The Exchanges

Q How do you know as a CEO though, how to make that decision?

A I think a lot of it depends on what you're selling and what the value proposition is. And it might, it's in most cases, it's a, it's a progression. A lot of it will depend on your roadmap. A case in point is these freemium to premium models typically start at a user level. Um, so that's going to be a bottoms up where you initially, because you have freemium to premium, You might be targeting developers, or you might be targeting individual users on the business side that you staff up with an inside organization, starting with inbound, then you start doing outbound to qualify leads, to follow up, to help people along that buying process. Eventually, as it gets outside of, you know, starts getting bigger companies, and you start to get beachheads inside these bigger companies where a bunch of users have to go up In their organization to a manager or a series of managers to do a larger deal because you have different kind of functionality for bigger groups, you're typically going to have to have somebody directly involved with them, and that's where you'd have to start stamping out in territory people that can go navigate the complexities of these big companies. So on the other end, if you've got this really complex solution that's going to require, you know, architectural Changes and a lot of integration and things of that nature. That might be a more of a case where you're start…

AI assessment note: “I think a lot of it depends on what you're selling and what the value proposition is.”

Q Yeah. So let me just push back on that for a second, because if I see an amazing product that's going viral in the enterprise, why wouldn't the CEO just like pick up on it and say, oh, I want to adopt this all across the board. Like, why do you need this extra overhead of sales to help push that through the hallways?

A 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. So as well as the, how the money flows inside these big companies, like it does in Congress, right? Just cause the house passes a bill doesn't mean that's going to become a law. And that's, that's kind of why I made that, that comment originally is, you know, you can go through the whole process. All the way to getting signed by the president, but it can, it could still get kicked out and thrown over the Supreme Court. And that, I've seen that happen.

AI assessment note: “rejection organism based on politics, other decisions, standards, security”

Q That's great. So those of our listeners who don't know the other cranny, you bring a ton of expertise on go-to-market strategy. And one of the things that you guys are both telling me from very different vantage points is that there's a lot of similarities between business and politics, which I think people can buy on the surface, but What argument would you make?

A I think, you know, if, if from a entrepreneur standpoint, your go to market executive, or even a, a CEO, putting the politics aside, if you look at what's going on in these big campaigns, particularly now, and compare it to what you're doing on a go to market side, there's a, there's little things you can learn. Cause it is kind of the Superbowl of, you know, a big go to market. If you think of how these started off as primaries and they had to go through this whole process, now we're down to the final two. It's a lot like enterprise sells for campaigns selling to, you know, large enterprises. You got to get a lot of different people on board in these complex selling situations, uh, and essentially get them to vote for you on the, on the tech sell side.

AI assessment note: “It's a lot like enterprise sells for campaigns selling to, you know, large enterprises.”

Q Yeah. So let me just push back on that for a second, because if I see an amazing product that's going viral in the enterprise, why wouldn't the CEO just like pick up on it and say, oh, I want to adopt this all across the board. Like, why do you need this extra overhead of sales to help push that through the hallways?

A 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. So as well as the, how the money flows inside these big companies, like it does in Congress, right? Just cause the house passes a bill doesn't mean that's going to become a law. And that's, that's kind of why I made that, that comment originally is, you know, you can go through the whole process. All the way to getting signed by the president, but it can, it could still get kicked out and thrown over the Supreme Court. And that, I've seen that happen.

AI assessment note: “there's a rejection organism based on politics, other decisions, standards, security”

Q from bottoms up. Do you then counsel founders to have the enterprise sales force in at the very beginning, or do they wait till the viral adoption happens and they get it at a certain point? Like when is the ideal time to bring in that, that enterprise sales force if you don't want a competitor to take the top half away from you in the market and the enterprise?

A Yeah, it doesn't have to be right at the beginning. A lot of it You know, depends on the traction that they're getting initially. A lot of it's, you know, based on the skill set, I think, of that founding team and, you know, their knowledge of, you know, what a, you know, major buyers or enterprises are going through to get that deep understanding. In some cases, you may need somebody in fairly early to really unpack what that functionality might look like over and above, you know, what You know, the, the founder's knowledge is from, you know, say if it's a DevOps type tool from a pure dev perspective, you know, what's that going to look like in these different types of enterprises from a workflow standpoint? A lot of it depends on what kind of momentum they have, what needs to happen to understand where they can, you know, start drawing that line and putting the pricing and packaging together. So, I mean, it is so case specific. What typically happens is, is they wait too long. Is in my opinion to start putting that in and or there's a miss misfit from a higher standpoint, as far as the skillset required to go put that in place.

AI assessment note: “Yeah, it doesn't have to be right at the beginning.”

Q Cranny, I once heard you say, I think the best line I ever heard you say about this is that selling to a large enterprise is like getting a bill passed in Congress. And it's probably one of your most famous lines. What was the genesis of that? Why is it so complex?

A If you think of, say, a Fortune 500 or a global 2000 company, these are big, bureaucratic, political, complex organizations that are difficult to navigate in. And you've got to win a lot of different groups in a large enterprise wide type campaign. To really get all of a, of a customer's wallet or the most potential that you can with an enterprise type solution. So to simplify it, if you just looked at, at a big account in three lenses, you've got users, and then you have the managers of those users and a lot of different business units. And then at the top, you've got more of the CXO type people that get involved in large deals. And every one of those groups Has a different set of buying criteria. One of the reasons I think some of the founders, particularly technical founders, are slow to understand the need for sales is that the products these days are so good in a lot of cases.

AI assessment note: “these are big, bureaucratic, political, complex organizations that are difficult to navigate in.”

Q So part of that anecdote, which I think is super interesting is that obviously with a startup, your product evolves. At the beginning as a founder, when is the right time to bring on a VP of sales? Like, is that your third hire, your first, second hire, your 10th hire?

A I have a pretty common answer for that one. A lot of it depends on the, the CEO and what their skill set is and kind of where the product is in, you know, product market fit. But generally they have three kind of choices. One, you can go higher. Kind of an individual contributor, you know, let them kind of get going with the sales motion. Typically what happens in that case is they end up being the VP of sales, the CEO, founder CEO does, and they end up with five or 10 people, and then it's like a bunch of birds in a nest. They're all sitting around, give me a worm, give me a worm. What should I do? So if you've got that skill set as the founding CEO, That you can go be the VP of sales. That's a, that's a okay way to do it. Start with individual contributors. On the other hand, if you don't have that skill set, you're probably better off hiring somebody that's at least a director, first or second line manager capable. And even if they start as an individual contributor, that you can go build a team around them. And then if you've got enough validation for your product and your market fit, then maybe you can go attract A real VP. The problem with getting a real VP of sales or a big executive too early is they're, 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, you might be a little early there. So, but a …

AI assessment note: “if you've got enough validation for your product and your market fit, then maybe”

Q from bottoms up. Do you then counsel founders to have the enterprise sales force in at the very beginning, or do they wait till the viral adoption happens and they get it at a certain point? Like when is the ideal time to bring in that, that enterprise sales force if you don't want a competitor to take the top half away from you in the market and the enterprise?

A Yeah, it doesn't have to be right at the beginning. A lot of it You know, depends on the traction that they're getting initially. A lot of it's, you know, based on the skill set, I think, of that founding team and, you know, their knowledge of, you know, what a, you know, major buyers or enterprises are going through to get that deep understanding. In some cases, you may need somebody in fairly early to really unpack what that functionality might look like over and above, you know, what You know, the, the founder's knowledge is from, you know, say if it's a DevOps type tool from a pure dev perspective, you know, what's that going to look like in these different types of enterprises from a workflow standpoint? A lot of it depends on what kind of momentum they have, what needs to happen to understand where they can, you know, start drawing that line and putting the pricing and packaging together. So, I mean, it is so case specific. What typically happens is, is they wait too long. Is in my opinion to start putting that in and or there's a miss misfit from a higher standpoint, as far as the skillset required to go put that in place.

AI assessment note: “What typically happens is, is they wait too long.”

Q have a good versus a bad salesperson? And part of this also is, I mean, how do you know that they don't have a tailwind in their favor, that they have just a really good territory or they're just selling a product line that's going to sell itself. Cause it's so damn good. How do you tease apart that from like the skillset of the salesperson? How do you know?

A I think you start with a good sales VP, you know, there's obviously is going to be good territories and bad territories, but if there's a, you know, a geography that's particularly good, And you have one great sales rep in it, you know, that sales VP is probably going to know that maybe he or she should have three good sales people in it. 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 intimate with what's going on in the customer's business, and your success rate, your win rate will go higher. A lot higher because you've got that intimacy that you might not have earlier on when there's, you know, one person in the east, one person in the west. When there's 10, it goes to a hundred. Sales forces typically get way more productive as the sales process gets honed, a system gets put in place, and you know, the management's putting the right people in the right place at the right time to be successful. So there's a lot more to it than just, you know, that individual contributor. There is a system that needs to be put in place of Process of segmentation and targeting air cover from product management as well as marketing to make sure that, you know, you've got great coverage and, yo…

AI assessment note: “So there's a lot more to it than just, you know, that individual contributor.”

Q have a good versus a bad salesperson? And part of this also is, I mean, how do you know that they don't have a tailwind in their favor, that they have just a really good territory or they're just selling a product line that's going to sell itself. Cause it's so damn good. How do you tease apart that from like the skillset of the salesperson? How do you know?

A I think you start with a good sales VP, you know, there's obviously is going to be good territories and bad territories, but if there's a, you know, a geography that's particularly good, And you have one great sales rep in it, you know, that sales VP is probably going to know that maybe he or she should have three good sales people in it. 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 intimate with what's going on in the customer's business, and your success rate, your win rate will go higher. A lot higher because you've got that intimacy that you might not have earlier on when there's, you know, one person in the east, one person in the west. When there's 10, it goes to a hundred. Sales forces typically get way more productive as the sales process gets honed, a system gets put in place, and you know, the management's putting the right people in the right place at the right time to be successful. So there's a lot more to it than just, you know, that individual contributor. There is a system that needs to be put in place of Process of segmentation and targeting air cover from product management as well as marketing to make sure that, you know, you've got great coverage and, yo…

AI assessment note: “I think you start with a good sales VP”