tools do we need? Right? So and the other thing about these two types of people is they don't always like each other. Sometimes they actually dislike each other, right? Because the figure it outers think the scale it uppers are not that smart or creative. And the scale it uppers think the figure it outers are kind of lunatics, right? Like, you could never get anything done. I mean, you could do stuff by yourself, but you could never build an organization. And if you look at salespeople, there's definitely figure it out salespeople versus scale it up sales people. And a lot of salespeople, particularly big companies, are scale it up, right? Give me a playbook. And I just want to lather, rinse, repeat my way to lots and lots of money, right? That's all I want to do. I'm not here to win creativity awards. I'm not here to figure out hard problems. I'm here to make money. Tell me the playbook and I will go execute it. That is a scale it up company seller, a figure it outseller loves hard questions, unanswered problems. They don't like process. When the process people come in, they get very uncomfortable, right? Figure it out sellers. If you keep them at your company too long, they'll quit quickly. Scale it up sellers, sorry, they will quit slowly. Scale it up to the opposite. They will quit quickly if you hire them too early, right? Because they'll say, this is the wrong company. Figure it out. People are artisanal. They're really. Sales is an art. Scale it up. They're industrial. Sales is a process. So on the left, they're like, give me a telephone and a machete and I can make my quota. On the right, it's give me a territory and a playbook and I can make my quota. So these are very different animals and you'll find them at different all across the company. This is just one example with respect to sellers. And the thing that's hard is Finding this balance because as you grow your company, you're going to have loyalists, people who've been you been with you for a very long time and you want to be loyal back to them. But they're probably figure it out people. They're not scale it up people. So what do you do when you have to scale it up? That's hard because maybe they're not the right person to lead sales anymore. I've worked with many startups where the figure it out sales VP had to leave when we hit 10 million. And I always feel bad about that because I don't actually think they have to leave. I think they should be redeployed. My answer is, what do you do with them? Go find something else to figure out. Hey, you want to move to Europe? Help us figure out how to open Europe, right? Hey, there's a new vertical. We want to sell to retail. Help us figure out how to sell to retail. So my advice is if somebody is a figure it outer and you know that and you need a scale it upper, just start with a blank list of problems you need to figure out and try to redeploy them. Worst case, you have to get rid of them. Best case, you can redeploy them. I think it shows that you value people. I think it's a creative use of the resources. It's always an uncomfortable conversation because that person doesn't sometimes admit to themselves that they're not a scale it upper. I can scale it up. I'm really smart. Yeah, but do you like that? Is that what really wakes you up in the morning? And the answer will be no if they're honest with themselves. No. What gets me out of bed is solving hard problems. So building and scaling are different. Again, building is about a small number of amazing, creative, unstoppable people. That's probably what you have at your company today. It's about solving problems. Quality is measured by individual excellence. And your motto is amazing people can do anything. And when you talk to investors, you talk about your amazing people and what are you doing? You're blazing trails in the jungle, right? You're going where no company has gone before, opening a new market, solving a new problem. Scaling is very different. It's about a small number of amazing process and infrastructure oriented leaders leveraging a large number of great but not necessarily amazing people. Right? They're not solving problems, they're building systems and processes. Quality is about process, not individual excellence. And the motto is we help great people do amazing things. Right? A very different philosophy than the company on the left. And when you talk to investors, you don't talk about your amazing people anymore. You talk about your amazing machine, right? Because that's what they want to invest in at that phase. I want to invest in a money making machine, not a bunch of really smart people opening a new market. And I dramatize this because it really is a big change for the company as you move from kind of a figure it out mode to a scale it up mode. Mistake three losing focus. I think it's very easy to lose focus. I think board members in particular leads from when I was a CEO, they were always burying me in ideas. What if we do this? What if we do that? We should do this. We should do PLG, we should do SaaS, we should do consumerization, we should do whatever it is. There was 10 of those, a board meeting. And I'm sitting there on the one hand going, didn't you want me to build a machine to pursue this $5 billion TAM? Can you guys leave me alone and let me do that instead of giving me 10 new ideas? A meeting? And the answer is, look, they're trying to be helpful. The first thing you need to understand is anybody who walks into your office with an idea is trying to be helpful. They're not trying to distract you, be they a board member, an advisor, an investor, an employee, a customer, Anyone with an idea is trying to help. And your job is to listen, to understand the idea and then by and large not do it. Right? Because if you have a good plan and a good strategy, you need to go execute that. So they're trying to be helpful. The thing that I did that does not work is you try and throw them a bone, right? I literally had a board member, I sold an enterprise Software package for $250,000 ASP and a board member told me to paint it red and rent it in a board meeting. And I'm like, okay, what does it mean to paint it red? He wanted us to build an appliance, right? And I don't want to build an appliance. So like, what problem problem does that solve for us? And I would get a series of those ideas every meeting. And I kind of put them into two buckets. One that you could only do over my cold dead body on the left. And the other ones where if I can't, you know, if I run out of excuses to say no, I might consider some of these. And I actually thought that if once in a blue moon I said yes, I'd kind of get some Credit, right? There's kind of debits and credits, and this is spiritual account balance. It was wrong because I did two of them. Neither one worked and I did not get a credit for trying. I got a fail for failing. So it's like, just don't do it. My advice, don't do it. If you don't want to do it and you're the CEO, don't do it. Don't play trading games or throwing a bone to a board member just because you think it'll get you something. For two reasons. One, it won't get you anything, and two, you'll lose focus in terms of second product. I talked about Jason Lemkin's work before, but he's done a series of tweets and blogs. And from his research to me, for most companies, it's probably 100 million-plus in ARR. And maybe multiple. For the companies I work with, multiple enterprise companies, multiple hundreds of millions. So if you're spending a lot of time worrying about a second product, look, if it's an integral part of your strategy, it's one thing. But if you're like, oh, people are going to ask me how I grow and I need to say I'm selling something new to our existing customers. Right. New product cost, like customer, existing, new product, existing, new. Right. There's a matrix where it's new customer, sorry, existing customer, new product. That's what they're asking about. It could probably wait. So for most of the people in this room, don't worry about your second album. Stay focused. That you know your company is not a fund. Investors get diversification by investing in 20 of you. You don't have to be diversified, Right? Diversification is their problem, not your problem. Your problem is you're betting your whole life on the success of this one company. Right? So go do that and do it well. And don't throw bones to people. Don't ever do an idea that you don't want to do just to make someone happy. Because your job and your livelihood and your team's livelihood is riding on it. Number four is messing up US expansion. I won't cover this in depth here. I'll hardly cover it at all just because I'm doing a series of blog posts on the Balderton blog on this topic. It's literally like 30 pages long. Sorry it got a little deep, but I have a series of six posts that talk about the top five mistakes which are listed here in expanding to the US Cause I've worked with a lot of European companies on US expansion enough to see patterns in what goes wrong and that those are the common mistakes. Let me see if there's one worth talking about here. Oh, my favorite one is hiring the wrong people. This one's fun because Americans always inflate their resumes and Europeans are pretty modest by comparison. And that's a terrible intersection, right? Cause you have someone who's kind of modest interviewing someone who they think is modest. And that person has created this resume that makes them. One founder literally said to me, these people are gods, right? Because he believed their resume. And it's like, no, you don't believe the resume. No American resume is worth believing, right? You have to kind of discount it back to reality and then you know who you're talking to. But there's four other mistakes. Hiring the wrong people is one of them. And if you're just starting out, one piece of advice. Drill into resumes, right? Ask what did you do at that company? Were you a driver of the bus or a passenger on the bus? The last mistake number five is accumulating debilitating technical debt. You know, it takes on average 13 years to build a public company. I guess it was 11 years for the 2021 cohort. It was only 11. But just think about what technology looked like 11 years ago. So that company was founded in 2010, right? AWS was four years old in a $500 billion business. New Relic was two years old. MongoDB was one year old. React hasn't been developed yet. You have to wait a year. Terraform and Kubernetes wouldn't be released for four more years, right? So think about how much technology has changed in those 11 years. And it's enough time to accumulate a huge amount of technical debt. And literally, I have one thing to say about technical debt, which is that shit will kill you. And it will. If you ignore it and you let it accumulate, you will eventually get to a point where your product becomes unmaintainable. And by the way, that takes around 11 years. So who wants to be going public just as your product becomes unmaintainable? Right? Answer no one. So the way to avoid it is three things. One, well, really two things. Hire and empower strong architects. Too few companies have an independent architect, not the VP of Engineering who keeps an eye on technical debt and the architecture critical role to have on your team. The second is do a trust release every four to six cycles where you just say, we're going to go retire technical debt. Hey, architects take the lead, work with the PMs to figure out what we're going to do. And if you just do those two things, strong architect plus trust releases, you will spare yourselves a huge amount of misery in the future. So ignore tech debt at your peril. So to wrap up, five things to think about as we scale up. One, we need to understand repeatability and avoid accelerating GTM prematurely. Second, let's build a team of mixed of loyalists and new hires. Third, stay focused on winning, not doing people favors. Fourth, start in the USA early. And fifth, get a strong architect on board and manage technical debt. I think we'll be doing an ask me anything right after this. Thanks so much for coming. And if you want them to stick around. See you. So I guess we're gonna. If people want to do Q and A, we just come up here and we'll just talk. If you ask me a question, I'll answer it with the microphone on and people can hear it. Excellent question. Good to meet you.

Hi, I'm Dave.

Hey, Dave, how you doing? Question was how. How do I know so much about his business? It's like, it's like you've been there. I have a scale up based in the uk. We just office in Austin. Yep. We're taking some boots on the ground.

From there to there.

We're currently 10 SDRs with some AES y we're selling in to a very large town in North America.

Financial services, ria, dealer brokers.

Really.

We understand the icp. Yep. But we're struggling with how we actually grow the team, how we do those hires. Got it. Hey, so we're going to try this. I've never done one before, as you can tell. But we're ask the question, don't repeat the whole thing and then I'll answer it. Yeah. So Bootstrap trying to figure out how to scale up has a broken microphone. Doesn't work. Oh, yes it does. It works. Now Bootstrap just opened an office in Austin trying to scale the team. We have some SDRs, we have some AES. We know our ICP. We have an idea of the TAM. Yep. How do we go about. I'm gonna move myself and my family to Austin full time. Yeah, good. And actually lead the American venture. How do we split America into addressable bits? If you try and do it all, we're going to fail. It's a really good question. Okay, so the question is in US expansion, how do we split America into addressable bits? And the answer? There's a couple of answers. One, us has geography and vertical industry. Right. They're Correlated, like if you're focused on pharma, you go to New Jersey Finance, New York City, Entertainment, LA. And sometimes for a company I actually recommend, even if you don't have to be vertically focused, be vertically focused anyway because it will drive your go to market. And you say, hey, why don't we just start in transportation? So we'll go to, I don't know, Atlanta or Seattle. Right. Or why don't we start in oil and gas? So I think that's the advantage you have in the US is that you is the correlation of vertical and geography. Barring that, I mean, a lot of people do NFL cities, which I think is a terrible strategy, but you could do that if you want. If there's a football team, put salespeople there. Not my recommended one, but people do it. When do I hire a VP of enterprise sales? So when do you hire a VP of enterprise sales? Is there a magic number where it's not me anymore? Yeah. So I have a trick on this one. Here's another. I love this trick, by the way. Don't hire a VP of sales. Hire a director and let them try and earn the job. So I got this from one of the companies I work with where the, the CEO hired a regional sales vp. So not a super big wig, but kind of a mini big wig. And they went on every sales call together for like six months. And after that he promoted it. Right. And the knowledge transfer that happened during that period was intense. And so by taking somebody still willing to go sell, but who, you know has management potential. Right. Because the person was an rvp, they knew how to manage people. It's a magic formula. So I wouldn't actually go look for the traditional VP of sales. I try and hire somebody. Oh, you've been a sales manager. You've managed six, ten sales reps. Awesome. Come sell and you and I are going to be glued together for six months, a year, and then at some point I'm going to release you and you're going to hire a huge salesforce. That's, that's the magic in my mind. Super. Hi. Hi.

Hi. I wanted you to talk about whether you think it's a great opportunity that there's so much technical debt for startups to just jump in and do a cleaner, better, faster job because some of them are so bogged down with legacy that they're terrible experiences for customers.

Yeah. So I think I understood the question. Unfortunately, the, the, the speakers are aimed for you to hear, not me. So, so I think I got it. It's what do you do when a startup is so bogged down with technical debt? Is that y. The question? Sorry, I'm going to answer two questions then. So there's the one she asked and the one I liked. I'll answer them both. One was, isn't it a great opportunity to go find somebody else who's dying in technical debt and attack them? And the answer is yes. Welcome to the cycle of disruption in Silicon Valley. Right. You have all these old software vendors who don't know how to get to the cloud, or can't go to subscription, or can't move to consumption, or can't make good UIs. Look, one of the companies I ran, the UI was so intense, entangled with the business logic that we couldn't fix the ui. Right. And I would say if you happen to have that problem, I actually believe private equity people are better than VCs at solving it. Right. Because that's what they do for a living. They buy old. Not the super big ones like Thoma Bravo or Vista, but the smaller PE firms who buy kind of 20 to 50 million dollars, 20 year old companies, they're actually really good at technical debt because they have to be. So if you're in that situation, maybe go try to find a friend who works at that one of those companies. There's a great book called Managing Legacy Code by the way, which is a book for how to deal with massive technical debt. But yes, we're startups. Those people are prime targets. Right. If you're sure somebody's drowning, go, go kill them. Yeah. Have fun. Yep.

Hello.

So my name is Jofo from Aliya.

Aliya is SAS AI platform. Okay to build AI projects for all enterprise.

Yeah.

My question is you.

You said, and I'm.

I'm sure you are really right, is.

That you must be repeatable before accelerate. But you spoke about sales process especially.

But do you see another topics which.

Mean be repeatable is my question.

I did get all the questions, so yes.

Can you, can you detail when you say repeatable business?

Yeah, yeah.

What are the key points?

Repeatability.

Yeah, repeatability more than the sales process you have figured out?

Yeah. So the question is repeatable sales process. To me there's a couple of elements of it. I mean one is just you have standard stages. We'll start at a mechanical level. But this is where most people fail. Do you have seven or eight stages? Do they have good definitions? Are they enforced by sales management? Because if a stage four is supposed to be solution fit confirmed, we'll just pick an example stage, to me, the definition of that should be customer verifiable. Right. With one phone call I should be able to verify that. And that one's easy. I just called a customer and say, do you think our product can solve your problem? Because that's what solution fit confirm means. Right. And if they say no, it's not stage four. And if they say yes, then it is stage four. So that's the foundation of a repeatable sales process is clearly defined stages. Absolutely. Totally. Yeah. Exit criteria is another way to say it. And by the way, it may sound basic, but this is the stuff people get wrong. I literally did a consulting gig with a company that had 100x pipeline coverage. You imagine so their pipeline was 100 times bigger and they still missed their numbers. So think about that. And the answer is they don't have what I call pipeline discipline. So that's the first level of it. The second level of it is more about the solution itself in my mind. Like if you use a sales process, there's a bunch of them out there, Medics selling through curiosity, mastering a complex sales solution. Selling customer centric selling. There's a dozen sales processes. They're next level up, they're above the stage level. But having some process where you try to understand what the customer is trying to what problem they have, what's the impact of that problem, how much money they can put to solving it. That's the next level up in sales process. And I'll call that sales methodology when I run. Right. Sales process is mechanical. Sales methodology is more that next level up.

Yeah.

And depend on. Depends on the size, large on price.

Big. Yeah. Depends on the deal size for sas. Yeah, for sure. Okay. Okay.

Yeah.

An email from.

Yeah. Yeah.

I could be in touch with my CEO.

Okay. Sorry.

Hey, should I just talk to you?

Yeah. Probably better if you talk to me and I repeat it. A good idea, Nick.

So we're at 3 million ARR.

Yep.

We found product market fit in UK and Europe.

Yep.

We are doing us intelligent. About six months into it.

It's going well.

Yeah.

Our problem is in the U.S. our customers are telling us that they need full service. They need all the kind of agency service. And I don't want to be an agency software company.

Yeah.

Right now with the fundraising market, agency could be useful.

What is the best strategy when you.

When your customers are telling you basically.

They want like all the marketing ads.

And everything, that we're kind of more.

Of a solution like do we.

Yeah, I. I think I understand the question. I'M going to genericize the question a little bit. So it may not be perfect, but I'll try to make it applicable to those who are hanging out 3 million in ARR. Expanding to the US they have a core product that has kind of ancillary services that get wrapped around it to make a solution. Those, I guess in Europe, those services are provided by agencies by third parties. Oh, in Europe, they do it themselves. Okay. This is actually very typical. So in Europe, they're willing to buy his product and wrap it into a solution themselves, using their own people to add value, the Americans. And this is. Is not uncommon because in some ways we're lazier. They're telling you, no, Nick, I want to buy it all from you. And I want you to be responsible for delivering the business result, not just selling me a package. With software, there's two ways to answer that question. One is you build your own services organization. If you go that route, then you got to be careful because if it gets too big, people are going to say, you're not a software anymore. You're not a software company, Nick. You're a services company, particularly pretending to be a software company. Right. So you have to be very careful. It doesn't get bigger than around 20 or 30% of total revenue. Once you get above 20 or 30%, people are going to, oh, no, it's a disguised services company. Right. So I think the correct answer, by the way, is to do both. Create your own agency or your own services Org, charge for it. Charge market rates, maybe even a little more than market rates. Actually not maybe charge more than market rates and then build a partner network. Super common in the US but you do both. And partners will say, are you competing with me? You're going to say, I'm mathematically limited to 20% of revenue. I'm never going to let it get bigger than that because investors are going to be afraid of me. And I'm trying to build a software company. So yes, I will have some services capacity to save troubled accounts, to win strategic deals. But I'm not in this. Yeah, yeah, for R and D. I'm not in this to build a services business. And it's very important the person you hire knows that because a lot of them are empire builders. And you're going to tell them, I just want you to make customers happy and not lose money. And they're going to get grand visions in their mind and try and build a big services business. So you need to make sure they're on the same page as you and by charging above market rates. That's how you enable the partners. You say, hey, my guys are 2000 bucks a day. The partners charge 1500, and I'm happy for them. Go buy from a partner if you can. Can you put some of the services in ARR is the question. Yeah, that's a really hard question in my mind. I'm not an expert on this issue. I believe that if you include a relatively standard onboarding, like, for example, during one of my engagements, we put GONG in. Right. GONG is a call recording tool, conversational intelligence. They had a CSM onboard us. It was free. It came with a subscription. I'm pretty sure she was in cogs, Right. She was in cost of goods sold. She wasn't in sales. Right. Just for an accounting. Right. Oh, hi, you're cogs. And so she was in cogs is the answer to the question. So, yes, you can do it. Had I paid a lot of money for it, she would have been in services cogs. Right. She was in subscription cogs. Right. Sorry to speak accounting, but. But. But that free onboarder was effectively subscription cogs. At some point, if you're building a services business, they become services cogs because you're reporting two lines of revenue, Right. Subscription revenue and services revenue. And then you're separating the cogs. So. But you could build it all in if you want to. But I personally, I don't love it because it makes it harder to do what I want to do, which is say you should use one of our partners. Oh, we have one. But we try not to do it. But we've got this awesome partner network, and if I bundle in free services into my subscription, I suck the air out of the room for the partners. Who's going to want to work with me? Because you give it away for free. Yep. All right, thanks. Hi, Thanks a lot.

I watch all your videos.

Thanks a lot.

Oh, thanks.

I have a question.

We are a bootstrap business.

Five years in Saudi Arabia.

Yeah.

The product we do is a very localized product.

Yep. Do you want a microphone or no? No. Okay. Bootstrap business, Saudi Arabia. Localized product.

Yes.

If we can fund from customers.

Like, we get more revenue from customers.

Yep.

And we get a lot of good opportunities from local business.

Yeah.

It's a local product.

That means we could go the MENA region, not to US or Europe, because.

It'S an HR technology that.

Got it. Okay. HR technology, local. Yeah.

What would make us go with VCs and what. Yeah, I know it might be a.

General question, but that's what we, you.

Know, like what would make us if we could get revenue from customers.

Yeah.

What are we losing here?

Or what numbers, you know, looking at.

Them or maybe maximum metrics that we.

Say no, maybe we need to go.

With VC or maybe continue.

Yeah. So interesting question. It relates to, it's a local business, does HR in the Middle East. And the question is VC versus bootstrap. And the answer I have is pretty simple. VCs in general, I'm going to use American baseball. They try for home runs, right? They're trying to do big things. They'll accept a base hit, they'll accept a small outcome, a cost of doing business, but it's not what they're trying to do. For example, if you went to a typical VC and said, I'm trying to build this to 30 million in revenue and sell it for 90, they would say, awesome, good luck. I'm not investing because that's not what I do. I try to build billion dollar businesses and yes, we'll sell one for 2 or 300 million once in a while and we might be happy we did, but it's not what we're here to do. So I think investor alignment is super important. So if you were to raise money, you need to find somebody who's trying for that outcome. Because most VCs, and these are all the big names we all know, they're not, they would not give you their money and it's not because they don't like you or your business. It's because they're trying to build unicorns. Basically.

You tell me from a busy perspective.

Yeah.

Are we losing if we're not raising?

Yeah. So the question from a founder perspective, the answer is yeah. Look, in my opinion, and because you're a local business, I don't think you're sacrificing as much. My instinct is you should bootstrap. But the, from the founder perspective, you look, it's, to me, it's two sides of one coin. You don't want to raise money from a VC who wants you to be a billion dollars and you want to sell it 100 million. I've had friends who wanted to sell at 100 million VCs, wouldn't let them. Right? Because they'll say, no, we're blocking the sale because we have that right. Because we're not here to try and get 100 million. We're here to get a billion. And that's what you should have known when you signed us up. So to me, it's one coin so from the founder perspective, you're giving up the chance for rapid growth, but that's, it's okay. If you can bootstrap and you're profitable, you can make it work. Cheers. Have a good one. Hi. Hi. Yeah, so I'm from lemax. We try to disrupt travel industry and I wanted to thank you for a fantastic, fantastic presentation. Thanks. We are now at almost 3 million ARR and we had some tough time because since we are in travel industry because of the COVID Yeah. But I would like to hear maybe more tricks and tips regarding the repeatable sales formula because I think we are near we. I really like the slide about the figure it out people and scale people because I think we are somewhere in the middle and we introduced lots of processes. We split the sales cycle into four and five phases. But we are still not hitting the quota as we would like to. So maybe a few more details about repeatable model. So it's more on repeatability, which is good. I think a lot of people have asked about repeatability, enterprise segment repeatability. Look, I think the answer is try to write a playbook. Just imagine for a minute you were going to hire 10 salespeople in one shot and you're going to train them. If you can't write the playbook, then you don't have repeatability. It's kind of a backwards way of looking at it. But just imagine for a lot of companies I work with that don't have repeatability yet, who do I call on what title and what size company? What do I say to them? What will get them to answer my phone call? What are the top five problems they're trying to solve? Say it's ahead of finance most of the time. Right. Because if you really have repeatability, I'll know that I'm selling to a finance vp. One of their top five priorities is accurate budgeting. I will know that the top five problems they have with accurate budgeting are 1, 2, 3, 4, 5. And I know that if I say I can solve those problems problems, there's a good chance they will resonate on more than one of them. They'll go, oh, problem three and problem four. I need to solve those. Right.

I think we are on a good way. On a good way because we have.

Almost the core playbook. Just we cannot now be sure what is like the problem with the COVID so, so big yet or we are, we are very, very near repeatability. It sounds like you're pretty close. Look, if you can write the playbook, that's Big. Because a lot of people can't write the playbook because it's a symptom that you don't have it. Right. They're like, oh, we're repeatable. And you say, write the playbook. And you say, what are their top five concerns? What are their top five priorities? And they don't know. Well, then, you know, they don't know. If you know all that, it's gonna either be the hiring. Do you know who to hire? Like what they look like?

Yes.

But I'm not sure regarding the enterprise payment ourselves are still 35. And I've heard that for the enterprise segment, maybe it would be better for.

People to have more experience than 10 years.

Yeah. So that's one dimension. So we're talking about in her case, maybe it's not the Playbooks that's missing. It sounds like they know a lot about their customer and their sales process. Maybe it's the seller, the seller profile. And you were talking about experience. There's a lot of other dimensions besides experience. Right. One would be, what other products have they sold? Like, for example, I once sold to publishers in New York media companies. And we tried to hire salespeople who were from. Who had sold to media companies before. As it turns out, no offense, those are some of the worst sellers in New York. All the good sellers in New York sell to finance. So we're like, even though it's counterintuitive, we're going to stop hiring people. Yeah, yeah, we're going to say we're going to stop. We thought. Thought they were an obvious target. They were actually wrong because the sales skills. Usually in sales skills matter more than knowledge. Right. Because the publishing people had media knowledge. Media is not that hard to learn. Right. Federal government, hard to learn. Media, pretty easy. So the sales, the raw salesmanship was more important than the experience. So maybe it's that one. That's the one I see the least thought put into and the most mistakes made is actually the seller. Like, who are we hiring to sell this stuff? Describe them in detail to me and then challenge your thoughts. Like is, you know, because the obvious answer sometimes are wrong. So, cheers. Yeah. Good to see you. Hello, Dave. One more. Okay, one more. I'll do some more over there without the microphone together.

Thanks for the fruitful session. By the way. While we are watching you, we say, oh, we leave this. And we had this mistake. So it was a fruitful session.

Good. I'm Daria.

I'm a partner experience manager at Insider. Insider is a growth management platform. We Offer cross channel orchestration for our partners. By the way, we call our customers as partners. So like I'm a customer side and while we are scaling up we have changed our team experience and partner experience and customer experience. And as you know that change management was the key thing there. And do you have any tips for us that how we could run change management processes in scale up companies?

Yeah.

So change management in scale up with respect to customer adoption or No, I heard the word adoption.

Adoption metrics that you are tracking.

Okay, so I don't think I have a good answer to this question to be honest. I can try to make one up. I guess the question is what kind of change? Tell me what kind of change?

Starting from team actually like we build up the technical onboarding team, we built up the product onboarding and we added the account management. We had the people who were figured out. Then we have changed, scaled up and we had more processes and then we needed to manage that, that process and our main responsibility as a partner experience team to manage all experience starting from.

Top, bottom to top.

I mean look the generic, I mean I could just go back to generic change theory. Whatever the guy's name was, what was the person's name? Can't remember. But basically make people understand the change, communicate why you're doing it, try and measure it, understand. I mean look, the first step is understanding there's two types of people and they may not get along or respect each other. And you try. I've always tried to get them to understand that like we need them. Like I'm a figured out person, right? But, but just say we're all figured out people. Like we need those people. We do because we want to hire 100 people in the next year and we need to train them. And are you going to do it? Do you want to do it? Like no. So to me it's legitimizing, basically explaining to people patiently why we need them and why they're important because we want to be successful, don't we? And that's usually the way I try to approach change is explain the reason for it and hopefully people will get on board at some point. If they don't, it's a problem. Right? You have to say no, we're going to do this. Like we're going to build an onboarding team and you may not like the people who work there and I don't care but you're going to help be them successful in their mission. Because we need to hire and train 100 people next year. Okay, good well, awesome. Thank you so much. I still can't remember the change guy. Cheers. I I'll be out on the back if anybody has an extra.

It. Ram. It.

One.

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Sa. Ow. Sa. I wanna jump around When I think about yesterday? Your smile, your star so fly My, oh my as time stood still I got the urge to still kiss and so I did Now I'm embarrassed but just a little bit. Oh, there must be gold on those leaves and honey on those fingertips. Can you imagine us too out in the woods in a big old house? We'd pass our days on clouds floating around oh, since I met you I've been unbreakable Oh, I can take it all Wish me good luck Give me the courage to ask for more oh, there must be gold on those l And hiding on those fingertips oh, we could be bur discovering the world the best ones they've ever heard about. Oh, there must be gold on those leave and honey on those fingertip I promise you promise you oh, there must be gold on those and honey on those favorite I promise you promise you. I promise you.

Please welcome Bill Bench, operating partner at Battery Ventures.

All right. Good afternoon. My name is Bill Bench, as the voice just said, and I'm operating partner at Battery Ventures right now. But I've only been doing that for about nine months. I am a classic operator for the last 29 years. Before that, I was in companies, and notably I was in a company called Marketo for almost a decade. And to set the stage for today's presentation, I was supposed to not be alone on this stage. I was supposed to be with Phil Fernandez, the CEO and co founder. But like with a lot of big production events, things don't always go to plan. And he unfortunately had some travel issues yesterday and was able to make it in. So it'll be interesting to watch me do this presentation because it was designed for two of us. So maybe on one point, I'll stay on this side of the stage, then I'll step over to another side and try to do maybe a little he said, she said type of thing. But before diving into the presentation, let's talk about this CEO and CRO dynamic. And I don't have slides for this, but I took a couple notes to lead off the discussion today around how I think CEOs and CROs can get onto the same page. I get asked that question a lot as an operating partner in a venture firm, which is how can the CEO and the head of sales really, really align? Well, and so I want to give five things That I think really set up the CEO and the CRO to be tightly coupled. So if you take notes, this is a great time to pull out your pencil or your, your phone to take them down because I'll give you five things that aren't up on the slides here.

Okay?

Number one, for CEOs and CROs to get connected, the two of you should have this discussion. Discussion. If at the end of the month or the end of the quarter we have made our quota, we have made 100%, but we could have made it A, buy more logos yet a smaller ACV or B, fewer logos but a bigger acv, which one is better? Now, there's no right answer. But I'll tell you this, as a pastor CRO, it's really critical that you and the CEO have the same answer. So it doesn't matter which answer it is that you have, but have the same answer. So that's number one, my advice of CROs and CEOs getting on the same page. Number two, I have this concept of scoring deals. One of the things that Phil, the CEO of Marketo and I did after every month, when we finished a month, we would sit down and physically print off every deal we had just closed for that month prior and we would score them. And the scoring doesn't matter how you do it. You can do a 1 through 10 scale, an ABC grading type of program, but the idea here is for the two of you to sit down on a monthly basis and look at the deals that you've just closed and look at the terms that you gave, the discount that you wrote, the concessions that you granted and agree on. Is this a good deal for the company or is this a bad deal? Because the reality is, if you're a young company, if you're under a million dollars in ARR or 1 to 3 million in ARR, at that point, you're probably taking any deal that you can, right? You bend over backwards to go win a new logo. And that's an important and good thing to do. But it's also important for the two of you to get connected on what are the future deals that we do going to look like?

What?

What's a good deal for our organization look like? So suggestion number two is score your deals. Suggestion number three, I used to do this with a prior CEO as well, where what we would do is once a quarter he would ask me, bill, go build your current org chart and then build me one plus one, plus two and plus three quarters ahead out and visualize for me what you think the org will look like? And I'd be like, boss, wait, should I just take the business plan that we have written and build the org chart against it? You say no, no, I don't care what the business plan says. I want to know what's up here in your head. You're the leader, you're the driver of the revenue organization. I want to hear what you think our business is going to look like in a quarter, two quarters, three quarters. And that was the basis for us to do a little gameplay type of, of situation. We would then go to dinner every month and this was a great, great process for us to go through. And that dinner was a safe zone. It was a safe zone for me to go and throw out ideas. And this was, you know, using a sports analogy. This was like sometimes I'd go in there and I'd propose like a three team trade. Like this player goes to this team, this, this person over to here and this coach moves over here. It was just a really great way for, for he and I to get connected on how we thought the business was evolving aside from what a business plan looked like. Right, because you wrote a business plan back in December or November of last year and now here we are in May and things have changed. And so he always wanted to see what I was, what I was thinking about and getting into my head. So another great CEO to CRO connection. So that's the number three. Fourth one is most companies build a top down business plan. For instance, if you did 3 million bucks in ARR last year, someone, the CFO, the CEO decides we're going to do 6 million this year and that's your top down plan. And a lot of times people say, well we did 3 million last year with 5 reps, this year we're going to go to 6 million. Let's just get 10 reps and wrong. It's just not that simple. All right, my suggestion here is that you take that top down plan and marry it with a big bottoms up plan. And I'll get very tactical here with you. But that's, this is literally building the waterfall of a spreadsheet of here are the reps I have and by month how much quota I've assigned out on the street. And then here are the reps I'm going to hire and when they come on. But now remember, when you hire reps, there's a ramp. So you have to incorporate that in there. Your reps that are already there. Someone's going to fail, right? They're not going to work out and you have to fire them or they resign. So you got to put in and add attrition into the model. Then you got to add a productivity metric to it because not everybody ramps at the exact rate that you thought they would. So you've got to add some nuance, if you will, to that sheet. And what I will guarantee you you will find is that top down plan that said 6 million and going from 5 to 10 reps will now say to get to 6 million you need 14 reps. Guarantee, guarantee that those two reps will, those two plans will be disconnected out there in the world. So a great way again for CEO CRO to get onto the same page and the last one that I'll give you is I believe in this as a truism. Whenever you finish a period, a month or a quarter, whatever your quota process is, there's two reasons you made or missed your quota. You either had enough pipe or didn't have enough pipe. You converted or didn't convert at your normal rates. And I would highly recommend you do this analysis. A lot of people do it for the board meeting. I'd recommend you do it on a monthly basis. Look at your month and look how you're trending and look and see at the end of the month, well, the prior month we converted and when I say converted, what I mean is take your pipeline categories, your commit, your best case, your upside, whatever your category is, are, and start tracking what you convert on a monthly basis of that pipeline so that you can start getting a trend and look back and on the month you just finished, look back and see did we convert at our normal conversion rates that we've done in prior quarters? If the answer is no, then you probably didn't execute on the sales side very well. You didn't succeed at the way you wanted to. And on the marketing side you'll look at your pipeline and you'll see did we have enough pipeline to go into the month or the quarter before we started? So those five suggestions are the five things not on the slides here that I want to run through of ideas of how CROs and CEOs can get on the same page. So with that, let me dive in. The plan that Phil and I had for today was to go back in time and do a little bit of a back and forth on some things that were, we felt helped drive growth and those things that still have impact today. So let me talk about this from this perspective. Marketo was founded in 06. We brought the product to market in March of 2008. We went public as a company in May of 2013. So it was five years, five years and a couple months, and we were over 100 million bucks in ARR.

So.

So super fast growth. And if I look back on some of the elements that I think really helped drive it, Let me walk you through mine. And then, like I said, I'll try to step into Phil's shoes and share what he thought were some of those items for me. Monthly quotas. Now, I'm sure several of you are in the audience here saying, well, Bill, I sell an enterprise product, I sell a big ticket, a long sales cycle. Monthly quotas don't seem to fit. And I would challenge you, I would challenge you to challenge that assumption and see if it did fit. Because even Marketo, which started off as an SMB play and moved into the enterprise, we kept smr. We kept monthly quotas intact for many, many years because it created a cadence, it created a pace that we moved at inside of that organization. You know, people talk about sports and you look at great sports, sports teams. Doesn't matter if it's a soccer team, if it's a basketball team, it doesn't matter what your sport of choice is. But think about what happens in the last few minutes or the last few seconds of any tightly contested game. What happens is you see performance peak and you get to see people perform at their best. And what I would submit is by being on a monthly quota, you get 12 viewpoints into your business. That way you get the ability to see 12 different views as opposed to thinking about it in quarterly basis where you have that big run up for the last couple of days of a quarter. I think about it in terms of 12 monthly runs to do it. I think it's a great way to train a team to build urgency. I think it's a great way to train a company around a cadence. So for me, monthly quotas are one of the secrets that I have out there, especially if you're an SMB focused business. Number two, logo acquisition. This goes back to the question I asked, would you rather have more logos and a lower ACV or higher ACV and less logos? I almost always default to more logos. And the reason is customer experience means something. It helps train the whole organization to be better. Because if you think about it, if sales is close closing logos, it's telling you something about product market fit. All right, so number one, it's giving confidence to your sales organization and then that therefore probably gives your CS team Experience being able to enable your customers so they're getting the ability to hear what customers are wanting to use, where they want to see the product evolve to and then they can feed that back up to the top of the food chain, which is your product and eng teams and, and say our customers are asking for these things. And that's very helpful for the organization because then product pushes that down to marketing, marketing to sales. It starts that whole cycle again. So logo acquisition was a key thing at Marketo that fueled our success. I think it still resonates today. And then thirdly is optimizing to get your buyer into the demo. And the reason I say this is think about what it takes to get a demo today. Right. Like you, I'll talk about the in a little more detail in a second. But someone to come and go through a demo has gone through a lot with your organization because they had to click on that get a demo button. They had to convert, they had to talk to a bunch of people and then they had to spend an hour, hour and a half, maybe two hours of time with you and your organization to learn about your product. Now think about if they're evaluating three different products, three different companies, that's like six, eight hours of their time to be able to schedule all that. It's a lot of work. But the output, output is this your best buying intent. Leads are somebody that's taking your demo. That hasn't changed in a long time. So to me, optimizing to get to your demo. So if you asked me three things that worked in the 08 to 13 period that still resonate today, those are my three. Now Phil here, if we've been doing this, we've been going back and forth. Phil would have said sales and marketing alignment. Now that's easy thing to say, but so let me give a little bit more detail on what I mean by that. A great, great, I think process that you can drive with your marketing and head of sales together is to have the two of them sit down and work on your messaging arc. It's a critical thing. A lot of times that messaging arc comes out of just the product or the product marketing team. But incorporating it in with your head of sales is critical to making sure that your two teams stay on the same page. And I think any company that's a fast growth company, you tend to see there's a symbiotic relationship between the marketing and the sales team. Meaning the marketing team's doing what they're doing, they're helping generate leads Generate demand for the sales team. And sales team is over there taking the ball and swatting it down and making it a closed deal. All right, number two, culture of success. Again, an easy thing to say, harder thing to pull off. What do I mean by that? Well, I think. I think if Phil were here talking about what he would share is a culture of success is always setting a higher bar. At Marketo, we would, like I said, run on monthly quotas. As soon as we would achieve a monthly quota, you know what our next monthly quota was? It was higher. Whatever that quota had been, we set the bar higher. And if we missed a quota, we take a step back, we'd pause, assess why we missed it. Do we miss it because we didn't have enough pipeline, or did we not convert? Right. And we'd look at those things and make some adjustments to our organization, and then we'd set a new bar. And as soon as we hit that bar, we'd raise it and go to another quota. So Culture of success is about building that winning locker room psychology inside your organization. That's what we talked about. And then thirdly, his one would be Velocity, which is very similar to my first two there of monthly quotas and the focus on logo acquisition. He's a big believer of repetition. And if you're here earlier, Dave Kellogg spoke about building repeatability inside of your organization. Like that's the true definition of product market fit inside of a business like ours, a SaaS business. Velocity is key, is getting that ability to have things be repeatable faster. So you can kind of see where this presentation is going. Three things that work. Now let's talk about three things that don't work or have changed in maybe the last 10 years, since 2012, 2013. So the first one's an obvious one. Dave Kellogg talked about this again as well, about the office space model. He was up here talking about that today, or I'm sorry, Jason said this at the kickoff that today talent is global, and you need to be able to go grab that talent base. Where it is gone, I think, are the days, and I know a lot of you will remember this, where you had that centralized hub or a couple of hubs, maybe, if you're in the US and east and in a West coast, if you're in Europe, maybe something in London or Dublin or something like that, where you had all of your people based. Now, this is a challenge, I will admit. I don't think we're at the end of this road here. I do think there will be some return to work. So I don't think we're at the, at the final answer of this, but I'll tell you, I missed this because I did enjoy going to an office and hiring that brand new sales rep or that brand new sdr. And you know how you trained them when you didn't have a formal training program, you sat them next to your best sdr, your best ae and they learned through the process of osmosis, right? They learned face to face. So there was value in that office based culture. Today that's called gong, right? It's called call recording software. That's what you're probably using to try and get that osmosis to happen over there. But that office based model has clearly changed and we're all aware of it. So I try to give advice to employees that are interviewing. Try not to be dogmatic about saying I'll never go to an office because if you say that you're probably not going to get looks at the best companies. And likewise to the employers, I try to say try not to be dogmatic. The other way of saying you have to come to an office because there's going to be a whole group of employees that you're not going to have access to because they're not going to buy into that. So right now that model is a little bit more open. That's something that, that worked back then. It was a huge secret to Marketo's success. I remember when we were building the organization, we said, up to 50 employees, we'll have them all based in our headquarters. When we got to 50, we said, well, let's try it up to 100 because it seems to be working pretty well right now. So we did it up to 100 and then up to 150. And then finally I got to the point that I was jumping on planes so much going on sales calls that I said I needed sales reps in different locations. And that's when we started actually hiring remote people. That model I think has changed forever. But I do think that we will come back to see some office based things. But that's one of the things that has evolved since a decade ago. The second one is the enterprise SDR model. Everybody familiar with this situation, buyer comes to your website on a Monday, knocks on the door, right? How do they knock on the door? They probably click a get a dog demo or contact sales button. And what happens? An SDR sends them a note, says, hey Bill, welcome to our site. Saw you're looking at our content. Love to schedule some Time to talk. What happens from there? The SDR schedules a time for Tuesday to talk with me. So I get on the phone, SCR qualifies me, asks me a bunch of questions, says, listen, I'm now going to go introduce you to Phil. Who's Phil? Phil's the sales rep who's going to do the demo that you wanted. Okay, when's that going to happen? Tomorrow. So now I get scheduled on Wednesday to go meet with Phil. Phil gets on the phone, he asked me a bunch of questions, probably the same questions that the SDR asked me the day before. And now I'm like, going, geez, can I just get a demo from you guys?

And.

And. And Phil says, hey, look, based on what you told me, I want to do a custom demo for you. I want this to be special. Well, what's that mean? That means I want to get a sales engineer involved. Okay, well, when then can they come on? Tomorrow. So now on Thursday. Okay, so I just played out like the absolute worst case buyer's journey situation. But honestly, that happens a lot. And that goes back to my comment about, like, optimizing for getting your buyer to the demo. Because if you think about that, that was Marketo's experience 10 years ago. Marketo, you knocked on our door on a Monday. We had to put you through the qualification. We had to then size up what your needs were, sometimes bring an se, and it took three or four days to get a demo to you. And today that just doesn't work. I mean, I remember fundraising for Marketo and going to meet with venture capital firms and Phil the CEO saying, you know, can you imagine if you went to Facebook and clicked to build a, you know, profile to set up your first profile, and it said, we'll get back to you in 30 days. Right? Like, that was the enablement process. No one would have used it.

Right.

There was an instant gratification thing that B2C apps that applied to us. Well, that is now applying to us in the business, to business world. And so people are thinking, I want to move faster. So I'm going to talk about a few ideas of how you can do that in a second. But the enterprise STR model of the old, you know, let me schedule timing with you. Let me qualify you. Let me send you that. There are ways to optimize that. That's not working quite the way it did 10 years ago. And lastly lastly, the controversial one here, ABM. All right, so I'm sure a lot of you jumped ahead and saw that note and said, Wait, abm, that seems pretty popular now. I'm not here to say that ABM doesn't work. I'm here to say, well, so first of all, just for a little credibility, John Miller was the co founder of Marketo and he went on to found a company called Engagio. Engageo is now part of Demand Base. Engagio was an ABM company. So one of the founders of Marketo took his toys and went to the next thing to build abm. And it was a good move. And so I don't want to, I don't want to like rain down on ABM's parade, but what I want to share is that ABM is not a technology, it's a process inside your organization. And I remember inside of Marketo, probably some of the ideas that gestated. The idea for John to go found what would become Engagio was as we started growing into the enterprise, we had to change, change our marketing, right at that point we were focused on inbound leads and prosecuting those leads. And suddenly we now had to think about outbound and we had to think about how we were going to go out and focus on accounts as opposed to individuals and how once we sold to an account, how we were going to continue to proliferate through that organization. And we did a lot of work on that. We did a lot of methodology planning inside the organization to build that. And so I would submit to you that ABM still works, but ABM is a process first that you then enable with the technology second. So three things there that have changed or evolved or don't work like they did 10 years ago. So as I promised, there's several new techniques that I think are out there and I'm going to segue a bit into some product led concepts here. Now, product led is a topic that Phil and I talk about all the time. Because back in 2008, Marketo had a free trial, all right? And a lot of people say, well, isn't a free trial essentially product led? Yeah, maybe it was back then. It was very discreet. The trial. You came, you clicked on get a trial button and then someone called you and we had to enable you. And that enablement took human beings about eight hours to get you up live and launching on your trial. That's not what I'd quite define as product led today. So that's where I want to dive into this and talk about. Because there was trials, there was free, there was freemium, and they were all very, like I said, discrete, siloed type of Things today, they overlap and intermix together. So I'm going to run you through a few ideas that I'm seeing out there in the world right now that I think are really exciting, that are helping evolve the SDR model, are helping fuel growth and are helping quite honestly drive virality. So let me walk you through these things versus less human involvement in access to the products. That to me is the core definition. Like it's hard to really pin down what PLG product led growth is. But if you ask me, it's really removing friction from the process for the buyer to be able to get access to your products. That to me is the essence of what PLG is. There's other things, things inside our products today that are making it much easier to understand how we can work with our buyers. Right. There's user telemetry. I worked for a company called Pendo. If you know what Pendo is, it's a user behavior analytics company. It measures all the usage inside of a product of where your users are applying the product. At Pendo, we're able to go and help a lot of these PLG companies design what their product was going to go look like. Because a lot of times you build a product, it's a huge massive box and only 10%, 20% of it gets used. Well, in that case it probably doesn't make sense to make that available to all of your customers. Maybe you just make that 10 or 20% that they really want to use available and that extra piece becomes your upsell ability. So user telemetry is something that's available inside of products today. A lot of companies are building it themselves. A lot of companies are buying products like Pendo to be able to do it. Really, really great mode self service models. Anybody here ever land that big deal? You go close the deal in Microsoft or in Santander bank or something like that and you close in a division and you're super excited because it took you six months, you landed the division and now your sales team goes back to the beginning and starts that whole process over again. They go through the whole process of trying to sell to division number two, division number three and they have to run that whole process again. One of the benefits of product led things is making it easier for your product to spread across the customers you've already gone to used to be in the days that you would go land your division and then you would go to those people once you made them successful and ask them for referrals inside the organization. Today by having a product led Strategy, a growth strategy that puts the product first. You can get the product into the hands of other divisions in a much more easy fashion than we could before. So that's a big thing. Product tours. If you haven't seen this, I'm become a really big fan of this idea. If you think about your standard website, right, you have website navigation, let's be honest, the value of that to your customer is fairly low and the value to you as a vendor is fairly low because you, number one, don't know who the person person was. They're just an anonymous lead. You cookie them, that's all you got. And to them, they got to go choose their own adventure in a way that, you know, you tried to put your best foot forward, but you can't control the buying experience. So it's kind of a low, low value piece. And then the next stop on your website is get a demo. And we've already talked about this. Get a demo means I click on that button, I fill out a form, you put me into a nurture campaign and SDR calls me and AE calls me, I get the demo. It's like a couple hours of commitment. It's high value to me as the vendor and it's high value to me as the buyer. But there's a huge gap between those two. You have website nav down here and get a demo up here. What's in between there on your website. And that's where product Tours, if you haven't seen these, there's a couple of companies out there that make the software that essentially lets you tell the story of your product and the value you provide through the product. You get to walk through the product. And the great thing about these technologies, it's not like just a video where you start it and it stops. They allow branching, they allow you to essentially choose which path you want to go down. You can do some interesting things like gate it so that I can go to the website, watch the product tour once. But if I liked what I saw and I come back and I want to show a colleague, it puts a form up there. So now I have to convert to be able to show my, my colleague, which means you've just, you've just grabbed value from me by getting those names. So Product Tours, I think is a great intermediary on your website Again, another great way to align your sales and your marketing team is that the sales and marketing team look at your website and try and visualize what your ideal customer buying process can look like. And the simple answer is Today it's not one path, there's not just one path to go down of getting the demo. There's the website nav, there's product tours, there's like drift and intercom bots and people being able to engage that way. There's videos, there is product tours, there's get a demo and then there's free premium downloads of actually giving someone your product. And if you look at some really modern sites out there, a lot of the best ones have all of those available. And essentially the idea there is, what they're trying to do is just drive higher conversions inside their business. They're trying to say, I'm going to go give my buyer the ability to come in and choose how they want to engage with me or what I call meet the buyer where they're at. So that's product tours, calendars instead of forms. We're all used to clicking on the button of contact sales or get a demo and the first thing that comes up is first, last email, company name, employee size, maybe a couple of other fields. But have anybody in this audience gone to the those sites where you go and click on it, the first thing that comes up is a calendar and you get to go schedule your demo. You're again disrupting the SDR model. You're going straight to the sales rep and being able to connect with them and schedule the time of when you want to get a demo. So I'm a big fan of that. Now some of you can ask, is that a product led like is that changing how you get access to my product? No, it's not. But it's a product led motion that's driving people to be able to engage and like I said, reduce friction with how they work with you. Demo. This has always been around, but this is something that I try to give companies advice to. If you're an organization that has more than 30 demos in a week across your entire organization, 30 is kind of my metric. You should consider putting up a weekly webinar on your website where you invite people to it.

Why?

Well, think about it. Number one, for one, you save a lot of time. If you have 30 demos across 10 different reps, that means each reps doing three or four demos. What if you can consolidate and every Wednesday at 11am Your local time, you do one demo. It's a live demo and you bring eight people or 12 people to it. A couple things happen. Number one, you'll probably get 10 or 15 to sign up. You'll probably get half that amount to attend. But You've just picked up a bunch more leads that you can follow up on. Number two is you save wear and tear on your sales engineers and your sales reps on being able to go and touch those people and freeing them up to do more important tasks out there. So I think the weekly Demonar idea, if you're above 30 on a week, is a really one. And then finally, simplified user terms. This is critical if you go back to again, the enterprise selling kind of classic model. We used to have these heavy MSAs where everything had to be negotiated, you have to sign one. And today we mostly click through those types of MSAs. Because why? Because we're taking our terms and we're looking at what industry standards are and making them easy. So few new techniques that exist today that have popped up in the last five or six years that I think you can apply to your business that don't make your company more plg, but make them more PLG esque. So last slide here, few takeaways. Nrr, the new magic metric. Now, I didn't talk about, about this in this whole session, but let me, let me share how important this is. When Marketo was growing itself in its fast growth days, we went public in 2013, our first earnings call. The analysts congratulated us on getting public, congratulated us on our first quarter results. And the first question they asked was, geez, about 75% of your business is new business focused. What's your plan to become more enterprise grade? And we said, what do you mean? They said, well, top enterprise software companies do at least 50% of their business through expansion, which is NRR. It's the health metric. In 2013, we could get away with that. We could go public and not have a really clear plan around that. But today after ARR and ARR growth, the most important metric that's looked at is what your NRR rates your net retained revenue metric is. And I would submit this if you are a PLG company. This is going to be interesting. Today, above 120%, NRR is considered best in class, kind of the place you want to be. I will submit that PLG product companies are going to start seeing 150, 200, 300% NRR. Because why? Because they're going to start on a lower price point as an entry and they're going to expand up further beyond that. So that's number one takeaways. NRR is the new magic metric. Number two architect for a growth path. This is the idea that I was talking about, about Applying PLG concepts inside of your business. The idea you want to do is be able to not make everything a custom made cycle, a custom made enterprise cycle for your sales and your marketing organization. You want to make it so there's an easier way for your product to become more viral. And then lastly, this is a common theme that has been in the presentation is velocity. This is around the monthly, the monthly quotas around having a logo, focus, things like that. Repeatability is key for you learning how your business should go. So that is the quick rundown of what was going to be Phil and my CEO CRO connection on how to drive growth. Both ideas that worked in the past as well as some new ideas. Hopefully some of those apply to your business. Hopefully some of those can be put into effect inside your business. And if you want, I'll be around for the next couple days. Happy to answer some more questions. Thanks for joining me.

Sam. Sa. Sa. Sa. It. I ran away from heartbreak Got nothing in return from my pain.

I never.

Thought I'd be so empty so lone and afraid. Wasn't looking for a lover Nobody understood where I've been.

Payroll was so complex in France. I mean if you, if you can automate payroll in France, then you can automate payroll everywhere. That's something we've done in France and it works like a charm. We are growing really fast at payfit. Spain, the uk, Germany. We want to sell every business in the world. That's what it takes to build a future European giant. The three of us, we share the same values, the same passion and the same willingness to build something that has never been built before. What is really important to us is everyone is as happy as we are. It's not just like ping pong tables and chocolate fountains. It's all about recognition, I guess, you know, knowing that you couldn't exist without the other. We are automating everything, simplifying everything. Each time you are growing, you need to give other people responsibilities and just let them work. More customers, more features, more payfitters, more countries, more happiness. A lot of more. Like millions of employers and employees that can be happier thanks to what we.

Are doing at PayFit.

Please welcome payfit co founder and CEO.

Furman zacchetto and excel partner philippe butteri.

All right. Okay, I think I got it.

All right.

Good afternoon everyone. It's a pleasure to be here in sunny Barcelona. And today we're going to talk about the seven secrets to a successful SMB go to market strategy. My name is Philippe Boteri. I'm a partner with Accel. So we're a global venture firm we started in Silicon valley for about 40 years ago now. And we realized that Silicon Valley did not have the monopoly on innovation. And this led us to open an office in London from which we cover all of Europe and Israel. And we do anything from a seed investment of a million dollar up to a gross equity check of $100 million. And we do.

SaaS.

Okay, lots of sound. Does anybody doesn't love SAS here who doesn't like SaaS?

No one.

Good.

So we do love SaaS and we had the chance to partner with great companies like Atlassian, DocuSign, UiPath and of course Payfit. So we had a chance to lead the series A in Payfit. That was in 2017 if I remember. Well, super excited about that. And I'm here with Fearma who is the founder and CEO of the company. So Fear man, maybe just to get started, do you want to just give a quick snapshot on PayFit and so everybody knows what the company does?

Yes sir. Thanks Philip for the introduction. I'm Firman, co founder and CEO of Payfield, a company we created with two of my best friends back in 2015. So more than seven years ago we loved SaaS at that time, even if we were pretty young to exactly know what SaaS was about. But we learned along the way and we built payfit. So payroll and HR company that help entrepreneurs digitized payroll and hr. We grew very fast in the past seven years. So we went from three founders to a thousand payfitters. We are now serving thousands of customers. So more than 7,000 customers all over Europe, in France, in Spain, in Germany and in in uk. And we are helping hundreds of thousands of employees strive in their SMEs. And as Philippe mentioned, we raised some funds within our during our history and we raised the funds with Accel five years ago to accelerate on our growth. At the time we were only a team of 30 people when I got the chance to partner with Philippe. So that was really not the same company that we have today. So happy to be there with you today and discuss a few secrets that we've learned over the past few years.

Thanks. Thank you ma'.

Am.

So when you think about a SaaS company, there only two things which do really matter. The first thing is building the product. The second thing is selling the product. Everything else is just to support these these two motions. But sometime the product sells itself or you want the product to sell itself. And in the case of SMB this is actually something that is critical. So we're, let's start with secret number one which is self serve when it comes to products is non negotiable for SMB. So Firmin, this is, you know, this comes from you, this is the number one secret was the most important. Why was it so important for you to develop very early on a self.

Serve or actually to think about the.

Product in a way that it would be self serve.

So in the beginning when, when we started PayFit back in 2015, we built the product and we built the sales funnel to have payfit self serve because we wanted our customers entrepreneurs to become autonomous in signing up for PayFit. But we had few challenges that made us realize it was super complicated to have customers customers autonomous on the transition from a payroll solution to another one. And so it took us years to get this challenge cracked. And this year we are still working on this and we are still building an engine that can make customers autonomous. Discover your product. Because if you don't have this engine, then you are forced to have manual conversations with all your prospects when they discover your product. Which is fine when you are selling to enterprise and to big customers. Because you can invest a lot in sales, you have a complex product, you have a sales cycle that can last for a few quarters, for a few years. When you are talking to entrepreneurs, when you are selling, selling to the Mass, to SMBs, you can't do that because either your prospects won't get the chance to wait for your salespeople to talk to you so they will just go and see another competitor or either they will just want reach the end of the funnel because they want to be autonomous in the sales discovering the product. I know there are a lot of entrepreneurs in the room. I know you are part of the 1% of the market that want to feel autonomous when you are discovering a new SaaS product. So if you are looking at a product that don't have a self serve funnel, you probably will be just ejected from the funnel and the system won't get you. So that's something I would recommend to invest very early on and that I think I would do it better if I had to do it again at payfit. Just one precision on self serve. It's not either sales either self serve. The two goes together. Which means that there will be some Personas, some prospects that will be fully autonomous along the way there will be prospects that would want a new payroll solution, but that will never be autonomous. Like for example my father My father, you know, he will never be autonomous in a self serve funnel to change a payroll solution for his little company. But if I have a self serve funnel, I can help him discover the product and I can make our sales team save a lot of time in some parts of the funnel.

And it's not about, I mean it is also very important for customers to be able to discover and try the product on their own. But even when they're a customer, especially on payroll, which is fairly complex with rule changing, you also want them to be self serve during their entire lifecycle. Right.

So you want them to self onboard and make the whole transition from the former payroll solution to the new one to PayFit. And then you also want to have the least support and declaration processes possible, which is a big challenge when we are talking about payroll, but which should be the goal of every SaaS targeting SMBs automate a lot of things through the product through also the marketing or customer communication that you are sending your customers.

And can you maybe just give a couple of examples of how you have evolved the product to make it self serve? Right, because at the beginning you have your products, some of the customers are the most advanced, maybe self serve, others are not. But how do you understand where, where is the workflow broken right when you need an in person intervention? So how do you spot that? How do you prioritize the intervention and the changes on the product to basically smooth out the flow so that over time you get more, you increase the portion of customers that can be self served?

Yeah, that's a good question. So in some businesses you just have a look and see that you are losing prospects on the, on the, on the funnel. Looking at your conversion rates. To us it's very easy. We just have a look at when prospects or customers are reaching out to them. Because we're talking about payroll, we're not talking about a nice thing to do. You know, our customers are forced to process payroll and this is very important for them. So the metric that we have to, to assess if we are doing a great job in making our customers autonomous on discovering self onboarding and then using the product is the number of tickets we get from them or the numbers of errors that we can see along the way. But it's true that you need to prioritize that with the building of new features which is not always something very easy to, to do. But you know, I would call it like part of the foundations of your product. That's not new features, that's not shiny, but that's the basis of your growth engine. Because at some point if you think that you are going to grow at scale with just spending more euros on marketing or adding, adding more salespeople in your team that can't scale, unfortunately.

So you mentioned talking about products, that having a product led sales motion is very important, but that's usually it's not enough and you need to complement that with salespeople. The difference when you're selling to enterprise, you have fewer sales reps, more expensive, high quota. When you're selling to SMB you have a lot of sales rep and you know, obviously lower quota and lower cost. So this leads us to the secret number two which is the volume game, right when it comes to sales talent. So you put as a number two, it was very interesting that you know, number one was product number two is like how do I really hire and scale my sales team? So why was it so important? Is it like so hard to hire salespeople sending to SMB? Like how do you think about it? How do you set up the infrastructure to make this as efficient and scalable as possible?

So yeah, as you put it Philippe, when you are selling to SMBs, you are not looking for the same sales rep as when you are selling to enterprise. So basically you need people that are a bit more junior, that have a bit less experience, that are also not the salaries that SDRs or AES that are selling to big corps are having. But you need more of them. So this is why it is the volume game. So you have a lot of people that are wanting to learn a new job, a new safe job and they come to payfit so that they can learn this job and then become an SDR and then either a manager as an ae. So you need to build career path to make sure that those young people that join you and you'll need a lot of them can evolve in your company and you need to just train them and you need a lot of them. It's really different than when you are serving enterprise and when you need just a few AES that have let like 10, 15, 20 years of experience that are paid a lot of money and that can, you know, not evolve, but keep this individual contributor job for the coming years. So that's why it's just so different. So you just need need to know when you are serving SMBs that it's different than serving enterprise and that you need to go and look for the right people to join you. So build the right hiring machine and then build the right HR processes so that those people can stay with you during numerous years and not just one or two, two years as it is the case unfortunately in most SaaS companies where we see a big attrition with salespeople sometimes more than 50% a year.

And where is it at Payfit right now? Sorry, where is the attrition at Payfit in your sales team just to give.

At the moment it's around 35% which is not bad given the market and, and the fact that it's intrinsically higher in sales team.

And maybe can you just give a few numbers just to help the people here on how do you plan your sales capacity? So what is if you need to make 100 for the year, what's your quota coverage of the 100 that you want to make and how do you think about increasing your sales capacity to make sure that you meet the goal for next year? Is it something where every quarter you have a batch of salespeople coming? Is it every month? How do you ramp them? Would be great to click one level deeper into the planning.

It's very important this sales hiring planning because in a sales driven even SaaS business model it's what drives growth. So basically when you want to look at your growth from one year to another, you need to annually plan how many people you are going to hire and then look at the improvement in terms of productivity. So you plan this annually and then you can review it, you know, quarterly and then you can make new salespeople come each and, each and every month. But it's really what is driving the growth and it's not AES so people closing deals that are driving, you know, the figures, the growth. But it's the SDRs and especially SDR outbounds which will, you know, generate new leads on top of the leads that will be generated by marketing.

And so now that you have so you have your product self serve, you have figured out how to hire and kind of scale your go to market team. Now how do you keep everybody together? Right? And that's the secret number three which is don't underestimate the importance of culture. This is the glue holding your company together. Another way to describe secret number three would be the barbecue test.

Right.

I think this is one of the things that was very original that you put in place. So maybe can you stop with that? I think it was a very good practice.

Yeah, we created this BBQ test which is actually not a BBQ test because there is no bbq but that we created when we, we were eight in the company when we wanted to create an informal time after the hiring interview so that candidates and current payfitters could meet each other an informal way. And that is something we are really happy with and that continued today. I think that when you are playing the volume game in terms of hiring and that you need a lot of people in your teams to grow, you need to be good at making sure that the culture is real and that is lived by your people. That's super important to have high engagement and to limit the attrition, especially in sales team. So I know that Jazz and Lemkin often talk about this. You know, the celebration that is happening at the end of the quarter for sales team is like almost as important, if not more important than the bonus a sales team will get. I've seen that over the past five years. It's really, really, really crazy. So everywhere you need to celebrate your success as a team, as a company, but especially in in sales team, when you hit the numbers, when you, you know, you're in success in a given quarter, celebration is a. Is everything.

Do you have a gong?

Sorry?

Do you have a gong? A gong?

We used to have one.

How long did it last?

A big gong. But yeah, after a hundred people in the company, it was hard to keep that because, you know, we are acquiring more than 100 customers each and every week. And so it was ringing quite often.

Yeah.

So when you get rid of the gong, it's actually a very good sign.

That's a key milestone.

Great. So you've hired your sales team, you keep them motivated with, you know, a very, very strong culture. So now that leads to. Now you have to face the customer. Right. And when you face the customer, that leads us to secret number four, which is be transparent about pricing and keep it simple. So on pricing, I mean, there are two line of thoughts on pricing. I think one line is let's get keep it simple so that the customer can really understand it easily. It's very transparent and it's clear. And there is another line of thought which is, well, actually if you make your pricing a bit complex and a bit harder to understand, then it's much easier to make changes and obviously to increase your price over time, which is, you know, as a startup, you always start with pricing low because you want the customer count and then start pricing on value and you increase your price. But if the price is very transparent, then may become harder. So how did you think about the pricing for PayFit and for you and for SMBs for what you're doing? Why was it so important to have very simple pricing?

So in the beginning I think we made a few mistakes because we have too complex pricing as we were shipping new features, new experiences and we were not that transparent for our customers. And so we evolved them and we changed that so that when you are a customer you can just look at the landing page and see okay, that's for me. I'm not an expert in payroll, in HR because I'm an entrepreneur. I'm the buyer, I will be the user. Okay, that's simple, that's transparent. I want to get it. So we changed a lot of.

So what did you change? So what did you start with which was not transparent and then how did you evolve it?

So at the beginning you know we had payroll and then HR and then we added features and then we had on top of different plans we had add ons. And the rules, the pricing rules of the add ons were different than the, the than the plans either. You have ex employees, you use it from a month to another. So we decided not to over optimize pricing so that it can just fit the requirements of the mass and so that it's. You, you may, you may think that you, you, you, you are losing money on the table, but you're not. When you have a transparent and simple pricing structure, you know, you just to get back to this self serve funnel, you don't lose your prospects. Then when you want to change your pricing offers, the communication to your customers don't get too bad, don't lead to bad NPS because your customers will understand the changes. They will seize the value you that you are bringing them with the new features, the new experiences that you invested a lot in and that you are releasing. So I would advise you even if you are worried that you will put money on the, on the table that to to be super simple, super transparent. Because once again you are not talking to experts, to buyers that are working in big corps. You are talking to entrepreneurs who will be buying your stuff but not be experts in that domain. So just be caring about them.

And how do you and this leads to secret number five like how do you get the awareness, how do you build the top of your funnel, how do you get your customers interested? And you're secret number five was build a B2C rather than the B2B marketing engine. So for a B2B company it's a bit unusual. So tell us more about what you've tried, what worked, what didn't work and why did you come to this conclusion?

Yeah. So what I call B2B marketing is for example, have a big, big, big, big event events and have a lot of of budget for those big physical events that were quite numerous before the, the COVID era. That's the kind of events that you are investing in when you are talking to enterprise because the people that will buy that will decide are there. Clearly when you are talking to thousands of prospects each and every week, you can't rely on that. You need to find a very scalable way so that your brand becomes famous with the mass and with millions of people in Europe. That's the only way to build some awareness and to build the funnel. So we were not great at that in the first place because we didn't, we didn't know that good that our segmentation was for SMBs. And so that's why we are using a lot of marketing techniques that companies striving with B2C are using. Because you are playing the volume games in terms of lead and you need that strategy if you want to bring enough leads into your funnel. At the beginning, it may not be a problem because there are so many prospects out there that applying all good B2B marketing, reaching out with outbound can be great. But at some point you reach a level where if you don't have the great brand awareness that Most of successful B2C companies have been building, you will eat a sailing glass.

I guess so we talked about several levers for growth. So we talked about products as a first lever, we talked about sales, we talked about culture, about marketing. But your secret number six was about customer satisfaction. So customer satisfaction is actually your first lever for growth. So why that? Because you would think intuitively that sales is probably your best number one lever, right?

I think that on top of sales and marketing and beautiful product, I think that making your customers happy with what you are delivering them is the most important level for growth. It's hard to get to this idea. It's hard to trade and to understand that one point of NPS is one point of growth. But I truly believe it, and especially when you are selling to SMBs, because once again you need your brand to strive. People will be talking to each other. One entrepreneur will be recommending your solution to another. And if you don't have, if you have a customer that had a bad experience with you, that can kill you another 5, 10, 20 deals in the coming few years. And you, you will be able to spend marketing, you will be able to hire salespeople. If you have those unhappy customers that can Kill the growth engine that you would have built in in parallel. So that's why you need to grow fast to keep your customers, make them happy, make them make sure that they buy more from you with different products, with more seats. But it will also drive the acquisition of new customers, new prospects that will hear from testimonials or from references that you want, you will not be even aware of. But that will play a role in the decision to get to talk to you or to just buy from you.

And your happy customers are growing every year by on average what, 15%?

Yeah, that's true.

So you have 15% of growth that basically just come from your existing customer, which is for an SMB business is pretty remarkable.

Yeah, that's another reason why you need to keep your customers current customer basis happy is because without doing anything in terms of growth, you will grow thanks to them. And that's I think the secrets of Most of successful SaaS company what we call net retention rate that is above 100% meaning that you will grow just by relying on your current customers basis, which is, Which personally makes SaaS very, very magical.

Nice. And now so we're getting to our last secret secret number seven which is about going international. So get your foundations right before going international to tools and processes are vital. So Fermat, tell us a bit more about your experience going international. What worked, what went wrong?

Yeah, we made quite a number of mistakes with this One quite obvious was to go international before having a CRM implemented. So we opened Spain, we opened Germany, Germany from France without having Salesforce, you know we were, we had our own in house salesforce. And that was a mistake because when you go international you add so much complexity compared to one country. So that can be true with other European countries. That can be true if for most of SAs you go to the US. So I would highly recommend to have all the tools and processes and the learning from your sales team that is quite clear and quite good. Before adding another layer of complexity and going international. So that's true for your entire funnel. Not just the tools that your sales team will be using, but how your marketing engine is built and then how you pour salespeople into that gross engine.

Well, thank you.

Fear Mer.

So we're down to the last seven seconds, so I'm just gonna recap what we discussed there. So even secrets to scale your SMB go to market. One, think products self serve, non negotiable for smart. Two, be prepared to pay to play the volume game when it comes to talents, people, everything make sure that you build a scalable hiring engine for your sales team. Three, don't underestimate the importance of culture. Hold your company together. Holds your culture together. Make sure you celebrate your successes with the sales team. Four, be transparent about pricing. Keep it very simple. Five, think about your marketing engine as a B2C engine, not a B2B engine. It's all about volume. Six, customer stat is your first lever for growth. And seven, make sure you get your foundations right before going international. Make sure that your tools and processes are well set before you start to replicate them in other countries. Well, thank you very much. Was pleasure to be to be here today.

It. Sam. Sa. We kept playing too long it was time to react. You can run, you can have but the music must stop it's a fan you want something else I agree but that's where you belong no point bending back cuz for me I'm just ching alone there's no use holding on if you love it you set it free just let it go move along that's how it's got to be. I don't know said the old folks down at the bar and our old friends bothered enough wondering where you are you want something else I agree that that's where you belong no point bending back cuz for me I'm just ching alone there's no use holding on if you love it you set it free just let it go move along that's how it's got to be. Happening time happens all in good time. Oh you win some, you lose some fall down you get up no matter what you do remember all the good times. Oh the wind will change the storm will calm down you win some lose some up all breaking slowly for a while breaking is easy take your time don't we just lay on the line? Why don't we just lay it on the line? Good time breaking slow breaking. Happens all in good time it happens all a good time. Ram. Sam. Wa. It. Sa. Sam. It.

We are in an era of digital fast collaboration. Our mission as a company is to empower teams to create the next big thing. Feels like you are in the same room near the whiteboard together. We want Mira to be an extension of your brain. If you have a blank canvas, you can solve any problem. You should be able to dump everything in and then work through it with your team. We have 25 million people using our platform across the world. Zoom allows you to see the body language to hear each other, but Mira allows you to understand each other. I was in the office with 200 people before pandemic and now we're 1100 people. We understand that this is a long journey. It will take us next several years to build platform that we're envisioning.

Please welcome miro founder and CEO andre hussid and general partner at iconic growth, matthew jacobson.

Where is it? Hello everyone. Great to be here at stage of Saster. Thank you for joining our session. This is Matt Jacobson, Iconic Growth and my name is Andre Hussid, CEO at Mira. Yeah, you may think that Matt will interview myself so today, but we plan to do opposite. So maybe I'll kick it off with you, Matt. So I'd like to learn from you how you make decisions in terms of investments like what companies you pick up and why you led our serious B Series C. It was a huge pleasure to partner with you, but I'm curious in general how you pick up companies.

I thought, I thought I was interviewing you, but it's very easy. We just look for companies like Miro. No, we focus on teams first and so we work with many product obsessed founders and we like that people who have kind of a deep passion for a problem they're solving, real clarity of thought in terms of what they're bringing to the table and the ability to hire really strong early team. We spend a lot of time looking at, you know, market. Either you're creating the wave or riding the wave, but the wave is really important. Most companies don't, you know, find a massive market that's unexplored right away, but they usually win in a niche. But that niche, you know, maybe like sneakily large or it might be strategic high ground to something larger as they continue to expand out. And that kind of goes to the third point point which is we're investing at the growth stage today and so really focused on companies that have momentum in terms of really effusive customer feedback and just a history of building great products. When we look across our portfolio of 120 companies, probably 70, 80% of those in software, product velocity, Miro being a perfect example of that is one of the defining characteristics of success. And so it's hard to kind of quantify that, but we look at a lot of, you know, qualitative and quantitative measures in terms of, you know, how quickly the product's moving is a key milestone in terms of that momentum. So those are the three things that we would capture in terms of what we're looking at. But you know, I'm excited to dive in and kind of ask you a question then we'll open it up to Q and A. Would love questions from the audience. But much more than revenue or valuation or big headline, things that people get excited about, you measure the company's success in terms of customer love and actually user love as the defining characteristic. Right now you've got I think 35 million total users and still growing in a very fast clip. Certainly you're doing something right, but how do you nail the user experience across such a horizontal group of people?

Yeah, it's a great question. So happy to share our experience. From the very beginning we were focused on data points that were coming from our users and customers. And I mean we look at data points at scale. We get hundreds of thousands of support tickets, we got tens of thousands of lines of feedback through, through the product. And of course we interview our customers to learn more how they're using the product and what they're looking at the product. So we do all of those things and historically we are iterating on that feedback a lot and we did a lot of small pivots along the journey to make sure that our product reflect what people are looking in the company. Also, I think that it's extremely important not just to build the right product, but to build the right service around the product. Because people really care not just how the product works, but actually how they interact with the company when they have a support ticket, when they need some help in terms of adoption and anything that might be of the interest, you need to serve that really well. And from day one we were really obsessed about support, making sure that everything that comes our way is answered in a timely fashion. And also that we provide helpful tips in our kind of ecosystem that we build around the product. We kind of invested a lot in, in product education. We invested a lot in a community and self service community where people can help each other answer questions and learn different, different use cases. So all of those things help to scale the community really broad and make sure that, yeah, that people love it. At the end of the day, it's.

Amazing how intentional you've been. You know, Andre, I think you know, Miro is one of the fastest growing companies in the world at scale. But Miro, you know, was founded in 2011 so like there's a Silicon Valley legend of blitzscaling, but your model has been very different. So why did it take so long to scale and how's that been an advantage in terms of building a durable business?

Yeah, few people know that. Actually we started in 2011 and the first name of the company was Real Time Board. So we launched Real time board in 2012 and we renamed rebranded the company into Miro in 2019. Are there any people in the room who used Real Time Board? Okay, there are a few of people here who know us from those days, which is cool. So yeah, we built initially a B2C product and as I mentioned in a previous answer, we were focused on data points that were coming from our community and we realized that a lot of people use this product actually for productivity goals. So we did a small pivot over the productivity and product engineering design teams and relaunched the product HTML version of the product actually in 2015 and start to build a self service motion. And then all in 2018 when we were around 5 million ARR, we started to build our go to market team. We start to bring sales marketing to our organization. So actually just like five years of established team and established companies that scale the product before it was a lot of experimentation and building as a self serve adoption engine. And of course those things helped us a lot to scale through recent years because we nailed down the viral mechanics, viral loop loops and those viral mechanics and viral loops accelerated us significantly in the last several years. But just before Pandemic we were growing 3x year over year, which is pretty normal growth.

But I think everybody here would agree.

Yeah, of course the majority of people learn about us in the last kind of three years or so.

And in terms of that, you know, insane hyper growth that you've experienced more recently, I think you referred to growing through the pandemic like, you know, building a plane while flying. You know, what did you mean by that and what were the biggest learnings of that hyper growth period?

Yeah, we entered pandemic with 240 people in a team and we were lacking senior leadership in a lot of areas. We were lacking middle management in a lot of areas. And through Pandemic we hired more than 50 heads of different parts of the business, which is pretty crazy. I remember like first year of Pandemic I was just like working, I don't know, like 14 hours a day, like six, seven days a week, just hiring, hiring, hiring, hiring and building the team. And it's not only about bringing right people, it's also about onboarding them into the company. Building processes that support the scale of the organization. Well, you know, making sure that everything you do are the right bets and actually accelerate you and not slow down you. A lot of people may think that when you scale the company, every net new employee, net new process can accelerate you. But in a lot of cases actually slows down on us. So we need to be really conscious about what, what, what, what really speeds up and where we kind of slow down the organization. So it's also extremely important to make sure that when we add this weight to our organization, we don't break some agile processes and we don't break overall agility of the organization. So that's what I call like building a plane while flying. You want to get to point B, but you need to build a plane while you are traveling to that state.

You know, in recent years I think it's become very topical, but like many software companies have grown very quickly selling to startups, which in many ways have been kind of cutting edge, you know, customers. But you know, what were the benefits of you building Miro and kind of working with a broader and sometimes more traditional customer universe versus only startups?

Yeah, we historically have customers from all different, different industries. But what I can say is that the difference is actually in type of users who are coming to the product. So we before Pandemic, like almost everyone in our user base, was early adopter. So those people who had their own need to kind of adopt the product, who were eager to find it, who were kind of, you know, who knew how to work with the canvas based products because they may come from other products with canvases like Adobe or Sketch or anything like that. And you know, they were curious, like this is early adopters. And then during Pandemic we start to see a lot of this early majority type of users who had some kind of need in our type of product, but who had to adopt it and had to figure out how to use it, actually. And then recently when we start to sell wall to wall to enterprises with a lot of knowledge breakers who are hesitant to actually adopt new technology, it's very different dynamics. It's late majority where you need to have all different enablement to make those people be successful with any product they adopt. So when we think about these three cohorts, we need to make sure that we have right tools and right strategies to make this cohort successful. And when it's the first cohort, you just make the product easy, easy to explore on your own. When it's the second, second cohort, you actually need to bring in some enablement so people can learn through knowledge base, through learning center. Like we organized lunch and learn sessions with our customers when we did it online or came to their offices right before Pandemic. And now when we have this late majority, when we kind of scale the product to Almost every knowledge base worker in big solid of people organizations. We actually need to drive this adoption through more sophisticated customer success plays. And this is very different dynamics from like early adopters that we had before. But what is kind of universal to all of those cohorts is that as more simple your product is, it's easier to adopt it. Like if we look at the best in class products, who grew the fastest in the world, like Trello and Slack and Zoom and Dropbox and Canva, like and Miro of course, like all of those products have similarity in how simple they are. And this is the foundation for Flywheel that can be created if you do it right.

Thank you for watching. Walking through that, you know, had another question that's I think on the top of mind for a lot of people here, you know, which is like 2022 is, is definitely a time for serious volatility in terms of, you know, markets and challenges facing a lot of founders and teams. Was there ever a point in Miro's journey where you know, you thought you weren't going to like sustain or survive and how did you manage through that?

Yeah, I was pretty positive about the future of the company and along the journey. I can't imagine at all like that one day I can be on this stage speaking with you, having you as our board member. But I thought that we will survive and we can be a 20 people company. So that's what I was positive about. So I was building from day one the company that can pay salaries for 20 people. So and then when we start to grow, I thought, okay, okay, maybe we'll right now 1500 people or now it's 1500 people, almost 1600. I think we're growing as we are speaking. So but in general, like from day one I was thinking about building a sustainable company and Miro is profitable and Miro was profitable from almost day one of when we launched the product. So like what I can think of is like make sure that you are not dependent on externality. And that's kind of really important because I remember when Pandemic started, we had several discussions with VCs and some of them were trying to invest in the company for quite, quite some time. When Pandemic started, they all started to think, oh, maybe we should wait. We don't know how all these things will evolve. And we were not dependent on those decisions because we were profitable before Pandemic. And yeah, we were lucky that you came regardless of the Pandemic and just doubled down on our growth and accelerated the Growth. But in general, like as long as I remember myself and the company and any fundraise we had, we were not dependent on the decision of the investors. And this is where you can really own your own destiny. So I recommend you to focus on customers, to make sure your customers see the value in your product, get to the product market, fit in the initial segment that you potentially can scale and go for that segment. So when we build the company, we build it for profit and investors can accelerate that business, but they can't kind of be the only source of that business. So that's my philosophy and that's how we survive through all the those times.

It's been a pure approach and you know, now nowadays very, very fashionable. The, you know, talking about those early days in that early team, my understanding is that you launched Miro with like a core team of, of 10 people or so, and all of them remain with, you know, Miro today. Like, how did you, you know, build and retain a team like that over the long term?

Yeah, one of our Miro versus values is collaboration. Another is empathy. And I think that when we kind of, when we build relations with people, we should be guided by those values. And this is what we share inside the company. And from, from very early days, I personally believe that those people who are excited about what they're building, why they are in this company, about the mission, they will be engaged and if we treat them properly, they will stay with us for a long time. Of course we now kind of scale the organization and we bring a lot of new people outside. But what we care about is also like how we can create opportunities for internal team to grow with the company and play their best game, I call it that way. And yeah, those 10 people with who we started, like they all were the company and they all contribute to the company's success. Another trick or a thing that I didn't consider at the very beginning. I thought that the company maybe will be worth 50 million or 10 million. So we gave some good stock options. So, you know, now the company valuation is a little bit bigger than that. So people are also pretty happy with their upside. So they committed to the success in the long term and they're kind of doing their best to make the company really successful and thrive through all times. And also they're culture carriers. So they kind of create this culture, they share stories, they make this glue of new employees who are joining the company and kind of navigating those people around different parts of the organization. Especially in a pandemic, it's extremely hard to onboard people. We scaled from 240 to like almost 1600 now. And just all those people never met each other. They all work through zoom. So those early employees help, you know, new joiners on board and that's another thing why we're thankful to them. But they also kind of recognized in the company. And a small fun fact, when we started of the company, we start to give every new employee a T shirt with a number. So we thought about our first T shirt and there was MVP sign in front. You know MVP is the most valuable player but it was also our first T shirt. We thought it's an MVP of T shirt. And on the back like on a jersey you had a sign. So all these early employees have the number when they join the company. Number one, number five, number 10, number 50. And they all wear these T shirts. And people inside the company recognize these are first guys who build it, who contribute to this. It's also a lot of recognition for those early joiners. So there are a lot of things why they stay in the company. But the one thing is like we care about them.

I never knew that in terms of the jersey.

That's amazing.

You know, now you've built out a world class management team to complement, you know, the team that you retained all these years. You know any secrets in terms of building out that team. How has your approach changed from those early days as you thought about management?

Yeah, for a long, long time we were growing our kind of internal talent. And as I mentioned only in 2018 we start to bring external executives to the company. And we had first two hires in 2018. Sorry, one hire was actually LA, like head of sales. He joined us in 2016 and then but he had just two, three people. So it was not like a scaled motion at that time. And then first CMO joined us in 2018 and when I started to hire senior leadership executives I started to learn what's the best way to do it. Because these people can actually help you to go and scale your organization. Go through hyper growth. I did it through my network initially. I was also looking through angel list or LinkedIn. But then I learned that the best way to build a leadership team is to bring on board an executive search firm. And when Excel joined us with around a, they actually advised us to hire executive search firm and go and search for our first kind of fast. Like executives went to hire with together through these professional firms and I think it was like a real success. And since then every hire I make I engage executive search firm and almost for every new hire we hire a different executive search firm because we are trying to find the one that specializes on specific area and who have a strong tracker record in that. I think it's also important to do extreme references on executives when you bring them in. For entrepreneurs.com David Scott has an amazing article on how to do extreme references on your executives. I'm a huge fan. Every time I'm hiring an executive I'm rereading the whole article to make sure I do all the necessary steps.

That's an endorsement.

Yeah. To validate the leader. Because your company is so much dependent on that person who is joining your company because everyone else is reporting to that person. Like this person is accountable for the whole organization, for the culture. It's critical for the success, success. And then you know, it's just, it's important to make sure you take it extremely seriously. I personally do kind of a lot of outreaches myself simultaneously with executive search. I do reference calls, I do back channels, I do proper onboarding. I like, I invest a lot of time and effort into brains of people who know what awesome looks like, who did it before, who saw it before, who did it in the best in class companies but who have beginners mindset. Because if you bring executives who just want to bring you a playbook from their previous workplace, it will not work out. Every company is to a degree different and you need to see if they have beginners mindset to make sure that they properly evaluate your company and properly design the place that will be most effective and efficient in this type of company. So this is also extremely important to make sure that those people have this beginner's mindset when, when they join your company, especially early days because they can make it or break it.

I love that beginner's mindset. You know Andre, speaking about Europe, you've.

Got distributed, maybe before we go there I'll ask you, you also have a lot of experience with building these leadership teams and bringing on board executives to the companies you invested in. So I'm curious to learn from you what you guys see. What are those best practices to build a leadership team and executive team?

I think you talked about it like this. Onboarding in enablement in terms of setting them up for success is something that people kind of under appreciate a lot and we see the very best founders like really engaging. It's a long process to recruit somebody great and then getting them off to a successful start is a massive, massive investment. And we've seen people over invest in that Function and see real success and some other people kind of undervalue that and learn along the journey. Journey. I think that the other thing that I would share is like, even when you're not hiring for a role, it's always great to just cultivate your network. And I know a lot of people have talked about this, but I can't underscore this enough. Just like being out there meeting with people, learning what great is in terms of certain scale, in terms of CRO or CFO or anything else, and building out that network over time because, you know, the very best, most critical hires are oftentimes like years of relationship and learning. And building a model of what great looks like can really help inform those strengths. So those are two things that I would.

Yeah, I can echo. Network thing and iconic team was extremely helpful on bringing some top candidates to us in the last couple years and also super helpful when you have strong investors who introduce you to kind of two great candidates and can, can also help to, you know, back channel some of those candidates. So it's extremely important to have strong networks and your investors are really kind of instrumental to that.

You know, it was a little bit like we saw things exploding and we're like, wow, you know, we talked about this and we're like, we need to build in a lot of manager structure that usually happened over years in a very short period of time with Miro to really enable the success that's been driven. It's just been incredible having a bird's eye view and watching you build out this team.

Shifting a little bit.

You've got a hub strategy in Europe and you built in a bunch of different locations. Like what is your thought process around M and A and is that something that you're open to and thinking about in terms of founders?

Yeah. We built our company as a distributed company across 12 different offices. So we have five offices in Europe, we have four offices in US, one office in Armenia and a couple offices in Asia Pacific. So in Tokyo and Sydney. And when we were building those offices, our vision was to make every office in the company a primary office. So wanted to have executives in every other location in the world and to make sure that people feel they're kind of first class citizens. They kind of influence the company strategy, they influence the company brand, they influence the, the company kind of culture. And that's, that's, that's extremely important. And with people who we hire like across all different regions, like we really hear that sentiment that it's extremely, extremely valuable to have that approach because when the company is gravitating toward like one, one area is like somewhere in Europe or somewhere in US, everyone else follows. While when the company, company is distributed, at least the leadership is distributed like it's more integrated, it's more inclusive. And while, while we have this kind of spread across all different regions, we try to focus and concentrate our product engineering in Europe because we historically built it out of Europe and we've built the kind of biggest productivity collaboration company out of Europe ever. And today we are thinking how to expand further in Europe and how to bring more of kind of this community power, how to bring more of the value of the customer value to our product. And we started to do M&As, and of course our core focus on M&As is in Europe today because as I said, like product engineering is here and all Our M&As are focused on product engineering. And we did a couple already. Like we closed one last year, we closed one early this year. We're going through another couple right now. So. And the ambition here is to build and to scale kind of this biggest productivity collaboration company out of Europe ever. Yeah, it's exciting.

Yeah.

And I know you guys also recently scaled to Europe. Europe. Congrats with opening London office. Thank you. Really happy to have you closer to us. And I'm curious like why you guys moved here and what you see in terms of European venture landscape. Like, I know you invested in a couple companies before Mira also that are based out of Europe and now it seems like it's time to double down. So I'm curious what your expectations for Europe are.

We actually invested in 10 companies in Europe in addition to Yamiro, we led investments in Miro and Adyen and Calibra, Data iq, Intercom, Motorway Primer, a variety of others. And you know, we just, we love it. It's like super vibrant. The quality of technical talent is literally just exploding. You know, it's unbelievable. The founders are super humble and have generally had to do a lot more with less, which has just created amazing durability in terms of the company. So just really impressive capital allocation. And the companies, you know, many of these companies have had like a global mindset from day one because like Adyen, for example, you know, the market in terms of digital payments in the Netherlands was not, you know, the end all be all in terms of market size. So the company had a global mindset from day one, one that they borrowed.

From a previous company.

But it just, it really strengthens and hardens the companies in ways that Sometimes we don't see in the U.S. so that's been, you know, exciting. We opened an office in London and brought on Seth Pierrepont to help lead that effort and moved over a bunch of our team members because culture is so critical to us, including Ritika, who's sitting here in the. In the audience and is a total rock star and somebody that you will read and hear about in Europe over time in terms of partnering with founders. So we are very excited to be here and to be closer to you.

Cool.

Cool. Welcome to Europe. Thank you.

And, you know, I think wanted to ask one last question and then hopefully drive some Q and A from the audience. You know, I'd love to ask what advice you'd give to other founders who are just now beginning their journeys like you were in 2011, and seeking investment. What should they look for in a partner?

So I think just the first focus is a product, like the value that you create. And if the value is there, investors will find you. So I had a chance.

This is like the frictionless platform.

My whole idea is to build things that scale and that role on its own. If you build the right product, the customers will come. If customers will come, investors will come. If investors will come, like, executives will come. Like, all these things are super connected. So the only thing that I care and I believe best in class companies did is just building the right product, building the right value, and making sure that this value is distributed across your target audiences. Like, if you nail down that value, if you polish that value, if it make it, like, really viral, you will have all the other things inbound. And, of course, it takes some time to build that value. And you need to have strategic patience. It will not happen overnight. You will iterate, you will pivot, you will change your audiences. But the thing is, like, if you have that strategic patience, if you believe that you can change the way how people operate, how the market kind of operates, you will find that product market fit. And once you find product market fit, just, yeah, your investors and your leaders will join you and scale the company with you. So be patient, but also be extremely focused on iteration around the customer's needs. So that's simple but powerful thing to focus on.

A very powerful thing and echoes the way that you built the product as well. We'd love to take questions from the audience. I don't know if there are folks. I think there's a couple people walking around.

Right.

Right here in the front.

Okay. Hi, this is Barry from Holland.

I'm from the Blue 10 and I'm a CFO at Blue 10 and I was looking at your leadership team and.

It seems to fail CFO when you leadership team.

Is that correct?

And if that's correct, why is that so?

Can you repeat about the leadership team?

Your leadership team doesn't contain a cfo.

Oh yeah, that's correct. We are hiring cfo.

Why is that?

Yeah, we are hiring CFO right now.

Yeah, not interested. Thank you.

Okay, if someone is interested, like let's speak, please let us know.

Congratulations on your success so far.

Phenomenal.

At the size that you are typically.

Then competition comes into play because you.

Get a lot of attention. Are you afraid of competition?

No, we are afraid that we will not be relevant for our customers. That's the only thing that we're afraid of. Because if we are relevant in terms of the product value, in terms of the service, in terms of the price, in terms of all of those things, we should, we should continue growing scale. Like we are the market leader today and of course like there are more players who want to, to get into this space and of course they are trying to copy us or bring some different angle to what we're building. But I think that like this continuous product market fit and continuous, you know, like you know, pricing feed is what I, what I care about. Because if you, if you successful with that things will follow. If you can fail something, then the rest doesn't matter because the competition only can get into our space and overcompete us if we become less relevant for our customers. And that's what we care is focus on customers as much as possible. But you are absolutely right, there is everyone who is trying to enter our space and of course there are, there is some usage that is getting out, but some other new customers and expansions happening with us.

Hi, thank you for your presentation. I am a Miro user. First of all I want to ask.

You something about your early days.

You said that you started almost 10 years ago, probably more than 10 years ago, when remote work was not such a thing as it now. How did you find back then your ideal customer?

What kind of companies or users were.

Your users back then?

Yeah, it's a great question. So a few of you may know that. But historically we were building the product for non remote work and now we with the pandemic, a lot of people start to associate us with the remote work. But actually more than 70% of our workflows were asynchronous. And now with the pandemic hopefully over, we see this trend getting back and like, we see more and more of these workflows happen asynchronously, which is great because we are a product that supports all different workflows when you are at the same time want to brainstorm on something or when you need to do work in different time zones, through different offices, through different teams. So at the beginning we had this product managers, designers, program managers, project managers, engineers who just need to do visual collaboration. And as I say, in the majority of cases it was asynchronous and continue to to be today. Also, a big part of our usage is asynchronous. So remote was just, you know, a trend that happened in the last couple years that was accelerated actually in the last couple years because of Pandemic. And we just positioned our product to support the trend and to get the most juice out of it. And now we can position it for hybrid work, which will stay with us for, I believe, ages from now. So, yeah, it's also about your message market fit. At different stages of the market development, you have different message that resonates most and it's also very important to see what resonates and what's the biggest growth lever in terms of this message market fit at a certain stage of the company. So if you look at Salesforce, I don't know, like in a couple recent years, but historically they were changing their message pretty frequently. At every Salesforce event, they came up with a new message with a new positioning because you try to engage with the audience from a different angle, from a different value perspective. So which makes a total of sense. So, yeah, just keep in mind that. And it's also super helpful on the scale of the company.

Hi, my name is Megan Murphy from.

Hotjar and I have a question for both of you.

Can you share a recent example in.

Which you've lived up to your expectations.

On displaying a beginner mindset?

You want to start, sorry, we've gone above our expectations.

No, like when you've lived up to.

Your own expectations recently of displaying a beginner's mindset.

So from, from my perspective, you know, the, the investment landscape and the growth landscape has changed, you know, quite a bit in terms of, you know, 2020 and 2021. It was, you know, extremely active and the market was vibrant and there were companies in our portfolio that were raising capital every six months in some cases, and the world was awash with capital. The landscape has shifted quite a bit and we've adapted. Our team is now 65 people and really adapted the way that we've engaged with companies supported our portfolio, companies invested more in terms of different services, in terms of supporting them. And so that's been a very meaningful shift and it was a very different motion than we had taken in the past. So for me it's felt like a beginner's mindset in starting many of our practices anew and kind of rebuilding them from scratch.

Yeah, for me it's just very recently we are kind of now in this exit pandemic mode. And also, you know, the markets are changing, the demand might be changing and we are looking from scratch at like how our customers think about us, how they consume us, what they expect in the future. So I think that company now entering absolutely new phase and I need to reevaluate all assumptions we have around every aspect of the company in terms of like headcount, in terms of value that we are offering, in terms of messaging, in terms of pricing, in terms of way we servicing customers. Like all of those things. I'm reevaluating from scratch right now because I believe that at this point stage we need to think very differently to how we thought about that a year ago when we was, we were at the peak of pandemic, two years ago when we entered pandemic and three years ago when we were kind of, for me it was business as usual for several years. So now it's absolutely new phase and I'm kind of rebuilding my data set to make sure that we are designing the company for success, for being generational in the next several years.

Hi.

Hi.

My name is Jaya. He's looking elsewhere.

My question is, you said don't be.

VC dependent on or investors dependent.

Right.

Especially if someone wants to scale.

Not everyone is in a fortunate place like Miro was.

So how do we become non dependent.

On VCs and investors?

Revenue first. Yeah, I mean like mirror.

Yeah.

Miro is successful in a certain way but as I said like every round we raised in serious seed, we were profitable. So just focus on revenue, focus on customers, focus on building value your customers would pay for. Bring people at the beginning of the company who will be more excited about equity rather than high cash sellers salary to make sure that they have on one hand enough motivation and skin in the game. But on the other hand you don't burn cash on super expensive people. Try to be lean as much as possible. I know like it's all general things like we all know but.

We are.

Trying to ask ourselves even now like what is nice to have and what is critical to have and if we see things that are critical to have, nice to have. We're just cutting them down like as much as possible because even with our existing scale, I want us to be extremely lean and extremely down to earth in terms of how we spend what we spend. On what we spend, I can tell you we are almost 1600 people. I review every day job offer that comes out in the company and I'm extremely focused on making sure that in the first place the job description is in the right place and then the job offer is coming out to right people. And of course we sometimes do mistakes.

Or.

Kind of do things that we can do differently. But at the same time it's extremely important to be heads down and see what's going on in your organization to make sure you make most out of every step you do. Some can argue that it's not scalable, but I spend maybe five minutes total on this exercise a day. But when you hire five, ten people a day, it's like a million dollars a day. It's pretty valuable to take a look what's going on.

Hi Xenios, great talk. Thank you very much for the very insightful information.

You talk about value of your product, which is obviously something that all of.

Us are obsessed with. How do you measure it is my question.

We found it to be one of the hardest things to quantify when it.

Comes down to what value you give your customers. Yeah, we have different measures. We, we have Northstar metric. It's a value metric as how much we see collaboration with our product because our product is focused on collaboration and value metric is built around that. We measure of course like some.

It'S.

Not vanity metrics but like it's scale metrics like weekly active usage which shows like the breadth of usage. We measure depth of usage of individual usage. We call it engaged users. And we have certain measures behind that. Of course we kind of measure ratios between our usage and prices per seat. Sorry, price per seat. So we call it like engaged user per like seat ratio. So we try to measure all those things and see how the trends evolve to make sure that we are not missing out some major external or internal things that happens. But in general we have pretty big and strong like analytics team both on go to market and product and yeah measures for almost everything we do. Like we have strong data, informed culture and, and it's pretty important to build it from day one because you can't improve it if you are not measuring that. And for sure like to set up ambitious goals to grow some numbers. You just need to have baselines and understand the root causes for those baselines. I mean we can go into a deeper discussion because I believe every product has kind of specific, specific type of measures. But I'm a big, big believer in building strong data inform foundations in the company.

I think we're.

Okay.

I think we're done. Thank you for the, for the amazing questions. You know, this has been an unbelievable masterclass in terms of scaling a company and it's been amazing speaking with you.

Thank you everyone. Yeah, good luck and let us know if we can be somehow helpful. Thank you.

Sa. Sam. Sa. It.

La.

I want to go there Sunday I know we going somewhere into danger zone it all parts points right to that I set myself aside either way on this trial if you don't know the way we can stop and make a change I know we walk for days losing hope fading love this night will be okay Waking up to another day. I wanna go this under I know we're going somewhere into the danger zone it all points right to that.

I.

Set myself aside either way on this joy if you don't know the way we can stop and make a change I know we walk for days losing home fading love this night will be okay Waking up to another day. It. I'm all right I'm not with you I'm all right When I feel you I'm all right When I'm with you I'm all right When I feel you I'm all right I'm not with you. I'm alright. Sam. I'm all right. I'm all right When I feel you I'm all right I'm not with you I'm all right When I feel you I'm all right. It. It. Sa.

Sa.

Sa. I ran away from heartbreak got nothing in return for my pain.

I never.

Thought I'd be so impressed Lone and afraid. Wasn't looking for a lover Nobody understood where I've been I guess I thought I needed more time to protect my love from potential up so I. I'm not surprised by what I found cause I know I needed something different and it had to be you out the blue somebody who listen and it had to be out of all people to reply my love couldn't be just anyone but baby it had to be you. I didn't seem to notice daddy you were checking for me we were just.

Friends.

But we started building trust and my fragile heart started to win yeah I should have paid attention. You would have been the obvious choice But I needed time to see clearly Dig deep and cut through the noise so I. Then you came around and you. But I saw you and I'm not surprised by what. I needed something different and it has to be out the blue Somebody who listen and. Be just anyone but maybe it has to be you. You sam. Sa. Everybody seems to know that I. I'm.

The one who crossed the line and.

It got me lost Everybody says the same Searching for a way to find.

A path back to self control.

Please welcome Saster founder and CEO Jason Lemkin.

Be hard to do it without a clicker, right? I mean they could do better, but.

Woohoo.

Good day for everybody so far. It's good to hear. Anyhow. I thought this could be an informal session. You could grab a cocktail or a snack, but. But the sessions. 20 upgrades for 20, 22. 20 things you can do to almost guarantee you will grow faster this year. And what I wanted to use was a bunch of surveys. So a couple months ago we invested a little more in our LinkedIn page. I know everyone knows LinkedIn works for B&B2B but we didn't do much. We started doing some surveys asking some of the Saster classic questions and wanted to use some of the answers from 1000, 2000, 3000 and per survey on some questions that we've talked about for years about how things work in your business and how to level them up. So I want to use about 20 of these surveys for a prop. We may run out of time. We may have extra time you can interrupt a little bit. But I think some of them tie into some classic Saster themes. A lot of them, a lot of the stuff you've heard today. But maybe we could dig in a little bit on data and this one, and I know David Kellogg talked about it. I think Bill Bench talked about it, if you heard their sessions. But I like this data because we've talked about this a lot. On sastr. There's a classic Saster post which I really think if you haven't read, I would. One of the top 10 I would read. Which is why the best sales reps close 9x more than a normal rep. Not a little bit, not 20% more 9x again and again and again and again. I was just talking with the top sales reach. One of the top sales reps ever, maybe the number one at outreach ever. He was 9x his first year. Even our little Saster team over here that sells sponsors, we have one person and it's a great sales team. We have one that has sold 23 million of sponsorships already.

Okay.

9X and we won't get into all the math today, but I did a survey and I asked. We asked only 427 for this. But how much more does your number one sales rep close than your average sales rep? 20% said 5x or more, 35% 4x or more and the majority 3x or more. So what do you do with this data? Great. The sales magician. The most important thing, if any of you are having any stress in your model is one way or another, move on from the bottom. Top 10% of your reps do it early. You heard David Kellogg and Bill Bench talk about making these decisions early. But think for a moment. Think how many leads. What if you took your 100 leads that you're sending to your two or three or five worst reps and gave them to your best reps or the middle of reps and they closed three times more, nine times more. Every single time I see this Applen SaaS company, had it happened to me back in the day as a SaaS CEO, magic happens. You just close 20% more from the leads you already have if you concentrate them in your best reps. Now of course you can't give your number one rep all the leads that doesn't scale, it doesn't work. But again your bottom 10% are usually just flushing leads down the drain. So be kind, be helpful but literally move out your bottom 10% and your revenue will literally go up in less than one sales cycle. It's just math. So this worked for me. It works for all the companies I've invested in or worked with and it appears to work with 427 you as well just get recycle the rep the leads to your best reps. A second one. I asked about what people are seeing on turnover and we could talk about the great resignation and what you're seeing, what you're feeling. But the best sales teams stay together and the best VPs of sales not only are constantly recruiting the best AES to join them, but the best VP of sales don't let any anybody good go and design sales comp plans so that you'll never want to leave. Right? And if you, if you haven't worked in a great sales environment, you're just experiencing it today. What you'll see is literally with the best VPs of sales, there's almost no turnover on their team and their top reps make a lot of money. That becomes a virtuous cycle. It is risky as an AE to leave and go to another startup if you're doing well. If you're making a lot of money at a certain SaaS company just because another one just raised a round or looks hot, what are the odds that you're going to make top 10% salary if you just quit and go somewhere else? It's risky. And if you love your boss and you're making a lot of money, you're not going to leave. So I asked what percent of your sales team turns over each year? The median appears to be about 20, 25%. That's crappy. It's crappy. And the reminder is, and I think we've learned this over the years, old school sales is some sort of bell shaped distribution. And notwithstanding that, we do want to get rid of the bottom 10%. We want everyone, we want the bell curve to keep moving and reps to get better and better. And you want the vast majority of your sales team hitting quota. You want 80%, 90% hitting quota. It can be done. We've talked. You can check on YouTube and Google Sam Blonde who's now CRO of Brex. We've done this so many times. You want 80% hitting quota, not having this turnover. So honestly ask yourself three things. Do your reps love your VP of sales? Your good ones? If not, that may be a flag. You have a problem. The best reps should love them. Does it reward excellence? Are your top reps making a lot of money? Like depending on where you are in the US your best AE should be making 300,000 for SMB, half million for mid market and a million dollars for enterprise. If you're best. If your best folks make three to five times more than the mid than the mid pack ones, they should be making that much money. So does your sales comp plan work? And don't take away money from your best reps and strive for zero voluntary attrition. It truly is a flag. If any of your best sales reps leave for any reason, it's a flag. Find out why. Go grab them in the parking lot if you have the off. If you have an office, grab them on zoom or grab whatever. Don't let them go. Because again, if they're making good money, I have a good boss. Why? Why would they leave? The only reason an individual contributor sales rep should leave your company is for a promotion they can't get at your company. You can't promote everybody. Not everyone can become a director of sales or a VP of sales or promotion. Typically there's only enough slots to maybe promote half of the folks that want a management level role but it should be the only excuse if someone else good is leaving. It's a flag, it's, it's a problem. So don't lose any. That's one of the best ways to keep growing. Concentrate that knowledge. Because their best reps just get better and better around year two and even year three. And they train the rest of your team. Don't let them go. Point three this one is I love what again what David Kellogg talked about the dramatic damage from a cost perspective a mis hire and VP of Sales can do. I asked the flip around question we should have gotten more votes on this one but how much of a revenue boost did you get from your first great VP of sales? 20%. Half got 20% and about half got 40 to 100% boost. And maybe the number one thing tactical thing you can do is concentrate leads in your better reps. But the number two thing you can do to grow fast this year is just up to Upgrade your weak VPs. Dave made the point that you already know who's not cutting it, but things should always approve in one sales cycle. Another classic Saster post, if you want to go back and look on the site is, you know, a great sales. A great VP of sales should make an impact in one sales cycle or less. And when I wrote this years ago, so many VPs of sales I knew got mad at me like how can you expect me to improve sales in one I need two quarters, I need four quarters, I need 12 quarters to turn this ship around. Read the post. You don't, you don't. Because what a great VP does is a couple of things. And not just in sales, in marketing, in product, in Eng. A great VP of Sales brings in a couple great people, a couple great engineers, a couple great developers, a great marketer and they move out anyone that's not great, they do it in fact their first week. The good VPs, especially VPs of sales because VP of sales is half your job is hiring the immediately assess the team on the ground. They immediately bring in one or two great people, move out one or two great people. And you see that same math with the great ae. Like they route the leads to the best people internally and they bring in a few ringers. And the best VP of sales are better at closing than someone mediocre. So they come in and the deals that are already happening, the deals that are already in the pipeline, they just close more of them than a weak VP of Sales or no VP of Sales. So you should always see some improvement. You should see more story points in your VP events. You should see more leads from marketing. You should see more revenue from sales. The nuance is don't expect magic. Not every VP of sales can come in and double sales in 30 days like I experienced. Sometimes it's a smidge better. Sometimes marketing gets a little bit better. Engineering product gets released a little bit faster. It can't always happen overnight. But if you see no problem progress, you're almost always better off with nobody. And most folks know this. You're almost better off without a weak with no VP than even a mediocre vp. So fix this today and revenue usually will go up. And again other folks have said this, but if we had to just wrap this last one. Just remember, time never turns a mediocre VP into a good one. It just never does. And especially never listen to your VCs or investors that tell you this. Many of them don't know they haven't run companies and they always want to give. Especially that strapping like white male VP of sales from a hot tech company that's 64 and has a suit and a good accent. They always want to give him more time. But you got to close, right? So time never helps. So Upgrade your weak VPs. A small one, but to impact your team is make sure you hire any great vp. You do not have to sequence it perfectly. And we've talked about this on Saster. It's a classic post of what order to sequence it in. But the real key to understand, and this is not intuitive until you're later, is any great VP is accretive any great vp. And I'll hit the math for a minute, But I asked folks 1101, which VP do you wish you'd hired earlier? Well, 38% said VP of Sales, which is what everyone thinks. But VP of Marketing, VP of Product, Eng maybe I guess I get the 9%. We could talk about it, but they're all accretive. And we've talked about this on Saster, but just a tie to the poll. A great VP of sales is at least going to increase sales 20% in the sales cycle. A great VP of marketing is going to bring in more leads than they cost, bring in more pipeline. You'll immediately see a boost at least somewhere in the pipe. A VP of product. Most folks here probably have not hired a great VP of product before. I see too many people wait, but your product by 5,6 million in revenue, sometimes earlier it gets complicated. You have a lot of workflows, you have a lot of Use cases. You have a lot of customer demands and I see too often the CEO or the CEO and the CTO hacking the roadmap. It doesn't work. When you have 100, 1,000, 10,000 customers, you're making the wrong bet, you're making the wrong bets overall, and you're making the wrong bets for your biggest customers and the ones in the pipeline. The VP of product will figure out how to manage those, those bets, those story points and optimize the chances. Big deals close and that big customers are happy and that big customers buy more from you. So they're all, they're all accretive. Even a million. And they are. So the point is, as founders, your job is spend at least 25, 20% of the of your time recruiting half if you can, but meet all the great VPs. And if you think you need a VP of sales, but you find a great VP of demand gen, just hire her. If you think you need a great VP of Product, but you find an amazing VP of Eng that your CTO loves, just hire her. They're all accretive. You hire an amazing VP of engineering and let's say you're doing 100k deals and you're able to close two more amazing customers because you hired a great VP of Eng. I mean, more than, than pays for herself in a quarter, a quarter or two. So don't wait, don't try to perfectly sequence your VPs. If you want to close more this year, hire any great one. They're all accretive. Okay. Another one that people give you crappy advice on, especially your VCs and investors. A VP, especially VP of Sales. But any VP, you have to bring in good folks. You have to bring in good folks. And when I'm interviewing any VP candidates, engineering, marketing, but especially sales, there's a few trick Columbo questions I ask. I never ask tough questions. I always ask simple questions, layups. But I ask, okay, who are you going to bring with you if you join this startup?

Bob.

Diane. Great. Okay, what are their backgrounds? Are you sure they're going to come with them? Go talk to Bob and Diane. It's okay if she's going to bring Bob and Diane with her. They've known each other for years. They're already grooming them to come. It's okay to go talk to them. If you hear a VP of Sales or really any VP candidate say, I don't know anyone, but I'm going to hire a bunch of recruiters, like, don't hire. That's not a vp. It's not a vp and this is a mistake again and again. So I asked 12, 17 people, how long do you give a VP to bring in a few good hires? Most of you failed this test. The correct answer is day zero. It's always day zero. And two thirds of you said a quarter or two. It never works. VPs don't have time. Any VP role is 50% recruiting, especially engineering and sales. And again, I've got to tell you, I've never seen a single VP of sales succeed that didn't bring in one or two good people with them immediately when they joined. Never seen it. Not once. Could be a good individual contributor, could be a good placeholder, but it's not the job. Okay, next one. This is kind of a more recent issue that I've realized that's dawned on me. It's not brand new, but this is one of the best ways to level up right now, this year is to make sure you focus as much on logo retention as NRR, right? Years ago when Saster started Saster's 10, we were just learning about the power of NRR. We didn't even really know. And now if you look at all the companies that have gone through public and you can read it on our five interesting learning series, everyone's got it. Datadog. You know we talked about it this morning. 400 million in revenue growing over 70%, 130% NRR. All these NRR numbers are great snowflakes, like 170%. But here's what I've learned. High NRR companies are friggin lazy, especially their customer success teams. And I wrote a post just recently about how customer success teams at higher NR companies are lazy. And all the CS people flame me on LinkedIn. A thousand people said I was wrong, but I'm right. I've recently interviewed over 70 CSICs. I usually interview P70. They're so lazy in these higher end environments. Now when you interview someone out of B2C or a high churn or SMB environment that's got 80% retention, 85%. They hustle, okay? They work hard, they're judged every, every hour, every day when you see that churn happening. But goodness gracious, when you walk into the work and your companies buy 140% of your API, they're lazy, lazy, lazy, lazy. And I've asked so many CSMs that are more mid market or enterprise, how often do you do QBRs, right? I don't know if it's in here like, well it's quarterly. But how many do you. I did one last quarter. Oh, they don't show up. They don't do anything. That's lazy. It's lazy. It's lazy. It's lazy. And okay, so we could talk about that point. To learn how do you cure a little bit of this laziness in a high NR environment? You got to track logo churn. You got to track it relentlessly. Because if you don't and you lose and you lose a couple of high profile customers and you lose Notion and chargebee and Asana, who's here but your NRR is still high. No one gets bent out of shape. Oh my gosh, we lost. We lost Asana. I mean, who wants to lose a sauna? That's death. But if your other customers are growing enough, no one cares. But if you say, look, we need 90% logo retention or 95, and you talk about that every day, every week. And it's just as important in revenue ops and CS as nrr. People's behavior will change. People will have to be accountable for every logo they lost. And really every logo. Every customer you lose in SaaS is sort of a failure. Someone failed sales oversold it, your product let them down or CS let them down. No one buys SaaS products for fun. It's not fun to deploy, test and roll out a SaaS app in your company. And every single time they churn, you have failed a customer and you're going to fail a few times. But focus on logo retention as much as NRR and you will watch magic happen. Things will happen much better. Don't let CS cruise because it's gotten endemic. Okay, next point. In terms of 20 ways to do better in 2022. And this is some old Saster stuff on how to raise pricing. But I asked folks, how much have you raised price on your product this year at all? I was a little surprised. Obviously we're in a weird inflationary world. Things have changed. But 60% of you have raised prices this year, right? And what I have found on the first point with companies I worked with and talked is there's a lot more elasticity and pricing for most SaaS products than I ever thought. I sweated this as a bullet as a founder, and then I sweated this since. But folks are getting better at this. They're providing more value in their products. They're more trusted vendors. And listen, if your products 20k a year, what's the difference between 20 and 25? Nothing. Okay, nothing. It may look like it on your website. But if you're providing, if you're charging 20, I hope you're providing 100k or 200k of value. It really doesn't matter if you're providing a lot of value if you increase your price even 20%. And it's great to not only will your custom, your new customers pay it, which we'll get to, but if they don't, it's wonderful learning to kick the ass of the rest of the team. We really can't go from 20 to 25 and we can't close customers anymore. I mean that's a flag that you are not providing as much value for your customers as possible. So a lot of things we can talk about. We have an old Saster post on on your next customer. Double pricing. I love doing this more in the enterprise is double pricing and see how it sticks, see how it goes. Different point but raise your prices but do it thoughtfully with adding value. Folks will pay more for high value products. But again the second point and I don't have the data on the second other than all of my experience experiences over the years. Hopefully things aren't tough for you as we talked about this morning. But if things are harder, if they're getting a little bit harder to close, if there's more drama, a lot of folks want to raise pricing on your base. It's a cheat. It's actually a completely weak sign when a VP of sales is missing a quarter and he says well you know what, I'm not going to make it, but let's raise prices so that we can make my plan. It's a cookie. You raise prices on your your base once it works, once you can't raise it every quarter, it's almost worthless. If you piss off your customers, it's not worth it. And the customers you have today, even if you're at 20 million in revenue, they're likely a very small percent of your customers going forward. So look, if you can raise prices on your base strategically, you have data, it works, it's elegant or maybe better yet, it's for a new addition, a new product so that it's additive. Go do it. But raise your raising prices on folks that bet their careers on you. I usually don't see that worth it. And it consumes a lot of internal oxygen. A lot of discussion and then the cookie's gone. And you can't raise prices next quarter to miss the plan. So maybe even ideally only raise prices on existing customers when you've blown out the quarter, then you take out the Pressure to kind of make up for it by doing it. And people come to that conclusion for the wrong reason. But it's interesting that the elasticity I've seen, you know, 60% of folks have said we've been able to raise prices significantly and implicitly, it hasn't really hurt our business. Okay, next one. And we talked about this a little bit this morning. If you, if folks on your team are whining about the markets. And again, SAS is growing faster than ever. We talked about this morning. Asana's doubling at 400 million in revenue. Snowflake's almost doubling, doubling at a billion in revenue. GitLab up 70. Like all the cloud leaders are growing like crazy. Salesforce is accelerating. But I know a lot of you are going to hear complaints from the field, from your teams, from your sales team. Remember that some budgets are down, but more are up than down. So I asked, you know, to 680 folks, given all the turmoil, what are you seeing on budgets? Well, 22% said they've seen budgets reduced, but half said no change. Not statistically, but more said budgets are going up. Like budgets are going up. So focus on that. Even if some of your customer segments are impacted, focus your energy on the segments that are growing. And like we talked about this morning, don't let too many excuses in the team. As many folks look at the folks here, like, let's just pick the sponsors. I bet our average sponsor here is growing 100% or more. Okay, these are good companies. If they're your customers, go get more, go sell them them more. They're going 100%. Worry less about the ones that are struggling because cloud is just, it's just a rising tide. And again, don't take budgets are down as an excuse. The data and the public markets don't support it. Maybe just this one quickly. We hit it earlier, but I asked. I'm a big fan of variable comp for everybody, but you got to get the KPI right. So I just asked how much of your VP is sales realized? Comp is variable. It was interesting to me that out of over 2,000 votes, only 13% said more than 50%, although very few had almost no variable comp. I did an old Saster post that a lot of folks have used for a 50, 50, 25 plan. I think it works well today if you can pull it off, which is half your head of sales. Comp is base, half is tied to hitting the plane for the year and then 25% for blowing out the plan.

I still like 50.

50. It still works. It worked 10 years ago, worked five years ago, it works this year. But whatever you do now is the time. We're in the middle of the year. Coming to the middle of the year. Revisit your variable comp plans. Boy, if you get them wrong, it really incents behavior and only one KPI matters. Do we have the right one for cs? Do you want to incent logo retention? Are you really incenting QBRs? Are you really incenting in driving NPS and NRR up? Do you have the right incentives for sales? I was recently talking with an amazing sales leader, but she was coming out of a really big company. She wanted 95% base 5% variable. Like we'll see how that one plays out. I don't think it's going to play out that well. Like pay more for more performance and less for weak performance. But my real point is sometimes we set up these variable compliance, we think we understand them, we don't revisit them. Revisit it this summer. Revisit it now. Tweak them so you can maximize the outcome. Because people really almost irrationally respond to incentives here and they don't do anything else other than the number one or number two KPI they have that they're getting paid out on. Okay, next one if you read much faster. I've just become religious on this as I've realized. We talked about the lazy CSMs earlier that don't do the Q and coast man. The last two years everyone lowered the bar in hiring and I'm talking to so many sales reps today that have no idea how their product works. They sell and no one can demo it or understand it. Everyone wants to bring in se someone else to demo the product. I almost want to blow my brains out but So I asked 11:49 folks, does your sales team really understand the product? It gets worse. On another slide, only 46% said their sales team's as expert as their customers. Just like think about that for a moment and listen to the gong and chorus calls and zooms and others will get to it. But honestly, move on from any sale until your brand is so big your product sells yourself. Move on from reps that can't sell your product. Move on from folks that send embarrassing emails and send dumb answers. Move on from them. And Dave Kellogg flipped it around this morning and said, you want a VP of sales that will go into to that meeting for you and be an ambassador for your product. You need every rep to be an ambassador for your product. And so Spend more time here. Not only move out the bottom 10% of your sales team, but either train them better, hire better people, but they need to be experts. Like we are all smart. The average, the average SaaS company is one of 200 B2B apps deployed in their org 200. So if your customers have 200 apps, that probably means they've evaluated 2,000. Like, they deserve an expert. They are not novices for SAS. They deserve their 10 questions answered very thoughtfully. They deserve a demo. They deserve whatever they get. They've earned it. We're all experts. And don't. So this is just, this is just shocking. And just two more points on this and we'll come back to it. You gotta read the emails, you gotta listen to the calls. And so I ask how many of you really read your sales reps emails and calls and zoom Zooms. It was a little bit better. 20%. Don't read any emails or listen to any gongs or watch any zooms. Only 40% do it for all reps. And look, all I can tell the founders here is if you don't do this, your sales team is worse than you think. Unless they're crushing it. Unless they're crushing it. I invested in a company that just crossed 10 million in revenue, almost bootstrapped, brought in a VP of sales, and then everything just slowed down. And that happens. It's the company's fault as much for hiring the person. But the VP of engineering had never been in a sales call ever. And he couldn't stand it anymore. And he went and listened to the calls. He's like, this is the worst. These are the worst calls I've ever heard. The VP of engineering said, I'll be the VP of sales. I couldn't believe it. And he literally was for about a month. And then the CEO took it over again. But you got to do this. I know you're busy, but someone on the team has to be doing this. And I.

You will tell.

Tell you one thing. If your VP of sales isn't great, she or he won't be doing this well, they'll be making excuses for the team. If your VP of sales can't demo your product, if your VP of sales is not an expert in your product, there's no way they're listening to the calls and watching the zooms and making sure the reps are good at it. It's a compounding effect. And then everybody gets just terrible, terrible at the product. So jump in as founders and make sure you're listening to a Subset of calls watching a subset of zooms. And if they're not good, change it. Change it, everyone. I'd rather have an expert in my product that's a decent closer than an amazing closer that doesn't understand the product. They won't close anything until your brand is just mega. So this one was pretty bad. And. Hold on, let me see if I can find the other one.

I'll flip back.

Okay, sorry, let me go back to this one and then maybe we'll just do a few more. Okay. Another thing you can level up in 2022 is just make outbound work. Do a good job, everyone. I would say five years ago, maybe half of SAS companies did outbound. I would say today it's like about 80 to 90%. As near as I can tell, outbound always works. There's a classic Saster post called Outbound always works. You can read it and walk through the math. But do fewer better meetings. Train your SDRs, force them to get you 15 meetings per month and force them to generate 2 million of quota. This is kind of the magic trifecta for SDRs. And then I ask folks, how many qualified meetings do your SDRs set up per month? And you can see about half did 10 to 15 per month. And then 25% did this 15 to 20. The more SDR leaders I've talked to in the last year, the more the best SDR leaders aim for the second target. They're like, we'd like 10 to 15 qualified meetings per SDR, and the best ones can do 15 to 20. And the best ones always generate about 2 million in pipe per year. So don't throw 20 terrible SDRs. Don't hire some agency that doesn't know your product. Get a couple of folks working at the right targeted account, nail this down and get them more help, and do fewer better meetings. Because it always works. It always works. Take a look it. And if you don't know how to do it or it's not working, a lot of folks say outbound isn't working for me. Like we tried, it's not working. Well, I ask a simple question. Who's your biggest customer? Well, you know, it's Google for 100K. Okay, well, who else like Google could buy your. Why do they buy your product? Who else is like Google? Well, there's Meta, there's Snap, there, whatever. Are you talking to the right people? Have you outbounded them? Have you set up the right conversations? Maybe, I don't know. It doesn't work like outbound. Will always work. You can always send an email to the same job function at Meta as Google and say, do you know Google just bought this for our marketing team. It's their number one favorite product of the year. Can I just show it to you? That best email will get opened half the time and you will get meetings if it's perfect. If you sell, try to do targeted outbound to the same buyer. If you load up a bunch of stuff in Salesloft or outreach who I love, I was an early investor in Salesloft or Mixpacks and you ask people for coffee, it's not going to work. Okay, it's just not going to work. But get them more help and do it better. It always works this year. Level it up and try to set these goals. Don't just set SDRs randomly. Say I want 10 to 15 qualified meetings per month that my AES accept and say is qualified and I want you to generate 2 million pipe a year and then pay up again. Pay up, pay up when they do it. A related point I just had was I just asked now that everyone's doing outbound, what's your ratio of SDRs again? Actually this ties to the prior point. The most interesting one is who has no SDRs? Only 14% of folks have no SDRs at all. So if you're forcing your AES to do all the work themselves, we may be past the age of the full stack ae. Like get them help and then what's the ratio? It is interesting that sort of the plurality is one SDR to two AES. So one person supporting to in a pod. There's different ways to do it. You need to experiment here. But again everyone's doing it and there's, you know, one to one can work if you have a big enough deal size 1 to 4 maybe if you're smaller. But if this, if this meeting is one to two, make sure you have one good SDR. Setting up appointments for every two SAEs and then sort of magic can happen. Oh, I think we sort of hit this one. Maybe I'll skip this one for time. Unless you people want to do more. You can let me know. But when did you hire reverse VLP of product? Most folks waited, it looks like here till about 4 to 5 or 6 million ar. Maybe I'll just simplify one thing that I have on the right. There's a moment in time when everybody realizes they need help. A product manager like a moment in time. I need a product person and 98% of you, 96% of you, I think make the same help sake. You hire a junior person. Okay, I'm going to go hire, I'm going to go hire a product manager that worked on one pixel at Twilio or worked on one little thing at some great company. They don't know how to ship products into production. A manager is not enough. Your product gets too complicated and someone with one or two years of experience at a brand can't do it. But if you hire a great VP of product at 3, 4, 5 million and you have and you have a sales driver driven motion, if you have magic happens a great VBA product immediately her or his first two weeks will go meet with your top 20 customers. Magically they will understand how to improve the experience your top 20 customers have. They will join your head of sales and your customer success on all the top accounts and provide leverage. And that leverage can be amazing. Hire a VP of product that has supported customers, that has worked with a sales and engineering team at your size and go hire them and watch more deals close and have higher NRR because they can provide more value to these customers. It's magic to drive up the revenue. All right, maybe just two more and then unless anyone wants, we'll drive home a point. One fun one if you want to do better is this was an early Saster post too. But be wary of high win rates. Be wary of high win rates, high close rates. It's a bad sign. It's if you win every deal. So I asked this was an early poll so maybe we only got 214 votes. But did your win rates go up or down as you scaled?

Right.

41% said they went down. So just a reminder that if you're going up as marketing gets better, if you hired a real VP of marketing, if outbound's working, if your mini brand is growing, you should start getting into more deals. You start getting into deals where the competition is not just the folks that know the this little tiny feature. You do well, but you should be in more conversation. If you're more conversation, you should be losing more often. You should be in the deals. If you're competing with Asana and you get into more of those deals. Asana is a pretty good product. It's a pretty good brand. You should lose a lot of those deals. But even if you win 10% or 50%, it can really move the needle. So be wary of high win rates and high close rates if you want to grow faster this year. Watch if your team's good, you should, you should Actually want to see your win rate go down. That's a sign that marketing's working and outbound is working, that you're getting into more deals. And it's a terrible sign. If 80% of your deals close, it means you're doing no marketing. It means you're literally doing no marketing or outbound if 80% of your deals close. All right, so maybe one more good one and then we'll break. I pick this one. Make support more important. I want to do all of them. But let me maybe break on this one because this is another one everyone's getting terrible advice to today. And then we'll break. People are being more capital efficient now. They're being more thoughtful. Even though the markets are up. Ventures down again. Come to a trillion great sessions tomorrow on what's happening in venture, why the stock market compressions are making fundraising hard. But I see so many folks freezing hiring in sales. Okay, it doesn't work. It doesn't work. And let's just talk about why for a minute. But let's say you're at 4 million ARR today and you want to get to 8 next year. So you want to double. So typically at 4 million ARR, you've been very efficient. Maybe you got there with three reps. And let's say you can do 500k per rep. That's pretty good. That's pretty efficient. Yielded. And you have three. Well, you want to go from four to eight next year. Hang with me. You have three reps that do 500k, it only gets you to one point. To go from four to eight million in one year, that's four million. At 500k attainment, you need eight reps. Hitting quota eight, not as many as you think. And to keep growing after that, you need more as you hit 8 because you want to go to 16, so you probably need a dozen. My real point is, as founders especially, we usually get this math off by at least 50% and we end up with not enough scaled sales reps. And look, there's nothing worse than flushing your leads down the toilet with a rep that can't close. But you will. As you cross even a couple million in revenue as you leave founder led sales, you will need bodies that are good to hit the plan. You will need bodies. Now if you bring on a suboptimal VP of sales, they will throw a lot of bodies and revenue won't go up. A lot of us experience that. That's destructive. But do the math. Look at where you'll be in 12 months. Be thoughtful about attainment like your efficiency will probably go down and just figure out how many reps you're going to need. And you can't freeze hiring and hit the plan. You can't cut your way to growth. It doesn't work. Whatever your issues are cutting sometimes you have to cut if you have two months of burn. But you can never cut your way to growth. And it especially doesn't work in sales. It takes a little while to figure this out in SaaS, but there's no friggin efficiencies in sales in SaaS like you get engineering efficiencies. Everyone can use your same code base but you barely get any efficiencies in sales once you hit a billion in ar. And I don't think too many people here at a billion in ar. It is linear. It is linear. But great sales reps are accretive. If a great sales rep closed 500k and she takes home 150, you've made 350. So dial that in and make sure you don't underhire. You will never hit the plan. So I got a few more. I'll post them but hopefully this was helpful and thanks everybody. Well let's go have some cocktails now and we'll do more tomorrow.

It. Sa. Sa.