Aug 23, 2024 · 1h 7m · news
Chad Peets: Why Most Sales Reps Underperform & Remote Reps Ignore Development | E1193 · 20VC with Harry Stebbings
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In this episode of 20VC, host Harry Stebbings interviews legendary sales recruiter and venture partner Chad Peets about his rigorous methodology for identifying elite sales talent, structuring hyper-efficient hiring processes, and aligning sales engineering with product roadmaps. Peets highlights unconventional tactics like hiring a Chief Revenue Officer pre-product and emphasizes how in-office collaboration and behavior-driven compensation models drive exceptional startup growth.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 17.7% of the talking time here. How this is scored →
Harry as informed peer 4.2 Guest teaching 5.8 Guest disagreement 3.4 Harry pushing back 3.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 48:39 Rejection of Remote Inside Sales Reps
Chad forcefully rejects inside sales candidates who refuse an in-office commute, declaring that competitors offering remote work are hiring low-commitment reps whom his teams will easily defeat.
Hardest push from Harry ▶ 10:34 Challenging Ecosystem Hiring on DiversityHarry directly confronts Chad on Sutter Hill's exclusive executive recruitment network, bluntly pointing out that relying on personal insider ecosystems restricts candidate diversity.
Biggest teaching moment ▶ 33:51 Eliminating Non-Sales InterviewersChad aggressively corrects the practice of involving engineers or HR staff in sales interviews, detailing how non-sales interviewers slow down hiring and create organizational friction.
Harry holds his own ▶ 51:37 Highlighting PLG-to-Enterprise TrapsHarry demonstrates strong market expertise by articulating the exact friction points PLG companies like Notion and Airtable face when attempting to move into top-down enterprise selling.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Greeting, Industry Praise, and Chad Peets' Career Backstory | 1 | 2 | 1 | 0 | Harry warmly welcomes Chad and cites praises from industry figures like Mike Spicer. Chad shares his early career backstory from stockbroking at Merrill Lynch to entering software recruiting. | |
| Are Great Salespeople Born or Made? | 2 | 6 | 3 | 2 | Chad firmly asserts that great salespeople are born rather than made, citing innate phone comfort and anticipatory thinking. Harry asks how Chad avoids annoying customer discovery questions. | |
| Scaling Horizontal Sales & Identifying Core Candidate Motivations | 3 | 6 | 3 | 4 | Harry questions how candidate targeting works in horizontal sales models. Chad reframes that horizontal selling is standard and explains how analyzing career trajectory uncovers genuine candidate motivation. | |
| Ecosystem Recruiting, Reference Weight, and the Diversity Challenge | 6 | 5 | 4 | 7 | Harry directly challenges Chad on whether Sutter Hill's reliance on familiar executive networks hinders diversity. Chad acknowledges the critique while explaining how their playbook network expands. | |
| Founder vs. CRO Discovery Roles & Seed Round Economics | 5 | 7 | 5 | 6 | Harry pushes the standard founder belief that founders must write the initial sales playbook before hiring a CRO. Chad bluntly calls this belief backwards, insisting pre-product CROs are required to run thousands of discovery calls. | |
| Collaborative Roadmapping and ICP Expansion | 3 | 6 | 2 | 2 | Chad details how CROs must actively shape product roadmaps alongside product managers to expand ICP accounts. He explains how sales teams break when boards demand headcount without product readiness. | |
| The Pitfalls of Geographic Sales & the Limits of Product Marketing | 5 | 6 | 3 | 5 | Chad warns against giving reps broad geographic territories that lead them to chase single custom enterprise feature requests. Harry provocatively suggests sales reps should handle product marketing, which Chad corrects. | |
| Bridging the Divide: Aligning Sales, Product, and the CEO's Leadership | 3 | 6 | 2 | 2 | Harry asks how a CEO should resolve deep distrust between sales and product teams. Chad outlines executive leadership responsibilities and demonstrates how comp plans shift rep focus toward expansion. | |
| Unit Economics: Minimum ACV and Productivity Benchmarks | 5 | 6 | 2 | 4 | Harry highlights the unit economic dangers of running full sales teams on low 10k ACV SaaS deals. Chad breaks down inside versus field sales economics, emphasizing the 3x OTE productivity benchmark. | |
| Redefining Customer Success and the Land-and-Expand Cycle | 4 | 6 | 3 | 3 | Chad shares why Snowflake operated without a dedicated customer success org due to extreme product pull. He explains how booking-based commissions incentivize reps to overbook deals and drive churn. | |
| Interview Process Discipline: Eliminating Non-Sales Interferences | 4 | 7 | 6 | 4 | Chad aggressively dismisses including HR or engineers in sales hiring interviews. Harry asks if non-sales staff evaluate culture or technical fit, but Chad insists non-sales interviewers slow hiring and ruin candidate momentum. | |
| Strict Profile Control and Oracle vs. Startup Selling | 4 | 6 | 3 | 3 | Chad explains why sales leaders cannot let new regional VPs bring in non-matching rep buddies. He contrasts legacy Oracle reps selling wrap-and-roll discounts against startup reps creating category demand. | |
| Identifying Mishires, Territorial Territory "Patches," and Startup Burnout | 4 | 6 | 4 | 3 | Harry asks how quickly sales mishires should be identified. Chad outlines manager responsibilities, the three-year startup rep burnout wall, and why reps who leave startups for legacy corporations are permanently filtered out. | |
| Consistent Messaging and the Forecast Balancing Act | 4 | 6 | 3 | 4 | Harry asks whether filling a seat quickly is better than waiting for a perfect rep candidate. Chad explains the high-stakes balancing act where falling behind on hiring headcount destroys future board forecasts. | |
| Candid Self-Reflection and Weeding Out Rocket Ship Passengers | 5 | 6 | 6 | 4 | Chad candidly admits his main weakness is lack of diplomatic communication. He criticizes modern job candidates who prioritize work-life balance and benefits over high-intensity career growth. | |
| Preserving Sales Intensity & the Reality of Outbound Strategies | 5 | 7 | 7 | 3 | Chad strongly defends strict five-day in-office mandates for inside sales reps, arguing that unwilling candidates lack drive. Harry agrees, noting the cross-functional learning benefits of physical co-location. | |
| The Challenges of PLG-to-Enterprise Transitions | 6 | 5 | 3 | 5 | Harry argues that PLG darlings like Notion and Airtable face massive hurdles transitioning to enterprise sales. Chad agrees that PLG momentum rarely translates directly into top-down enterprise adoption. | |
| Mid-Market Entry Strategy and Gross vs. Net Revenue Retention | 5 | 6 | 3 | 4 | Chad explains why startups like Sigma and Snowflake purposefully begin in mid-market before pushing upstream into enterprise. He breaks down the structural differences between Gross Revenue Retention and Net Revenue Retention. | |
| The Product-Sales Relationship and Rep Retention | 6 | 7 | 4 | 5 | Harry calls out CEOs who set top-down revenue forecasts far higher than their CRO's realistic estimates. Chad agrees, detailing how artificial board forecasts designed for fundraising ruin sales morale and trigger executive turnover. | |
| Programmatic Onboarding and Enablement at Scale | 4 | 5 | 2 | 3 | Harry brings up rapid scaling examples like Rippling to ask about onboarding pitfalls. Chad emphasizes the necessity of structured, programmatic enablement and strategically calculated early-stage discounting. | |
| Quickfire: Sales Myths, Mike Spicer, and Scaling Pitfalls | 4 | 5 | 3 | 2 | During the quickfire round, Chad debunks the myth that sales reps are purely coin-operated mercenaries, praises Mike Spicer's operational judgment, and identifies executive impatience as his main weakness. |
Statements from this episode (52)
Peets rejects sales reps unwilling to make a 30-minute commute
“If a sales inside salesperson is not willing to make the sacrifice of a 30 minute commute every day to further his own career, I don't want that person.”
Great sales ability is innate and cannot be taught
“A hundred percent. You can't teach, someone's either, someone either can sell, or they can't. I can, you can teach someone to be better, but if they don't have the innate ability to sell, some people are petrified of the phone, right?”
Snowflake's sales organization was the fastest growing in history
“Chris and I took a sales organization and grew it faster than any sales organization has ever grown in history. It's snowflake. There might've been others since it have grown faster, but at the time, nobody's done that.”
Conducting 10 interviews per hire kills sales team scaling productivity
“If you're going to scale like that, you can't have 10 interviews per hire, right? It kills the productivity.”
Single-vertical focus severely caps startup TAM and company size
“If you're going to sell, A product that only goes to one vertical, you're seriously limiting the size that the company can be, right? Just think about the TAM. Like, if I'm gonna sell into healthcare, that's all I can sell into. That's, you better crush health…”
Disqualify sales candidates whose only motivation is making money
“Is that the only thing that motivates you? Because if that's the only thing that motivates you, we're done here. I have nothing to discuss with you.”
Wealthy veteran sales executives rarely return to operational CRO roles
“Most of these guys are now reaching a point where they've made so much money where they may not want to go back and do this again. So you have to look for the next generation.”
Sutter Hill Ventures hires CROs before startups build products
“So we do something unique at Sutter Hill in that we bring in a CRO pre-product, right?”
Chris Degnan is the only CRO to scale revenue $0 to $3B
“Chris is the only guy that's ever gone from zero to three billion.”
Sales-driven customer discovery must precede product building
“That has to take place before you build the product. Otherwise you could build a product that nobody wants to buy.”
Sales leaders, not founders, must build a startup's initial sales playbook
“I don't want to say it's BS. I think it's backwards. You need a salesperson to create the sales playbook.”
Hiring pre-product CROs requires raising $10M seed rounds
“Yeah, usually you're going to need more than a couple million bucks to do this. You don't need 20, but you probably need 10.”
Sutter Hill incubates all portfolio companies internally
“I mean, look, Sutter Hill, we're different. We incubate our own stuff, right? So everything we do, we incubate inside the four walls of Sutter Hill.”
CROs know what customers buy better than product teams
“The person that knows what the customer wants to buy is the person that's talking to the customer. It's the CRO.”
Snowflake initially sold exclusively to ad tech accounts
“In the very early days of Snowflake, we could only sell into ad tech accounts. That's it. They were just selling to ad tech.”
Assigning sales reps broad geographic territories without ICPs is disastrous
“What I never want to see is, Hey, I just hired 10 reps. I put a rep in New York, rep in Dallas. And a rep in San Francisco and Los Angeles, and I told them they can have all the accounts in those geographies. You're in deep shit.”
Sales reps should collect customer data, not write marketing content
“Salespeople, as good as they are, is capturing and understanding the data. That doesn't mean they're necessarily great at creating content. So what you want them to do is capture all of the information, feed it back into product marketing and let product marke…”
Product teams are ultimately responsible for revenue alongside sales
“They are, in fact, while not as directly responsible as sales, they're still responsible for revenue.”
Salespeople are predictable and driven entirely by compensation plans
“Salespeople are great because they're predictable. I can get you to do whatever I want you to do by setting up the comp plan accordingly.”
$10K ACV products cannot support dedicated field sales reps
“So if you look at a 10 K ACV, well, that's definitely not a field sales rep, right? If I'm a 10 K ACV that I'm exclusively inside sales and I better be able to keep the cost of sale low. Otherwise, to your point, I can't justify it. The unit economics don't wo…”
Sales reps must generate at least 3x their OTE in productivity
“My reps should be able to generate three times their OTE. So if your OTE is 300 rough numbers, you should be able to get 900 K in productivity.”
Startups should pause sales hiring until productivity targets are met
“So if you have a field sales organization and you have 10 reps and the productivity is 600 grand, you better not be hiring. You need to get that productivity, and until such time as either you get that productivity up, or at least can look at the data and see …”
Enterprise sales ramp times realistically trend toward nine months
“Inside, I'd like to see 90 days. Outside, six months. Reality is, it probably trends more towards nine months in enterprise.”
CROs, not founders, should decide sales enablement hiring
“So first of all, it should be the CRO's decision, not the founders.”
Startups need dedicated sales enablement at 30 to 40 reps
“So at 10 reps, do you need an enablement person? Probably not. And each circumstance clearly is unique, but at 30 to 40, yeah, you better start to think about it.”
Early Snowflake had no customer success organization
“They don't have a customer success organization at Snowflake, or at least they didn't. Maybe they've created one out, but they didn't. The feeling was everybody's in customer success.”
Early Snowflake accounts expanded from $15K to $150K in six months
“Like, people would buy A 15 K land deal, and they'd expand to 150 in six months, right? So when you have product like that, that just expands on its own, you can get away with less customer success. I've not seen that since Snowflake.”
Account expansion is a sales function, not customer success
“What I don't agree with is the rep does the land deal and walks away, and they, the customer success rep is responsible for expansion. Expansion is sales, right?”
Paying reps on bookings in consumption models drives severe churn
“I'm paid off of bookings, so maybe they're only going to consume 50, but I think I can get them to commit to a hundred. Can't fault the sales guy. He wants to get paid, so he's going to go book a 100,000 dollar deal, and then a year from now, you're in deep sh…”
Sales hiring managers unable to decide in two hours are the problem
“If you can't make a decision on whether or not to hire somebody after two hours with them, you're the problem. Not the candidate. It's you.”
Sales interviewers must either qualify candidates or sell the role
“If you're going to be in my interview process, you are either uniquely qualified to qualify or you are uniquely qualified to sell. If you are not one of those two things, you are not getting into the interview process.”
Including engineers in sales rep interviews slows hiring and creates friction
“So you bring the engineer in, number one, it slows the process down, ok? Number two, there's risk. I don't know what this engineer is going to say to the sales guy. We're recruiting. He could say something about the product that he shouldn't say. It scares the…”
Startup leaders must block new VPs from hiring unvetted former colleagues
“This is the profile. I'm not deviating from it. Back to the conflict thing I said. So let's just say you hire, hire a new VP of the East, right? And he has his background or she, and he's got five people he wants to bring with him, which is a good thing becaus…”
Legacy Oracle reps do not do real new-logo pipeline generation
“A reps at Oracle right now. He's selling software, right? He's selling software. That's what he's going to say, and I'm going to say, okay, are you doing pipeline generation? Yeah. I'm selling our new X product into all these Oracle accounts that have never br…”
Sales reps blaming a lack of leads will not succeed
“If I ever hear that a rep says, well, why aren't you hitting your number? Well, I'm not getting any leads. You ain't going to make it. So yes, they are ultimately responsible for their own lead generation, but they should be supplemented.”
Startup sales reps cannot expect to love daily pipeline generation
“Having a rep that loves his day job is, is very difficult in our environment because nobody likes doing pipeline generation. It's not fun. It's a grind.”
Leaving startups for legacy tech companies permanently disqualifies sales reps
“Hey, you were at this startup company and you did really well, and then you went to IBM to use an extreme example. You went to IBM for five years. We're never talking. I'm never recruiting you. Not because you're not a good rep, because by that move, I know wh…”
Inconsistent interview messaging destroys startup credibility with candidate reps
“If you get managers saying different things and selling it differently as the reps are going through the process, what happens? You lose credibility. Hey, this manager said this. What the fuck? Now I just don't believe anything you guys are saying. So you gott…”
Missing sales headcount targets inevitably breaks next year's revenue forecast
“When you're hiring at scale, you have to hire. Because if you can't hire next year's forecast, not this year's, but next year's forecast is shot. Now you're going to the board saying, I got to lower the number. I know we raised off of doing 200 next year. I ge…”
Many join Databricks solely because it is perceived as hot
“Look at Databricks, right? Like Databricks is hiring lots of people. Some might argue too many people. I, we'll see how that plays out. But A lot of people are just going to Databricks because it's a hot company, or so they think.”
Peets refuses to hire sales candidates focused on work-life balance
“That's not me. And it will never be me. And I will not hire people like that.”
Inside sales reps develop faster when working in person
“Any inside salesperson should recognize that by being in the office, they are going to get better faster. They're going to develop faster. They're going to be better at what they are doing faster.”
Outside sales reps belong in front of customers, not offices
“Functions like a, like an outside salesperson. You can't make them be in the office. I don't want them in the office. I want them in front of customers.”
Cold email and LinkedIn sales outbound no longer work
“Like what I'm being told, and again, I don't do it, but the feedback I get is emails, LinkedIn simply doesn't work. It just, it, there's too much of it.”
Startups should start with direct sales before adopting PLG
“A lot of people think if I nail PLG, then I'll nail enterprise. You can nail PLG and enterprise. I just would argue that nailing one does not necessarily make you more likely To nail the other. So if you can do both, but You gotta, in my opinion, you gotta sta…”
Wiz is the only startup to successfully start enterprise-first
“Wiz is the only one I've seen do it successfully where they started in the enterprise, right?”
Gross retention measures product fit; net dollar retention measures go-to-market
“Gross retention tells me if people like my product. Like, I understand if my gross retention is 90%, I probably have a pretty good product. Right? If my gross retention slips down to 70%, I have a product problem. Net dollar retention is about expanding. So yo…”
Sales engineers leave failing product companies before sales reps
“Sales engineers are going to, and so what will happen is your SEs will start to depart before your reps. And when your SEs start to depart, the reps know that the SEs know more than the reps know about the product, right? So you'll see SEs start to depart, and…”
Sutter Hill mandates CRO alignment on CEO revenue forecasts
“This cannot happen in our companies. We will not allow for this, right? So Sutter Hill Company, CEO says, here's a forecast for next year. We say, great. Chad Peets, John McMahon, your CRO are in agreement with this, right? Because if they're not, that's not t…”
CROs who accept unrealistic forecasts will be fired in nine months
“CEO's, CRO's got a decision. You either stand up for it right there, or you accept the fact you're getting fired in nine months. Because you know you're not hitting that number, and I promise you they're gonna blame you, and this happens a lot.”
Companies shouldn't expect revenue before fully enabling sales reps
“Don't get greedy and try to put the rep into a position where you're expecting revenue before you should expect he or she to be enabled. Commit the time and resources and understand it's going to take this amount of time, this amount of resources to get our re…”