@Saastr Founder Jason Lemkin on Why Revenue Leaders Must Run Towards Bad News.

Jason Lemkin, welcome to the podcast. Appreciate you joining.

I am so excited to be here. It will be great. We're going to talk about some stuff that maybe hasn't been talked about before.

That is definitely the focus. Hello and welcome to the Revenue Leadership Podcast by Topline. I'm your host Kyle Norton CRO@owner.com and every Wednesday we dive deep into the strategies and tactics being used to drive drive success by the best revenue leaders in the world. So join me as I sit down with revenue operators to discuss actionable frameworks that you can implement in your business today with no fluff, no sales pitches and no platitudes. Today's guest is none other than Jason Lemkin, who was the founder and CEO of EchoSign, which sold to Adobe. He then founded Saster, which is arguably the greatest community for founders out there and is a prolific investor through Saster Master Fund with five of his first investments all going on to become unicorns and Decacorns. So it's a honor to have him on and we're going to be talking about what revenue leaders need to know about understanding and managing their board. And so if you like what you hear, make sure to follow the Revenue Leadership Podcast by clicking the link in the show notes. Hope you enjoy. But first, a word from our sponsors.

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Sure. I'm a SaaS founder myself, founded one of the early E Signature leaders called Echo Sign that was acquired for Adobe for nine figures way back in 2011 and then just I was the first of my generation, David Sachs and the Renee Liserts from Bill and Aaron Levy's to have an exit. So I just started sharing my learnings on a little blog called Saster that's taken off. It's a big deal we've done 10 years of events with tens of thousands of folks. I've invested in five or six true billion dollar companies through Saster Fund, including owner that Kyle has done an incredible job at. So I've invested about $200 million over the last 10 years and mostly I'm just trying to run this community to help other SaaS and cloud executives do better. So that what seemed crazy in the early days was that we could share these playbooks and they would work at other startups. But it turns out it's true and so it's well understood today. It was radical 10 years ago, but that's kind of the mission to help share share how you just how to make it just that much easier to push the boulder up the hill. That's Saster.

That's awesome. And Saster was one of the most important knowledge bases for me when I was first breaking into tech and learning things myself. I think I stumbled across your name Encore, which I'm sure is familiar. Yeah, is a familiar story for many and so it's been a big part of me figuring things out.

Good.

I remember so clearly reading Impossible to Inevitable and just like having a book full of notes. And so it's exciting to have now partnered with you at onr. So how many boards are you on right now and how much time are you spending in operational details with your portfolio?

Yeah, I'm not on that many boards. I think I'm on five boards and I'm probably on two more where I'm definitely not on the board but might actually be the most active investor. Those are situations where there's really no one helping the company too much, but the company's doing well. So I'd say five. Five for real legal board seats and two that I have a similar role. I don't enjoy being on boards. I did try to avoid it when I started investing, but ultimately I came to the conclusion that if you're one of the largest investors in a startup, it's, it's. You've, you've got to do it, you've got to step up and, and take this role. So I try to do as few as possible. If there's someone else that can do the role, I generally will defer to them for both selfish and unselfish reasons. Maybe that's TMI, but yeah, I'd say about only about five boards. A lot of VCs that are in big funds, this is a big difference for the audience. If you're at a. Had a VC at a huge Fund a great fund. You know, they are, they would, they will spend upwards of 50% of their time on boards. And one of the most important things for them is being on boards. You'll see you, the classic one is you look on their LinkedIn and you'll see their last 20 jobs were board member, owner, board member, shopify board member. Then you know that like that's their job. And a traditional VC that isn't that involved operationally or isn't doing other things, the maximum of VC possibly could do is 20. There just aren't enough hours in the year. And as you approach 20, you become a full time board member.

Yeah. And, and I would imagine that you get pulled into this because you are uniquely still dialed in. I think, you know, you've been out of the operator game for 11 years a little bit more.

Yes, yes, that is true.

And yet anybody who follows you on Twitter or LinkedIn and looks at your breakdowns of businesses, public and private, you seem to have more operational depth than just about anybody, including the people who were most recently operators. How do you stay so dialed in? How do you keep that operator edge after all these years?

It is a good question. I do think this idea of decay of your fluency is real. And I certainly think the playbook of a decade ago pretty much died during March 2020. It died when things exploded right in March 2020 and then it died when things in some cases deflated. So I think if you're literally talking to someone that has been out of the game since pre 2020 and that frankly, that's a lot of the early Saster content, I think a lot of it is pretty dated. How have I kept up really? Two ways. One is it has helped to be pretty involved with, you know, a handful of pretty successful SaaS companies that have still struggled along the way. Right. If it's perfect, you learn nothing. And if you run the thing right into the ground, you learn nothing. But to watch, like you said, you're gonna have the, the sierra of Salesloft on. You know, I invested in Salesloft pre revenue to watch them dump 8 million of revenue and go to zero and rebuild the company from scratch. Those are great, great learning experiences to watch owner go through like three different life cycles since you start does it. So I've been through, I'm much more closer. Most investors actually don't even understand how sales or marketing works. So I usually. And I'm curious. So. So that's a piece of it. A side benefit is while not intentional, you know, we have closed, I don't know, one hundred and something million revenue of sponsors, sponsor sales at Saster over 10 years, maybe close to 100 million plus tickets, but tickets is more. Selling tickets keeps me a little bit current on email marketing and demand gen because we do have to sell 5 or 6 million of tickets a year so that I don't have to fund it all. And then I don't know how I feel about selling to sponsors. But you know, we need 100 to 200 of them a year. And it doesn't keep me fresh in the latest tools. Like you're really good at the cutting edge tools. It doesn't keep me in, but it really keeps me fresh in terms of how are how our buyers thinking about things, how are marketers thinking about things in particular, but also CEOs and founders. So literally being forced to sell 100 million of sponsorships for 10 years, it hasn't kept me SaaS fresh, that's investing, but it has kept me sales fresh. Like I living, you know, every single day we have a scrum with our sales team five days a week. So I'm with our little and our sales teams for people and it is different. But I've spent, you know, eight years having, the last eight years having a daily sales meeting. It does help. It's not perfect, but it keeps, it keeps you somewhat current. Right.

And you're a buyer, which you've written a lot about you, you are buying enough tools for SaaS.

Enough tools. Yeah, yeah, I think it's. And honestly, to answer your question, I think being an investor in a bunch of SaaS companies that have done well but also struggled selling $100 million sponsorships and being a buyer, I would say it's just barely enough to keep me current. Yeah, it's. And if I wasn't curious, like if I wasn't had a curious mind, I don't think I could be current. Right. I think you decay in about. I think your, your knowledge of, you know, I think you're lucky if you're like cutting edge knowledge of sales lasts two to three years. Right. And maybe your knowledge of the market lasts a little longer but then it, then it just falls apart. Right. Even the restaurant industry, if you worked at Toast 10 years ago, I don't think I'd hire that person at owner. Right. Two years ago, like the problem is it's a different market and it's too big. But at least they know that two years ago they know what's happening. But four or five years ago it was just a different world, right?

Yeah, totally. Okay, well let's, we're gonna hop right into our two major topics.

So also I will say I think that having quote operators on your board has pros and cons. A lot of cons. Everyone can't help comparing it to their last company. If you, if you have a CEO on your board, next CEO, they think it was like their last company. And if you have a successful VC that has only a couple successes, they always think it's like, it's always like their last company. I remember I was an investor in a company and one of the investors in Slack was on the board. This company was very enterprise when Slack was all self serve. And he kept talking about how it was just like Slack at every board meeting and yelling at the CEO, why aren't you more like Slack? Why aren't you doing what Stuart's doing? And I kept trying to tell this very famous VC look, it's just, it would be great if this company was like Slack. But we're selling like 3 to 400k enterprise deals with 11 stakeholders, not self serve deals before Slack even had a sales team. And I just, you just. So that's bad. And then founders, you know, I'm very careful now. I certainly bring a lot of the lessons that I'm learning but I don't, I don't bring my too many of my old CEO lessons. You got to be careful. And so you are kind of inheriting. If you're doing SMB and you have a CEO on your board, covc, that was an enterprise, you're going to get a weird bit of advice, right. If, and then also there's sort of a deal size and then there's like different burn profiles. Right. If you've got Reed Hoffman on your board, he's Mr. Blitzscaling.

Yeah, right.

If you're a VC that has for example, their whole career been a CVC, they may be all about capital efficiency. Right. And so you're going to get conflicting advice based on the, the size, based on capital efficiency. And so I think that initially founders prefer having operators on the board because it feels like them, it's more comfortable. But I'm actually not sure it's a positive over like a financial vc. Right. I'm not sure it's better.

Okay, that's interesting. And so the two topics that we want to explore today from the perspective of revenue leaders is very much related to this point. One is how do we understand and navigate board dynamics? And we're also going to kick off with a conversation around how should a revenue leader pick the right fit and make sure that there's alignment with the founder that they're joining. Because you've written a lot about this. It's very difficult to find fit in alignment between stage and profile segment. And so let's move, we'll move around the schedule a little bit.

So you.

Get all sorts of different advice depending on the profile. As a revenue leader, how should we be taking in this insight? How directly do you think ahead of sales, ahead of revenue should be reacting to that type of advice from their board.

From a board once they've taken a role.

So I'm yeah, we'll start with topic to board management. So.

Well, first of all, listen most again I think there's two types of board members. Folks that have been CEOs and folks that have not been CEOs and founders. And I think especially for a CRO, you need, you need to really read the audience. Right. The reality is a vc, a board member that has never been a CEO, is always attracted to logo and a deep baritone voice and speaking with confidence. If you came out of wherever, Shopify, LinkedIn, toast wherever. Let's pick our leader, especially maybe a leader that was like 10 years ago. Salesforce, like it's great but Salesforce is at 30 billion in revenue. They're always up to a, up to a point they're going to be impressed with that, how pretty your pipeline charts are and your funnel looks. They're going to be impressed with all that stuff. I think the more they're an operator, the more they just want to know what your commits are to flip it around. What are your commits? Just. And I see and this is why I can, I can smell this in, in 60 seconds when a VP of Sales comes in and their first slide isn't their commits. I, I know this just they're not doing well. All they want to do is you're a startup. You don't have two years right here. Okay. They start off okay. How is the quarter? You know, whatever you give, you give yourself an honest grade. That's what a great startup had a sales does give you an honest grade. How's it looking for the next quarter? And here's my honest commits. They're hard. I got an 80% chance of bringing in service now. I got a 50% chance here. The mediocre ones don't give themselves a grade. They, they blame others and they have a bunch of random pipeline that makes no sense but looks really good because there's A lot of logos in it just tell me that, you know, commits are, commits are obvious. I'm not sure that when I started in SaaS that just this basic concept was as well known, right? To have a true commit in the funnel for sales. But it is the way all the best sales leaders present. What's your commit? What's your confidence? What's your commit? And don't run from it. And don't run from bad news. And the mediocre ones run from bad news. Don't run from bad news. When you present to a board, the one thing to remember, this is a lot, what a lot of first timers, 90% get wrong is, is what a board wants is honesty, optimism, honesty plus optimism. Not pessimist, not a Debbie Downer. And they want it. They want commitment, they want honest numbers. But they know that not every week is going to be great. Like, they are wired. Professional investors and board members are wired for a certain amount of bad news. Too much bad news is too much, right? You lose confidence as you would in someone on your team, right? Someone on your team missed, missed every month for a year. You'd lose a little bit of confidence no matter how much you liked them. But one month is not the end of the world. VCs know this too, right? Board members know this too, right? And the other thing that just kills a lot of first time beats even sec, even third or fourth time. The one that really undermines, destroys confidence in the board, and this would be true for everyone, but especially at the board level, is unexpected bad news that destroys. That's 10 times more a confidence destroyer than anything else. If you say, listen, last quarter was great. The plan was 1 million, we did 1, 2. But this quarter is going to be hard and here's why. 30% of it's me, right? I screwed up. I made a couple bad hires. 30% of its seasonality, 30% of its competition. It's tough. And so we're going to only do 800k this quarter. It's down. That's a hard miss. It's not a soft miss. It's not like growth is slowed. It's down. And then what? The quarter ends up being 850 or 900. Okay, well I've gotten, I've gotten a great heads up, right? And everyone's like, okay, Kyle, let's talk about next quarter. Like it's behind us. Who gives a shit? I mean, but when it's a bomb, when it's a bomb and I just, it's just, you've got to learn this as a revenue leader to telegraph on bad news with a positive filter. Don't be a Debbie Downer, but telegraph it as early as humanly possible. But in a way that, that shows why, if you believe the business has velocity, why it does. Like do it the right way, but no surprises. No surprises. And I loved a long time ago at Saster, Olivia from Datadog, the CEO came in the early days of data. He came to our first Astro Europa and he said something which sounds trite, but honestly, this is the best advice I could give to any, any revenue leader. Also, founders to run toward bad news. I know it sounds like an ism. Write it on your palm in indelible ink and look at it before every team meeting, every board meeting. Run toward bad news. Run toward it. This is what the best people do, they run toward bad news. Now a lot of founders run from bad news. It's bad enough, right?

Yeah.

The classic way is when the investor updates start coming later and later and then they don't come anymore. That's running from bad news. But CROs are even worse at it because one, they dilute themselves. They can make it up next quarter at the end of the year and they commit to crazy backloaded growth numbers that are impossible. Like that's a delusional, that's a, that's a top five mistake folks make to the board in general is committing to a crazy plan to make up for a miss. And two, they, they almost get paralyzed. They almost get paralyzed with maybe some, some excessive amount of intimidation and they just start, they just start making it up. And they, they don't run toward bad news. The best ones run toward bad news. They run toward it. Right.

I, I think this was one of the, I, I put a bunch of messages out to folks to see what they would want to know from a board member, an investor. The two top things were this topic. How do you manage the board's confidence in me as a revenue leader? Because sometimes things aren't going to go great and I think this is great advice for people. It sounds like honesty and optimism. Would you add have a plan to that?

Yeah, always have a plan. And listen, if you need a framework to present to a board, people have, I think everything can be distilled to one slide. And your one slide is what was your commit for the quarter? How did it go? Be honest. Don't hide it.

Yeah.

If you came up short, you came up short. What went well? Three bullets. What didn't three bullets commit? Actual. What went well? What didn't? Well, this slide, especially if I see it ahead of time and I can read it. Bitching. You're already ahead of 90% of CROs and VPs of sales.

Yeah.

What did I commit to? How did it actually go? Like my goal, my real goals for the quarter. And three. Three things that went well. Three things that went less well. I do a gbu. Good, bad and ugly. So I also have ugly. I like to split into gbu. But you can just do good and bad if you want.

Okay.

But it's so honest that rather than everything's great. I know, I know we. We said a million and it was 400,000. But everything was great, Kyle. Everything's great. Everything's great. Yeah, everything's great. The first startup I ever worked at is the first time I'd ever worked with a professional sales leader. Right. He looked apart tall, you know, deep sea diver and offshore Rex, deep at the bottom. And every day I'd say to Michael, how's it going? He'd be like, never better. Never better in the entire year he was there. He closed zero. The VP of sales. But never better. Every day. Okay, Never better.

And. And that is where you lose confidence from the board. Yeah.

You don't. And listen, here's related to it. Listen, if you want advice. Way too many VPs of sales. And not just first time, second time, they think they need to sell up. They think they need to manipulate the board. They think they need to look a certain way and talk a certain way. No. Maybe. Maybe at the IPO stage. Maybe. Okay, maybe no. If you're a startup or scale up, be you like, start with the dashboard I talked about. What was the commit? How did it go? Three good things, three bad things. Every time. Just present it that way. Most with a little bit of a passion, but not emotion or blame. And then have the second. Whatever your dashboard is. I like commits. I like this. But have it be your thing. What? Dash. Here's the cheat code. Don't spend talk to a lot of cos these days and they're often canceling board meetings or moving them because it takes too long to prepare. It shouldn't. Your second slide, Kyle, should be whatever your favorite dashboard is. How do you like to work with your team? It's brilliant. Give that way I can see how you think. Is it a screenshot from HubSpot or Salesforce? Great is. Do you have your own spreadsheet? Do you have a weird system in notion? Whatever it is. If you take a screenshot of your dashboard that shouldn't take more than five minutes. Shoot it with a few notes. That should be it. That's so great. Okay, this is how he thinks. This is how he thinks.

Okay?

Don't sell up, don't schmooze. People are all, all your board wants you to do is grow as quickly as you can and be successful. You are aligned. It's not a game. And even if it is a game, they're going to see the emperor has no clothes. If you, if you over. If you over. If you claim things that you're not. Bu. There are, there are, there are. There are CROs today that are very nerdy and math oriented and they're almost to a fault, right? There are CROs that are more on the enterprise side that are even today are ultra relationship driven. They're like constantly hanging out with their prospects in person. Like you be you. Like there are different sales is still has different paths to success. Don't act, act a little bit like we're all acting a little bit, but don't act more than 10%, be you. And that will inspire the confidence, right? And like, if you give too much bullshit here, trying to act too much will undermine it, right? And then the other thing you can't do about is, you know, too much fear. That's the end of it. That's the end of any head of sales. Too much fear when.

What do you mean, too much fear?

Look, startups are hard, right? And even when they're easy, they're hard because even when they're easy, the bar goes up.

Yeah, right.

Or they're either. So like. And in some ways the hardest job of all is ahead of sales because, you know, it's tough to be an ae, but your quota might be the same for five years, but your quota goes up every year, every quarter. As a VP of sales, your job gets. If you don't recruit better and better people, your job gets harder and harder each quarter. So it's hard and everyone knows it's hard and everyone's trying to watch. Okay, can Kyle make it to the next level? We just want to know. There's no judging. Everyone wants a lot of the early stuff. A lot of. A lot of angry VPs of sales on LinkedIn. Think everyone wants to fire them. All these CEOs, nobody wants to fire anybody. I can tell you what owner. All people want is Kyle to get us to a billion dollars in revenue. No one wants anything else. That's all. Why would you. Why would you want anything else? Kyle's done A good job. Why would you want anything else? Why would you like people? People read these irrational things into it. But what you are looking for is when it gets harder and harder. Like okay, let's say, let's say Kyle joined. Say you joined owner at a million. I don't know when you joined. Okay, and we're at 20 something today. And so yeah, Kyle, Kyle was very confident going from 1 to 3 and then 3 to 9 and then. But when sometimes you see that fear and you start hearing, well, I don't know, going from 20 to 30 is really, that's, that's a really big number. And in fact, in sas, a lot of times you're closing more each year than all the other years combined. You have to do as much work in sales this year as every year combined. And so if fear eats at you too much, you just can't do it right. So we are looking for fear. We are looking for fear.

I think the fear piece is rampant. One of the questions I got the most was, well, revenue leaders are always on the chopping block when things go wrong.

It's not true, Kyle, it's just not true. But keep going. This is what I think is one of the biggest disservices on LinkedIn and social media is this idea that revenue leaders are on the chopping block. It is not true.

So explain this from the board person's perspective because I love this, I love this point that you're making.

Let's step back for a minute. I know, I. Listen, don't get me wrong, most of the best, especially first time VC sales, not all, and I'll give you some stories, but many of the best did get chopped. Okay, but often, first of all, often they got chopped after they got topped and they, they got huffy and they got quit. They quit when a CRO or an SVB of sales was, was brought on top of them. Many of the best ones I know who think they got chopped didn't get chopped. They talk about they got chopped, they got topped and that's a different topic.

They got topped and then disgruntled and then eventually had to be moved out.

I think half the, the great stretch VPs of sales, the great ones, it's their first time as a VP of sales. They're such passionate folks, these first timers. They're not machines, right? They're not mercenaries that it's tough. They do quit half the time when they get topped. It's hard, right? And maybe half the time they quit and another 25% of the time they almost quit. Yeah, right. They almost quit. So. But that's not the same thing as getting fired, is it?

No. And I think a lot of this comes from giving people titles and saying, you're the head of sales and that person gets it in their mind that they are the top of the chain forever versus having an open conversation about, hey, we're going to see the founder having an open conversation and saying, hey, we're going to see how far you can take this. But this business is five today and is going to be 20 in 24 months. And you might be able to keep up if you're a super duper learner, but if not, it's still an incredible victory. And then we're going to bring in somebody that you can learn from.

But I think that's the right conversation. I think what CEOs don't do that, they should do. I wrote this post not that long ago in Saster, but I should have rewritten it like 11 times. If you're going to have that conversation with your stretch VP of Sales. Okay. Then you have to decide if you want to say something at the end, which is, listen, I don't know where it's going to go. I want you to go all the way or I don't. Right. If you can't, we may need to bring in a CRO or someone at the next. Next stage. But no matter what happens, you have a job here forever.

Performance.

I know that, that when you say that to people at the time, it doesn't. It doesn't really help. It doesn't take. If there is a sting, it doesn't take the sting out. Okay. And I know, but I think this is a really important thing to say nevertheless. It's like, listen on, if you. You have done such a great job. Kyle. I don't. I mean, I'm making this conversation, but let's say I was the CEO of owner. We had this conversation. Like, you've done a great. Like, you're a 10. You are a 10. I'm being objective for the listeners. You're a 10. And I don't know that I would have that conversation. Because you're SMB, which we could chat about, because I think folks in SMB can scale longer. But let's say we did have that conversation. Kyle, you've done great, but I don't know if you're the right guide to be our CRO at 200 million. But whether you are or aren't, I want you to be one of our senior Leaders on our revenue team, period. That might not make you feel better, but it's the right thing to say if you mean it. Because then at least this, this LinkedIn mania of I'm going to get fired. I'm telling you Kyle, if you can trust me, you're not getting fired. You may quit, you may go on to another company. Right. You will not be fired on my watch. You've earned a spot here. And like for example, the, the third investment I did is a company called Algolia which is a search as a service API that hopefully will IPO in the not distant future doing a Coup Million. The first head of sales, Gajen, he just left two months ago. He joined in 2014. Now his role changed. Head of sales CRO, chief business officer, Chief Strategy Officer. I mean he hasn't run sales since it was like the post founder sales level but he always had a senior role. Yeah, that's what you want. The last thing. Listen, you know Adam and Dean asked my my opinion but if I were running owner, no matter what, I don't want you leaving. You know too much about how this company works. I want to find you a role. I hope it's CRO, if later it's chief Strategy Officer or chief Business officer or maybe you're GM of our SMB unit or something. Jameson, our old team, our old sales team at Echo Sign just left as SBV sales at Gong after I think eight years. He was the first sales hire.

Yeah.

Now I think there were like two or three CROs hired above him that maybe one or two might have come and gone and his role evolved. But he made it eight years through, all the way through SVB sales. I kept him running this classic mid market motion all the way through a couple hundred million in revenue. Right.

And mass massive victory for him. Massive victory for the company like that.

So realize it's not that simple as getting fired. If you decide if does your CEO believe in you have this conversation and if you're a CEO, tell someone because there is this paranoia in sales that I'm gonna get fired. It is a paranoia. I'm not saying it's going to work that day but. But you got to tell people you love them in life and if you love your CRO, you got to tell her him you love them. You got to tell him no matter what. You have a senior role here. I don't know what the senior role will be at 100 million and 200 million in a billion. I don't know for sure what your Senior role will be at a billionaire, but if you want to stay, you are part of the inner circle.

That's a great message and hopefully this can help put to bed some of the fear that is definitely rampant in these roles and will prevent people from ego quitting.

It's accelerated the ego quitting. It's, it's, it's, it's, it just, it doesn't help. And I think people are just eating themselves up in their own heads and their own minds and listen, I just, you know, whatever the statistic, the average now CMOs are different, but for zeros of the average, zero makes it 14 months or 17 months, whatever your number. This is where averages are misleading.

Yeah.

You know, and listen, the other thing that is misleading is that, like that somehow today, because of layoffs or whatever, like, it's so easy to find great people. No frigging way. It's impossible to find great people.

Yeah.

You can't. It's harder than ever. Most people don't want to work. Most people want to be strategists. A lot of people are angry and burnt out. It is harder than. It is easier than ever. Just get a thousand. You can put an applicant. You can get a thousand AI applications in an hour if you want. Finding someone that wants the job, it's still only 1%.

So done the research, prepared for the call.

Yeah. If you're one of the. If you're one of the handful of leaders in a startup that truly cares about the mission, that cares about for real, that cares about the company, which is rarer than ever. The best founders never want you to go. Up to a point. Up to a point. They never want you. Until. Unless you become a problem. They never want you to go. They never want you to go. So these numbers are misleading. No. And a good, A great CEO knows, hey, shoot, I fire Kyle or Sam or Brendan, I fire them. I better have someone better than Kyle right next door. How many of them have someone better?

Yeah. Yeah.

Right. So, yeah, it does happen. Cos, like, you miss the number, you miss the plan. And they fire the revenue team. And I've written this, I find firing the entire revenue team because you miss a number rarely an effective strategy. Rarely. Rarely. In fact, it often. For a mediocre CEO, it often leads to a death spiral of a start. It's a start of a death spiral when a mediocre CEO fires the whole revenue team.

I have.

Because they never replace them.

Yeah.

There's just nobody. Yeah.

And so from the board's perspective, when you see Struggling results. Because I think the tension is always, how much is the product, doesn't have as much fit as we thought versus this revenue leader doesn't have it. How do you untangle that?

Never say this as a CRO, Never, ever, ever in public. Blame the product. That's when you're going to lose your job.

Okay.

That's a sign of a loser CR over sales. A loser one. Because anyone that's been around knows that every product has weaknesses.

Yeah.

Everyone has competition, everyone has gaps. Sales is hard. And what's the simplest excuse? What's the simplest excuse in sales? What's the easiest one to come up with?

People don't want the product.

Product sucks. Yeah, they don't. Like, yeah, if you had this feature, we could have closed Exxon or whatever, but we don't. It's a sign of a loser CRO or VP of sales is blaming the product. Doesn't mean there isn't truth to it. It doesn't mean in quiet moments, the manage. You should have discussions with the management team about what you want. If you really believe the product sucks, you should leave. Like, if it's really below. Below a certain line, you should leave. But whatever you do, do not blame the product. It just. It. Nothing makes a zero. Listen, lying about the numbers is pretty bad. Missing the quarter is pretty bad. But just railing into the product, it's like, not only is it like railing to your children or your aunt or your parents or. It's just. I know that I would. I would immediately pull the CEO aside after board meeting and say, listen, you got. You got. It's not going to work.

Because if they've lost confidence, you're. You're.

It's a version of fear. It's a version of fear is blaming the product because it's true. It's the ease, but it's the easiest excuse. Mm.

You know, and there are situations where the product doesn't have or has fallen out of fit and for sure. And in that.

That's part of the startup journey, though, is there's always competition. You can't win. Part of being. Part of being a great revenue leader is understanding your relative strengths and getting really good at your. Where do we win? Yeah, let's lean in really deeply where we win. Okay. Now. And then the great ones say, okay, where do we lose? But not always lose. Okay, let's find some fudge. Let's find some counterfeit. Let's find a script that. Yeah, okay, listen. We're actually not that competitive in this segment of the market. But our product is easier to use. So let's just frigging go to that.

Yeah.

As great as this competitor is. Yeah, I know they have 80% market share and we, look, people do love them, but it takes three months to onboard them. We can get you going today. You're going to win some deals with that lead. But it's so easy to turn around and say we, we can't win. Like our product's not good enough. The best revenue leaders productize. Not only do they productize where they have a competitive strength, then they productize where they lose a lot of deals but still win some and they maximize the revenue they can get out of them. The mediocre ones lose. Lose all of the second tier and just say it's product market fit.

That's great. That's great insight. And so the, I think the, the fear is like a sports team that's struggling. The GM lets the coach go and the VPs of sales tend to feel like the coach and maybe they don't have the fit or the plan made no sense and they're the scapegoat. What's your commentary on that as a board member?

Sorry, restate the question. When the CRO is the scapegoat.

So yeah, I think that is where a lot of the fear comes from. It's like, well, we're not growing fast enough because my VP of sales isn't good enough. So we're going to replace him or her. And it might be a product fit issue or the plan.

Well, look, of course there can be truth here, right? And all but the great CEOs sometimes are looking for people to blame too. And all but great CEOs sometimes will blame the CRO, the VP, sales. They will, it will happen. I haven't seen the great ones. I know people are going to challenge me on this. I haven't seen the great ones do it. In fact, the great ones sometimes over protect their revenue leader. They protect them too much.

Okay, interesting.

So stick with Kyle. I know he's right. I know the first couple months have been rough. He knows what he's doing. He's doing the right things. Back off, back off, Lemkin.

That makes sense.

They are protective because they know they need that. Like this is it. Like start. I don't know if startups are truly fun, but there's a. They're very, they're very involving. Right. There is a fun element in it. And it's a team sport, man. And you got to protect your team. Don't you. You've got to protect your team as the CEO. And if you start throwing your team under the bus, you can do that. But the good CEOs know that it's extremely costly, right? Yeah, it's extremely so. So this mythology that all these CEOs go to their board. Here's the other thing. Let's tie this together. Kyle. People, your board is important for a variety of reasons. They are not important in the way a typical VP of Sales CRO thinks. They're not important in that way. They don't run the company, they don't make the decisions. And in fact, you know, in the old days, like I, you know, I think, you know, when Sequoia invested in Cisco, I think they threw out the first CEO and brought in another CEO. And yeah, when Kleiner went into Google, they brought in Eric Schmidt. We don't see that anymore, do we? Rarely.

No, you can't.

A little bit. Not only can you not do it for control reasons, it's not even part of. Except for some like P funds and crossover. It's not even part of venture DNA anymore. You know what happens if an owner doesn't work out today? You know what happens if an owner didn't work out 10 years ago, someone lost their job in venture. You know what happens if owner doesn't work out today? You move on. Okay. At this point. So, so, like, don't. Don't give the. If. If more than $10 million has gone into the company, take the board very seriously. Because that's real money, dude. It's real money. But they're not. They're not really. Forget about the. What? Yes, legally, they're the boss of the CEO, but that's about it. Treat them with respect. Treat them as stewards of capital. Treat them that way. But don't. But they're not making these grandiose decisions on whether you stay or go. But. But they will talk about you, like going to the point when, when the, when the closed session starts.

This was my next question.

The first thing that is discussed is the management team. There's no point in talking about the numbers because everyone's already pre talked about the numbers. They've seen the deck. They already know the numbers. Right. If there's something weird in the numbers, it'll be the first thing that's discussed. But actually, when the closed session happens, we don't talk about the numbers. We talk about the management team. That's all we talk about is the management.