Excerpt from a June 23, 2021 YouTube interview with Peter Gassner (CEO, Veeva) where Gassner asserts that revenue follows people: you must hire people now to generate revenue years later (he cites a ~4-year horizon). He describes product development as a multi-year "cooking" cycle, explains a preference to "not over cover" customers (intentionally leaving some top-line revenue to avoid creating desperate sales behavior), and warns that desperate reps create poor customer experiences—harmful for large customers (he references customers spending "well over $20 million a year").
Questions this video answers
"Well over $20 million a year".
There's sort of two models that people come and ask, does revenue drive headcount or does headcount drive revenue? And it sounds like you're squarely in the former camp that you derive headcount from revenue.
No, no, I actually drive revenue from headcount, but I make sure I have enough stocked away. Any revenue that's generated in Veeva is because of people.
Oh, for sure.
Yeah. And you gotta, you gotta hire those. If you want revenue four years from now, you gotta hire those people now. Yeah, right. We're starting up a brand new, probably our biggest product area to date. And this year we hired 30 people. Those people produce real good revenue for Veeva four or five years down the road, that's when that will be 100 plus million dollar business. But you gotta hire them now. So revenue follows the people.
How do you think related to that? How do you think about how many of your sales team should perform? Like, how do you think about that? Do you believe in that bell shaped distribution? Do you salespeople, if you're waiting four years for them to perform, it's terrible if you have that attrition, isn't it?
Yeah, no, I'm really thinking more about the product, the ingredients on the product. People that's like a soup that has.
A, they start to hit their stride.
A product has a four year cooking cycle, right? It's the soup. They're like, oh my God, I want to eat it four years from now. I got to start cooking it now. Really? That's, that's not good. But yeah, product takes a long time with sales. You know, we have a philosophy that we say we don't, we don't over cover. So we want to leave top line revenue on the table. We don't want to get all the top line revenue because if we, if we push all the way for that, we will get some inefficiencies and that's not so good. But also we will get bad customers feeling because a desperate rep will do desperate things and the reps in front of the customer and they'll feel it.
You don't want those desperate things, do you?
No, because for us we have many customers that are, you know, they're over well over $20 million a year customers from us. Do we want them ever having some relationships?
Right.
Yeah, these are 20 year relationships. Do we want somebody in there saying, I got to close this thing on my quarter because of my commission and I don't really care that you're paying us $20 million a year. So the way you do that is you sacrifice top line revenue and you don't put too many reps on there. So then a rep is not desperate.
