00:00hi everyone welcome to the a six in Z
00:02podcast I'm sonal and I'm here with Mark
00:04cranny who heads up our sales and market
00:06development team Lars dalgaard and Ben
00:08Horowitz and today we're talking about
00:10the why how and when of sales everything
00:14from how to structure your sales
00:15organization depending on what you're
00:16selling to when to bring on your first
00:18sales hire sometimes the very thing that
00:21makes founders start a company they want
00:23to change the way things are done can
00:24backfire if they're applying it to
00:26establish processes that work like sales
00:28or maybe you're rightfully worried about
00:30how to compensate sales people
00:32especially with Commission's when others
00:34in the company also contribute a lot to
00:36making that product to sell in the first
00:37place so how do you approach this
00:39tension how do you deal with jealousy
00:40around commissions and why shouldn't
00:42founders reinvent how things work when
00:44it comes to sales especially when that
00:45mindset is a very thing that's made them
00:47start a company in the first place we
00:49cook off the conversation with how some
00:50technical founders sometimes approach
00:52sales well I think that you know a lot
00:54of technical founders just don't have
00:56any experience with sales and there's an
00:59awful lot to it that I think that if you
01:02kind of just sit in your room and you
01:06know theorize you're gonna get very very
01:09wrong and we've seen many founders have
01:12theoretical models for how they would
01:14like sales to work and those have tend
01:17to be been like extremely unsuccessful
01:20because you know there's a lack of kind
01:23of practical grounding and like what it
01:25means to sell something you know not
01:28just to an individual but to a large
01:30complex organization with a very I would
01:34say hard to understand decision making
01:38process crannie I once heard you say I
01:41think the best line ever heard you say
01:42about this is that selling to a large
01:44enterprise is like getting a bill passed
01:46in Congress and it's probably on of your
01:48most famous lines what was the genesis
01:50of that why is it so complex if you
01:52think of say a fortune 500 or a global
01:542,000 company these are big bureaucratic
01:57political complex organizations that are
02:03difficult to navigate in and you've got
02:05to win a lot of different groups in a
02:08large enterprise wide type campaign to
02:14of a customer's wallet or the most
02:16potential that you can with an
02:19enterprise type solution so to simplify
02:22it if you just looked at a big account
02:25in three lenses you've got users and
02:28then you have the managers of those
02:30users and a lot of different business
02:32units and then at the top you've got
02:34more of the see EXO type people that
02:37have get involved in large deals and
02:39every one of those groups has a
02:42different set of buying criteria one of
02:45the reasons I think some of the founders
02:46check the technical founders are slow to
02:49understand the need for sells is that
02:52the products these days are so good in a
02:54lot of cases exactly that they're able
02:57to start by getting users at that bottom
02:59tier you know they're easy to deploy
03:01great feature functionality then get you
03:04know individuals and/or small groups on
03:06board but when that starts to spread an
03:09organization or after the startup is
03:12landed it becomes tougher to expand as
03:15they get trying to get to other parts of
03:16the organization so they can go on for
03:19quite some time and be successful
03:20landing but the key is are they going to
03:22be able to expand and they gonna learn
03:24how to go to market with those other two
03:27groups the user managers as well as the
03:29cxos because their criteria is
03:31completely different you know the cxl
03:33it's gonna be more financially oriented
03:35how is it Maps up to the overall
03:36strategy and initiatives of a company
03:38down below it's like you know can I get
03:41my work done better yes let me just push
03:42back on that for a second because if I
03:44see an amazing product that's going
03:46viral in the enterprise why wouldn't the
03:49CEO just like pick up on it and say oh I
03:50want to adopt this all across the board
03:52like why do you need this extra overhead
03:54of sales to help push that through the
03:56hallways it's typically because there's
03:58you know they've they're set up to
04:00reject it's like there's a rejection
04:03organism based on politics other
04:06decisions standards security things of
04:09that nature as far as how it affects
04:11everyone so as well as them how the
04:13money flows inside these big companies
04:15like it does in Congress right just
04:17because the House passes a bill doesn't
04:19mean that's going to become a law and
04:21that's that's kind of why I made that
04:24that comment originally is you know you
04:25can go through the whole process
04:27all the way to getting signed by the
04:28president but it could still get kicked
04:30out and thrown over the Supreme Court
04:32neck I've seen that happen
04:34maybe people are confused how many sales
04:36reps are at Facebook and Google
04:38thousands of sales reps in both
04:40companies and I think people must
04:43realize that all the world's greatest
04:45companies have a fantastic sales force
04:47I've wrote a big blog post around
04:49coin-operated idiots and the reason I
04:50called it that it's because it's
04:53stunning to me that there are people
04:54that literally say that in Silicon
04:55Valley that the Salesforce coin-operated
04:57idiots however these people are the
04:59people that can inform you about what's
05:01going on with your customers unlike
05:02anybody else the salespeople are in
05:05front of customers every day that's what
05:07they do and if you don't bring them into
05:09your organization you're missing out on
05:11one of the most important things you've
05:12invested in the company the having
05:15product managers sit in the closet as I
05:16like to say and not benefit from vanilla
05:19and customers but they're real buddies
05:21that are out there talking to customers
05:23all the time understand their
05:24interpretation of what product will
05:25actually sell and what product will not
05:27sell which one is having that's a huge
05:28loss for an enterprise
05:30yeah there's sort of a catch-22 here we
05:32ourselves talk about investing in
05:34technical founders and and product
05:37driven CEOs it isn't part of what we're
05:39looking for for CEOs to have a sense of
05:41that roadmap in their head already
05:42without needing to to have to get all
05:44these inputs that vision I mean I'm
05:46thinking of an example a classic example
05:47like Steve Jobs like did he really ever
05:49listen to what his customer said well
05:51yeah I mean so he's famous for saying
05:52that they don't know what they want and
05:54and we you know we'll figure it out but
05:56first of all I don't think there's a lot
05:58of Steve Jobs as I think that there's
05:59people that have talent in areas but he
06:01was a pretty unique person why miss out
06:04on the opportunity to benefit from new
06:06hire great sales reps you know in case
06:08we had a thousand they can give you an
06:11amazing amount of data that you cannot
06:13get otherwise and so I made it a rule
06:16that product management would never have
06:18a meeting discussing roadmap without
06:20having sales reps in the meeting and
06:22they have a different temperament
06:24combining with the rest of the temperent
06:26of the organizations and one of them is
06:29that I think probably management which I
06:31love and is important essential for a
06:33company has a different sense of urgency
06:35than a sales force us because the sense
06:37of urgency that a sales rose as we need
06:39to go sell something now
06:41and so of course just making the whole
06:42roadmap about that becomes a problem but
06:45you can definitely use that in meetings
06:47that get stuck run by product management
06:50where you can fall in love with new
06:51technologies ideas you had in your own
06:54head that nobody actually cares about
06:56and so getting it validated instantly by
06:59the Salesforce or thing is a massive
07:00thing to take advantage of the other
07:03thing I would add is like if you look at
07:05Apple's products and their product
07:07position and you look at their success
07:09in the enterprise versus say Microsoft
07:12which is selling competing products you
07:15would I would argue apples vendor shot
07:17their potential with the products I have
07:19by probably 100x so if you're a company
07:23that's only selling products for money
07:26to consumers which is almost no
07:29companies in Silicon Valley so if that
07:34is if you're selling giving a product
07:36consumers and selling advertising to
07:37companies or if you're selling products
07:40to companies then that's when you need
07:43sales and I think that yeah absolutely
07:45if you're only selling products for
07:48money to consumers directly that's a
07:51different situation but that's a very
07:53rare situation so that brings that full
07:55circle cranny to your point about it
07:57being like selling a bill in Congress I
07:59think there's a misconception about you
08:02know sells in general that that they're
08:04there to kind of to communicate the
08:07value of of the product that's been
08:09built when in reality they're there to
08:12create value for their customers and the
08:15way they create that value for their
08:17customer is with a very deep knowledge
08:20and understanding of that customers you
08:23know strategy what their initiatives are
08:25what's in place from a people and a
08:28process and a technology standpoint you
08:31see most most enterprises particularly
08:33when you're dealing with a start-up or a
08:34new kind of technology or a new way of
08:37doing business via software the customer
08:41doesn't know how to evaluate that
08:43because they don't know as exists and
08:44the the purpose of the sales force as
08:46well as marketing from an air cover
08:48standpoint is to help make that
08:51prospective customer under
08:53stand there's a better way of doing
08:55things and that only comes from a deep
08:56understanding of what's going on inside
08:58these big companies and you don't get
09:00that sitting in a cube in you know San
09:04Francisco or Silicon Valley you get that
09:06from walking the halls of these big
09:09organizations and really understanding
09:10you know what their initiatives are and
09:13how your be able to map up what your
09:15product could do for them and then you
09:17go if they have to go through this sales
09:19process of you know a lot of discovery
09:21really understanding what that you know
09:23what's going on in that that customers
09:25business as well as you're typically
09:27gonna have to go through some kind of
09:28technical validation event and you can't
09:32necessarily rely on a customer to tell
09:33you how to evaluate it the cells force
09:35is there to help them through that whole
09:37process as well as the last pieces you
09:40know and which is really a more focused
09:42on that senior level the CXOs is what's
09:46the business case right and why should
09:48they invest in this not only versus
09:51other technical solutions in that
09:53particular space but why should they
09:55invest the time the money the energy and
09:58the resources to go do anything with
10:00whatever you're selling versus all the
10:02other things that could be you know
10:03using their capital with well let's
10:05revisit a point that you guys all
10:06mentioned which is this notion of a
10:08cultural difference and the mindset
10:10large you talked about the coin-operated
10:11idiot I know that you say it's a
10:13phenomenon but I don't believe that
10:14every technical founder believes that
10:17like they they actually want a higher
10:18sales person but maybe there's a fear
10:21that that's gonna change their culture
10:22can you talk a little bit more about the
10:24cultural integration of you know
10:26engineering in sales
10:28yes I think this is an area where you
10:29need to open your own mindset if you
10:31want to be a strong CEO that can lead a
10:33complete and comprehensive company that
10:35has all the strengths that you can
10:36benefit from and building a real team
10:37then you need to open your mind that a
10:40sales person and the sales manager might
10:42not behave and think the way you did
10:45when you were in undergrad or grad
10:47school doing CS but that's the strength
10:50you don't want a CS person necessarily
10:52that's not necessary your target you
10:54don't want people that are exactly like
10:56you oh of course you can have a basic
10:57cultural value concept of treating
11:00people with respect for instance which
11:02was one of our values and that you need
11:04to truly take care of customers and that
11:07if they have a different personality
11:08they live in a different way and they
11:09have values around how they make money
11:12that's different than yours that's okay
11:15you need to open yourself towards that
11:17concept and you need to include them in
11:19your culture and you need to find them
11:21you don't want to dilute out anybody you
11:23can find that you like how they say they
11:26think and talk and what their story is
11:28so much so that they don't have the true
11:30powers of what a salesperson is and and
11:32what they're excited about and so I
11:34think it's super important for all roles
11:35but particularly sales that you are very
11:38open minded around how they can come in
11:40even though they think and operate
11:41differently that's a choice they made
11:43you're hiring a person that's doing
11:45something different usually looking for
11:46a compliment not someone who is like you
11:48like what motivates a sales person I
11:50think I mean I have a particular profile
11:54I've recruited ooh my whole career but
11:56and that's gonna vary across different
11:58types of cells worse but if you think
12:01about the progression of a company you
12:04know what they go through early on they
12:06you know if they have something that's
12:07really unique and differentiated you
12:10know there may not be a lot of
12:12competition so there may not be the need
12:14for that cells you know because users
12:17are adopting it's kind of a bottoms-up
12:19type approach the need may not be there
12:22but I think CEOs might be being pretty
12:26short-sighted that there's not going to
12:28be competition down the line
12:29particularly as they try to expand
12:31inside a account so one of the first
12:33criteria I always look for was how
12:35competitive was this person and what you
12:38know what they've done in their careers
12:40to really demonstrate that and it
12:41typically goes you know pretty early
12:43into their career so competitive high
12:45courage focus discipline people that
12:48have a little bit of charisma you know a
12:50lot of intellectual horsepower and can
12:51think quick on their feet and people
12:53they can take a beating right that they
12:55can actually go in and take a lot of
12:56failure to get to some success in and
13:00you know you can see that you know in
13:02their track record in the selling side
13:04but even earlier on you you typically
13:06see this and a lot of things like you
13:08know junior military officers team
13:09sports things of that nature so the
13:12competition is probably the biggest
13:14thing can they get in and compete and
13:15it's not just necessarily competing
13:17against another person in your space
13:18it's it's competing in that
13:21you know Selleck situation for all the
13:23other things these big companies could
13:24be doing with their time people in
13:27capital I think that's right I think
13:29that the other thing that we run into
13:32sometimes as people will say oh well you
13:34know in my culture I don't want people
13:37to get commissions because our engineers
13:40don't get commissions and I think that
13:42is kind of very naive view of for
13:45starters the marketplace so if you had a
13:49cultural philosophy that you wanted
13:51everyone to stay 20 years and you said
13:52okay I'm not gonna hire anyone who
13:56doesn't have a 20 year vest that you
13:58know it would be a good idea in a vacuum
14:00but in the market where every other
14:02company is offering a four year vest you
14:05to make it hard to get the very best
14:06engineers and if you think about the
14:08very best salespeople the very best
14:11salespeople on a commission plan can
14:13make over a million dollars a year so if
14:16you go in and say well my philosophy is
14:18that you as a salesperson can't have
14:23commissions because other people don't
14:24then if I'm the very best best of the
14:28best salespeople and I can make a
14:29million dollars by delivering real value
14:33to the company at company a and at your
14:36company they can make $200,000 which
14:39company would you join you know so I
14:42think that you have an adverse selection
14:43problem where you automatically attract
14:46the worst salespeople the people who
14:47don't want to be paid for performance
14:49will be the ones who join your company
14:51I've certainly seen that with people who
14:53try to attempt to you know basically go
14:58against the market without a real
14:59strategy or understanding of what the
15:01market is yeah and I think another thing
15:03you can fall in love with there is one
15:05rep does one big deal that doesn't
15:07really mean anything
15:08I mean sales is a hard job it's very
15:10easy to think that because a couple of
15:12reps do some big deals now you figured
15:14it all out and let's move on to the next
15:15thing people get very excited when they
15:17see one big deal even as venture
15:19capitalists it scares me a bit did you
15:21just go in custom pitch and press them
15:23build the product and now you have this
15:25big deal hallelujah who cares that was
15:26that gonna scale how is that going to be
15:28a massive brick mountain as opposed to
15:30one big ply wall that just falls over so
15:33so I'm attracted to that and
15:34attracted to people who can do that I
15:36think they come from many walks of life
15:37to answer that question I agree with
15:39granny you can get some awesome people
15:41from the military you can have people in
15:43your professional services organization
15:44that thought hey I see what they did
15:47when I'm out there implemented the
15:48product I can do that better so they
15:50have the competitive skillset but they
15:51want to do it and they end up having a
15:53fantastic solution sell because they
15:55really understand the product unlike you
15:57can learn from a training when you've
15:59done it yourself I've seen engineers
16:02that thought the reps made too much
16:03money and we would have a statement set
16:05of success factors this was you think
16:07you can do it you welcome we're hiring
16:08reps and some of them failed
16:11spectacularly and some of them found a
16:12whole new living for themselves
16:14I think wraps come from many walks of
16:15life it's the commitment to winning and
16:17I also think that some reps that are
16:19successful in one organization like
16:20super successful might not have any
16:23success in a different company it's it's
16:25a very different thing depending on what
16:27you're selling and I also think that
16:28wraps that are very successful early on
16:31the company shouldn't feel bad if
16:32they're not successful later it becomes
16:34very different from being an
16:35evangelistic sale and having all the
16:36leads and then later being one of the
16:38scaled wraps in a territory that's
16:40kicking ass you're all mentioning this
16:41notion of a competitive spirit which I
16:43think characterizes any good employee
16:45yes what's unique about the sales
16:47persons competitive spirit and frankly
16:49why does that really justify this
16:51besides a market value that need for a
16:54commission as its way of keeping score
16:55is it is it I mean what is it well one
16:58is its explicit competition there there
17:01may be like very competitive people all
17:03around the company and there's nothing
17:05wrong with that but most of them
17:08everybody doesn't know when they lose
17:14it's up for interpretation right and you
17:16know when you lose in sales you get
17:18fired you mean like we you don't meet
17:19your numbers for example yes you go and
17:22you you have five deals and you lose
17:24five deals unifier like that's that
17:25that's where it is that doesn't happen
17:27you know when you lose in other jobs
17:29that regularly or that guaranteed so
17:32it's a different level of
17:33competitiveness and I think that you
17:36know when one thing I always ask my CEO
17:39is like well you know do you have any
17:41engineers who love programming and you
17:44know just really love their jobs to the
17:46extent that they might actually do
17:48like a project in their own time you
17:50know do something for fun programming
17:53and all most of them say oh yeah
17:54definitely and you know I'll guarantee
17:56you they don't have any sales people
17:58that sell software in their spare time
18:00for free and for fun it's a it's about
18:04the competition it's about winning and
18:06so if you don't embrace that and you
18:10know make a scorecard of it and
18:11recognize it and reward it then there is
18:14nothing like so it has to be there yeah
18:16one of the things I'm very attracted to
18:19with great sales reps that I've seen and
18:21I've seen thousands now is when one of
18:25my favorite reps and success factors he
18:27was in a horrible territory and he was
18:30just continuing to put up numbers every
18:32year and when you look at it over time
18:33you see somebody just continuing to find
18:35a way to make the quarter it's pretty
18:38unusual most people have a gap but he
18:40was just continuing to and I asked him
18:41Tom how do you do this I mean nobody
18:44else is doing is I'm such a shitty
18:46territory and he just looked me straight
18:47in the eye and goes Lars I kiss a lot of
18:51frogs he just earned it
18:53he wasn't bragging well he wasn't
18:55claiming anything and you could just
18:56look down his CRM system he was kissing
18:59a lot of frogs and that's my favorite
19:01rep that doesn't take it for granted
19:03that they have an SDR or a support
19:05person or whatever or they get leads
19:06from mark and they are gonna make damn
19:08sure themselves personally that they're
19:10gonna make this number and they have
19:11figured out the second they get the comp
19:13plan exactly how many deals is gonna
19:15take and how many deals are not gonna
19:17get closed that they thought that were
19:19closed that they also have in the pipe
19:20and that type of thinking that's a real
19:22executive salesperson so how do you tell
19:26then like that that you have a good
19:28versus a bad sales person and part of
19:30this also is I mean how do you know that
19:32they don't have a tailwind in their
19:33favor that they had just a really good
19:34territory or they're just selling a
19:36product line that's gonna sell itself
19:37because it's so damn good how do you
19:39tease apart that from like the skillset
19:42of the sales person how do you know I
19:43think you start with a good sales VP you
19:46know there's obviously it's gonna be
19:49good territories and bad territories but
19:51if there's a you know a geography that's
19:54particularly good and you have one great
19:57sales rep in it you know that sells VP
19:59is probably gonna know that maybe he or
20:02three good salespeople in it and
20:04actually they get more productive the
20:06less territory they have the less amount
20:08accounts that they have because they're
20:09able to it kind of forces the situation
20:11to do you know where you're penetrating
20:13deeper into accounts getting a lot more
20:15intimate with what's going on in the
20:18customers business and your success rate
20:20your win rate will go a lot higher
20:23because you've got that intimacy that
20:26you might not have earlier on when
20:27there's you know one person in the East
20:29one person in the West when there's ten
20:31it goes to 100 sales forces typically
20:34get way more productive as the sales
20:37process gets honed a system gets put in
20:39place and you know the management's
20:42putting the right people in the right
20:44place at the right time to be successful
20:46so there's a lot more to it than just
20:48you know that individual contributor
20:50there is a system that needs to be put
20:52in place of process of segmentation and
20:55targeting the air cover from product
20:57management as well as marketing to make
20:59sure that you know you've got great
21:01coverage and you know to go win the
21:03market you know I would say of course
21:04there's are you performing and are you
21:07showing up but I think that sort of
21:08hygiene I think beyond that it's
21:10essential to assess which type of sales
21:13force you're building so you know we're
21:15talked about enterprise sales forces in
21:18the field driving around very big part
21:21of Silicon Valley now I think is
21:23fantastic as inside sales just to
21:25clarify how do you define inside sales
21:27well so typically doesn't ever leave the
21:29building for selling they might leave
21:30for lunch but they they stay in the
21:32building on stay on the phone and so in
21:34that case typically you sell many more
21:38deals so it's a much higher frequency
21:39and therefore you have lost less time
21:43with the customer so you need to have
21:45the ability to have that type of pace as
21:48opposed to having you know 6 or 12 deals
21:50you're working in a quarter maybe even
21:52two now here you have maybe eight or
21:56twenty in a day that you're working
21:57you're touching in some way and so there
21:59you're assessing a very different skill
22:01set I think there's a lot of naivete
22:03around reps ability to move up and down
22:05that cycle including managers there's
22:08something very different about having
22:10the understanding of how that operating
22:12system and your brain needs to work when
22:13you're handling that many deals at a
22:15I do think that there is great
22:17opportunity for some of those reps to
22:19scale up and have a great sense of
22:20urgency when they go up market but many
22:23people get to stay in that job for a
22:25very long time and then I think you're
22:27really looking for people who can come
22:29across as compelling and really
22:30understand the story
22:32I'm nervous about reps who don't dive in
22:35on the material to understand how to
22:37position the product if you serve reps
22:39that aren't willing to continue to learn
22:41I think they don't win there's no easy
22:44way to pay an inside sales rep either so
22:46there's clearly a difference depending
22:47on what type of sales you're doing what
22:49you're doing big deals volume of deals
22:50where you're doing it etc yeah so what
22:53are the secret sauce is to to go to
22:55market is depending on the product that
22:57you have and the features and the
23:02targets to initially engage a
23:05prospective customer will determine
23:08whether you're going to do one of the
23:10three following bottoms up which is
23:13starting with an inside sales
23:15organization typically either aimed at
23:19you know small medium business and or
23:21departments inside larger companies to
23:25get beachheads and/or top down meaning
23:28I'm gonna have to go to senior
23:30management and sell this top down which
23:32is typically an outside direct in
23:34territory sells organization that has
23:37deep knowledge of these accounts or you
23:41know B or C is is do all of the above at
23:45the same time how do you know as a CEO
23:47though how to make that decision I think
23:48a lot of it depends on what you're
23:51selling and what the value proposition
23:53is and it might it's you know most cases
23:55it's a progression a lot of it will
23:57depend on your roadmap a case in point
23:59is these freemium to premium models
24:02typically start at a user level so
24:04that's gonna be a bottoms up where
24:06you've initially because you have
24:07freemium to premium you might be
24:09targeting developers so you might be
24:11taught targeting individual users on the
24:13business side that you staff up with an
24:16inside organization starting with
24:18inbound then you start doing outbound to
24:21qualify leads to follow up to help
24:23people along that buying process
24:24eventually as it gets outside of in
24:27large you know starts getting bigger
24:29and you start to get beachheads inside
24:33these bigger companies where a bunch of
24:35users have to go up in their
24:38organization to a manager or a series of
24:40managers to do a larger deal because you
24:43have different kind of functionality for
24:44bigger groups you're typically gonna
24:47have to have somebody directly involved
24:49with them and that's where you'd have to
24:50start stamping out in territory people
24:53they can go navigate the complexities of
24:55these big companies so on the other end
24:58if you've got this really complex
25:00solution that's gonna require you know
25:02architectural changes and a lot of
25:04integration and things of that nature
25:06that might be in more of a case or
25:08you're starting within territory direct
25:10reps in the field because you need that
25:12deep knowledge of that account and or
25:15that vertical to be able to go get your
25:17value proposition across to that
25:19customer as well as implement a more
25:21complex selling process so bottom-up
25:25top-down or some in a lot of cases you
25:27need to do all of them at the same time
25:29it really depends on the product and
25:31your value right and you know it's not
25:33always obvious from the beginning who
25:36the target is or what the decision
25:38making process is going to be and we're
25:41in a company that's doing amazingly well
25:43a company called octo which provides
25:46really the definitive authentication
25:48solution if you're going to move to the
25:50cloud and the guys came from Salesforce
25:53and Salesforce is strategy because they
25:56were a SAS company was look we're not
25:59going to have the features of Siebel to
26:01begin with so we're gonna sell to small
26:04groups underneath we're gonna go where
26:05Siebel can't go with little deals and
26:08afford to go and they can't afford to go
26:10their products too complex to implement
26:12we're gonna go down market we're gonna
26:15use an inside sales for us to get there
26:16then as our product matures and we have
26:19more robust feature set
26:22we'll go up market and go direct and
26:23that's what Salesforce did to
26:25unbelievable success so the active guys
26:27were like great we'll use that playbook
26:29we're a SAS Identity Management
26:32authentication solution that's makes
26:36well it didn't quite and there was
26:40really two reasons for that the first
26:43nobody buys a pocket of authentication
26:46if you buy in that you need to secure
26:48your users all employees are getting it
26:50and so everything was a complex decision
26:53as opposed to a simple decision the way
26:56it was for sales for us and then
26:58secondly it turned out that the more
27:02applications you had the more users you
27:05had the more valuable that product was
27:07even on a per user basis which was also
27:10different than sales for us and that
27:12kind of drove the premium target to be
27:16more upmarket and the decision process
27:18to be more complex and so they ended it
27:21up although they started out with an
27:23inside motion more of a bottoms-up
27:25motion being much more of a top down
27:27motion generally as it went on and that
27:30channel strategy actually is I think in
27:33retrospect what when the market against
27:37the other startups in the field so part
27:39of that an idea which i think is super
27:40interesting is that obviously with a
27:42start-up your product evolves at the
27:44beginning as a founder when is the right
27:46time to bring on a VP of Sales like is
27:49that your third hire your first second
27:51hire you're a 10 tire I have a pretty
27:53common answer for that what a lot of it
27:56depends on the the CEO and what their
27:59skill set is and kind of where the
28:01product is in you know product market
28:04fit but generally they have three kind
28:06of choices one you can go higher kind of
28:09an individual contributor you know let
28:11them kind of get going with the sells
28:14motion typically what happens in that
28:15case is they end up being the VPS sells
28:19the CEO founder CEO does and they end up
28:23with five or ten people and then it's
28:25like a bunch of birds in a nest they're
28:27all sitting around give me a worm give
28:28me worm what should I do
28:30so if you've got that skill set as the
28:32founding CEO that you can go be the VP
28:34of sells that's a that's a okay way to
28:37do it start with individuals
28:39contributors on the other hand if you
28:40don't have that skill set you're
28:42probably better off hiring somebody
28:44that's at least a director first or
28:46second line manager capable and even if
28:50they start as an individual contributor
28:52that you can go build a team around them
28:54and then if you've got an
28:57validation for your product and your
29:00market fit then maybe you can go attract
29:03a real VP the problem with getting real
29:06VPS sells or a big executive too early
29:10is they're they're there to scale and if
29:12you're still wander around a little bit
29:14in the desert trying to figure out the
29:16fit you might be a little early there so
29:18but a lot of it depends on the the
29:20founder if if you want to be the VP of
29:22sells hire individual contributors but
29:24if you don't know what you're doing
29:25along those lines then you probably need
29:27to bring in a pro that you can rely on I
29:30grew with that I have come more things
29:32to say about it which is first of all I
29:34think it's super important to get out of
29:36the mindset that sales is some sort of
29:38necessary evil or something like that
29:39it's the exact opposite it's the benefit
29:42for your company you can bring in all
29:43the time and if you make them inclusive
29:46unconditional inclusive in the
29:48organization like they really feel part
29:51of the company this is maybe one of the
29:53biggest breakthroughs in SuccessFactors
29:54history was that we made reps feel like
29:56they were as important as engineers
29:58there was important as anybody else in
30:00the company and if you feel like that
30:01well guess what they're gonna open up a
30:03part of themselves that they've never
30:04opened up in a organization where they
30:06were coin-operated it is that nobody
30:08talked to when I was at a very big
30:11pharmaceutical company I came in from
30:13the sales force I've been in training
30:15there and I walked over to this
30:17destination where we had all reported
30:20our sales reps what was going on with
30:22the products and with the customer and
30:24there was this answering machine that I
30:26had spoken about all these ideas because
30:28that's what had been told we should talk
30:29to and I was sort of wondering why none
30:32of the ideas none of us had ever had had
30:33ever ended up in the field and then I
30:35found out why because there's a big
30:36blinking light there's like twelve
30:38thousand on listen to messages I did and
30:44it was actually amazing and it was
30:46actually kind of fun it was like
30:48something I wish I could find that tape
30:49and because it was amazing stories I
30:51mean there's the stories from the field
30:53it was incredible and there were so many
30:55amazing product stories on that and what
30:58customers were actually doing with and
30:59so the point is being this is second
31:02nature for companies to just ignore all
31:03this and like have all the answers it's
31:05very seductive to be in the head office
31:06everybody's felt that and just have
31:08these ideas that we think
31:10it all out and magically the sales sells
31:12it all whatever we figured out the net
31:14of it is bring these people in and so if
31:16you're start-up and you can find a
31:18senior exec that wants to work for you
31:21that's in sales that believes in your
31:23story so much Wow you can build the
31:25company with this person
31:26and I'd much rather have that than the
31:29opposite right and so what a lot of
31:30people do is well we don't really kind
31:32of need sales but some VC said that I
31:34should so I'm gonna hire this junior
31:36person that I can kind of put up with as
31:38opposed to let me hire a total rock star
31:40that it's gonna think through sales for
31:43us from the start and I think we all
31:45this my third and final thing is I think
31:47we all here believe that CEOs should
31:50always be part of selling and everybody
31:52in the organization should be selling
31:53yeah and I I just add one thing to Lars
31:55this point which I think it's a great
31:57point which is you may not realize it
32:00but to the outside world to everybody
32:03who uses and buys your products your
32:07Salesforce is your company yes like
32:09that's who they know they don't know you
32:11they don't go to the All Hands meetings
32:13that you have they don't care about your
32:15brand marketing stuff they know you
32:18through the quality the integrity the
32:22honesty of your salespeople and if you
32:26put them in a position to be the best
32:28that they can be then your company is
32:31the best it can be and if not you know
32:33if you treat them horribly and you have
32:35a bunch of scumbags running around and
32:37you're gonna get what you deserve on
32:40that and that's gonna be your reputation
32:42in the marketplace so it is it's it's
32:44really fundamental in in fact in a way
32:47it's the most important part of your
32:50company to have great culture and
32:52because it's the part that represents
32:54you how do you truly treat them as if
32:56they are part of your organization
32:58holistically well one thing is when you
33:00have a company party and you have 500
33:02reps in the field say across the world
33:04they get something - are you gonna fly
33:07them all in for the party we actually
33:09did fly all our reps in every year
33:11because we wanted to have a meeting
33:12where everybody talked together about
33:13everything that's going on so yes but if
33:15that gets unscalable and hard for you
33:17then maybe you send them this same
33:20equivalent value of what you're spending
33:21to all the other employees at the party
33:23so they have that spending card and they
33:25can take their spouse out for dinner or
33:27their kids they can have an experience
33:28that we had a great year so then how do
33:31you make the rest of the culture get
33:32this because okay I buy that this is
33:35what motivates salespeople it's not just
33:36mercenary you know you're motivated by
33:38this the scorecard how do you then get
33:40the rest of the company to come along
33:42the engineers everyone else who's seeing
33:44all these benefits and perks that they
33:46might not necessarily get yeah well one
33:47big controversy is Club which is where
33:50the reps who made quota get to go on a
33:53trip that's specific it's an additional
33:54reward and and it becomes a great
33:57company building event what we did in
33:59that case is we gave them a vote who
34:01helped you the most this year and they
34:04got to go talk about Darwinism and
34:06competitiveness mark and I are laughing
34:08because that's what we did - yeah we all
34:10did MVP program so the other thing that
34:19we did that Lars kind of a little bit
34:21too earlier is you know there there does
34:23get to be you know you always have the
34:24potential in anything not just sales and
34:27engineering or marketing or whatever but
34:29there's always that potential for
34:30jealousy in the organization and that's
34:32like that's a leadership issue and so
34:35when you get the question a lot of you
34:36know and I've heard SEOs well what do I
34:37do when you know an engineer asked me
34:40why doesn't he get paid on the deal and
34:42Lars his answer is right one which is
34:44like we are hiring in sales if you would
34:46like that job if you would want to pick
34:48up that bag and live that life and deal
34:51with the ups and downs and get fired if
34:53you missed your number absolutely we'll
34:55pay you a commission but until you do
34:57that you're not getting Commission
34:59you're part of a different team that has
35:00a different reward system and like
35:02people just have to understand that if I
35:04had some some advice to founders along
35:06these lines it would be think of the
35:08sells forces another way of
35:09differentiating the company and like
35:13Bennett alluded to earlier that the
35:16people that you know who's representing
35:18the company is who's in front of of that
35:20customer at any given moment and what is
35:23the processes that you've put in place
35:26to help them get involved with your with
35:29your company and your value proposition
35:31and your solution and constantly
35:33optimizing those processes and the
35:37in those processes from first contact
35:39whether it's inbound through having
35:41outside direct people walk in the halls
35:43of these big companies all the way down
35:45to customer success the other thing
35:48people don't realize is look it's one
35:50thing to to land that customer and to
35:52get a beachhead in there it's another to
35:54expand and there's a whole set of
35:58processes and organizations and things
36:01you're gonna need to do to really become
36:02a large independent company to really
36:06optimize and make sure that you're you
36:09know getting a position inside these you
36:12know inside a large and/or small
36:14organizations where you're gonna stay
36:16and you're gonna be able to continue to
36:17grow from an upsell and cross-sell
36:19standpoint and deliver great value for
36:22your customers that's the only way
36:23you're gonna have a long lasting company
36:26and culture and that the culture of
36:27winning the market is the culture I
36:29think that people should be thinking
36:31about versus just these subcultures that
36:33are gonna exist in any any company you
36:37know engineering is always gonna be a
36:38little bit different than then it sells
36:40and marketing is gonna be different than
36:42engineering and and all that stuff and
36:43but the big culture of you know taking
36:45care of customers that you know getting
36:48them first is always kind of important
36:50and and you know winning from a
36:53competitive standpoint is what I think's
36:55more important been you started this
36:57whole conversation talking about how
36:59founders reinvent they have their own
37:02theories for like how to reinvent things
37:03and frankly that is the hallmark of a
37:07good founder I mean the whole thing that
37:08took you to the business in the first
37:09place is that you're coming to a new
37:12product and hacking a solution
37:14essentially that mindset is it makes you
37:16succeed so why shouldn't they experiment
37:19here why do they have to stick to all
37:20these no offense old ways of doing
37:22things that you guys are saying are
37:25and yet we're telling them to disrupt
37:27industries in other areas why shouldn't
37:29they reinvent the wheel so reinventing
37:32sales is a great thing there's nothing
37:34wrong with inventing your own way of
37:36doing sales and really owning it and
37:38making it your own culture in your own
37:40philosophy where you'll get yourself
37:42into trouble is if you do it from a
37:44place of zero knowledge where you just
37:46sit with your engineering team and
37:49figure it out that way
37:50they what we're emphasizing is really
37:53look understand why people made the
37:56decisions that they've made understand
37:58how things get bought by large complex
38:02organizations and understand the things
38:04that you don't know before you start
38:07making judgments and go to your comfort
38:09zone and as Laura's saying don't be
38:10afraid of hiring someone a little
38:12different than yourself who may be much
38:13better at that job I would say why to
38:16try to fix something that ain't broke
38:18right I mean we know how sales work and
38:21they think we're addicted as founders
38:23that we need to change everything
38:24because everything is so damn broken and
38:26this is my shot so now I'm gonna
38:27definitely change everything there's
38:31things you don't need to change right I
38:32mean we also use the same phones you
38:34know like basic things at work and and
38:36one way is to compensate reps do your
38:39metric ly based on performance if they
38:42don't perform they don't get compensated
38:45well if they perform outstandingly then
38:47they get compensated outstandingly I've
38:49written a whole blog around how to do
38:51sales compensation what I can tell you
38:53is the worst thing you can do in the
38:54world is make selling so damn
38:57complicated with so many different
38:59variables that have wrapkin trying to
39:00optimize they don't have the ability to
39:03actually figure out what you want them
39:04to do make up your own mind what do I
39:07truly want my reps to do 1 2 max 3 I
39:11think that's almost too much and then
39:13guess what you will get what you asked
39:15for if you come up with all these other
39:17complicated things that they need to do
39:19that actually has nothing to do with
39:20selling you will get a shitshow such as
39:24focus and letting them sell and and
39:26frankly all of companies in Silicon
39:29Valley that we didn't have Salesforce
39:31upfront and thought they could rethink
39:32and have all come home to roost and they
39:35now have great sales forces that cell
39:37with Commission for living well thank
39:39you guys for another episode of the a
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