The Wisdom Wall

“What you're describing is as, as Peter described the power law venture, where there can be a series, a, an exceptional company that is raising money at 30 to forty million dollars, which I think is probably the Middle of the road series a right now and a billion dollar outcome for that company. It actually doesn't move…”

“We made decisions based on a spreadsheet. We had a historical data on rep effectiveness in 20, 20 and 20, 21 in finance plugged the number going from 10 reps to 14 reps into the spreadsheet. And the spreadsheet said this was what was going to happen when we go from 10 to 14 reps. And it actually went, it not only Um,…”

“You will close more revenue with fewer salespeople when you are in an environment that is demand constrained.”

“if you cut the bottom performing whatever percent of the AE team, what that means is you will give the limited number of opportunities that you do have to performers that have a higher conversion rate and actually convert more revenue or more sales with fewer sales people.”

“There are only so many really amazing sales leaders that exist to begin with. And if you limit your candidate population to a very small domain, like let's just say property tech or something like that, how many unbelievable property tech sales leaders are there? It's just like, so you, you ultimately end up…”

“embracing this identity around sort of like fast growing tech company raised a bunch of money. Um, that was a, that was a mistake. Um, and I, I think the right thing to do or, or what to try and do is associate your company with what you do. Had we been known as, you know, the best health insurance broker or the first…”

“I set the target with 90% confidence that we're able to hit it.”

“it's universally applicable that you're getting paid less for producing the same, depending on where you're located.”

“what works for 11 Labs at 20 X quota, meaning if you are paying a rep a 100,000 dollars a year, they need to generate two million dollars a year. That works for 11 Labs. It does not mean that we pattern match that to all other startups the way that we might, that five X revenue contribution in this sort of like SaaS…”

“We can adjust it in quarter to, to, uh, you know, make it more motivating for the team. The last thing that you want is like approaching the end of the quarter in reps, like trying to get to 20% of their number, like talk about a depressing sales environment to be in.”

“The brand does matter. There are three people in, in this meeting room right now. It's Jason, Amelia, and Sam. And on Monaco, it's Jason, Amelia, and Sam, meaning like an agent that is representing any of the three of us, the likelihood of that, um, getting a response and ultimately converting into a customer. And it's…”

“The only problem is it's entirely wrong. And, you know, you have like a sales rep that is adding their own like subjective Experience about the account. Like they may want to influence the sales manager to think that the deal is going to close, or they may be forgetting about what actually happened on the call.”

“You can manufacture what I would describe as like a culture of winning or an environment where people are making good money. And what I mean by that is like, you set the quota, you decide what the commission structure is. And if early on, you want to be deliberate about creating an environment where people are making…”

“So I think ultimately you are spending far more time leveraging external recruiters because of the process that I just described than if you're able to leverage your personal network and find some people that you know were top performers at a prior company.”

“The best candidates don't really use external recruiters. The best candidates oftentimes want to go somewhere where their reputation precedes them.”

“The result that most people conclude in this environment is we need more sales. We need to hire more salespeople. That is the wrong answer. More salespeople oftentimes will focus on the middle of the funnel. And so if you have a limited number of opportunities, if you are in, again, what I would describe as this demand…”

“focusing effort in the form of resources. So people, and then focus on demand instead of on the existing funnel will produce more revenue for the business than focusing on what I would again describe the middle of the funnel conversion rates.”

“I see lots of resources in this category of CSM, which is like ongoing maintenance and servicing of customers and under resourcing in implementation. And I just think the initial experience that a customer has on a product or with a company has so much influence on the lifetime value of that customer, the happiness of…”

“the lowest hanging fruit to influence growth is generating more pipeline. The idea that if you are able, if you think about Splunk at this point is a much more mature business, but for many earlier stage startups, if you just do the math on this, if you're able to double the demand or double your pipeline and…”

“You do not want to start with purchasing a sequencing tool, purchasing a system that gives you contact information and blasting your ICP. I've talked about this before, but you really want to start with who you are targeting being in your own network.”

“When you do hire your first SDR, hire two because they will be able to share learnings with one another and really accelerate the time to effectiveness because they're trying and failing, they're trying and succeeding, and then they can share both the failures and the successes with their peer.”

“for, for most companies, AEs really should be sourcing their own revenue. There's almost never going to be this perfect equilibrium where you have exactly the number of demos and opportunities that you're working. That mean that as an AE, you're filling eight hours a day and maybe in like, you know, boom times that…”

“initially you have somebody focused on serving the customer. That includes both mitigating churn, making them successful, and also increasing the revenue, um, because especially at an early stage as a startup, having this like concept of over specialization where you have one person that's customer success and one…”

“Just this concept of like, you're almost certainly overpaying your worst employee and underpaying your best employee.”

“I'm not aware of a single miss Um, I, I've seen tons of misses on, we hired from a big company. I haven't seen a single miss where we hired from the hottest tech startup of the sort of last generation. We hired somebody that grew their career there to come in and, and lead sales for us.”

“philosophically, the advice that I give to folks is you want 70% of the team over quota. And so if you're defining your success by being your by being over quota, what you're effectively saying is I'm going to be in the top 70%. And that's not that good. Um, there's only one number one. Uh, and so if you define your…”

“I would argue, That, um, this, let's call it a correction that is happening right now is probably healthy for the, uh, ecosystem broadly, because, um, you know, there are, there are likely great people at some of these companies that, uh, aren't going to make it, um, and so distributing some of them to the best…”

“what Rex did, and what I'm, um, recommending to founders, again, depending on the business, let's just say businesses that are less than 70% gross margins, instead of at the all hands, um, and having the headline number be, we're at ten million, a hundred million, whatever it is in ARR, you actually use the number that…”

“Companies are hiring less today. And so the net dollar retention for, uh, within a customer base for a, a, um, company that licenses software and their revenue is sort of directly influenced by the headcount growth or something like that of their customers, that is slowing. And so you shouldn't use the…”

“the reality is, I, I think that with few exceptions, the domain experience, uh, largely becomes irrelevant over time. Uh, and Smart people learn businesses. Uh, and, and so actually solving for, um, like a, a track record of performance into quality hire over someone with this specific type of experience will pay…”

“Your business will actually grow much faster with the winning culture and it's counterintuitive. If you set a target that is higher, um, you may think that that's going to drive more behavior and ultimately drive higher performance from your team. But if you're missing targets, it's going to do the exact opposite. And…”

“The person that makes the referral really takes that person under their wing and makes sure that they're successful. We get the reflection on them and like all of these positive, I think, um, or not, I think I'm pretty certain that it doesn't help diversity.”

“there is so much value to having the early team be in an office together. I think not just developing relationships, but also the, like, You know, eight o'clock at night, everybody's still in the office. Oh, this thing came up. Let's all jump in the room and, and whiteboard out. Like how we can accelerate, you know,…”

“these three different steps here, score my database for me, overlay intent signals on top of my score database. And then tell me what I should do to break into these accounts based off of the information that exists in these scores and intent signals. Models are very good at that today. And so these are things that I…”

“If I were to list our top two or three problems, it's the same top two or three problems that we had like a quarter or two ago. That's not okay. And so that was my big takeaway as, as you were sort of like re answering the same question through the lens of today versus the lens of 11 months ago. It's like, this is what…”

“my experience with these systems is I would describe them as like reactive data repositories where when you buy Salesforce or when you buy Golong or when you buy outreach, it really requires the user to input data and instruct the system what to do. And much of the like strategy and opinions that are then ingrained in…”

“I think so many companies focus on generating new customers by focusing directly on those customers, but you already have an army of potential quote unquote salespeople in your happy customer base. And, um, again, like the, the status quo here is to Thank you, email, not even ask for a referral. I would argue that you…”

“And my diagnosis or the concept that I recommend here is from day one, be prescriptive on how to buy your product. And as you are introducing a potential customer to your business and product, you're going to do something like show them a product demo, hopefully gauge their interest. What you should do. Very shortly…”

“implementation is this Point in time and only one point in time occurrence where you have the attention of the customer and the opportunity to get them to take the actions that you believe will make them more successful as a customer. It's really difficult to go back long after the fact and try and get them to do those…”

“Onboarding at Brex and what I would recommend for other folks, onboarding isn't dictated by a period of time. It's not like a 30 day process. Onboarding is a milestone based process. And until a customer is fully onboarded, they're living with that implementation person.”

“you don't scale either of those channels or people until you, you are happy with the efficiency of those people and processes.”

“when you're hiring your first sales person or your first SDR, you should always hire two.”

“when you hire your first marketing person, don't hire somebody really junior. You should hire someone in the, we could say director level or above something like that, but someone that can come in And operate in an environment with ambiguity where they know what to do intuitively versus needing lots of instruction on…”

“the probability of people replying to an email after they had seen our billboards and knew what we did Was significantly higher than the probability of somebody who has no idea who we are or what we do replying to an email that they received.”

“The way that I think about this is the further up the funnel you go, which sales qualified opportunity is towards the top, what you are solving for is more quantity over quality. And the further down the funnel you make the SDR performance measurement, like what their quota is based off of, you are shifting that…”

“Most folks sort of gravitate to or diagnose the bottleneck to growing faster being the middle or the bottom of the funnel, that they aren't converting deals. And in four out of five, um, instances, uh, the, the real diagnosis is that it's actually the top of the funnel.”

“the bottleneck in four out of five companies that I speak with is opportunity creation. It's demand gen. Um, and this is oftentimes misdiagnosed as conversion rates.”

“What I like to see is something like two new demos every day on a sales reps calendar. And what that means is a sales rep is doing something like Four customer calls every day. So if we think about a sales reps day, there's something like eight hours in the day. We want to be spending something like three to four of…”

“when you hire a senior sales leader, there should be some expectation that that senior sales leader has the ability to source, recruit, and hire Um, people in network that have a low risk of success and high probability of, or low risk of failure, high probability of success.”

“So many of the best founders at the best companies spend a high percentage of their time customer facing. Um, and that happens on day one and it happens on day 1000.”

“if this person wasn't a customer, would they make for a good advisor? And if the answer is yes, then make them an advisor as a customer and compensate them with that equity.”

“When you're ready to hire your first IE, leverage your network, whether it's former colleagues, friends, investors, um, like, you know, don't gravitate towards putting a job posting on your website and seeing who's sort of like, Comes in.”

“the advice I always provide, ah, to folks is assuming you're doing sales led growth, um, you wanna have a few, um, paying customers before you hire dedicated salespeople.”

“The company is two to eight sales reps, which is maybe the, uh, range with which I would suggest making this higher, you know, any, anywhere between two and eight.”

“if you put in, uh, uh, successful sales, one, um, downside or potential downside of that is it can mask Uh, product market fit related issues that you can be acquiring customers because, uh, the salespeople are really good at doing just that.”

“You shouldn't sacrifice, uh, joining an incredible company where you can move into more strategic and senior positions for like a more OTE. More, more W-two or theoretical W-two compensation. Um, you should be solving for a business that's growing, and we'll have new leaders that are growing through the ranks within…”

“You can really de-risk that through either, um, you know, you're hiring your first two sales reps, put them on a draw for 60 to 90 days, and a draw means pay them their full commission. If you're paying somebody like 150,000 dollars a year, that means that their commission is going to be 75,000. That means each month…”

“the, um, more, Common path here is hire a couple individual contributors, make them successful, then hire a sales leader to scale the team.”

“First is, like, solve for the quality of company and not OTE, um, especially earlier in your career.”

“And the thing that you're referencing, Jason, that was a huge takeaway for me is it makes such a huge difference which sales rep gets the lead in terms of the probability of that deal closing. Like, you would think the product is what matters, but there is so much variance across the team Did the customer experience or…”

“When you really need to set your first target is when you have dedicated salespeople who are focused on revenue.”

“Initially, you want to set targets on a monthly cadence. There's no advantage early on to setting, ah, targets that are farther out into the future. You want to set monthly revenue targets.”

“There was no advantage for this CEO to set the target at forty million dollars in the first place. What you should have done with, with hindsight, is reached out to the board before the meeting, said, what does a successful twenty-twenty-two look like to you all? They would have told them twenty-eight million dollars,…”

“philosophically, um, you want some, some consistency with those targets, but also you want something like 70% of your sales team over target or over quota.”

“the shift to remote has, um, I think more than ever made the, the sort of perception of performance... Very data driven. Um, it's less. You, you, you, you're so, I'm in data so much more and so much less going to lunch with people and developing these sort of like personal relationships that can make, um, performance…”

“That if you can get someone who you believe can have an incredible impact on the business and has this track record that is Colin like where starts as a BDR just crushes it realizes a bunch of promotions over a number of years. And, uh, that person is also extremely passionate about the specific domain that you are…”

“it's almost universally true where the, the product that you are selling at your business, you have the buyer of that product internally... And so, uh, companies probably under leverage that internal resource, uh, around, um, you know, what, what the buyer, if they are selling to this, this person, um, externally,…”

“there are people who, um, and this is maybe less true in sales, but it does exist, that are less comfortable sort of like asking for help. Um, they're, they're just not, they feel like they're intruding or they're taking somebody's time. Those types of people will struggle more.”