The Exchanges

Q Why do you think that hasn't gone to plan?

A You know, candidly, like when you enter a new market, um, like you have to be like, Like everything is way more expensive. Like is it, is a big, like when you're in an early stage company, like efficiency, like doesn't really matter. Like you don't even have a business, right? Like it's not about how efficient are you? It's like, you're just trying to win any way possible and you're losing money and all that good stuff. As you get to be larger, like in your, you know, our size, like all of a sudden, like efficiency is like the number one constraint. Like there are things that we could go do to win more business in places that we don't do because we couldn't do it efficiently and we're not trying to light money on fire. And so in the, in the U S market, There's all these other things. There's organic, there's brand, there's all this like free, you know, like accrued benefit over time. And so you can afford to go pay money and do different things to acquire leads in more expensive ways. When you go internationally, like all you can do on day one, right? You can go put money in the LinkedIn machine or the Facebook machine or the review sites or whatever, and you can get demos, but like you don't have all of the like easier, more free stuff to like blend the portfolio into something that works. And so your growth is just like, It's a little bit stunted if you want to grow efficient…

AI assessment note: “When you go internationally... you don't have all of the easier, more free stuff”

Q Final one for you before we do a quick fire. What is the biggest signs that someone is not scaling? How does that most often show itself?

A I think when someone is not scaling, um, I, I think there, there, there are two things. I think one is, um, they end up becoming, uh, like they're, they're leading from the back and not the front. And what I mean by that is they're, they believe that their job now is to like tell people like what to do because they've done it, but like they don't believe their job anymore is to like do it for them, show them how to do it, be involved in like, you know, leading the way and be like, everybody follow me. Uh, and they just kind of hit a point where they, like, they, they kind of think that being a director or a VP or whatever means that, like, all of a sudden you don't have to do that stuff anymore, and usually when that happens, they start to lose the locker room, and, like, even if it's a winning team, like, their team starts to not really like them, you know, it starts to fall apart and kind of flounder from there, and you can't come back from someone who, like, lose, like, an organic promotion who was amazing all the way through, but then they, like, lose the locker room because they think that that's not my job anymore. I think that's, that's it.

AI assessment note: “they're leading from the back and not the front”

Q Do you think that people are born salespeople or do you think it's something that can be learned?

A I think there's a lot of people that are born that could be salespeople, um, you know, just given the, the kind of The attitude that you have. And I think there are certainly some people who were born who probably don't, you know, would like run in the opposite direction from any sales job, but I think it comes from, you know, wanting to be, uh, you know, wanting to be competitive and being okay when you lose, because in sales, like, yes, of course you win, but you lose the majority of the time really. And so I think there's a, there's a lot of dynamics, uh, that I think are, that you have to kind of have the, the right ingredients, but I think From there, you can certainly, you know, teach a lot of the skills that, you know, that make a good salesperson good.

AI assessment note: “you have to kind of have the right ingredients, but I think From there, you can certainly, you know, teach”

Q Matt, when you evaluate your go-to-market team today. Okay. We're sitting here. They've got a fire beside us, a whiskey and a cigar. We're just like shooting the shit now. Where are you like, oh, that bit's the weakest part of the go to market. And what are some lessons for you from that?

A If I think about the, the, like the way that the, the company kind of evolved, I would say that, um, up until literally 18 months ago, I'd say up until two years ago, up until two years ago, Like the sales org myself and like everyone that reported to me literally never once thought about generating an outbound demo or like even like it was 100% like demos pop up on your calendar. Like marketing does a bunch of stuff inbound SDR schedule them and like you just sit on, you know, go show up and you do four or five calls a day and like that's all you do. Um, and I think over time we got to this, I'd mentioned this pinnacle point like two years ago where AK, uh, Ashley Kelly We were like, oh my God, we have to do outbound. We hired her. We like, you know, grew it from zero to a hundred, whatever. And like, we started to weave into the culture, like, Hey, like as a sales rep, like you should care about where your pipeline comes from, but they still don't own it. Like outbound SDRs own the quota. Like they schedule the demos. If you're a rep at Ripley and you have zero, like actual prospecting targets. And so over time it was like the whole sales.

AI assessment note: “they still don't own it. Like outbound SDRs own the quota.”

Q Um, Matt, what difference is the kicker? I just have so many people who will ask me like, what is the difference? Yeah.

A Um, it's gotta be relative to your, I mean, there's so much goes into like, the way I think about it is like, you know, what is your, you know, commission rate on a, on a new logo? And like, that could range anywhere from 10% to 30%, depending on like, are you outbound? Are you inbound? Like, you know, what, what deal size, whatever. And so you want to make sure that the kicker you're paying on a deal isn't much more than like, you know, let's call it like 10, 15% of the deal, right? So maybe if you're, if your commission rate is 20%, then maybe you're giving them an extra like two to three percent kicker for a multi-year deal, but you can't make it that your commission rate is 20% and then you sell a multi-year deal and you get paid 40%, right? Like that math doesn't work. And so it's, it's generally, I'd say maybe 1015, 20% of the original contract, like the year one Contract, like, or, or thinking of the commission rate, like that's the right way to think about it.

AI assessment note: “maybe you're giving them an extra like two to three percent kicker for a multi-year deal”

Q Matt, when you evaluate your go-to-market team today. Okay. We're sitting here. They've got a fire beside us, a whiskey and a cigar. We're just like shooting the shit now. Where are you like, oh, that bit's the weakest part of the go to market. And what are some lessons for you from that?

A If I think about the, the, like the way that the, the company kind of evolved, I would say that, um, up until literally 18 months ago, I'd say up until two years ago, up until two years ago, Like the sales org myself and like everyone that reported to me literally never once thought about generating an outbound demo or like even like it was 100% like demos pop up on your calendar. Like marketing does a bunch of stuff inbound SDR schedule them and like you just sit on, you know, go show up and you do four or five calls a day and like that's all you do. Um, and I think over time we got to this, I'd mentioned this pinnacle point like two years ago where AK, uh, Ashley Kelly We were like, oh my God, we have to do outbound. We hired her. We like, you know, grew it from zero to a hundred, whatever. And like, we started to weave into the culture, like, Hey, like as a sales rep, like you should care about where your pipeline comes from, but they still don't own it. Like outbound SDRs own the quota. Like they schedule the demos. If you're a rep at Ripley and you have zero, like actual prospecting targets. And so over time it was like the whole sales.

AI assessment note: “everyone that reported to me literally never once thought about generating an outbound demo”

Q You said that not doing outbound was a big mistake. What did you do that you wish you hadn't done?

A The slides, and then we roll out the pitch deck, and I do the trainings, and I do the script, and, like, when you're an early stage company, that makes a lot of sense, and then all of a sudden you get, you know, five segments, 10 segments, 20 segments, and, like, you're no longer the expert about all of them, and so I definitely held onto that, like, way too long, kind of being the, like, the, the number one person in the org who, like, knew the script, and the pitch, and the competitors, and Probably two years ago, I hired, like, my first kind of, like, layer of just, like, really, kind of, successful VPs underneath me, and then over time, now it's like, I literally don't even think about those things. Like, I was completely owned by the VP of SMB, or the VP of Midmarket, or whatever, and I should have done that, like, a lot sooner, because what happened was we would be doing deals, or we'd be in, like, we'd have, we'd have a deck that sucked, and I'd go look at it, and I'd be like, this deck is terrible, like, this is, this feels so stale, Like how does, how does the SMB work stand up and like give this deck every day? Like it's so bad, you know, this is the 18 months old. And there was just a general thinking of like, well, you made the deck, right? Like you, like you authored this thing. And I'm like, no, no, no, no, no, no. Like you guys are better than me at all of this s…

AI assessment note: “I definitely held onto that, like, way too long”

Q Okay. So when we think about the different segments, we've got like SMB mid market and enterprise. When we think about like demos booked, what does the different close rates look like across the different segments?

A I mean, we, we sell the companies as small as, you know, three, four employee founders running payroll for the first time. Right. And so on the very low end of that market, you know, we win 50, 60% of the opportunities. And honestly, the majority of the ones we don't win, They're just like, you know, funding fell through or whatever. Like they don't need to run payroll anymore for some reason. Um, and on the high end of the market, we're selling to companies that are up to about 5000 employees. Um, and so, you know, like, uh, it really has like a wide range of, of kind of, um, the different segmentations. Now for us, we have segments that are based off of employee size, like any traditional company. But then we also have a bunch of products that like our core kind of, uh, new logo reps sell. But then we have too many products. We've got, like, 30 different products that we're playing, and so as we started to spin off different product suites, like we launched a finance suite to compete with your brexes and your ramps of the world. We launched a global payroll suite to compete with your deals and remotes by global, and so at some point we had to carve off, like, a, a separate what we call product account executive team. So you have, like, a core rep that, you know, sells the majority of the HR stuff, then you've got, like, a different, Uh, finance suite rep, you've got a global …

AI assessment note: “on the very low end of that market, you know, we win 50, 60%”

Q How do you do deal reviews, and how has that changed over time?

A Um, I'll, I'll pick like our, you know, let's, let's call it our middle, you know, mid market team who's kind of like in the middle, but I think the main thing that you're looking for in a deal review is, uh, like reps get, you know, like salespeople by, by almost like definition are like optimistic, right? And so, um, oftentimes they like, they get happy ears and they hear things that, that they want to be true, that might be true, but they don't sometimes ask like the second, third layer question. To figure out if it is true. And so for me, deal reviews are all about like that. They're all about asking your rep, you know, who are we talking to? Who does that person report to? Uh, were they there when they bought this system? Like, you know, a bunch of questions around who are they talking to? How do these decisions get made? What do they think the timeline is? Like, you're trying to basically poke a hole in this per, if you're just sitting there and your rep is like, Hey, here's the next step. And here's who I'm talking to. And you know, it's all good. And you're like, okay, great. Sounds good. Like, let's go to the next one. Which is what a lot of pipeline reviews look like. That's like zero helpful. Like you, you got to create a relationship with your rep where you can poke holes at them. And they're trying to like, you know, prove to you why this is a solid deal. And there…

AI assessment note: “deal reviews are all about... asking your rep, you know, who are we talking to?”

Q Okay. So we hire them a little bit earlier. Let's go with that, Matt. Okay. Should we hire juniors or like a senior sales leader who builds the team around them?

A You want to hire for slope. Right? Like you want to hire for how steep you think somebody is like going to be able, ah, to kind of grow and scale. But like oftentimes, like the, like the number one thing that I look for, I think if you're looking for an early stage, ah, you know, sales leader, there's a bunch of things that we could get into. But I think one of the things that stands out is you want somebody who has been like rapidly promoted at the same company two or more times. Like, that ingredient, and what I mean by that is, like, if you're an account executive for, like, a year, and then you're a sales manager for, like, nine months, and you're, like, a director of sales for, like, a year, right? Like, when you look at high-growth companies that are just, like, growing super fast, right? Whatever all of the historical SaaS companies you might want to go look at, like, where should I hire someone who works at a high-growth company? And you find somebody who was promoted multiple times. There are lots of people that get promoted once, And it's a mistake, right? Like they're not good at being a manager. They don't want to be a manager or whatever. But when you find someone that's been promoted two times at the same company, it's like an immediate signal that that person is good, right? Like you don't get promoted twice at high growth companies if you're not good. And when t…

AI assessment note: “You want to hire for slope. Right? Like you want to hire for how steep”

Q 45 K outbound is justified. At 45 K, is customer success justified?

A In terms of customer success, like, at Rippling, um, you know, we have, we, in the very early days, we had Uh, customer success, which I think of as like their, you know, charter is make customers successful, renew them. But like, it's not to like, you know, it's generally not to like sell new products. Um, and so, you know, early on at Rippling, again, we had three products when the company first launched and now we have over 30. And so at Rippling, early on, we had customer success. And when somebody signed up for Rippling and then they came back six months later to add a product, Like we would bring it back to the original sales rep and like over time, that was just like clearly a terrible model. And so we converted.

AI assessment note: “In terms of customer success, like, at Rippling, um, you know, we have”

Q 45 K outbound is justified. At 45 K, is customer success justified?

A In terms of customer success, like, at Rippling, um, you know, we have, we, in the very early days, we had Uh, customer success, which I think of as like their, you know, charter is make customers successful, renew them. But like, it's not to like, you know, it's generally not to like sell new products. Um, and so, you know, early on at Rippling, again, we had three products when the company first launched and now we have over 30. And so at Rippling, early on, we had customer success. And when somebody signed up for Rippling and then they came back six months later to add a product, Like we would bring it back to the original sales rep and like over time, that was just like clearly a terrible model. And so we converted.

AI assessment note: “In terms of customer success, like, at Rippling, um, you know, we have”