SaaStr 797: GTM in 2025: How It's Changed, How It's Changing, and What Hasn't Changed (Yet) with Jason Lemkin and Sam Blond

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I do think that real disruption is coming to generating demand and like making decisions and taking action around how companies do that. Let's see, I think at the lower end, the more transactional side of sales, purchasing, something for working with a vendor right now. And it's, it's a commodity. It's effectively a commodity that I'm purchasing. And I would much rather buy, like in quotes, from an AI sales assistant than the human that I'm buying from. And I think like, it's like close to a support-like experience where I would rather have certain consumer support experiences with a really effective real-time AI than the sort of subjectivity of a human waiting on hold.

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Thank you for having me. Great to see you. No place I'd rather be.

So I thought we'd have fun today. I wanted to combine two things. I wanted to talk about the topic that we're all talking about today is what's the role of AI in go-to-market. Sam, as you know, has worked on this. He's now a stealth CEO, unannounced, working on AI and go-to-market, right? He's on the board of Rippling, built their whole team, former CEO of Brex, worked with many of the best startups. Not only that, but I thought we would do something fun. I thought we would go to our new SaaStr AI, Take a look at the CRO confidential interview Sam's done with Wiz, acquired for $32 billion yesterday. Codium Toast, talk about what they're doing in the age of AI and go-to-market and press on 10 learnings from the best and seeing if AI is changing that or not. Literally, if you haven't, I launched this SaaS for AI on this company called Delphi. Brian Halligan and others use it. It's really awesome. Go, it's right on our nav on SaaStr and it has 18,000 pieces of SaaStr content in it. Every YouTube, every interview, including all the ones Sam has done on Cereal Confidential, they're all there and you can talk to it. And I would say 85% of the time it's pretty awesome. And I would say the one learning, and then I want to get into, then I'll, then we'll go into questions. The one learning is, so we put it up on our SaaStr annual website yesterday too, and here was A couple epiphanies from it. One is this morning for SaaStrangel sponsorships, it handled it pretty damn well as a BDR. Someone came in and said, listen, I mainly want to buy Jason as an influencer. It said, sorry, here's why Jason doesn't do that. And then it said, okay, can I sponsor SaaStrangel? Here's my goal. I want to get my CEO in front of folks that asked about the budget, what the goals were for it. And it frankly gave a better answer than many of the folks that have ever worked on our little sales team as a BDR. So I have a lot of skepticism about outbound from AI, which we can talk about. But when I saw this morning, I was like, pretty good. And you didn't have to wait. Like the AI never sleeps. And that was my first moment there. And then I think this is the meta question. Can't like what Sam just did an interview with the VP of sales at Codium, which we'll chat about Rocketship. Cursor, its competitor, rocketed to $100 billion in a couple of months. Bolt, lovable, like why? For folks that aren't close to it, on the upper right here, I got from one of my favorite investments, RevenueCat. It powers 40% of all mobile subscriptions. Here's a chart of their merge pull request, but really their productivity since they've added these products, right? Cursor slash Codium et al. You look at the right, look at the growth and productivity. This is not from a one-kid batch, this batch of YC where he is got no team. So obviously it's all AI. This is from kind of an elite team mix of A tier and S tier. And this is what happened to their productivity. Like this is pretty profound, isn't it? So I think the meta question is this boost on the right. Can marketing and sales and customer success get this? Is it an illusion? I think that's the question. Do you agree, Sam? I think it's the question of the year, right?

It's a good question. I'll give maybe my contrarian overarching opinion and then we can jump in. Look, I think we're now 2.5 years in. ChatGPT launched to consumers November of '22, I think. And my contrarian take is something like AI has not yet, that's an important word, yet really disrupted SDR or sales much at all. So I'll give that as an initial take and then we can see how it applies to the rest of the conversation. It is a bit contrarian, but, and I'm sure you have opinions, Jason, as well.

I do. I've just, I've, I'll tell you once since I launched the SaaStr AI, my eyes have opened because I've, we've already done 2,000 chats on it in one week. 2,000 in one week. Okay. We're not, this isn't rippling. This is SaaStr did 2,000 and I'm learning. And I'll tell you what meta thing, not only did it handle that BDR conversation this morning really well, right? I've started to do this weird thing, Sam. And I know, I don't know that any AI tools do this, but it's great. Okay. Now I do conversations with my AI together with another person, me, Amelia, and Jason Digital. And it is amazing because Jason Digital doesn't forget. Jason Digital can, I forgot what, what Colin said, the CEO Emeritus at Wizbloom. Who didn't forget? JSON AI. So I don't, do I want every comp, do I want the AI having every comp? But this is like an IR weird copilot where it's a true copilot, like literally forgets nothing. Right. And I don't see why some version of that can't make anyone in sales give them a superpower. If nothing else, it remembers every conversation, Sam, you ever had at Brex with a customer and your AI Sam jumps in. Excuse me, Sam. Great point. Do you remember when we had the conversation? With a similar customer. You might have forgotten that that prospect you're talking to is that Codium and Cursor are competitors because you got so many deals you forgot. You know who didn't forget?

The AI, Jason.

Yeah, the two of us. This is so weird. The two of us. So this and my, I'm with you that it's slow and I think there's reasons and I don't know, but that productivity bump with Cursor and Codium, it's not like it happened a year ago. It happened in the last 90 days, the last 90 days. And there's reasons because Claude, it's all, it's, and OpenAI are not new, but the set of circumstances came together and I'm less skeptical now. Now I'm wondering what the magic moments are going to be in this year. It's not going to be crappy chats. It's not going to be people firing their customer success and support teams and getting better results. That's, we have data from gorgeous than others, but man, some of this stuff, the three of us is pretty cool. The three of us.

I like the framing and I like the like use case and application that you just described. And to be, to reiterate, I think it's coming.

Yeah.

I do think it's coming. I think though, you touched on Codium and Windsurf and their product Windsurf and it's really taking off in same category as Cursor. The, these are companies that have really taken off in the last 6 to 9 months, to your point, and they are AI first. They are extremely valuable and they are whatever X-ing the productivity, the efficiency of engineers. What is the equivalent on the sales side? And the answer is, or my answer is there isn't one. There isn't a Codium equivalent in Sales for salespeople. And so I think where AI has added value for SDRs and sales is what I would describe as like on the edges. So it's what is AI good at today for salespeople? It can record calls and it can summarize them quite well. And then it can, or you can take that information and you can add it to your CRM. Now, this is still the CRM that existed pre-AI. So it's not a new CRM that you're interfacing with. It makes like note-taking and deal tracking or something like that better. Account research, like you can get better insights about a company. You can learn that they have a job opening for this HR coordinator on their website. And Jason Lemkin is attending SaaStry Annual this year. So it can give you information about the companies and people that you're talking to. And again, I qualify that as like it helps around the edges, but are SDRs or AEs today more efficient than they were in 2021? Like similar macro environment. Of course, there's been ups and downs that are macro influenced. Not really. I haven't seen the company equivalent of Codium or Cursor or Harvey in legal. Or like a bunch of these AI-first companies in the different categories. So one, the companies don't exist, and two, the use case doesn't exist where— like the concept of AI SDR received a lot of attention. Like that would be the dream, like replace headcount with an SDR that works 24/7. And is more effective at generating demand, scheduling meetings than your human sales reps, SDRs. And like, we aren't there yet. It hasn't played out like that.

I think for sure, but I, I wrote this post maybe a month or two ago that I observed, but I did not understand until we had 2,000 folks use our AI in one week. Right. I wrote this post that what's coming is the mech AE, the mech AE, where the AE walks into a meeting and she or he is perfectly prepared, everything in the armor. It's not a note taker. It's not research. It's not even a digital SE or solution architect. I personally think, this is just me, I think the killer product will be everything. It will be everything. Anyhow, we can go, I'm waiting, what I, for what it's worth, I'm waiting for this mech AE now. My thesis, listen, just my eyes have been opened, right? And my thesis just is that the reason, listen, we can talk about how all the AI SDRs generated spam, right? And we can talk about why, like, the AI BDRs haven't totally exploded, which they should. Why didn't they? Why aren't they qualifying everybody's leads automatically? And maybe there's great reasons, but maybe like Cursor and Codium, they're just not enough of a solution yet. They're just, you could use these tools to do some code completion before Cursor and Codium, and even Codium before it was Windsurf. Had to plug in, but maybe these tools just don't do enough. And in another 6 months, they'll do everything. I think for $20, $50 a month, you can afford to arm an AE with everything, not marketing using this Clay thing and someone else using this tool and a little bit, but every, you walk in and you walk into every meeting and your AI, like Digital Jason, is there with you in the meeting on every Zoom because these Apps already, like even on our AI, it doesn't quite work perfectly with the vendor we use, who I love called Delphi, but it already can loop into your Zoom and listen to your Zoom and answer questions. Now it needs another rev, but imagine every sales call you do, there's digital AE who acts, who like you make the no-look pass. Sam, my AE, look, actually, I'm not sure if that integration works. What do you think, Sam? A good question. Actually, we have 22 customers in production that are using that integration. And all of a sudden, the AE's got armor. The AE's got armor. Do you— and all the 100 features, the corner cases, the mistakes. Do we have any customer like that in our database? And the, the MEC knows it and the MEC summarizes the meeting and the MEC sets up the next follow-up and the MEC does the research. I just think we don't need 28 mediocre point solutions. That a bunch of VCs have funded because they think they understand outbound. That's my thesis. This MEC product's coming and it's going to do $100 million in 2 quarters when it comes.

Well, look, hopefully you're pitching the product that we're building in my company.

That's my kibitz. The MEC AE, right?

I think here are the things that I think are, we're like right on the precipice. There is just a lot of the sort of administrative decisioning and actioning around demand gen that I do think this is like not one-to-one interaction like you and I are having right now that I do think models today are probably better at. It's just, there isn't yet a product that has effectively applied today's models. And like, they're only getting better. And so I do think that real disruption is coming to generating demand. In like making decisions and taking action around how companies do that.

Yep.

Let's see. I think at the lower end, the more transactional side of sales, purchasing something for working with a vendor right now, and it's a commodity. It's effectively a commodity that I'm purchasing. And I would much rather buy, like in quotes, from an AI sales assistant than the human that I'm buying from. And I think like it's like close to a support-like experience where I would rather have certain consumer support experiences with a really effective real-time AI than the sort of subjectivity of a human waiting on hold, all that comes along with traditional human-based support. And I think if we're not there already, and I think you gave an example like the inbound chat. Is a support-like sales use case where you have somebody that comes in and your AI responds to it in real time and maybe better than, depending on who receives the inbound, a salesperson could. But the thing that, what you just described is the sort of like where people actually want to talk to a person. And there I think it is the like Copilot, the, I always have this all-knowing buddy with me that makes me more effective at the thing that the buddy isn't doing for me, which is developing relationships with a buyer.

Yep. Yeah, I don't know whether the AI will develop the relationships. One point, then we can dig into these learnings from the best CROs you've talked to, but on this, the AI sales for the low end to talk with chat support, right? One really, one thing that folks might not know if you are in parts, large parts of B2B is what's happening in e-commerce. B2B e-commerce at Gorgeous has 20,000 SMBs. Klaviyo, which IPO'd in marketing, what is, what will completely happen by the end of this year is there will be no line between sales and support anymore. And soon there will be no line between sales and support and marketing because that chat experience, you said, I'd rather chat with that thing, but is that, is that a support call or is it a sales call? Now, the reason e-commerce is at the bleeding edge is because much more often in e-commerce, a support call, a chat is to buy something. When you go to a typical vendor and you hit chat, And it's because they shut my app off because they thought we didn't pay the bill or whatever drama, right? You've got a trouble ticket. But when I go to an e-commerce site, more often than not, it's because I'm interested in buying. I got 4 questions, right? So that's accelerating this trend, but it's crazy fast. It is crazy fast, the convergence here. And there will not— AI means there will not be 4 links. There will not be sales. Support, enterprise support, low-end support, and wiki. Those will all be dead in e-commerce this year. There will be one thing and AI will know the difference. It's, and it will converge all the vendors. The vendors are being mixed up. They will all accelerate the fact you won't, they'll be hard to tell the difference between these vendors because they'll all be doing all of them, right? So sometimes in SMBs are much faster than enterprise, right? And this e-commerce is even the fastest because support has been sales. Like they're, they are merging one. So if For just for folks in general, this is why I write about it. Cause I see it study that if you want to know the future in some ways of B2B for AI, study e-commerce because it's at the bleeding edge of what customers want, right? Because it's all burgeoning. It's a different world that's faster.

It's a smart insight that like historically this, what has been reactive customer support and transactional sales will in a lot of ways converge. And the same product will fulfill both needs.

Yeah. It's, I bought for my son's birthday, I bought him a Secret Gaming Chair and it went to the wrong address. So I had to figure out how to return it. There were 4 links. There was sales, support, there was their own thing they'd rolled on ChatGPT and a 4th one. None of them could work. None of them could talk to each other. And they finally gave up and said, we can't change the address. Do you want a refund? And the chair had already been delivered to the correct address. So none of these things, but with AI, that's all going to, it's going to happen fast. Right? So anyhow, let's talk through some of this stuff in AI. So Wiz, $32 billion all-cash offer from Google, a lot of learnings. You talked, it seems like the early days, but it was like 18 months ago with the founding CEO, Collin Jones. I pulled out AI, Jason pulled out one thing. This is, And you already hit it when you started it, but it's worth one interesting thing you said was 5x revenue and 5x headcount. We chatted about this at SaaStr Miami. We chatted about, I think, some of your lessons learned from the go-go days of Brex, which is a much more like, this is a linear approach to headcount and revenue. Are there any other efficiencies, any other learnings you have here today on this 1-to-1 ratio? We grew up in a world where you always got less efficient when you scaled in sales, right? That's how we grew up, didn't we?

Yes. And even with the pre-AI tools that, that in theory 5 or 10x your productivity, the outreach of the world. I remember vividly when I was sitting in Echozine. Clicking one at a time on emails and copy pasting copy into the message that I was going to send to somebody. I mean, look, it was early days Marketo. You could do this in marketing automation, but as an SDR, I couldn't yet do it. And so then outreach, like in theory was going to 100, whatever X my productivity. And in practice, it seems like SDRs are generally sourcing about the same amount of revenue that they have for the last Gosh, it's been almost 20 years since I was doing that at EchoSign. And here's what I think has changed. And it's a bit of a meme on Twitter right now, or X. And here's what I think has not changed. And we alluded to at least the latter previously. What has changed is companies are scaling revenue much faster, largely through product-led sales. I think you see a lot of data points around this company has X employees and Y dollars of revenue. And so from that perspective, like companies are able to grow revenue more efficiently than they have been historically. And I think some of that is innovation around AI and what they're selling, like what the company does. And some of that is innovation around closing and onboarding new customers in an automated or product-led way. I think what hasn't yet changed is enterprise AE revenue contribution. How much can you get out of a sales rep in ARR that is selling to medium to large size companies with several month-long sales cycles? And I think this slide Highlights that to your point, this was maybe 18 months ago. I don't think it's really changed. And I think that there are aspects of selling that are easier today, taking notes in CRM, like easier today than it used to be. Does that really, does that make me twice as effective as a salesperson? It doesn't.

Yeah. I mean, I think when you interviewed Graham just a couple of weeks back from Codium Windsurf, it was 3 to 75. Was it employees or go-to-market employees?

That was go-to-market.

And 3 to 75. So that's not more efficient, is it?

I think this is a perfect example. I think the company is like 130 to 150. I can't remember the exact number. And so 75 out of 130 or 150, that's a large percentage of the business.

Yeah.

And so maybe they are getting more efficient on the code writing side, like maybe they would need to be far more engineers historically speaking, at least on a percentage basis. And look, I think you see this in some, what Salesforce is doing too. We're hiring like 2,000 AEs to sell the like new AI product. You would think that AI would help sell the AI product in a dream world.

Yeah, it's interesting when you do the Codea math quickly. If you look at classic SaaS companies that go public that are sales-led, they traditionally have about 40% of their headcount and cost in sales and marketing. 40%. It could be pushed a little higher, but it's usually about 40%. If it is more efficient to build software like Codium, that's now 60%, 70%, right? Startups, you'd often see half, half the team would be in sales, half the team in engineering. But in that case, it's more. Right? It's more go-to-market professionals. And at Salesforce, Mark said he wants to increase the number of sales team 20% this year if they can hire them. He raised it again in the last analyst call. He's 0%, not one single net new engineer in 20%. Now that may be a slightly different beast, but the real question is, have the rules changed? Codium and Salesforce suggest the opposite, that actually even if the I don't think Graham said that their quotas are any higher than traditional. They had some folks that were, he said a number of folks were closing well over a million, but that doesn't necessarily mean the quota attainment is magically different because of AI.

The folks that I talked to were in sales leadership roles at all kinds of companies. Quotas are the same as they have been historically. And more mature companies, you alluded to Rippling and there are a bunch of others, more mature companies that are adding tools that have AI incorporated in the tool. Quotas are staying the same. They aren't increasing the effectiveness, efficiency. They aren't getting 2x out of the sales rep and they are adding the tools.

Yeah. Yeah, it is. It is. Maybe that's the meta one to learn. I am excited about this MEC AE, but we haven't— in our history in SaaS, we've seen the dramatic evolution of tools, right? Even just Gong alone was jaw-dropping when it came out, right? The whole sales loft outreach, but we haven't really seen any net productivity gains despite that Gen 1 stuff. And we'll see, but I like this idea, but I like this idea at least of Wiz. I see too many folks talking about nutty versions of efficiency numbers, but too many folks are hiding in this, but still their sales efficiency is going down. Wiz at least through $100-something million was linearly efficient, 5x growth, 5x. It is interesting. So, but you know efficiencies yet, right?

I do. Maybe this is the like optimistic You, history would suggest otherwise. I do think it's coming. I do. I don't think we have realized it and I do think it's coming and I hope I'm right.

Yeah. Do you think as we've changed culturally last few years, do you think if sales reps, sales executives can be more efficient through AI, they want to be? Do they want to do another 5 calls a week? Do they want to do another? If you literally can do 8 calls a day instead of 4 because of AI, are we as humans willing to do that? I see everyone willing to work less.

Here is my sort of illustration of the question that you're asking. There's a company that I'm actually an investor in and it effectively, at least historically, made it much easier for sales reps to take notes in Salesforce. It's called Scratchpad.

And they were a beneficiary of that wave 1.5 of efficiency, big beneficiary of that 1.5 wave. Yeah.

And sales reps loved it because one of the, one of the top complaints you hear from salespeople is like updating Salesforce is such a pain in the ass or updating CRM broadly.

Yeah. We pay people to do it.

And then this company came along and they made it super easy. To take notes in Salesforce. And what did it do? It saved salespeople time.

Yeah.

The like logic was if we can save a salesperson 30 minutes a day, whatever the right metric is, that gives them 30 minutes a day to do revenue generating activities. They can do more outbound.

Close one more deal.

They can take another call. Here's what I think people do with that 30 minutes extra of the day, they're talking to their neighbor if they're in the office or they are doing something different if they're working remotely at home. It's just, it's 30 minutes of like free time. I don't think that it actually goes back into what I'm doing that day, which I think is the like example version of the question that you're asking.

Yeah, we should ask them if they have the data of people love it, right? But do they have IRL efficiency data on the realization of it. And I mean, I obviously it's going to be, he'll have the most positive spin on the numbers, but he'd probably be honest. That is the tough answer. Do any of this? That's why no one's buying these tools today because they didn't, they're burnt. They're all about still about consolidation. It's still about consolidation, right?

My perspective as a once sales leader. It is, it has to improve that you have to be able to tie dollars to the product itself, like time savings. I just, I, and it goes back to the original question that you asked, like time savings. I don't think it equates to additional dollars of revenue or faster growth. I need to see hard data around. What is my, how much in sales do I have at the end of this month with product, without product? And the time-saving stuff, I just don't see it.

It's a good insight. The learning from Scratchpad is the AI may just may have to make you a better seller because making you a more efficient seller may not be even the AI version of all the Scratchpad stuff. It's not going to make you close another deal a day. It, there are, we are human beings. And so it's gotta be, it's gotta make you a better seller, not a more efficient seller, potentially. That might be the learning.

I think that is, that's an articulate, you articulated that insight well.

Yeah. Okay. So this next one, it's just interesting for AI. I asked Saastr AI to summarize the most interesting AI-related learnings from your deep dive with the CRO of Toast. Toasted. A tough sell. Small ACV, $10K, 20%, 30% gross margins, a lot of competition. And he said something, and then this, when you interviewed the CEO of Splunk, they both said something. It was really interesting that they summarized this. We know this, but I actually hadn't realized this number. In-person sales generate 3 times higher conversion rates. Can AI improve this? And also as human beings, Where do you find these people that are willing to go in person? Where do you, are people back to it? Are sales reps willing to, for enterprise, get on a plane and for SMBs, are they willing to go to the restaurants? Are they willing to, you know, folks that are willing to spend 20 or 40 hours a week on the road?

First, I think traditional tech salespeople are willing to do so for the juicy deals. Got a million dollar deal with Adobe. It's expected that you're in the CIO's office meeting with them and taking them to dinner. I think non-traditional tech salespeople are willing to do it for the transactional deals. I work at Toast. I live in Cleveland and my background is I was at ADP. The payroll company for years before, and I'm being hired to, to go knock door knocking effectively.

Yeah.

I think where there's like an allergic reaction to it is tech salespeople that aren't selling the juicy deals. And I think it's probably a missed opportunity where especially if you are in San Francisco, you're an inside sales team and we have the data we had, or probably have the data around this at Brex. We were selling to startups when we went in person to meet the startup. It's exactly, I don't know if this quote was from the Toast CRO or if it was from me, because the data is the same. We closed when there was an in-person meeting and we like tracked it in CRM, 3x conversion rates. And here's the thing.

Oh, you saw 3x too? Not a little bit. You saw 3x at breakfast?

3x. Yeah. I was like, If our average conversion rate was 15 or 20%, it was like 45 or 60% if we met the buyer in person.

Yeah, that is interesting. Honestly, not that I matter. It would be true of me too. If I was trying to decide between Brex and Ramp, right? And someone intelligent showed up at the office, I'd buy that one. I'm not smart enough to know the other differences. That's why it's nothing. I'm just not smart enough to know the differences. Right? So if a human being walked me through it and they were intelligent, I'd buy that one.

I'll give one other story and then I'll give a takeaway that I have all of this stuff. This story is when I was early at Brex. This has only happened one time in my career. And I remember the, this, the sales rep and I, it was an SDR. And I remember the company and the office manager from Brex came over to my desk and he said, this woman is here to see you. And I said, who's that? And he said, she's from Talkdesk. She said she has something for you. And this SDR from Talkdesk came to our office and brought me, I can't, he was some like Talkdesk swag or something. And we can debate on whether that was the right thing to bring, but the only person ever who has showed up at my office trying to get a meeting. And I still remember it to this day. I'm sure we took the meeting. And so there's some learning in there. And then here's the maybe takeaway is I think a lot of this AI stuff is enabling salespeople and go-to-market teams to mid-curve it. And it's like the Ryan Peterson posted this thing on Twitter that I reposted. I think it's brilliant. And you have the low IQ side of the meme and it's send the prospect donuts. And then the mid-curve is send them and send the prospect an AI-generated deck. On the volatility of shipping lanes and like how your product can help alleviate the, with the fluctuation, whatever the, the other end of the curve was donuts from the S&P.

Donuts.

You know, and it, no, it goes back to, you know, gosh, what are the things that work? You got power dialers now that you can, you pick up the, effectively pick up the phone, you cold call people. And you show up, this is exactly the slide you show up and try and generate a meeting with somebody in person and sell to them in person. I think with all this AI stuff, don't lose sight of just getting back to basics. A perfect slide. I didn't realize this is what was next. And like, perfect segue.

Yeah. It's funny. Just on the last one. I'm at, so Brexus 3x too, the most extreme one. We did a Workshop Wednesday like this with Lauren Padleford, who now is the CRO of Slice for pizzerias. Before that was head of Shopify Plus for years at Shopify, where I got to know him. And not only is Slice a tough sale, right? 10K ACV, full stack, everything from pizza boxes to software, right? It's in person and it takes them up to a year to do the close. So you've gotta be there. You don't even just show up with donuts. You know what you have to do with Slice? You have to build a relationship with the pizzeria and help them and figure out how to evolve their business, and up to a year goes on until they, they switch over. And you got to get to know them old school, right? Maybe AI will kill this, but all the data says it works, right? And so I don't know how AI will enhance it. We'll see. It may make it worse.

Yeah, I think there, there— look, there's probably insights around preparing. You, you can more efficiently prepare when you If you're out trying to meet with somebody in person, you're, you're the Toast sales rep in Cleveland. You're going door to all the restaurants. You can maybe listen to an update about the restaurant that you're about to visit and the owner, and that could then give you an easier in and improve conversion rates. But there's not going to be— what's Tesla's robot's name? Optimus, I think. There aren't going to be Optimuses walking around talking to pizza owners. Needs a shop.

I don't think so. I'll give you one last data. I actually wrote up the actual data as we do at Saastr, but it was probably about a year and a half ago, but we closed a little bit more than $100 million of sponsorships at Saastr. When I wrote it, we crossed $100 million and we looked at it and there's some correlation versus causation issues here, but we tagged every deal where we met them in person, the sponsor. And actually for us, the close rates weren't that different for a variety of reasons, but the deal size was 30% larger, the deal size. So 3x the close rate is a no-brainer. It's a no-brainer. Another way to think, but this goes to a sales exec's time. Is it worth it for you to increase the deal 30%? Now for that, for the half-million-dollar deal, it is, right? Is it worth it to drive a $60K deal to $90K deal? I think if you're hustling, it is right, because you're going to, but it's 30. It was interesting. I hadn't really thought about it, whether it's worth their time. But we proved it across 100 million. It's worth 30% more on average if you show up 30% more. But anyhow, let's talk about this one.

Also interesting insight. Like my intuition on this is there's two things at play here. One is you're probably selling higher tiers of sponsorship. The other thing is there's a psychology aspect around, I imagine like somebody that you've never met, it's a transactional sale. They'll ask for a bigger discount, something like that. Than if you've met somebody in person. It'd be interesting to see the data around is that if you meet somebody in person, what is this sort of like discount rate versus not meeting?

It's a good question. I don't think it's a, for what, and I want to talk about this AI cold call and Rippling next, but for what it's, I don't think it's the discount, although that's a fair point. You know what it is? I think it's really just this simple, which is that there, when you have a discretionary budget, a discretionary. So the way a marketer works is I've got $10 million a year for field, $100 million, $2 million. That's what I'm gonna do into field and events. Okay. I have a budget, but where I place those chips is just, it's up to me to some point, right? There's, when I meet with someone and I can trust them and realize on a relative basis, this is where to deploy my dollars. I'll just get more because I know I trust Sam. I trust Amelia. I trust Jason. Look, I could do $100K here, right? But if I'm not sure, I'm gonna do $50K. But if I know, and I, so it gives you a chance not just to, where I think AI is harming sales is everyone thinks it's about relationships. You don't build a relationship by having to sit through a 4-minute Zoom call, right? And you may not even build a relationship by building donuts, but at least it gets you in the door to add value. In person, it's just easier to add value if you do it right, is I think the reason. It's this discretionary thing. And it's like if Brex showed up to the office and RAMP didn't, I'd buy Brex because I don't know, you're adding value and I'd probably move everything to Brex instead of some of it.

And then I know we want to move on. It's interesting because this isn't new. We, you and I presumably everyone else. He's been saying this for like years. What you just said, if Rex shows up and Ramp doesn't, I'm going with Rex. Why is there— is it just purely efficiency? Is it just like, I guess the question is, okay, so why aren't there more Rexes showing up at your office? If you're like, we all know this is true. And I suppose the answer is somewhat obviously like you, you can just talk to, you can get more meetings done.

I don't think that's the reason. I'll tell you why. You talked to Jonathan from Toast and I didn't, but I read everything on Toast. I think the reason is it is a ruthless sales culture. It is ruthless. You are judged ruthlessly on daily metrics that you all— I've never seen a public company that talks more about sales efficiency than Toast. They share— public companies don't usually share the number of meetings per rep that they talk. In their last call, Toast talked about territory reorg, right? And territory compression. And they said, we shrunk our, the tighter we shrink our territories, the more money we make. Okay. And we could talk about why that is, right? But my point is they're relentless with this thing. And I don't think 90% of the folks that we've worked with over the years are willing to be relentless that way. The sales execs, right? I, they, they want a, they want a six-figure job that is work from home and mainly inbound driven. And I don't think you can yell at them or give them a KPI or tell them they to go to the restaurant and it's going to work. I just don't think it's going to work.

You're right. Especially as we sit here in the Bay Area, there are options.

None of these people will. And it just, it is a, it may be the most, I don't know whether you guys got into it and let's talk about Ripley. I think it's the most relentless sales culture I've studied from a distance. Just fucking to build that to when you have low ACV and low gross margins and it's sales driven, this is the worst combination of the three, low ACV, low margin and almost no self-serve to, to bet. At least if you have low ACV and you're getting half your revenue from self-serve, you can blend it together, right? You can blend the PLG and SLD, but Toast has it. It's a hard, was it a hard 8, hard 7? Was, I'm not a gambler. You're a gambler. Hard 8.

Oh, if it's craps, it's a hard 8.

Yeah. So this is like a hard 16 that Toast has, like it's gotta roll 2, or maybe it's a hard 64. It's gotta roll 2 hard 8s in a row. And so they're just relentless. So get out there. Okay. This one, you did this great one last year at SESTRA Annual with Matt Plank, who obviously you've worked with since inception, right? But it was one of the insights was how well cold calling was working. Do you think AI robocall— a lot of folks are excited about AI robocalls. They're actually excited about, in fact, I don't even know how this works. Voicemail before ring. This is a vibe today. Voicemail before ring. They want to leave a voicemail for the prospect where they don't even get the call. They just get a notification that it's a voicemail, so they'll hear it from the rep. What'd you learn? What are you learning from Rippling, from Matt on the board and AI cold calls? Any thoughts here?

I think two things come to mind. One is, and the reason that my mind went here first is you talked about like The leaving the voicemail. You want to leave a voicemail without even talking to the person. I think touchpoints matter. And so if you have email touchpoint, LinkedIn touchpoint, call message touchpoint, like you're just, you've got different forms of communication and I think different people respond. Consistency matters. You know, if you see the name or hear the voice or whatever, like multiple times a day or multiple times a week, you're just more likely to interact with that. And then the second thing that comes to mind is I get exponentially more cold emails than I do cold calls. And just, I think being different, even though cold calling isn't totally unique or innovative, it is, it is like less common than the cold email. You can get some of that.

That was one of Matt's points too, of being surprised how effective it was. It was, you can stand out.

That's right. And I think Matt's point was, I don't, I either don't answer cold calls or when I get them, like I, I maybe listen for a moment, but I'm generally in the middle of something and I'm like, call back and leave a message. And for maybe us, I, I don't know that cold calls, it may be part of why Planck was saying this, like they don't really work on him, but they do work.

They do work for, but his point was they do work for Rippling. He, this point was they were surprised. He was personally surprised how effective it was.

That is exactly right. And I think If I think the takeaway is use cold calls to supplement other types of outreach. And when you, if you catch somebody at the right time and they've maybe been thinking about you or they read your email or they've been meaning to reach out, if you catch them at the right time, you're That's what you want. You're going to progress to an opportunity.

Yeah. Yeah, it's a good one. Yeah, I don't know whether AI is going to make this better. We'll see. I am worried about this whole straight-to-voicemail vibe. I guess it must work, right?

It's a good question. I think, first of all, I think there's like some regulatory issues around this. I'm not well versed in them.

Yeah. I'm not sure most startups care about the regulatory compliance piece. It's a good point.

I do think, I do think there's an aspect of like inbound responses. So if somebody like fills out a form on your website, and you can in real time have a good AI, like agent, call that person back where they're expecting the call, I can see that working. I don't know that you would call that a cold call or not, but I think it's a version of a sales call. And I haven't spent enough time thinking about AI agents doing true cold calls. Voicemails, clearly it makes sense. Like, you're not going to know if it's a live person or an agent. They're pretty good these days, but real-time conversation, you'll know.

All right. I want to hit one more before we run out of time. Number 4, we can't, you actually hit, this was the AI thought that AI powered Codium's territory and pipeline management, but I actually think you hit this, which was interesting with that we're not all this stuff. AI should do territory and pipeline management better, right? Just like the V1 tools like Outreach and Gong and Salesloft did, but this may not increase net productivity, I think was your point. But this next one then, if you want to hit anything on it, this one I think is super interesting for AI. So you interviewed recently the CRO of Databricks. Okay. And if you guys haven't watched this, I think Ron's done a few things, but I think Sam had one of the best interviews I've ever seen with him. Also in part because I think it challenged some of your assumptions, right? I think it was maybe a little different than you thought going into this interview. And, but he was there from $1 billion to $3 billion. Okay. That's pretty good. That's pretty, that happens. But not every day. And one of my favorite interchanges you guys had, and the AI pulled it up, is technical founders need technical sellers. And you challenged him a little bit. Not, maybe not challenge is the wrong term, but you pushed a little bit. Is this real? But he was pretty, pretty strong on this, wasn't he? That as an engineer that went to Stanford Business School, can an AI do this? Can an AI, here's a meta, I think, can an AI make a generalist that can't sell to developers or can't sell in regulated industries or vertical SaaS or to defense or to sell missiles or bombs or a data lake. Do you think AI can take the average B2B sales rep and have them sell a technical product?

Look, I defer to Ron and I think to your point, that's probably fair. You can count on, you can count on probably one hand the number of people, revenue leaders who have scaled $1 million to $3 billion. Yeah.

A hand or two. Yeah.

And I presume based off of this slide, Ron's intuition around this is like, no, at least historically speaking, he has biased towards technical salespeople with technical experience. Yeah. I think Jason, why you said I like pushing them here, a mistake that I see commonly made, and I think you do as well is over-indexing on domain. And like, there are examples of this where imagine if at EchoSign we had only interviewed and hired salespeople who came from a contracting background, like they either worked at an electronic signature company or like a document creation company. It really limits the population of people that you can hire from. And sure, does it accelerate the like ramp time? Probably. But it, it's not worth the trade-off. And so if you apply that methodology or if you apply that mindset to just broadly, then Databricks shouldn't index on sales reps with technical experience. I think like there, there are clearly examples, and this is one of them where that breaks down. And you gave an example and I think it probably loosely correlates with complexity of sale. You know, you could, the example of, let's say you are at Anduril and you're selling weapons to the government. There, there's like a type of salesperson that is probably going to be more effective at that than somebody with electronic signature sales experience. And you get Databricks and it's like probably closer to that end of the spectrum than it is the Brexes of the world. So like maybe back to your, here's my intuition, which is trying to project what I think Ron would say. It is AI might supplement or support these technical sellers, but the, the algorithm doesn't change. I'm still hiring the same people I was hiring pre-AI to, to fit these rules.

Yeah. Yeah. I don't know. I'll give you two just learnings I've had. One at the startup level, there's a, I believe in this person, this is my life experience, technical, you need technical sellers to sell a technical product. We've seen other, we've seen other environments where you can be successful. You've done it, right? But I, it's my life experience, but on the AI side, there is a developer focus. Startup I invested in that's doing really well coming up on $100 million. And they got an early AI tool to do a solution and sales engineer. And they had their sales reps put in all the tough questions in it. And after that, they fired more than half the sales team.

Okay.

Because questions were so terrible. Like, how do you, what is an API? What's a date? What is a data brick? The first one actually was a question that reps that had been there that were scaled were asking, what is an API? And they're asking their own internal, so, SE, digital SE to ask this, and it tracks all of it. And the CEO just could not believe that I, the quest, not asking brand new, because training and enabling is different, that scaled folks were asking literally questions that were fall-out-of-your-seat questions. So maybe the V2 of that product or the V3 can somehow make these folks better. That's the extreme. The other one interesting, I did an interview a little while ago, it was really good with Tui Courtemanche, who's the founder and CEO of Procore, which is construction tech. And I got this wrong. I said to, 'cause I misunderstood something he'd said. I'm like, do you still, that he said to in an analyst call and said, you still need reps that have like construction experience because this is like real domain expertise. He's not anymore. He's we have such a strong brand, but we have a great enablement team and we make them experts by the time they come out of our enablement program. And we have SEs. I wonder if at a procore, an AI can do that, right? Can accelerate the qual— not just that, because we're still gonna do enablement, maybe AI can make it better. Maybe we can flip around that example I said where they fired half the sales team and you come out of enablement not having checked the boxes in onboarding, but actually the AI makes you more of an expert. I hope so. Maybe it's possible, right?

It's your co-pilot. The next slide is a different version of this. But I think it's like the way that I would try and form an answer to that question is I would ask the buyers. It's like, we use the Anduril example. I expect if you go to government officials that are doing the weapons contracts, do you want to do a weapons contract with an AI agent or do you need to speak with a live person? I like assume, although it could be wrong, that they would say, no, we need to like talk to a person about the—

No, but I think the question is, can AI turn can you turn a salesperson that isn't a subject matter expert into one? That's the meta question, right?

Though, I think the, and maybe it was on the last slide, something about can it replace SEs? Yeah. And let's see, can AI substitute for an SE or SA? I, this is one I gave the example earlier. There's a transactional sale that I'm involved in right now as a buyer. I'd rather buy from an AI, like I'd rather buy from an AI salesperson. Does the CIO at Adobe or like any of whoever we're thinking of, the Databricks guys right here, do they envision a world or want a world where, you know, the questions that they have about the product that they are looking into, the Databricks of the world are answered by a computer? Do they actually want conversation with a person around this stuff.

All right. We're almost out of time. I just wanted to hit a fun one and then we'll break on this one. I think we hit most of the rest. Contrasting your conversations with Wiz and Databricks, the Wiz one, when you had with Colin was, I can't have, I can't do one more pandemic story. It's been 5 years, but the pandemic hits Wiz in the beginning. And so the sales team goes hybrid and it was great and made it work. And Wiz is worth $32 billion, right? Databricks is going to be worth $100 billion. Ron's saying in this age, sales teams work much better together than remote. Can AI make this better? This, there, this is a debate and I would say 80% of the CROs I talk to want, at least want folks selling together for different reasons. Can, is there anything that AI can make this better, make this hybrid sales environment more efficient, better for all parties, or is AI not a solution to some of these to this trend?

My opinion is the answer to your question is yes. Can AI, or even just whether it's AI sales tools, whether they're AI native or not, make being remote better than without the tool? There, there are products. One, one is a company called Nooks that I think is oriented around—

has got a lot of traction. I'm not actually sure why, but it has a lot of traction.

I think a big part of it is like getting the team together, clearly mimics information, the knowledge transfer that, that may happen in an office. And maybe it's a virtual office type product. So is that better than having that product? Yes. I think Based off of the actions that companies are taking, there seems to be consensus around that you can't yet replicate the in-person environment. And I think it's a combination of things and we've touched on both of them. One is the knowledge transfer. It's just when you are, when I was early days at EchoSign and I was like 2 feet away from Scott. And Scott told me like everything I needed to know all the time about EchoSign. And I wouldn't have slacked him. I, Scott, who ran support, if you remember, I wouldn't have slacked him. I wouldn't have called him at the time. It was just like, because he was there, I was able to get the information. Then the other thing, which I think maybe people underappreciate, gosh, if you're working from home, most people aren't working as hard. And so especially in sales. And so I think like just getting people in an office, you're going to get more hours of work out of them, especially salespeople, than if they're sitting around the house, no matter like what tools you give them access to.

Yeah, we can wrap on that. I should learn more about Nuxt because it's super popular. Maybe it helps bridge that gap, right? Like that and, and Roam and others, those are great tools. But can AI magically turn a hybrid or distributed sales team and give it all the benefits of folks want these IRLs? Maybe not yet, right? We'll wait for that tool. We'll see if that tool comes. All right, Sam, I know we're over. Thank you everybody. And see everybody at SaaStr Annual in May. Sam will be there. We'll have some great folks. And if you watch this or hear, we're also doing CEO-CRO poker night again. We had a couple hundred folks last year. It'll be bigger this year. And if you, even if you just want to meet a CRO, this is a place to do it, right? It's I think whether you work distributed remote for your sales team, fine. Meeting CROs is harder than ever. And you got to do that in person, man. I think hiring someone without meeting them, or it's just, it's a weird recruiting environment. So meet them in person is amazing.

I'll reinforce no better place for customer acquisition sponsoring the event than also recruiting faster. Is for Brex, it was the, for dollars in, dollars out on the sponsorship stuff, exceptional. So thank you for having me and great to see you as always. Thank you everybody for attending and excited for SaaStr Annual.

All right, man. We'll see you at the next CRO Confidential too. Thanks for all the hard work, Sam. Talk to you soon.

Thanks, Jason.

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