LIVE from SaaStr Europa 2024: Stage B- Tuesday

Sam. It.

Please welcome to the stage daniela nyarko.

Head of strategic sales emea at canva, and jorge bestard, head of emea sns at canva.

Hi, everyone, my name is Jorge Bestard and I'm the head of sales and success here at Canva.

Good morning, everyone. And I am Daniela Niyako, strategic sales lead.

So today we're going to be talking about the concept of the PLG trap. So this is a journey that Canva has gone through, and we've observed some companies that have started doing PLG similar to us, and how they've fallen into what Oliver J. Calls the PLG trap. Our goal is that you take with you a ton of insights, some strategies, and that you learn how to navigate these challenges.

But first, let's try to identify why companies fall for a PLG trap. Right. And also why it's so attractive. So I think it's fair to say that most organizations that use the PLG playbook, they either focus on B2C. Right. Or they're very much focusing on end user acquisition. And it makes a lot of sense because if we go back a few years and when the PLG playbook was launched in the market, the industry went crazy.

Right.

Everybody loved it. We had a lot of success stories, a lot of businesses that actually were able to demonstrate how much they increased their adoption rate through. So obviously there was a lot of noise and it was very exciting. Right. And it is a very powerful tool because what it allows is it allows an organization to actually offer value to a customer without them needing to purchase the license first. Right. So usually there's also a freemium model attached to it, which then again creates a lot of loyalty. It also creates a lot of trust. And on the other side, also, it increases your adoption rate in a very fast way. Sorry. So companies that want to scale. Right. The PLG motion is absolutely the right way to go because you have a product that sells itself and also it's a self service model. And on the other side, it also has a good and positive impact on your retention rate. So overall, I would say the essence of a PLG motion very much is simplicity. So you focus on the product, you build a product that everybody loves.

Right.

And you make it indispensable to an end user. But the question is, as you try to kind of like move out of that trap almost, how do you encourage widespread usage across a company? So across teams, across locations. Right. And across functions? So what you need to do is you need to identify essentially a champion internally. Right. Ideally, you have a use case or a business case, and then you use those insights to actually target corporate buyers within that organization. So that could be procurement, for example. It could be it. And that's when you start talking about the consolidation and move away from that end user approach and actually offer additional value to those end users. And that's sort of how you get widespread company adoption.

So I want you to think of it this way. Each step into the PLG journey makes very logical sense. And that's why in a way, it is a trap. So remember the first step, you build a great product, the end users love it, you get traction in the market. So you raise a little round to build a marketing team in a sales team. You build that marketing team and sales team, all of a sudden you see that hockey stick, you continue to rise, you're deeper into the trap, and then you want to double down on your growth. You're doubling year on year and you say, okay, so our next step in our journey is to continue that growth. So the logical next step is to build an enterprise team. So you double down on hiring salespeople that are very expensive, that have enterprise experience, marketing team that is very expensive, they need enterprise experience as well. And all of a sudden you are stuck in a trap because you realize that large enterprise required things that are so far away from your product team's grasp that you are stuck on a two, three year journey to build that to market. All right, what CIOs require, what hazard procurement require to go wall to wall is very, very different than what small teams require. And they make decisions in a very, very different way. So the, the symptoms of the PLG trap, generally you see that hockey stick effect and then your growth really stagnates. You have a lot of difficulty going up market and you require it because you've told your shareholders, hey, we're going to take over the enterprise, right? And then there's a big disconnect between what the product delivers and what procurement teams and IT teams are telling you now the to go a little bit deeper into the. What we've observed in market is actually that PLG companies, they do experience that huge growth, that hockey stick effect. With small and medium businesses, however, they struggle to go beyond the 5 billion valuation. So think about companies that are in the market right now that started as PLG company. Think about Asana or Evernote or Dropbox or these kinds of companies, they've all had a very hard time breaking through that 5 billion evaluation once they went to market. Now the difficulty in going up market as well is that all of a sudden your cost of acquisition just increases. So the growth that you were doing earlier, you know that 30, 40% year on year growth that you were doing at certain unit economics that completely shifts. Once you need a legal team that serves procurement teams, once you need a product team that builds for the enterprise. So they actually found that PLG companies are 10 to 15% less profitable than their sales led counterparts. And to finish off, the disconnect between the capabilities and the demands of these teams mean that the journey is extended. So we're in Europe. One thing that I'm sure everybody's faced when dealing with procurement teams for Fortune 500 companies, data residency, we need SoC2, we need a certain MSA that a lot of times when you're going into the enterprise for the first time, you're faced with and you're like, oh shit, I actually have to prepare all this. And it's not something that you turn on like this, Right?

Right. So to break through the 5 billion valuation barrier, companies really need to make a shift, right? And shift needs to happen at the right time. So they no longer can let with a product led strategy, but maybe perhaps they need to lean to more towards traditional methods, right? So let's say going back to sales, so the product alone no longer sales itself. We need additional input, having a presale team, having a POS sales team. And it's very important also to understand that this isn't easy, right? It's not just like flipping the switch and from one day to another you sort of escape the trap, but it takes a lot of sort of collective effort as a business, right? You need to build out a roadmap, a framework essentially, and then you execute on a go to market strategy. But one thing that we have seen is that companies that have not been able to make that shift at the right time, they stay stagnant. And once they're stagnant, it's extremely difficult to get out of, out of that place, right? So let's look at a couple of examples. So we have here Dropbox and Slack, which I'm sure we all know or some of you might even use. And they have one thing in common, they use the product to drive user adoption, right? So within a very short period of time, they had hundreds and thousands of thousands and millions of users within their platform. But as they scale, they all had a couple of challenges, right? So Dropbox for example, they started off with their freemium product. Again, within a short period of time, they Managed to get millions of users. We all know it, we used it during our uni times, school work. Right. It's a very, it was always a favorite tool for many. But then actually as they were trying to bridge into enterprise, they realized, hey, we have an offering that's only focused on the product, but there are things missing. Advanced security controls, for example. Right. Admin controls for things that companies really need in order to operate in an effective way. Likewise. And then on the other side, of course we have Box, which only focused on enterprise. Right. So actually what Dropbox has seen is they saw a decrease in their year over year growth, falling from 25% all the way down to 8% in a very short period of time. And if you look at Slack, so Slack, very similar use case here, their go to market strategy was, it's very easy to use. It was catered towards small teams. It's all around productivity and collaboration, as we know. Right. And then what happened? 2020 Covid hit. So all of a sudden there was a huge demand for such tools, right. And the question was, were they ready? So they actually had to build in an additional comprehensive suite of enterprise kits, right. Which I think in their case was Enterprise Grid, which allowed them to have, which allowed users to have multiple workspaces. And then of course we also know what happened there. Teams later came in and focused on enterprise only. Right.

So we're going to talk a little bit about Canva and our journey is still being ridden, as you saw in Jason's talk. We are still growing quite a bit, but we are going through a certain journey. But our journey definitely started in the consumer side of things. So we started targeting individual users and small businesses and as a tool we became very popular, just created a huge Groundswell. We have 185 million monthly active users and that was a great place to start fishing for enterprise clients. Now what we discovered after almost 10 years in the consumer space is that as we started to dabble into the large enterprise space, we were slowly digging ourselves into the PLG trap, right? So the exact same symptoms. We had staggered growth in the enterprise. Our enterprise features were not ready for what our enterprise customers were asking. So we almost had a, we had a heart to heart with ourselves and we said, well, we have a product that is great for teams. We don't have a product that is great for enterprises yet. So we really pulled on the brakes and we said, okay, okay, let's focus on doubling down on teams and let's create almost a separate kind of company. Let's Separate the product team, the marketing team, the sales team, and let's give ourselves a leeway of two years to build a pure enterprise product.

Exactly. So we also had to go back to the drawing board essentially, right, because we're focused on B2C first. And as we try to understand what does enterprise look like for us, right. What do we need to do, what's missing? Essentially, we had a great product that was selling itself, but all of a sudden it was a little bit stagnant. So we also went back and looked into collaboration tools, so maybe perhaps shift away from just a traditional social media tool and going into a productivity tool. Right. So collaboration admin controls organizational hierarchy so that companies can really mimic their business strategy within Canva. Right. So the process involved four main pillars and one aspect that was really important was really to understand the market demands and also trends, Right. So we took big bets straight away. Very early on we were one of the adapters of AI in the tool. And also we looked, we pulled in additional features, right, that were really dedicated to enterprise users, such as as whiteboards, presentations, recording, et cetera. And then we went and had a lot of feedback and sort of discussion groups with our customers, trying to understand what is it that they need from us, what is it that the end user need in order to deploy Canva as an enterprise tool and then pull that back into your product roadmap and continue to evolve your product. So that's what we did at canva. So a couple of weeks ago, as part of our Canva Create event, which is our product release event, we actually pushed out our enterprise product, which showed that we are committed to focus on enterprise only. But also, as you can see here, we have a slightly different messaging, right? So it shifted to work redesign so that we also address the right audience. And ultimately what happened is it helped us to really close the loop. So now we are able to address a truly diverse customer base, right, which we have. So we have the end to end user. We have individual users, so we don't use pro paid users. We have Canva for teams, which is for smaller teams, and we can now cater to larger organizations as well.

So how can companies really predict and avoid and overcome the PLT trap? So we have a three pronged strategy that we'd love to share with you. The first of all is really getting the company mentally ready. So as Oliver J. He's one of our advisors, he's the ex CRO of Asana. He says if it doesn't feel like you have two separate companies, you're doing it wrong. It really has to feel like you're separating yourself team, you're separating your product team and they really, really have to feel that you are building a whole separate section. This almost reminds me of when Apple they, they started on their lease projects, right? They, they completely separated that project from the company that was very profitable, but not, not that computer. So we did the same thing and we, we separated and we started building in the enterprise. But not only did we need to have a different product development team, but our customer interactions had to be different, our go to market strategies had to be different and our specialized talent had to be different. Think of finance. When you are selling into the enterprise, so you're selling to a company like Unilever, which has hundreds of billing departments, it's very different from sending a bill to a hundred percent team than sending a bill to a 200,000 employee company, right? So your finance team that is very focused on teams, end users, all of a sudden they're going to be focusing on how to build their structures for a enterprise product. Think about legal as well. So we talked about MSAs and negotiating with procurement teams of 50 to 100 people. If your legal team is very used to just very light MSAs for small teams versus negotiating with the Fortune 500, you need a completely separate legal team and security data residency. When do you kick off that journey, right? Getting your SOC1, SOC2 certifications. So all that is a journey and you have to communicate that journey when you started, right? You have to communicate with your employees, you have to communicate it with your partners. But we took it one step further and we communicated with our customers. A lot of our customers that were telling us, hey, we're thinking about going wall to wall. We told them at two years ago, hey, we're not, we're not ready yet, we're not able to support you yet. But let's support different teams and when we are ready, we're going to let you know, right?

And then as a second strategy, what we put into place was early and continuous product adaptation. So an organization with 500 users, 1,000 users, 5,000 users or 10,000 users, they have completely different product requirements and they also have completely different service requirements, right? They have expectations on how to work with a vendor. So what we did was we focused very much on the user experience. So we went away from the product led growth alone and really focused on the user experience for smaller teams, for larger teams. And then what happens is that your product needs to continue to mature as well, right? So on our side, what we did was we looked into the feedback that our customers have provided and some of the main requirements they had were actually single sign on which all know is a very basic requirement, right? But for us it was a shift and also data encryptions and compliance standards. But when it comes to adaptation around AI, for example, it's still fairly new. So a lot of customers, they have a high appetite for AI. Others, they're still a bit weary, right? And they feel a bit overwhelmed. So being able to respond to both sides, giving them the opportunity to play with these tools, but also giving them the assurance that they have control. So we have both, we have AI, but we also have controls in place so that they can slowly ease themselves into the product. And then on top of that we also focus on specific teams and we offer them different functionalities, right? HR team, they have different requirements, finance design teams or marketing teams. So we have a dedicated work suite that caters to all of them.

And to finish off off just our evolving sales and marketing strategy. So what we did is we got together as a go to market team and we said, well, we have part of the team that is very used to selling to users and smaller teams and we hired a set of enterprise sellers that were very used to selling the enterprise. So think of this as, as a two prong strategy, right? As a company starts adding users, there's team sellers and then there's enterprise that are able to sell to C level executives. The target markets that you have in the enterprise are very different from the target markets that you might have in teams, right? There's even the sales territories, there's countries that are very SME and mid market heavy and there's countries that are very enterprise heavy. And then the pricing, we actually did an audit with an external company to really audit our pricing and see if the pricing is ready for the enterprise. And we completely shifted our pricing, we lowered our pricing on the team side and because all the features that we had on the enterprise brought a lot more value, we raised the price on the enterprise side and then we tried to align the sales and marketing communication as much as possible. This is, it's actually something that companies have a challenging time because at the end of the day you do want to market to users, but you also want to market to the C levels, right? Think about how you adjust your message in a different way. The value for a user is very different than a value for a head of IT or C level who is never going to use your product, but they need to know how it's going to influence their business. There's two examples here, which is a message that we, how we market to individual users. You can see it's very feature driven. So hey, with, you know you have, you can create stunning designs, you have unlimited access to premium content. A CIO does not care about that. What he cares about is how are you going to streamline my workflows, how does Canva live within the ecosystem of apps that I have and how are you going to make or help me save money for my company? So very two pronged approach here.

And we also focus a lot on the post sales side. So we have a dedicated customer success team at Canva because for us it's very important that customers understand the maximum value they get out of the product very early on. So we actually taking a forward looking approach where our team sets up dedicated sessions with clients and they try to understand their goals and their objectives for the next 12 to 24 months. Right. It also allows us to spot risks very early on and also identify trends because it's almost, it's like a, like a feedback where the customer then goes to our CS team, our CS team goes to sales and then sales takes it to product and then product takes it to customer service and so on. So this is how we all work together. That's why pre sales and post sales, they need to align and work together. And we also work with champions, internal champions. It's really important that you identify them because you can use a train to trainer approach. Right? Those champions can help you with the adoption rate. They can go out, sell to different functions, different regions on your behalf. It really helped us also to build a lot of trust and loyalty with those customers. So in the end it's all a balancing act, right? As you can see, PLG is a powerful tool, but it's about balancing the strength of a PLG strategy and the demand of enterprise customers. So we have taken you through a lot of different points today, but just to summarize it, it's really important to get a company mentally ready. It's almost like you have two different companies acting under one roof, right? They have different requirements. And it's important to communicate as early as possible and also to be transparent with your team, address challenges that might arise because it does take collective effort. And then also don't forget your product adaptation, being able to respond to trends as early as possible, speaking to your customers, speaking to your SES team, and then ensuring that your product matures with your customer base. Because at this Point it will be very diverse and then you go layer deeper which is addressing your sales and marketing strategies and your go to market strategies. Right? Refining your messaging and your positioning so that you can target the right audience. So thank you for your time. Any questions?

Thank you so much. Can you please elaborate a bit on your pricing strategy for enterprise companies? It's not enough to just multiply your consumer price by 10. Right. And sell to enterprise. What was the process? Enterprise pricing.

So we, as I mentioned, our pricing was we had enterprise pricing two years ago. So it's 3x the price that we have right now for the teams product. As we started growing our product, we realized that we wanted to make it as frictionless for the team's users as possible. And one of the points of friction was that once we hit a certain price threshold, they involve their procurement teams but our product was not enterprise ready. So we said okay, well let's, let's stay below that threshold while we build our enterprise product. Let's lower our pricing on the team side and then let's figure out what our pricing should be in comparison with other products that we were compared to. So obviously the first process is what is our product compared to? Are we comparing compared to our direct competitor Adobe? Are we compared to Google? Are we compared to Microsoft or other products that were just not conscious of. It was actually the latter. There was products that we were compared to like digital asset management systems. We were compared to whiteboarding solutions like Miro or Mural. And we adjusted our pricing to, to their enterprise pricing and their threshold because that, that's what they were thinking of turning off or turning on when they use Canva. So to summarize, we lowered our team's pricing to reduce as much friction as possible for the PLG motion, but increased our enterprise pricing so we could englobe and think about wall to wall and add all the enterprise features to it.

Yeah, yeah.

So the question is, I mean you could have followed different approach when it comes to enterprises, right? Because I'm sure some of teams within enterprise companies, right, they would have adopted your software without having, I mean to go through all enterprise process. I could say for example, I'm a head of a design and a specific enterprise company, right. I can just sign up my team there without going through the IT process, etc.

So why didn't you follow that approach?

Like I mean bottom up approach. That's one question. I mean we can start with that. I have follow up questions.

So let's start with that. Canva is a tool that actually sits between two worlds. Right. One is design, and that englobes, you know, social media, teams, marketing, design, teams, branding. And so we were really good at targeting those folks, but all of a sudden companies started using us for productivity. Just this morning I saw a YouTube video of somebody that built their whole wireframe with Canva. It's a use case that we haven't even thought about. Right. So more and more we sit between this world of design and productivity. So I think the gap and the growth that we had on design and marketing was definitely there. That's where we got, you know, the 185 million active users that we have right now. But when it comes to going wall to wall, design just doesn't quite address every challenge that every, every company has. Right. So that's where we went to the drawing board and we said, so what do, what do HR teams need? What do sales teams need? So what are the different teams that we need? And that's where you have to almost separate the team that has got enough to 185 million active users to the team that's going to get us to the next 300, 400 million active users.

Yeah. Essentially a lot of our customers came back to us and they said Kava is seen as a very, sort of has a very limited use case.

Right.

So as you said, some customers sat on teams before, but then we were stuck there because I might only see an adoption rate up to 500 users. But there are companies out that have hundreds and thousands of employees who essentially have a need for a design tool or productivity tool. Right. So we really had to work on our messaging and we also needed to help our customers and our internal existing users so that they can position it internally as a productivity tool. Right. And some of the features that we needed are now part of our enterprise suite, which weren't part of teams. So if you want to break into 5,000 users or 11,000 users. Right. Your procurement team or your IT team, they have different thresholds and we needed to meet those thresholds. And that's what we are doing right now.

Okay, second question is that I imagine, I mean, for enterprises, your offering would be against competition.

Right.

I mean, for standard procurement and big enterprises, they are basically required to go through like for example, minimum three bids and whatever internal standards they have established. Right. So how did you basically distinguish yourself in a competitive world? Number one, and what was the strategy for creating values to enterprises and convince them that, okay, this investment is worth it?

Right.

So what kind of messaging did you use?

Sure.

I Think as, as Jason presented, I think the in B2B SaaS, we're living through a bit of a challenging time. And when you speak to the enterprise, the main thing that they're thinking about is what, how can I consolidate the tools that I bought when, when money was free, right? So in the past 10 years we just bought tools that we, that we knew we could use. We took a lot of bets. But now CIOs are thinking, okay, the next two or three years are going to look a little bit different and we are consolidating the tools that we have. So when we talk with a lot of the enterprise customers that we have, they actually, they lay out the tools that they, that they have, but whole ecosystem of tools that they have and they say, okay, you have the, you have the buy in from, from our, from our users, from our employees. But what tools do you, do you replace? Do you coexist with or which tools can you sit side by side? Right? So when we compete, we don't compete with one specific competitor. We compete with different features of different competitors, editors. Right, we just launched the whiteboarding tool. So in that of course we're going to compete with, with Marrow Mural, Google on certain aspects. We, we have a video recording tool. So with that we compete with, with the likes of Frame IO or different, different tools. So, and we address each one of them separately. Now when you go into the enterprise, as I mentioned, you have to train your sales team to be to, able, able to speak to each of those features and prepare them with the different battle cards for each and every single one of the features that you're going to be competing against. Right? So it is, it is definitely a upscaling of some of your sales team. And then what I always tell my, my colleagues is that you have to go to your enterprise clients with a partner first approach, say, hey, this is Canva. This is where we're headed as a company. We are your visual communication partners and there's certain things where we're going to help you. There's certain things where we don't have yet, but we're going to be on this journey together. And whenever you're ready to join us on this journey that we have, we're ready to have you.

Right? And essentially what we want to do is we want to bridge the gap between designers and non designers, right? If we look into market trends, visual storytelling has become a commodity. Everybody, everybody in the room at this point we have to design something or we have to use visual storytelling. It might be for LinkedIn, it might be for, you know, presentations, it might be for your social media in general. So this is really where Canva sits. Right. So we want to bridge that gap between designers and non designers. And what companies have realized is if they do not enable the users, they go out and they just find their own ways. And then again, that might be against their brand guidelines and their brand standards. Right. So they come to Canva because we offer them that comprehensive work suite as Hochas mentioned, but they can also manage it in a very controlled way. So it's all about enablement.

Hi.

You mentioned that to pursue your enterprise.

Strategy, you almost had to divide your company into you.

Right.

And build a separate company chasing the enterprise customer. What I'm interested in is how do you maintain the synergy between your enterprise and non enterprise offering and how do you balance between kind of building a coherent product versus delivering some very, very customer, enterprise customer specific things when they are chasing for some, pushing you into a particular direction?

Yep. If I understood your question correctly was how do you, how do you build for one or the other and prioritize certain features for the enterprise versus. Yeah, so, so we did exactly that. We, we knew we had a successful business on the consumer side and we knew that that product team, those, the product team that built those features, they were going to continue to build that and be very successful. So those are the teams that took a big leap on AI, for example, the teams that took the big leap on, on whiteboarding and certain features. Now the team that builds that, you have to think how a product designer or a product owner, product manager, how they think about those features and how sexy those features and how fun they are. If you go and you tell them, hey, the next few years you got to spend building something for the enterprise, you got to spend building sso, there's just such disconnect between the skills and the motivation that you have to hire a separate team. And that's exactly what we did. We went out to the market and we hired a VP of product for our B2B enterprise side of things. And we said these are the features that are really cool that we can leverage on the enterprise side, certain adaptations. Right. And, but what is the separate roadmap that is not going to affect the, the consumer products? And that's where they got building. Right? They, we had a lot of actually sales intelligence tools. So that's where sales became incredibly more important. And we leveraged every single call with our customers where they were asking for certain features that were limiting our growth and we sent it to the product team and they got to work. Right. So the first iteration of that was about a year and a half ago. And then this year we've actually launched everything that our customers were telling us. This is the, the one thing that is limiting our growth and this is what we need in order to go wall to wall.

Hey, thank you for the great presentation.

First of all.

So you mentioned a Canva.

You created essentially a completely separate team. It took took two years to kind.

Of get that to market. From an enterprise point of view.

Yeah.

From a startup, small, medium business kind.

Of size, that can be a very big, expensive, very strategic change to the organization. And obviously from the look and feel of the organization, people are going to see very, very different things. If you get that timing wrong, it's going to very, very heavily affect the, the future of that company.

How, what are the flags almost, what.

Are the signs that a company should see to actually say we need to start this journey now, whereby in two years we're going to have all this ready? What do they need to see before.

You know, moving away from that full PLG motion?

Yeah, man, that's, it's hard. And I want to, like, I want to be very honest here that Canva has the, I would say the privilege, the Canva Enterprise team has a privilege that it has a very generous, I would say investor, which is our Canva consumer product. Right. If Canva Enterprise were a standalone tool, we would have seen that stagnant growth. And if I, if I were starting a startup from scratch and I started seeing that, that journey, that growth journey, and the logical jump to the enterprise is what's going to get me to the next phase. I would start that as soon as possible. Because if not, you are seeing that hockey stick effect, you're communicating that growth to, to your shareholders, you're sharing your, your amazing success journey. But you know that's going to plateau, right. So you want to knit that in the butt as quickly as possible. And almost when you start the company, when you raise your first round, you have to tell yourself, are you an enterprise company or are you a consumer company? Right. Are you Dropbox or Box? Right. And it's a, it's a call that you have to make early because if not, or you have to set expectations with your team, we're going to see that stagnant growth and it's going to be a period where we're not going to grow as fast as we did. Right.

And I think at Canva as well, if you look back a few years, you will always have some customers that are early adopters. Right. So they're ready to try the product even. Even though it might not be 100% enterprise ready. So there was also a level of organic growth that we leveraged where you have maybe perhaps a smaller team approaching you and saying, hey, I think this could be good for me and my team, but we need additional enhancements or features. Right. So that was also something that we had leveraged. And then really take your time, sit down with those customers, get their feedback, and then try to understand the opportunity size in two to three years from now. Right, right. And then we go back to our product team, we go back to our legal team, our IT team, and that's how you start tapping into or tapping out of the. The PLG playbook. Yeah.

Thank you.

Yeah, go ahead.

You've been stood up.

Okay.

Hey, I'm Fabian from make.com. hey, Fabian.

I've been in a PLG motion for.

A long time now.

I've been building sales for a while and observe very similar topics there. I'm curious, do you have any rules.

Around the size of the customers for.

Which your sales teams are engaging and.

If there's like any lower barriers to that and how strictly you are enforcing that?

Yeah, that's, that's an ongoing debate that we have actually, because there's, there's certain companies where the, the addressable size within the company is, is. Is wider. Right. So in, prior to being at Canva, I was at Miro, and prior to that I was in Facebook on the B2B side of things. And we would segment the customers by how the viability of those customers to adopt these kinds of products. Right. So if you go for a customer like let's use Asda, for example, it's limited on how many people are gonna adopt the software versus a company like Deloitte, who each and every single one of their employees can adopt a product like this.

Right.

So right now we've almost taken an artificial break and saying, okay, companies that have below 5,000 employees, they are companies that we're to consider mid market and SME. And these are companies that we can. We pretty much have a success rate and we're able to target them with the initial team that took Canva all the way there. Canva's companies that have above 5,000 employees, they have a different buying process, they care about different things. If you go wall to wall with the company that, that has over 5,000 employees, the level of scrutiny that they put in Your company is much, much, much, much greater than a company below that amount. Again, this is an ongoing journey for us, so we're learning, but that's how we're doing it at the moment.

And just to Clarify, even below 5,000, you still have a sales team, but it's a different.

We still have a sales team.

Yeah.

We have a sales team that's very used to selling into the enterprise, that's very used to dealing with procurement team that's very used to selling to CIOs and CEOs. Yeah.

Thank you for the presentation.

We're going through a very, very similar stage at the moment, so it's valuable.

To get your insights. A bit of a variation on a.

Theme, so on kind of the cost.

Control sides of it.

If you are creating that separate business, be it a separate product, be it.

A separate sales team, marketing, etc. It's very expensive. And that's why most companies do try.

And do it with their existing teams and resources and tap out because they're.

Not able to achieve it and they.

End up with a mixed message.

So, kind of tactically, how did you.

Prevent costs spiraling out of control when you are effectively building a separate business across all those main functions?

Yeah. So as I mentioned to the previous escrow, we. I think we're in a very privileged position where we have the funding from the consumer product that's. That's powering a lot of that. I'd say that the big question mark and what I Lover Jay speaks about is are you ready to hire that sales team before you have the product? Right. Salespeople are very expensive. Marketing teams are very expensive.

And.

And do you have enough faith in your product and in your enterprise journey to all of a sudden pull that lever and hire that team? If the answer is no, I would probably say be very, very careful when hiring your first sales folks. It is a catch 22, say, well, unless I hire the sales folks and I start getting pushbacks on going wall to wall, should I be building enterprise features? But it is a. I always like to refer the story of Batman, right? Whereas he's in the jail and he asked the other prisoners, which is, who is the one prisoner who got out of this jail? And they say, the person who took off the rope and took a leap of faith and it was a live or die situation for them. If you're in that situation, you have to make the call, right? If not, you can build those features little by little, and when you're ready, you can hire the sales team. You can hire the marketing team, but you have to decide yourself, am I ready to make that leap? Did you explicitly create a separate P.

And L for the account vet MT team?

Yeah, we did. I would say we were in itself a startup where we were not profitable for the past few years, but now we are.

Thank you.

Yeah. All right, I think we have one more question left.

Oh, one more.

So as I was hearing you, I.

Was thinking that eventually with enough time.

And funding, all enterprise solutions will end up the same, like doc collaboration, video huddles, whiteboarding solutions. So do you think this Canva will.

End up in this enterprise wrap at some point?

That's interesting because as you know, I worked in essentially platforms in the past and what we competed with was companies that had that amazing wrap. Right. So Google has a whiteboarding solution, Microsoft has a whiteboarding solution. All these companies have a whiteboarding solution. I think some of these solutions are going to become just the status quo. If you don't have a whiteboarding solution in your enterprise packaging, then they're not going to collaborate with the same efficiency as if they would. Right. And if you are Microsoft House, then you have that. But at the end of the day it's, you know, do you want to go for best of breed or do you want to go for a solution that englows everything? I think with anything enterprise productivity wise, there's always a pendulum of do we hire the best in breed tools and that we separate everything or do we think about consolidation? I think right now we're kind of in the phase of cost cutting and consolidation. And to your point, I think a lot of the companies that have a yes, we can sort of do this, but we don't. But it's not a best and breed solution will probably go that route first before acquiring a separate company. So any platform play that companies are having will have those, those solutions, but that like they'll have a core product that is very, very. It's what defines them. Right. For Canva it is, it is design and it is visual communication and then we have other collaboration tools for other companies. It can be like, like Mero or mural. It could be whiteboarding and then they have other solutions. Microsoft, their productivity suite. So, so that kind of. And that will probably be a little bit different two years from now, right?

Yeah.

And it also goes back to the user experience. Right. Because once we have customers using, for example, whiteboarding or using Canva for docs, the next natural transition is for them putting it into a presentation. So that's Canva's visual work suite. So we keep our customers. Customers under one umbrella, and they really, truly use it as a productivity tool. They're planning it, but they also execute in the tool. Yeah.

All right. Thank you so much. This is great to be here.

Thank you.

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Don't stress, Don't stress, Don't stress. Sa. Sa. Sam. Sa. It. Please welcome to the stage pia heilman.

Vp of sales at klaviyo.

Good afternoon, everyone. Thanks for joining. I realize that I am in direct competition with lunch, so appreciate some of the food in the audience. Feel free to eat. As I'm talking, as as mentioned, I am Pia Heilman, VP of Sales at Klaviyo, which is a D2C marketing platform that enables smarter digital relationships. So very apropos to the topic today. Thank you for inviting me to speak today at saastr. Super excited to be here as well. We're here to discuss a topic that's not only near and dear to my heart, but also critical at this stage of of SaaS for driving growth and revenue retention in what is an increasingly competitive market. Mastering the Art of Customer Focused Sales now, before we get stuck into the tactical bits, I wanted to do a bit of context setting. First and foremost, having studied the history of art in uni, I know more than anybody that art is subjective. So there may be things that you love about this, there may be things that rub you the wrong way, but regardless, I hope it evokes some kind of emotion and critical thought. Secondly, why listen to me? What I'm going to share today is by no means revolutionary. In fact, many of you may employ some of these strategies already. But like many of the revenue leaders that I've met, I never wanted to put pursue A career in sales. In fact, I wanted to be a marketer. Dinnertime chats as I grew up centered around brand marketing. Advertising with my father, who was at the time a VP of marketing and sales was not a particularly interesting profession. But when I graduated, the market was pretty saturated and the only job I could land was in sales selling into marketers, which I thought was a great foray to better understand the world in which I wanted to pursue both as a profession. And this mentality of better understanding the other side became core to my approach relatively early on. The bulk of my career now has been spent at early stage startups, despite the fact that I am now at Klaviyo. But that afforded me a very unique opportunity in a sales role where my focus was not solely revenue related. There's so many facets of the business that you're exposed to if you're part of a startup that you don't get to see in large organizations because as you scale, those roles become more and more specialized. I remember the days of myself on mute during a demo to scream over to product and engineering, walking over to customer success when something I sold wasn't working. And that unique opportunity allowed me to see the other side. It wasn't again, solely about hitting revenue targets, but that experience I gained in my first few roles made me obsessed with understanding my customer and the art of the sale, rather than the sale itself. Today, I'm excited to talk about how to put that customer relationship at the forefront of your sales strategy. The most crucial lesson I've learned over the years is the importance of understanding and empathizing with your customers. And that applies at all stages of the customer journey. Now, to do that, you must align internally, first and foremost, understand your customer through data, both anecdotal and quant, and maintain agility and adaptability. Now, the world has evolved and so have customer expectations. Again, nothing new. We as consumers expect a different experience. Whether that's a a physical product that you've ordered from Amazon overnight or software. The expectation is that not only is the product different and the price different, but also your experience with that company. And that's where you can really differentiate yourself. We're all consumers. Again, whether it's a physical good or software. How do we deliver that differentiated experience? By leveraging the data available to you to speak to your customers in the language that they want to be spoken to at the time that they want to be spoken to, addressing the challenges that are relevant to them and in a way that they'd prefer to consume the solution that you're offering to them. And I don't mean from a product standpoint, I mean how they engage with you and your team from their first interaction, maybe finding your solution on a review site or googling you, to how they're interacting with you as a customer of yours as you negotiate renewal or additional product. Now more than ever, every single interaction matters. Again, not rocket science, but over the last decade, sales has changed massively. Couple that with growing consumer expectations and you can't solely think about a single channel or a single stakeholder, or even a couple of channels and a couple stakeholders. You have to count for every customer interaction that starts at the top of the funnel, even pre funnel, and follows throughout their entire customer life cycle with you and beyond. Even churned customers are valuable sources of data for you. You have to think about how they're consuming their interactions with you, what they see, what the value statement is. Is it consistent throughout the life cycle? If you didn't win the sale, why not? How can you go back and ultimately win the sale if you did, why did they buy? Why do they continue to stay a customer of yours? How is their customer success and support experience? And what will engage them enough to renew? This may seem obvious, but it's not. So as I mentioned at the beginning, there are really three key points that drive how to activate customer focused sales. The first, and arguably most important is aligning internally. And this starts at the top. In fact, in some organizations I've been a part of, we refer to this as corporate jail. It's where your C suite is locked in a room for a couple of days and they have to agree on what the value is to the customer. Actually pre that before that, they have to agree to who the customer is. And I think in some organizations you would be shocked to find that who your vp, your Chief Product Officer, believes that you should be selling selling to is different from your chief Revenue officer or your chief Marketing officer. So first and foremost is making sure that you're all selling to the right person. Then it's understanding value alignment to that icp, making sure that it's applicable and consistent across the entire executive team. Only once you have that alignment at the top can you then cascade the communication downwards. And that's before it's even left the walls of your organization. But that alignment needs to be absolutely tight. The ideal state then is that regardless of who engages with your company at which stage of the funnel, in any role, there's a consistent value prop that appeals to the buyer. It should feel consistent but differentiated across the entire organization. So they'll come to you and you'll have a consistent value prop and it will differentiate you from the competition with regards to how they've engaged with you. Every customer interaction is also an opportunity to set yourself apart from the competition competition. You'd be amazed by the creativity that's coming out of BDR teams right now. TikTok videos that appeal to innovative companies. Can't say that I'm a TikTok user, but certainly appreciate the creativity that comes behind outreach that's entirely social based. Renting things that are outside of the home billboards to catch attention. It's really amazing. But think about how you're differentiating from the competition who may just be sending emails at scale. Insert cringe slide here. Get ready to screenshot. As you think about this alignment and how to differentiate yourself and even how to hone in on an icp, I would ask yourself these questions. How are you listening to feedback from the various touches points? Are you spending time with the frontline to understand how customers are responding to the message? Is it resonating? Then workshop that from the top of the funnel to the bottom. And if you're familiar with the bow tie even beyond what topics are most engaging to get people through the door and what topics are most engaging to keep and retain customers as they continue to get greater value added of your product? What are the hotspots on your site? What search words are popular? What events are people attending? Communities are they part of? What content are they consuming? What feedback can you gather from your partners? Partners are massive in this case because they have access to the market in a way that you cannot as a direct seller. If you've not mapped the customer journey, I encourage you to spend some time doing that and then validating it with your sales team, with your marketers, and anybody from a customer standpoint who lives that every single day. And then how do you think about making sure that your sales team is equipped to navigate the customer journey themselves? Are they product experts? Do they have certifications that are required of them? Are there okrs aligned with the product? And then the question everyone always has how do you do this at scale? It's easy when you're reaching out to five or 10 people to personalize a message. How do you make sure that you can do that and still ensure that each customer feels as though they're experiencing a differentiated experience? Experience that each of their competitors isn't also receiving? So how do you do that? The answer through data for those salespeople in the room. This is the importance of keeping your CRM hygiene good. One of the most valuable tools that you have is one centralized and connected consumable viewpoint on your customer. If all data resides in one place, you and the analysts can make smarter decisions and engage with people at the right time based on the behaviors that you can recognize through trends and analysis. Tech is huge here, but that's not where it ends. So what I would recommend doing is leaning on technology to assist you. But don't live and die solely by the tech that's available to you. Demographic insight, behavioral insight, market insights are amazing, but I'd also recommend just interviewing your customers, supplementing this with anecdotal data. The rich data enables us to leverage the information that we have to make smarter decisions around which organizations to target, when how to strengthen our value prop and align it to a hard metric revenue to the organizations that we work with. Weaving that data together from disparate sources allows you to tell a story about the customer where you can continue to position your tech more effectively. Which brings us to the next point. Maintaining agility and the ability to adapt. So go to market strategy. Again, not revolutionary is not a set it and forget it thing. It's a dynamic framework. It requires that you revisit what you initially believed, continue to test hypotheses and prove or disprove them. You may need to adjust it based on what you're hearing from the market, what you're seeing in the data, conversion rates shifting overnight. Identify the areas of opportunity and the challenges, and work with your team to understand them greater. That is where the anecdotal feedback comes into play. Put in place mechanisms to listen and gather feedback from the deals you won, but also those you lost. Sometimes more valuable are those closed loss conversations than the closed one. Closed one validates something you already knew. Closed loss allows you to identify things maybe you didn't within the sales organization At Klaviyo, we have a weekly closed meeting. It changes from week to week. Sometimes it's won, sometimes it's lost. Sometimes it's focused on large deals. Sometimes it's focused on volume. But that meeting includes our cmo, our cfo, our VP of product, Legal Finance. Broad, broad audience. But we review thematic takeaways that allow us to take action where needed, whether internal or external. Often those meetings sit exclusively within a sales organization. And it's great. But salespeople love listening to themselves speak, so adding in additional functions gives an empathy and understanding outside of the walls of the revenue organization and Often drives change. At the stage we're at with Klaviyo, we also have an incredibly diverse customer base. I imagine the same is true of some of you, whether you're pre product market fit, trying to figure that out or at scale. But what each of those customers needs and how they consume the product is different. Which requires us to not only attract those audiences differently, going to different combinations, conferences, different partners, reaching out differently with different messaging, but it also requires us to segment our go to market strategy. And at Klaviyo, we're very intentional about pairing our go to market strategy with remarkable people who can carry out plans where it drives impact. We leverage something like this. Again, probably not unfamiliar to many of you, but a sales skills and competency matrix. And within each of the segments that we sell into, there are different expectations of the members of the team. So for example, for Entrepreneur and SMB, those smaller organizations that we're selling into, we look to evaluate how the product may enable the sale.

So that the.

Evaluation and buying journey is frictionless and salespeople can be hugely efficient with their time while still providing value to the customer. On the flip side, as we move up market to the mid market and enterprise, again expectation is different, so the skill set must be different. How do you best build and respond to an rf? How do you multi thread internally with the appropriate stakeholders? How do you navigate the complexities of security and compliance? Last but not least, thinking about how you're aligning your internal resource. So CMO to CMO connects, CTO to CTO connects so that they can discuss challenges and goals. That in and of itself is delivering a differentiated experience because you're offering strategy in a way that maybe your peers aren't able to do, particularly not at scale. Last but not least, the sale extends beyond the sale. The art of customer focused sales does not just stop at leveraging data from customers to be more successful sales people. It's also incumbent upon us to ensure we deliver incredible customer experience. What does that mean within our walls? It means establishing things like a customer advisory board, having a voice of the customer survey so that we can continue to gather information from our existing customers around what's working and what's not. Qbrs with the customer service themselves as a feedback loop that are then shared with the sales organization so that sales can continue to become smarter at where the customers are getting value out of the product that we're providing. We share an upgrade number across sales and customer success as well. So we've created a team who sells into our existing customer base, working closely alongside cs who's responsible for strategy and identifying additional value add within the product. But that shared goal allows us to work together so that our customers are getting greater value out of the product constantly. This focus on our customer and the value that they derive has allowed us to grow and innovate and stretch beyond what is our traditional icp. It's allowed us to experiment and understand other areas where we deliver value that may be within our customer journey that we'd mapped or our corporate jail we hadn't identified. And that then goes right back to adaptability. How can we use that as a continued feedback loop and either establish a new segment or a new vertical that we can pursue? So if nothing else, I hope that you take away from this Internal alignment is required across all functions to enable a customer focused sale. There's rich data available to you assuming you keep your CRM updated and all of your integrations are working which enable you to create a narrative that resonates with your buyer. Agility and adaptability are key. Identifying key areas where you can invest more or shift the investment will enable you to continue to solidify your go to market strategy and grow quickly building out the frameworks and skill set within your organization. Hiring the right talent against those skill sets and frameworks. We'll make sure that you're holding your sales team accountable to the expectation of delivering a differentiated experience based on the segment that you're selling into. And last but not least, personalizing your outreach and the interactions based on the data that you've gathered, mirroring your prospects so that you're finding them when they want to be found with the right messaging and communicating in a way that's relevant to them. Whether that's email, WhatsApp over LinkedIn in person will enable you to put the customer at the forefront of your sale. Plenty of time for questions. I think you can use the mic.

Yeah.

I loved your point on getting the go to market team aligned. Also beyond sales, obviously one thing that always strikes me in all our clients salespeople is also where does referrals and testimonials sit? Because marketing always says we never see speak to customers says that we're busy selling customer successful.

We're the nice guys, we don't want.

To ask for anything. Who gets the testimonials and referrals if not the founders or CEOs themselves?

Yeah, I think the the reality is you need alignment across sales and customer success to drive customer testimonials. So one tactic that we use is as part of a negotiation, making sure that you're including some sort of commitment to a customer story, a use case or marketing collateral. It's then incumbent upon the customer success team to make sure that they're successful. There's a short window, it seems, where you can get a customer to do something like that before they're too far along in the customer journey. But I actually think it starts with the salespeople. It helps considerably if customer success team holds a number around how many case studies, referrals, etc. That they're obligated to deliver on a monthly or quarterly basis. So alignment across CS and sales hugely drives that as well.

And so how would you use the.

Testimonials in your marketing? Would it be in like direct email copy?

Would it be posting on LinkedIn or web website?

Could you elaborate on that?

That'd be helpful.

I think it's a little bit of all so the question was I think you guys can hear based on the the microphone, but where do you use your customer testimonials? I would integrate them into a variety of copy. In fact, I have this term tweetables. It probably dates me because I know Twitter doesn't even exist anymore technically. But how do you break your customers testimonials, use cases, et cetera, down to bite sized consumable takeaways that your sales team can use and integrate into their outreach, but can also be standalones on a website if it's searched on Google, that your partners can post, etc. So it's a matter of taking something that may be larger and break breaking it into content that has a variety of uses essentially.

Thank you.

So this might be a detailed question.

But how could you manage.

The contract renewal stage when you have changed your prices? Of course you increase your prices with the current customer.

Yeah, this is something that we've been experienced even this year at Klaviyo specifically. So how do you navigate a conversation when prices are rising? I think this is something on everyone's mind at the moment, if I'm honest. It starts with understanding where the customer is getting the greatest value and if there's opportunity for additional value add. So what we've found, and I imagine this is not true just of the organization I'm a part of, is that oftentimes adoption and implementation still leaves quite a bit to be desired. So how do you identify the opportunity to increase the value recognition back to the customer that can align with the price increase. There will be cases where you'll need to walk away from customers because Their CFO is putting additional pressure on that to consolidate tools or spend less. And inevitably I think in any industry there will be cheaper solutions. So it all goes back to value. The most effective thing that I've seen within my walls is having sales and CS collaborate around that value conversation. Oftentimes salespeople are more comfortable with commercial conversations, so they can manage that well. The CSM can drive the additional value to the. To the end client.

So most of your relationship with customers start as a self service, right? So they come and register on their own and start using your product. How do you decide when it's time to get in touch with them? Or do you just reactively wait for them to ask for help? Or. Or you proactively go out and try offering advice and help whenever you see them struggling. So yeah, is there a balance between this type of reactive and proactive customer success?

Absolutely, I think there's a balance. We have a very strong, as you mentioned, PLG motion, which is our self service business and people are signing up for Klaviyo without us getting involved from a sales standpoint, which is great from an efficiency standpoint. But to your point, oftentimes those people may need help recognizing the value of the product. So in that case, back to the alignment component. I think that's a really good opportunity to sit down with product and interview the customer to understand the friction points within product. There will inevitably be a catalyst or sort of a balance point at which you need to get human intervention involved.

And is that sales or success when you.

It could be either. To be fair, I think it's very dependent on your offering. So we have multiple products, so if there's an opportunity to sell an additional product or increase spend, I think that's where a salesperson naturally fits. If it's more a matter of working through any technical concerns, support issues or value creation, even though they're familiar and comfortable with the product, then I would say that's probably a csm.

All right, thank you.

Of course.

I'm interested in this sales skills and competency matrix.

Is that something you roll out upon promotion? Is it an ongoing thing? Interested to see what that process looks like and how you hold them accountable?

Yeah, absolutely. So highly recommend. A skills competency matrix is rolled out as soon as you can roll it out to the team. I think it fits really nicely into the concept of career architecture as well. So as you think about the journey that your salespeople or revenue team members may go on and retaining employees as well, you want to give them opportunities to continue to expand their skill set and increase their opportunity to earn. So it is nestled into the concept of career architecture and there are certain skills or competencies that they have to demonstrate to move into the next role that are tightly aligned as well to their revenue targets. So it's not solely revenue, but also the demonstration that they've grasped additional skill set that will prepare them for the next role within the organization. They are fairly generic as you can see if you took a screenshot, but I think it's really important to also retrofit it into your organization because there may be some things that are more important than others. For example, previously I'd never worked for a PLG company, so that transactional sales model was not something I was familiar with. So I was pushing multi threading and stakeholder management in a way that actually was getting in the way of a transactional sale which could just be executed really quickly because you're speaking directly to the CEO. So the sooner that you can roll out some sort of matrix, the better. And yes, I would test for those competencies on a quarterly or biannual basis. It's a great way also to have a productive performance review conversation.

Got it.

Thank you.

Thanks Pierre.

Thank you for a great talk.

Really insightful.

You've been with the business during its.

Hypergrowth phase and what I wanted to.

Ask is how much of Klaviyo's success.

Particularly in Europe, was based on executing.

The right plan versus being able to.

Identify the opportunity and changing course and what were the key motives, moments along the journey in the last three years that made you realize you were on something?

Yeah, I think it's a great question. You're absolutely right. Klaviyo was very fortunate to experience incredible growth during 2020 essentially when E Commerce absolutely skyrocketed. So I think we benefited naturally from some market conditions. Luck and timing is what they always say. I think most recently and again I think this is common in most of the organizations that I've spoken to. It has forced us to evaluate whether the growth that the growth path that we took and some of the decisions we made were the right ones. So I think probably the best way to talk about this is in terms of international expansion strategy. We were taking everything and there's nothing wrong with that. But being more deliberate about our out outbound strategy based on what was coming to us and thinking very strategically about how we plan to incrementally increase our exposure to certain markets is something I wish I thought about two years ago. If I'm Honest. So, for example, as we think about moving into France or Dock, which are key commerce markets, we took passive revenue, we grew a team, we hired in French speakers and German speakers. But we are just now setting the foundation to capitalize on an opportunity in the right way. So you can still pivot years later. But yeah, we absolutely benefited from some good timing.

Great. Thank you.

Of course. Any other questions? Well, thank you so much for being an incredible audience. Really appreciate everyone's time. Enjoy lunch.

Thank you.

It.

When I grab your body, pull you.

Close I need you more than you.

Need me and there's no shame in that.

When you put your arms around me I don't I'm stressed Go and lay your head right on my chest you are in my life I worry less without you girl I don't think I.

Could rest don't stress, Don't stress. Don't stress oh no, I don't want to be all on my own.

It'S.

Like so when I grab your body.

For your clothes I need you more than you need.

And there's no shame in that.

There'S no shame.

When you put your arms around me.

I don't stress Go and lay your head right on my chest you are in my life I worry less without you girl I don't think I could rest don't stress, Don't stress.

Don't stress, Don't stress. When you put your arms around me.

I don't stress Go and lay your.

Head right on my chest you are.

In my life I will relax without.

You girl I don't think I could rest. Don't stress.

Don't stress, Don't stress. Sa. Sam. Sa. Sam.

It.

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La. It.

Please welcome to the stage, Eleanor Dorfman.

Head of sales at Retool. Dominic Grillo, head of technical success at OpenAI. And Harry Stebbings, founder at 20VC.

Oh well, thank you so much for joining us, everyone. I want to start with a little bit of context and actually, Dom, why don't we start with you because Head of technical success.

Yeah.

What does that mean?

What doesn't it mean?

Yeah.

Yeah. So head of technical success is basically, I manage all of our pre and post sales engineering customer facing engineers for OpenAI. So we break that down to a couple different roles. We have typical solution engineers for pre sales. We have solution architects which work with a lot more of our companies that are looking to build products and services using AI. And then we even have an AI engineer which helps with people that are really interested in fine tuning our models. And working very specifically with some of the backend art architecture.

Eleanor, how did sales at Retool talk to me?

A lot more straightforward. I manage the sales team.

Super simple. Where were you before?

Before Retool, I worked at segment customer data platform, where I actually held roles in both customer success and the sales side. So I worked on building scalable customer success programs, new business sales expansion and renewal sales.

Okay, so I know we had a schedule, but I think we agreed to kind of put it aside. When we think about the world today, it's changing faster than ever. AI is changing sales motions faster than ever. It's changing post sales motions faster than ever. It's changing customer expectations. How has your role changed most significantly over the last 18 months?

Yeah, I mean, I think some of the things that are definitely shifting in terms of how people are looking at it is where can you apply the technology in the customer journey? And so we're looking at it from a couple different angles. One is going in and automating a lot of these processes that would normally be very human, very intensive things like being able to capture all these different knowledge sources that most companies have and then start getting that available to your employees so that they can be able to provide people with more insights, more data, more answers in a more timely fashion. And so a lot of the do.

You find large enterprises are willing to provide such access to the those data sources?

Yeah, I mean, that's a huge portion right now. So a lot of emphasis right now is focused on what are those knowledge sources, what is a way to be able to safely gain access to that and then how do you start applying that to the customer journey? I'd say right now, just to be totally candid, the area where we're probably seeing the most emphasis right now is around customer support. And there's lots of large enterprises that are coming to us. We did a a case study with Klarna recently that's gotten a tremendous amount of interest and they're trying to figure out how can we start using AI agents to start running agentic processes, which is just another way of saying automated processes and letting these agents actually operate on behalf of the company to automate certain levels of customer service.

Are there commonalities in the biggest challenges you see post sales with the customers in terms of expectation and delivery?

I think the biggest challenge we have right now is just people are starting to try and figure out how do you apply the technology? And so it's a new category. There's lots of questions about where do I even Go to get value. What are peers doing? Where have people found success? One of the challenges we've seen certainly is that it's really easy to get to a prototype with AI that can look and appear something transformational. But it's much more challenging to actually get that into a production use case where you've mitigated risk, where you actually have it, so that it's something that can be then brought in and scaled to something that is actually used day in and day out.

How have you seen your role change over the last 18 months?

I think it's. There's two factors that I think have driven a lot of what's been changing. I'm sorry, this is. Let me know. Just raise your hand if you want to leave the room. This gets so bad. And I can step off.

Let me try moving back here, give you some space.

So I think it's two things. It's the zero interest rate environment going away in the last two years and having to dramatically change the way you think about sales. And then it's also this advent of AI and this excitement and this eagerness and this sort of desire to use it as quickly and quickly as possible without maybe thinking through what are we going to do? What are we trying to achieve? What are we trying to achieve A solve.

How has the zero interest rate environment changed how you think about sales today?

I think it's just much harder. I was thinking through some very fancy answers about what's changed, but at the end of the day, what does that.

Look like we saw with Salesforce in that, you know, results? It was, you know, I think they need 3x pipeline coverage to hit the same 2x number. Specific examples of how it's harder.

I would say the pipeline coverage you need, we used to need about 1.5x. Now it's closer to, to 2.5. I think sales cycles have gotten longer and I think instead of being able to rely on inbound and hand wavy ROI calculators to be able to make a case, you actually, we've sort of shifted more to this inbound, outbound version where you have to get religious about intent signals and time to lead and speed to lead and following up immediately. It's. You can't. You have to have a very strong champion who knows how to actually attach to a top level business initiative. And we've always historically said, of course you have to attach to a top level business initiative, but now you actually do and you need a stronger champion. You need a clearer business case. You need to attach to Something that's incredibly important to the company and you have to take a lot more time doing it.

If we just kind of go through the sales lifecycle that we said we need more pipeline coverage, great. But also companies are cutting back on spend in a lot of cases. How do we think about that? Do we spend a load more in terms of SDR teams? How do you approach that?

I think there's two ways you can grow. It's the top line as well as the efficiency. And we're focusing a lot more on the efficiency. And so how can we maximize the BDRs we have? Can we give them more tooling? How can we capture every single intent signal? How can we make sure that we're spending our money on brand awareness and education? Because when you're selling an open ended product like both of us are, the awareness and education, education is almost more important than anything else because you need to work together to find a use case in order to capture that budget.

Okay, so we then increase pipeline. How are we seeing time to sale change and how do we actually shorten that in the face of lengthening time to sales? How do we create urgency?

I mean, I think a lot of it is just I've spent more time probably managing expectations than shortening the lifecycle, but I think both are important. I think a lot of it is attaching to one of their top level initiatives so that you can craft a compelling event around that and also attaching yourself to market trends like AI. And so figuring out how does retool fit into your AI story? Are we how you adopt it? Are we how you prototype? Are we how you can actually get something built and in production for your support team or your sales team or your engineering team faster? And it's understanding very critically what the goals are of your prospect or your customer and attach to them from day one.

Do you think startups do that well today?

I think it's a moving target. I think it's a lot easier said than done and I think that's a lot. What's changed in the past two years and 18 months is there's a ton of noise around AI, there's a ton of noise around the economy and your job is to create focus and clarity and a path to sale as quickly as possible.

Dom, I'd love to hear your thoughts. Year we've heard about how people need more metrics, they need more proof points around success. How do you think we see actual post sales change in this next wave where people want to see more data? Klarna want case studies of effectiveness of kind of effective agent use. How do we see post sales change with the increased demands of customers?

Yeah, I mean, I think a lot of what we're focusing on is just being able to learn jointly with customers and so brand new technology, new category, moving really quickly. A lot of what we're spending a lot of time doing is actually the surveying of customers and really understanding what are some of the compelling use cases that we can then apply value and metrics to and then using that to start building out solutions, being able to have a hypothesis by different industries as to what is the impact in the technology. So a lot of what we're doing is working with customers, customers jointly to really understand with them and to guide them on where the technology can be applied. The second thing that we're focusing a ton on, at least within our organization, is building out lots of education and that's not entirely just based on the technology, but how to think about the technology. Companies come to us and they're saying what should a responsible AI use policy look like? Has anyone ever written something like that? How can you help us think about that, that type of problem? So we're working through and building a lot of these frameworks to allow people to be able to actually have the tools to figure out how to deploy the technology at scale.

Where does OpenAI suck at post sales today?

Where does OpenAI what?

Why are you not good at post sales?

I'd say that a lot of what we have a constant challenge with is just scale. So we're a really small company relative to the type of demand that that we see. And we obviously compete with some of the largest companies on earth and we're competing with them all simultaneously. And so a lot of what we have to do is honestly expectation setting and that we can only work with.

What does that actually look like? You actually turn down customers?

We have to.

Yeah, absolutely. It doesn't mean that we don't turn them down from a technology perspective, but it means that we can only work with them directly with an account team at a certain level of scale. And so that's why of the biggest pushes right now is we're just massively scaling our go to market organization. We opened up an office in Japan, we've announced we're going to be opening up an office in Paris and we want to be where all of our customers are, but it's going to take us some time to get there.

Has there been a mistake or two that you've made in the post sales learning process and building it out that has most shaped how you think, you think others could learn from.

I mean, where do we start? Mistakes I've made chronological order exactly. I think some of the things that we've certainly made mistakes on is just assuming that the market has more knowledge of this technology and that we really do have to create a crawl, walk, run. And a lot more of what we've been focused on is doing that initial education and not making assumptions that people have a stress strategy around AI. It's been shown actually multiple times that lots of companies have interest in AI, but very few companies actually have a serious strategy in place around how to go in and deploy and make use of the technology. So it's made us shift a lot more towards doing education. You know, going in and working with knowledge workers and explaining what prompt engineering is, how to go in and give these models the ability to retrieve information so they have more context about your business and how it works.

You're thinking, God, I wish we could go back to the schedule because I'm just peppering you with kind of harder questions, but is it difficult in a engineering centric organization where researchers are like, you know, royalty and GTM is like a necessary evil?

Yeah.

Is that difficult?

I don't think so.

I mean, we work a lot with research like you would a traditional product team. They're delivering innovations to the market. We are then going to productize. And then the big part of the mission is to bring AGI into the hands so it benefits humanity. Well, how do you do that? You actually have to have people using the technology. And so we look at the go to market team as very much a part of that mission because it's taking a lot of those innovations, those breakthroughs that are happening in research, and actually bringing them to the market so it can be applied.

I interviewed Brad, your COO and Sam actually in London, and Brad said that the biggest misconception that large enterprises had around kind of adopting OpenAI and your solutions is actually they want to see like line items move around balance sheets. And actually you can't sometimes quantify someone's time in certain respects and what we're doing. If I were to ask you the same question, the biggest misconception perceptions that large enterprises have around adopting open AI in your solutions, and you were to say something different, what would you say?

I mean, I'd say there's a couple of different things that we see traditionally. Like, one is that a lot of large enterprises think that the innovation is going to start with their machine learning team or their data science team. And what we're seeing a lot of innovation happen is actually at the line of business level, the people that are closest to the problems and closest, closest to the processes generally have a much better intuition about how to apply the technology. So that's one. The other one that I would generally say is that people grossly underestimate the amount of time it's going to take in order to pull off a really successful transformational AI project. And that if you're not really, not only resourcing it top down, but it's part of the company's strategy and that you really have a group of technologists along with some of those folks from the line of business working together, it's going to take a while to pull these projects off. And so when we talk about some of these companies like Klarna or Spotify or Morgan Stanley that have really done something transformational, I think we all have to keep in mind we started those projects probably nine months ago. And it takes time and iteration in order to get something into production.

Can I ask you, Alan Retool obviously was a very fantastic and efficient company pre the AI hype cycle. And you said you have to kind of attach yourself to trends in certain respects. How is a like non AI first company, I might get in trouble for that. But non AI first company attach yourself to the trend authentically without being like, oh, and we've got AI slapped on the side.

So actually I think we're in a really interesting position because if you, you look.

I hope that wasn't offensive.

No, no, no.

You looked at the website and you don't see.

Not at all.

You look at the website, you don't see AI anywhere. You have to dig deep into our docs to actually see where AI fits in. And in case you haven't looked at our docs, which I imagine as many of you, it's in how you build applications and then you can also infuse AI into the applications that you've built.

But do you bring it into customer conversations?

So they bringed it in. It actually started with our customers. So a lot of our excitement internally around AI. We're a very customer. Hypothesis driven organization has come by seeing how our customers have used us. So they've built tools to parse their contracts, they've built a ton of sales tooling so to have messages drafted, categorized and to fit in with personalized use cases by industry, they've built a ton of customer health dashboards that use AI to generate use Case ideas or to triage support tickets. So it's actually what we've seen is we're sort of of what Dom said where we're closer to the line of business so we're selling into the people who actually have a lot more intuition about what they need to build. And so by not starting with the machine learning or data science teams, by actually starting with the pain points in a business with a practical application of how do you bring AI to solve a problem that we face today? That's the pull we felt from our customers and how we've sort of evolved our AI strategy and enabled our sales team team to start to use that messaging upfront.

You mentioned kind of zero interest rate environment being a challenge and a new thing to kind of get one's arms around. Sales forecasting is even harder. Today we saw, you know, Salesforce I think miss projections by 40 million and lose 50 billion in market cap. How do you think about effective sales forecasting state? Because it is harder than ever it would seem.

It's very challenging. We actually built a retool out that's we have a lot of playful names internally it's called the pipeline profit and it is continuously learning. So it looks at close rates, it looks at create and closing quarter, it looks at open pipeline and it looks at all of the individual reps stats on how they historically can close the pipeline that they have. So we do a blend right now of bottoms up forecasting which is more standard where AE submit their forecast calls, managers submit their forecast calls, we roll that up, we looked at our weighted pipeline and then honestly the pipeline profit has been within 10% of accuracy every quarter. And so while I'd like to pretend that I'm a forecasting savant, I usually end up going with what that says.

I'm on quite a few boards and quite often in the conversation I was ah, it just fell into next quarter, fell into next quarter and I'm always stuck like okay, well what should I say to that? What is the right answer?

I think you set a goal for how to get the slips down. I think, I think one thing we have gotten quite good at is execution and so much of forecasting, again it's all expectations, management with your customers, internally with your product team, with yourself. And in terms of deal slipping, it's asking yourself in every single deal review, if this doesn't close by this date, why will that be? And being ruthlessly, intellectually honest and the pipeline profit takes slipping into account. So it does account for that but for the Most part it's just a lot of discipline and oversight and intellectual honesty with yourself and your team.

For founders listening, how often do you do deal reviews and what's the difference between like a good and a great deal review? What do you know now as a sales leader that you're like God, I wish I'd done this in my first deal review?

I mean there's a few things. We do deal reviews pretty programmatically. When a deal that's over a certain dollar threshold hits stage three, we do an early stage deal review.

What's that dollars threshold hold?

50K?

50K?

Theirs would probably be a little larger. When it hits stage five, we do a late stage deal review. And so for me the biggest thing has been building that discipline and predictability that I know when we hit stage three, which is for us, you're entering a proof of concept that we're going to inspect. Have you met with the economic buyer? Have you sold beyond just a use case? Do you have a platform vision in place? Do you know what problem they're trying to solve? Do we have a compelling event? And most importantly, what top down initiative are we attaching to? Because every deal, even if it's not a head to head compete, is a compete because you're competing for budget and you're competing for mindshare. And when OpenAI has to have companies move budget line items around in order to justify the spend, we certainly have to do that as well. There isn't usually a line item that we can directly replace. We have to create a compelling enough vision to get the budget.

How do you keep morale high when deal cycles slow, when things just seem harder?

I think that's pretending that it like acknowledging the reality of the situation. And I do think there is a lot of glory in the struggle and it's finding the early wins. It's not just celebrating the output, it's also celebrating the inputs. We do a weekly stand up every Monday with the entire dota market. Org where we talk about the wins from the previous week. What did we close, what did we renew, what customers customers did we activate, what sales qualified opportunities did we generate? We do a weekly shout out. What's something amazing that happened, what's a disaster that happened. And we laugh at the things that are hard and it's investing I think in the collaboration, the community and then finding early wins.

Do you do it in person?

In person in the offices but across we do it globally.

Is it difficult to do virtually?

I don't think so.

You don't think so you don't think.

You have to invest heavily in me and gifs and a lot of midjourney and dolly generated images. That's a very key part of it. There's one of me combined with Pam from the office that has unfortunately made its way into almost every deck. But it's finding the people who are really good at doing that.

The corporate meme economy just booming.

The number one benefactor of AI has.

Been the corporate meme economy.

But yeah, it's just fun finding it being silly and knowing that you're all in it together.

Dom, can I ask you, you sign a big customer, right? And the sales team say, hey, great, here's. I don't know, Klarna or any.

Throw it to them.

I don't know actually, how does it happen? Like seriously, how does it happen? Do you sit down with that head of sales and do the handoff and then like how does that happen? And when you get given a customer, what happens then?

It depends.

So one thing that's interesting about OpenAI is we sort of have different business models. So we have ChatGPT Enterprise and you could say that that's very analogous to a hyper scaling B2B SaaS organization in the productivity space. And so people are looking at ChatGPT Enterprise and they're saying, hey, we kind of want to AI enable our workforce. We want to allow people start using these tools and become more productive. And that's very much something that's sold to a cio. It's looked at as part of the, the productivity suite of the how intelligent.

Are the buyers in terms of their decisions? Have they said, hey, we've actually already done the work and we've realized we wanted OpenAI over Mistral and llama or is it like you're the only one they've.

So I think it depends. Like we would never be competing in ChatGPT Enterprise with like a Mistral because this is something that's a package software application. On the other side is the models themselves and those are all available through API. And that's where, yeah, people are going to look, look at a bunch of different factors when they're evaluating models. One of them is going to be what is the model's intelligence and reasoning capability? There's all sorts of different ways that we benchmark those. The other is the price point and then the final piece is the latency. So how fast is this model on the input and the output? And generally what people will try and do who are really sophisticated is they'll optimize for each one of those dimensions as they're building the product. So maybe they'll say for this part of the product we actually need very high reasoning and high intelligence. But for maybe this other part of the product we actually really want to optimize for cost and latency. And then you can even do things which a lot of companies start doing, which is you start and validate with the most reasonable and the most intelligent the frontier model, in our case GPT4O. But once you've validated that the use case is possible then you try and cost optimize and look for if you can still accomplish that with the same relative performance with a more cost effective model, something like maybe like 3.5 that's fine tuned.

So I read about, and this may be completely unfair again no idea what I can and can't ask but I read about like PwC's like massive rollout and a massive contract. How on earth do you do onboarding education for PwC? I think it's a 30 million NEA contract. It was rumored to be with thousands of seats. What does that look like?

Yeah, I mean we very much are doing the train the trainer approach. So we're working with global project managers, we're doing a lot of the best practices in sharing and then we started staffing enterprise account teams. So we have a customer success team. We've got solution architects that can help with integration patterns and we work with them through the journey and we do a phased rollout. So you know, something like PwC will probably do it over time to get to that number and that's both for them to be able to make sure that they have the level of enablement within their workforce and then also to make sure that we're going in and validating some of the value in the use cases and being able to advertise those, build the champion network, continue to go in and make sure that we have the type of sponsorship to make those rollouts successful.

To what extent do you set the benchmarks for success versus the.

I think that we try and arrive on some joint metrics for sure and that's the ideal state. I do think that there's a lot of companies right now that and this is, you know, a luxury to be in this position but for something like chat GPT enterprise they are purchasing without a defined use case in mind because they are sort of saying look, do.

You not find that quite nuts?

Yeah, no.

Oh yeah, sure.

Here's a couple of million bucks. I don't really have a use case for this.

I think what people are trying to figure out is this technology has the capacity to be transformational, yet I don't have intuitively a ton of in house expertise. I could go about trying to work with analysts to get that expertise. I could go in and try and do the research or I could just get the technology in the hands of my workers and then try and start really deeply understanding where the value is.

What role do you think AI should services companies have like Accenture posted $2.4 billion in generative AI revenue. I tweeted a year ago that AI services would make more money than AI companies and they announced 2.4 billion and OpenAI did 2 billion. Paul Graham called me a that was heartwarming. But like to what extent you partner with them on the customer education process as well?

Oh, absolutely. I mean, mean. So we look at a lot of those companies as and work with some of those because large companies obviously partner with them to do a lot of implementations. We generally when we're talking about companies that are interested in building things on the models, we sort of target the either end of the market in that we work with really large companies that want to do something transformational. Pwcs1 guy example and then we work with a lot of startups. So we really do think that there are companies that are being created today that are going to be implementing the technology that could disrupt a lot of technology sectors, a lot of ways that we think about products. And so we make an outsized investment in making sure that those companies know how to leverage our technology to the fullest.

I want to talk about like building sales teams themselves. This is a component that every founder has to to do in terms of hiring, management, firing. When we go start at the lifecycle of sales team hiring, as crazy as it can or specific as it sounds. What are the must ask questions when you are hiring a sales team to identify the quality of candidates?

I actually think there isn't a silver bullet must ask question. I think the key when you're interviewing salespeople is when you ask a question you have to go five layers deeper on the answer because they're salespeople and in an interview they're selling their favorite subject, which is themselves. And it's very easy to have like a charming answer to a question. But the reality is in a sales cycle like ours, where you have to be incredibly good at cultivating champions, where discovery is the most important skill set, where product mastery matters as well as sales skills, you need to go really deep and you actually need to test the depth of their knowledge so it isn't the specific question so much as you have to go five levels deeper every single time so you can understand how deeply does their expertise, how credible are their answers and like how authentic is their grasp of this information.

Do you bring other people into the process?

Oh, absolutely.

How do you do that?

So we, our post sales team is very much involved in the sales interview process. In the early days we absolutely had product and founders involved in the sales process. So we'll do a technical screen which is someone outside of the sales team. You want your culture screen to happen from someone outside of the sales team as well because you want someone to be able to actually assess their cultural fit unless I really think they're going to close deals. So that's more important. So you create the balance to make sure that you're getting a fair opinion.

What do you think are the biggest mistakes that founders make in sales team hiring?

Looking at a resume versus as an.

Individual, what do they get wrong in the resume? They just rely on logos.

I think if you rely it's really easy, it's an easy proxy, It's a cheat code. You're a founder, you have a million things to do every hour and you look at it and you think yes, this is a blueprint for success. When in the early days, curiosity and high slope, high potential individuals can have such an outsized impact.

Would you rather someone sold a certain size deal or they've actually sold in your vertical before?

I would say it depends on the lifecycle and the more mature when you become a growth stage company, the ability to have closed those large deals and to be in front of a C suite and to multi thread is honestly a little more important than the product expertise. In the early days when you're in market share mode, when you want to close as much as possible and more importantly you want to learn as much as possible, then the vertical experience matters more.

Dom, what are the biggest mistakes you've made in sales team hiring?

Why do I get all the mistake questions?

She put it too this is a replicable one.

Put on a nice shirt. Harry just jogs in with his mastery. All my mistakes.

He flew through there because it was warm.

No, I think that the thing that certainly one of my mistakes that I've made is that I think there is no uniform sort of profile for how you go in and think about technical sales and even technical post sales. And I think there's all these sort of things that you want to identify which is Based on, you know, what stage of growth is the company in. You're also thinking about, like, who, what type of product you have, who is the actual user. And you think about those, start working your way backwards and that starts to allow you to start to understand what type of a profile you need. Like one quick example, because I've been now at multiple companies that have gone through the hyper growth journey, you generally find that earlier stage, some of the things that make people really successful. And the analogy of like an old HBR article from 2006 would say, the Renaissance sales team. And it's the team that's able to operate in a lot of ambiguity and they have a high tolerance for that. Because a lot of times you have to start creating the playbooks. No one knows what the sales process is. No one knows what the deck is and how that it should be organized. No one knows what the value proposition and some of those metrics are. You sort of need people that are capable of creating that. And that's a very different skill set than when you're starting to scale the organization. Those have all been defined and you really need people to run the play and do it scalably and effectively. And those are different types of skills. So even the same role, depending on the stage of growth that the company in, you might isolate for different factors.

Do you worry about the motives of people coming into teams? Like, OpenAI is a hot company now. Everyone wants to come work at OpenAI, especially in sales where, you know, customers are actively.

Yeah, I mean, I think you have to screen for that. I made the mistake when I first. Since we're just continuing to go through my mistakes. One of the mistakes, the first one was scale.

It was a bit of a soft one, wasn't it? It's like I worked too hard.

One of the other, really, I catch him up.

I'm too empathetic to my customers.

That's right. Look, this has been a great therapy session. I think we're finally getting somewhere you'll really like.

I wish we had the schedule.

Can we extend this another 10 minutes? No, another thing that I did was I posted when I got the job at OpenAI. Hey, I've got this job at OpenAI. I'm incredibly excited about it on LinkedIn. I posted all these roles at any other company, that'd be probably a pretty reasonable thing to do as a manager. And I think I had 900 inmails within like 4 hours of posting that. And you realize, you know, there's a certain level of scale and brand recognition at this company that you're going to have to start thinking about even things like the hiring process a little bit differently because now how do you even sort through those? How do you even start understanding who are the people that you should be making that outreach to? And so one thing that we have done is we've shifted a lot of the hiring process and things that you would normally do more at an on site. We've shifted that earlier because we have to inherently do a lot more screening.

What is that elements that you've shifted?

Things like we do a take home assignment and normally you would do that more interns with the inter. With the actual on site. But we want to shift it up because we need some of those disqualifiers a lot earlier because we just have too many candidates to be able to.

I'm always struck with take home assignments because people sit in different camps like do it with the company that you're hiring for so you know they can build up some skills or that's unfair. There's asymmetric information that people hiring have so much knowledge and they have none. Which one's the right one?

I think it depends. I mean, and that's going to be the answer to a lot of these. There's been.

Come on.

No, I mean what I would say is in our situation, I do think it's the right thing to do that. And even though there's asymmetric information and potentially there's going to be factors that maybe some candidates don't have the ability to be able to show up as well as they could. The reality is that we've got to be able to go in and do those screenings earlier. And if people have the time to be able to show and do some of the research, that's a really good case. This is going to be a strong candidate that they've gone in and taken the time to learn a little bit about our industry as opposed to just raising their hand.

I also think it's really easy to get excited by a brand or a product or by traction. And if you have to do a take home that's tied to that company, it'll actually show. Do I have the capacity to learn about this? Was I excited while working on this take home? I always tell candidates, if you enjoyed this take home, you're going to really enjoy selling this. But you have to enjoy it and this is signal for you just as much as it is for us.

On.

If an open ended platform sale is.

What excites you, how quickly do you Know when you've made a MIS hire?

First 90 days.

First 90 days, yeah.

I mean, there's variability, but yeah, I'd say within the first 90 days. If you haven't been able to make that diagnosis, then there's something wrong with either your onboarding or the way that your managers are conducting one on ones or the way that you're evaluating people as they come into the organization.

What have you found are the most common first signals that someone is not making the grade?

I think follow through. Do they do what they say they're going to do? That bizarrely manifests itself pretty quickly. So ownership and their ability to act like an owner, I think can show up really, really quickly. And that's usually one of the biggest signals that it's been a MIS hire. And then you just start to see are they ramping? Are they hitting. You have some internal milestones to show. Are they grasping the material? Are they ready to take that first call? Do they need managers on their call for longer than you'd anticipate?

How quickly do you put new reps, SDLs, BDRs, you name it in front of customers?

Two weeks.

Two weeks. Does that vary on deal size? Do they go with someone else?

You'll have a buddy on those first few calls, but for the most part in the first two weeks we do a certification process where we ramp them. If they don't pass their certification, we will have them redo it it and we'll give them another week. So sometimes three. If they miss their certification twice, I think that's another pretty strong signal that you might have hired the wrong person.

How quickly do we expect them to.

Sign a deal for their first deal? Completely varies by segment. So if they're working with zero to 100 employees, they should close their first deal within their first two months. If they're working in the enterprise, if it happens in the first nine to 10 months, that's still completely normal.

Dom, what are your thoughts in terms of. Of for you, the clearer signals that someone isn't performing or is a mishire?

Yeah, I think it goes back to what Eleanor said. You should clearly define what success looks like. You should have competencies and clear learning path. And if it they're not being able to ramp or be able to grasp the information or be able to grasp the role or the customer journey, you should have the ability to have those checkpoints where you can make those assessments. And that doesn't mean that the person's immediately fail, but it means that we're giving them the chance that here's where our expectation is, we need to see this or that and give them the chance to succeed, of course, but you're going to be using those to be able to set up and understand whether that person does have the capabilities to do what the role requires.

Final question before we do a quick fire. But like, how do you think about the verticalization of sales teams? Where you think about, okay, we've got healthcare, we've got fintech, we've got, you name it, whatever we want to choose. Professional services. How do you think about verticalization? Because some people say that's super expensive, massive change for organizations. But some also say actually you can test it much more efficiently. Give it a go.

I'll go. I mean, I think that there's a scale of verticalization. There's like, hey, we have a New York team and let's inherently use verticals as a proxy to regionality and just say we're going to start having some members of the New York team focus on financial services. Maybe in the Bay Area we'll have a tech vertical and maybe within the Midwest we're going to have a manufacturing. And it's really more just sort of aligning them to the types of customers and the majority of the companies that exist. And that's one level of doing a vertical strategy. There's another level which is we're going to go in and start bringing in vertical managers and we're going to have people that have 20 years of experience in media and entertainment or financial services and we're going to start verticalizing and tracking that specific number for that particular vertical with the assumption that we're going to grow it. That's very different. And so I would say one of, I guess my hot takes, I think companies rush to verticalization a little too early. And I do think you have to really understand what your overall value proposition and get your core sales motion going before you just rush to verticalization. Because the challenge that you have is that vertical is not just a go to market strategy, it's also a product strategy. So if you suddenly just say we're going to go after financial services and then suddenly you realize your product doesn't have the certifications, the regulations to be able to operate at scale in that environment. Now you've got a conflict between your product team and your sales team and your go to market team team. And so I do think that you have to go in eyes wide open that this isn't just a go to market strategy. You have to have the corresponding backing of the product team, which means that you're probably going to need to stack, rank which verticals that you really want to go after. Be really thoughtful about what does it mean and how much we're going to commit to each of those. And it's, it's something that really needs to be thought about as something that's jointly owned across product and go to market.

I was going to say the product and go to market piece as well, because that's very true for us. In terms of whenever we think about verticalization, it has to be an entire company decision because the integrations that are required by, I think a typical large bank are very different than what you're going to see from a legacy enterprise software company or from a regional manufacturing company or a rubber manufacturing company in Canada. In addition to that, it's thinking through which motion does it make sense. If you're working with zero to 100 employees, the sales cycle looks, it's pretty similar across the board. But if you're looking at say a strategic segment where you have a rep that only works with three or four customers and you have POD with a bdr, you have a technical account manager, you have an ae, verticalization makes a huge difference because you live or die on the success of those small number of companies and accounts and your ability to deeply understand their business and draw transferable conclusions from one customer to another. It's a force multiplier. It's not down market. So a lot of it is verticalizing at the right time with the right segment and knowing that you're why you're starting there and what problem you're trying to solve. Is it acceleration of deal cycles? Is it ability for the product team to focus on the integrations that really matter? And when you're aligned on that, I think it makes a lot of sense. And I always think that upmarket is the right way to start with verticalization.

Finger snaps for that.

Sorry.

Apparently I was the only one.

Thank you all for your fitting stuff and support.

We've got a minute 45, so I'm gonna do the quickest quick fire ever. Dom, what makes Sam Altman so special to work for?

I always say, like when you're looking for a great founder, you look for someone that has product strategy, that can be customer facing and that can be visionary. And if you get like one of those, you generally get a pretty good founder. If you get two of those, someone who's an amazing founder, and I do think you get all three, someone who truly is a special founder So I think he's great. He's a culture carrier. He's very honest. And even though the mission is incredibly important, sometimes the mission is incredibly daunting. He's really has a level of humility and transparency that anyone that works at the company appreciates.

Final one, what advice would you give to a founder hiring their first sales leader? Or you can choose the sales leader starting their new job tomorrow. What would your biggest piece of advice be to them?

Back channel.

Back channel.

That would be my most direct one. I think. Meet in person and spending a lot of time together is so, so important. I've realized that first sales leader, CEO relationship is an incredibly important one and almost in the same as any relationship. Communication and expectations. Expectations management is so important. And if you are in a really successful one that's humming, you've developed a shorthand because you know you're both optimizing for the same things and you can't identify that unless you spend a lot of time together in person. So I think it's spend time together in person, check references, back channel, really get to know someone and what motivates them.

Listen, I cannot thank you both enough for doing this. Dom, I'm so glad that you appreciated my. My running attack.

You're never going to let that go.

Yeah, we're going to run home.

Ban from the podcast.

Thank you so much, everyone. It's been great.

Thank you.

Sa. Sam. By.

Please welcome to the stage dawn herndon.

Vice president amia build an isv partnerships at IBM.

Hello.

Oh, is it on? The microphone's on. I can't hear anything, but I made it up the stairs, which is like the first big thing I overcame in my presentation here today. Dawn Herndon, everybody. I'm thrilled to be here. Thank you for taking 15 minutes to spend with us and talk about the X factor. Any guesses what the X is in X factor? Anybody? Does anybody think that AI is the X factor for your business and can lead to exponential growth? I'll see how many X's I can use throughout the presentation here in the next 10 or 15 minutes. How many words do I say that start with the word or the sound? Ex. So the first thing I want to do here is just show you what the dictionary says the X factor is. It's a variable that leads to a significant impact in the outcomes that you drive. So today we'll focus on different areas that AI can accelerate your business and different factors that you need to think about as you are building products and solutions that you want to take and sell to your clients. Now, I think we mentioned when I came up on stage that I'm with IBM. Sometimes people don't think about IBM in the mainstream aspect of being a technology company that develops AI technology, but just by show of hands, or even just yell it out, shout it out here in the audience. Does anybody know how long IBM has actually, actually been focused on developing the AI technology that we have in market today? Let's just do a range. We started developing it in 1940. 1940. 40 years. Okay, 40 years. That's a good guess. You're close. Actually, it was actually a little bit longer than 40 years ago. It was in 1956 when what we believe is AI today was originally started from a development perspective. So that's not to say though, that what we're doing today is what we were doing in 1956. What we are doing today is two things we are focused on, first of all, helping organizations accelerate how they go to market with AI by providing the best of breed technology and innovation in the AI space available. And we do that through being very open, focusing on open source, focusing on developing AI so that it fits the purpose of your company and it fits the domain or expertise that you need to deliver in how you sell to your customers and how you ultimately make money.

So.

Okay, so this slide here is to just give you something to think about. How do you leverage AI today to drive all of the outcomes that you need to as a startup, as a big organization or enterprise that has a startup organization within it? Really what you're wanting to do here is grow revenue, right? At the end of the day, every single company on the planet needs to figure out a way to make money. And every organization needs to figure out a way to attract new clients and to grow revenue streams or routes to market and sources of revenue in order to track new clients. So we want to talk to you about how you could leverage AI technology just to do that exact thing. So when we talk about how do you accelerate your business, we really do look at at a couple of different ways that organizations are looking at productivity enhancements through leveraging AI technology. And I will say that there's a lot of information and a lot of statistics here on the page. But when I think about how do organizations that I work with look at how to leverage AI technology? I would break it down into three different silos in every company, for every organization or leader that I've spoken to, they look at how do I increase employee productivity. So that is leveraging and embedding AI into how my employees work, how they collaborate with each other, how my internal business processes and systems work, and leverage AI to make them optimized and more efficient to deliver better outcomes internally for my company? Number two is how do I appear to my customer base? How do I market my company? How do I take advantage of AI and technologies that allow me to interact with my customers on a more efficient, more cost effective basis? For example, in a call center, if you have customers calling into your support organization and you want to accelerate how quickly they can answer questions, provide responses to your customers to then reduce the amount of time that customers are working with you on customer support, that's one of the ways that you are externally interacting with your customer base. And then number three, the area that's very dear to my heart is how do you take advantage of AI in the products and the solutions that you sell to your customers? How do you leverage technology to attract new clients, enhance the products that you bring to market? How do you take that enhancement and drive new sources of revenue and new revenue streams by attracting and getting to new clients? So if you take all three of those different areas and you apply them and you look at the different productivity challenges that we have here on this slide, you can correlate and you begin to see where you need to make investments from an AI perspective in order to accelerate your business. One of the areas I want to highlight here on this page is development and IT operations. I do believe this is one of the areas right now that we are still seeing a lot of organizations testing and experimenting with AI to decide where to start. So if you take advantage of the large language models and the generative AI features that are today's mainstream AI conversation, how do you leverage those in the development cycle that you have of your products so you can get to market faster, so that you can reduce the amount of time that your developers and your companies are working on adding enhancements to the products that you bring to market. So some of the different areas that you probably want to think about is that the product development lifecycle itself could take tremendous advantage of AI and then drive a significant outcome for your company and how quickly you get to customers and new customers. There are a number of barriers that organizations are dealing with, dealing with, and I think probably these are not a surprise to a lot of you. Integration and scaling challenges is one of the areas that people are really still trying to experiment with in the AI space they are looking at. How do I take advantage of AI and go from experimenting, which I've been doing for probably the last two to three, three years since AI became such a mainstream topic of conversation in every company. And how do I scale that inside of my business? We're going now and what we're seeing trend wise happen is going from experimentation to really driving automation in the AI space. We used to talk about how important it was to get the data model correct, how important it was to leverage the correct large language model. And where we are today is moving toward how do you build models that are tuned and trained on a specific domain, a specific industry for a specific business need. So we are actually overcoming a lot of these barriers as we continue to go through this evolution of the AI technology roadmap. Another area I want to point out here is governance. One of the biggest considerations that companies of all sizes need to make, not just big companies, but small companies as you're starting, and organizations that are going to leverage any kind of technology, is how do you govern your data, how do you govern that technology being integrated or embedded into your solutions? I think that here in the, in the UK and leveraging some of the information and data that has come out from the EU AI act is very important. But if you're working with vendors that are providing AI technology and they're not focused on how do you govern and secure and keep compliant in how you deploy the AI technology or how you embed AI technology to accelerate your business, you are going to potentially be exposed because you can't control some of that data unless you know where the data came from. So a really important piece of how do you drive business value and how do you exponentially grow and make a significant impact in your business around AI. The X factor is to really think about how well the data is governed and how well you know where the data came from. I'll skip through the rest of these for now, but I want to come here because I mentioned to you that one of the ways that organizations are looking for how do I leverage AI to drive an exponential impact to my company, the X factor, it really is moving toward AI assistance. Some of you may hear these things referred to as co pilots. It's very, it's not different. We call it AI assistance in our world. And the reason for that is because we believe that across all of the domains that you have and all of the functions that you have in your company, there's going to be a place for AI and there's going to be a way that AI will enhance that experience or the productivity of the person or the end user that is interacting with it. So if your assistant, your virtual agent, your digital assistant, your copilot, your ultimate end user, has the ability to have automation and integration with backend enterprise systems, your ability to increase productivity of your employees, the first example I shared a little while ago is going to increase with automation. We talk about the ability in the AI assistant or the virtual assistant or digital assistant to have a conversation, which is really common, a chat via a chatbot like experience in this digital assistant. And instead of just having a conversation where the large language models and the data models that are behind the scenes are driving, the answers that you see in that conversational AI interface really evolving to how do I take action? Or how do I execute a command inside of that AI assistant? Which is one of the reasons that we are calling it an assistant, because it is essentially going to become a person. For example, in the HR example on the page here, the ability for me as an employee of a company to go into an AI assistant for HR that's trained on the HR terminology and vernacular, that understands comments and commands like transfer this employee to John Smith, the new manager, give this employee a salary increase. And you do that through a chat in this AI assistant. And then behind the scenes, the workflows and the decisions and the integration and interaction with the data model will happen automatically through automation. So the future of AI and the evolution that we're in today is really driving toward making it more tangible and realistic to how you run your business. If I go back again and I talk about the other factor, the products that you develop and you sell to your customers, how do you enhance those with AI? Perhaps you're a fintech and you're working in the banking industry and you are creating a new loan and you want the loan processing agent to be able to talk to the underwriter and provide data and information direct directly to the underwriter through a conversational AI system, that's reality. And you could embed AI technology into your product, that is that loan processing software platform, if you will, and you could drive that outcome with AI and with AI assistance. You see a number of logos at the bottom of the screen. The logos are here to just give you an example of all of the companies that you're probably familiar with and you probably use inside of your company every day that are thinking about AI in this way and thinking about the future of AI being again, very, very focused on how do I go from experimentation to scaling in my company. So speeding up your AI ready business. I just want to summarize a couple points there that we made here before because I think it's really important to think about multi models. There's lots of vendors out there that are creating large language models. There are lots of vendors out there that do them in an open source kind of way. I'm very familiar with one of those. There are other proprietary vendors out there as well. But all of the models are about making sure that they're trained and tuned to the domain that is specific to your company or your functional area, how you leverage your data, how you govern the data, how you govern the technology and the implementation of the technology. Again, very important. How do you leverage and even more importantly, how do you fill the skills gaps that every company on the planet is dealing with right now by leveraging AI technology and how do you create client ready use cases to leverage the best practices that are out there from some companies that have been in this business for a long time and some companies that are coming into the business over the last three to five years. And then most importantly to me, my favorite topic is how do you go to market and how do you drive new clients? How do you drive new business streams? How do you drive new routes to market so that you can ultimately grow your business business by leveraging technology? I do believe that that's the X factor. And when we identify the use cases that get us there and drive that significant impact, your businesses will grow exponentially. So now I am under by 40 seconds already and they're giving me the I. So I will wrap it up here. I've got a number of examples here on the screen. Our entire team here in the UK is over in booth 201. We'd love to have a conversation with you about how do you really unlock that X factor. We all are all wearing the Watts and Next T shirts so if you need to know how to find us, just look for the Watts and X T shirts. And again I do thank you for your time here today and for listening to how you can accelerate your business through the X factor being AI. Thanks everybody.

Please welcome to the stage ham patel, coo europe, middle east and africa at oracle netsuite and nikki tozer, senior vice.

President oracle netsuite amia at oracle netsuite.

All right, good good afternoon everybody. It's great to be here. What is that wedding statement about Richard Burton and Elizabeth Taylor about doing the same thing but making it different. This topic is quite similar to what we just talked about, but it's great to see you all here this afternoon and we are going to make this different for you. Okay. So if you haven't noticed from the buzz of this event, it's a great time right now to be doing business in the uk. You know, if you, I'm sure all of you have heard in the next couple of months it's likely the bank of England will cut interest rates. We're growing wages faster than inflation and that's why businesses now are looking to try and take opportunities to take advantage of those situations. But obviously, as you've heard a lot today, I'm sure everybody is trying to do that more with less. So we can't grow at all costs anymore. We need to be looking at how do we make that growth profitable. So there's a great focus on people, processes and technology and making that efficient so that we can achieve that growth but still remain profitable growth. And as you will have heard today as well, AI is one of those things that can really drive profitability, productivity and roi. It can really supercharge your growth, but it needs fuel to supercharge your growth. And that fuel is your data. So we're going to spend a bit of time talking today about how you can really use AI to unlock the value of your data and how we can give you some practical examples which Ham is going to talk about afterwards with some real world examples of how you, how you use your data to do that. Okay, so a little bit about the opportunity then. By 2027, 29% of organization organizational spend is going to be on AI and that will be about $150 million, which will have about a 17 trillion dollar impact on the global economy. 60% of CEOs expect AI to drive product and service quality. And 75% of that value is going to come out of use cases across four different areas. So operations, sales, sales and marketing, R D and product development. And we'll talk a little bit more about that later on. And the reality is that if you can use AI, you will be able to compete faster, better and using less resources. So Genai at the moment, Goldman Sachs did a survey last year which says that Gen AI will drive productivity by 1 1/2% over adoption of about 10 years years. So that's about twice the rate that the US is growing productivity at the moment. So there's real value in investing time, money and applications to help you do this. So dawn just talked a little bit about this. We talk about AI all the time. What my experience is, of the customers that we speak to, everyone has very varying knowledge of AI to very basic knowledge to already trying to implement to in their businesses. But everyone is trying to look at AI and understand what is the value that this is actually going to bring to my business. We inherently know it's good, but what, what can we actually do to drive it? And dawn was from IBM. I think the first real example that we saw of IBM was his Deep Blue computer which beat the world chess champion back in 1987, right? That's classic AI. Classic AI is typically a huge something a human being can do, a task that a human being can do. Looking at patterns of data and working out what might happen next, right, Summarizing that data and making suggestions on it. But generative AI is the, the newest part of EI and that with the natural language processing is actually going to be able to create something for you. So it's talking about this, the power of, you know, the myriads of data and real loads of computer processing to be able to create content for you. And that might be a document, it might be an image, it might be text. But that's really the difference now between the classic AI and what generative AI can really do for us. And that slide builds. So what we are, look, if we, if we look at some, some, some examples like a layer down, if we're using gen AI for large language models to generate text, this is also creative, right? So you, as I said these, these words mean what they do in English really. You could generate code, you can generate documents. And we're going to talk about some examples of how this helps you in a minute. If you're summarizing or extracting data. Remember this is millions of data, massive computers that a human being themselves could not interpret. It's asking questions of that data and being able to summarize it without changing the original message that it was intended. You can transform data and translate it. So you could literally translate data from one language to another or transform it to look a certain way or deliver an alternative content with the same meaning. And then this is the bit that perhaps doesn't always. So you know, there's sometimes a misconception around what AI can do and what it can't do. And when you come to reasoning and acting upon that reason, AI to a certain extent can have this multi turn conversation. So you can have an iterative discussion with it to come up with a logical outcome. But it's not a human being and there's a very long word for this that I can never say, but it's answer anthropomorphsical, whatever, you know, So I mean, it's not, not a human being, it cannot come backwards and forwards all the time to be able to come out with an answer. So we don't advise currently that we're trying to do this with AI and apart from anything else, consulting wise, it's a bit of a logistical challenge because it has to inter integrate so many different data sources. But if we look at then what is a typical use of a large language model look like, and this will look familiar to you from earlier, because one thing I have really understood from AI is everybody's talking about it and we're all largely talking about the same thing, which is good because it means that it's probably right. You know, these are five areas. Ham's going to talk a bit about strategy and finance shortly. But these are all the areas that I mentioned earlier on that are key to where we think that 75% of value is going to come from in terms of the investment that we make. So customer operations, marketing, sales and product development. If I give you a couple of topics that we talk about quite a lot in our business from a sales perspective, and you're all varying companies in different size etc. But from a sales perspective, we sometimes call this engineered selling. So you're talking about generating pipeline in an automated way and then how do you interact with those people that you generate the pipeline time with and sell to them. So if I look at my data model, I know which kind of companies do we sell to and therefore which kind of companies do I want to prospect to, and I have AI produce those for me. And then if I look at that as a company, say by industry, I can also have AI create the material with which we are going to approach those prospects and then also the sales pitch that we're going to generate from that particular process. So it's an end to end engineered selling type process where we're generating the pipeline, acting on the pipeline and taking it through to a sales pitch. This is one very common example of what people are doing from a generative AI perspective. And the other piece is product development. So if you imagine that you're developing a new product or you are expanding what you already do with a product that you have, you need to know what do you need to develop this product to do. And that comes from large volumes of data that might include user feedback. So I'm sure if you have any of your products and services, you take a lot of feedback from your users, market trends, logs in the system, all of this data that can create for you analysis that shows you why you need to develop this particular product. And then once you've done that, AI can actually start also to build that code for you. So you know, the amount of time that people spend coding, you don't need to replace them. You can expand what they're doing and accelerate what they're doing to create more products or accelerate the delivery of those products. You can, and then you can also use AI to test them. So here are two of those sort of examples of that 75% bucket of value that you can expect to get out of AI areas are right here in two of these particular areas. So with that, I'm going to hand over to Ham to talk about some examples of both classic and generative AI.

Thanks, Nicky. So when it comes to value creation, there's a great deal of promise and opportunity and hence investment when it comes to generative AI. For organizations that are looking, looking to create value now, generative AI is just the tip of the iceberg. To get the real return on investment, there is still the traditional AI, the classic high that Nikki talked about that you shouldn't really overlook. And that ROI can be delivered in multitude of different ways you may already be using today. So let's take a look at some of those different formats and let's see how they're being used in systems today alongside generative AI. So a good example of traditional AI in action is document understanding. You may be receiving invoices into your back office system in scanned images or emails. Now these, these can be accessed via traditional AI today using object document detection. And, and what they're doing there is they're putting out things like the invoice number, the purchase order number, the item quantity, the other details that you might need for downstream processing of that invoice. This is being used by accounts payable departments already. And this is just traditional AI in action. What it's doing is it's allowing these departments to get through a lot more volume much quicker than they would have done in the past. We can switch over to pulling that data out of the invoice and into a record bill. And what this allows the system to then do is to do that onward processing and remove a lot of that legwork that those departments are doing. So it's boosting the productivity of an accounts payable team. Now somewhere else where we might be using generative AI is over in Areta, for example, in, in their Commerce Department. Commerce Department. One of the things they may have to do on a regular basis is add new products, and those products requires description. And we can use generative AI to support the generation of those descriptions. So a user would go to the AI powered commerce software and just enter some details. So, for example, they want to add, it's quite warm here, so let's talk about black leather sand with rubber soles, suitable for the summer, requiring some level of comfort. By putting that into a system that's got generative AI alongside it. The generative AI can then start to use the large language model to generate a description that is more complete, which is taking on your brand's own tone and style, and then making it in a format that your customers are more likely to respond to. Over in the finance department, they may well be using planning and budgeting software, and these are often, these days, AI powered again using traditional AI, though. So what these tools are doing is typically analyzing the plan forecasts and variances, and then the predictive algorithms are then surfacing constantly. The information that you need to know that you wouldn't be able to get through if you were an analyst looking at this information on your own. And they're taking really large volumes of financial data and surfacing information that you need to know about that you need to quickly act upon. This is saving people time on analysis. And again, this is just another example of traditional AI in action. We can take this a step further with generative AI. Here's an example of narrative being created for financial reports. And what's possible today is using generative AI to point at the data in these planning and budgeting systems and get it to start looking at information that it should be generating for you from a narrative perspective and that analysis and that context and doing that on a quarter, on quarter basis. So it's learning from all your information that's previously been going through that platform to deliver value to somebody who's having to maybe do this on a regular basis. These tools are here today and they can provide that sort of value to any finance organization. So as we've seen from what we've talked about and what colleagues at IBM.

Have talked about, the data is critical.

For your success with AI. The data tells the story of your business. What the AI allows you to do is to make that story clearer, more useful, and essentially easier to interpret for the people in your organization. The AI produces this results based on the data that it's been given. So if we say another way, the best AI, the best AI starts with the best data, and that's your data. So if you want to drive real results within your Business. The best data is your business data. And the most useful AI essentially works with your existing business processes, driving your users to make the right decisions at the right time as they're flowing through their standard process processes and delivering the right results that you wish. You don't want a specialist team of people that are out there doing the analysis for you and delivering that information too late to your business. So these are the examples. Nikki, where does that leave us?

Oh, thank you, Ham. Okay, so we talked about right at the outset that it's a great time to do business. We have an opportunity to take advantage of that and to build strategies to do that. And the AI can be a huge part of that growth journey and make it a very productive one with a big return on investment. So how do we make it part of those growth plans? So just a few things before we finish off. Build a strategy for AI. You've probably already made a start and some of you may be away through it, but this is for everybody. So if you don't have a strategy, build one. If you've got one, start to develop it and make it for the short, short term with short term deliverables. But also think about the long term vision. If I go back to that statement at the, at the start, that 1 1/2% increase may come over a 10 year broad use of AI. So don't limit yourself to what happens in the short term and then prepare your data for broader gen. I use for years now with any systems we've talked about rubbish data in, rubbish data out, but more so than ever in now, AI is reliant on data being good data being structured in the right way, standardized, documented to enable you to make sure that you get the right output. So it's reliant on good input to get that good consistent output. And then also don't. You don't need to start from scratch, right? Depending on the size of your organization, you may or may not have lots of data, but you don't need to start from scratch. As Ham said it does. Your data is the good data, but you can combine it with public data. Don't just use public data, combine your data with the public data so that you're building your own language model for your own business. But also you can buy applications that collect data and use AI in a way that suits your business. And if you do that, you accelerate your AI strategy and your deliverables because you can start to get value right out of the box. All right, so there are pieces of advice we hope that we've put some seeds of thoughts in your mind about your generative AI journey. Coming up, we'd love to continue the conversation with you. You can either do that here at this Qi code or. Or indeed we are right down the end the big oracle stand. There's plenty of people there to start the conversation with you as well. But in the meantime, thank you for your attention. I know it's a long day with a lot to think about. Thank you very much. I wish you all the best with your journey. Whatever that takes you.

Thank you.

Sam.

Oh, no, I don't want to be all on my own.

It'S like so When I grab your body for your clothes I need you more than you.

Need me and there's no shame in that? There's no shame in that?

When you put your arms around me I don't stress? Go and lay your head right on my chest you are in my life.

I worry less without you, girl I.

Don'T think I could rest don't stress, Don't stress.

Don't stress oh, no, I don't want.

To be all on my own it's.

Like so When I grab your body.

Pull your clothes I need you more than you need.

And there's no shame in that.

There'S no shame in that?

When you put your arms around me I don't stress?

Go and lay your hand right on.

My chest you are in my life.

I worry less without you, girl I don't think I could rest? Don't stress, Don't stress.

Don't no stress. Don't stress?

When you put your arms around me I don't stress?

Go and lay your head right on my chest you are in my life.

My wor without you, girl, I don't think I could rest?

Don't stress.

Don't stress, Don't stress Sa. Sa. Sa. Please welcome to the stage, Natasha Evans, head of customer at Hook.

I love that little, little hype up. Thank you. Hey, everyone. Great to see you. I'm Tash. I'm head of customer at Hook. We are the AI driven revenue prediction platform, and I'm here today to talk about something that I am particularly passionate about, which is how do you leverage your customer success team to really drive revenue growth? And we're talking about growth in the traditional sense today. I'm just going to visualize it in a bit of a different way than your usual data and charts and all of that stuff. So when I sit and think about how does my CS team drive revenue growth the way that my Brain works is I start to map backwards in steps what are the things that my team needs to achieve or set up to really fuel that revenue growth. And I really focus in on three different things. I think about how do I create that predictable repeatable renewals engine that creates that really nice jumping off point for growth. I think about how do I align my teams, my resources and the right places and to focus on the right customers that are going to drive that growth for me. And then I think naturally as a CS leader about how do I make my customers really successful and how do I show them I've made them really successful so I can expand an existing customer base and I can create really cool data driven case studies to help my sales team go and bring in net business. And so if they're my three objectives today we're going to talk about how we do that. And for me it all starts with data. Very topical. For any of you that were in here for the last presentation, they talked a lot about the value of data too. And if you were to take anything from this presentation, please let it be. Go fight for better data for your customer success teams because it is absolutely going to help you drive revenue growth and hopefully I'm going to give you a little mini business case to help you along the way today. So growth is the name of the game and to be able to do that, I think that data is the backbone as I've said. And we're going to think about data being necessary to revenue growth today in the same way that we think about water being necessary to organic growth. And it's really important right now because historically CS teams we've been pretty data poor. We've kind of gotten by on basic adoption metrics and on gut feel of where we think our customers are going to land when it comes to a renewal. And that worked for a time. Some of that was down to the maturity of our function. Did we sit in revenue? Did we not sit in revenue? Did we own renewal? Did we not own renewals? And some of that was down to market conditions. Maybe we put a gut feel against the forecast and we didn't hit it, but that was kind of okay because we were going to bring in all of the net new business to compensate for that. And the world just looks different now. There's different expectations of a CS team and quite rightly we're expected to back up our forecast and our gut feel with data. And I love that for our team if we have the action excess. So we're going to talk about data today to drive revenue growth. And there are three things that I would use data for to really be able to do that. And we're going to talk about how they link back to those three objectives. At the start, I want to use data to build a value narrative, a health score, and a forecast. And for each of these, we'll talk a little bit about why. We'll talk about best in class if you have access to all of this data. But I'm also really aware that not everybody's there yet. And so we're going to talk about some quick tips. So if you don't have access to that, how do you just go away and start building that back at your desk tomorrow? So it all starts with the value narrative. Now, value narratives have been around for some time, right in the pre sales motion. Here is the value that we bring to you, here's the pain that we're going to solve, and here's the use case and how we're going to do that. But I don't very often see that feed all the way through into post sales. How many of your CS teams mirror that same value narrative in their qbrs and sit in front of their customers with metrics that show exactly how they delivered on that value? And that's so important right now because if any of you are in throes of the renewals with your team, you'll understand that unfortunately it's not good enough right now for us to say, hey, your team are using our platform. We have to be able to back that up with return on investment and with value. So this value value narrative is really important not just for securing your renewals, but also helping you build those business cases that we talked about to expand into existing customers and go after net new customers too. So if I had access to all of the data, what's the best in class? What would I do? I wouldn't actually start with the data. I would start with the story. Get your sales, your CS and your marketing team in a room and think about what is that really compelling value narrative that I want to tell? How do we tell that pre sales and how do I tell that story post sales in my business reviews too? And then I would think about what are all of the data points that my team need access to to be able to show that in a business review and partner with my engineering team to get that data in the hands of my CSM team or even better, straight in the hands of the customer. A really compelling data driven value narrative. And one of the Places that I think we've seen this done really well was when I was at LinkedIn we basically said, hey, you buy our talent solutions, we're going to help you recruit the best talent quicker than you ever did before. We had this really great pre sales narrative that was build, engage, recruit. We're going to help you build a really relevant audience, we're going to help you engage with that audience and then we're going to help you recruit from that audience really quickly, really top talent. And this narrative was something we use in every single QBR. Hey Mr. Customer, here's how I've helped you build your audience, engage that audience recruit faster than you ever have before. So a really compelling data driven value narrative is really key right now with how the market is going. But again, I'm aware not everybody has access to all of this different data and so if you don't, where do you start? What can you go and do right now? Well, I actually think that efficiency is a really easy way of inferring value. What data can you get access to from how your platform, how your product is used? Can you correlate a time saving to any of those different data points and total it all up? So in a QBR you can say, hey Mr. Customer, here's how much time I've saved you by you leveraging our platform and here's how that converts into productive hours your team can spell and spend elsewhere or full time employees that you haven't had to hire. If you're in the throes of a renewal discussion, it's kind of too late to pitch them a value narrative or they're not buying into the efficiency. The other thing that I think is a really good last ditch attempt is cost of leaving what's their time investment been in implementing your software and training the team and getting to where it is and what's going to be the cost of their business if they have to go and do that elsewhere. So aim for that best in class data driven value narrative. But if you can't do that, there's a couple of things that you and your team absolutely can do right now. The second thing that I talked about using data data for is building out a health score. I want to see for every customer. I want to see for my whole book of business, where is my opportunity for growth and for upsell and where do I have risk. And that comes back to one of those objectives which is aligning my resource and my skills in the right place and on the right customers. And so again, if I have all access to all of the water, all of the data. How am I going to do this? Well, I'm going to ingest data from multiple different data sources and I want to know which of those many, many data points actually correlate to retention and to growth and to upsell. Not just what I think it does, but actually what does the data tell me. And I want to translate all of that into a really easy to understand health score that my CS and my sales team have access to because that's how you drive the alignment. Here's where you go after growth and upsell and here's where my team needs to go after and run around risk. And I want that visible at the customer level and all the way up to the full book of business so I get a really good view of what is happening, where. And if you can't do that, if you don't have access to all of the data or you don't have access to a platform that can do that for you, where do you begin? Well, so often we just rely on CS sentiment. I think that account is healthy or I've had a conversation really, really recently or I've just done a qbr. I think they're in a good spot, but I think even in absence of tons of data we can do a little bit better than that. So I used to have my team rate on four key points. Pull whatever adoption and usage metrics that you can and rate their health score. I want to know are they getting value? Have you shown them a value narrative? Have they shown you some of those lagging indicators that you couldn't get access to? I want to know what stakeholders you're engaging with. Do you have an exec sponsor? Are you engaging with a champion? And I want to know sentiment behind the relationship. And then what I do with that information is I want to map that to help them prioritize. So I want to map that against ARR so that my CSMs know okay, well they're spending time on high risk, high ARR accounts. And on the upsell side of things, I want to map health against white space so I know where my real upsell opportunity is. So again, I'm aiming for a best in class data driven health score. But if I don't have it, there are a few things that I can do just to get myself started. And then the third thing that I talked about at the beginning was forecast. I want a data driven forecast. I want to see my book of business. I want to see not just this quarter I want to see the whole the whole year in terms of retention or churn and upsell. So net revenue retention and I want to see the whole year because I want to be able to get ahead of things as proactive as I possibly can. It's no good just looking in quarter for upsell opportunities. What are the things that I need to build towards or what are the risks? Far out that my team need to rally around. So again, if I have access to all of the data, what am I going to do? Well, that data driven health score that we talked about a couple of minutes ago, that's going to dynamically inform my forecast that's best in class. I want to see for every single customer and an aggregation weighted level for the entire year and for the quarter, what's my net retention forecast and how does that compare to the plan that finance gave me. So I know what the gap is that I have to fill for the quarter and for the year and guess what, my health score against every customer is going to tell me how I go chase down that gap. So if I have a gap to go fill to hit my net revenue retention, I now know exactly which accounts I need to rally around for upsell, which accounts I need to rally around to save risk, to be able to hit that target at the end of the year. And again, if you don't have access to all of that data, I'm still going to expect my CSMs to go in and manually input a forecast over a certain threshold for the entire year. So I still get that proactive visibility. But I'm not going to let them just go rogue. I'm going to give them some structure behind it. So I know if I'm looking at any given account, 50% means that they're a confirmed risk or they're red, 80% means actually that could be an upsell opportunity or 100% is there's one in play and perhaps they've gotten verbal confirmation. So again, aiming for a best in class data driven forecast that helps me chase down my number create that repeatable renewals engine that is a really good jumping off point for growth. But if you don't have access to all of that, there's always things that you can do. So hopefully I've given you some ideas here. Remember I said at the start if you take one thing away from this presentation, please let it be to go and hunt down better data for your CS team because you'll see that that helps you build this compelling value narrative, build out a health score, build out a forecast and they're the things that we need to truly drive revenue growth for our customer success team. And if anybody wants to talk about this a little bit more, I'm happy to talk about that for the next couple of hours. Please come find me at the ice cream stand.

Thank you.

Sa. Sam. Sa. Please welcome to the stage Niv Shaked, head of indirect sales at TikTok.

So hello everyone.

I'm super excited to be here with you and thank you Saster for this invitation. My name is Nivsha and I'm heading the indirect sales at TikTok. On TikTok we always want to go straight to the point and continue from there. So I will say it as it is. By the time you reach out your B2B buyers, you are too late, guys. They have already progressed 71% in their decision making and to make an impact and in this stage it's almost impossible. And today we are going to talk about this. We are going to talk about the reasons and also how we can get to our audience in an early stage and can make the impact. So first let's talk about the B2B marketing. It's a new area. It's a new area that we need to learn the decision makers. It's no longer 12 people in the company. It's much more than that. It's the VCs, the stakeholders, the marketing team. Everyone is part of this decision making. And also the number of platforms, guys, everything is part of the journey. The digital media, creating more and more platforms, platforms, more and more tools that giving so much information for these stakeholders, for these decision makers. And if it's not enough, also the way the decision makers getting their decision have changed. They no longer need to travel miles away to another conference to be updated about a new AI AI system that will solve all their problems. They want to do it by themselves. They are trusting themselves, not the seller. And the power is on their hands. And how do they do that online? Of course they're searching, exploring all the time when they are in the elevator waiting for the dog doctor in a boring meeting and starting to scroll the for you feed. And guys, maybe the main number that will sum all these challenges is 95%. 95% of B2B buyers are out of the market at any given time. In other words, it means that they are not familiar with your product, they haven't been exposed to it, they don't even know that they need it. They are actually a potential future buyers that one day will need your solution. But when this day will come, we want to make sure that they know about you, that they know about your product. Now let's take a look. Second to think about how much effort, budget, strategies, time we are putting on only 5% and how much potential we have. More that we are not even starting to talk about. So maybe the main question will be how we can create the same impact that we did in the past with more tools but less attention. And we can talk for hours about the different tools and measurement and data and whatever you want to call it. But to be honest, if there will be one tool that will be effective for all of you, for all the companies, for all the marketing, it will.

Be word of mouth.

Because word of mouth is one of the most effective tools to reach out your audience. Nothing can compare to recommendation from someone you trust. This is where we want to be and this is where your audience want to be. Short video formats have changed the way the decision makers searching, exploring, deciding. And this is the way to do it. Let's see an example of content that some random person uploaded. Talking about Monday, my business transitioned fully.

Over to Monday this past quarter.

And my honest opinion is that it's amazing.

And no, this is not sponsored at all.

This is how we use it.

We do our influencer outreach and organization.

On Monday we've automated our bulk order process.

On Monday it has automated collecting of.

Our resale license, of creating accounts, our emails. We do our entire workflow and project management here.

It has saved our team so much time.

It gets our team all on the same page. If you're interested in learning more, comment below.

And guys, when we are in the first stage where your consumers are just starting to explore where they are not involved in your product, the way to do it is with video. This is what they are saying to us. We can see the numbers. Videos is the new way to give a recap of your value proposition. This is the way to get their attention. And you're going to ask me how we can do that. Why in the world that they are getting so many information all the time. We just said it. They will listen to you. And this is a big question. This is a question that it's a bit even hard to talk about. But guys, this is the time to take out your notebooks or your notes on your phone and start to write. Because the first thing will be addressed the problem. Guys, each one of us have a problem in general and also as companies, your products are solving problems for people. You need to address it as the first thing that you do in your content touch a real painful problem. The second thing will be talking about your product. And yeah, it's obvious everyone's talking about their product, showing screenshots, but you need to be authentic. You need to talk about what your real product is doing and not saying that this is a one click integration when you need a football team of engineers to do the integration because they will cut you. And after that the word of mouth will be a bad thing for you. The third thing will be the format or how we are entertaining our consumers. How we are giving value with entertainment. Entertainment is the way that we educate. It's the way that we are making them laugh, smile, even cry. Because when we are talking about the problem at the beginning, they will get to a position that they want to see the rest. How you are are addressing this problem. Guys, we need to earn their attention. So use the creator that they will rely on. Use the video, the sound that everyone is hearing and this is how you will do it. But maybe guys, I'm giving also good news today guys that you don't need to invent the wheel. They are already talking about you constantly. Please end this session. Go search your company name, search your problem, search your solution, search your competitor's name. You will probably already find a conversation things that in the past we needed to put tons of budgets to research surveys to understand the problems. Today we just need to listen. Listen to our consumers, listen to the problem that they are talking about, to the solution that they need. And when we are doing all of this we're creating what we are calling it on TikTok impactful entertainment. Entertainment that drives action. Entertainment that will give your consuming the wizards. And maybe let's finish with one example that WIX Studio have done and addressed all these parts.

You struggling with creative block.

I got you.

Check this out. Did you know wix Studio has an inspiration page that showcases a bunch of.

Really dope sites by some amazing designers. So you can come here to see what features people have added to their.

Own sites and even use them in your own projects.

So there are a ton of sites.

On this page but here are a.

Couple in particular that I really first up we've got.

I will stop it because I want you to be tuned and go see it on TikTok. But what they have done they addressed a real problem that designers have. How to get inspiration. The second thing they gave the solution WIX Studio a new product that sold for designers inspiration and integration parts. The third part will be the entertainment they did it with A well known creator, a well known designer in a short format of video. And the third, they was part of existing conversation. They talked about the pain that all the designers talking about on the social media. So guys, if there will be three things that I want you to take today. The first one, remember that you are reaching your audience in an early stage. The second thing will be that you need to be part of the word of mouth. You need to create this word of mouth. And the third part, listen. Listen the conversation and be part of it. Thank you very much guys.

It. Please welcome to the stage donald hasson, cpo at dashlane. All right, welcome everybody to this afternoon's session of the Saster Europa ROPA conference where we're going to talk about how to build a customer first strategy and structure for your business. My name is Donald Hasson. I'm the CPO of Dashlane. And my goal over the next 30 minutes is to boil down a couple of decades of experience into actionable advice that you can apply regardless of whatever stage company you may be at. Now, I recognize that I may be the only one in between you and the pub or happy hour has been a long day, so we're going to try to make sure this is action packed and I guarantee to be worth your time. So before we dive in, a little bit about a little bit about me. So as I mentioned, I've been doing this for a long time. I've always gravitated towards product roles because of my obsession for solving customer problems. This is really embodied by a story that I want to quickly tell. So a while back we brought in a new CPO at one of the companies I was at, who I reported into. And I worked with him for a few months and after a little while we sat down and had some drinks and he gave me some advice. He said, donald, you know, you're really good with customers. The sales team really loves you and the deals that you're part of, they always seem to go really well. Have you ever thought about going into a sales role? And I thought, not really. I kind of like doing the product thing. So I sort of blew it off. So about a year goes by and, and we sit down again having some drinks. He says the same thing, Donald, you know, you're great with customers. You've ever thought about going into sales? So I, you know, again I was flattered but like, this isn't my thing. I wanted to do product. So another year or so goes by, same thing. Hey Donald, you great with customers? You ever thought about going to sales. About the third time I started to ask myself, does this guy think that I would be good in sales or does he just think that I suck as a product manager? And I like to think that it's the former. We went on to do some great things that company, but it really sort of embodies what I think about the role of the customer and how central the customer needs to be in all of our development processes and building out product strategy. So as I said, I've been doing product for a long time at a variety of roles, either product like or more technical or pure product management at companies ranging from global multinationals to small startups building products ranging from navigation systems for military aircraft all the way to SaaS based pass for managers like where I am with Dashlane. And some of those stops along the way have been at companies that are private equity owned, which has sort of sometimes a bad connotation certainly in the startup realm. But one of the things that I learned from it, when you're being imposed with hitting 45% EBITDA margins while still growing at above market rate, is it forces you to get really good at working with a very limited amount of resources. Exactly what startups have to do anyway. And so some of the things that we're going to talk about today really represent some of the things that we've learned on how to really optimize the best results that we can for the business in whatever stage that we're at. So as I mentioned, I'm chief Product officer of Dashlane. Dashlane has about 15 years experience really serving about 20 million customers and 22,000 businesses around the world with a product that end users love and businesses can depend on. And some of the things that we're going to talk about today represent how we think about solving these really hard problems for our customers in a way that ultimately meets their needs and serves the growth and needs of our business. So for example, how do we build a product that end users choose to adopt because they love it so much while simultaneously improving the security of our organization? And this is a problem that is no more pronounced and critical than it is today. So we'll talk through that as we go through the presentation a bit more. So getting building out a customer first strategy. There are a lot of things that that can get in the way of making this harder to do. But it really comes down to sort of four big problem areas that culminate into being blockers to being great at being customer first. Now the first thing is how do we corral this massive amount of market research and customer data and insights and feedback that's coming in in a way that we can actually do something about it. A lot of times what companies will do is they'll put up on their website, feedbackompanyname.com, you get a million emails in, you can't do anything about it, and you become known as a black hole. And then people just stop sending things into you. So that's not a good solution. The next thing is becoming this sort of feature factory where we're building things that we don't really understand exactly why we're building it. We may be checking some boxes, we may be doing on gut feel, but it's not tying back to the customer problem or trying to achieve a specific, specific outcome. So that doesn't really help us that much either. The next is a lack of research. Now, research can feel like a very heavy thing. It doesn't have to be. We're talking about validating that we're building the right thing and not sticking our head in the sand and hoping that the features that we've just built actually meet the market needs. We're doing some basic validation to make sure that what we're solving for something, we're solving for as much of the market that we're trying to serve as possible. And the last is a very common challenge around shipping and forgetting. Now, there's really two parts of this. The first is kind of back to we talked about, about the feature factory. Sometimes we don't have real goals for what we're trying to build. So we put together this time and effort around a feature. We don't really understand what the outcomes are we're trying to achieve. That's really a non starter. You need to have some idea of what this feature is trying to do for both your customers and your broader business. Secondly is when we ship it, we need to have some clue as to what we're looking for in terms of measurement to decide and to see if this thing has achieved the results or if we need to iterate on it. And we'll talk more about that in a bit. Now, this is critical because I want to walk through a very quick scenario when we're making these decisions. These are big levers that we're pulling. We're talking about potentially millions of dollars of development resources that we're deciding where to put those resources. So scenario is, we have feature A. It could be a product, could be a feature, doesn't matter a feature A. It cost us about a million dollars to build. All right, we build the feature, we get it into market and for whatever reason we've missed the mark and we didn't get any incremental ARR from, from this feature. Now the scenario, the second part of the scenario is we could have built feature B. Let's just assume for sake of discussion, it costs also a million dollars to build the feature. But when we get into market, we've generated 5 million in arrow. So what happens is if we made the wrong choice and we built feature A, it didn't just cost us a million dollars, it actually cost us $5 million in opportunity cost. That's really the more important piece. So between A and B, it both cost a million dollars, but B would have driven 5 million. We don't choose B, we choose A. That's a 5 million dollar swing in terms of opportunity costs. So yes, the things that we're talking about are critical that we get right and we learn ways to de risk the things that we're building at every step along the way. So just like most business challenges, how you become more customer centric really comes down to a combination of people, process and tools. Throughout the presentation, we're going to touch on each of each of these three areas and touch on some maturity models that highlight how you, you can apply some of the initiatives within each of these three categories. So a sort of opportunity to see where you fit in that maturity model and we'll categorize them into these three, these three areas. So before we get too far into it to give the most practical advice possible and to align where you all are thinking about where you are in your business at your particular stage, we need to understand where you are. And so it may be that you are a respectable early stage company. And because of your funding limits, you're working in a bit of a broom closet of a break room and your caffeine supplies coming from a good old Mr. Coffee. Or maybe you've made the leap to the next stage of 5 to 10 million dollars in ARR and you starting to get a bit more versatility in your coffee choices. You've made the leap out of the broom closet of a break room into a decent kitchen and now you got a Keurig machine that's supplying your caffeine and giving you a bit more taste and flavor and, and advancing what you're trying to get from your coffee. Or you may have graduated to that envious position of double digit ARR. You may be knocking on the door of that powerful milestone of 20 million. Now you've earned the right to step up your coffee game and you can get an automated espresso machine which requires little more than a water line and the ability to push a button to get some fantastic tasting coffee. So those are the sort of three stages and we set up the presentation to align with each of those three things. Sort of a choose your own adventure about where you are, where you're trying to go and you can start to map out some of the advice that we're giving that aligns to where you are in your growth journey. So good. Does everybody have in their minds at least what the coffee machine should be, regardless of what it actually is? Roll with me. For sake of discussion, we'll use this throughout the presentation. So a customer centric strategy really starts with people. And there's a reason for that, a couple reasons. The first is your people are generally your most expensive asset at most SaaS companies. And so we've got to really optimize the work they're doing and the time that they're putting into building what we're trying to build. And the second thing is that people are much more flexible than process and tools. And so we don't want to go heavy handed in a process and tooling right away. We can lean on our people to do some more experimentation to help us build out what things are going to look like and how flexible they need to be. As we progress over time, we'll start to layer on the tooling and processes that we talked about. So before we dig into the specific structure, there's a couple of pieces of this that fundamentals that I want to reinforce. The first is when you're building a customer centric structure and strategy, you've got to be bringing on people that are inside, insatiably curious. Now this is hard to teach. You can optimize a bit for it, but you really need to hire for that insatiable curiosity. Curiosity about your customers and their problems. Curiosity about your business and the goals that you've said. Curiosity about the market and the competition. Curiosity is core to what we're trying to do when we're trying to think about what we want to build and the order we want to build it in. Curiosity, by the way, breeds empathy. Empathy is truly understanding your customers, being in their shoes, understanding the goals, what motivates them, what drives them. This not only helps us choose one of the most important problems that we want to solve, but also how to solve it so we have a much higher likelihood of when we put something in market, it's going to hit, hit the mark. And the second thing is you want to be really careful as we just alluded to, trying to over framework your way out of relationships and collaboration internally. So you still want to lean on your people being still central in courts. No matter what what we're doing. If you try to build so much process and tooling around things, you're going to over engineer something and waste time. And certainly at the stages of growth that we're talking about, things are going to change too fast. You can't do that. Yes, we want to optimize process and tools, we'll talk about that. But you don't want to try to over engineer your way out of depending on people to build good relationships. So let's talk about the team structure. It starts with what we call the triad of the course. Made up of product manager, product designer and I, some sort of engineering manager or a tech lead. The sort of threesome of the group that we're trying to think through, that's trying to think through what to build and how to build. The PM is responsible for determining what's a viable solution, what's going to drive business results, what's going to help meet the needs of the customer. The product designer is helping to make sure that this thing is usable, that we can get the, the customer gets the value out of the solution that we intended them to get. And the engineering manager or the tech lead is making sure that it's feasible. Can we build this thing at all? Can we build it within the right time frame and the cost that we would expect to make sure it's actually feasible solution? Now, the next outer ring, just outside of the triad, is made up of a few roles that have a couple different purposes. One is to provide input into the prioritization process. So research or data analytics help with prioritization as we talked about. And of course you have the development team, the, the team that's responsible for actually building the feature that we want to build. And then the outer circle is that group of stakeholders who has a couple of different roles. One is that they are gonna bring some influence in terms of the prioritization of things that we're gonna go build and we'll talk about this a bit later, but at earlier stage companies it's okay if that outer ring of executives and key stakeholders is heavily influential in the process when you're a certain size company, and that will decrease over time, but there's always going to be some influence that comes from, from that group. Secondly, and more importantly, and this hap. This is true. No matter where you are in the growth stage. This is a group of people that needs to be intimately aware of what you're building, why you're building it, when things are coming out, so they can help amplify the value that you're creating so we can then get into market and capture that value in some form of ARR. Now, this is a scalable structure. The likelihood is no matter what stage you're at, you will have someone doing some parts of all of these roles. Now, that might mean that you have one person wearing three, four, five hats, and that's okay. So PM might be doing data analytics or doing some research, or maybe you haven't hired a designer yet, so you have, the PM is doing that role as well. That is okay for the growth stage you're at. But the key is it has to be crystal clear to everyone involved, your key stakeholders, about who's doing what and why they're doing, and to the depth that we expect them to be doing that role. And then, of course, as you grow, we'll add more specialization, which we'll talk about just a second. So what I want to show here are examples of specializations that you can consider adding as you go through your growth journey. This is not intended to be an exhaustive list, to be clear, just samples of ways to think about the roles that you're bringing on, why you should bring them on, and when. So if you're at Mr. Coffee stage, if you reach the sort of million to $5 million mark, you should really be thinking about bringing on someone whose job is to be filling that product management role. Certainly you're going to probably have someone that's acting in sales role, if not a few people, and in support. Now, the key is, as I mentioned, product manager might be doing three or four jobs. The same is true for customer support and sales. You might have customer support, customer support, answering calls, doing implementations, writing documentation, et cetera. And again, that's okay as long as everybody's clear about what those roles are, why we have it structured that way. Now, the Keurig stage, we've got a bit more versatility in our coffee and it's time to bring a bit more versatility in our specialization. So one example is we have our product managers that may have been doing a lot of market research and may be overburdened by it, because for whatever reason, at your stage, company in your industry, there's a lot cheaper, a lot of changes happening, and you've decided it's time to bring on someone in a full time research role. Or it could be someone that's already there doing some research and we've just made the conscious choice to carve out half their time do research and half their time to do whatever existing job they were doing before. Another good example of this, a really powerful example is product marketing. Now product marketing as a role could be filled by someone say in PM working across the aisle with someone in marketing or in, in sales and you can fill that role. But the challenge is that we're trying to maximize the value of the things that we create. We're gonna try to tie back to what does the customer really need to hear from us to understand what we built. And product marketing is uniquely suited to fill that gap between what the product and engineering teams are doing and what sales and marketing CX need to be able to enable them to and empower them to go take this message back out to market again to maximize the results the value of the thing that you built. Now you've upgraded to an espresso machine, you've got a well oiled coffee making contraption and you're living large. And now it's time to start expecting the same thing from your product development process. And so this is where we start to think about how we can optimize the overall processes that we put in place with a role that we call product operations. Now this is a relatively new role in our field but it's becoming increasingly important as we expect so much out of our product development process. Because we don't want to make that $5 million mistake that I was talking about earlier. So someone that can step in to fill that role. Again, it could be a part time role, could be a PM that is leaning a bit more operationally. Really kind of like that, that stuff, they can step in and do this sort of a part time for a period of time and as you grow you can start thinking about bringing on.

A full time role.

So, so regardless of the stage, the key takeaway is that these roles should be very clear. As I mentioned before, everybody should understand what we're doing and why we're doing it. So there's no ambiguity. And you understand that when we need to add on a new role, everybody's clear about why that is and what the right time for that is. So we've got a good foundation on our people side. We understand the right skill set are in the right roles and everybody knows who they are and what they're doing. Now it's time to start thinking about bringing on, on some good processes, right size and right place for your company to be able to be optimized, to optimize how those people are working. Now, the first thing I want to talk about here before we get into the specific process is what we're building is we're trying to build out a process that will make sure that we're thinking hard about how we build for solving problems, solving broader market problems. This is a huge challenge for certainly for companies of any sort of earlier stage where we're sort of building based on projects, project backlog, we're maybe checking some box, maybe trying to catch up to a competition or something that we've heard recently from a customer. But we don't really all the way understand it. It's just sort of been a mandated thing. We want to build processes that are incentivizing us to think about things in a broader context. That's how we get real growth. Right? We don't solve. We don't get growth from solving for one or two or five customers. We get real growth from solving for 20 or 50 or 75% of the market. That's what we're trying to achieve. So it starts with prioritization. And there are a lot of ways to do this. An early stage company may have a decently formatted spreadsheet list of features. We rank them, we Say score is one for high and 10 for low. And we have that rank order and we know what we want to build. Even at an early stage. I would encourage companies to think about it from the standpoint of a prioritization framework. Like for example, Rice, which has been around for. Is there. Raise your hands. Have you ever heard of rice scoring? Rice framework. Okay, I thought that was pretty. Okay, good. So let me explain why this is so important. It could feel overly complex and to be fair, it's not. It's some basic drivers. Reach, impact, confidence and effort. And these drivers are, are super important to drive critical thinking for not just the people that are making the prioritization decisions, but those that are hearing about it. So what this does is rather than say, I think this is an important feature, it's super valuable. And three customers told me about it last week. Now we can go through and we can say, why is it that we think the reach is so high or gonna be so high on this feature? What are the things that are gonna make it so high? Why do we think the impact is gonna be high or low or whatever it may be? Now we're starting to ask some really critical questions that will help us understand the true priority and help us start to think about the goals that we have. What are the outcomes we're expecting for this feature? So regardless of how you do that, you're gonna come out of there with a prioritized list of things that we're gonna do and the list of things we're not gonna do and why we're gonna do those higher priority things. Now we get into the build stage and so what we call this is a tri track model because it's based on the notion that we can run these three steps somewhat in parallel, which is based on the notion that we don't have to have perfect information to go to the next step. So we start out with the PM doing problem validation. Now this is really important because you're at the very early stages. The problems we choose to solve, we need to be really clear about what they are, why we should be solving them. So the PM does some varying degrees of light to really heavy validation on what this problem is, why it's important for us to solve it, why it's important for us to now our customer's gonna pay for it, those sorts of things. The next is the product designer gets, sees that we're far enough along in that process, picks the baton up and starts to think about what the solution should look like. Also starting to build some mockups and user flows and things like that, and starting to do some light validation, ideally with customers, but it could be with some internal stakeholders who are customer facing just to start bouncing ideas off and see if we're on the right track. And then at some point along the way, the development team starts to pick up some technical spikes to see how feasible is this, Are we in the ballpark of this being solvable? Then of course, at some point they start the build process. Now there's a couple of really important things here. First, the trick to getting this right is that the triad and with in conjunction with some of the other supporting roles needs to get really good at constantly asking yourself the question of can we make this smaller? So there. And the reason this is important is a lot of people think about this in terms of what's the MVP? I don't like talking about MVPs because they don't mean. It doesn't mean anything. We all have our different definitions. We can't really decide what that means. It ends up stirring up more controversies than helpful. The way I think about this is I use a quote from Reid Hoffman, from A while ago to sort of articulate why this is important. He said if you ship something and you're not embarrassed, then you ship shipped it too late. Now, embarrass is a little bit of a harsh term in this case and it can be construed in different ways. So I say if you've shipped something and you're not uncomfortable, then you've waited too late. And what does that mean? If you have this problem and somebody says to solve it is 100% and you look at this thing and like 100% is, let's say it's six months worth of development. Instead of trying to do the 100%, start by building 10 or 20% of it. And of course when you ship it, you're going to be uncomfortable because it's not really done yet, but it's meeting the initial sort of entry level. Needs to try to start solving this problem now. To be clear, caveat, we're not talking about quality. Quality's fixed, we're not compromising there. It's whatever the needs of your customers are. We're talking about the feature set, the capability that we ship to market to get something out that can, we can test and start getting signals as to whether or not this is a truly valuable problem for us to solve. The second thing is running in parallel like this is a fantastic way to de risk the solution. We get something in market much faster and we get the feedback back much faster as well. However, what it means is the triad and supporting stakeholders need to be in really good sync and build really good collaboration to make sure things don't fall through the cracks. The last stage is measurement. We've sort of already alluded this to some extent. This essentially is to say we've got a set of goals that we put in place. Maybe some very basic things. Doesn't have to be heavy. Again, could be one or two KPIs. It could be we expect the usage to be 30% from our customer base or something like that. Having something will let you give you some guidance as to how close you are to hitting the mark. So we ship the feature, we look at our KPI, whatever it is that we're using, and we say we're getting good feedback. But the feedback is okay. You're in the ballpark, but you need way more. That's perfect. Now we go to work iterating on that feature. It may take us 3, 4, 10 iterations to get it to really where we want it to be. The worst thing you can do is spend Six months on something, you ship it to market and it's crickets. You don't get bad or good feedback. That's when you know you have miserably failed. That's the reason why we work so hard to get really tight small increments. So what the measurement phase is going to do is tell us are we on the right track or not? Can we keep iterating if we're way off? We need to think about pulling the feature. We need to think about cutting our losses early enough so we don't waste any more time, as hard as that may be. And by the way, I'm sure most of you are well aware of this, another way to really mitigate this risk even further is through beta. So we get a beta of that initial release out there, we test the feedback and it's much easier to pull a beta than it is a GA feature. So this is the, that was the sort of container development process. But you still need to have some steps and milestones along the way, some check ins to make sure that you are on track for hitting your broader goals. And so if you're at, say for example, the Mr. Coffee stage, as we talked about, you may have a very basic prioritization framework as a spreadsheet with a list of features and you're doing some check ins with your executive team or stakeholders, let's say every two to four weeks, right? Just to have a good check in. Everybody's aligned. Regardless of how you got to priorities, you're super clear that this is the stuff we're going to build, this is what's going to be built later. And these are the reasons why we prioritize it the way we are and the goals we're expecting. Now, once you advance to the Keurig versatility and variety, you're going to have to start thinking a little bit further ahead on your roadmaps. So instead of doing something on a monthly basis, you're going to start thinking about doing, we call quarterly planning, where we're bringing a bit more rigorous prioritized list to the team. The team spending time doing capacity planning, dependency mapping and hopefully looking back on what you achieved the previous quarter and applying those learnings to quarters coming forward. And then the outcome of this may be a three to six or maybe even nine month roadmap to give you some sense of where you're going. Now, once you advance to that glorious automated espresso machine, you're pushing buttons, getting great coffee, it's time to start thinking much further ahead. You're starting to get more advanced in your quarterly planning process. You may want to introduce a yearly alignment session. Now, I understand that for most startups, thinking a year ahead maybe seems like a waste of time. Yes, things will change, but the goal is to get really good alignment. About what, how you're thinking about the product direction, where you're trying to go as a company. That really sets the tone for everything that you do going forward. And keep in mind, as you grow as a company, the communication challenges and collaboration challenges become bigger. Right. So you have to come up with new ways to solve for those things. At first, you may have been working right next to the salesperson, and you lean over and tell them, this is how it's going and this is the feature and explain it. They get on the call and they sell it and you're good. But when you get to a place where you got a marketing team that's maybe on the other side of the building or in a different office or a different, different part of the country, we've got to really start to enable them, as we talked about with product marketing, to really amplify the things that we're building, really maximize the value, get in terms of what the customer needs, doing things like preparing for webinars and all the PR that comes from great things that we build. We need to really empower them much further out so they can get a head start of what we're trying to do. The last thing I'll point out in this is this quarterly planning events are really big staple for how I make sure we're maintaining that customer centrality that we talked about. But they don't have to be big, they don't have to be heavy. Events can be the core group of product and engineering folks who are spending some time preparing. You get that kind of core group with some stakeholders involved for a few days of alignment sessions. And the result of that is you read out to the broader organization your updated roadmap, why it is, and what your goals are, and everybody's in really good alignment. Alignment with how you're trying to carry the company forward. All right, so the next thing we want to do is talk about tools. Now, tools, no matter what stage of company you're at or how basic the tools may be, they're a really good way to help ensure that your teams are able to easily follow the processes that we just talked about. We put in place to make sure we're optimizing the business. We don't want this to be a heavy thing. This is going to be a reducing the burden on these teams to help us implement these processes. Now the first thing is we said that Mr. Coffee stage, you are probably, you need to have some good prioritization frameworks as we talked about it could be something as basic as taking feedback from emails as we talked about earlier, or from Slack. PM drops that into a spreadsheet, does some basic prioritization, does the check ins on the monthly basis that we talked about. The moment you get the Keurig stage, you will definitely be starting to get far more feedback in terms of volume and the sources and the variety of feedback. And what will happen is if you're not careful, you, the people that are charged with maintaining that feedback and managing all that will get massively overburdened and that either won't keep up and we turn into that black hole of feature requests that we talked about earlier, or they're so burdened they don't. And we ask like, why aren't you doing your real job? The reason is that we've totally buried them. So at this stage we need to start thinking about bringing a tool that's more designed for managing this at some scale. Now some companies can do this fairly well with a dev oriented tool like a JIRA or GitLab for example. My suggestion is, and what I've seen to work very well is at this stage, start to think about a modern roadmapping tool that's purpose built for what we're trying to do here. It's not gonna add that much in terms of time or effort or even cost because the limited number of people that may be using it, there's view only licensing and all that great stuff. But it's really purpose built for what we're going to do and set you up for some of the later stages that we're going to talk about. Now at the advanced espresso machine, you are getting in an incredible amount of feature requests and data from a variety of different sources, from partners to analysts to internal to looking at your competition, it becomes quickly overwhelming that even with some good tools, you're still not gonna solve for the scale challenges. So you wanna start thinking about some ways of building in some smart integrations, maybe some very basic things to start with and you add onto them over time. Another thing is, and this can apply to any stage, but what we're learning and to be honest, at the beginning I was fairly skeptical about how well AI was going to advance what we did as quickly as it did. And it turns out it is making Our job so much easier. So take massive amounts of data from a variety of different sources and proactively pull that in. In a way we can start to see real trends and real understanding the mindset of the customer and the problems that they're trying to solve in ways that we never could in the past. So this is a view of how we are set up at Dashlane. To be clear, we're probably further along than maybe most of you are in our growth journey. This is really sort of designed to show you what are things to be thinking through, what you should be trying to get to in the direction of why as you're growing. So we'll start with, as we said, Productboard is a roadmaping tool that we've chosen. There are many alternatives, but it is our source of truth, and we reinforce this over and over again. What we're going to build and why we're building it, how it aligns for our goals, is all captured in Productboard. Now, of course, we integrate with GitLab in our case, so we're sending data out from a development standpoint, but this is where things start. Now, on the input side, I'm not gonna go through all these, but a couple examples, we still take input from Slack, our internal stakeholders. We want to empower them to share feedback with us in the easiest way possible. And a lot of time for them, that's. That's through Slack. The difference is I don't have a product manager responding to every single Slack message that goes directly into Product Board. Categorize it around to the right people, drastically reduces the burden on our product management and design team. So, again, other sources of data, of customer data we get, that's super powerful, provides a lot of context. The one I want to call out, because it's really exciting, it's something very new for us, is we built some AI tools in Gong. Gong is, as many of you probably know, the tool that our sales team uses to record prospect calls and CX uses to record customer calls. And what the AI is doing is listening for some sort of customer sentiment to say that there is a problem that they have that we're not solving. There's a feature that we're missing. There's something they don't like about the product, and we're keying off of that. And the moment we hear that, we send that over to Product Board as a feature request with all the context we need. Now, we're being incredibly proactive about what we're looking for and how we get that data. Before I personally listen to a lot of gong calls. That's great. But even my broader team is not gonna going to scale in a way that AI is going to scale to pull this data in. So in closing, I want to cover a few key takeaways, things that you can, you can use as early as next week to begin next week to begin rolling out a right size customer facing or customer centric strategy and structure for your business. Now, the first thing is we talk a lot about this prioritization framework, something that's going to incentivize your broader organization to prioritize objectively those problems we want to solve that are going to have the highest impact for the broadest segment of the market who we're serving. Without that, again, you're guessing there's a little bit of feature factory work going in here and so it's not going to work. Prioritize everything you do. By the way, one thing is practically speaking, things will jump the prioritization framework. You will, it's never going to be perfect. And even if I have a perfect list of 1, 2, 20, I may not do number one for some other reason. This is directionally accurate is what we're trying to get. It gives you a stronger sense as to which are the right things that you're going to do. Regardless of what it is, we should still put it through this framework so we can learn from it. The second thing is on the people side, as we mentioned, we don't want to try to framework our way out of having good relationships and good collaboration. So we want to invite our people, external or other stakeholders, to the prioritization events, the planning events that we talked about. We don't want to try to just build out processes and tools that don't require any people input at all. We're losing far too much context. And certainly if we're trying to build our way out of talking to customers, which no matter what we do and what I told you today, that still is a super critical part of what we're trying to do to make make sure we gain feedback and context about what we're trying to solve for. Now that being said, we do need tools and processes that allow us to link these critical market problems back to the features that we're trying to build. We can't solve it all just by talking with internal stakeholders or even talking to customers. We'll spend our entire weeks doing either meetings or calls or just responding to Slack. And that definitely won't scale. So you need to have a good balance between the two, the last thing I'll say is, as I've mentioned many times, it's super important that we're matching the people, process and tools to where we are in our growth stage. Just like the coffee machine in your break room needs to match what type of company that you are, so too, should your process and tools match what. What stage company you're at. Now, here's the important part, and I've mentioned this a couple of times. I cannot reiterate this enough. It's super important that we're clear with all of our key stakeholders what we're doing and why we're doing it and who should be responsible for these things. Multiple times in multiple ways to the point where they almost get sick of hearing it, because everybody needs to be in really good alignment. I'll close by saying it this way. If you get to the point where you've shared this out enough times with enough people, enough ways where they can play it back to you what it is that we're doing. By the way, we're depending on them to be a part of these processes. If they're playing it back to you, that's when you know you've achieved the alignment that you need to be successful. All right, with that, I think we have a few minutes for questions. I'd be glad to go a little bit deeper in some areas. If anybody has any questions on. I think there's mics, by the way, in the aisle, so it may be easier to get questions through that way. Thank you for that.

It was very helpful for my position.

To know that there's other businesses having the same sort of challenges as you go through the stages. I had two kind of points. We're at the early stage, they're really crap coffee machine. One was around prioritization, because at the.

Early stages, there's so much noise from everybody.

Everybody maps everything the same. So it doesn't matter what prioritization you say.

There's generally. Everybody says, well, this is urgent because everyone shouts.

Yep, so how do you overcome that? And then the second one is the whole idea of sort of shipping something kind of not minimum viable product, but kind of small, as quick as you can. We get asked internally then, well, when are we going to finish that product? We never get back to it because we're doing the next thing. Yeah, I almost talked about that. It's a big point, so very good points. First of all, that's why on the first question, that's why you need a team or a person that's responsible for making really objective decisions. Yes. All of your customers are going to send something in and say this is super important, the most critical thing ever. And you're weighing that against a thousand things that are super important and critical. That's when you put it through this objective scoring methodology where somebody objectively can make decision as to what's actually more important. Now of course you're using the customer voice in that decision making process, but that, that's the only thing that you're doing. You're matching that up against your other data sources, your product strategy, what are the feedback that you're getting from different places. So a simple example is actually when I talk about the prioritization framework, there's really two steps to it. The first is a very macro sort of rough cut of what the feedback you're getting in that even goes to the next stage. I'm not actually, actually doing a prioritization scoring on every single feature request that comes in. I may do it on let's say a quarter. The other 75% sort of gets ruled out because it does. I don't have enough feedback. I'm not seeing enough requests from this. So I leave it out there and I wait to get more feedback and start to bring those things together. Then I go into that sort of more fine tuned objective scoring process. Does that answer that question?

Yes.

Yeah. Second one very important I mentioned, I put of lot a lot of weight on this. So I want everybody to hear this. We talk a lot about this thinnest possible slice. The, the thing that you are uncomfortable shipping and what you call it is exactly right. What makes this hard to get adoption internally is people are scared to death that you won't come back and iterate on it. By the way, the people that are most scared of that is the triad, the ones that should be driving it. So when I come into an organization, I've got to first convince them that this is the right approach. And the only way that you do that is by following up on your commitments. If you say that you're going to continue to build a speech route, it gets in market, you're getting the traction that you needed. You have no choice. You've got to find a way to come back to that. Now you could say, well, the reason we're not iterating on is because no one actually cares. Well, that's not the right answer. The right answer in that case is you've got to pull that feature back out. You got to say, look, we learned something. We're not wasting more time on it, the features coming back out of the product. That way there's no middle ground. Right. There's no ambiguity as to what you're doing and why you're doing it.

Yeah, okay, perfect.

Thank you very much. Yeah, great. Do you have any tips or methodologies about estimating the financial impact of introducing new features? Yeah. So first of all, it's really hard. Trying to tie direct to revenue to a feature is virtually impossible. So I would say don't try to push too hard on that. Now there can be some major feature or certainly a new product or an extension or a module that you can tie back to revenue a little bit easier. The reason why I put more weight on something like a RICE framework that you can modify and weight different things is those are things that are more in your control. You can have a better idea as to what the reach is going to be from the feature. Maybe based on past features, features you've done and some analytics that you have there, the impact of the feature you can gauge a bit better with a few conversations with customers or your internal stakeholders. Understand how impactful this is going to be. Those should be, if you've got the, the framework right, should be indirect ties back to what's ultimately going to drive revenue. Impact and reach are two obvious ones. Again, we have others that we fine tune a bit more, but it, it indirectly ties back to revenue and that's really key. If you try to get to revenue, you're going to miss the mark. Or when you don't hit the revenue targets, by the way, you don't have any way to prove it. Unless again, you've carved it out as a separate sku. Then everybody's looking at you going where's the million dollars you promised me? And you're like, well, it's there, but there's no way to know it because I didn't tie it back to it doesn't make any sense. So it needs to, it needs to be indirectly tied back to revenue in a way that you can loosely see it through some correlation. But that's not the driver that you should be looking to solve for. Again, separate from products or individual SKUs, those are things that you gotta do a bit more complex modeling. You can tie it back to revenue, you should have revenue targets on those. But for the general day to day features that you're building, it's much harder to do.

Right. Question is on the product design, I mean, fulfilling also specific customer demand, how do you basically do that while balancing maintaining a general product offering across that can be shipped to all your customers and users.

So I think if your question is how do I balance driving building new enhancements, new features, new value, while at the same time maintaining an existing product that already has a bunch of features and value built into it, Is that right?

Correct.

Yeah. So there are a few ways of doing it. One is I still run things through a prioritization framework. So if I see that a new enhancement is going to get far more, far, much higher or far higher reach and impact than an existing enhancement, then I'm going to lean a bit more. Now it goes back to this other question, which is I can't leave the incremental improvements behind or else I get left in the state of I built an MVP and left it alone. So the way I solve for that is the best way to figure this out is to think in terms of rules and thumb of allocation. So I may spend 40% of my time on net new enhancements, might spend 40 other, another 40% of my time on improving incremental improvements to other features to make sure I don't leave them behind. I finish the polish work to make it a really great feature. Maybe the last 20% is just general UX debt and sort of shoring up the ux. So it's. And those numbers are never going to be perfect. You've got to think about what's right for your business. But it helps take away a lot of the guesswork and ambiguity when you just structure it that way. These things are going to go in these buckets. I'm going to try to fill those up. And then you'll learn as you ship things, is that the right mix for your business and for your growth stage?

Right. Okay, second question is on, I mean very essential topic, which is basically the time, right? Yeah.

I mean you gather feedback from customers.

You need to also promise them with a date and time of delivery as well as if you want to reach to some sort of a perfect product roadmap. I mean eventually you have to, I.

Mean work, I mean with the time planning.

So how do you, I mean from.

Your experience, manage the time estimates? Yeah.

With different stakeholders that you're working with Us, I mean.

Yeah. So there's a couple things here. I'll probably answer the question without answering it first and I'll come back to your, your question for sure. Earlier stage companies, you will have more external commitments and that's just because you're trying to survive. You should work really hard to avoid having external commitments to one or even A couple of customers because it backs you in a corner. We get back that situation where, yeah, we might be making one or two customers happy. We might have an idea that it's going to serve the needs of the broader market. But the reality is you can only count on helping these few customers. So you got to try to back away from the commitments to the one and make sure that you're serving the many. Now, on the estimating side, sometimes you still have to do it and certainly you should be estimating for internal deadlines as well. Our target is to move as quickly as we can. The best way to do that is to really think in terms of what you've done before and comparing it to similar types of features or capabilities that you built. It'll never be perfect, but you get enough of the right people thinking about it and extreme clarity on the problems we're seeing, solving, who we're solving it for and what the goals are. Then you get far closer to being able to accurately estimate. And then of course, you do the usual tricks. You build a little bit of buffer in. If you are. If you don't have something that's similar enough so there's much higher risk there, you build a bit more buffer in. You do some of the tech spikes that I talked about. You do those earlier in the process and maybe more frequently with maybe more senior developers to start to really reduce the risk of the feasibility side, you get a lot better handle of the overall estimates it'll take. Hi, my name is Heike. Donald. What's your perspective on reserving a portion of the product team's capacity for building prototypes that they think might be interesting? Yeah, this is a good one. I've had a couple of teams I've worked with that actually inherited and they had some percentage of the engineering team. In this case, not really so much product. But the developers that were entirely reserved at prototypes. I again sort of going back to that like PE owned mindset and really thinking optimally about every step along the way. You might get lucky and you might get once a year where something pops out of there and it's like, oh, this is amazing. What I found is it's actually not super customer centric and that's what makes me nervous about it. I love getting ideas from developers. I love doing hackathons, by the way. We do a hackathon about once a quarter. Anything you want goes. Having a dedicated team, even a small percentage of it, that's their entire job all year long is just to think about, dream up ideas I don't personally think that that's a great way to do it. I mean, if I'm a way bigger company and I can, I can allocate that amount of time to it maybe, and maybe there'll be something interesting that comes out every now and then. But I'd much rather be driven by what's the heart of the customer. Problems that we know we need to solve. Feed that into the machine that we just talked about where we can come up with great solutions that are based on empathy, that are understanding the really core heart of the issue doesn't mean that the customers are asking us for this solution. It's the whole Henry Ford faster horse thing, which by the way is a bit of a quote. But the sense of it is like if I asked him, they'd have told me a faster or that's not the point. We're not asking them what we want. We're asking them what is your problem? What are the things that you can't do today that you think you should be able to do? Once we learn that and we understand the severity of that, we can go build great solutions and things that surprise our customers and delight our customers. That's to me, that's how I get great innovation. And then by the way, I take that smallest iteration and I increment on that over and over again and it comes out the other side may take me six months. I've got a fantastically innovative solution that no one's even thinking about. That's where I think true innovation comes from. Thank you everybody.

Appreciate it.

It. It. Sam. Sa. Sa. Please welcome to the stage Harry Stebbings, founder at 20 VC and Robert Locker.

Founding partner at Visionaries.

Alrighty. Okay, let's just start with some context on where we invest. Rob, where do you invest in the stack? How much do you write? Check size wise? Just talk to me about that first.

Yeah, yeah. Super short. So we're. And thanks so much for having me. I mean great to be here in. In London. Yeah. So we invest, we have a seed fund where we go in pre seed to seed where early focusing on European software founders. We have another early growth micro fund. So it's a 200 million fund where we set the best product for founders. From our perspective is not just to build another lead fund where you compete with great multi stage funds, but to complement those series B plus rounds with our entrepreneurial network. Because the difference from our LP base compared to other VCs is that we only have successful entrepreneurs. So we have 25 unicorn founders like the founders of UiPath, Miro, Flixbus, HelloFresh. So people have built great digital companies and went through the journey and then we have 25 family entrepreneurs which sounds boring but if you look at the European economy, the DNA are 90% of the companies are family businesses. Some of the best companies like lvmh, Peugeot, Fiat, Ferrari, they're all family owned and they're entrepreneurs and they're a great enablement actually for software companies. So we want to bring that into the late stage and that's kind of of our strategy.

Okay, so today is going to be completely unlike all the other structured course. Rob's actually a really good buddy of mine so we're just going to shoot the shit on some of these slides which are pretty good actually. Why don't you start on multi stage investing at seed? A lot of founders like ah, Excel and Index, they're super interested and actually it'll progress and they might even want to do the deal at seed and signaling it doesn't exist. How do you feel about this buddy?

I think it's, it clearly exists. I think as a founder there's no right or wrong who you want to partner with, right? There are different strategies on how you want to build your company. Do you want to be more aggressive, more risk taking? Do you want to be a bit more like organic? I think the thing is if you look at the whole market, what happened in the last three years is that there have been a tons of multi stage funds entering Europe, building a new office. So five years ago it was Excel, Index, Atomico, Boulder and a few competing and now you have Sequoia, you have nea, you have Iconic, you have Lightspeed, you have General Catalyst. So suddenly you have maybe five times the amount of multi stage funds in London. And then I think it was on a slide just now. Those funds have raised their largest funds ever in history.

Am I allowed to be really unfair? Just like so top three of those funds for founders listening. Which ones would you go to market? Multistage generous rank them.

I, I think they're again like it depends on what you're looking for at a founder. You know if you want to have a GP focused fund benchmark is a great address because like they just have partners that will work with you. They don't have a platform, they won't delegate the work. If you're saying hey look, so I'll go with like many great ones who would use who you choose. 20 VC, 20 VC for growth.

I'll go first like Sequoia Excel and.

Index, they're all good partners in there in one or the other way. So you won't get me to the answer because I think it really, you know, it depends on the individual who's taking the board seat. It depends really on what you're looking for as a founder. Do you want to go into the US market with your software company? Do you want to stay in Europe? And I think it's just as a founder about finding out about the DNA who you want to work with. And I won't give you a recommendation now on who I like was. I respect all of them a lot to be honest. But it's a different story. At seed stage we were talking about signaling. So I think what I was saying in the beginning is Series A has become such a red ocean for VCs competing to enter the rounds that it's just very difficult to win deals. If you were a multi stage fund five years ago, you would maybe have a 50% chance to win a term sheet in one of your great founders, right? And today you would have 20 funds maybe competing with the term sheet. So your win rate ratio as a VC firm is maybe going down to 10% and if others are even having more momentum, it's going down to 1%. So what are you doing? You're trying to do a C round. So you're buying optionality, you're doing maybe a 3 million check here, a 3 million check there. If you have a billion fund doesn't hurt you that much. But you basically buy the optionality to preempt the A rounds if things going well. If things don't go well, it's just a little difficult for the founders because if you have an aggressive multi stage fund in your cap table, everyone knows if you're killing it, they would preempt your next round. They would clearly do the A round. That's certain. I mean can give you 10,000 examples. So it's just if things are going okay but not massively great, which is normally the case at the early stages, it's going up and down. It's just a bit more difficult to explain. Hey, there's this partner David in my board from Multi Stage Fund X. And yeah, you know, he likes us, he has his 12, 15% ownership. He said it's nice, he doesn't need to preempt the round. Everyone will call him and say, look, can't be such an amazing deal, right, if you're not doing it yourself. So I think that that's a little, maybe the the tricky situation to be.

In, I think the core question to ask if you're a founder is like, does this multistage fund care about me enough? Am I meaningful enough in proportion to their. So it's like what proportion of their fund size is this? Check sub 2 to 3%. Honestly, it's a total optionality bet. I think you'll probably agree with me on that. I think another thing is one of the biggest ways that I see companies get killed in the vein that you just said you're doing okay sometimes actually really good. But the principal in the multi stage fund left and you're one of 30 companies and you are orphaned is kind of the term where you don't have a champion in that fund and then actually you're not going to get the next round anyway. And so you have done well but you're still in other words in trouble in that respect. And then one sorry is like, it really pisses me off. We do rounds and it's 3 million round. We do 2.6 and a big fund says we'll do 200k. And the founders are like oh I really want that big brand name. And I'm like it means nothing to them. They are buying optionality, don't take that money. How do you feel about that?

Yeah, I think it's, you know, as mentioned, we love partnering with all those funds and we love them leading the A round. And I'm in seed boards with some of those funds because we also teamed up with multi stage funds at seed and I'm in many serious AB rounds and if you put in a 20 million check and you have a partner of a multi stage fund in that company, that is a meaningful ticket, that partner will work her or his ass off to make you successful. Because it's basically core track record, it's really something. Maybe one investment that you do a year as a partner on the seat side, it often gets delegated to an associate which doesn't have to be negative, but it's just like a very different kind of operating mode. So if you're a multi stage fund, it's just a different business model. You're doing a few investments, you're spending great time with the founders, you're having a larger fund size, but you can't build a portfolio of 50 companies then you're ending up Y Combinator and that's not the brand that you want to have as a multi stage fund. For us as a seed fund, if we're having a 165 million fund, we do a 5 million investments, that's a hell of money for us. So whether it's myself or one of my partners, like they would die to make that company in the series a round of fundraising success. Right. Because it's, it's a meaningful check if we lose that. And again, there's no right or wrong. I think there are five. You know, I admire crandom benchmark or smaller like 400 to 500 million funds that clearly say we do seed and a, and clearly when they do a seed investment, you know, it's one of 30 investments they do in total. They are all in with the founders. I think it's a little of a different thing than if your strategy is oh we have a seat fund, an A fund, a growth fund and you feel it's a little like an industrial pipeline to just over time build, build opportunistic ownership in your best companies. Which is a smart strategy. But it just comes a little at the cost of the founders having, having that exposure. We just had it like a few weeks ago there, there was a company very successfully raising that, you know, had three multi stage funds competing or all. Yeah, let's take Tacto last year you were also following the round. So there were a lot of multi stage funds putting down a term sheet for an A round and afterwards and B round. That's a great situation to be in as a founder if you have all those logos basically trying to win you for the A round. I think the tricky part is if you have already blue chip fund A in the cap table. It's a little bit like I think we have this picture of a towel next to a pool. Like I'm from Germany and Germans when they're on holiday in Mallorca in the morning, they put a towel next to the pool to reserve the space and then they go sleeping again and then four hours later they basically go back. So it's a little bit putting dips on the companies and then you can preempt it. But what's the ratio? Is it maybe 15, 20% of multi stage funds following up on their seats. So I think it's something interesting to discuss.

I think these conversations are best when they're like super granular and tactical. And so I think the question to ask if you're a founder is like okay, five out of 160. How do you think about initial versus reserve checks? The reserve is the follow on capital that you put subsequent. Okay, so actually you have a 50. 50. So actually you're 80. 80. Okay. Can you talk to me about a time when you have not followed on into a company. Why? What would be those reasons, by the way? If they do also want to do the deal? You've also just got a number of references that you can speak to which maybe wouldn't be perfect because you always want keep to get off sheet or imperfect references. I think it's really important to ask these questions and I don't know about you, but I find the best, best founders really interview me.

Yeah, yeah, yeah.

Look, I think it's as a seed fund, it's a bit more easy because you're more aligned with the founder. Because normally the first check is the one that matters. And then, you know, I think there are a lot of arguments against parado rights, right? So I think there are a few funds or founders that, that say, why should you have the right to do pro rata? You need to deserve it. So I think there are different models. There are funds like Point 9 who say, look, if you want, we just give you the promise to do pro rata in the next round to avoid any signaling. So they would just do pro rata in any company where a founder wants it. So you avoid that.

Right.

So there is no signaling risk because the seed fund would always follow on. We offer the same to our founders. There are other founders take deal from. Like Alex from Deal. We were lucky to do the seed round with my first fund, La Familia. When Andreessen and Spark preempted the AMD rounds, they were saying, look, guys, Parada, are you kidding me? We want to do the whole round. And we got really pushed to our limits to be asked to do as less as possible to make that. And then there are those situations when founders are like, if they're not really like. There's three scenarios. Either the founder bloody kills it, then it's a competitive situation anyway and you would want to do provider as a seed fund and everyone is just fighting for the ownership or the founder is doing good, like okay in the middle. That's normally the case. And with any amazing outlier we had in our portfolio, whether it's a deal or Presonio or Miro, they've all gone through those journeys. They were all not obvious. I think Daniel died. What's on your podcast when your ipath has been done? I don't know. 80 fundraising meetings, two years fundraising vault, Mickey. So I think normally companies are in the middle bucket and that's where there's a lot of room to. We would always do our full provider There because we still know the company can go into a great direction. We don't know yet, but we would also offer the founder, if it's a very aggressive situation to do a little less than provider. And then there are those companies where you think obviously there may be not doing that great, but they found an investor that is backing them where it's a bit also like we would never talk someone into such a deal. I think it's a bit also the choice then of the new investors the leading the round and normally the founders are then of course asking us to do a certain part of Prada. We would always do that. We would maybe optimize a little bit as a fund to say look, is it okay if we do half parader? Is it okay if we do kind of a certain amount should just to give you the confidence to close the round. I think that's honestly how we're trying to handle it. How about yourself? Are you having a follow on reserve strategy with your seat?

No. So we remove signaling so we don't ever do follow on. And so the reason we don't have a default line. No, because the reason is when you actually look at the data and we have probably the most data across, I think almost Anyone, we have 2700hp track record records and when you look across that data set, 78% of the time reserves are misallocated. The way that we define misallocated is they don't receive a 3x TVPI on paper within a 5 year period. That in my mind is a serious opportunity cost of capital. I do agree with you that signaling risk exists which is why we take it away by saying we never do it. We always align with you and from this point on we're totally incentivized to get you the best next round if you have actually a very heavy skew towards reserves. Actually we're not aligned because that new round that you're getting, I don't want it to be that high because I want to double down and put more in. It's much more beneficial to me that it's lower. Also it creates this really perverse incentive mechanism where you can't really be that honest with me because you're always waiting for the next check. I'm like, hey, we're in this together. You can hit me with anything because I'm not writing another check. But we're told if you have a multi stage fund that does the seed, you can't come to them that easily and say oh, I had of Sales sucks, we missed the quarter. We definitely don't have product market fit. But we'll be coming to you in three months for the next round.

Doesn't work.

So that's how I approach it.

I think it's a great takeaway by the way, also for us founders because they're showing shouldn't be a paratha ride. If, if I was a founder and I'm speaking against my own interests a little as an investor being opportunistic, but why the hell would you give someone a parada, right? Because either that investor needs to earn it and really show that they're doing great work. So it's even making the investor more hungry to show after a seed round, after a round, after B round to really deliver on their promise. Or you have the signaling thing, you know, which again puts you in a negative situation that maybe existing investors don't do pro rata, but in all the other deals they do. So I think we should. It's somehow in Europe it's still very existent. I think it's fair to kill pro rata rights.

I think it's also lazy. I think you're a buyer or you're a seller and I think pro rata is this kind of easy path to be supportive, which I think is just lazy thinking, actually.

Good stuff.

There's something I wanted to discuss it here which is, you know, realizing they don't have bandwidth. And when we think about venture value add, it's something we also, I mean venture investors essentially sell cash. So we have to wrap it up differently. And venture value add on platforms, as they're called, are so popular. How do you feel about the platform approach to value add today?

Yeah, it's a great question. Again, I think there is no right or wrong answer. It depends on what you're for looking looking for as a founder, what I can say, I mean, if we take the extremes, what Harry was mentioning, I mean there are on the one super extreme funds that just give money, don't take a board seat, say that we don't want to get involved like Tiger, very late stage. Fair enough. And then on the other side, you have those platforms, all those early stage funds that try to be super involved and really kind of support them. I think among this second category you have again two very different polls. You have the one that Harry mentioned taken Andreessen and Atomico. They have a team of I don't know how many partners that are just focusing on platform support. The other extreme would be someone like Benchmark who say we don't have anyone in a platform team. We don't delegate work, we do it as a gp. I think the way I would balance it as a founder is ask myself, you know, I think if you're having a GP support, so imagine you're hiring a VP sales, you're tapping into a new market, you're looking for advice that would be more like an ownership perspective because that person is aligned with your interest to just make your company a bloody success no matter no matter how. So if that person is doing an interview of your VP sales, that person will like the GP will grill that person will make sure it's the right fit. If the GP is delegating to a platform part partner, it becomes sometimes a bit more of a service business because people that are in platform teams, that's the way why we don't have it as visionaries and we are all former founders, we think the best of the best people out there you can't hire in a VC firm. If you look at our LP base that we're trying to leverage and you're having the same strategy with 20 VC. If you want to speak to a Daniel Dines on international market expansion or you want to speak to a Hanoi from personio on hey, how did you build your sales team? If you spend 30 minutes with those people, it's a 10 out of 10 support that you get and value that you get out of this. I think the more you delegate to people who are platform managers, it becomes a bit of a consulting service, kind of ticking the box thing. So I sometimes get the impression that the platform people are more like scaling the GP time of a fun to make more investments than really scaling the founder time. But again, I think there are other founders who really love those platforms. I mean if you take in our portfolio, Alex from Deal, I think he has worked a lot with Andreessen and they have been a great support because it has been such a fast scaling company. There are other companies in our portfolio where it has been the opposite. One last thing I would say and I would be super curious to get your take. Those founders in our portfolio that really output outperformed were pretty independent founders that really just were looking if they were looking for advice, they were looking for a 10 out of 10 highly strategic or on the point advice to answer a certain question. As a founder you have to answer 100 questions a day or you have to make 100 decisions a day. So I think every second you spend with a VC firm beyond the money should be a 10 out of 10 experience, not a 5 out of 10 experience. And I think you get closer to a 10 out of 10 experience if the GP is giving that support or if like in our fund structures, you make the introduction to someone who has really authentically gone through that journey. So I think summary from my side is both models can work incredibly well. It depends on how much handholding you want, on how much what you expect from a VC firm and what's your take? That was a too long monologue. You have to interrupt me.

No, I think there's like three types of investors as investors who know a lot and are very helpful. Fantastic big tick in the box. There are investors who know nothing and know they know nothing and don't do much. Fantastic big tick in the box. Both great. And then there are the really dangerous investors who think they know everything but actually know nothing and want to do a lot bigger. Big cross. Worst of the worst. Europe has a lot of them, sadly. So I think that. And then I think on the platform spend, really dig into their spend. Andreessen have hundreds. They're actually very, very deep across every segment of hiring, across every segment of B2B customer acquisition. They are a machine. Insight is the same. I mean we have insight who've done our companies and it is a machine that they roll in that is very impressive. The ones where I'm just highly doubtful is like, oh, we've got a head of talent here, you know, whatever their name is. And you know what, it's complete crap because you're hiring a CMO or you're hiring a cto. Completely different roles. At the end of the day they just end up kind of navigating a job spec between different recruiters or helping. It's not helpful, but we're pretty good at selling it. I would just say that, like build your cash table like you do a sports team. Everyone has a very specific position. A left back, a right back, you know, have someone for PR marketing, have one for engineering recruiting, have one for fundraising, have one for pre product market fit, customer discovery. And then for each different thing you have these outsourced kind of weapons that you can utilize really effectively. Like be very, very tactical about how you build your cap table.

Yeah, no, I think that makes a lot of sense. But really like two little things to add. On the one hand side, like we don't work that much with search firms, like for at least management hires. If again it's a service that they give you, it's not an owner in your company that is really trying to get you the best senior management candidate. It's different if you're looking for AES or if you're scaling the overall team but if you're really looking for like the best, I mean it can open up the funnel but I think it's just if you look at the distribution of candidates, we think if it's really the GP putting a lot of time of it, sometimes the quality is a little higher. The other thing is I think it heavily depends on stage. So at seed stage if you take a Christoph from point nine, it's an amazing partner. Like he would be very hands on on the spot. I guess every half an hour you spend spent with him will be amazing. And then maybe at a series A stage you work with a Luciana in the board from Sequoia or it can be anyone from Excel or Index or any of the other great funds sometimes then when you've built your board, let's say you have Harry and Christoph Jans in the board and you have a great multi stage fund in the board and then you're raising your serious C or D, the question is like what, what exact support do you need? Is it maybe US market entry? Do you need a platform in the US or is it maybe really just the money? That's why I think at the later stages we really see sometimes the support angle relevance declining and it's more like raising money at better efficient economics than having another partner that takes a super hands on role in the board.

Yeah, I mean I always want to roll off the board. No, no, I mean that like as you said you shouldn't have five investors on the board who generally don't add that much return. Different perspective if at the series B not that much use for me to be there really. If the founder wants it, fine. But like absolutely, like I don't think we should stay on the board in perpetuity and a lot want it for brand or whatever. I don't think that's necessary.

Yeah, I think it's important to take ego out of the equation as you see to venture and be happy to leave a board.

Let's talk about this one. I like this one. So like let's. There's companies that just get hot. You mentioned Tacto earlier. I mean this was successive rounds insanely quickly, extremely high prices. Just talk to me about how you see this one where there's incredible heat for a very few number of companies and then what about the rest?

Yeah, I think this is a really interesting one and hopefully we'll have a Long discussion about it because it has so many angles. Let me maybe start with one angle. It's at least how we perceive. If you look at 20, 20, 21, like the, let's say bubble boom times. If you imagine there's a left door and a right door and the left door is Maybe the top 10% companies and the right door are the 90% remaining companies which can be amazing. It can be the top, top 25%, top 40% whatsoever. I got the impression that in this bubble time funds just went through both doors a lot. So there was a lot of funding left and right in companies that maybe didn't have the metrics yet but got preempted a bit of fomo. I got the impression, and it's something sad and I'm sure you can add to this that in the last one and a half to two years, I mean there's more than enough capital in the market. We never had more capital for software companies. There haven't been many investments, but those investments that had been done. I got the impression every, every fund suddenly just wanted to go through this left top 10% door of great performing companies that were absolute outliers with metrics and the valuations went insane. So if we just take like a few of our portfolio companies, pigment Tacto, but there are many others like Deep L Johannes here with, with Jarek also so, or Penny Lane, I think great companies, amazing performance, but the valuations are insane. Right. So my takeaway is a little bit what has happened. A lot of funds suddenly just, everyone just wants to do insane outlier quality and it has become quite difficult for some of the maybe top 25% companies or top 30% companies that are still amazing SaaS businesses, great opportunities that were a little left aside like oh yeah, let's wait and difficult market times, let's see how they play out. But what, what's your take?

I'm losing all my friends in this talk. I just think investors are incredibly lazy as to how they define attractive markets. Like I always laugh that my all my investments are in the world's best founders in the world's most unpopular VC markets and I'm perfectly happy for that. I don't care that other investors don't find my market attractive. Generally they're very good businesses that make money pretty quickly and so I don't really care. I think there is an element though to unpack there which is like there is a question mark around incentive mechanisms of investors and if you don't own your firm, you do Actually have to think a little bit about that. If you are a strategic person in a multi stage fund, getting into one of these hot deals is what's going to get you the promotion. Doing the slightly off the beaten track but amazing company that might take three or four years to get to product market fit or is very deep in the infrastructure build, you're not going to get that promotion. So you've got to think about the strategic incentives of the people making those investments. And that's why I also really like and I always push people work with the founders of firms, they ain't leaving number one, you're not going to get orphaned. They're not afraid to take these courageous bets and not getting fired by other partners. And so I think we're just to going quite lazy to define hot markets and I think that drives a lot of the concentration of capital to a very small number.

Yeah, I think it's a great point because it's, it's something bad about our VC industry and what we discussed 50 minutes ago. There are many funds, maybe 60, 70% of the multi stage funds now based in London just have moved over in the last few years and they had to recruit people from Europe that would lead their practice. But there are not that many VCs that you could hire that, that have built a track record or have a lot of experience. So it's of course easier and I think it's a bit of a misalignment of interest to just do blue chip deals that are hyped in the market trying to win it. I think the best of the best VCs and some of the best deals ever are those that are in this other door that are not obvious that are left.

Let's just unpack these. If we actually look at them which is like you know, in Europe like Volt as you said, I mean how many rejections did Mickey get?

Insane. I mean it's one of the best companies. Mickey, one of the best founders. I think they got 80 rejections. All the standard VC talk. Yeah, you never get a delivery model profitable. I give you 10 more. UiPath Daniel out of Bucharest back then many people saying like ah, he has done this 10 years. So standard VC would say oh, didn't scale in the last 10 years and kind of looks very manual. Miro, one of the best companies ever out of Europe doing several hundred million in ar, founded in the little city of Perth in the middle of nowhere. Andre, an amazing founder, also not a really obvious one. You can continue. So it's basically we're now talking about the best outliers we have in Europe.

I would argue more proportionally of the biggest outlier have been in this door than that door.

Yeah, I think both, both doors are fine. I mean, I guess there are two rules you added in your podcast. Following the heat or trying to, to identify the own alpha. I think it's, it's great that both, both doors can work well. I think as a VC actually the better brand you can build is the right door.

Right.

Because that's the non obvious one. If you pick, if you have picked a uipath or a mirror at the, at the seed stage or at the early stage, it would have been more of a differentiator than if you, if you had done the stuff that all the others are doing.

But when does price stop you doing a deal? There are some great companies too that are on the left side that you will get the chance to invest in because of brand access, network, whatever that is. And when you look at like again we've got great companies here, but I don't know if the numbers are public, but these prices were crazy. And when do you decide, fuck it, I'm going to do this and double down or no, it's just too high.

Yeah. So two lenses from my seed investment perspective. So from our seed fund, when we do a deal we never really negotiate the price. It sounds odd. It's more like we want to have a mutual understanding with the founder on what game we want to, to play and if we're aligned in how we want to build the company and how we can be a good partner. So to give an example, if there's a founder saying, hey, I have an idea, I want to raise 10 million and I'm just amazing. And look, because I have been a serial entrepreneur, I'm raising that. It wouldn't be our DNA because we like humble founders who are product driven. Sometimes the bit more nerdy ones, sometimes a bit the outliers. That for us it's more like the founder thinking about why would I choose to make a round expensive or less expensive. So on the seed side we have more founders actually taking. If we offer a term sheet, we're not often the highest one, but going for a term sheet with us or even saying I want to do a little lower round because I want to build my company sustainably, I want to keep optionality, I don't want to like go into a loser game where I'm sitting on a high valuation and just work against it. So on the seed side, I'D say it's more this what we're trying to get to the ground of. So we are doing sometimes an expensive deal. But there are good arguments from the founders why it makes sense to raise more money. And sometimes we're passing on a deal at the same valuation because we got the impression it doesn't convince us how the founder is thinking about it at the later stages. It's a great question because we're also struggling with the market or doing it. And I did make many wrong decisions in the past. If you look at some of those companies.

I said no to deal.

So we, we were seed investors in, in, in, in Pikmin, Tacto and I could take deal. We didn't follow on in Pikmin deal some of the best companies because we thought it was too expensive. It was wrong. Right. I think the great deal sometimes when you review that, when they get preempted, they, they are just expensive. But it's difficult to figure out where it's a momentum bet that can go wrong and where it's just a great deal.

But when you review that, let's just pause that. Would you do it differently now?

We're trying to get better to judge. So we had a few preemptions again last year and this year and I think we're just trying to have an honest discussion in our team where we think we're seeing the upside and I think you have to pay price points for great companies. We're not value investors, we are upside investors. So we're only interested in how we can get not that much to make a great deal. But we're also interested in backing sustainable founders. So if we are too momentum driven, we end up being a bit of a, you know, momentum fund that just puts in money left and right. And I think the worst thing that can happen and that that's why it comes down to our quality of judging is if you pay a high valuation in a deal that is just doing average because then you're building a portfolio of companies and that was the trap in 2021, 22. So we all drank a little bit of this too much of this wine that you know where it just has been a high valuation, maybe not the perfect SaaS growth metrics and the companies are doing nice, but they're not really a vck. So I guess that's, that's what we need to balance. And sometimes we'll be right, sometimes we'll be wrong in those companies. I regret it.

I think the big mistake that I see Actually founders make on constructing rounds is their thoughts on dilution and how the venture business works. If you come to a venture market with a 10% dilution round, you're not going to get the best venture investors in the world to partner with you because you're going to be giving it max 8% away because there's going to be 2% for angels, maybe even less, maybe 7%, 1% existing, 2% for new angels, whatever that is, you're not going to get the best. That is the problem with these like low dilution. Now don't get me wrong, they can work. You can do angel rounds, you can have people who aren't ownership. But like the true tier one partners who founders want as venture investors, you're not going to get. I'm just intrigued to hear how your thoughts are with that in mind on ownership and how you think about that.

Yeah, I think as a founder and we discussed 10 minutes ago the value add that you expect from a fund. And I think there are two things that should go into this. The one is like the value angle. I would always at the early stages just go for the best partner, not that much optimized for 2% more or less dilution because it's more like, I mean you're up building a 10 billion plus software company and you want to get any ingredients on board to make that happen, which is already very unrealistic. It is already something of a massive act. So I would try to get on board the bloody best ingredients in terms of an angel and investor to help me build the upside and not optimize for 2% more or less because it's more about what you get there. The other thing is I'm personally biased totally against aggressive massive pricing or raising massive rounds because I think they're like it feels nice for one or two days after closing the round for the founder that you did this amazing deal and you have seven years Runway or whatsoever. But I think it just comes with downsides because you, the the first thing is you're sitting on a high valuation. You're turning a winner game into a loser game because basically sitting on a high valuation means you constantly work against proving that you can grow into it. It's a daily pressure on top that takes your optionality. I think having optionality as a founder is the best situation you can be in. If things go amazing, you can always accelerate and raise more. If things go bad, you have the flexibility to do a bridge round to take in more money from great investors. If things go medium you have the optionality. If you're sitting on a bloody high valuation. And look at all those companies in the last two years, SAS companies, companies that had to raise down rounds like that's something terrible to do. Your employee is the most important ingredient. If you have a high valuation, a high strike price for your esop, like the people will leave, the smartest people are smart that make the dent in your company, they will understand what valuation you're at.

And they all leaving.

Yeah, they're starting to leave or they're starting to question. Look, we just had a medium year. Maybe we grow X percent, so maybe 50% below what we wanted to grow. The valuation is high. Maybe I go to this other company at the earlier stage where the valuation is lower, because how should we grow into this? It takes three years for us to go into the valuation, another three years to make money. That's six years for myself. So you lose your best employees or you have to reprice, which again is not something nice. The third thing is something hidden, which we really see with every hard learnings we had with pricey seed rounds. If you have no more money as a founder, you're not as diligent with the first employees and hires that you do. You're more aggressive on hiring and you're starting to compromise on quality. If you can only hire five people and that's all the money you can spend, you will sleep three, four, five nights, be up at night to think about, should I do this one hire? And those five or 10 people are automatically the next hundred people that you hire, because they will. So it's destroying the culture in many countries if you have this momentum. Oh yeah, and I got a VP Marketing, fast. VP Customer Success. Done, done, done. Because I have the money and if it doesn't work, I can rehire. Suddenly you have 50 hires that they've made, which is maybe, I don't know, 60% of your employee base. And then you feel, well, that's, that's not our culture, it's not the right people. And the last thing is, sorry, super long monologue. If we look at the later stages, I mean, for every billion in valuations that you have add. If you take a 10x multiple, which is already generous, taking public market 6x multiples, you need to add 100 million AR. So take a normal round. Even if you have two to three years, Runway. And if you're adding 1 billion as a valuation that is too aggressive, you have to add 100 million in ARR to justify that valuation increase in that point, point of time, if you don't do that and the market is not as, as nice as it was the last two years, you're just having trouble. But how do you think about it?

I mean I've done 170 investments in 10 years. And we analyze performance across them according to actually how much they raised at the seed. And consistently the worst performing companies raised 5 million or more at the seed round consistently.

That's at seed.

It is just absolutely the clearest signal you have. It slows down all kind of urgent. As you said there fundamentally people do too many things at the same time. They are not focused. They do a second country way too soon, a second channel way too soon, customer discovery, whatever, let's just go, go, go uniform by far the worst. And then also when you do 5 on 25, you know what you take away? You take away the ability to actually do the next round at 25. The best is to do 3 on 12 or 3 on 15. And then actually if it doesn't go that well, you can still raise like 4 on 20. But when you raise 5 on 25, you gotta hit it. A really good heuristic to think through is like I need to 3x every round. So if my price is 20 now in a 12 month time period, because you're gonna fundraise generally for 18 months of Runway, generally speaking, broad strokes, you're gonna go out in 12 months. I need to be at 60 then can I see that? And if you can't see that or you're going, oh, you're going to open up a world of pain. Because it really, really damages employee morale when they don't feel like they're moving fast. I think it really does really, really important.

It's spot on advice. I think it's exactly and interesting that you have those metrics. Maybe you can publish them on Saster or you can publish them to me in an email. No, it's I think one thing to, to add on top is which I forgot now, but I'll get to to it, I'm sure in a second. Speaking about, we spoke about raising too much optionality about price points.

Every founder is just like, I'll put the money aside, I'll put the money aside. I know I raised too much. Yeah, they never do, never do. Parker Conrad from Rippling and I always have this beef on Twitter and he's like always you're wrong. And you can put the money. I said yeah, 100% you can. But barely anyone is Parker. The majority you Just get a little bit looser on what you can do. Yeah, that's a luxury hard but fuck it, we can do it.

I give you one funny example that I loved with the founder. It's actually.

Is there a slide?

It's on the slide. So it's a contra example but Office of Founders, interestingly we have a massive correlation between an anti correlation between how nice the office looks and how good the company is performing. So here's the thing. I had a conversation with a founder a week ago who said, look, we're going into a mediocre office because we're an early stage company, we're doing well, we've raised a lot of money but we want to give the people, every employee the impression that we've not made it yet, that you're hungry every day, that you built this company into something absolutely insane. But we're not there yet, we're not retiring yet. If you give your employees the feeling that, you know, we have the most luxury office with 20 coffee machines and kickers and take the Elon Musk example of going into Twitter, your employees will feel like, you know, I'm on top of things, I've reached everything. Like it will just make them a little less hungry. It's just one argument of a founder. So. But it also creates that constraint resources.

Our they can afford it. And so when it comes to also like salaries and bonuses and you can spend that on a coffee machine. Why can't I have this? Yeah, I'd much rather invest in the team.

Yeah.

And I think it's also like aligning like which people do you want to have? Do you want to have people that really get their hands dirty and build a great company or do you want to have those people, you know, that want to have a great office? I mean it doesn't mean like of course get a great office, but make sure you get it at the right stage and the right kind of expectation management. One last thing to close that chapter, I would forget about everything we just said and just be a founder and build the company the way you want to build it. I think there is far too much hype about what do VCS expect at what stage and what would one do to raise an A or a B round? You're an entrepreneur. There are a thousand ways to build a great SaaS company. Some of them haven't even raised a lot of money. There's a company called Kima or it was called Asia Inspection. The founder, you know, has built a billion dollar plus software company. He hasn't raised any amount of money. So just think about what do you need, what money do you need, what support do you need? How can you be a great entrepreneur and don't listen too much of what thousand people would tell you to do?

I think it's like know when you're Walt Disney and know when you're Jordan Belfort. And what do I mean by that? Walt Disney is sell me this story. Like make it magical and make it it wonderful. That's your pre seed and your seed. And then you need to know when to sell me the pen.

Yeah.

And there is a very rude transition between the two that I think will catch people up. And I think people are seeing that now, which is why it's often easier to raise pre launch than it is post launch. Pre launch you can still be Walt Disney next you're Jordan Belfort. And so I just think it's really important to recognize when that transition is and yeah. Do you find that too?

Yeah, I think it also has changed a little bit in the last two or three years. Right. So I think three years ago, four years ago, people would raise an A round maybe with not that much traction and you would be Walt Disney. Do you buy this, this slide or the metrics? So these are just metrics. It's, it's an average of our portfolio. So we have different quartiles of company performance and a few other VC funds we have share data with us. So it's a bit what we how we classify VC cases. It doesn't have to do with like you can build an amazing software company that grows 30% year over year, make this a family business or. But if you want to be aggressive kind of in the VC shark tank, I guess this is a little bit different metric categories that we, that we see as an orientation for the Series A stage.

Invest through this lens. Do you invest through this lens?

No. So we're investing seed and serious B. So this is more when we get our companies prepared for an A round like from those conversations they have with funds. This is not like what, what we think is great. It's more like what the market represents in which companies convert in raising series A rounds fast, medium fast and maybe not. And if companies I think it has just changed a little bit that there is more focus on metrics. There is more focus. I think what maybe used to be, if we take 500k ARR, maybe 3 years ago with a great Walt Disney story and a few great product references would have been an A round that many would have many VC funds would have looked at which today I think the corridor has gone more into something in the direction of 1.5 million to 2.5 million in AR. I think where series A funds start looking seriously into into SaaS companies.

One slide everyone should have on their deck I think is three reasons why you should not invest in us today and then say oh I don't know our sales cycle is too slow and it could give the data on that retention not number is too low. Give the data and then on the next slide show a proactive plan as to how you plan to mitigate each of them. That is the most insightful self aware founder who clearly understands their challenges, has a plan to solve them and is completely humble enough to accept that. And on top of it no one does that when I'm like oh. Because we're all thinking oh shit that sales cycle sucks. No, no, you've just addressed it. You've not only said that I get it, I see that, I see where your head's at but I see the three ways that we're going to solve that here. Wow, that's really impressive. Answer the problems that VCs think before they say them.

Yeah, so what we're trying to do, I mean we're, I mean not, not always best preparing the companies but we're trying to have a monthly check in on kind of where we stand with this and it starts with the seat like there there are no men. You're building the product and you're seeing do people use the product like, like once it gets more into a series A normally it's the case that some things might look like outlier but it comes at the cost of of others. Like if you grow faster normally your perm multiple is higher. It's fine if your kind of sales cycle is bloody long fine if you have a good argument like why why that is the case and how you want to improve it. I think at this year, hey, you don't need to have an answer to all those things. Even if your metrics don't track. I think it helps a little bit to navigate the coming from a Wal Disney having a good idea building a product to graduating a little bit into what will be important for serious B C stage because at a certain point you need to look more into metrics and I think these are the metrics at least I think for a SaaS company. So as a human if you do is it blood picture? Is that the English word? If you go to a doctor and he's Telling you, oh, yeah, I looked at your blood and you know, blood test, blood test. This is what tracking good. This is average. Oh, you, you should have less cholesterol. I think this is a little like, a little like a blood test of a SAS company. It tells something about some health angles. But like if Harry had a night out where he drank like two bottles of water, of course it would show bad. But if you have a good answer that it was just one night out because it was a wedding of a friend, then it's fine to understand it. If this is a recurring pattern over 10 years, you won't do well. The company wouldn't do well. If the metrics don't add up right.

I'm loving these analogies. Final one, what would be your parting words to founders in this fundraising market?

I think it's the best environment ever that you could have because the pace of digitization and Digital adoption in B2B has never been higher. Europe is home to all those industrial world market leaders. Look at the DNA of our economy. I think it's the biggest enablement you can have building a SaaS company. The capital is there. I mean, there's more than enough capital that has been raised. Just be an independent founder. Great founders build great companies independent of cycles and just try to not be too much in a bubble of what VCs expect. And, and just try to define your way to build the company and you will succeed. If there is a good product, there will always be a pull and you can decide yourself what founder you want to be. Do you want to be a VC driven founder? Do you want to be an organic founder in the first years like Daniel with your iPadH? And I think it has never been a better time to be a founder. What's your take?

Someone once gave me wise advice like, you know, getting a great round is like finding the love of your life, which is like the truth be told, you should not be. The best way to do it is to work on yourself and work to be someone that someone else would want to partner with. And it's the same thing with fundraising. Work on yourself, make yourself a fantastic product and work to be that thing that someone else will partner with who is also great. And I love that analogy.

It is.

We've really gone from Jordan Belfort to love at the end, but I would say that's a very strong one. Be focused too much on what other people think and it's like, just work on yourself and work harder than anyone else.

That's a great, great, great hope this.

Has been really different. Actually. I want it to be fun and discursive between two friends, and so I hope it's been enjoyable. And thank you so much.

Thank you for being with us.