Workshop Wednesday: LIVE with SaaStr CEO and Founder Jason Lemkin

Series. We're so excited that you could join us live this Wednesday right before the holidays. Thanks for joining. I know you're all coming in. If you've never been to Sasters Workshop Wednesday series before, this is a different kind of series that we've been doing for the last couple weeks now. We're thrilled to have you back. We've been doing these almost every Wednesday. Last week we had scale, but every week we bring along a SaaS expert to walk us through some of the content that they're a subject matter expert in and kick off an interactive discussion. So this is a bit different. As you'll see, some of us have our cameras on. So as much as you want to do that, don't be shy like we're all here friendly faces to engage and interact in this interactive session. We're planning for about 20 to 30 minutes of content. Today's guest should be known to all of you, so definitely needs no introduction, but we'll do a quick one anyway. And you will have the chance to interact with our today's speaker and connect with fellow community members after content wraps. So today's very special guest is Saster's own CEO and founder, Jason Lemkin. I know you all know him. I see a lot of familiar faces too. So welcome back to Workshop Wednesday. Good to see you all again. And today we're going to be talking about eight ways on how to motivate the sales team after a rough patch. If you have any questions, you can drop them into the chat. We'll also be doing like interactive Q and A, so we'll be calling on folks with their cameras and mics after the formal content is over. So without any further ado, Jason, I'll let you take it away.

Thanks, Amelia, and thanks for everyone watching on streaming or joining. It's fun to do these Workshop Wednesdays. Please give us your feedback. Submit speakers on our on our Submit a Speaker site, which you get@saastr.com but our idea here is to at least once a week kind of reproduce some of the workshops that we do at our big Saster annual feature, SAS to Europa, and do them live here on the Internet to help everybody. So I'll pinch it. Today we have so many great speakers, CEOs and founders, but once in a while they'll let me do one when there's a hole in the schedule or they need a little extra content. It's right before the holidays. So what I thought I would do was two things. One, I thought, hey, you know, for Some of us, it's the last half of this year has been a little rough, so I thought I would dust off and update a classic saster post that we've written a few times over the years as we've gone through these ebbs and flows in SaaS on eight ideas how to motivate the sales team after a rough patch. But also we can just use this as a related Open ama. So throw your questions in the chat or join the session and ask them voice because, well, I will try to stay on for an hour or so to answer any of your questions after we go through this content. And some of these ideas are pretty basic. I will flag that for you. But I think, I think if you take a couple of these ideas away and help your sales team, that's the key thing. And I think. I know I've said this a lot over the last couple months. No matter how it may appear, things are not like terrible in SaaS or cloud. If you look at go to SAS or look at even the latest Gartner data, CIO spend is still up 10 or 11% next year. There are categories of software that have no issues. I was on a board meeting Yesterday for a SaaS company that sells mainly to healthcare. They see no downturn or impact. There are other categories like sales tools that are kind of decimated now because a year ago everyone bought an extra 100 sales tools to help their sales team. Now they're thinking maybe 70 is enough. So the impacts are uneven. But Cloud and SaaS are not, are not even, are not even dead. It's just we had such a crazy explosion of buying and growth in the boom. Let's not forget that both, both Shopify and Zoom went to from 1 to 4 billion in revenue in one year. Okay, think about that for a minute. Zoom and Shopify not only got to a billion, but then in one year during the craziness went from one to four. How could we not have a hangover? How could we not have issues? How could the year or so after all of this not be a tough year at some level? Because what we're seeing again is deceleration. That's what we're really seeing. I don't think there's a recession. I don't even think there's a downturn. What I do think is there's deceleration. And when you, when you, when you're such a rocket ship, when the missile goes up so high and so fast, like there's got to be some deceleration. So what does the sales team need. And even some of our sales team is on this. So I'm, I'm relearning these lessons. Even with our little small but mighty sales team who just this morning closed two big deals and I think may even have a record week, December, the week before Christmas, our own little sales team may have a record week. How do you do that in these tough times? Well, we'll go through a few ideas on how to motivate the team in this rough patch, but most important is showing them that it still can be done. I would say, and then I'll go through these points. I would say maybe 20% of the startups I work with or have invested in are having records Q4s and we'll chat about why in this little bit and I would say 15 to 20% have kind of given up. They've kind of given up their phone it in. A few even are growing 0% now and are actually okay with it. Like they're okay. Like 0% is pretty good in this economy. They're saying maybe, but maybe what they're not doing is leading from the front and maybe they're not motivating the sales team through a rough patch. So let's use this first point and I'll share some real time examples. The first point, which, which may sound obvious to folks, but deliver sales a true 10x feature. And this is, this is tough. When we go through tougher times. Everyone that's been doing SaaS for a while starts to hear whining from the sales team like our product's not good enough, whoever's beating us and all the deals, why don't we have a HubSpot integration? Why don't we have a Salesforce integration? Why doesn't our product do this? Why doesn't the dialer work, whatever it is, why don't we interface with Magento? Um, look, there's always, you're always going to have more features to build than, than time that you will ever have. But here's something that really inspires the sales team. Sit down with your sales team calmly and figure out the one or two or three features that they have been dying for for a year and finally go frigging build it for them. Okay, now the feedback you're going to get from the sales team, literally, it can be exhausting because it can change every week based on the last deal. The deal they lost on Monday they needed a certain feature than the deal they lost this Tuesday. All of a sudden the sales team will change their Perspective. Even the best sales reps tend to be a little bit myopic in their request. So you've got to drive this. But. But magic happens. If you go through the 10, the 100, the 200 deals you've lost this year, you've got to do it rigorously. Why did you lose deals this year? We do too many deal one meetings and not enough deal lost meetings. And we certainly don't analyze loss deals enough. We don't track the data, we don't track the inputs. I'm pretty sure even our little Saster sales team that's on this and they don't actually know why we lost a lot of deals. They don't know why a lot of our sponsors didn't, didn't sign up again or didn't do. We don't know. We know anecdotally. But anyhow, you get, get together and give them one 10x feature in Q1 maybe ideally by February, it will inspire the team. If they lost a big deal this year and instead of blaming it on the economy, you can then give them that one feature that they really wanted. It almost always inspires the team. They can see that you're, you're going from a struggling company or even a loser company into a winner if you can deliver those features they always want. I've never seen this not, not work at some level. Okay, next one. And I started writing about this like 10 years ago at Saster and this and a few other early Sasser folks, and I hate this word, but they just triggered people. Okay, a couple early Sasser posts. One of the first Sasser posts from almost 10 years ago was, you'll know in 30 days if your VP of Sales is going to work out. And so many sales leaders hated me for it. They wrote, oh, that's ridiculous. You've got to give a VP of sales 60 days now. You've got to give. You've got to give them a year. You've got to give them five years to get points on the board. But I asked people to calmly read this post, which is, hey, look, if a VP of sales comes in and nothing gets better in 30 days, it never will. I've seen this again and again. If they don't bring in a better rep, if they don't improve the playbook, if they don't just influence whatever's in the pipeline, they never will. And eventually folks realized, hey, you're right, the VP of sales doesn't always do magic in their first three days. But things do have to get Better this one, folks, until recently, I think have struggled with. But now everyone sees it's true. Like the simplest upgrade on your sales team in tougher times is to let the bottom 10 or 20% of your sales teams just go today. I literally mean today. And a lot of us, obviously we are at in some ways almost a record time in layoffs, which we may chat about a little bit. It's a little crazy when times are still decent that layoffs are at a record level, but they're. Because hiring was a record level. People hired at literally an insane level last year, especially on their sales teams. A lot of sales teams doubled or tripled last year, not just to hit insane plans, but because there was vast amounts of capital in the system and it was go, go, go, go, go. And I don't know how many startups I work with, I know there's one that, that I, that I've invested in. A long time ago, it was literally one of the most capital efficient companies I know. Got to nine figures in revenue with 300 employees and then last year they went to 900. In one year, 300 to 900. It's all over the place. So. So we've learned we do have to shrink a little bit. But this is magic. And let's. I've written about it 20 times on Saster, but let's talk about it. If people have questions at the end, let's really go through this because literally this, as tough as it is to let people go, this, this helps everybody look around your sales team. And I put the math on SAS for a long time ago. The best sales reps often do 9x the average sales rep and they almost always do 2 to 3 better. In really good times, mediocre reps still do okay. Like they still hit. They come close to quota, but in tougher times they close nothing. And look around your team. I know it's tough. Do you have some reps on your team that literally this quarter have closed nothing or close to nothing? Nothing at all. I bet you do. And I bet your top one or two reps close the same as earlier in the year if you're struggling. They often close almost the same in tougher times. And we can talk about why here. You can read more on Sasser. But think about the math for a minute. Leads are so precious for so many years, for so long. Certainly until a hundred, two hundred million ARR. Leads are precious. So let's say you're getting a hundred leads per month and you're giving 20 to your two worst reps. Give those 20 to your top two reps. What happens? Think about the math. You will almost inherently increase bookings 20 to 40%. Think about the math. I know the math is obvious, or at least maybe now you know in 20 going into 2023, it should be obvious.

But.

But do this math on a spreadsheet and realize you're. You're kind of always flushing your leads down the drain when you give it to mediocre reps. But you do have to train people. You have to scale people, so you're going to take some risk when you're hiring rapidly. And then like in 2021, everyone lowered the bar. Everyone hired reps they wouldn't have hired in 2018 or 2019 just to put warm bodies against deals. And now you can see in tougher times again, they're flushing your precious leads back down the drain. It's sad, but every founder knows this is true. And every VP of sales that's been around for a while knows it's true. So do the math. And I know it's tough. It doesn't mean don't give people severance. It doesn't mean don't. Don't treat them well. But reroute the leads from your worst reps to the best reps and literally your bookings will go up 20 to 30% in Q1. I guarantee. I guarantee it. Okay, next point. This one we've talked a lot about, but this is a great strategy in tougher times. Mo Most of you have hopefully already done this in Q4, but if not, 2023 is the right time. Promote your top rep. Promote your top rep. Now, not every sales rep wants to be a manager. In fact, many of them don't. And in fact, many of them that think they want to be managers shouldn't be managers. Being a manager, a sales manager, is almost nothing like being an individual contributor. Ae that the skill sets are so different. But at least ask go to your number one or number two and in your number two rep and ask how you can promote them or your top sdr. Maybe they want to be a manager now. Maybe they want to be a team lead. Maybe they want a title, but without the responsibility. So be it. Like promote them. We all like promotions. They signal something to your. To your winners and they signal something to your team that, that, that they're a leader and it shows the team to go to the certain point that you're investing in your winners. It's whether whether it's a true promotion from SDR to AE to team, lead to director to VP to svp. That's like one progression path. Whatever it is. People on the sales team, they're ambitious one way or another and they want to see there are paths to promotion. And even if the paths aren't perfect, even if it's a promotion from one flavor of IC to another, everyone wants to see it. Everyone wants to see that there's a path to growth in sales. They want to make more money, which, which we talked about in the prior point and we'll talk about more. And we and many of your reps want to see those approaches. So at least promote your number one rep. Whether you have room on your org chart or not. You may not have room to promote a third of your reps or a quarter, but you can definitely promote your number one one. And it's a, it's clear as signal that you're a winner when you promote your number one rep. So do it. Do it. We got plenty of days left in December or do it in January. Okay, number four. And again, this goes back to point number one, which is a 10x feature. But I see too many founders when things are tough, not asking the sales team. And look, these are, these are complicated conversations because even the folks on our Saster sales team that are here, I think will reinforce this. You can get a lot of feedback when you ask your sales team to get feedback. You'll get feedback about the deal this morning. You'll get feedback about, you know, line 28 on page 16 of the prospectus. You get a lot of feedback from your sales team. And honestly, as founders, it can be overwhelming because sometimes sales folks are very, very focused on their individual issues and deals. And that's okay, that's your. But that's your job. Ask them. Your sales team, we know this. Your sales team is on the front lines. They give you the best product feedback out there, even though you have to filter it. And they have some of the best ideas on how to sell better. They just also have some of the worst ideas or the most unfiltered or undistinguished. But open it up, have in conversations and you will hear noise. And going to my second point, get a thick skin. You will hear complaints from your sales team. If you have honest conversations, you will hear complaints, especially if their comp has gone down. It's tough on sales folks and a lot of it will be short term feedback. But ask them, involve them. Get them their 10x feature and get them a few resources, get them more training. Join more calls, folks. And we're going to hit this point next. Help them backfill them on whatever you want, but get the feedback from every single person on your sales team. There's a gem. There is a gem in every person on your sales team. There's at least one thing that you can implement from every person on your sales team that's closed a deal this quarter. They know they're on the front lines. Okay, point five. This one sounds so basic, but I'm going to bring it up anyway because it's a kick in the arse to some founders that may listen to this or watch it. Get them more leads. Okay, get your sales team more leads now. Everyone that's read or seen Glengarry or Edd Ross or whatever can, you know, we all know that leads are hard to get. Blah, blah, blah, blah blah. Every. Every sales rep, every sales leader I've worked with complains they don't have enough leads. Like not all of them, but they always complain. Or the leads got worse. Like why didn't everything's getting harder. It's December. Are the leads are the leads are worse than they were at the start of the year. So be it. But look, twice as many leads, even if they're not quite as good as the prior leads, that's still something in tougher times, right? Get them more leads. And the number one thing you got to do. And this is my kick in the arse, I see this too often these days. Hire a VP of Demand gen. Way too many founders go way too long without hiring a true VP of demand gen. And I know I've written this before, but listen to me. A senior junior marketing manager does not count. A content marketing manager making infographics does not count. Someone that writes three pieces of content a week on a blog no one reads does not count. These things can help. This is not ahead of demand gen that has a number that has a commitment to the sales team, a commitment to grow leads, to grow pipeline, to grow opportunities, to grow MQLs or S S SQLs or sales accepted leads or whatever. Honestly, it doesn't even matter what the commitment is as long as they come in and give the sales team more. And you have to hire someone, period. And you have to hire someone senior enough that they have owned a number before in marketing and that they will own a number now. And I've written about this since the very beginning. Classic Saster post. I hire my head of marketing at 20k. Mrr. It wasn't a week too early or A month too early because she inflected the curve. She got us more leads than her salary cost. But what's different today is whether it's because of plg, whether it's because there's so many startups out there, whether it's because of so much funding. I see SaaS startups get to 10 million, 15 million, 20 million without a head of marketing. Without a head of marketing. And kudos to you if your product generates a lot of viral leads and kudos to you if your outbound team is great and if everything else is working. But gosh, in tougher times, get the team 20, at least 20, 30, 40% more leads. You don't have to be a total magician here. Hire someone that will help your sales team. And so I'm kicking you in your ass if you're arse, sorry if you're, if you're reading or watching this to finally be honest, do you have someone on your marketing team that can own a commit to your sales team and are they executing on it? Do you have someone? I will bet 90 if we, if we could do a real survey on this, I'll bet 90% of the folks watching, listening, we'll see it later. Do not actually have someone on their sales team that owns a number on the marketing team that owns a number to the sales team that has the same quota your sales team has. Not only will it work, I guarantee you it will inspire your sales team if someone's helping them more. This is how you can help your sales team in tougher times. So it's time to do it. And yeah, it's a tough hire, but every hire is tough. I mean, they're all, they're all hard. Go, go. Now's your time to finally do it. Okay, point six. And this one I made a while ago and this is maybe something more to think about for the next year or possibly now, but plan resets. So look, in tougher times, you do have to reset your plan. Both as founders, you've got to do it and, you know, once a year as ahead of sales, you can do it once a year. You can't reset the plan every week, you can't reset the plan every month. And importantly, this is really important for where we are today. You can't have no plan next year. I would say half the startups I work with have no plan for next year sometimes it's one reason is folks just are less disciplined today. Folks don't have board meetings. Folks don't do things they used to do. Some of it is founders are hiding from not having to plan next year. Some of it is they just want to. They're very transparent on their monthly metrics. Hey, we grew 3.6% last month. But they don't want to sign up for a plan next year. But first of all, it's almost January. Like go do your plan. Like build a plan. And if you don't know how, do a saster search for your L4M plan. Your last four month plan. It takes you 10 minutes. Average out your last four months of growth, average out your last four months of burn. That's how you're going to do for the rest for next year unless you, unless you make changes. And if you don't like that plan, it will force you to think through it. But make a plan and then if you have to reset it, just do it once. The best leaders, the best founders and the best VP of sales, if they do have to reset, they do it once. The best VPs of sales get a quarter or two into the year. And look, they don't promise some. They don't promise the magic of Q4. This is the sign of a disastrous founder or a horrible VP of sales is the magical Q4. How are we going to do this year? Well, Q1, we're going to do 500K, Q2, 400K, Q3, 300K. But Q4, 6 million. I mean, you laugh. I can't tell you how many plans I've seen plan on a magical Q4. No, what are the best sales leaders and founders do you know? Three or four months into it, they do one reset. It's an honest reset. It's based on data and they do it once. So, so be real. Don't, don't plan on a crazy back half to the year or a crazy Q4 to bail you out. But if you reset every month, the whole process is sort of pointless. And the last point, and this is a tough one, this is a tough one founders are going through right now. You know, you have to have a plan that where you grow, but you also have to make sure the team can hit the plan. Setting up a plan for next year that no one on your sales team can meet is going to lead to disaster. And there's, there's two elements to that, just to talk through it. The first element is, you know, and we talk on saster about like three types of plans you should build for next year. A C60, a C90 and a C10. And C is confidence. So your base plan for both your, your business, for your revenue and your burn and for your sales team should be a C60 plan. In my, in my experience, when you have about a 60 chance of hitting, if it's 100, it's not that ambitious. If it's much less than, than 60 chance, you can hit it, it's too risky. So like 60 is your base plan. A plan you have maybe a 10 or 20 chance of hitting for real as your stretch plan and have a 90 plan for cash so that you don't spend too much cash. But once you build that plan, if, if, if the plan, you have at least a 6% confidence of hitting. That also means the majority of your sales team should be able to hit quota. Make sure they tie together. If they don't, if they don't match. If your sales, most of your sales team can't hit quota to hit your, your C60 plan, something's broken here. Your sales team is going to get demoralized and they can leave. And I will tell you, this is, this is a, I don't think this is a downturn. I think it's a deceleration. But what I went through the worst of times as a founder in 2008, 2009, all of our best sales team hit their plan. Okay? The worst, the worst time now, we had high churn. We had challenges. I remember one of our sales team back then, Sam Blond now at Found at Founders Fund, then Sierra of Brex most recently, he just did one. I remember back then he was like one of our more junior sales folks. He's like, this is the worst of the recession. Okay? 0809, when the world is shutting, it's like, I'm making Dr. Money. I'm making Dr. Money. Okay? If you have any bookings next year, like, your team should still be able to make good money. Maybe, maybe your team might need to be smaller. Maybe the bottom third of your team shouldn't get leads. But the team's got to be able to hit the plan. Most people should hit quota. And even in tougher times, the best salesperson on your team should be driving a pretty nice car, maybe even making a down payment on a condo. So make sure the plan makes sense or you're just gonna have a train wreck later in the year. Okay? Point seven. And again, this one, this one is now commonplace. It was kind of disruptive, believe it or not, when we first started talking about it. But this is something where if you're going long, you really can help the sales team over the next Year, which is driving NPS up. Look, driving NPS up next quarter does not immediately make the sales team more money next week. But if you force the whole company to drive NPS up, your product will get better. It ties to the first point. One thing you can do is give the sales team what they what they asked for, which is the 10x feature. And then the other thing you can do is give the sales team what they need, which is a better product. Okay, Both will help them. The first one will help them next quarter. This will help them over the course of the year. But we, we hide too much. We hide from our unhappy customers again. We don't have enough lost meetings. We have too many win meetings, but this really works. I just wrote a Saster post a couple weeks ago about four disastrous CS experiences we had. Okay, four. Go read it. I mean, your jaw will drop. I'm not going to say who these were, but these were four horrific experiences with sales and customer success teams. Okay. One, at the end of a lengthy sales process with us, asked us not only to pay twice what we're paying for an existing vendor, but then asked us for 40,000 extra dollars to do data migration. Okay, now I get that maybe, you know what, maybe this might have in theory possibly made that sales rep more money now. But what if they built a better product? So this data migration was automatic for next year and the MPS was higher. They will close a lot more deals. Another product that, that we use, that really doesn't work that well. Sales rep aggressively came at us a couple weeks ago and asked us to pay an extra $8,000 next year. They would shut it off in a matter of days. Okay, well, it was blackmail. And blackmail kind of works in sales. But what if they just actually made this product better so that it wasn't the number three in the marketplace was the number one. We would gladly pay that money anyhow, on and on and on. But there's a whole bunch of conflicts today in terms of short term behaviors. Trying to close deals now when times are tougher and making customers happier. And this is a tough balance for founders. But trust me, measure your NPS and make it a top three goal for the company to drive it up. Not nrr, not even other metrics, but make your customers happier. And at the end of the day, whether it's through referrals, upsells, or more, you're going to make your sales team, life sales team happier next year. And nothing at the end of the day a sales team is, is less inspiring to a sales team than selling the worst product in the market or a fungible product and. Or the product that has is clearly not better. Not better. I remember I was talking with someone recently, a sales leader that competed with Figma, obviously $20 billion exit. And I asked what was the story competing with Figma is like? Well, in the early days it was pretty easy. Figma didn't do a lot of things but. But later we had just. There was nothing we could do to win. We were worse. We were worse on every feature and every metric by the end of this process. So drive that mps up, it will force you to do the right things to help your sales team during the course of the year. Okay, Point eight. Boy, this sounds obvious. And then we can open up to questions. But, but so many times these days, so many times in the last month, in the last weeks, I see this not happening, both from founders and from VPs of sales. You got to lead from the front in tougher times. You cannot retreat. You cannot sit in front of your monitor all day. The sales team will believe if you go do it, if you go close, if things get tough, but you go out yourself and close a deal, the sales team will believe. I remember during the brutal recession of 0809, so long ago. But, but God, it was so bad. We actually did pretty well. I, I told you the doctor Money story with San Juan and others, but things were hard and I went to our second largest customer and I just told them they needed to pay us 800,000 upfront for two and a half years, for three years. No reason. I mean there were reasons, but the contract wasn't going to renew for six months. I had to call in all my favors with this customer that I personally onboarded and helped, but they gave us the $800,000. Not only was it a lot of money for our burn rate at the time, but I mean it's leading from the front. It's showing the team it could be done. Everyone knew it could be done in tough times that someone could go out and get 800k. So you go get 80k or you go get 8k lead from the front. And I see too many, too many CEOs hiding, hiding, hiding in low growth, hiding in blaming. I get investor updates this in the midst of the worst recession of our lifetimes, our growth has decelerated. This is not the worst days of our lifetimes, folks. Look at MongoDB, look at, look at Monday, look at Atlassian, look at all the cloud leaders, look at Adobe. No one's not growing. Slow down for a minute. Everyone in sas, look at any public company, they're all growing now. Some are growing a lot less than last year. Some actually I just wrote about it today. And Sasser Adobe isn't decelerating at all. Mongo isn't accelerating at all. Monday's down a bit, but still growing at an insane rate. If you're selling in the collaboration or CRM space, they are not. So lead from the front. Go get deals done. And I know this is a checklist, but it's true. Go get on a plane. Go get on more planes. Go visit your customers. I've written about it so many times on Saster, but I never lost a customer. I visited in person and the same is going to be true of you. Go get on a plane. Go visit prospects. A lot of you as founders don't visit enough prospects. And a lot of VPs of sales. Maybe they let their team do it or they become more managers and not hands on enough. Go visit them. Invite customers to the office. We're back. This third one, the Saster team knows how passionate I'm about it because it's the greatest hack of all. Do a weekly customer webinar. Most of you don't do this. I've written about this 87 times. I've never seen if you do 52 weekly cupstore webinars, not once in a while. Not when you remember, not four months a year. If you do it every week, you always get more customers. Go do this. This is so easy. Fourth, don't hide from bad sales. Lead from the front. Talk about those lost deals. Plan your first customer conference down here. This, like the weekly customer webinar, always works. A customer conference always works. You know what, you know what you do when, when times are a little tougher in sales, get your prospects and customers together. Because if you have high nps, you'll go to this. You'll do a customer conference. Even if it's just a steak dinner, even if it's 10, even if it's 20 and it's magic. Your your customers will tell your prospects to buy your product. They can't help themselves if your customer shows up to your steak dinner or your customer event, even if they complain about a feature or two, they they they almost can't help themselves going into sales mode for you. How has it been working with your product? Well, not perfect, but I love the team. I love this. Like they wouldn't show up to the steak dinner or the event if they didn't happen. And this stuff has a lot of soft costs, but honestly it does not cost that much to have a dinner in Vegas or a dinner during Sastor annual or to rent one hotel room. Okay, you don't have to rent Moscone. Okay, you can rent, you can rent a room at the Holiday Inn and invite your customers and they will sell each other. It's magical. And two last points. And then I will break because I don't see folks do enough on this checklist. If nothing else, take this checklist. Anyone reading this that's in a leadership position and be honest. How much of this checklist on the screen are you doing? Not enough. These are actionable things you can do in December to help your team. And the last two, and the la, the penultimate one, actually we just re added this even to our own Saster team because this always works. Give everyone in your sales team a two meeting a week quota they can drag you into. This is a magical trick. Okay, Sales is hard. If anyone on this watching or listening doesn't know that sales is hard, it's frigging hard. Except maybe there was if you worked at a few applications in like the summer of 2020, it got really easy for when we were locked down. But sales is hard. Tell everyone on your sales team they can drag you into two meetings with either prospects or customers. They don't, they don't need, they can just pick whichever is best. If it's a tough one, if they need a product expert, if they need that founder DNA, if they need someone that can add an extra spark of creativity. Not every sales rep knows every part of the playbook, every way to use your product, every way to configure it, every integration, every competitive benefit. So let them pick two and, and drag you in and for whatever they want and you just go. And if nothing else, you're their wing person. If nothing else, you're whatever. We all just watched Maverick. You're the Rio. Okay? It benefits all of us at least to have someone that is even more fluent in the product and more fluent in the company. If as founders, you join two sales calls a week. If they want you, stuff, more stuff always closes. Not only do they know things that the sales reps don't do, but never forget we forget sometimes prospects love to talk to the CEO and the founders. They love it. They love it. They love it. Even if you're a five person company, if you're a 10 person company, 20 person company, those letters CEO are magical. It's a sign of respect to customers. It's a sign of a special relationship that you have with a vendor where, you know, we go buy Salesforce, we don't get to talk to Marc Benioff. You know, we don't even get to talk to Yamini if we buy HubSpot or go or Todd McKinnon if we buy Okta. But, but if your prospects get, get at least get the CEO to join one of these calls. It's a magical relationship. It will help them close. So how do you do this? Well, again, you tell the reps they can do two a week and the beauty is they'll often only do one and they won't fill up your entire calendar and the last one. And this is, this is how you can challenge yourself. Do five more customer zooms a week. I know it's brutal as founders or as VPs of sales, but do five more Zooms. I know we're back to in person and in person is better. And I've written about this and you've got to get on planes and you got to visit customers, but we have more time, we all have time to do more customer zooms a week. Don't do everything by email. Don't do everything by DM and text. Talk to five of your customers a week. Just pick up the zoom, pick up the phone, and magic will happen. You will close more. So anyhow, this is my general idea. Lead from the front, don't hide. And Too too many CEOs, too many founders, and even too many VPs of sales, hide in tougher times. And it's going to catch up with you. And the team will smell it. The team will smell it in a matter of hours or days that you are not leading from the front. But if you do, I'll bet you the team does does even better. So thanks, everybody. I know that was a long, a long monologue of some ideas, but my basic idea is look at these. We'll post the slides. Do three or four of these. You don't have to do everything on this list, but do three or four of these things and I guarantee you you will sell at least 20 or 30% better next quarter than you are this quarter. I can't guarantee you you're going to quintuple sales, but I absolutely guarantee you will do more with what you have next quarter in this quarter if you, if you take some of these actions. So those are my thoughts and we can, we can open it up to questions that folks might have.

Okay, we've got a few questions in here, so let's start with Deepak, who has a question.

Hi. Thank you, Jason. My question is to understand how should the sales compensation be structured in terms of the base, the bonus, the variable, the ote and the likes given a quota.

Yeah, well, look, there's. Let's step back for a minute and we do have some good content on this on Saster. At the end of the day, you gotta. At the end of the day, there are sales. Sales does have to bring in more revenue than it consumes. Right. So you gotta start with some first principles at scale. At scale across almost any industry there is, from automobile sales to back in the old days, photocopier sales, whatever it is, sales tends to take home 10% of the profit as bonus of the profit. Okay. Not of the revenue. And what happened in SaaS and software is because in most categories of software, the gross margins traditionally have been so high. Right, right, right. You know, Right. Once and use a million times margins were 90%. Margins are still 90% at Adobe and Microsoft and Intuit that we basically gave the sales reps 10% of all the revenue instead of 10% of the profit. Right. So a sales rep might make 100 bucks when they sell you a $40,000 car because the profit's $1,000. So we, so we simplified that to 10%. And then we got to a basic model of 10 and 10. So, so that basically a sales rep should keep about 10% of the deal. They close and make another 10% in base salary. And that comes off the profits. And so, and so where that, where that, where that you can simplify that one layer simpler and say, historically successful software with decent price points, there's a 5x spread. Right. In other words, sales reps should close five times what they make. Right. The 10 and 10 is 20 times 5 is 100. So a very simple way to saying is, hey, sales reps, if you want to make a hundred thousand dollars, you have to close 500,000. If you want to make 200,000, you have to close a million. Okay? That's the basic math. And then as time has gone by, we've stretched that a little bit. And first we've said, hey, look, for SMBs, it's harder for SMBs. It's pretty hard to close a million dollars if your price point is $3,000 a year. Right. It's just so many deals. So we started to see that drift down to 3 or 4x. Right. And we kind of came up with a model of 3, 4, 5x 3x for SMB. Right. 4x for mid market deals, 2030, 40k and 5x for true enterprise. And I think that was mostly true through about 2019 or so. And then so much capital flooded into SaaS companies that it all, it all broke down. Right. People would give large draws, people would give guarantees. People became obsessed with the whole SaaS. There was inflation. Like sales reps would ask for more and more ote. So how do you deal with that? Right. And so this 3, 4x5x broke down the last two years and it's going to create some sad stories and some pain, but we have to get back to business models that make sense. So if you sit on a Google sheet and you just design 3, 4, 5x, you'll be fine. You'll be fine. That's the way to do it. And in the early days, if you're, if you're early and, and your marketing costs aren't high, you can put more of it into sales. That's what I have done twice as a founder. I've built companies that had relatively low marketing costs. Not that we didn't do marketing, but relied on social media, viral and others. And I put that extra money into sales. So I paid sales more than that 3, 4, 5x, not dramatically more, but enough more but enough so that the math worked out. And if you can, in the early, early days, you gotta, you have to make sure that sales can eat. So sometimes your first rep could not only take home 20% of what they close, in fact, in the very early days, it's often 1x. In the very early days, like you bring your first rep and you'll say look for the first 90 days, for the first four months you'll, you take home everything you close because we wouldn't have closed anything without you anyway. So just, just keep it all. And then after that we'll, we'll scale up to 3,4,5x so there's more content on Saster but hopefully that's a good framework. They have to eat, you have to make money. But some of the insanity the last two years, it's got to go because the mat that we're burning too much cash. We're all burning too much cash.

Thank you.

Okay, next question. And if you guys have a question, just drop into the chat that you want to ask. Either type it in or we can ask it live. So the next question comes from Adi. I don't know if you want to ask your question live and come on.

Sure.

Thank you. Jason. I loved your early point about not having enough closed Loss meetings, never enough.

Even at the best companies, there's not enough discussion. Never.

I totally agree with that. And, and so I'm wondering a lot of times it's what I hear as well. We don't really know why they didn't buy.

We didn't.

What, what have you used and how have you counseled people to try to get to the bottom of that, that sort of. And, and there's obviously eventually a lot of reasons perhaps, or you know, how do you answer that question of putting a better process in for getting that. Getting data out of that conversation?

I wish I had the perfect answer. I, I know what I have done historically in the past is I don't pay sales reps commission unless we know why, where the lead source is and why we won the deal. So I've always put two fields in Salesforce, which is lead source and why we won. And I just never paid commissions until they were filled out. When I did that for one deals, it worked magically. Now it's not perfect, but it allowed you to collect data in the aggregate. Right. You know, and so for lost deals, I don't have the magic. I don't think that. I don't know that there's the perfect process to get sales reps to do it. You can certainly create a mandatory field in your CRM. Why did we lose it? I do think there's at least two things you got to do, which is in your weekly meetings, go over the lost deals rigorously and force everyone to come up with one reason, one reason. And don't allow price to be the reason. Here's the only tip I can give you. Because if you allow price to be the reason, it'll always be too expensive. Like maybe not, not maybe not if your product's a two dollar widget, but if it's of any size, it's going to be price or budget. And that's okay because sometimes it is budget. But I would, I would force them to give you any answer other than price or budget because you won't get to the truth. Right? Because if, if a prospect. Because people forget sales reps for sales reps definitely forget that there's not that many prospects that want to waste their time on seven calls with a sales rep. It's not that fun. Okay, there's a. They don't inbound and spend hours with you and then not have ten grand a year. That's never the reason. Yeah, if it's a, if it's a. If it's a. If you've reached out to someone using your self serve product and they don't buy. Maybe, maybe it is money but trust me, if someone's had three or four calls, it's, you know, it's never what the product costs. So ask. You got to find out every deal that was lost this week. Not let folks hide lost deals because reps will hide lost deals and then force them to give you any reason other than price or budget. But beyond that and the field and the CRM, I, I don't have the magical answer. But with the final point, which I think is great, once you add that rigor and once you can actually track lost deals and why. Right, and create a. And then force yourself to create a weekly report lost deals and why, what's then magical is have someone else customer success, marketing, even a co founder reach out to a subset of those lost deals and talk to them. Just talk to them. Some of them won't respond to you, but you'll be surprised how many. And as founders or leaders, VPs or founder, you will find, you will find miraculous learnings in talking to those lost deals. But unless you create a report out of it, right, you'll. You'll never know. They'll get swept under the rug even by the best of us.

Thank you.

Next question is from Shantanu.

Hey Jason. Emilia, thanks for taking the time. My question is regarding like for startup founders, is there any metric that you would recommend under emphasizing in a high rate environment versus overemphasizing in a. In a low rate environment? Basically macro specificity for SaaS in a high what environment?

High churn environment.

Higher high rate environment. The macro currently high interest rate environment. High interest rate environment.

Would that change the KPIs that would hold the company to.

Yeah. I mean like is there like broadly speaking like a lot of the SaaS valuations have come down. Yes, as, as a consequence to that.

Well that's for sure.

Yeah. But what would you, would you suggest like any metric for founders in B2B SaaS space that hey, these metrics are fundraising for fundraising.

Or look, we could, we maybe we can do a different workshop on fundraising. I've done a few. Literally one of the best conversations I've had was from a couple weeks ago. It was a, it was a zoom and reinvent with Excel Iconic and Salesforce interest. Watch that one on Saster because it's so good. Look, let me simplify because it's a long, a longer topic. Anything series A and later requires the best metrics. Anything series B later requires Perfection. Today there is no, there are no series B or later rounds happening. Okay? They are so rare that TechCrunch will write up a 10 million dollar round today. Okay? Last year, literally, if you talk to the best reporters at TechCrunch, they would not write up a unicorn round. You could not get a journalist to write up a unicorn round last year because there were two. This is not a joke. There were too many. Now you can get TechCrunch to write up a 4 million dollar round. Think about that for a minute. They don't have enough content, forget about unicorns. They don't even have enough 8 million dollar rounds to write up. Right? So look, it's, it's. And so a few answers like seed has not changed that much in the current environment. It has, it has changed. People are not as quite as greedy but, but generally folks and seed have been looking for the same things for all times. If it's pre seed, they're looking for amazing teams doing something that matters because there's no metrics. And as you approach seed they're looking for, for hints of greatness in the metrics. Right? Very early growth, but very fast growth. Very early or, or very high usage. Right. You know I remember I met Loom in the early days. I didn't get it because the revenue wasn't there but the usage was off the charts. Right. At the seed round or you know, we. I did something the other day with Algolia was my, my second seed investment. I invested at 10k a month in revenue, but it was already quintipoline. Right. So I know those are. But it's supposed to be high bars but, but it's kind of the same for all times. The later stage stuff is almost frozen and what's changed in the middle and is the quality of revenue. So last year you could be a fintech with 10% margins and get valued the same way as a B2B company with 90% margins. It was insane. It was insane. A fintech that was hemorrhaging cash, that was that. And then we're seeing, we're seeing lots of, of, of pain from that in today's markets. So the quality of revenue today has to be much higher. So maybe that's the biggest changer of the 12 months. Pseudo SaaS is out of fashion. Products that claim their ARR Mr. But are not really recurring are disguised services as SaaS. Fintechs that have low margins are no longer treated like normal software companies. I was at a holiday party a couple weeks ago. Great One. And I met with a founder I've known for years. He was great and the business is great. I think he's at almost 10 million, but he can't raise any more money, even though there's nothing wrong with the company. And why? Well, it's really a services business packaged up as SaaS. Now he actually has very high margins. I don't know what they really are, but I believe them. They're 60 to 70%. It's a security product for a big need in security, but it's really people doing the security work. It's not really software. It's a thin veneer of software. And that's an example of something that, like last year people didn't care, like, oh my God, you're growing. He was growing at an insane rate at a million and raised at 100 million. He raised it 100 arx round. But today he's unfundable. Even though he hasn't missed a beat, his burn rate is not high. He's a great founder. He hit his plan from, from, from a year ago. It's just this pseudo SaaS, low margin SaaS. These, these things are just out of fashion, right? We want, and you know, we want high SaaS, companies that at scale, at scale can be very profitable. And then the last point, which is, and you know this, and it probably doesn't affect you if you're asking the question, but high burn rates are way out of fashion, right? I mean, I know it's hard to process, but it's, it's night and day. Literally 12 months ago, people cared about your burn rate, but not that much because here's the, here's the last point. We'll say 12 months ago, if you had decent metrics, VCs were almost 100% sure the next round would come in. Okay? And the entire way venture capital works is based on a series, you know, series A, series B. Those are series, okay? And, and there are assumptions based on the odds that the next series would happen. And through, even through 2019. And 2020 was pretty good, right? 2019 was pretty good. Each series got harder. Like, and as an investor, you knew the odds from going from a seed to an a would be 30, 30% and from an A to a B would be 30%. And they're all like these 30% winnowing margins. And then it got inverted. And in fact, your odds of raising another round got higher in 2021. They got higher because there was so much capital. No one could get into hot deals that that it was insane. And so that's the biggest change that I see. Founders today that have not been founders for more than four years in fundraising. This is the part they still haven't internalized. They know that there's more scrutiny on burn rates. They know it's harder, but they don't know how much dramatically harder the next round is going to be. So that. That's the biggest change in. We used to say, just assume the next round isn't coming, and that got perverted or inverted. And it's back with a vengeance. It is back. It's back with a vengeance. You. You kind of have to assume today that if you do raise capital, that that might be it for you. Or that. Or that in the old days, and I defined the old days through like 2019, you might @ least go a year without being fundable. All the best companies I've invested in, all the best unicorns and Decacorns. Salesloft, which was acquired for 2.5 billion in cash last year. Talk to us. Worth 10 billion. Algolia, worth 3 billion. Pipedrive, my first investment, which was sold for a billion and a half in cash. They all had over a year in their history. Maybe two years where they're unfundable, no one would fund them. Unfundable, we forgot about that for two years. But that's really the way it works. Not just you and I. The best companies in the world I've worked with have been unfundable for more than a year. So I'll break on that point.

Okay, we'll try and do a few more questions before we wrap. So next one is from Manny.

Hey, Jason. So our churn rate is very high because we serve micro SMBs. So, I mean, fortunately, all of them are organic, but we lose like 80 percentage of all the customers every month.

Yes. It's brutal.

Yeah. So we are planning to focus on one of the two segments. The first One is retail SMBs, which have organic traction but might still have churn. Because they are SMBs, right?

Yeah.

The second one is like healthcare companies, which has low churn but not organic traction. So which segment do you advise we should focus on?

Well, I don't know, but I will. Like, you're not at 10 million in revenue, right?

No.

No.

So we are just three people.

But.

No, I know the reason I asked the question, because I'll summarize an answer to you. 8% per month. It's not bad. Okay, but you're not SaaS. You're not business software you're at the edge of consumer software. Okay, I know this without knowing anything from you and what I can tell you is no one running the SaaS playbook with this type of consumer churn. No one scales past 10 million that I've seen. Now look, meal delivery that massively subsidized or uber things that massively subsidize customer acquisition can, can brute force themselves at the. But I don't know anyone that calls themselves business software that has ever gotten past 10 million. Okay, none. Now I, someone will go find an example more with this type of churn. I don't know anyone with more than 3 to 4% a month churn that has gotten past 10 million. That is, that is SaaS. So you have to change. Okay, the good news is you have customers, right? You have customers today. So like it's not as bad as it sounds because they're giving you constant feedback, right? Every bit of churn. Every customer you win is feedback and every customer you lose. So, so treat them as your, as your precious lab to learn from. Should you do retail, SMB or healthcare? I don't know. I think you should try both. I think what you should really do is look at the 100, 200 customers you have today. Job one is do better. Just do better each quarter. This is a classic Sasserone. So which sub segment of that customer is, is the highest value? Right. I, I went through this a great company owner which I'm on the board of does marketing and, and mobile for restaurants, for very small restaurants. Right. And we went through this exercise twice, we went through it a couple months ago where they have, it's very small businesses. These are like restaurants that have, this isn't that are one or two tiny restaurants. And so there's segments of their other business that have this 8% a month churn, right? But there's other segments that have negative churn. And it was brutal. But through the summer the company highly focused on the segments that got the most value. And now we're crossing 10 million, growing 10%. Okay? But if we hadn't made that change, I don't think we would have ever crossed 10 million instead of 10 million and 10%. So just look at what you have, focus on what's working. And if you, and if you want to do health care but you have no customers, I mean that's a big tilt. So I don't know whether to tell you to do that. But what I bet is if you have 100 customers, there's 10 of them that don't have 8%. And like that's the obvious, the best answer I give you today. But this won't work. Your business model is broken for B2B but your lab is working. The good news is your lab is working. It is teaching you the future. So thanks for the question.

Thank you.

Okay, next question's from one of our Workshop Wednesday regulars. Sheila.

Hey, Jason. Kind of moving back to the, the cash burn multiple and the focus there kind of two questions. First part is how do you expect the growth expectations to change from the typical like triple, triple, double, double, double. And then given those growth plans, how are you counseling your portfolio companies to think about hiring ahead on the go to market and kind of sales force given their ramp time? Because obviously you've got this extended burn until they get up to full ramp to try to hit those growth targets.

Yeah, I'll let me break those up. Because first of all, investor expectations for triple, triple, double, double, they haven't changed. Now what was interesting, if you go back and look at that growth session again that I did with Iconic and Excel and Salesforce, it was so good. And, and Iconic. Doug made the point at the growth stage at Iconic, he's trying to invest in Companies north of 100 million in ARR. They're making exceptions. They will invest in the best company in a segment if that segment is macro impacted. Right. So he said, look, we did a deal that's growing 30% that last year was growing 100%. But that's because they're number one. They're number one. Right. I was literally talking with the founder yesterday who's in a super competitive fintech industry that's super impacted today. Right. And he's growing at a mediocre rate. But his other two competitors are shrinking. Okay. This is a fundamentals without. This is a fundamental company. So I think he could get funded. It would be hard and his competitors weren't. And you'll get a pass at certain if you're number one in something important today. But it's a, it's a, it's a niche pass. And Iconic said they did one of those deals. One. So it's probably not you. Right? And you're number one in your market. Right. It's like investing in Airbnb in April 2020 or trip actions during the downturn. Right. When lightspeed went all in on trip actions. They're like, well, if travel never returns, this is, this will be a terrible investment. But we're going to bet travel will return. And now trip actions may be the first to go public of the next group. Right. So we are seeing those bets, but they're so rare you almost have to ignore them because they will confuse you. Right. Unless your trip actions or Airbnb or something like that. Otherwise, here's what's tough. And you know, I said this earlier, of my own portfolio, 20% are growing faster than ever in at the end of the year. Why? If you're an investor and the pressure's off today, like no one cares anymore if you invest, would you invest in those 20% or would you reach down below? What would just logically, what would you do as an investor? You'll just wait and there actually was a lot of pressure to invest last year. It was good. It was, it wasn't negative pressure, but people invested, people, bigger VC firms invested at three to four times their historical rates last year. Okay. Now they're going to invest at a third the rate they have. Like that's, that's like a whiplash, isn't it? To go from 4x to 1/3. It's not even to normal. They're like, listen to Excel Growth on that thing. They said they did one growth deal this whole year versus 25 or 35 last year. 25 or 35 to one. And there's. So there's no pressure to deploy capital this year. And if 20% of the companies are growing faster than ever, that's where all the capital is going to go. And it just means less companies are going to get funded. You don't get a pass. You don't get a pass from triple, triple, double, double, with one last exception and then I'll move on to your second part. The huge exception is existing investors. And this is why I've written a lot on Sasser around bridge rounds. So much of the venture capital today is going into bridge rounds and extensions. And if you made an investment investment last year of 5 million and the company was tripling and now it's growing 30%, but you believe in the founders and you invested 5 million last year, you'll probably put in a million this year because you don't want to lose your 5 million. So existing investors will give you a partial pass to triple, triple, double, double. But there's no point in new invest. There's no point. They may take the meeting, but don't think you're going to get a pass. Right. And don't make excuses in the meetings either. It's just not going to happen. How do you ramp. Look, people ask this question, but I actually think People were just stupid last year. You don't ramp epically ahead and quintuple your burn rate in one month, people. I'm not saying that's what you did. You always need look, in sales, first of all in sales, you have to hire ahead or you'll be behind. Right? But you don't have to hire a year ahead. Right, but you always need to hire a little bit ahead. Marketing has to develop pipeline. This isn't magic. It's just you need sane customer acquisition metrics, right? And so what you really need to do, the last point, I'll say is what you really need to do, what everyone should do, which people stopped doing last year, maybe you did, is you need to come up with a burn rate budget for the year for the company. And then you roll that into each department. And I'll say this, this is my last point. But it's a magical moment. If you have a true VP or a true head of, or a true leader and you say, look, Diane, Jane, Amelia, Caitlin, Jason, Kevin, you've got three hires this year or you've got your whole marketing budget's 500k, that's it. The mediocre ones will complain. The mediocre ones will tell you it can't be done. The mediocre ones will quit. You know what the great ones will say? Got it. I'll come back to you next week. I'm going to make 3 great sales hires instead of 10 500k marketing budget. Okay, I'm going to do, I'm just going to do podcasts, Sasser annual and a few direct things. I'm going to dump everything else. But the, the pros know the. I've seen this time and time again. Like they adjust, if not in an hour, in less than a week. And so that's what you do. You have to have, it's this simple. In tougher times, you have to have burn rate budget for the company and then you have to break it down by department, tell the department what they have. And the best ones will, they will evolve rapidly and sometimes you don't even see a lot of impact because they just, they just focus on what works. So thanks for the question. We got one more. Amelia. Is that it?

Yeah, you've got. Well, we'll try and see if we can sneak in two. Okay, next one is from Menucha.

Hey, thanks, Amelia. So, Jason, just wanted to clarify a bit about your last point about, you know, raising a B round. So essentially, from what I understood, you were saying that after you raise your Series A round or your first round. You shouldn't expect to be able to raise more money like treat that round as if it's your last funding.

Just don't expect it until you know it's going to come. Yes, yes.

So when you say that, do you mean that companies should plan to be profitable with that first investment? And I'm asking because from what I've seen, like, I'm relatively.

I call it Cash Flow. I haven't written this in a while. I'm going to refresh this post. I call it Cash Flow Break Never. It's not that you have to be profitable, it's just you have to have a model that doesn't assume any more cash in. They're not the same. You can have a slowly declining burn rate where, where it takes you four to five years to run out of money or whatever. You don't literally have to be. It doesn't have to be so dramatic that tomorrow your burner has to be zero. But yes, you do have to be Cash Flow Break Never. Right. When you. It's just, it's just part of the job. Right. There it is. It is possible to build a company without 300 million in. In venture capital. Right. Which is the average in the cloud 100 from a couple years ago. And to IPO, the average company that IPOs are raised 300. But when the IPO is valued at 5 billion, raising 300 is not that crazy as a percent of 5 billion. Right. But yes, you have to. You. You have to. And, and it will make you a better company. So essentially that's not the question you're asking though. But yeah, it has to be Cash Flow Break Never. It does.

Essentially what you're saying is that like once you raise 10, 15 million, you don't necessarily need to be profitable, period, within a year, but you basically need to have a plan that you don't run out of money in two years and you have to raise another round.

Yeah. Until you know for sure where that money's coming from. This is just the way it was. This is the way my entire career in tech until 2019 was. That's the way every company was run. And then. And then people just got insane because they were so confident the next round would come, that all discipline was lost and it wasn't irrational. The markets got inverted like we talked about. It got easier. Right. But that's just if. It's just always been the way. Right. It's always been the way. I mean, if you go back and look at the the session I did with the founders of HubSpot, Brian Halligan and Darmesh, they talked about how over a year they couldn't raise any money at HubSpot. They went through a wilderness, too. Forget about the ones I gave you. Like, it's just always been this way, right? It's all like, capital used to be very hard. It's. And then it got. It got way too easy. And. But, yeah, that's the answer. And. And if that means raising a little bit of extra money, if that means slowing down some hiring, that's just. That's just the way. The way it should be. But you. But if you raised money in the last two years, you got crappy advice. But as founders, you got to adjust, right? You got crappy advice.

Okay.

We got one more. Time for one more. Amelia.

Yeah, sorry, I stuck on mute. Last one is from Rohan.

Cool. Thanks.

Amelia and Jason. Yeah. Love the story that you told. You briefly touched on about leading from the front. Wondered if you'd be open to sharing a little bit about that specific deal that you talked about. You went out, you know, this customer didn't have renewal coming up for six months.

Yes.

You got them to close on 800k. What were like the typical ACVs at the time in that company.

And they were one of our bigger customers. Right. So they were one of our first big customers. So they were on an early deal. I think by that point, For Adobe Sign EquuSign, a bigger customer was probably paying 250k a year. Right. 300k year. That's some of our bigger customers with lots of sales. Big sales teams were paying. And they were on an early sweetheart deal. So they're paying like 80 or 90. And look, they deserved it. I mean, they did a lot. This customer, they did a lot for us. Right. And I would not have even even thought to raise their price because they did case studies, they did video testimonial. They got us. They got us like three or four other customers. I mean, that's why you got to be really careful about raising prices on existing customers. Because if you do it wrong, especially your early customers, I think it's never worth it. You got to grandfather them because sometimes they must have brought us in millions of dollars of goodwill from being one of our, like, first two or three global, you know, Fortune 500 customers. But they were on a really big sweetheart deal. So I just told our champions, like, I just. We just can't afford to do this. I need your help. Right. And I gave them all the prices with the names redacted of all our top 10 customers, I showed them how they were paying by far the least. I told them they would still be paying the least. And I asked them if they could please prepay three years.

Okay.

And then I don't think I would have done it if I had 10 years of cash in the bank. And I don't think I would have done it if I didn't have to lead from the front. But I needed this for the team. I needed the team to believe. And our burn rate, I think our burn rate then was. Was probably 50 or 60k a month. Because I remember we got almost a year of Runway out of this when times were tough. Right. But I had. I had to. So I was just. You know, there's been a couple moments in my career in with customers and sales where I was positive but brutally honest. That was one. And I just showed them all the data. I was totally transparent. Right. Like, here's whatever. I didn't. You know, here's what I didn't tell them, but here's what Dell's paying. Here's what Comcast, like, you still are. Are the cheapest. I love you. And I asked for three years. And they. They're such a big company that was so profitable. The three years actually didn't really matter to them, you know, because you don't know. It was so much cash. They had already budgeted using our product for a decade. Okay. This was key to the story since you don't know. Like, there are. There are trial periods, and then really big companies change software platforms every five to 10 years. And since in their mind, they'd already budgeted three to five years and cash itself didn't matter. What mattered was their budgets. They were willing to trade off a little bit for the cash because it was coming. Right. But you don't know unless you ask. Right? So that. That's, you know, I. I did. I did it with one customer where I had. We'd both done so much for each other that I had that. But I did shock them. Like, I do remember. They were shocked from the conversation, but I felt like I had no choice. Right. I had to play the play.

Awesome.

Cool. Thanks for sharing.

Okay, thanks, everyone, for joining.

I know we went along to everyone for the time.

Yeah. So if you didn't get the chance to watch the whole thing, we'll be sending the recording and slide afterwards since we were live streaming. And we'll be back not next Wednesday with the holidays, but the first week of the new year. So we hope to see you again for our next workshop Wednesday. Thanks, everyone for taking the time.

Thanks, everyone.