The Exchanges

Q This is something a lot of founders struggle with. They know, okay, I need to figure out my segmentation strategy and hear what we're going after. Can you just kind of give us a primer on segmentation? What people should know about why this is important and then how they might approach this.

A Yeah, so segmentation is basically how do you carve up the world of companies that exist on the planet, uh, to reason about them where they buy differently. So I'll give, um, I'll give examples from, from Stripe and Bercel to bring this home. So a very, very typical company segmentation is small, medium, large. That's a rational way to do things. Uh, small, you often have a single decision maker. Medium, you know, a small team, and large, it's complex, it's a committee, etc. Um, so the buying process does change across SMB mid-market enterprise. Um, but if you stop there, uh, you are likely missing, okay, but what are the things within your offering that also change the way something gets sold? So at Stripe, um, there, there were two ways we further cut the business. Way one was, so think of segmentation as, as a graph. So x-axis was size. Um, so small, medium, large. Y-axis was growth potential. And that was important for Stripe because it was a consumption based business. So if you were going to grow at 200% year on year, you were more valuable to Stripe than if you were going to grow at eight percent year on year. And so we wanted to spend more time, spend more money, um, going after the 200% growers than the eight percent. So that was one that informed your strategy on who you targeted. And then for Stripe, the other thing that we cut it was business model. So are you a B t…

AI assessment note: “segmentation is basically how do you carve up the world of companies that exist”

Q So let me start with just the basics. When people are here, the term go to market. What does that mean? What does that encompass?

A I think there are two answers to this. Often what people think of is sort of the tip of the spear of what drives revenue, which is marketing and sales. For me, I think of it as any function that is going to touch a customer or make a dollar. Um, and actually my remit at Vercel is that. So that includes marketing, sales, uh, all of your technical sales roles, like sales engineers or, uh, post sales Platform architects is what we call them at Bercel. It's customer success. It's support. It's partnerships. And the reason I say that is, uh, my experience throughout my career has been that those functions often have this Venn diagram strategy where marketing's pursuing one thing. It overlaps with what sales is pursuing, but not perfectly, which also overlaps with what support is pursuing, but not perfectly. Examples of this would be slightly different, uh, uh, Slightly differing segmentation frameworks, et cetera. And so one of the things I think you're going to want to see more in this particular moment is that that become a really integrated life cycle in particular, because I think we're going to see a lot of the functions of go to market get redefined. So we've gone through a period of like hyper specialization and go to market, uh, you know, depending on how you count them, there are, you know, I think somebody quoted like 17 different, ah, roles within go to market these days.…

AI assessment note: “For me, I think of it as any function that is going to touch a customer”

Q AI gives you. One thing that I know a lot of people think about when they hear this is, okay, I'm going to get more of these really bad emails trying to pitch me on stuff and just like, this isn't going to work. I can tell this is AI. What have you learned about how to do this where people actually receive emails that actually convert and do well?

A Our processes all always have human in the loop. And, uh, so basically where we'll start is we take a go-to-market engineer and we have them shadow the higher, highest performing individual in that function. And so you can go and you shadow an SDR and you can see, oh, wow, they've got seven tabs open. They're looking up the, you know, person on LinkedIn. They're reading about the company. They're doing ChatGPT on this. They're, You know, looking in this database to get these sets of attributes. Um, and so that's how you sort of inform the initial work, uh, workflow. And then what we do is we let the agent make a call. So in the specific example with, um, with inbound, right, you have to determine whether or not you think the lead is likely to be qualified, and then you have to determine what to say to it. And so we'll let the agent make those two calls. It ultimately then does some deep research, Pulls in a bunch of information from our databases and crafts a response, but we have a human review all of those and actually hit send. Now for us, we had 10 SDRs doing this inbound workflow, and now we just have one that is effectively QA-ing the agent. The other nine we deployed on outbound, so we got to move them up the value chain. At some point, I think we'll get to a place where we feel like, hey, you know, the, the human reviewer is, um, saying yes, enough Of, of the time that …

AI assessment note: “crafts a response, but we have a human review all of those and actually hit send.”

Q Maybe just one more question before we get to our very exciting lightning round. Let's give you a combo question. Uh, I hear you have a hot take on kind of sales comp, how to comp salespeople that's different from other people, and also who to hire when you're hiring folks in sales. Can you just talk about your takes there?

A I struggle with sales comp because, um, uh, you know, it's all about pay for performance, which I'm obviously a fan of, um, but it is, um, it makes your organization less flexible because you basically have to decide 12 months in advance, these are things I value. Um, and particularly in this moment, that could be different. Um, as a great example of this, uh, when, you know, we wrote the sales plans for this year at Vercel, the AI cloud did not exist. We were selling our front-end cloud, and we were selling vZero, and, you know, introduced the AI cloud halfway through the year. Now, we had all sorts of good ways to still incentivize that, um, but, um, you know, I, I think, um, you want to be able to be innovative and pivot And, um, you know, when you have a well-designed sales plan, um, uh, or, you know, a very structured sales plan that, that can be challenging. So that's, that's a little bit of, of my hot take is just, I'm trying to figure out how do you have the upside of sales of, you know, motivates people. It's a quantitative function, which is great, but also the flexibility to change your mind because I think a lot of companies right now are having a hard time doing annual planning. So, so that's one. Um, on profiles, I have always valued what just sort of a diversified portfolio. Um, so I, I strongly believe that sales is a skill, and so you want sales people with act…

AI assessment note: “I struggle with sales comp because... it makes your organization less flexible”

Q While we're on this topic, just a quick tangent. The advice for hiring your first salesperson that I usually hear is wait until you're around a million in ARR. When you have a repeatable process, you can teach someone. Any, anything there is that, does that seem right? What would you, what would you recommend?

A Yeah, I think that seems about right. Um, I do think, uh, as a founder, you want to stay deeply connected to customers and get it to a scale and get it to a point where, you know, you use the word, there's some repeatability there. I think that's one of the things that not all founders get right is founders are incredible salespeople, right? They convinced a VC angel investors to fork over a bunch of money. So clearly they're going to inspire people to buy. But if you're getting to a million in ARR and the set of customers you have look nothing like one another, you still have very much like an evangelist sale, very much founder led sale versus if you can say, Hey, I now have an ICP If you have an IP here or ideal customer profile, e.g. something you can write down, you know, we are good. Uh, our product fits with, uh, startups with less than a hundred employees who are typically building SaaS applications, right? Something like that. Um, then you're probably ready to hand over the reins. Uh, and then what founders have to remember is to actually hand over the reins. So, you know, you've got to enable the person who comes in. What's your content? What are the discovery questions you're asking? How are you handling objections? Um, so you can transition that knowledge, but also don't hand them over entirely, right? You want to stay connected to the customer because you still have…

AI assessment note: “Yeah, I think that seems about right.”

Q I love that whiteboarding example. Are there any other examples of what you've done to make it actually work really well in this way?

A Yeah, another principle, we really developed this, um, at Stripe Two, and I brought it to, to Vercel, was just the idea of adding value at any touch point, regardless of whether or not that customer bought. Because even if customers don't buy, you often find that if you miss them on that buying cycle, three or four years later, when they're in another buying cycle, they do come back. You know, I was at Stripe for nine years, and so I saw the number of customers that we lost, and then half a decade later, here they are, and they bought. So, um, uh, that, that was sort of another one. So, you know, examples of this that we're doing at Vercel is, um, we, uh, you can, there's great data on the internet, um, that helps people understand the performance of their website and how fast, uh, your website is, um, actually impacts SEO. And SEO impacts AEO and everybody's thinking about AEO right now. Um, and so, you know, one of the things we try to do when we reach out is actually give folks insight immediately into how they're performing on an absolute basis, how they're performing relative to peers. So ideally, you know, that piques your interest and you want to learn more from us. Um, but even if it doesn't, you still have insights that you may or may not have been aware of, um, that maybe make you contemplate whether or not you've got the optimal setup.

AI assessment note: “examples of this that we're doing at Vercel is, um, we, uh, you can”