Jan 2, 2019 · 39m · a16z
a16z Podcast | The Why, How, and When of Sales
Mark Craney · 12m spoken Lars Dalgaard · 11m spoken Ben Horowitz · 8m spoken Sonal Chokshi · 3m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, tech leaders Ben Horowitz, Mark Cranny, and Lars Dahlgaard discuss the essential mechanics of building, scaling, and managing an enterprise B2B sales organization. They offer technical founders practical guidance on go-to-market strategies, sales compensation, timing key hires, and integrating sales culture with engineering.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 10.3% of the talking time here. How this is scored →
The host as informed peer 2.9 Guest teaching 5.0 Guest disagreement 1.8 The host pushing back 3.6
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 38:15 Lars rejects reinventing sales
Lars forcefully dismisses the founder instinct to reinvent established sales principles, arguing strongly that overcomplicating compensation and sales structures creates a total mess.
Hardest push from the host ▶ 3:42 Host directly challenges need for enterprise sales forceSonal explicitly interrupts the premise of enterprise sales complexity, demanding to know why viral enterprise adoption cannot simply bypass sales teams entirely.
Biggest teaching moment ▶ 7:03 Ben reframes Apple's enterprise failureBen Horowitz counters the host's premise about Steve Jobs by demonstrating that Apple's reliance on product vision without sales caused them to underperform in enterprise revenue by 100x relative to Microsoft.
The host holds their own ▶ 5:30 Host cites Steve Jobs as vision-driven counterexampleSonal effectively draws upon the iconic example of Steve Jobs to question whether visionary product founders really need input from sales representatives to build their product roadmap.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Technical Founders and Enterprise Sales Complexity | 4 | 5 | 2 | 7 | The host explicitly pushes back on Mark Craney's argument about enterprise buying complexity, asking why a viral product wouldn't automatically be adopted top-down without sales overhead. Craney explains the internal rejection mechanics, politics, and security hurdles in large organizations. | |
| Integrating Sales Insights into Product Roadmaps | 5 | 6 | 3 | 6 | Sonal challenges Lars Dalgaard's push for sales-driven roadmaps by citing Steve Jobs as a counterexample of a visionary founder who ignored customer inputs. Ben Horowitz and Lars reframe the example, pointing out that Apple vastly underperformed in enterprise revenue compared to Microsoft precisely because of its lack of enterprise sales motion. | |
| How Sales Forces Create Enterprise Value | 1 | 5 | 1 | 1 | The host briefly introduces the topic connecting back to previous points, allowing Mark Craney to deliver an instructional overview on how sales forces actively create enterprise value rather than merely communicating it. | |
| Cultural Integration and Sales Mindsets | 2 | 4 | 1 | 1 | The host prompts the guests on cultural integration between engineering and sales as well as what drives salespeople. Lars and Mark outline the necessary open-mindedness for founders and detail the competitive traits required in sales hires. | |
| Sales Compensation, Commissions, and the Drive to Win | 3 | 5 | 2 | 4 | Sonal asks why a salesperson's competitive spirit justifies commission structures beyond standard market compensation. Ben Horowitz reframes the discussion around public scorecards, explicit risk of termination, and adverse selection in hiring top performers. | |
| Evaluating Sales Performance and Go-to-Market Execution | 2 | 5 | 1 | 2 | Sonal asks clarifying and evaluative questions regarding how founders can differentiate a good salesperson from favorable market tailwinds. The guests break down inside vs. outside sales metrics and share a case study on Okta's go-to-market pivot. | |
| Timing the First Sales VP and Building an Inclusive Culture | 2 | 5 | 1 | 2 | The host asks practical timing questions about hiring a VP of sales and managing cross-departmental jealousy around perks like President's Club. Mark, Lars, and Ben offer operational advice on staged hiring and inclusive company culture. | |
| Sales as a Differentiator and Sticking to Established Principles | 4 | 5 | 3 | 6 | Sonal presses Ben on why founders shouldn't apply their disruptive, rule-breaking mindset to reinventing sales processes. Ben and Lars explain that while innovation is welcome, breaking proven sales compensation and execution mechanics without domain knowledge yields bad outcomes. |
Statements from this episode (19)
Horowitz: Technical founders' theoretical sales models consistently fail
“And we've seen many founders have theoretical models for how they would like sales to work. And those have tend to be been like extremely unsuccessful.”
Cranny: Enterprises have built-in rejection mechanisms against viral software
“It's typically because there's, you know, they, they're set up to reject. It's like there's a rejection organism based on politics, other decisions, standards, security, things of that nature, as far as how it affects everyone.”
Dahlgaard: Product managers must include sales reps in roadmap meetings
“And so I made it a rule that product management would never have a meeting discussing roadmap without having sales reps in the meeting.”
Horowitz: Apple undershot its enterprise market potential by 100x
“If you look at Apple's products and their product position, and you look at their success in the enterprise versus say Microsoft which is selling competing products, you would, I would argue Apple's undershot their potential with the products they have by prob…”
Cranny: Sales reps must walk client halls to map enterprise needs
“And you don't get that sitting in a cube in, you know, San Francisco or Silicon Valley. You get that from walking the halls Of these big organizations and really understanding, you know, what their initiatives are and how you're to be able to map up what your …”
Cranny: Relying on bottom-up adoption without sales is short-sighted
“The need may not be there, but I think CEOs might be being pretty short-sighted that there's not going to be competition down the line, particularly as they try to expand inside a account.”
Cranny: Top sales hires often come from military or sports backgrounds
“So competitive, high courage, focused discipline, people that have a little bit of charisma, you know, a lot of intellectual horsepower and can think quickly on their feet and people that can take a beating, right? That they can actually go in and take a lot o…”
Horowitz: Top enterprise sales reps make over $1 million a year
“The very best salespeople on a commission plan can make over a million dollars a year.”
Horowitz: Eliminating sales commissions creates adverse selection for sales hiring
“If you go in and say, well, my philosophy is that you as a salesperson can't have commissions because other people don't, then if I'm the very best, best of the best salespeople and I can make a million dollars by delivering real value to the company at Compan…”
Dahlgaard: Initial large sales deals do not signify a solved sales model
“One rep does one big deal. That doesn't really mean anything. You, I mean, sales is a hard job. It's very easy to think that because a couple of reps do some big deals, now you've figured it all out and let's move on to the next thing.”
Dahlgaard: Top sales reps often fail when moving to a different company
“Some reps that are successful in one organization, like super successful, might not have any success in a different company. It's a very different thing depending on what you're selling”
Cranny: Restricting sales rep territory sizes increases productivity and win rates
“And actually, they get more productive the less territory they have, the less amount of accounts that they have, because they're able to, it kind of forces the situation to do, you know, where you're penetrating deeper into accounts, getting a lot more intimat…”
Horowitz: Okta won identity management by switching to top-down sales
“And so they ended up, although they started out with an inside motion, more of a bottoms up motion being much more of a top down motion generally as it went on. And that channel strategy actually is, I think in retrospect, what won them the market against the …”
Cranny: Do not hire a scaling VP of sales before product-market fit
“The problem with getting a real VP of sales or a big executive too early is they're there to scale, and if you're still wandering around a little bit in the desert trying to figure out the fit, you might be a little early there.”
Dahlgaard: Equal status for sales and engineering was SuccessFactors' top breakthrough
“This is maybe one of the biggest breakthroughs in SuccessFactors history was that we made reps feel like they were as important as engineers.”
Horowitz: Sales is the most critical department for maintaining company culture
“In fact, in a way, it's the most important part of your company to have great culture in because it's the part that represents you.”
Dahlgaard: Sales reps voted non-sales peers onto President's Club trips
“What we did in that case is, we gave them a vote. Who helped you the most this year? And they got to go.”
Dahlgaard: Overcomplicating sales compensation plans is the worst founder mistake
“What I can tell you is the worst thing you can do in the world is make Selling so damn complicated with so many different variables that a rep can try and optimize that they don't have the ability to actually figure out what you want them to do.”
Dahlgaard: Startups attempting to eliminate commission-based sales always revert
“And frankly, all of companies in Silicon Valley that we didn't have Salesforce up front and thought they could rethink it, have all come home to roost. And they now have great sales forces that sell with commission for a living.”