GTM 105: Scaling to $100M ARR with Creative Demand Gen and Hiring Discipline with Sam Blond

The tactics that it takes to scale from 10 to 100 are evolved. The leaders that are able to evolve as the needs of the business also evolve. Am I presenting myself in a way that investors believe that they can return the fund by betting on me?

Where would you spend your time if you could only make a few bets in the Demand Jam bucket?

Really exhaust proximity to the business, personal connections, customers before you leverage this, like, truly cold customer acquisition.

Any key things you think you got wrong?

Be very deliberate about how your customers are implemented and onboarded. You only get one chance at a first impression. Behind the scenes, it was a small group of people that were doing everything.

Welcome back to the GTM podcast. It's your host, Scott Barker. I want to know how this insane growth actually happened. One thing we've learned in helping our founders and operators scale their businesses is that cash is one of their most precious resources. Cash flow is really the lifeblood of any business. That's why we partnered with Flex to help companies improve the way they manage their cash flow. Flex is a finance super app built around a credit card with a unique net 60-day term that enables businesses to make an investment today and pay it back 60 days later with 0% interest. If your business growth is constrained by the cash flow you need for inventory, marketing, advertising, or really anything else, Flex could provide you with a really interesting growth lever. Uh, we use it here internally at GTM Fund. Uh, for more information and to apply now, visit www.flex.one. That's www.flex.one. Hello and welcome back to the GTM Podcast. You've got Scott Barker here. As always, wanna thank our listeners for rocking with us for the next 45 minutes or so. We know there's a lot of places you can get your go-to-market information. From, so we don't take it lightly that, uh, you're hanging with us and, uh, super cool. My VP of marketing just told us we crossed into the top 1%, uh, podcast globally in terms of, uh, listens, which is pretty cool for a niche go-to-market SaaS podcast. So, uh, thank you all for rocking with us. This is a very special episode. I've been excited for getting this guest on for a long time. We finally made it happen. I am joined by Sam Blond. Sam, welcome, man.

Thanks so much for having me, Scott. Congrats on the Top 1% milestone, and thanks so much to the audience for tuning in.

Thank you, man. Thank you. It's been cool to see the reception, and it's thanks to guests like you. And really quickly for the listeners, so Sam, if you haven't followed Sam's journey, it's an impressive one. Sam recently left Founders Fund, in my eyes, one of the greatest VC funds of our generation. Where he was an investing partner, and he left to be co-founder at a new startup, which we might tease a little bit. We won't go too far into it. Prior to Founders Fund, Sam served as the chief revenue officer at Brex, where he oversaw revenue growth from less than $1 million to several hundred million dollars of ARR. Sam joined the company before its official launch, so saw it from literally like idea stage into the behemoth that it's become. And then you left 4 years later and the company was valued at $12.5 billion, which is insane. And then prior to Brex had an incredible run as well. Sam was the VP sales at Zenefits where he oversaw revenue growth from again, less than $1 million to $700 mil of ARR in 2 years.

$7B. I wish I'll take the extra zero. That would've been a more impressive outcome, but we were 1 to $70 or thereabouts. Thereabouts in a couple of years.

Hell yeah. Hell yeah. Well, thanks for the catch there. Just trying to pump you up even more, you know?

Like I said, I'll take it.

Well, man, so, so impressive that, that background. And, you know, my first question to you is, I think there's this notion that your sub-$1 mil guy or gal isn't going to take you past 10 isn't going to take you past 50. And you've been able to do that twice. Um, do you think that that is a correct assumption that you need a different archetype of leader, or are you just an anomaly?

Oh, well, look, um, I've been, you know, as you were talking through the 3 firms that you mentioned, Zenefits, uh, uh, Brex Founders Fund, even before that, um, I was very lucky when I joined or when I, uh, got out of college to join a company called EchoSign. And I, I've just been really fortunate to surround myself with incredible people and companies that have done so well and even afforded me the opportunity to continue growing as the business is growing revenue. I only influence that so much in a VP of sales or CRO seat when you have people like CEOs, co-founders, CTOs, the folks that are building the product. And so I've just been fortunate to have the opportunity to scale beyond that revenue milestone. And I think the real answer is like the tactics that it takes to scale from 10 to 100 are evolved from the tactics that it takes to scale from 1 to 10. And so it's not going to be one size fits all where, um, I have this like, you know, deeply ingrained belief that, uh, revenue leaders broadly can and should take businesses from 1 to 100. And like, you know, they shouldn't be replaced along that journey. I think it's the leaders that are able to evolve as the needs of the business, uh, also evolve. One, you know, really big one that comes to mind that I think reaches an inflection point around that $10 million ARR point that you mentioned. And again, not one size fits all. I needed to, and I experienced this for the first time at Zenefits, I needed to be able to hire people that were both more senior than me. And also much better than me at their respective functions. And I think where some sales leaders that have seen, uh, success from an early stage, they join a company sub $1 million ARR, they scale it to $8 to $10 million ARR. I think that the thing that I see oftentimes preventing someone from taking it to that next stage of growth is the ability to do that. Hire people more senior, hire people that are better at their respective functions than the sales leader themselves. And I think that's sort of the thing that I see most frequently stalling a revenue leader's growth where, you know, they're sort of topped, I think, is the most common occurrence there.

I think that's a great, a great callout. How were you able to do that at, let's say, Zenefits? How did you— it sounded like that's the first time you really experience the need to hire people better, hire people more senior. How did you approach those conversations and get them bought into it when they might be thinking in their head, I should have this guy's job?

You know, I think there's a few things that come to mind. One that I actually don't control. And then one that I do have more control over. The one that I don't control, You know, Zenefits at $10 million in ARR, when we started hiring VPs to report to me as a senior VP, the company was just crushing it. And, you know, my close friend Parker, who is the CEO, and he's now the CEO at Rippling, you meet with Parker and like, you just, I'll use the cliché, you just want a seat on the rocket ship with this guy in charge. And the revenue growth was literally second to none. I think there's a lot of, you know, external publications that cite Zenefits at the time as the fastest growing SaaS company of all time. And so, you know, when you have those dynamics at the company level, it makes recruiting easier. Like salespeople want to join, sales leaders want to join. I think just across the company, having ability to get an equity stake in a business that is experiencing that type of success is really attractive. I, you know, I control some of that because I was a VP at the company, um, but only so much. Uh, and so much of that is sort of like outside of my control. And again, was fortunate for Brex to have those similar dynamics. I think within my control, I would say if I think about areas of, um, strengths and weakness for myself, Recruiting is an area that I think of as a strength. Um, and it's partially a strength because I prioritize it. And so I have a lot of experience recruiting. And so if you're looking for maybe advice coming out of this question or conversation as a sales leader in one of these seats, that's it, you know, 1, 2, 3, 4, 5, 6, 7, 8, 9 million in ARR and looking to continue scaling with the business and being the leader reporting to the CEO versus having somebody come out, having somebody else come in, spend a lot of time recruiting, prioritize recruiting, make sure that you do not lower the bar on recruiting and challenge yourself in interviewing and trying to recruit people whose resumes you see And you were like, that person's like more senior than me. Um, I don't, I don't know that I have business, um, having them report to me. Um, and, uh, go through that, that process.

From a time allocation standpoint during that time period, how much time on a percentage basis were you spent in recruiting activities, would you say?

Well, I'll try and answer the question directly. Gosh, like 50%. Um, and I think that, um, part of that was because a recognition on my part that, uh, which I still believe today. I mean, by the way, we got plenty wrong. Uh, so we can talk about those things too. Um, a recognition on my part that the, the number one thing that I can do to influence the success of the business is hire the right people. Um, people build companies, and if we are hiring the best, and then insert whatever role we're hiring for, our probability for success is just significantly higher. And mistakes there set, and oftentimes the company, but certainly the organization back so far, you know, if you're hiring a senior leader, you make a mis-hire, you of course have the sunk cost of the recruiting and onboarding of that person. But there's also second-order impacts, like maybe they brought in the wrong people. And so you have people that reported to them that they brought on. And so getting these things right is just pretty critical. And, you know, you couple that recognition that I have, and I continue to believe today with the fact that we were growing so fast. And so we were as a company and as an organization hiring so much that it just meant that I was recruiting a lot almost regardless of whether or not I believed believe that.

Yeah, I've certainly seen firsthand the impacts of getting those wrong senior leadership hires because it's— they can come in and also everyone wants to have a big impact right away. So even if you catch it's the wrong hire in like 3 to 4 months, they've spent those 3 to 4 months implementing all of these changes that you then have to, you know, somehow claw back. And it can be incredibly, incredibly disruptive. Um, so obviously getting, getting the right people, so that was huge, is, you know, you're spending 50% of the time, which is crazy. And then you mentioned this other bucket of things that are somewhat uncontrollable, but you need to have the growth and the metrics to attract this talent. And a lot of that growth comes from doing demand gen well early on. Um, how do you think about demand gen today? How did you think about it back then? And knowing that this audience is, you know, primarily revenue leaders and founders at kind of earlier stage companies, um, that are maybe, you know, trying to get to that $10 mil ARR, where would you spend your time if you could only make a few bets in the demand gen bucket?

So much comes to mind. Um, let me start before I get into the specific answer of the question. You mentioned something like I was in the fortunate position at Zenefits and Brex of having companies that were doing really well, growing very quickly, incredible investors, you know, really exciting stock price appreciation through financing rounds, both internally and externally. You can manufacture some of this, like a lot of the narrative that exists in public, if you're going direct on like social media, if you're going through PR, the way that the business is portrayed in different publications as you earn media through fundraisers and whatever else. And then internally, you do want to focus on the story that you are creating. And when I talk about like manufacturing the narrative a little bit, Zenefits and Brex, like we were sort of faking it until we were actually making it around what we were going to the employees of the company with. And we created a winning culture because we were deliberate about creating a winning culture, not because we started winning and then that sort of manifested in the culture. A little bit buzzwordy there, but I think like, You, you get the point. Um, and then the thing that comes to mind around, uh, demand gen, which is a lot, I hear, here's what I observe most startups doing, which is, is largely just like sort of going through the motions. And what I mean by that is like, we want to do, and I'll take a couple of different categories. We want to do outbound. What most startups are doing is they're buying ZoomInfo or one of these systems that provides contact information. They're buying an email sequencing tool like Outreach. They are putting contacts in their target market in sequences that, you know, they either write or they— Bear, you can't— I have a dog.

Quick cameo. We'll take all the dog cameos we can get.

It's fun trying to keep my train of thought and then also manage expectations with this monster. Um, okay, so continuing along the path of, uh, outbound, you know, they buy these different services and then they effectively blast the universe. Um, and oftentimes this happens from an early stage where the company is an unknown company. The person that is reaching out is an SDR that is unknown to the person that they are reaching out to. And then they get like, you know, near zero response rates and you're sort of like checking the box of doing outbound. You can do this with like every channel. Next one would be something like events. We are sponsoring the event and we pay for like a gold booth and we have a couple people show up at that booth and, you know, like try and pitch to people that stop by the booth. Okay, we're doing like paid advertising. And so, you know, we pay Google every month and we pay LinkedIn every month and they surface ads to like our ICP. And so many of these things I think of as just sort of going through the motions. The two things that I would do differently, one is I would on a pretty regular basis, if you were an early stage startup, this is like a monthly cadence. As you mature, this is probably like a quarterly cadence. Rather than, or in addition to measuring the traditional metrics around like MQLs, SQLs, SQOs, those sorts of things, I would just pressure test if you are being creative enough. And, you know, as a reflection, as we are ending, just ended Q2, what were the 2 or 3 most creative contrarian campaigns or marketing things that we did in Q2? And I think for most companies, the answer, like, it boils down to we didn't really do anything. You know, like you try and come up with something that like sounds kind of creative and then you hear that and you're like, they're not that creative. Like we, we, um, had an ad on LinkedIn that incorporated animation into the ad. Like, it's just like, that's not, um, actually creative. And so then, you know, you do this both backward looking and forward looking and really, I think, um, uh, really make sure that you are being creative and contrarian because the most effective, uh, demand gen campaigns that I've ever both experienced and then also observed as somebody who hasn't put them together, they're new, they're creative, there's something that someone else isn't, or most people are not doing. So that's like one takeaway. And I can give some examples there if it's helpful. Um, and then the second takeaway, and this is true, um, for, from sort of an early stage, I would be far more targeted than most people default to. And I would think about the world in terms of concentric circles. And, um, this is one thing that we did get right at Brex. And so I will give, uh, some examples. When I joined Brex, we didn't have a website. And so imagine trying to send like a cold email to a, uh, uh, customer and they go to brex.com and it literally said coming soon. So like we, we are as unknown as a company can possibly be. There was no PR about us. We were waiting for the product launch and the fundraise announcement. So on the internet, it was all about like Brexit, um, which like isn't good, you know, brand tailwinds for, for doing like outbound. So what we did was, um, we first started with in-network connections that we knew people personally that were, you know, you go to like LinkedIn, you look up first-degree connections, you sort by founders at tech companies that I'm connected to, that Enrique was connected to, and you sell to your, um, friends and former colleagues. And from there we went to, uh, Brex was fortunate to be a YC company. We went to like their YC batch. Um, and again, they, they all know Pedro and Enrique and we, we tried to exhaust their batch as much, much as possible. Then we went to prior batches. It was like, you know, we were in this YC batch, we just raised from YC continuity, et cetera. And so like the, the likelihood of replying and getting a meeting because of that proximity was significantly higher. Um, then when we launched, We put billboards all over San Francisco. This isn't something every company can do because it is expensive, but we tried to take advantage of those brand tailwinds and target customers that were headquartered in downtown San Francisco that we had a strong belief, like they would have seen our billboards. And so they would like probably know who we are. First corporate card for startups, all over billboards in downtown San Francisco. Um, and then the other thing that we did is we tried to leverage existing customers. And so you close a customer. That is, um, I'm just trying to think of the right analogy here. Um, you know, you, you close a tech company and then you go to G2 and you look at all of their competitors and then you reach out to their competitors with this, like, hey, we just closed company X and we're helping them do Y. And man, like we got so far into customer acquisition, revenue growth. By the time that we had such a brand that we were starting this like truly cold outreach, but it didn't mean that we weren't doing outbound. We were, it was just like very targeted outbound with this concept of concentric circles, trying to solve for proximity to the business and the people within the business. Um, and so, uh, I think like You know, just applying that more broadly to any demand gen approach that you have, those are like two of the big takeaways that I would have. Be creative and contrarian and really exhaust proximity to the business, personal connections, uh, customers, uh, before you leverage this like truly cold customer acquisition.

Yeah, I think that, uh, I'm seeing that a lot now is folks finally waking up to that idea. Call it ecosystem-led growth, community-led growth, whatever you want to call it. It seems like out of necessity, folks are starting to pay more attention to this idea of— I like how you put it— concentric circles. And I've always thought of it almost like a tree, right? And you get a branch, which could be a new industry. And then, all right, what are the leaves of that branch that all kind of look the same? And exhaust that whole branch before you try and create another one Um, so I, I like that. And so going back, so you have this idea of get more targeted and then get more creative was the first one. Can you outline some of the more creative campaigns that were successful at either Zenovitz or Brex?

Yes. And I'll reinforce what I'm talking about a little bit. Um, what I see all too often in, uh, people in teams that are focused on generating demand. Is they take like the easy path. And, you know, we talked about outbound. The easy path is just like dropping people in sequence that are in your target market with like a pre-written sequence or an AI-written sequence that I don't even have to like write myself. The easy path on events is you like try and negotiate 10% off the gold booth sponsorship and you show up and you raffle an iPad. To like, you know, the person that lets you scan their badge and like hope that you get more badge scans and you're just scanning anybody that comes by the booth, you know, with the promise that like you've got a 1 in 1,000 chance of winning an iPad.

We've got some marketers right now going, oh, oh shit, that's our, that's our strategy next month.

It doesn't mean don't raffle the iPad. I'll get to like, I'll get to what you should do and what we did do. And, you know, the paid advertising thing, it's like, you just go through— how easy is it to call your representative at whatever platform you want to advertise on? LinkedIn, Twitter, Google, some popular ones, and just like pay them to surface the ads. Like, these, these are the, like, easy way out, going through the motions. On, uh, each of these different channels. And here's the approach that I have taken and what I would recommend taking. Um, first with, uh, outbound, and then I'll sort of like go through each of some of the ones that I mentioned and try and provide an example. But, um, with outbound, I did this like now, uh, well-known, uh, campaign that where we sent people bottles of champagne. And we basically took founders that had raised a Series A in the last 6 months. And what most people would have done is they would have just dropped them in a sequence. And what we did was we constrained the list to San Francisco Bay Area. We sent people a bottle of champagne for this specific campaign. It was Veuve Clicquot, which like is super interesting because it gives the perception of like high end. Um, but it's $40. And so if you think about like spending for it, so people get this bottle of champagne, like this super nice bottle of champagne, like probably nicer bottle of champagne than most people drink if they ever drink champagne, but it costs us $40. And so if you think about that from like a, uh, uh, customer acquisition cost perspective, like pretty cheap, like, um, we're, we're approaching like sending people, um, donuts and bagels and lunch or something like that. Uh, but. You have this sort of like prestige of this fancy bottle of champagne. Okay, so we did that. It was super effective. That doesn't mean everybody that's listening should go send their ICP bottles of champagne. I think it's an illustration of how to do something new and innovative in the like category of outbound alongside like some of the really targeted stuff that we focused on, like the concentric circles that I described. If we think about events, Brex sponsored SaaStr. SaaStr is my like favorite event. And I think like the community is really exceptional. And so we always wanted to be as involved in SaaStr as we possibly could. And so we did do like, you know, gold or platinum sponsorship or whatever, but what we did was, and this is the way that I would treat many of these different channels. Um, let's say 60 days leading up to the event, we get the core group of people that are most relevant in a conference room. Okay. Saastr is coming up in 60 days. Before this meeting, everybody come up with the 3 most creative ideas that you can come up with for us to maximize our sponsorship, maximize customer acquisition, uh, coming out of this event. And we get the 4 to 5 people in a conference room. Everybody puts their 3 ideas up on a whiteboard. We sort of like gauge reaction from the folks in the room. You know, with some of these things, everybody's like, that is genius. Like, we've got to do that. And with some of them, people are like, interesting idea. Like, maybe it doesn't make the cut. Uh, and where we ended up was, um, if you had gone to Saastr in the early days, first you get there, we have all the billboards surrounding the conference. So. As you sort of like walk from your hotel to the event, you're seeing a bunch of like Brex billboards and you actually can do this relatively inexpensively. This was downtown San Jose. I think buying like the bus shelter ads, we're talking about like a few hundred bucks per bus shelter ad. We then had a group of TaskRabbits that were decked out in Brex gear and they were handing out breakfast burritos on like the public sidewalk right before you entered the event. And so like everybody that walks into the event gets a breakfast burrito with like the people, it's a Brex sticker on the thing. These things like $3, $3 a burrito or something like that. So we're still, and remember like the entry-level sponsorship is like $50 grand and for, you know, a decent booth or whatever, you're at $100 grand. And so maximizing the sponsorship through these types of things are a rounding error compared to the sponsorship itself. We then had a magician that was at our booth and he was incorporating a bunch of Brex tricks into his magic act and giving away preloaded Brex gift cards to people who stayed and watched the magic show. And so as I would walk into the sponsorship hall, there'd be like crowds of people around the Brex booth and every other booth would be empty. Because, well, we were giving away money, but also it was this like cool magician who was doing tricks that were quite good. The other thing that we did was, um, it was in San Jose. I don't know what percentage of people travel for SaaStr, which is pretty high. Um, and we sponsored, um, we actually went to SaaStr with this sponsorship. They weren't doing it before. We sponsored the key cards. And so whenever anybody checked into the hotel, they would get a hotel key card that was a Brex credit card. And so every time they wanted to enter their room, they'd pull out the room key and it was a reminder of like their Brex credit card. And so all of these ideas came out of this process that was like, everybody come up with your 3 most creative ideas. We get in a conference room, sort of like, you know, vote whether directly or indirectly on what we think the best ideas are. And then we are like, by far the most creative sponsor that shows up at that event. And you do this with each different channel. In the interest of time, I'll do like a fast one on paid advertising that I've used as an example with some folks before. And so it might not be new. Most people pay LinkedIn. One of the more creative ones that I've seen is what Rippling does when you onboard as a new employee to a company that uses Rippling. Rippling then sends you an NPS score, uh, for your onboarding experience. For those not familiar with Rippling, it's HR software. So you're filling out like your W-4s, I-9s, employment agreement, health insurance, those sorts of things as you join the new company. Anybody that marks it a 9 or 10, Rippling offers a $50, uh, Visa gift card to go on LinkedIn and post about your onboarding experience using Rippling. And so you have all of these, um, seemingly organic posts from new hires at companies talking about how awesome their onboarding experience with Rippling was, and they're getting like all sorts of engagement because if you, if you follow LinkedIn, like the things that get most engagement are when you join a new company. So many people like it. Congratulations. So much more. So, um, think about like the ROI on that $50 compared to paying LinkedIn $50 to surface a Rippling ad to their target ICP. Um, and like, you know, these are illustrations that I hope get people's creative juices thinking, but like, you should do this with basically every channel you want to invest in. Like, how are we doing it differently from the way that everybody else is doing it?

Great examples. I love the breakfast burrito is a really good one. I hope you guys ran that a few times. You can run with that one. That's great. So creativity. So, I mean, I look at I used to run outbound teams, you know, back in the day, and basically all my success came from not doing things the way I was supposed to do them. And that usually came out in the form of creativity. And I see a lot of maybe like younger teams getting creative— not young, younger is, uh, like early stage companies— and then as they scale, creativity gets beaten down. There's just so much going on, you know, and, you know, I think there's this, as you scale, you cross 20, you cross 25 mil ARR, maybe 50, and then it's hard to keep that culture of creativity going. How were you able to do that and make that a key pillar of your kind of go-to-market teams that you were running?

It's such a good question. Good observation and point. And even as I reflect on, um, my time at Zenefits and Brex, I think what naturally happens is the less creative, uh, demand gen strategies, tactics, uh, become more effective as the business starts realizing more success. And so, you know, I talked about like the motions of dropping people in outreach sequences and blasting the universe. Well, look, like when Brex didn't have a website, our reply rates were going to be like zero to that email. And if you fast forward to the time that, you know, let's say Brex just announces fundraise at a $12.5 billion valuation and, you know, the market share within startups is some massive percent and, you know, we have this like huge brand tailwind. Well, gosh, like people start replying to those emails a lot more frequently. And so I think that is part of the natural evolution. And so two things come to mind. One is like, you probably don't need to be quite as creative as the business scales and starts realizing success. That said, like, I would really force it for as long as you can. And as I'm involved with some of these later-stage businesses today, I do think that getting back to, like, some of the examples that I just cited would really serve the business well. Um, and so, um, I think it's something that you have to just sort of like fight gravity around. Um, because it does get easier to, to do some of the things that are less creative and like maybe the real answer is you should do both. Like you should both be doing the things that are working and are less creative, but like force the, um, uh, muscle of, of continuing to be creative because it will, um, pay long-term dividends if you can. You know, keep coming up with these examples that I gave and keep sponsoring events the way that Brex did in the early days, even if you're a mature organization.

Yeah. Now that's, that's a good callout and it's, it's interesting. It's like the creativity gets you the brand and the brand makes those more boring channels more effective. And then you kind of forget what got you there. And I think one of the sentences of death in a lot of boardrooms or executive meetings is this idea of, well, we're an enterprise brand now, or we're going after these big enterprise company, so we can't have like a breakfast burrito that doesn't fit this new image of enterprise. And it's like, I always thought that was so wrong because even at these enterprise companies, they're humans, they're people, and everyone likes a fucking breakfast burrito. So it doesn't matter.

Yeah. Uh, I do like the extra, maybe, maybe a, um, tactical way of preventing this from happening. Is rigor around the exercise that I recommended, which is, okay, we're out of Q2. What were the 3 most creative things that we did in SDR? What were the 3 most creative things that we did in demand gen marketing? What were the 3 most creative things that we did in brand marketing? These were like more mature organizations where these different, um, almost like different functions exist. Uh, and I just suspect that most companies that go through this exercise, you will see the list of 3 and you'll kind of be like, we're not creative enough. Uh, and, um, that, that's maybe a tactical approach to, uh, addressing it.

That's a great, a great exercise. And then naturally celebrates the most creative, which will then foster more, more of that coming to light.

Um, and I mean, like, just a side thing. These things are fun. Like how much, how much fun is it as a Brex employee to walk into the SaaStr conference and you're everywhere? Like you see the billboards, you see the breakfast burritos, you see the magician at the booth and the booth is like, it's so motivating. Um, and, and you could use that for like each different, each different sort of creative example where like it, it, it makes, um, it makes employees proud, uh, to stand out in that way.

Totally. Then it's like, I don't just work at a SaaS company, we're like the fun SaaS company, you know, everyone wants that kind of identity, which is cool.

All right.

So you did a ton, right? A ton, ton, right? You know, Echosign, Zenefits, Brex. Any key things you think you got wrong you want to highlight?

So many. So I'll maybe start just chronologically with Zenefits, a few things that come to mind, and then I'll do Brex. This will be maybe a 5 or 6 minute monologue, um, but I'll, I'll try and time box it as best as I can. Um, for those that aren't familiar, uh, because this is, um, starting to sort of like age out, but Zenefits was this company that, uh, uh, was a precursor to Rippling, which most people listening in would be familiar with. Same founder, CEO, similar space. And we, I joined in late 2013 and we experienced hypergrowth. And so everything was growing, revenue was growing very quickly, headcount was growing very quickly, stock price was growing very quickly. And it sort of like the downfall of Zenefits, which was about 2 years, 2 to 2.5 years after I joined, we had a lot of negative PR around things like compliance and culture-related issues. And so, you know, that's, I think, for those that are familiar with the Zenefit story, what they are familiar with. I think the more interesting topics for this audience are from like a growth standpoint. What, what are the things that went less well? Because you asked, like, you know, what are some of the mistakes? Okay. Here are a few that come to mind. Uh, we eventually got RevOps right. Um, at the time it was like sales ops, you know, it sort of evolved into RevOps. Um, but when I say eventually, we should have invested in and focused on RevOps earlier. And, um, I had come from— this is a different time, but I had come from Echosign. We were a privately held company that was acquired by Adobe. Um, and we didn't have sales ops when we were acquired. And then the sales ops that we got within Adobe was like, you know, Adobe sales ops and it wasn't super effective or impactful. And so I was like fairly resistant as a sales leader to introduce sales ops because oftentimes the experience that I had at Adobe was that they actually, they added like friction to our ability to get shit done. So I like resisted incorporating sales ops for like as long as I could. And then the system stuff just got so out of hand and the it became clear to me that like we actually do need support here. Um, we hired a very senior RevOps leader, sales ops leader at the time, who came in and, um, within like 2 weeks came to me and said, you know, we're, we're selling to customers in 48 states right now because we're licensed as an insurance broker in all 48 states. But if we think about our business, there are so many things that influence revenue. Um, those are conversion rates, which vary greatly state by state for different reasons. And, um, commission rates, which also vary greatly state by state. If you think about, um, the average cost of health insurance in California, it's like 4x the average cost of health insurance in Alabama. And that manifests all the way through the commissions that companies like Zenefits are receiving. And so this RevOps or sales ops leader came to me and, and this was when Zenefits was like $30 million in ARR and was like, dude, we should stop selling in 20 states like tomorrow. We're going after this massive TAM. And at the most extreme example, there was a state that we had like 1,000 demos in the state and we had won like 2 customers. And, you know, you like, you don't stop and pay attention that every time you get a demo from like Mississippi or Alabama or whatever it was that like, those don't really close because the next demo you have is in the state of California. And like, it's just like all in the wash. Um, and so then I think like, you know, really valuable, less— oh, and you know, like there was a, uh, an evolution to that comment that was like, if we do this, Here is what will happen to our revenue as we continue scaling, because we will replace these demos with lower revenue-generating opportunities that convert at lower rates with the higher revenue-generating opportunities that convert at higher rates. And like, this is what happens to revenue over the course of the next, like, you know, through the end of the year. It was right. That's what it did. Um, and so that's, I think like, um, one big example, but I think the, the meta point is, um, getting RevOps right. I've never, I've never seen an example where a company has invested too early or too heavily in RevOps and, uh, the efficiencies that that function will drive and this sort of like ROI that is oftentimes difficult to measure because they aren't a sales rep, but you will see sales rep effectiveness improve so much. I think is one of the early sort of takeaways and mistakes that we made at Zenefits. The next one that comes to mind— well, two more with Zenefits that come to mind. One is the importance of getting implementation in the customer experience right. And we were drinking from a fire hose in terms of customer acquisition. And we were doing so at the expense of the customer experience in implementation. And our implementation managers that were onboarding new customers, they were overwhelmed. And what that meant was mistakes were made, delays were happening, and the, like, first impression that businesses and people had as a customer of Zenefits was oftentimes very negative. And if you think about like even this sales community, we're on the GTM podcast, companies develop reputations in the spaces that they are selling into. And so Zenefits started developing this reputation in this tight-knit HR community of not delivering on the promises that we were making in sales. And I think that the impact of that, of course, was, you know, like higher churn and lower revenue retention, but also things like our ability to close new customers because of the reputation that we had developed. The last one that comes to mind, and so like, you know, don't trade off customer experience for top-line growth, short-term growth, and, um, be very deliberate about how your customers are implemented and onboarded. You only get one chance at a first impression, uh, and, uh, really optimize for that. Um, okay. And then the last one was we just hired way too quickly. Um, and I think the, the logic that we used was something like the existing set of SDRs and sales reps will continue performing at the rates that they are performing today. And we will reach diminishing returns because we're adding so much incremental headcount. Um, but the, the ultimate number of opportunities that we are creating and amount of revenue that we are closing because of that supplemental headcount will be higher than if we don't hire at all. Higher revenue, meaning, and, and hiring new people. And the opposite happened. We actually sourced fewer and lower quality opportunities because we hired more SDRs and we closed less revenue, like total revenue, not even on a per rep basis because we hired so many new salespeople. And what we were effectively doing was diluting the pool of companies that we were able to go after within SDR. And we were spreading the demand that we did have across, um, more less tenured reps, uh, and conversion rates, um, in aggregate really suffered. And if you were an AE, you were getting fewer opportunities than you were previously. and so you were closing less revenue. Uh, and so I think maybe the takeaway on that one is what we did was we plugged in some assumptions to a spreadsheet around like diminishing returns of each incremental hire, um, increased ramp time for each incremental hire. And we basically let this spreadsheet dictate our hiring plan. Um, and you, like, I've seen this happen in a bunch of companies. Do not do that. Um, don't plug numbers into a spreadsheet and expect the sort of like revenue output that the spreadsheet tells you you're going to realize to actually happen in an environment where you are hiring a bunch of people.

Those are great, man. Thank you for sharing. So to sum some of those up, invest in sales ops, rev ops. Early. I think that's fantastic advice. Um, you know, never sacrifice customer experience for top-line growth, and then slow down hiring and don't hire off of spreadsheets, um, because you will pay the price inevitably.

Yeah. And maybe I'll go one layer deeper on that last one. So like, how should you think about hiring? Um, there are, uh, a few things that come to mind. One is, um, especially on the AE side, just make sure that you are hiring in a demand-rich environment. You do not want to hire AEs in a demand-poor environment. You will close less revenue than if you don't hire the AEs and of course spend more money because you're paying more people.

Which sounds intuitive, but it's, it's not how most folks think about it today. You know, you, I feel like a lot of people I talk to are like, demand is low. We need more sellers to increase demand, and that's the opposite way you should be thinking about it.

Yeah, I think, um, you know, we may talk about sort of like contrarian beliefs or something like that at a later point in the show. Um, more salespeople does not equal more sales. And that, that sounds, uh, like counterintuitive. Uh, it sounds almost obvious the opposite way that if you want to grow sales, you should hire more salespeople. And in reality, for most startups, um, because I see most startups in sort of a demand-constrained environment, for most startups, that is not what happens. You do not have more sales when you hire more salespeople. Um, so that was like, you know, thinking through the framing of, okay, how should we think about growing the team and hiring? One, like, hire into a demand-rich environment. You do not want to hire salespeople into demand headwinds. Um, think about the environment that exists and if the average person is likely to be successful in the environment that you are bringing them into. At Zenefits, we were hiring in classes and the training, uh, that somebody would come into as a new AE, oftentimes they would be sitting next to their sales manager. It was like a new sales manager being trained by somebody who joined the company 45 days ago. So like a new trainer that like just got out of their training for training. And like, if you just think about the average person, um, not an exceptional person, because like you can't solve, like not every single person that you hire is going to be exceptional. Um, if you just think about the average person, like these are, you know, 25-year-old people who have been in sales for 1 to 2 years and They're coming in and like they're meeting their manager that's training alongside them with like a new, like, it was crazy. Like the, the, um, the environment that existed was not setting new hires up for success. And so just make sure that you have confidence around the environment that, uh, exists. And I think much of that is predicated on, and I sort of alluded to this in the example that I just gave, it's predicated on leadership. Um, Do we have the bandwidth to absorb new hires on this team? And is the manager, the first-line manager that this person or these people will be reporting to, are they good? Like, are they strong leaders? And so then if those dynamics exist, then yeah, like continue hiring.

Great, great, great, great callout. And now more than ever, as people are looking to grow more efficiently. We are in a demand-constrained environment. Just be very intentional around your hiring and your hiring of AEs. I think that's 3 great learnings. All right, switching gears a little bit, I want to go to a listener question. I'm going to ask you to take your go-to-market operator hat off and put on your investor hat because this is from a founder. And the question is, I'm having trouble fundraising right now. What's the most compelling pitch you've ever seen and why?

There are a couple of things that come to mind. Um, the first one is that if you sort of apply, apply the go-to-market lens to fundraising, you know, the equivalent would be for this audience, something like, um, I'm having trouble finding product market fit. With the, with how I am pitching and selling the product. So what do you do when you are struggling? You know, it's founder-led sales or early sales rep-led sales. Like, what do you do? Well, you evolve what you are pitching and selling. And I think you talk to, uh, your target audience of customers, which in this case would be buyers. And you try and understand, like, how can I build something that you want to buy? Uh, like, what, what are the problems that exist in the business? And you come up with solutions to those problems. I think, like, you know, taking a similar approach as you are a founder with fundraising, if the pitch isn't resonating, really try and understand, uh, why that might be. Um, maybe you have, like, uh, some folks that can give you some real feedback as to, uh, what is missing in the business. And then the two things that come to mind that, um, VCs sort of optimize for, um, one is objective and one is at least somewhat subjective. Um, the objective one is like the numbers are the numbers. So, um, if you can, uh, gain some business momentum maybe through some of the things that we've talked about on this show, like if you can start to grow the business and start to acquire customers and, um, let the, the like, uh, market do the talking for you in a way where like we are finding product market fit. Here is a bunch of data around new logos that we've acquired. Talk to the customers about how happy they are. Um, you present like some objective data about business momentum. I think like that changes the, uh, uh, fundraising story. The second thing that is more subjective, probably more important in a way, is like being able to sell yourself as a founder. Uh, I think, you know, certainly my experience at Founders Fund and, uh, through close relationships with investors at every stage, it, it, it really doesn't matter. Like, it seems intuitive that this would be more pronounced at the early stage where the business metrics matter less. It's like you're investing in the founder. It is equally as true at the pre-IPO stage. And I think for, you know, a lot of even public markets investors, they are making bets based off of the person running the company. And, you know, we can think of a bunch of examples specifically in tech. Gosh, like, you know, Zuck and what he's done at Meta and Elon with all of his companies. Um, the, the, uh, these are the largest companies in the world and we're still betting on the founders. Um, and, and so then, uh, back to the original point, I, I would sort of like optimize the way that I am pitching and presenting the company around those two angles, which is like the, the momentum that we are seeing through objective metrics and, um, how to sell yourself as a founder. Um, because again, like, uh, uh, most VCs are investing in the people. Uh, and so then again, just like taking stock of where these things exist and are they good enough? Um, uh, are we good enough as a business to fundraise? Um, and if we're like, you know, pre-product launch, is the product that we're developing good enough to be VC investible? And me as a founder, am I presenting myself in a way that investors believe that they can return the fund by betting on me and then optimizing for those two things?

Yeah. I mean, that piece about crafting your personal narrative is huge. I see a lot of founders fall down on that and, you know, whether that's enlisting a a coach or just getting your mentors around the table and just pitching them and getting feedback from a group of people you know and trust and be like, is this landing? Like, am I showing how exceptional I am? Because if you're building a business, hopefully you're an exceptional human and you have to find ways to showcase that, particularly if, you know, the metrics should support your fundraising journey. And then if not, maybe doing the hard question of like, am I ready for venture? Because I do see a lot of businesses that you're just not venture-backable at the moment. And that is, that's okay. You know, that shouldn't be the goal in and of itself.

Yeah. Like, again, not one size fits all. And like the opposite is actually true in certain instances. And so it's a bit dangerous for me to try and give like, you know, but this is an example. I think of something that is almost counter to, I think, what a lot of, uh, early-stage founder advice that is given, which is like, are you as a founder dreaming big enough? Like, is, is the business that you want to build one that can make an investor's career if they're early in their career? Or can influence the fund in the form of returning, you know, if, if we're talking about on the early stage, can I return 100x or more on this investment? Because like, you know, a lot of these like super niche point solution companies that could raise in 2021 where you could sort of like extrapolate out the terminal value of a business like that using public market multiples they're not backable in today's environment. And so, you know, that's an example, obviously not like universally applicable. There are instances where the opposite is true, where a pre-seed founder talks about being a trillion-dollar company in 7 years.

Like, you know, just like, uh, all we need is 0.01 of this huge 10 that I kind of just made up on this slide. And then look how big we are.

That's right. I mean, and so like I was trying to use illustrations versus like universally applicable advice around dreaming big, but, uh, uh, hopefully it landed.

No, that's, that's great. Uh, and thank you for the question. I hope that was helpful. All right. Last two questions. And the first one I think we hit on, uh, already, but if you want to add anything, uh, feel free. And the question is, what's one widely held belief that revenue leaders believe to be true that you think is bullshit? We highlighted one, uh, more sellers does not equal more revenue. Uh, do you want to add anything to that or is there any other one that comes to mind?

I do. There's, um, there's this like new meme that I think, um, is part of like a bigger, uh, point that, that I think I hear a lot from revenue leaders that, and specifically sales leaders, that I think is bullshit. So the meme is like outbound is dying or outbound is dead or whatever. Um, I could, we'd spend a whole show on like why that's not true, but like I, I, I, um, uh, wholeheartedly disagree. Um, and you know, I can sort of like back that up with data, uh, in a bunch of companies that I work with. And then I think there's this like bigger point. That like sales is not responsible for demand. Um, and, uh, I think like so much of a sales leader's success and the success of growing revenue within startups is predicated on the ability to generate demand and in a perfect world, create a demand-rich environment. And that is not— if you have a marketing leader, that is not just the marketing leader's responsibility. You want to control your own destiny and take ownership of your success here. And so, so much of my focus at all times, you know, I talked about spending much time on recruiting. I think the thing that I spend the second most amount of time on is demand as a sales leader. Um, and so, uh, uh, that, that's another sort of like either like something that's lazy or just a, a belief that I wholeheartedly disagree with.

That idea of controlling your own destiny. I mean, yeah, this idea that it's someone else's problem at startups, there's nothing that's someone else's problem. You got, if you have a demand problem, you got to go figure that out. If you have a recruiting problem, you got to go figure that out. Um, so I think that's a great, a great call out. So sales leaders, if you're struggling to hit your number, you know, go and do some demand meetings and figure that out. Get creative. Um, all right. Final question as we wrap up here, and this has been great, man. Thank you for, for taking the time. Everyone is looking for silver bullets. Uh, I think most folks know they don't exist, but, uh, what is one go-to-market tactic or strategy that you're seeing working for the companies that, uh, you're involved with?

Couple things that come to mind, one of which is, um, bigger picture and then something that is, uh, uh, uh, tactical. We spent much of the show on demand and there's, there's like conceptually, I think where people and startups gravitate towards when they think of sales. Is around converting opportunities to customers. And so, so much, um, both attention and, um, reporting and resources in the form of both headcount and then the focus of that headcount is allocated towards, um, converting pipeline to closed one customers. And I think where for most startups that attention should be focused is actually on generating additional demand. We've talked a lot about that on this show. And to use an illustration, especially in a demand-poor environment, If you increase conversion rates by something like 50%, so if you're at 20% conversion rates to get that to 30%, man, it's just, that is a hard thing to do that comes with lots of sales training and, you know, discovery training and it's possible, but, you know, product marketing and so much more. If we think about increasing leads by something like 50%, there are single, especially in an early stage, there are like single campaigns that can do that. Brex's champagne campaign that I mentioned more than did that. Uh, when we did the event at SaaStr, more than increased leads by 50%, because when the N is small, meaning the number of opportunities that you are generating You can pretty easily influence that number. And if everything else remains constant, let's say you, you are able to increase opportunities by 50% through focusing on demand. You have just increased sales by 50%. Um, and so I think this, uh, maybe, maybe like the meta takeaway is something like if you are not in a demand-rich environment, Focus on demand until you are, um, and that should be the number one priority in the go-to-market organization is, is moving from a demand-poor environment where reps have, you know, one call a day with a customer to a demand-rich environment where people are so busy talking to customers that what a great problem it would be to have some stuff falling through the cracks. And then maybe sort of like, um, more tactically on something that is, is a recommendation as a starting point for people to do this. I see most marketing dollars and marketing focus oriented around, um, targeting the potential new customer. And I think especially for earlier stage startups, but even later ones too, We are under-resourced and under-focused on customer marketing. And, you know, even at an early stage, we should have some like raving fan customers that love our product, and we should be deliberate about leveraging those raving fan customers to generate new ones. And so what does that mean? I think it means, um, you know, at a minimum, just like having conversations around, is there anyone in your network that you think could realize some of the benefits that you're realizing from partnering with us? But I think it's more than that. I talked about dollars. Just go above and beyond for the people who are going out of their way as your customers to help you. Um, you see somebody post on Twitter about a positive experience that they had with your company. You see somebody make a customer referral, um, that you know is a customer and they told their friend about it and their friend is now a real opportunity. Be very deliberate and put some resources in the form of dollars towards encouraging that behavior. Uh, and you know, the specifics will vary company by company. But I think like at a starting point, so many are doing nothing there.

I want to underscore the importance of that, that last one. And funnily enough, it took me switching from operator to, you know, running the fund to really understand the importance of this. Because when you're fundraising a fund, your customers are your current founders. And, you know, it's what they say to prospective LPs, to new founders. That is make or break. It's whether someone accepts your money, it's whether someone gives you money and making sure that you have raving fans that are supported, that feel like they're on a pedestal is so incredibly important. And, you know, now with that learning, like, yeah, it's the exact same when you're building companies, find ways to elevate your raving fans and they will be the best sellers that you ever have.

That's right. You have a, a field sales team in the form of your happiest customers.

Totally. Well, Sam, you're the man. Congrats on such an incredible career and your ability to articulate a lot of those learnings is, is incredible, man. So really appreciate you taking the time to sit down with me and share those with our, our listeners. And lastly, where can folks follow along? I, I heard maybe through the grapevine that what you're working on might be in this space? How can folks stay in lockstep when you're ready?

For sure. Let's see, the social media platforms that I'm on are LinkedIn and Twitter, and that's it. And so, you know, I periodically post and try and help founders and sales leaders with some content there. And you alluded to it earlier, I am getting back to operating, co-founding a company and more to come there, but still early innings.

Awesome. Well, thanks again. And to our listeners, I always say listening's one thing, executing is something totally different. Hopefully we gave you some ideas, tactics, and strategies to implement at your own organizations. And we'll see you all next week.

Thanks for having me, Scott. Thanks for listening in.