20VC – Host Harry Stebbings (podcast summary)

20Sales: Rippling’s CRO on Why Founders Should Not Create Sales Playbooks | Why Discounting is BS and How to Create Urgency in Deals | The Biggest Lessons on Pricing and How to Win the Pricing Game with Matt Plank

• When prospects say no, go over the top to ‘kill them with kindness.’ Maintain good engagement because they will come back round in ~18 months. The second time around the deal moves a lot faster.
• We book 50% of our outbound demos at Rippling over the phone via SDRs.
• Don’t fight over attribution. A lot of what Marketing does drives outbound success. Marketing should tell sales who to reach out to and when based on intent across target accounts.
• Early on, you build segmentation around who you get demo requests from.
• Stages:
  • 1: Demo booked
  • 2: Demo held
  • 3: Prospect has agreed to an evaluation
• Org structure:
  • SDR: Outbound (MM and above only with $45K+ expected ARR). Team is led by Ashley Kelly.
  • “Core” AEs: New logo owner; does not prospect – meetings come either from inbound demo requests or outbound SDRs; 70% of variable tied to new business and 30% to GDR
  • Product AEs: 75% inbound new logo + 25% prospecting to cross-sell into existing accounts
  • Solutions Consultants: Demos, PoCs, etc.
  • AMs: Own the post-sale commercial relationship
  • TAMs: Drive adoption, esp. with customer admins; manage escalations across support and product
  • Implementation managers: Directly drive implementation & usage for the first 60 days
  • Support
• I don’t think you can take a CSM and make them a quota carrying rep.
• List price is a fake price – you set it based on the targeted discount price
• Maintain an extremely consistent and firm discount policy. Customers will talk to each other and you must be able to walk them through differences and stand behind it.
• From $0 to $1M, the only thing that matters is winning [marquee] logos. It does not matter what they pay. Once you pass $5M to $10M, increase price until you find friction. If you are winning 60% to 70% of deals at that point, then your price is too low. Note, this does not apply to existing customers.
• Don’t offer a time based discount before you understand if a prospect can possibly even move that fast. People do not sign contracts on the last day of the month because they are worried the discount is going to go away. The reason they sign is because you’ve built the relationship and there is a level of trust.
• Questions to ask in weekly pipeline reviews (usually manager + rep):
  • Who are we talking to? Who does that person report to? Were they there when they bought the existing system?
  • How do these decisions get made? What is their timeline?
  • What does the contracting process look like? Who is involved? Who signs off?
• If a deal pushes because a key person left or a budget dried up, then it is not merely delayed. The rep may not know it but they are starting over from scratch.
• Run legal reviews in parallel with commercial negotiations.
• As a sales leader, you get zero credit for [only] knowing how to do something yourself. Your job is to help your team execute.
• Avoid having AEs own outbound prospecting for as long as possible and instead rely on SDRs. Every time you start outbound, you’ll find one or more parts of the funnel are broken. You can get an SDR team to fix things way more effectively than sales reps. You need a whole bunch of structure and focus.
• When hiring early sales leaders, hire for slope = someone who has been rapidly promoted at the same company two or more times. You don’t get promoted twice at a high growth company if you are not good.

20Sales: What I Learned Scaling DataDog from $60M to $1BN in ARR | How to do Outbound in 2024 | Why Discounting is Dangerous and Contract Sizes are Misleading with Dan Fougere

• You want to believe the deal is good… and you need to know that the opposite is probably true. You have to look for the dirt every time you are reviewing a deal.
• MEDIC should answer the 3 whys:
  • Why do anything?
  • Why do anything with us?
  • What do anything with us now?
• MEDIC:
  • Metrics:
    • What metrics do we have that build some kind of business case? Even if it is just back of the napkin.
    • Do we have any metrics from previous customer that we can use to tell a story?
  • Economic Buyer:
    • Do we know who the economic buyer is? It is probably 1 or 2 levels above who you think it is. The technical buyer’s boss is probably your real champion and their boss is probably your real economic buyer.
• At Medallia, we had to put together a value prop and a pitch that spoke to the people running the company (the CEO). At DataDog, we had to earn our way up over time; we were not going to talk to the CIO/CTO for a year or two until it become a bigger problem.
• As a new sales leader, don’t f*** up what is already there; go build what isn’t. When I joined DataDog, I needed to build enterprise, channel, international, forecasting, etc.
• A mistake I’ve seen is reps trying to qualify prospects at enterprise accounts. Instead, your job is to light them up with excitement.
• The way you differentiate yourself is by the way you show up. It is not ‘We are a cloud monitoring company. We are based in NYC. We have 500 employees.’ Instead, do your research and come in with value.
  • Step 1: ‘Saw on Twitter that you are implementing Redis. Another customer, X, just implemented Redis. Here is the video. Here is his link on Github. Would love to see if this is interesting to you to see if we can help you guys have similar success.’
  • Step 2: Two days later. ‘Hope you enjoyed link about Redis. Also say you are trying to implement Kubernetes. We have implemented Kubernetes ourselves. Here is a link with some of the dashboards our own people are using.’ I’m not a knucklehead; I’m trying to help you. I’ve done my research.
• Asking someone else to do pipeline generation (PG) for you is like asking them to go to the gym for you. I don’t think is creates a good culture to think that PG is something that can be outsourced [even to others internally]. PG is everybody’s job.
• Distill down to the minimum number of metrics that you need to run the business. I track:
  • The number of new business meetings. This is discovery meetings and demos.
  • The number of new, qualified opportunities added to the forecast.
• When starting out with a large enterprise, as long as it is a real project solving a real problem, we don’t care about how small the deal is. When things take off, whoever is in the stack will scale with the applications. Just get in there and be part of it. In the beginning, it is a leap of faith. This also puts you in a position to gain feedback so that you can iterate [on the sales process and the product].
• When you do a demo, the prospect needs to see themselves in the story. That means doing your research so that you can reference real people, real situations, real systems.
• Don’t use technology at the expense of connecting with people and showing them how they achieve their personal goals to succeed at work.
• At DataDog, when we were single-product, we focused our commercial team on landing new logos. AEs had 4 months to expand after landing and then it was passed over to CS. The CAC was incredibly high but the growth was non-commissioned since CS did not have commission.
• For enterprise CS, it was more about implementation and support. For commercial CS, it was more about sales.
• Ways sales cultures suck:
  • Letting underperformers stick around
  • Lack a vision for greatness (of your people, their learning, earning, and careers)
  • Failing to hold people accountable for performance
  • Having leaders who are not ‘in the boat’ with their team. Nothing should be a surprise; you should be in the meetings with your reps.
• If someone is a trainwreck disaster, just exit them; don’t put them on a PIP.
• Left to their own devices, salespeople will give the maximum discount 100% of the time. The more you can control discounting the higher up in the leadership chain the better. Work with product [and with marketing] to make sure your solution is so good that you don’t need to discount.
• Don’t discount in exchange for customer testimonials. People provide testimonials because you are delivering value and because you are building relationships with them. I would not want to trade economics for non-economic support.
• To detect discipline, look for:
  • physical fitness
  • deep passion for hobbies/interests
  • people who stick it out in jobs (i.e. not job hoppers)
• I always have AE candidates present our company back to us.
• Very junior people can do very big deals with the right training and the right leadership. That is very different from what most salespeople are taught. You can get more productivity out of more junior people.
• Impact of AI on sales:
  • Do better research
  • Write more compelling prospecting emails
  • Put proposals together faster
• When starting as a new sales leader, get wins on the board. Week 1, month 1, 90 days, 6 mos, 1 year. List out, share with your CEO, agree on what is realistic, and go do (only) those things such as:
  • Game changing hires
  • Game changing deals
  • Instrumenting the business
  • Messaging
  • Efficiency & Productivity

20Sales: Biggest Lessons Scaling Slack from $6M to $1BN in ARR | How to Build a Customer Success Machine and Where Most Go Wrong (AJ Tennant)

• The best AEs are the ones who spend the time to do outbound themselves
• The worst thing you can do early stage as a sales organization is segment too early and move way upmarket. If I had moved all my sellers to just focus on the the Fortune 50 or Fortune 100, that would have been a nightmare because we would not get revenue for 9-12 months. You still have to feed your reps while you are slowly moving up-market.
• When you land and plan to expand with a large enterprise, you need commercial and executive alignment on the success criteria you need to hit in order to get to a 7-figure contract.
• If you have a horizontal product, you need to be at $200M or even $250M to verticalize your sales team.
• We don’t pay AEs on their deals unless they have an approved deployment success plan filled out.
• At Glean, we measure customer success on NRR and active users.
• When hiring, I seek to understand the deep background of the individual over their entire history going back to high school.
• When hiring, ask candidates to provide a non-confidential ‘artifact’ of their work product.
• Panel interview: (1hr)
  • Your history
  • Biggest career challenge
  • Biggest win
  • Deep dive into how you would prepare to sell [our solution] to a particular target account. Choose an account you are actually prepping to win.
• Interview question: If I gave you 100 accounts, what 10 data points would you use to prioritize your account list? Push them for 10 because you want to test their creative problem solving capabilities.
• You have to backchannel job candidates.
• Before you join a company, speak with their customers.
• The main reasons new AEs fail are weaknesses in #1 creative problem solving and #2 collaborative tension. Creative problem solvers bring solutions and ideas, not just problems. Being ineffective at collaborative tension shows up either as stream-rollering or being overly passive.
• As a new CRO,
  • Learn the product. Get your hands dirty on the deals
  • Get to know the people – build relationships
  • Lean the position that you have

20Sales: How Snowflake Built a Sales Machine | Why You Have to Hire a CRO Pre-Product | Why Most Sales Reps Do Not Perform | Why Hiring Panels are BS in Interviews (Chad Peets)

• In interviews, ask reps why they made career moves then listen for all of the following motivators:
  • To go to a place where I can be the best sales person I can be; to work for people who will teach (develop) me and help me grow my career
  • To sell a product I believe in
  • To make more money
• Hire a CRO pre-product because you need a sales person, not a technical person, to create the sales playbook. Moreover, sales people are better qualified to have 1000s of conversations with prospects and feed back the learnings to the product & engineering team.
• Who has designed your product roadmap? More often than not, early sales leaders say, “Well, I talk to the product (marketing) people. The product organization is going to build what they think the customer wants to buy. The person who knows what the customer want to buy is the person talking to the customer – it’s the CRO.
• Startups should only hire more salespeople if the product has evolved to offer more use cases in existing accounts or to unlock additional ICP accounts.
• Managers need to execute on the enablement plan created by the enablement function; they should not create their own enablement
• The land is the beginning of the journey; the big payoff is in expansion.
• If you went from a startup company to a big company, I’m not recruiting you. My that move, I know you don’t want to do the heavy lifting anymore.
• Everyone in the rep interviewing process has to have the right/same messaging down.
• Culture to me is, I want to go to a place where
  • we are going to win
  • I’m going to develop and become better
  • there is a meritocracy
• I only want to hire inside salespeople who want to work in the office. This shows that want to invest in developing themselves.
• Start with mid-market, then enterprise, and then go into PLG.
• Gross retention tells me if people like my product.
• If sales engineers start to depart, it is an early sign you have a product problem.
• Early stage companies especially need referenceable customers.