SaaStr Podcasts for the Week with CMX Media and Salesforce — May 22, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

 

 

Ep. 335: David Spinks is the Founder @ CMX, the premier network for community professionals. In 2019, CMX was acquired by Bevy, where David now serves as the VP of Community. Bevy is a customer-to-customer community management platform, building products that brands use to build, grow and manage their community event programs, both virtual and IRL for companies like Slack, Twitch, Salesforce, Atlassian, and Duolingo. Prior to CMX, David founded 2 prior startups centred around different forms of community building and before that was Community Manager in the early days of LeWeb the largest tech/startup conference in Europe.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How David made his way into the world of SaaS and came to found CMX. Why David believes that community is so central for all SaaS companies today?
* How does David advise teams on expectation setting around virtual events? How ambitious should they be? What big mistakes does David often see in the early days of the planning? How does this differ if you have an existing cohort of users vs are starting new with no audience?
* How dependent is the success of the community on the platform it is hosted on? What is the ideal size for Slack, Telegram and Whatsapp communities? Should the host seed the discussion or allow it to be natural? How important is it to establish a handbook of expected actions and behaviors? Should you cull members who are inactive?
* What does David believe separates good from great when it comes to discussion groups? What innovative strategies has David seen work when it comes to bringing a virtual event to life? What is the right amount of people in that discussion group? What is the core role of the moderator for the group?

 

Ep. 336: Leveraging survey data from 66+ enterprise SaaS companies, Matt Garratt, Managing Partner of Salesforce Ventures, shares the landscape of how businesses are shifting their sales & GTM strategies to react to today’s uncertain times. Adnan Chaudhry, SVP of Sales at Salesforce, then provides actionable takeaways on how to refocus your sales teams, engage with customers, adjust your sales comp and how you can properly forecast in today’s new landscape.

 

This podcast is sponsored by Guru.

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Matt and Adnan’s session at SaaStr Summit. You can see the full video here.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
David Spinks
Matt Garratt
Adnan Chaudhry

Below, we’ve shared the transcript of Harry’s interview with David.

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings, and you can suggest both questions and guests for future shows on Instagram @Hstebbings1996, with two Bs. And I always love to see you there. But to our episode today. And there’s one question every SaaS company is asking themselves right now, “How the hell do I do virtual events, and what makes the best so good?” Well, diving into this today, I’m thrilled to welcome David Spinks, founder of CMX Media, the premier network for community professionals. In 2019, CMX was acquired by Bevy, where David now serves as the VP of Community. Bevy is the leading provider of in-person community software, powering community programs and incredible companies like Slack, Twitch, Salesforce, Atlassian, and more. And prior to CMX, David founded two other startups centered around different forms of community building, and before that was community manager in the early days of LeWeb, the largest tech startup conference in Europe.

Harry Stebbings: But enough from me, so now I’m very excited to dive into this extravaganza on what makes the best virtual events, with David Spinks, founder of CMX Media.

Harry Stebbings: David, it is so great to have you on the show today. And what you probably don’t know is I’ve been an admirer of yours from afar, mostly on Twitter, for a while. So thank you so much for joining me today, David.

David Spinks: Honored to be here.

Harry Stebbings: I would love to start, though, with some context. So tell me, how did you make your way into the wonderful world of startups, SaaS, and how did you come to found CMX?

David Spinks: Yeah, it’s a long story, but to make it as brief as possible, I’ve been building communities online since I was a kid. Started in middle school, around video games, Tony Hawk’s Pro Skater 4 was my game of choice, built a big online forum around that, and just became pretty fascinated by how technology could connect people and create community. And so I did that, I was just active on every online community platform I could. Eventually that became my career and I became community manager, joined a startup in Philly called Scribnia, at the time. And we were in an accelerator program for three months, and halfway through that accelerator program, we pivoted and started SeatGeek, which, everyone will know SeatGeek, and no-one will know Scribnia. And we kicked that off and that was my first entry into tech. And I ended up running that first company, Scribnia. I was the managing director and ran that company. And that just got me in the door and that led to more and more opportunities to work with different tech companies.

David Spinks: I ran community at a company called Zaarly for about a year, I ran community for LeWeb, which you may know was one of the biggest tech conferences in Europe for many years.

Harry Stebbings: Sure. Absolutely. Loic.

David Spinks: With Loic Le Meur. Yep. And helped Udemy kick off their first community program, and also started companies. So I started a company called Feast, which was delivering ingredients to your home, and you get this home cooking experience with videos that teach you how to cook.

David Spinks: And ultimately kicked off CMX six years ago, because throughout my career, starting companies and building community for companies, ironically, there was no community for community professionals. And so I would do everything I can to find other people who are doing this work and just get to meet up with them, ask them questions. I co-founded thecommunitymanager.com with a couple of friends, about eight or nine years ago as a place to just start writing about this stuff.

David Spinks: And eventually led to starting CMX Summit six years ago, which is our conference, as just a place to bring everyone together who’s doing this work, building community for companies. And so that grew, we bootstrapped it for five years. Last year, at the start of last year, we were acquired by a company called Bevy, which powers event programs, event communities for companies. And that’s how I’m here.

Harry Stebbings: And the rest is history. Speaking of communities today, every company in the world is thinking, “Shit, how do I move from physical to virtual events?” I want to dive into that because I think many are foundering and a lot of scratching their heads, doing it for the first time. So you’ve had a starting point, and expectations set slightly when thinking about the transition to virtual events. So when you think about maybe expectation setting for these companies, how do you advise companies to approach just how ambitious they should be when it comes to that first virtual event?

David Spinks: Yeah. It’s funny because I’ve been banging this drum of community for more than 10 years now, and all it took was a global pandemic, and all of a sudden everyone’s like, “Wait, this is important.” I’m like, “Yeah, I know.” And so there’s companies that have been doing this for a while, but even the ones who have been doing it for a while were probably still reliant on in-person events, and they’re trying to pivot. And then you have companies who weren’t really doing much in terms of community, or weren’t doing anything online and they’re kicking it off for the first time. If this is your first time doing that, I think just getting started’s really important.

David Spinks: It’s easy to overwhelm yourself and try to do too much, and launch a massive forum, and throw a huge virtual conference. But you can start in very simple ways with just simple discussion calls, kick off a Zoom call with your 10 top customers. People are craving community right now, they can’t connect with each other in person. And so they’re looking for any opportunity to connect with each other, and they’re all dealing with this epidemic. It’s affecting everyone, and so everyone has a lot of shared challenges and lot of things they want to ask each other right now. And so just start creating those spaces for them to come together, and a lot will start to happen organically.

Harry Stebbings: Can I ask, when you create these spaces for them to come together, and sorry, this is off schedule, but I’m intrigued, do you seed the discussion threads themselves, or do you let the discussions flourish naturally within the participants?

David Spinks: Ideally, it’s all happening organically, and you’re just sitting back and nudging the direction or facilitating. More realistically, you’re going to launch an online space and you’re going to have this vision of everyone showing up, and participating, and engaging. And then it’s just going to be crickets. There’s so many spaces for people to engage today, that to create a new space, you really have to put in the work and facilitate. And so in those early days, I think you really want to be creating a lot of the content yourself, be putting out discussions, be putting out conversations that you think would be interesting, and then don’t even wait for people to respond. As soon as you post it, message five people that you know, and already have a relationship with and say, “Hey, I just posted this question. I’d love to get a conversation going. Do you have a minute today to jump in and post a response?”

David Spinks: And so you’re manufacturing the example that you want others to see. So when someone new joins a group, now they see activity, they see people engaging, they see thoughtful responses in there. And now, that sets an example for them to be thoughtful in their responses and start posting. And it just puts out the message that this is an exciting place to be. It’s the same reason that a bar might only let some people in at a time, in order to create a long line, so it looks like it’s in high demand. Same kind of thing for communities, if people show up and it just looks empty and it looks dead, that’s not going to feel like an exciting place to participate, but if you start to create that experience of engagement and excitement in the community, then when people join, they’ll feel drawn into that group.

Harry Stebbings: So, as I said there, we write these schedules and then we just go completely off script, but I much prefer it that way. In terms of the platforms, I’m really intrigued. How dependent is the success on the platform choice that you make? Because you could do anything from a WhatsApp group to a Telegram group, to a Slack channel, to any of the collaboration tools that we have today. How dependent is success upon the platform choice?

David Spinks: Yeah, it’s a big question. If you already have an engaged audience, and a lot of people who are trusting the brand, aware of the brand, engaged with you, it’s going to be easier to launch your own owned platform. Maybe you kick off a Discourse forum, or you use one of the enterprise platforms, and you bring people to your site and your community, because they’re already engaged, because you already have an audience, that’s going to be easier.

David Spinks: If you’re starting from scratch and people still don’t know who you are, and they’re not fully engaged with your brand, and your team, and your product yet, maybe you don’t have a lot of users yet, it’s going to be really hard to get people to participate in a new space as well. You’re just creating a new habit, and people are so used to going to big social to interact now, that it’s hard to get people’s attention. And so in that case, it might be better to go to where they are already, which might be a Facebook group, Slack is really popular because people are already in there, Discord is really big for gaming, and use that to build the community. And then, once you have that engagement, once you have an engaged community, the community is the people, it’s not the product. And so once you have the people engaged, then it becomes easier to move them to different spaces that maybe they otherwise wouldn’t have.

Harry Stebbings: Totally get you. Can I ask, in terms of those groups and communities that you build in those initial days, how do you think about optimal size? Because you want enough where there’s enough discussion and enough content going around, to where it feels like the velocity of thought is high, but you also don’t want too much where there’s apathy and too much noise. How do you think about the optimal size in those early days?

David Spinks: Smaller is often better, right? A good quality group of 10 people is going to be much more valuable to someone than a hundred people that weren’t as curated, and in an experience that isn’t as intimate. And everyone knows that, like you go to a dinner with 10 really awesome people, this is the best experience, right? Everyone loves that kind of experience.

Harry Stebbings: Totally.

David Spinks: But then you go to the meetup with a hundred people just casually drinking, and it was open to anyone, that’s not nearly as valuable. It’s not as facilitated. You don’t get to talk to people as deeply. It doesn’t feel as curated. And so in general, I think smaller is better to start, and then you want to grow it incrementally. So if you’re looking at an online group, maybe ten’s a little small, unless you’re in a WhatsApp group, or a chat space that works with a small group, but let’s say you did a Slack or a Facebook group. You’re going to want more people than that, I would say maybe 50 or a hundred’s a good starting point.

David Spinks: And then you want to grow it gradually. So you don’t want to overwhelm it, right. Going back, I keep using bar examples, I don’t know why. It’s on my mind, I guess, I haven’t been to a bar in months, but you ever go to a bar, and you’re with friends, and it’s not that crowded and you’re having a great time, and you can hear each other and you have space to move, and you can get a drink quickly, and then rush hour hits. And all of a sudden it’s packed with like 500 people, and you can’t get to the bar and you can’t hear each other, and you don’t have space, and it no longer feels like it’s there for you? That’s what it feels like when someone kicks off an online community and they have a hundred people in it, and then they invite 500 people into the group. It just completely overwhelms the community dynamic that you had in there.

David Spinks: And so maybe a good rule of thumb is to keep it to like 50% growth each week, or each month, or even 25%. So if you have a hundred, then add 25 more each week, and then you can welcome those people properly. Everyone who’s in the group can contribute to welcoming them properly. And you create more of what feels like an organic growth, rather than a manufactured growth.

Harry Stebbings: Can I ask a tough one? Do you cull people who don’t engage or who don’t consistently show themselves to be a meaningful part of the community?

David Spinks: Usually, no. It depends on the format. Let’s say you did bring together 10 people in a discussion group, and it’s noticeable that someone is not participating, that they’re not showing up, that they’re not engaging. Then I might call that. And I might say to that person, “Hey, it seems like maybe this isn’t the best fit for you, so totally cool. But we want to make sure that we keep this group really focused. And so we’re going to keep rotating members out based on engagement.” You might be able to do that in that small group, just to keep it really high quality. In a larger group, it doesn’t matter. You actually want to have people, even if they’re passively engaging in these large groups, because that becomes an audience for those people who are creating, that makes them want to create.

David Spinks: So there’s the 90-9-1 rule is this old study on large online communities, and it basically said that 90% of people will passively consume in a community, 9% will be responding and engaging, and 1% will be creating. And so realistically, every community is going to have a very small percentage of people who are actively creating and contributing, and then a much larger percentage who are passively consuming. And then there are people who just go completely inactive. And at the end of the day, unless you’re paying per user, or some meaningful metric to you, you can just let those people do what they do. And you can also run campaigns to try to reengage them. So everyone plays a role in the community at all different levels of activity.

Harry Stebbings: Can I ask, we mentioned the different levels of activity and we mentioned some different behaviors there, in terms of very active, responsive, and then creating. In terms of guide books, or guidelines, when initiating people into the group, how important is it to have almost a guide book, a set of rules? “This is how the community operates.” How important is that, versus letting it be much more free flowing?

David Spinks: It’s absolutely critical. There are communities out there that prefer to just be completely free flowing. I think we’ve seen that historically devolves into some pretty bad behavior. And I think it’s really important that you have a lot of intention in any community space that you create. And so there’s a concept called setting the container. And I think that applies to anything from a small discussion group, where you’re trying to essentially explain, “Here’s how to participate in a quality way, and here are the rules that will make sure everyone feels safe and comfortable participating here,” right? So it’s not just rules, it’s not just what not to do. It’s also being explicit about, “Here’s how to contribute in a great way. Here’s the kind of behavior we encourage in this group.” That’s going to guide people to know how to participate in a quality way, that they may not have realized, or may not have been comfortable doing that before.

David Spinks: And so it’s really important to have that. That said, you should always be open to evolving and changing and learning from your community members. And so maybe someone one day recommends a different kind of guideline, or they do something within the boundaries that you’ve set, and you realize, wow, that was a great way of approaching this problem. Let’s turn that into an official guideline or rule. So you can constantly adapt and evolve your guidelines, but you always want to be intentional about how you want people to participate, and how you don’t want them to participate in the community.

Harry Stebbings: We’ve spoken quite a lot about discussion groups there, and I think a lot of companies in particular, are scratching their heads in terms of how to really encourage engagement within the community. I’d love to hear your thoughts, having seen so many different kinds of viral and vibrant communities, in terms of really, what cool methods of engagement have you seen really work well in virtual events?

David Spinks: Yeah, so the world of virtual events is evolving rapidly right now. And I honestly think everyone was sleeping on the value of virtual events before, and now that they don’t have a choice, everyone’s getting a crash course in it. The default has been the Zoom call. The Zoom webinar, the traditional webinar. Have a speaker, everyone watches that speaker. There’s a chat feed where they can respond, or ask questions, or talk to each other. And maybe there’s a Q and A at the end. It’s pretty one way, right? It’s one person broadcasting to a lot of people.

David Spinks: That’s not really going to be a virtual event in the same way that a physical event, you have the opportunity to meet people, to turn to your neighbor and talk, to network. And so the really great virtual events are incorporating more opportunities for those attendees to engage, to participate, to network with each other. And so, events that do this really well have a combination of different formats. They do have speakers that are presenting and educating, and then they have speed networking, so icebreaker.video is a really great tool for this, or if you use Hopin. A lot of these tools have speed networking built into it, where each attendee gets randomly matched up with another attendee. Icebreaker does a good job of giving discussion prompts for them as well. And you can choose the time that it rotates out. So you can do three minute talks, or five minutes talks, or seven minutes, and then it fades out then at seven minutes, and you get matched up with someone else. So our community loves that, that’s been really effective.

David Spinks: And then just a small discussion group. When you have a speaker broadcasting to everyone, no-one else is getting to meet each other or discuss the content. And so using breakout rooms, using smaller group discussions, is a really awesome way to make it feel more like a real event where they’re getting to meet people. They get to participate in the discussion, they get to bring their questions and hear from others. And so that’s a really valuable way of making your virtual event more engaging.

David Spinks: And you can combine these things, right? So we do, CMX Connect is our global event program that’s run by members of our community. We have over 60 chapters around the world. And for all of the events that we do, we combine all these different elements into one event. And so we might have 30 minutes of speed networking to start, and then we’ll have a speaker talk on a topic, like measuring your community, or running virtual events. And then we’ll break out into discussion groups, so that people can discuss that topic amongst themselves, and share their own challenges and their own lessons. And we might mix up that order, and mix and match different formats, but you can think it as modular like that, you have these different event modules, and you can combine them to make a more holistic experience for your community members.

Harry Stebbings: I’m really pleased you mentioned Hopin there, it’s one of our favorite platforms. So, really pleased to hear that. And you also mentioned discussion groups, and I’ve heard you say before that one of the key rules is, it’s under 10 and over 30. Explain this ratio and rationale to me here, David.

David Spinks: So it’s just a way of remembering how to make a discussion group really valuable. And it’s not a hard and fast rule, but more of a guideline. So under 10 means less than 10 people. We’ve all been in discussion groups with 15 people or 20 people, and there’s just no way that everyone gets an opportunity to have their voice heard, not everyone’s going to get to participate in the discussion. If you try to involve everyone, you just don’t get to go very deep. And so I think ideally discussion groups are generally six to eight people. I think 10 is about the most you want to have, so shoot to have less than 10 people per group.

David Spinks: And then over 30. So this depends, but generally, especially if the entire event is a discussion group, 30 minutes is just not going to be enough time. You want to have enough time for people to introduce themselves, for you to kick off the conversation, and then really give people opportunity to bring their challenges, bring their voice, be able to respond to each other, be able to get into conversation. And just so many discussion groups, especially virtual ones, which just take a little bit more time to really facilitate and engage, they get cut off at 30 minutes, and that’s when the conversation usually starts getting good. And so, just making sure that you have ample time for people to have that discussion, and you keep the group small enough that it can be a meaningful discussion.

Harry Stebbings: Totally with you there in terms of giving it ample time. You mentioned the facilitation, there. I’m interested, because it’s a tough role, being a facilitator. What’s the most important role for a facilitator to enforce, in your mind?

David Spinks: I think it’s about equity of voice. I think their job is to identify who hasn’t had a chance to speak, and making sure they create the space for those people to speak, and their job’s to see when somebody is taking up too much airspace, and moderate and facilitate and say, like, “Thank you so much for sharing. It’s been really great to hear from you. I’d love to hear from other members of the group. Harry, what do you think about this topic? Anything that you’d like to share?”

David Spinks: And so without that moderation, every single discussion group I’ve ever participated in has devolved into one person talking a whole lot, and everyone else is having to sit there and listen. And when people participate in a discussion group, they don’t feel like they’re in a position of power or authority to moderate themselves. And if they did, it might feel very, they’re bringing conflict to the group. And so first of all, every discussion group should have a moderator, a facilitator. You should never have an unmoderated or unfacilitated group. You always want to have someone who’s responsible for facilitating the discussion, and it’s that person’s job to make sure that everyone has an equal opportunity to share their voice

Harry Stebbings: Totally with you in terms of the voice equity. There’s one element, which is always challenging, which is that terrible, awkward silence, especially when you throw an open question out and everyone’s waiting for everyone else to answer. I’m interested, in terms of the awkward silence, what’s the right way for the facilitator to act and engage in those awkward silence moments?

David Spinks: You just got to sit with it, honestly. It’s always tempting to try to fill in empty space. You always want to take out the discomfort for everyone, but I think a good facilitator is comfortable just sitting with that silence and letting others fill it in with their voice. And sometimes it’s just people wanting to be polite, and they don’t want to be the first one to speak, and they want to give other people a chance to speak. I remember in elementary school or middle school, not wanting to be the first one to raise your hand. People just are hesitant to be the first one to volunteer, but then once one person gets going, then it opens it up, and others want to share.

David Spinks: And so just being comfortable with those uncomfortable silences, letting it sit and letting people fill it in themselves. I’ll just sit there on the Zoom call and smile, and see them start to smile as they realize that no-one’s saying anything. And then inevitably someone, within 30 seconds, which might feel like a lifetime, but it’s usually only 30 seconds, someone will be like, “All right, I’ll go.”

Harry Stebbings: That’s funny. 30 seconds, as a facilitative before, 30 seconds does feel like a lifetime, I tell you, David. I do have to ask, though, when we do Q and As, as well, the awful moment is when you say, “Does anyone have a question from the audience?” And you get the really awkward, no questions. What do you do in those situations? Do you seed people in the audience? Do you have backup questions ready? What’s the right way to approach that really awkward element?

David Spinks: Yeah. I think that you really do want to seed it ahead of time, if possible. And you want to continue to remind people to post those questions. One really fun thing you can do is ask people to send in questions ahead of time. And if you’re doing it like a webinar or Zoom call, you can actually have them send in videos of themselves asking the question, and then you can pull in the video and play it live, so it actually looks like someone came on and asks a question and then you bring it back to the speaker to answer the question. So that’s a fun way to make it work on virtual events that you couldn’t even do elsewhere and offline, but seeding things upfront is really good throughout the event.

David Spinks: Reminding people, like, “Hey, just as a reminder, we’re going to be moving to Q and A in 10 minutes. So please put in your questions now, so we can get rolling right away.” Right? So that’s the kind of thing, because sometimes you open up to Q and A and you forgot to remind anyone that it’s coming up, and then they’re not ready to ask a question. And so you want to try to seed it as much as possible. And then when you get to that Q and A point, if you realize that there are no questions in there, don’t stop and say, like, “All right, any questions?” Just keep rolling through it and say like, “All right, well, I have a few more questions that we seeded from the community ahead of time. Please keep posting your questions here in the chat, but let’s dive into the first one.” And so you don’t have that dead air time. And so that’s different, right?

David Spinks: If you’re facilitating a discussion group, uncomfortable silences are really good. If you are putting on content, you’re performing, you’re creating, it’s like doing a podcast or doing a radio show. You don’t want dead silence on a TV or on a radio. It’s the same thing in your webinar, you don’t want to be sitting there live with 200, or a thousand, people watching you and just saying like, “All right, any questions?” That’s just awkward and that just looks like people aren’t engaged, which isn’t a good look. And so I’ll just keep rolling through it, and just go right into those pre-seeded questions that you’ve already pulled in, or prepared. Or just make it up, say like, “Oh, we collected these questions ahead of time. Let’s dive into that.” Even if you literally made up those questions right before the call.

Harry Stebbings: Trust me, David, with my over-excited British way, there is never an awkward silence in my podcast, but I totally agree with you there. I do want to ask this, so we have this event, and we want to know if it’s successful, and we need to measure it. In terms of measurement, I’ve heard you say before that there were two lenses with which to really measure the success of your event. What are those two lenses and how do you break them down?

David Spinks: Yeah. So in working with any community team, we map it out that you have two, what do we call them, dual objectives. So you have a business outcome that you’re hoping to achieve, and then a community outcome that you’re hoping to achieve. And you should be able, in theory, to achieve both with any sort of experience or program that you run. So if it’s a forum, you have your engagement in the forum, your monthly active users, your daily active users, your sense of community, you can actually survey people, you can get NPS, and all these ways of measuring the health of community. And you might be looking at something like reducing support costs, or collecting feedback on your product, or retaining customers. And so you have both the community and the business objectives.

David Spinks: And it’s the same thing for events. You’ll have aspects of the event that you want to tie back to, are we building a healthy community? And in the same way as an online group or forum, you can send out surveys. “Do you feel like you belong in this community? Do you feel safe in this community?” Net Promoter Score. You can look at number of attendees. How many RSVPs did you have, and what percentage of them showed up? How many of those people were repeat attendees? So these are all kinds of things that show you, is your community happy, healthy, and engaged?

David Spinks: And then you’re going to have the business objectives. We use a really simple framework for identifying the business value of community programs. It’s called the SPACES model. So that breaks down into support, product, acquisition, contribution, engagement, and success. And so those are the six areas and you could probably figure it out from the name, but support is people supporting each other, answering questions, giving each other support with their technical problems. That tends to be more in an online forum space, but it can work in events as well.

David Spinks: Product is, you’re collecting feedback and insights on how to improve your product from your community members. So, did you collect that feedback at a booth at your event? Or did you have people fill out a survey at the event to help you improve your product?

David Spinks: Acquisition is growth. So this is actually a really key one for events, and everyone should be doing this, and every event platform should hopefully be able to help you do this. And so you should be able to say, who came to our events, how many people came, how many of them were new leads? How many of them were new prospects? How many of them were opportunities? How many of them ultimately closed to sale? How many of them were customers? And so that gives you a good idea of how your events are actually impacting pipeline.

David Spinks: Contribution is, if you have a platform, let’s say, Airbnb, you have hosts who are contributing to the platform. They run lots of events for their hosts, and they want to see that those events are helping their hosts become more successful at contributing to the platform.

David Spinks: Engagement is essentially customer attention. And so, are our customers more likely to be loyal, to stick around, customer lifetime value as a result of attending our events.

David Spinks: And then success is, customer success. It’s helping people be more successful at using your product, and growing in their career through education programs.

David Spinks: And so all of those can be powered by your events and your online communities, and you can tie any of those events back to one of those business outcomes.

David Spinks: And the last thing I’ll say there is just, we tend to think of these events as one-offs, right? We think of it as like, “This is an event and this event needs to drive this business value, this community value.” And that’s it. We look at it in that bubble, but what you should look at your events as, is touch points with your community over time. And so your goal is to build an ongoing, engaged community over years. And that event is just one single touch point amongst many touch points, that can include your forum, it can include your email, it can include events, in-person events, when those come back. It’s one touch point in an ongoing community member journey that people are having with you.

David Spinks: And so, think about holistically for your event program. Maybe you’re doing a big conference twice a year, and you’re doing regular meetups every month, and you’re doing office hours every week. Those are different kinds of events that you can create, and each one of those is going to have a different community goal, and it might even have a little bit of a business goal. Or maybe some of the events don’t have a business goal, it’s just about engaging the community, knowing that later it’s going to drive business value. And so when you think about it, now you start thinking about your entire community program holistically, and all the different events and touch points that might feed into that customer journey.

Harry Stebbings: I absolutely love that holistic perspective. And I really liked the breakdown there between the two different lenses. So I think that’s an awesome clarity to what is quite a murky, “How do I measure success?” I do, though, David, want to move into my favorite, which is the quickfire round. So, I say a short statement, and then you hit me with your immediate thoughts and I’m going to throw in a couple that aren’t in the schedule that you just mentioned because I’m too intrigued. So just roll with that. Okay. So you mentioned that RSVP to confirm in attendance, what’s a good measurement and a good success rate in terms of that RSVP to attendance of virtual events?

David Spinks: That range is going to be huge, because it depends on the size of the event, right? If you have a 10 person event, you probably want all 10, or at least nine out of 10 people to show up, because you personally invited them. If you have a big conference, it’s going to be lower and we’re seeing the range all across the board. Some people are seeing higher attendance rates than their offline programs were, some people are seeing lower rates, and so offline, historically we’d see for a free meet-up, or a free event, you’d see about 40% people show up. We just hosted CMX Global. We had 3000 people RSVP for that event and we had 2200 show up. It was about 70% showed up, which awesome. It was really cool to see that high of a turnout rate.

David Spinks: It’s hard to have a benchmark, just compare against your own events. So if you did a conference, how do you compare against the last one? If you do a meet-up, how do you compare against your previous meet-ups? And see what you can do to continue to improve that conversion rate by improving your emails, your communication flows, things like that, that might help people be reminded that the event’s coming up, and make sure they have it on their calendar, and that they’re ready to join when it kicks off.

Harry Stebbings: What a terrible question from me, I apologize for that. Benchmark- [crosstalk 00:30:08].

David Spinks: Well, it’s a terrible, “It depends,” answer, which everyone hates.

Harry Stebbings: Tell me, what’s the biggest misconception around virtual events?

David Spinks: There’s a belief that you just can’t build real community through virtual events, there’s just no way you can replace in-person experiences with virtual experiences. And that is true, that you can’t replace it, and there’s a hundred percent, many elements of in-person gatherings that we are just never going to be able to replicate virtually. Even if you got the VR experience perfect, and you have your haptic suit, and you could feel everything. And even then, it’s still not going to be the same as just being able to run into someone in the hallway of an event. It’s the serendipity that you miss out on.

David Spinks: That said, there are a lot of things that you can do to create really meaningful experiences that help people actually connect with each other, and form relationships and form legitimate bonds. And so you have to get creative, and you have to figure out ways of creating serendipity and connecting people with each other in ways that aren’t just a webinar.

David Spinks: You can replicate a good amount of things that you have in an in-person event. Will it do it a hundred percent? No, but there’s a lot of value that you couldn’t even do in an in-person event, because virtual events are just more accessible, for one. So people who may have not been able to travel, or afford a ticket, they can all come together in a virtual event in a way they couldn’t in person. So look for the unique values, or the unique opportunities that virtual events provide, rather than just trying to copy what an in-person event is.

Harry Stebbings: Totally agreed in terms of not being a copy of the in-person. Final one, but a really interesting one for me to hear is, obviously you have CMX, but of all the other virtual events you’ve been to, what has been your favorite virtual event, and what made it so good?

David Spinks: it would be the virtual Passover Seder that we hosted with our friends and family.

Harry Stebbings: Got you. And what made it so good was the bond between friends and family?

David Spinks: Yeah, it was awesome. It was a virtual Seder and, so Seder means order. And so it’s basically, you go through the order of Passover, and you read the stories and you sing the songs. And we had, everyone pulled up a virtual Seder, and they each read from it. So we rotate around. So everyone felt involved, everyone felt included, you drink a lot of wine during it. So it was fun. And so we used to host Seders at our house all the time, every year.

David Spinks: Obviously we couldn’t do that this year. So we did it virtually, but my family is in New York. I grew up in New York, I live in San Francisco now. And so they’ve never been able to be there for the Seder that we host. And this year they were able to join from New York. And we even had two other friends, from Australia, join us. It was morning for them, so they maybe had a little less wine than us, but it was really cool to be able to have our really close friends in San Francisco and our family involved. And just seeing that melding of different groups, that I think otherwise would have been really hard, because everyone would have just done it with their friends, or with their family, to be able to bring those groups together was really special.

Harry Stebbings: David, as I said, I’ve been an admirer from afar for a long time. So I can’t thank you enough for joining me today, and this has been fantastic.

David Spinks: Awesome. Well, thank you so much for having me.

Harry Stebbings: Absolutely loved that deep dive with David. And if you’d like to see more from David, you can find him on Twitter @DavidSpinks. Likewise, it’d be great to welcome you behind the scenes here. You can do so on Instagram @HStebbings1996, with two Bs.

Harry Stebbings: As always, I so appreciate all your support. And I can’t wait to bring you another fantastic episode next week.

 

The post SaaStr Podcasts for the Week with CMX Media and Salesforce — May 22, 2020 appeared first on SaaStr.

The Silent, Lurking Churn: Activation Rates Less Than 90%


This post is by Jason Lemkin from SaaStr

It took me a little while to see activation rates as literally one of the 3-4 most important metrics in SaaS, but it probably is.  I started to track activation rates at a lot of start-ups I work with, and I saw numbers that shocked me.  I often say 60% or so activation rates 30 days in.

Think about that.  That means after all the time and money put into building your product, marketing your product, trialing your product, demo’ing your product, selling your product, closing the deal, celebrating … and then … a ton of those customers are immediately at risk.  Why?  They don’t deploy.

I don’t have a perfect metric, but after working on this with a dozen+ SaaS companies recently, I have a simple heuristic:

90% or more of your customers need to activate in the shortest practical time.   And you need to track this, measure it, and discuss it weekly.  Every week.

If you don’t, so much of that hard work is down the drain.

The exact amount of time can vary.  In some cases, it should be the day they pay, e.g. an in-app purchase or an upgrade from free to paid.  For many apps, perhaps it takes a week.  If there is real business process change, it might take a full month to deploy into production.  It’s also important to distinguish between a limited pilot and true deployment, lest you take your eye off the ball here as well.  And ideally, you’d track not just activation, but also % deployed as well in bigger deals.  But just starting with activation and tracking it as a north star metric is enough.

Whatever the shortest time the team can agree makes sense, start measuring it now.  What I can tell you is over 80% of start-ups are shocked how low their activation rates are, once they are faced with them as a core metric for discussion.  Importantly, activation rates are always lower than people think intuitively.  Yes, folks anecdotally know some of the customers that haven’t deployed.  But they rarely have a 360-view of how many, and why.   Put differently, almost everyone is doing worse here than they think.

The best way to grow your revenue in SaaS is to keep the revenue you do have.  That’s the magic of compounding revenue.

And the simplest way to make that happen is to make sure all your customers go live as soon as possible.  At least 90%.  While B2C can be different, for a B2B app, why should it be less?

And then make sure you have clear action plans for the other 10%.

A Top Customer Success Hack: Driving Up Activation Rates, ASAP

 

The post The Silent, Lurking Churn: Activation Rates Less Than 90% appeared first on SaaStr.

SaaStr Podcasts for the Week with


This post is by Deborah Findling from SaaStr

 

 

 

 

 

 

Ep. 333: Bridget Gleason is the Head of Sales and Customer Success @ Tidelift, the company providing managed open source, backed by maintainers. Tidelift has raised over $40M from some of the best in the business including Foundry Group and General Catalyst. As for Bridget, she has the most incredible track record. Before Tidelift, Bridget was VP of Sales @ Logz.io and before that was VP of Corporate Sales @ Sumo Logic where she drove ARR up by a record 237%. Prior to SumoLogic, Bridget was VP of Sales @ YesWare where she increased MRR per rep by 450%. Finally, before YesWare, she was VP of Sales @ Engine Yard, where she tripled monthly recurring revenue, over the course of her 3+ year tenure, in 3 key leadership roles.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How Bridget made her way into the world of SaaS and Sales and came to be Head of both Sales and Customer Success at Tidelift.
* Why does Bridget believe the best starting point for customer success is “company culture and value”? How does company culture impact the quality of customer success? In practice, what can one do to improve it? Who has done this well? How does value drive customer success forward?
* How does Bridget think Maslow’s Hierarchy of Needs drives the roadmap for customer success? What core elements does it change? Where do most teams go wrong in implementing the role out of their CS strategy? When should one hire their first CS rep? What should that hire look like from an experience perspective?
* How does Bridget advise her CS reps the best ways for them to build trust with their clients? What works? What does not work? Does Bridget believe CS teams should be involved in the upsell process? Does that endanger the element of trust?

 

Ep. 334: Hear from Michelle Zatlyn, co-founder and COO of Cloudflare. Michelle started the company during an economic downturn in 2009. In this talk, Michelle will share how she made her business idea come to life and some lessons learned that can help other entrepreneurs—from solving a real, meaningful problem, to communicating in a crisis, prioritizing when there’s a true lack of resources, and more.

This podcast is sponsored by Guru.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Michelle’s session at SaaStr Summit. You can see the full video here.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
Bridget Gleason
Michelle Zatlyn

Below, we’ve shared the transcript of Harry’s interview with Bridget or you can jump to the transcript of Michelle’s podcast.

Transcript of Harry’s interview with Bridget:

Harry Stebbings: Hello, and welcome back to the official SaaStr podcast with me, Harry Stebbings. I always love to see behind the scenes, you can do that on Instagram at @HStebbhings1996, with two Bs. 

But, time for the show today. We’ve spent a lot of time in the world of marketing lately, and so I wanted to switch it up today, and move to the sales and customer success side. So, with that, I’m delighted to welcome back to the show Bridget Gleason, Head of Sales and Customer Success at Tidelift, the company providing managed open source, backed by maintainers. Tidelift has raised over $40 million from some of the best in the business, including Foundry Group and General Catalyst.

As for Bridget, she has the most incredible track record. Before Tidelift, Bridget was VP of Sales at Logz.io, and before that was VP of Corporate Sales at Sumo Logic, where she drove ARR up by a record 237%. Before Sumo Logic, Bridget was VP of sales at Yesware, where she increased MRR per rep by 450%. And finally, before Yesware, she was VP of sales at Engine Yard, where she tripled monthly recurring revenue over the course of her three year tenure, in three key leadership roles. 

But, that’s quite enough from me, so now without further ado, I’m so excited to hand over to Bridget Gleason, Head of Sales and Customer Success at Tidelift.

Harry Stebbings: Bridget, I have to say, it is such a joy to have you back on the show. Thrilled to see about your recent move to Tidelift, and such exciting times ahead there. But, thank you so much for joining me today, Bridget. 

Bridget Gleason: Well, Harry, it was great. You know, the last time we did this, it was, I think, February 2019, so just a little over a year ago. Really great to connect, and get caught up. 

Harry Stebbings: Absolutely it is. Listen, I loved that episode so much, when we did the first one. But, hit me, for those that maybe missed our first episode, which was so great, tell me, how did you make your way into the world of SaaS, and how did you come to be the rockstar head of sales and CS at Tidelift today? 

Bridget Gleason: I love it, I love the rockstar name that you give me, whether it’s true or not. But, Harry, I like to tell people that I took the jungle gym route here, meaning that it wasn’t this straight line from rep, to manager, to VP, mine was nothing like that. I was an English business major in school, but I taught in the engineering, I was a [inaudible 00:04:08] in the engineering school. 

I went into product marketing for the commercial arm of Xerox Park, which is a big computer research company here. Then, I went into sales school, Xerox sales school. Then, I started a company, which I sold in early 2000. Did a lot of consulting for high tech startups, I really love the startup space. Ended up taking VP of sales role with one of my customers, and then, gosh Harry, I did all sorts of things. I opened an office in Ireland for one of the companies, I was the first US employee for an Israeli company. 

And now at Tidelift, which interestingly, the CEO reached out to me after he heard the podcast that you and I did more than a year ago. 

Harry Stebbings: That is amazing to hear. I did not know that, but I’m absolutely to thrilled to hear that. He clearly has great tastes in podcasts. 

Bridget Gleason: Well, he does have great taste in podcasts. And, I don’t know that I would have found Tidelift, and it’s just been a career defining role and move for me, and really, really inspiring. So, thank you, thank you Harry, for doing what you’re doing. 

Harry Stebbings: I absolutely love doing it. But, I do want to start on a really interesting aspect, because when we spoke last time, you were head of sales. And now, with the new role with Tidelift, CS, customer success, has been incorporated into your purview. 

With that, we have to have a starting point for the strategy and the plan, and when we spoke before you said the best starting point for customer success is company culture, and value. What did you mean by this? Maybe, is it better to take it turn by turn, and how does company culture play into the level and quality of customer success? 

Bridget Gleason: There’s always been this discussion. Does customer success start after you close a sale? Should the handoff start before the customer becomes a customer? Should customer success start when reps are reaching out? 

My belief, Harry, is that customer success starts with the culture of the company. I read a book, God, it was years ago, about Marriott. JW Marriott was notorious for this, and he said, “If we treat our employees right, they’ll treat the customers right.” I think Marriott started in 1927, and in the early ’30s, they were one of the earliest companies to give healthcare benefits to their employees. They really had an employee first, and by extension, a customer first orientation. I believe that 100%, that if we’re not treating each other well, and we don’t have a culture that is engaging, and respectful of the individual, it’s going to be very hard for us to extend that to the people who we’re dealing with.

When you look at, just in statistic, Harry, of it, companies that have employees who are highly engaged are 22% more profitable. So, how did we do that? You’ve got to have a culture where employees not only survive, but they have to thrive. 

Harry Stebbings: Can I ask, if we take that to a practical level, because I totally agree in terms of that career development, and the thriving. We’ve seen the chastising of the foosball tables, and La Croix provisions that are deemed culture, often. What can one do, on a practical level, that you’ve seen work in terms of building that culture and company value so inherently into how we think about, also, customer orientation? 

Bridget Gleason: Well, I think there’s a lot of different pieces of it. 

I know, just at a manager level, one of the things that I try to do with my direct reports is, first of all, how are they doing? Just, how are they doing as humans? Especially now, around COVID-19, how we’re doing, we’re all under a lot of stress, so checking in with how people are doing. As well as their professional desires and aspirations, those are always top of mind. One thing we did as a company was … It was last Monday, our executive team said, “You know what? We need a Maintain Ourselves Monday.” Everybody just got a day off. It’s an allowing of people to bring their whole selves. 

This leads to the next part, Harry, when you asked about value. I believe that values lead to value. So, values lead to more, also, value creation. Tidelift is unique in my experience, in terms of values. There is not a person in the company who couldn’t rattle off the four values, we talk about them every day, and have them integrated into their work. We don’t need to have them posted, we don’t need to have them, really, reviewed, they are so woven into our brand. So, that’s how we deal with one another internally, as well as externally. 

I’ll tell you what they are really quickly, because I think they’re interesting. There’s four of them. So, optimistic, we see an amazing future. We deal in open source, we provide managed open source for large companies. We believe that open source is really awesome, and we want to be part of it. So, we’re optimistic, and as it relates to customer success, we believe that for our customers. We’re practical is value number two. We know that the words in these lofty ideals aren’t enough, so we try to be very pragmatic, and very honest, and have a really honest assessment of ourselves and our product. The third is additive. We have a growth mindset, that we’re capable of learning and doing more. Then finally, is around inclusivity and diversity, and we believe the world is a better place with diverse voices. 

Those are the things that we practice internally, but also bring those to the table when we’re dealing with customers. 

Harry Stebbings: I love the four values. I am really interested by one especially there, and it’s the element of open source. Now, you’ve been involved in both sales and customer success is closed source also. How does it differ, in terms of traditional enterprise software, versus open source? Specifically, when it comes to customer success, is there a core differentiator? 

Bridget Gleason: Well, I’ll tell you, for us what’s a core differentiator is open source is an amazing phenomenon, of all of these people contributing with no expectation to get anything back. When we talk about additive, as it relates to open source, there’s been a history of companies harvesting the value from open source, but not, then, added back to it. So, when we think about customer success, we don’t want to just harvest the best things of open source, and not contribute back. But, we also want to be ones that are adding to the value, that’s a core, underlying mission. 

So, our products and services are around how can we help companies utilize open source more effectively, more securely, more responsibly, as well as contribute. And then, it’s a two-sided marketplace, so we’ve got subscriber companies that we provide support for the open source that they use. And on the other side, we have the maintainers themselves, that we pay to keep their open source that they are responsible for secure, et cetera. We’re trying to add back in both ways, and make both parties successful. 

When you have a commercial product, you don’t have this two-sided marketplace, where you’re trying to balance both. Making sure that we’re not just harvesting, but that we’re really contributing in a meaningful way back to the community, and we engage in that also with our customers, which I think is really, really powerful. 

Harry Stebbings: Speaking of engaging with your customers in that way, I am really interested if we take the hat of head of sales that you have worn before, now incorporated the head of CS also. A lot of questions that I get asked from early stage founders is, “Okay, I’m always told that I need to develop a sales playbook before I can hire my first sales rep, and then I pass it onto them. With customer success, is it the same? Is there a customer success playbook that I have to develop? And, when should I hire my first rep?” 

I guess, there’s three separate questions there, that are kind of integrated. How do you think about that requirement for CS playbook, and when to hire your first? 

Bridget Gleason: So, I see sales and customer success as a continuum. I don’t see them as distinct, perhaps, as some might see them. When the sales team is engaging early on, what we’re trying to identify is what is the success criteria of this particular prospect, what are they trying to achieve? How might we be able to help them do that? By extension, then, that after the commercial are completed, we’re just extending what that looks like. 

I think a highly functional, evolved team is one that starts the criteria really early on, and is just rolling it out, and playing it out. If you don’t do a good job on the sales side early on, and setting those expectations, it will be very difficult for you to do a good job on the customer success. So, the playbook needs to be written as you’re working this out with prospects.

In fact, Harry, I’m working right now on some big proposals. Some of the sales reps and I are working on some big proposals, and customer success is highly involved because in these proposals is the success plan. What we do is we send out, in a Google doc, a proposal. We ask that the prospect to review it with us, and tell us where we have it wrong before we submit something formal. It’s not just pricing, it goes all through the rollout, Harry, of what it’s going to look like as we rollout. Not just rollout and onboarding, but then, what does success look like? We start really, really early. 

Then, to your question about when to hire, because it’s a continuum … Again, we’re an early stage company, so what we did, as you’ve probably seen before, is founder’s really involved, everybody’s involved. Founder’s really involved, then you have the sales team that’s managing it as it extends. And then, we got to a point, also … Again, we sell to very large, primarily regulated industries. Because we’re selling high, six figure deals, we just need to make sure that we’ve got enough resources on the ground to deliver a really incredible experience to them. 

Harry Stebbings: How do you think about professional services, and the challenges that naturally occur in terms of delivering that in a COVID world? 

Bridget Gleason: We’re all learning. We’ve had to adjust a lot of our delivery mechanisms, and these are things that we’re doing in conjunction with our customers.

It’s interesting, Harry. Because we sell a technical product to technical people, they’ve actually been distributed for quite some time because in order to get great talent, you’ve got to be distributed. You don’t have to be, but it helps if you can be, in terms of getting talent. I don’t know that we’re facing as much of a challenge, because the teams that we work with are often highly distributed anyway.

But, it’s going to continue to evolve, it’s continuing to evolve. It’s something, I think, we’re all really grappling with. 

Harry Stebbings: Pulling on that thread, I’m really interested to dive in here. A lot of founders say “Hey, our professional services is growing, and it’s becoming 30, 35 percent of revenues.” At what point do you think professional services becomes too heavy weighted on the revenue front? And, how should founders think about that balance and tipping point? 

Bridget Gleason: Well, I guess it’s what function is professional services performing, in terms of the sale, the implementation, and then the ongoing maintenance. And, how big a part of your business do you want that to be, do you want to be a services organization?

If delivering services is fundamental to your product, if it’s a core competency, keep it. Keep it, keep, keep, keep it. If it’s not, if it’s something that you’re delivering but it’s not really part of your core competency or differentiator, there would be an argument to bring in partners. Because there’s some benefits that you can’t achieve you’re also using partners, and letting them take on some of the professional services revenue.

I look at it, just how core is it to what you’re delivering, the value that you deliver? 

Harry Stebbings: Yeah, absolutely. I love the integration there, of partnerships. 

I do want to stay on CS though, so apologies for that drifting off. But, we discussed the first stating point. If we then think about enacting that, and putting a roadmap of success together, you’ve previously stated the importance of Maslow’s Hierarchy of Needs as a roadmap for customer success. A bit of a cliffhanger for me, with that one. So, talk to me about this one, Bridget. How is the Hierarchy of Needs a roadmap for customer success in your mind? 

Bridget Gleason: It’s an interesting one, and our CEO Donald Fisher is the one who first started talking about this, with prospects and customers. If you think, Harry, at the very base level of the hierarchy, the basic needs, which are physiological and safety, what that translates to customer success as I look at it is implementation, onboarding, you answer my questions quickly, you handle my basic needs. And Harry, I think for too long, we’ve looked at these basic needs as, “I’m doing great customer success! They’re implemented, they’re onboarding, I answer their questions,” and we measure things by that. 

If you go up a level, though, the next two levels in Maslow’s Hierarchy are belonging and esteem. Those, in the customer success world, they map to adoption and insights. Is there more that I can get? Because on the esteem side, and the belonging, and what are other people doing, that fits in there. Is there more, are a lot of people using it, do I feel good because I’ve gotten great adoption in the company? That’s better, customer success when it moves up to that, and you’re helping companies extend the adoption as well as get more insights, that’s good. I think most companies, if they get to that, they’re going to give themselves an A.

At Tidelift, we’re not stopping with those. The very tip is the self actualization, and what that looks like is a thought partner. For Tidelift specifically, how are we, together, making open source better, this community? We have an amazing community. Again, specific to Tidelift, there’s a movement, when you get to this level, of open source consumption. So, how are we, as a company, consuming open source in a way that is efficient, and secure, and responsible to an external contribution? 

Harry, what is so amazing, and what’s so thrilling about being part of Tidelift is the companies who we are engaging with, they have a strong desire to move beyond the harvesting of open source, and getting whatever they can out of it because they know it’s amazing, so they want to keep using it. But, they also want to be contributors, and to give back to this community. That’s where you get this self actualization. 

I think, in other companies, it’s similar, it’s not going to map in the same way that Tidelift will map. But, where do you find, at the tip of the pyramid, that you can engage with your customer to do something greater, and to be really a thought partner in whatever it is that they’re doing because they’re the star of the show. 

Harry Stebbings: I totally love that positioning as the thought partner. Can I ask, in terms of check-ins, I think a lot of CS teams get this wrong. What does the right check-in structure look like to you? And, how do you think about really structuring that conversation ahead of time, without being too formulaic, and objective, and maintaining that human element of the relationship? 

Bridget Gleason: I’m not a fan, Harry, of, “Hey, just calling to check in,” where there’s no structure to it.

If we go back to what we were talking about earlier, this success plan that we put in place before they become a customer, it does give you a roadmap. They often have a roadmap of what they’re trying to achieve, so we do two things. One, with good tooling, we try to understand as much as we can about what’s happening in their environment without having to ask them. Again, not being creepy, they need to know, “Hey, we’re looking at your dashboards,” or whatever it is, whatever kind of tooling makes sense. We learn as much as we can through tooling, because in SaaS you have a great opportunity for that.

Then, number two is, we really stick to and look at what they’re trying to achieve in the success roadmap, and use that as a template when we have these conversations. Has that shifted, have things changed? COVID-19 changes a lot of things for how things are going to be rolled out, how we implement things, and it’s a continual conversation. 

We also let our customers guide, in terms of the frequency of check-ins, and the mode. Sometimes it’s phone, sometimes it’s Zoom, sometimes it’s Slack, sometimes it’s text, sometimes it’s email, sometimes it’s a report, sometimes it’s an in-app message. But, we work with them to develop the communication cadence and style that works for them. 

Harry Stebbings: Sorry, you said there about the impact of COVID. I do just have to ask, with both hats on I’m sure you have such amazing purview, but I have so many SaaS founders who say, “Hey, Harry, so far, my sales pipe hasn’t been impacted.” I guess, how would you respond and advise that founder? How have you seen your sales pipe be impacted? And, how do you think a head of sales should be thinking now in enterprise, when looking at that pipe? 

Bridget Gleason: When you’ve got founders who say the sales pipe hasn’t been impacted, that, to me, means if you think about an axis of companies that are least affected to most affected, and the financial strength, they’re selling into a quadrant that is financially strong, and not as affected. Which aren’t very many companies, by the way, not very many companies that haven’t had a supply chain disruption in some way. So, I think that’s great. I mean, that surprises me a little bit, but I think that’s great. 

Harry Stebbings: But in enterprise, the contracts are long, the clients are slow moving, generally speaking. 

Bridget Gleason: Right. 

Harry Stebbings: So with heavy enterprise, my concern is … I go, the big point here is, so far. Actually, we haven’t had the first round of renewals, and we haven’t had the first discussions on this accounting. This is going to be more painful than you think, don’t go into this thinking so far, we’ve been fine, so we can expect the same moving forward. Batten down the hatches is my advice. 

Bridget Gleason: Yes. 

Harry Stebbings: Would you agree with that?

Bridget Gleason: Yes! Yes, 100% because the plans are still evolving, the plans are still evolving. What one hears from a prospect or a customer may have been said to them with 100% integrity. “This is going to happen, in this timeframe,” 100% integrity. But, things can change because we’re not through it yet to know, nobody knows. 

I agree with you, that we need to move through with a measure of caution, and realism. Again, one of our core values … Okay, I can’t get through the day without talking about one of our core values, but being practical. And just flexible, build that into the plan, that things are not going to go exactly as planned. They’re not going to. 

Harry Stebbings: If we have that in mind then, a willingness to accept uncertainty, say, when we think about rollouts, the other big thing that I’m seeing is slippage, especially at the enterprise level. From the customer success perspective, what kind of core things are you seeing in terms of slippage, in terms of delayed rollouts, that you think COVID has really impacted? 

Bridget Gleason: Well, COVID affects people, and people are part of these rollouts. People are getting sick, they’ve got family members who are sick, they are working in environments that they’re not used to working in. So, I think we see slippage, and time frames extended because of the very human element of what’s happening, and a lot of uncertainty. 

Harry, people are more stressed, there’s more anxiety, they can handle less. Zoom fatigue is a real thing. You factor in the human element of all of it, and things are going to take a little longer. We’ve got to accommodate for the human part of the businesses that we’re selling into, that we’re not selling to robots. Again, just keeping that in mind, and having some buffer built in as we think about it. It’s a great muscle right now, that we can learn to flex as an organization, of being flexible, and resilient, and learning how to have some buffer but still keeping things going down as predictable a path as we can. 

Harry Stebbings: You said there, flexible and resilient. The question that I get a lot from different founders is, “How much should we be willing to give when it comes to discounting?” When you think about discounting, and that flexibility and resilience in mind, you’ve got to meet your business objectives, but you also need to be flexible. How do you think about the right level of discounting to accept? 

Bridget Gleason: God, it’s so funny, Harry, I haven’t thought about discounting at all. 

Harry Stebbings: Really?

Bridget Gleason: Well, I haven’t. I haven’t thought about it because we’re delivering against value. We’re really trying to look at what the value creation. I do understand how some companies would think about some discount, based on the new reality. It’s not my go-to place, it’s not my go-to place. We try to price things fairly from the outset, so we don’t get into that. 

I don’t know, it’s a good question. I get it, but that’s not my go-to place. 

Harry Stebbings: I mean, speaking of that pricing fairly though, it does take me something that you said to me before. Which is, the centrality of trust, for a CS team to be successful. So, I guess the biggest for me is, absolutely that makes sense, me the customer, you with Tidelift, how do we build trust in this relationship? And, what really work in building that relationship of trust? 

Bridget Gleason: Well, I don’t think it’s a surprise to anyone that trust is a key factor in driving customer engagement and loyalty, it’s a key factor. Threading this pricing issue and trust, a great way to erode trust is to offer a customer a price, then when they ask for a discount, you give them one without asking for anything in return. Because what that says to them subconsciously is, “Oh, I thought you were giving me the best price, but then you give me this other one.” That sows a seed of distrust. 

A way around that is a give to get. “All right, I can give you a discount, if you can close it this month because this is important for us.” Or, volume discounts are normal. Or, in exchange for a testimonial, there are things that you can do to give to get. What’s hard, also, about this give to get in this environment is if I were to tell a customer, “I’ll give you a discount if you can do it this month,” that doesn’t seem like it’s really taking into account their realities, also. I may be better off giving them extended terms, just to do it that way. Okay, that’s threading the two together. 

Ways to establish this trust. I tell the team, “You have to be trustworthy in order to get trust.” Like, you have to be trustworthy, you have to tell the truth, first and foremost. Second, it’s okay, and in fact I often encourage it, Harry, to tell a prospect or a customer things that you can do and things that you can’t do, because it lets them know that you’re not just trying to sell them swampland in Florida. Also, another way to develop trust is to say, for example, “I will deliver this proposal to you by Friday at four PM,” and you put in a date and a time, and you deliver on it. That starts to say, “Oh okay, they do what they say they’re going to do.” Conversely, if you make commitments that you can’t keep, you’ll erode trust in that way. 

Harry Stebbings: Totally aligned, in terms of … It sounds, I don’t mean it badly, but so people would do as you said, what they said they would do. “I’ll email you tonight,” and it comes through tomorrow. It’s like, you said tonight, build that trust in that really important way. 

I guess, the biggest way that trust is often deemed to be eroded within the realm of customer success, or often a lot of people think it is, is when customer success is heavily involved in upsell processes. I’m interested to hear your thoughts here. Does being involved in an upsell process erode that element of trust? And, should customer success be involved?

Bridget Gleason: I don’t think it should erode trust at all, if a customer success person is involved in an upsell, because we shouldn’t be talking about an upsell if we don’t think that there is some value, based on that upsell. There needs to be a lot of integrity in the process. If there’s integrity in the process, I don’t see that there’s any issue with a customer success person also being involved in an upsell. 

I think, sometimes where I see a separation as being helpful, is sometimes customer success people, if they’re more technical than not, they just don’t feel as comfortable, or as fluent around that process in the commercials. I don’t see that as a problem, I would rather them be clunky, and just be honest, because customers see that, and they respond well to it. But, sometimes I can see just a separation of roles, that you want one person that you just know, if it’s a highly technical product, that they just handle the technical side, and they like to have that handoff, a division of work. Because getting involved in the commercials, you’re involved in a lot of other pieces of the business. 

So, I see it not as an issue of trust, as much as just a division of labor. 

Harry Stebbings: Totally agreed, in terms of the division of labor. I’m glad we’re aligned on that. 

I do want to dive into my favorite though, Bridget, which is a quick fire round. So, I say a short statement, and then you give me your immediate thoughts, in about 60 seconds or less. Are you ready to rock and roll? 

Bridget Gleason: Yes. 

Harry Stebbings: Okay. I love this one, actually. What motto or quote do you most frequently revert back to, and why? 

Bridget Gleason: Okay. Well, I’ll tell you my most recent, and these change. So, the one that I’ve been quoting most recently is, “If you want to go fast, go alone. If you want to go far, go together.” I just finished this great book called Boys in the Boat, about this rowing team that won the 1936 Olympics in Berlin. I so believe, Harry, that we can do so much more if we do it together, I’m a big believer in teamwork. Again, at Tidelift we’ve got this opportunity to work together as a team, to work together teams within the company, to work together as teams within this larger open source community, and I just really believe that we’ve got this great opportunity if we work together. COVID-19’s another great example, let’s figure out how to do this together. 

Harry Stebbings: What do you know now that you wish you’d known when you entered SaaS? 

Bridget Gleason: I’m probably not giving a good answer here, but I love surprises. I love the unknowing. For me, I’m so curious, so to learn something new, so I’m glad I didn’t know any more than I knew so that I would have the privilege of discovery. Which, I think, is just a fantastic journey. 

Harry Stebbings: Oh my word, it sounds wonderful. But no, I don’t enjoy the privilege of discovery, I’d much rather get to the endpoint much quicker. 

Bridget Gleason: That’s funny. 

Harry Stebbings: I do want to ask, biggest surprise about the move to Tidelift? 

Bridget Gleason: I didn’t know that a company could be so rooted in values, and what that does to how we work together as a team and how we show up in the world, it is one of the greatest privileges of my professional career. This founding team are inspiring, they move me to tears what they’re trying to do in the world. I just feel really committed to what they’re doing, and who they are, and really wanting to bring about more diversity. Here are four individuals who don’t have to care who do, and are using their background to do it. So, just that I could be so inspired by a company. 

Harry Stebbings: Building a team outside of the Bay, what’s the biggest pro, and the biggest con? 

Bridget Gleason: Well, we’re 100% remote, so we’re all over the place. We’ve got a core of people in Boston, where I sit now. I think one of the pros is when you’re building all over the place, you’ve got a larger talent pool so we get great talent. Also, at this time, COVID-19, we’re all used to working remote. 

The biggest con is, oh gosh, Harry, there’s nothing that can replace the in-person. We do get together as a company, several times a year. But, the camaraderie in an office, and that in-person, is probably the biggest con. 

Harry Stebbings: If you could change one thing about the world of SaaS today, what would it be and why? 

Bridget Gleason: It’s probably the one thing, and the one thing I hate. So, I think sometimes with SaaS, there’s the ability to leave something quickly, that you can be in and out because it’s easy to rip and replace. I think sometimes companies may not stick with a product or service long enough, and it puts a lot of pressure on quicker wins. I think we lose something if you’re not able to establish a longer term relationship, and moving to that point, like I said, of self actualization, really developing something great together. 

Harry Stebbings: Do you think time to value can actually be quite an erosive, problematic principle? Essentially, you could try and gamify it to create short term value creation, to reduce the time to value pendulum. But actually, there might be more value, or an optimal situation created with just a little bit more time, and slower to value, but more value. 

Bridget Gleason: Yes, plus one to that, I agree. 

Harry Stebbings: Yeah, it’s something that always annoys me when people go, “Oh, it’s all about time to value.” Totally aligned there. 

Final one. Who in SaaS customer success today do you think is killing it? And, why do you get inspired by them, in terms of their approach? 

Bridget Gleason: A couple of companies come to mind, one is Outreach. The CEO, Manny Medina, I knew early on. What inspires me about them is they really are working with customers to try to get to that tip of Maslow’s Hierarchy, and partner to try to figure out what are sales teams trying to do. Okay, so that’s one. 

Zapier, I think, is another one. I know the team there, and the woman that’s running customer success. Again, what inspires me about them is this close collaboration with their partners, and really pushing the envelope in terms of trying to help them do more, and the customers really being the star of the show. 

Then finally, there’s a company, Catalyst, which is a startup. These two brothers, Edward and Kevin Chiu, that are creating a new customer success platform. I’m just really anxious to see what they’re going to come out with, but I love that they’re trying to change things up a bit. 

Harry Stebbings: Totally with you, I think Catalyst are great. But Bridget, listen, as I said, I’ve wanted to do this episode for a while, since I saw about the move. Thank you so much for joining me today, and this has been so much fun. 

Bridget Gleason: Likewise, Harry. 

Harry Stebbings: I always so love my discussions with Bridget, and I want to say a huge thank you for her for giving up the time today to be on the show. If you’d like to see more from us, behind the scenes, then you can on Instagram at @HStebbings1996, with two Bs, it’s always so great to see you there.

As always, I so appreciate all your support, and I can’t wait to bring you a phenomenal set of episodes next week. 

 

Transcript of Michelle’s podcast:

Announcer: This is SaaStr’s Founders Favorite series, where you can hear some of the best of the best from SaaStr speakers. This is where the cloud meets.

You know the deal. Your project is due EOD, but the stakeholder with the answers you need is MIA. Well, there’s a better way. Guru is the knowledge management solution that delivers the information you need when and where you need it. Guru lets your team capture information instantly, wherever it surfaces. Slack, Gmail, Salesforce, Microsoft Outlook coming soon, and more.

Up today, CloudFlare COO Michelle Zatlyn.

Ben Dahl: Hi everybody. We are very lucky to have Michelle Zatlyn, co-founder of CloudFlare here today, to talk about starting a business in the midst of some economic headwinds. Clearly we have a little bit of a headwind at this point, and I think Michelle’s perspective as a founder during that sort of time period will be really useful. I think it would be really helpful for Michelle to just give a little bit of an overview about CloudFlare and about herself.

Michelle Zatlyn: Sure. Thanks, Ben. Thanks so much for being here everyone. I’m Michelle Zatlyn. I’m one of the founders and CEO of a company called CloudFlare. And we started CloudFlare during the economic downturn right after the financial crisis in 2008. And so we started to work on this in 2009. And while it’s different, it’s definitely a different thing going on in the world today. I do want to say that there are a lot of companies that actually started with us, that class of companies, and many of them have turned into big great companies today. So if you’re one of those entrepreneurs who are working on your ideas and thinking, “Man, is now the time to start?” it’s definitely possible. So we started CloudFlare in 2009 and today we have about 1400 people around the world. Our customers are internet properties, so websites, apps, APIs, and those customers come to CloudFlare to be fast, safer, reliable online.

So we built a service that does cybersecurity, global performance and reliability for any intranet property. And in these last 10 years, we have 26 million internet properties that use our service on any given day. So a huge scale. We stop about 50 billion cyber attacks daily on behalf of those 26 million internet properties. And we make the internet faster, safer and more reliable for a lot of people, so we’re really proud of that and our whole team is really proud of that. And so that’s some of the things we’ve done in the last 10 years.

And one thing that’s been really cool, starting the company 10 years ago in an economic downturn to today, about six months ago, Matthew and I and our team took the company public on the New York Stock Exchange. So we went from an idea that started during the economic downturn to a company that went public about six months ago. And today we’re about a 6, $7 billion market cap company.

Ben Dahl: So Michelle, as you think about starting CloudFlare in the midst of an economic downturn and you fast forward to today, do you have a sense or major tips for entrepreneurs as they’re thinking about either starting a new business, or extending their current business?

Michelle Zatlyn: Yeah. Sometimes I think it’s easier if you’re starting than extending. So I’m going to answer your question with that frame of mind. Because I think back to 2009 and it was really hard to get a job. I was doing my MBA at grad school, and so many of my classmates couldn’t get jobs. I had done my summer internship at Google. And I remember getting the call from Google, my manager at Google saying, “Hey, we’ve decided not to extend any of our summer internships a full time offer.” Because again, it was 2008. There was this huge financial crisis and people just were not hiring. And in many ways, when it’s hard to find a job, it’s actually, out of necessity it’s actually a really good time to start a company, the right company anyhow. Because I wasn’t competing with a lot of other offers. It wasn’t like you had a choice of a hundred things to go and do and you had to say no to a hundred things to go pursue this one thing.

So if I think back to our year at business school, a lot of amazing companies came out of that. And I think part of it is because the job prospects were kind of gloomy. And so for entrepreneurs who are starting to think about starting, again, I think for the right idea that you’re really passionate about and if you really think you’re solving a big meaningful problem of a big market with tailwinds to your back, it can be a really good time. That doesn’t mean it’s easy. It’s still really hard and there’s lots of things that was hard about it. You got to be really frugal and you got to innovate your way out of problems.

But I do think the mindset of, it’s almost like your option B or your other options, it’s almost easier to walk away from it because there aren’t that many other good things going on, so let me go create this thing that I just can’t stop thinking about. And so that’s for the people who are currently… And then the second thing I will say, I remember we raised, our first round of money from Ben who was one of the partners who helped us raise our series A, and then Venrock. And we raised $2 million, which, today people laugh. That’s like nothing for a series A. But back then, that was kind of the size of rounds.

And I just remember Matthew and Lee and I, and our team of the original eight people who really worked on this idea, we spent every dollar so wisely because it was a scarce resource. And when you only have a little bit of money, you really innovate your way out of problems or engineer your way out of problems. And we had this great engineering team and we really innovated our way out a lot of problems and tried to figure out ways to do things cheaper, better than we would instead of throwing at the problem. We used to have a saying, “Don’t throw money at the problem. Let’s innovate our way out of the problem.” And again, in a downturn like today, where money is still going to be hard to come by, that’s actually I think a really good, it can take you very far when you’re building your company.

Ben Dahl: I recall in the beginning that your rule used to be that the answer when someone wanted to spend additional dollars to solve a problem, was the first answer was always no. And that in the future, to the extent that you couldn’t solve it through creative programming or what have you, that potentially you’d loosen the purse strings. But the reality is, is that smart engineering was an important part of how you approached building the business.

Michelle Zatlyn: That’s exactly right.

Ben Dahl: In terms of when you were ideating on CloudFlare, how did you get to a conviction on the scale of what you were solving and the size of the market? Because largely at that point, particularly on both the content delivery, but also the web security side, this was not a problem that people were really focused on.

Michelle Zatlyn: I’m going to answer this question, but I want to make one caveat to my answer. When Matthew and Lee and I started CloudFlare, we really wanted to build a big company. That was our desire. And so a lot of my perspective is always behind building big companies. Again, a multibillion dollar public company. That’s what we wanted to do. And so I’m going to answer your question, because that was the frame of mind of what I was looking for. I was looking for a big, meaningful, hairy problem to solve that was going to turn into a big company. But there’s lots of different ways to build businesses, and there’s lots of amazing companies that never become a multibillion dollar company that are equally great and profitable, they’re just different.

So the advice that I’m going to share is really related to this swing for the fence model, and that works for some people and less for others. And so when we think back to what was happening when we started back in 2010 when we were working on this idea in 2009, we just saw there’s this huge shift going on, where we were going from a world from hardware and software that you owned, to services in the cloud that you rented. And I remember AWS was growing really quickly. And at the time there was a big debate of, will big companies ever really use AWS? Well fast forward 10 years later, that seems like such a naive thing to say today. I mean, them and Azure, they’ve just had tremendous success. But 10 years ago that wasn’t a given.

And so this huge shift was going on. There was all these software companies and then the advent of all these SAS application companies like Salesforce and Workday that were breakout successes. And we saw the same thing happening at the network layer where, yeah businesses have always wanted to be fast, safe, and reliable and I used to buy a lot of hardware boxes. And we said, can we turn that into a global service in the cloud that customers rent from us? And we knew that was a big idea. And there was just this huge shift going on. So again, kind of this idea there was a big market and there was a tailwind and there was this macroeconomic shift, which creates opportunities for new entrants. So that was the first kind of aha.

And the second thing that I was really proud of, and I think that if you’re a founder that can find both, it’s like, wow, there’s a big business here. Because the first thing you have to ask yourself, is there a business here because businesses are what sustain.

The second aha that we had was our go to market where we wanted to start with all of the startups and small businesses and nonprofits and developers out there, who today were using nothing. Because they didn’t have the budget or technical resources to buy these enterprise-grade services that existed for big companies. And so we had this big aha, like wow, we’re going to start with small businesses and small websites, and developers and startups and nonprofits who need to be fast, safe, and reliable around the world, and today they’re using nothing. So when we launched, our competitor was nothing. We were trying to get people to go from using nothing to something. And so we had to make it ridiculously easy to sign up and attractive. And if we did, it would kind of become a flywheel, knowing that our end goal is not only do we want to help startups and entrepreneurs and small businesses and developers and nonprofits, but over time, we also wanted to go help medium-sized businesses and large organizations and big enterprises and government organizations. And again, fast forward to today, we do all of that.

But early on we really started with a different go to market, and that allowed us to build our product and our technology and get momentum, so that we can then go compete more heavily with current competitors among large enterprises. And so it was those two things, it was like, “Wow, there’s a big macroeconomic shift. If we can help make the internet better for all these people around the world who currently have nothing, I’d be really proud to work on that.” And so it’s this idea of, I thought there was a big business opportunity and something that I think Matthew and Lee and I were really proud to show up every day and work really hard on.

Ben Dahl: One thing that I think it’s worth spending a brief moment on is just the distinction between good technology and a good business. And I think one thing that you and Matthew have always been focused on, is building both, really solid technology and a good business. But I think for people that are thinking about building a business in this environment, it’s not just solving a hard technological problem, but it’s also creating a real business out of it. And I think it’s worth you talking about that for a few minutes.

Michelle Zatlyn: Yeah. So again, when you start a company and then now we’ve scaled it to, in 2019 we did about we did 287 million in revenue last year. So just to give you a sense of going from 0 to 287 million in revenue last year. And some time along the way you realize as a founder, it’s all about mission and your vision, and do I have a problem here and how can I get people to come work for me? And how do I make sure that people love where they’re working? But at some point I remember having this big realization of “Wow, we’re founders and a business owner.” And it’s really hard for a company, you cannot, tech is amazing. I mean, we’re an engineering-driven company and that’s where we love and we celebrate it. But it is so hard to compare technology between one company and another. It’s way easier to compare business metrics.

And so at some point we had to keep all the great things about our technology. It is about the tech. We love that. It’s differentiation. We live that on a daily basis. But at the end of the day we also had to put our business owner hats on, and the questions we ask ourselves as business owners are different. They’re like, how fast can we acquire a customer? Do they renew our service? Do they want to adopt more of our services? How happy are they? How much does it cost us to deliver this service to them? And it turns out you really need to do both. And I think some founders forget about caring about the business metrics and I actually think that’s a real mistake. Because at the end of the day, if you have a really great business around awesome technology, that’s when magic happens.

And so I did not realize this on day one. And I wish someone had kind of come up to me in the face and told me really directly, “Michelle, at some point you got to think about the business metrics.” And for us it was around 50, 60, 70, 80 million in revenue that I really had an aha of like, “Oh wow, we are going to get compared on these KPIs and these metrics.” A, I got to know what they mean. And B, which ones are we good at today and which ones are we bad at? And the ones that we are bad at, how are we going to get better at them? And then over time we slowly moved them in a direction that we’re proud of. And even today there’s some that are better than others and we continue to work at it. But I think the faster that founders can realize that they’re also running a business, I hope that that means you’ll get to 80, 100 million in revenue faster than we did.

Ben Dahl: So as you think about that evolution as a company, how did you instill a culture that was about leveling up and continuing to evolve, and surrounding yourself with the people that you needed to build that business?

Michelle Zatlyn: Well, there’s kind of two points to that. There’s both the people you bring in to hire, to be part… Again, it doesn’t matter how great the founders are, you need a team to go really far. And I think trying to get that first team to come join you and then scaling the team. And who you need to be your first 20 teammates, who you need to be 20 to 100, who you need to go from 300 to 2000. Actually, people look different in those stages. And some things are the same, people matter. They make a huge difference. And there’s a huge difference between a great hire and a good hire at all those stages. But the types of person that we used to hire when we had 50 people in the company looked different than what we look for today.

Today it’s all about people who understand process and repetitive motion and automating things so we can do those things really efficiently so we can free up time and resources to do other things that help give us leverage in our business, versus when you’re employee number 20 or 30 or 40, you just need a lot of doers to roll up and do the actual work because you’re in build mode, build, build, build. And I think that the types of people you look for along the way are different. Once you have great people on your team, you want to make sure that they stay.

I was talking to one founder a couple of weeks ago, and they were really proud that they had 30% attrition of their team last year. And I said, “30%? That’s really high.”

And they said, “No, no, no. In a startup it’s normal for people to leave that often.”

I was like, “Well it’s true. People leave more frequently than a larger company, but 30% annual attrition, there’s something wrong. Either you’re not hiring the right people in, or you’re not a very good place to work.” I think most high-growth tech companies have annual attrition of 10 to 20%, and maybe 15 to 20% is considered average. So you want to be less than 25 and you want to be less than 20. And maybe in a nano point of time, it spikes because you’re going through some really important transition. But again, most of your peers are at 15 to 20% annually and you’re up at 25 to 30, something is wrong. Either you’re not spending enough time on the hiring side, or once they’re at your company, they feel like they can’t contribute or it’s not a good place to work, or the culture is bad or something is broken. And I really encouraged that founder to go back rethink what they thought was good there.

And at the end of the day that’s a leadership decision from founders of saying, “What kind of place do we want this to be for people to work?” And I think there’s lots of great stories. And then recently in the news, the last few years, there’s been some terrible stories. And I actually think it’s upon all of us as leaders in the tech industry to show there’s lots of ways to create a work environment, and some can be really healthy and be a place where people choose to work and want to be and have huge success stories. So that’s for the team and getting people in.

I would say one thing that we’ve done that worked really well for us that isn’t always well-appreciated or agreed upon, it just worked for us, is that hiring managers. We have a belief that people come work for their manager, and they stay if they like their manager. And so our hiring managers are heavily involved with hiring. And early on we didn’t have any managers so that meant the founders did most of the hiring. And then we hired managers and they did it. And when we were at less than 100 people, 50% of my time was hiring. So you just feel like you’re always looking for people to join. And I also had all my other things I had to do so it just meant I was working all the time.

And today of course, we have a recruiting team. We have a great recruiting team and they partner with the hiring managers. But even to this day, hiring managers are responsible for building their teams. And again, we have a much bigger organization today, and the recruiters partner with them to build great people in. And even to this day our hiring managers spends about 20% of their time hiring every week. And that might not sound like a lot, that’s like one day a week, or two hours every single day. And I just don’t believe you can outsource it. Good people, and we think there’s a big difference and a great hire and a good hire, and great people want to work for great people, and they need to know their manager.

So that’s a little bit about getting great people to come into your company. I think if you’re thinking about a founder scaling and how do you scale yourself through all these different phases, it’s slightly different. Because it’s rare to start a company and then still be running the company as a public company. And I’m really proud of that, and I know Matthew’s really proud of that. And I hope that, we have role models above us, whether it’s Marc Benioff and Parker Harris. Or whether it’s the Shopify founders or Atlassian or Jeff Lawson at Twilio. They are definitely people that we can look up to and I hope there’s a whole other class of companies coming up behind saying, “Wow, they did it. We want to do it too,” because I definitely think it’s possible.

And I guess there’s a couple of things I’d say about scaling yourself as a founder is, I remember someone said this to me once and they were totally right. They’re like, “Either you’re running your business, or your business is running you, and you got to decide which one it is.” And I mean, I’m a competitive person. Obviously I want to run the business. I don’t want the business to run me. And this is kind of going from a founder hat to a business owner hat. And so you got to do things to scale with the business because what matters at 20 million in revenue is different than a 100 million. It’s different at 300 million. And I think that if you can be a sponge, that is like, if I can only give you one piece of like advice, it’d be, be a sponge, this growth mindset, constantly learning. Read.

At SaaStr, Jason Lemkin and his team do an amazing job getting people here to help you. And if you just show up and listen for free, you will avoid making so many mistakes and grow as a leader. That’s what I did. I went to a lot of things like this and I learned from people ahead of me and we got to where we were faster. So there’s so many resources today that help you learn as a founder, way more than 10 years ago. It’s pretty phenomenal. You can read books and whatnot. I think as you hire your leadership team, sometimes people don’t want to hire people as good as them because they’re worried that they’re going to look bad. That’s rookie mistake 101. You need to hire a leadership team that’s better at you than everything you do. Because, as long as you’re confident that you’re the vision, you’re the founder, you’re going to care about this more than anyone ever does. And if you can partner with these amazing leaders who are so good, the best head of product, the best head of engineering, the best CMO and the best chief revenue officer, and you all get everyone rowing in the same direction, that’s how you build an amazing business, as a team together. And so you’ve got to really hire a leadership team better than you.

Ben Dahl: Well, Michelle, thank you for answering my questions.

Michelle Zatlyn: Yeah, likewise. And thanks to everyone who listened in and hopefully it was helpful. And I can’t wait to see everything you build and I hope you all build big companies quicker because you learned something today.

Announcer: Say goodbye to slip-ups. Old news is a thing of the past. With Guru’s verification tool, you’ll always be confident that your team’s knowledge is up to date and accurate, because it’s verified by your in-house experts. SaaStr listeners can get Guru for free today by visiting getguru.com/saastr.

 

The post SaaStr Podcasts for the Week with appeared first on SaaStr.

SaaStr Podcasts for the Week with Work-Bench and Initialized Capital — May 8, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

 

 

Ep. 331: Jessica Lin is a Co-Founder and General Partner @ Work-Bench, one of New York’s leading early-stage enterprise funds with a portfolio including the likes of Cockroach Labs, X.ai, Dialpad, VTS and Catalyst to name a few. Prior to Work-Bench, Jessica was a Learning and Development Manager at Cisco Systems, where she worked with the Engineering organization on Agile transformation, innovation and culture. Jessica is actively involved with the education and workforce development community in New York City and as chair of the Industry Advisory Board at Opportunities for a Better Tomorrow.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How Jessica made her way from learning Swahili into the world of enterprise and into the world of venture with the founding of Work-Bench?
* How should founders expect to see their new business pipe be impacted by COVID? What does Jessica believe is the right way to do proper pipe reviews? What specific elements does Jessica really double click on in reviews? Where does Jessica find managers and founders do pipe reviews wrong?
* What does Jessica believe is the right way for sales reps to engage with new customers during this time? What is the right tone to adopt that achieves both empathy and a business objective? How should sales teams and CS respond to requests for discounts? What should be the compromise with discounts?
* What specific and deliberate things can startups do not just to prevent churn but also to increase usage and upsell? Does Jessica agree with the rule of thumb that in enterprise, on an annual basis, 95% of your customers should retain? What other strategies has Jessica seen work really well for retention?

 

Ep. 332: Prepare for the worst, hope for the best. Hear from Garry Tan, co-founder and managing partner at Initialized Capital, about how to protect your business during a crisis. He’ll cover remote work, team management, sales, marketing, product development, and more.

 

This podcast is sponsored by Guru.

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Garry’s session at SaaStr Summit.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
Jessica Lin
Garry Tan

Below, we’ve shared the transcript of Harry’s interview with Jessica.

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings. And if you’d like to suggest future guests or questions for the show, you can on Instagram, @hstebbings1996 with two Bs. But to our episode today, and I’ve been such a fan of the model this team have built. They’ve also been incredible community builders and players in the New York tech ecosystem over the last few years, and I’m so very excited to welcome Jessica Lin, co-founder and general partner at Work-Bench, won new York’s leading early stage enterprise funds, with a portfolio including the likes of Cockroach Labs, X.ai, Dialpad, VTS and Catalyst, to name a few.

Harry Stebbings: Prior to Work-Bench, Jessica was a learning and development manager at Cisco Systems where she worked with the engineering organization on agile transformation, innovation and culture. Jessica is also actively involved with the education and workforce development community in New York city, and serves as chair of the Industry Advisory Board at Opportunities for a Better Tomorrow.

Harry Stebbings: But enough from me. So, now I’m very excited to hand over to Jessica Lin, co-founder and General Partner at Work-Bench. Jessica, it is such a pleasure to have you on the show today. I’ve heard so many great things from the one and only Jonathan Lehr. So, thank you so much for joining me today, Jessica.

Jessica Lin: Thank you so much, Harry, for having me.

Harry Stebbings: Not at all. I’ve actually really wanted to see this one for a long time. I love the Work-Bench model. But I do want to start today with a bit about you. So, how did you make your way into the world of SaaS, and how did you come to co-found Work-Bench? What was that aha moment?

Jessica Lin: Well, again, as you said, you may know us at Work-Bench as IT to VC with my co-founder Jonathan Lehr, who joined your podcast in 2017, John coming from Morgan Stanley corporate IT, my colleague Kelly coming from Forrester Research. But I’m actually not only IT to VC, I’m also Swahili to VC. So, I studied International Development in Swahili in undergrad, thought I was going to end up in a career in global health, but then serendipitously ended up taking an engineering class in my senior year of college that led me down a path of working with student startups.

Jessica Lin: Then, serendipitously again, took on a role at Cisco Systems, working with really great internal engineering teams. So, my story is the ultimate story of pivots, of having really lived and breathed our motto at Work-Bench as an enterprise tech VC fund, which is that great things happen at the intersection of suits and hoodies.

Harry Stebbings: Absolutely it does. I have one very pressing question. Have you ever used your Swahili in work?

Jessica Lin: I need to find more use cases for that for sure.

Harry Stebbings: It’s a burgeoning enterprise ecosystem, I’m sure.

Jessica Lin: Absolutely.

Harry Stebbings: I do want to dive in straight though because it’s such a pressing and interesting environment right now, and I want to start on the lifeblood of any business, which is the sales. Everyone is anticipating COVID will kill the majority of pipe and new business discussions. If we get a sense of the lay of the land, when you sit down with your company’s pipe reviews, how should founders expect to see their new business pipe be impacted?

Jessica Lin: Absolutely. And how we review pipe now is actually the same as how we review any other time with our portfolio companies. I think a lot of SaaS VCs tend to look only at booked business or MRR, but where we like to spend time is actually a layer deeper, because we know just how nuanced enterprise sales can be, and most of all that they take a very long time and can be very complex. So, that means in every pipeline review, understanding, one, deal velocity. How are your meetings progressing, who are they progressing with, are the right stakeholders in the room, what’s the next action step, how fast is the next followup meeting getting scheduled, how are pilots going, and what else can we be doing to get our clients onboarded as soon as possible?

Jessica Lin: Then, most of all, really the quality of the pipeline. How can we continue experimenting to grow the top of the funnel, whether it’s content, now virtual events and more. We’re of course taking into account COVID, that there are delays, that stakeholders may be distracted, but we’re also still hearing demand from our corporate network.

Harry Stebbings: Can I ask, and this is totally off schedule, but why not? In terms of the stakeholders themselves, I always have the perception in my mind that if you’re not a top one, two, or three enterprise buy for the CIO, it’s going to be fundamentally challenging. And honestly, I don’t find it so interesting. Is that shortsighted of me given the huge amount of software that CIOs and the stakeholders have to engage with today, or do you think it is right to have that very rigid prioritization in mind?

Jessica Lin: One of the things that we talk a lot about with our companies and with our Work-Bench community is that the misconception is to go straight to the CIO. The CIO is the top dog, they have all the budget dollars to spend. But in our experience at Work-Bench, what we’re seeing is that the actual stakeholders who are evaluating and assessing your tech as a vendor is really N minus one, N minus two, N minus three. So, the titles may be MD, VP, director, and we actually advise our companies to go deeper within the org, and that’s where you’re going to find technologists who really appreciate and have the bandwidth and capacity to understand what you’re doing.

Harry Stebbings: Can I ask, how do you deepen that relationship when the CIO or the stakeholder is maybe more in the top echelons of the enterprise? How do you deepen that relationship and look to build those maybe more product champions when your key primary contact is in the higher echelons?

Jessica Lin: Yeah, and this is so much of what even we do at Work-Bench as we build up the corporate network, it really is about how do you provide value to those executives? And a lot of them really love tech. That’s the key part is that they really love learning about new tech, about what’s out there, about how these technologies will transform what they’re doing in their business. So, we really advise our companies to be able to build those relationships really authentically.

Jessica Lin: A sale may not happen within three months or even six months, but the more you can provide value to them, whether it’s connecting them with other peers, whether it’s inviting them to events, whether it’s sharing, those are the types of relationships and investment where you can see the enterprise relationship pay off, maybe sometimes even one to two years down the line, but can be very worth it.

Harry Stebbings: Totally, in terms of that sales cycle. You also mentioned pilots there, and it can be a nice onboarding into a much longer and more formal relationship. How have you seen the best engage with offering pilots, and what’s the structure of the pilots that you tend to advise when selling to enterprise?

Jessica Lin: Yeah, I think that’s the number one thing for especially the enterprise. And a big part of it is that time kills all deals, and this is more true than ever. So, how do you get people using and loving your product asap? So, you really need to speed up onboarding, especially for an enterprise customer. So, our company, Arthur, an explainable AI company, realized that the regulated industries they sell into also want their solution on prem, even during a pilot phase. So, they set up an install that now only takes 15 minutes per deployment, and also rolled out sample data sets and models so that customers can download and get models pumping into their platform in minutes.

Jessica Lin: Our company Fire Hydrant and Incident Response platform has set up what are effectively sandbox simulations where their prospective customers can actually use Fire Hydrant in the case of a simulated outage. So, it pulls the now-remote now-distributed reliability teams together and lets them collaborate on solving the problem where they can feel the power of the platform firsthand. So, I always advise our companies, it’s really accelerating the time to value.

Jessica Lin: How can you make sure your customer gets fully onboarded as soon as possible, which again, sometimes can take up to three months in the enterprise with implementation and deployment, and then make sure that there’s really high usage and active engagement within the first three months so that customers can see your ROI in value in that time, and that the next six months then can be focused on upselling and cross selling in the renewal.

Harry Stebbings: In terms of optimizing the onboarding, often for enterprise it can be a launch part, coaching, professional services, very much in-person, high touch, where the team really comes in and spends time on site. How do you think that high touch professional services onboarding changes in a COVID world?

Jessica Lin: Yeah, I think so much of that is being creatively done now, and we’re finding that there’s new ways, and a lot of it is blending. I think so much of new sales and customer success are blending together, and that’s actually for the best, but the love you show for your existing customers, you can now extend to new prospects as well. And I love that joke around VCs, “Let me know how I can help.” Well, this is true for enterprise start-ups too, instead of saying in generic, “How can I help?” go to your customers and prospects with three specific needs where you can help out the most based on other customers you’re working with.

Jessica Lin: So, for example, our company, RippleMatch, they started hosting community chats for university recruiters across their enterprise customers and prospects. These were really curated sessions where small groups of campus recruiters could have a safe space and come together and share what they’re doing around recruiting this year. Our company, Catalyst, a customer success platform, has been offering trainings, not only to customer success managers, but to so many other functions like support and product, since customer success and retention is so critical in this time cross-functionally.

Jessica Lin: So, I think it just looks and takes on a slightly different form, but being able to offer something that will truly help improve your customers and prospects lives is really what’s going to make you stand out during this time.

Harry Stebbings: You mentioned some of the companies that, in terms of Catalyst, RippleMatch, they’ve really done it well. When you look across the landscape and suite of companies, where do you think many potentially go wrong in terms of really engaging that enterprise sale, also maybe in the midst of COVID?

Jessica Lin: For many people, it’s tempting to throw out all messaging out the door and try to sell to COVID, and that may be relevant in a few industries like healthcare, but for most other enterprise software companies the principles still hold true. What is the technology, what is a unique opportunity, and what is the ROI that I can bring to my customer? We had Kelly Breslin, previously the EVP of Sales at Tableau, who led the company to over $1 billion in revenue, on one of our webinars yesterday at Work-Bench. And she said that, with Tableau in 2008 during the financial crisis, they actually didn’t change their messaging. If anything, actually reinforced their current mission, which became more important than ever.

Jessica Lin: So, if anything, it’s not just selling features, it’s not just selling functions, it’s about telling your story. So, for your customers, sharing with them user stories, how are other customers using your product. It may help illustrate new use cases that your prospects may not have known about before. Now, on the flip side, there is a chance that your messaging does have to change during this time in this new environment, and Bob Tinker, the founder and former CEO of MobileIron, shared with us that in 2008, for their smartphone security and management product, the downturn actually forced them to change their messaging.

Jessica Lin: They had previously gone out with a productivity pitch, but they realized that what was way more compelling to customers was cost savings, which honestly ended up being a huge inflection point for them, even better for them in the long run. And the hardest thing, Bob said, is for founders to let go of their founding idea. It can feel really uncomfortable. But you may need to go out and test new ideas, potentially refine or go-to-market urgency fit by validating customer’s new top pain points during this time.

Harry Stebbings: Yeah, no, absolutely. I totally agree, especially in terms of that more human narrative behind it. I guess, thinking about that human narrative, how do you advise founders and reps on the right tone to engage with potential customers in this time. It’s such a tough time, because you need to be empathetic, kind and caring, but you also have to achieve business objectives. So, what’s the right blend in terms of the tone that you adopt these discussions?

Jessica Lin: Bob said it best. During tough times like these for founders, you have to have both empathy, but also ruthlessness. And that gets talked about less. And I love that duality. And I see it in our founders. All of our enterprise companies still have sales targets. They may be adjusted, but the targets are still there, and they may just have to be more creative than ever to hit them. And I do think there is a way to strike that balance. And the best way really to do that is simple. It’s to truly care about your customers. And if you truly care about your customers in an authentic, genuine way, then you can be ruthless [inaudible 00:13:42] about solving problems for their business.

Harry Stebbings: Can I ask you, you mentioned target sales, and it’s such an interesting talking point for me, in particular. I’m really passionate about this one. And it’s, when you think about target assessing with your companies, and you were really part of that active discussion, how do you set targets that are ambitious and really stretch targets, but also you don’t want to create ones which are unachievable and will create disincentives within the team and then lack of morale if they’re not hit? How do you strike that fine balance, and what does that decision making process look like for you with the founders?

Jessica Lin: I think about that a lot, especially for sales teams who may be harder for them right now to close new sales during this time. And I think the key takeaway and lesson here is really just to over communicate. And what I mean by that is saying, “Hey look, we may have to adjust targets. This is how we may be able to make it up to you, whether it’s through spiffs, through other accelerants,” but to constantly be clear with your sales teams. Something I’ve heard from a lot of account execs right now, it’s less about the fact that they may not hit their original targets, but it’s the fact that they don’t have a clear roadmap in mind. What should I be doing with my time?

Jessica Lin: And again, sales teams tend to be very competitive. They like to have goals, they like to have metrics. So, I think as long as it’s very clear to the sales teams, “Hey look, we may have you focus less on closing new sales, but can we have you work at the top of the pipeline? Can we help you help out more with customer success?”, then I think that can be something that’s really important for sales teams and founders to be seen right now.

Harry Stebbings: Can I ask, I had Ben [inaudible 00:15:10], CR of [inaudible 00:15:11] on the show, and he denigrated the specialization of sales and said, really, you lose that natural human relationship when he was simply passed off from SDR to RAP to AE. How do you think about the specialization of sales, if that’s right, and do you lose that human relationship with the mechanical policy?

Jessica Lin: I do think, like I said earlier, that customer success and sales are blending now, and so much of what you were doing, again, for existing customers you should be doing for new prospects. So, I do think perhaps in the future that those lines will be a bit more blurred. I do think it’s still helpful to have some organizational structure, especially as teams grow bigger and bigger, but that customer success mindset coming to the center or for the organization. I actually think it’s a change for the better.

Harry Stebbings: I do agree. I think it’s better for the customer, fundamentally. I do want to ask, you mentioned customer success, that being more and more important than ever. If we dive in a bit, what specific and deliberate things can start-ups do, not just to avoid churn, but also on the upside, to expand the usage and upsell?

Jessica Lin: Yeah. So much of what I shared a bit with RippleMatch and Catalysts I think is so critical. And the key is how do you get customers using the product during this time. And there are of course products perhaps within dev ops, security, automation, that will be seen as more essential during this time, but it’s really proving that time to value that I mentioned earlier that is going to be so critical so that when renewal does come up, you can prove very clearly to them, “Hey, this is how much you’ve been able to use our product and for this ROI.”

Jessica Lin: And a great example, like I mentioned, is our company, Catalyst, the customer success platform, and what they’re seeing with their platform is more and more usage, again, not with just customer success managers, but across product, across sales, across marketing, coming in and using their platform to understand customer health, and again, what their customers need. So, it’s a bit meta, but it truly is showing that customer success is now the center of our organization.

Harry Stebbings: We love a good meta point, don’t we, on that one. But you mentioned that the renewals, and one thing I think we will see obviously a lot of, and I’m by no means that wise person for this, but I think we’ll see a huge obviously amount of discounts coming back. How would you advise, and how do you advise your founders to approach discounts, and how to think that through?

Jessica Lin: Yeah, I do believe at least at the early stage that we’re investing in, at the C2, that offering a discount to an enterprise or a larger logo can be worth it in this environment, but then you do have to write in your contract around price increases for your two, or just make it a one year deal, and then you readjust when the macro environment improves. And I do still think big contracts can still get done at the enterprise. We’re seeing this with our start-ups selling into large Fortune 500s. We just had a company close a multi-year, multi hundred thousand dollar deal with a large pharma company.

Jessica Lin: And the key is, of course, which sector and function. But if it’s a true pain point at the enterprise, it shouldn’t be a budget issue, from what we’re seeing. It tends to be a bit more black and white for large enterprises. Either there’s a budget freeze, or there’s cash to spend, and it might just get pushed back a quarter or two.

Harry Stebbings: Totally. And I always find a give and take, we give the discount, but then we’d also love for an extensive case study to be available from you guys, as a bit of a compromise. I think there’s a lot that you can negotiate with. I do want to ask, because there’s a lot of rules of thumb in enterprise around churn specifically, and that when we’re talking about customer success, often people will say logo should retain 95% on an annual basis. This is one of the core rules of thumb. Would you agree with this, and how do you think about the rules of thumb around churn, and maybe the ones you agree with versus disagree with?

Jessica Lin: Yes, I do think that’s a general good rule of thumb. What I will say is different than perhaps SMB is that, in the Fortune 500 with enterprise customers, your contracts are either churning, renewing at flat, or expanding. And it tends to be a bit more tied to the hip is what we see. And that’s why enterprise deals are of course so much more painful to close, but when you do get them they’re stickier. It’s that 12 to 18 month sales cycle versus the two to three month SMB contract. So, we do see that a bit more closely tied together, logo versus all our retention.

Harry Stebbings: Yeah, no totally, especially in the tie. I’m interested, because a lot of VCs always shirk when they hear the elements of professional services. I personally quite like it. Obviously not as good for the margin, but fundamentally, I think great for the retention and usage. How do you feel on the professional services basis, and what do you think is a healthy ratio of product to professional services rev?

Jessica Lin: At the early stage, what we’re seeing, we really advise our companies to just invest as much as possible in customer success and professional services. And especially in the early days where product is still getting built out, that’s where actually so much understanding from your customers of what needs to be built into products so it can be automated more in the future, is so important. So, the more that you can invest there in customer success, it feeds so much better into product, and that’s where staying close to your customer, customer feedback, can be such a critical part of your product roadmap and development.

Harry Stebbings: Yeah, no, I’m totally with you in terms of that, super tight communications channel. Can I ask, I want to delve into Work-Bench a bit more as an organization now, especially in terms of the current times, because Work-Bench has a specific strategy around events and community, and it’s absolutely killed in the last years. As I said, I love your model, and so many people talk to me about your events. It’s incredible. But I wanted to talk about how it’s been impacted in the recent environment. So, how have you adapted your approach and strategy in the face of COVID and the rise of virtual events?

Jessica Lin: Absolutely. Community has been such a core part of our DNA at Work-Bench since day one. We’ve, in the past, hosted up to 200 enterprise events a year in New York, and we’ve moved everything online. And in a way that surprised me. I’ve actually enjoyed it a lot more than I thought we would. It’s easier than ever to spin up events. There’s more access, more people across the country, the world can join. So, we’ve been doing at least one or two webinars and events a week with Fortune 500s, founders, sales leaders, our corporate round tables, sales leader chats. And the number one thing I always say is that, content still needs to be number one. And I think most conferences assume that speakers got it. And I actually think the opposite. I think most speakers need practice, they need feedback, they need run-throughs. So, don’t assume that can be masked on a Zoom.

Harry Stebbings: I totally agree. Can I ask, what do you find about the best speakers that makes them so good? I certainly have a lot of thoughts on this given the podcast, but what do you find makes the best so good?

Jessica Lin: I think it’s a lot of practice to be honest. We hosted a massive women in enterprise tech summit two years ago called Navigate, and the amount of time I saw our speakers put into their individual presentations, I think, has a direct correlation. The more time you put in, the more feedback you get, the more comfortable you’ll be, the more fun you’ll have. And I think that really comes through and resonates with the audience.

Harry Stebbings: Yeah, no, I’m totally with you in terms of the preparation. I guess, for you as the organizer of the event, have there been any big learnings in terms of what it takes to run a really successful online event, and I guess, why do you think many are maybe going wrong today as they make that transition?

Jessica Lin: I think even if mistakes are being made right now, they’re being made in the spirit of creativity, and we’re seeing so much creativity and personality and full throwers. I love what our company Fire Hydrant did. They actually created a video for a sponsored happy hour at a virtual developer conference on how to make an old fashioned drink. It was so well done, it had a great sense of humor, and I think it just really resonated. And we always do it. I worked [inaudible 00:22:40] at our events, it’s a tradition. And we had a presenter last week actually show a photo of herself via Zoom screen share of her sitting on an ostrich. These are things that were hard to do in person before. So, I think it’s having fun and recognizing that we’re all learning along with each other. That is so important during this time.

Harry Stebbings: Well, I mean I’ve never quite had anyone share a photo of them on an ostrich, and I’ve done over 3000 entities. So, clearly I’m missing something. I do want to move into my favorite element now, Jessica, which is the quick fire round. So, I’ll say a short statement, and then you hit me with your immediate thoughts, about 60 seconds or less. Are you ready to dive in?

Jessica Lin: Ready to go.

Harry Stebbings: Okay. So, the New York tech ecosystem, the pros and the cons.

Jessica Lin: The pros, I love our pizza, our hustle, our [inaudible 00:23:22], our geography, getting uptown and downtown in minutes, our diversity of industries, the number of suits and customers in New York, unmatched anywhere else in the country. And we’re all missing New York City so much right now, and praying for it to fight and come back during this time. What’s hard for New York, and I think specific to enterprise, is that certain enterprise roles are, of course, so harder to hire for. And it’s really just a function of not having had that long time enterprise ecosystem here. So, talent like enterprise marketing, product managers with a lot of experience, that’s still quite competitive to hire them.

Harry Stebbings: Can I ask, with the cost inefficiency of the Valley, with, I think everyone would agree, probably worsening living conditions in the Valley, are you seeing a migration of top tech talent from the Valley to New York?

Jessica Lin: We absolutely are. And we’re seeing a lot of folks say, “Hey, I’ve always wanted to live in New York,” come out. We’ve seen founders, serial founders who may have started their first company out in the Bay but have decided to start their second or third company in New York city. So, we’re so excited for that and we welcome them with big arms.

Harry Stebbings: Tell me the hardest element of your role with Work-Bench today.

Jessica Lin: I think it’s the hardest, but it’s also the best, which is just constant context switching and so much learning. So, constantly learning, constantly having to teach myself new things, new technologies, companies, peoples, deals, events, content, customer insights, our own fundraising, hustling alongside our start-ups. And it’s the best part of the job, but also by Friday my head actually hurts from just so much stuff in it. And we always joke at Work-Bench that on Fridays, “Did that happen this week?” because whatever happened on a Monday usually feels like two weeks ago by then.

Harry Stebbings: I totally agree, and I think in some ways magical thing about founding your own firm, knowing that I … It’s such a start-up, and I don’t think people quite realize how much of an operator founder fund managers are.

Jessica Lin: Absolutely.

Harry Stebbings: Tell me, what would you most like to change in the world of SaaS and enterprise SaaS today?

Jessica Lin: I would say this about enterprise, which is, at Work-Bench, honestly, we’ve tried to just make enterprise more fun and more accessible. It’s historically been a white man’s game, and I think that’s why enterprise tech faces more diversity challenges than perhaps consumer tech or other verticals. But we’re making inroads, and that’s why we do so much to grow the New York tech community. Tons of events, think a lot about how to make it welcoming, and do a lot in supporting women enterprise across our women and enterprise founders database, our workshops, our lunches or conferences, and more.

Harry Stebbings: Jessica, hit me. Final one. What’s the most recent publicly announced investment, and why did you say yes and get so excited?

Jessica Lin: This is great timing because again, our company, Catalyst, a customer success platform, just announced their $25 million series B led by Spark Capital yesterday, and we actually met the founders back in 2016 through our New York city community when the founders were at Digital Ocean, and Ed, the CEO, led customer success there. And given our community with the VP customer success dinners, and [inaudible 00:26:21] we hosted, we saw this tremendous demand for truly unified customer success platform, and how Ed and Kevin [inaudible 00:26:28] really stood out.

Jessica Lin: So, they started Catalyst in 2017. We’ve led their C2 back in 2018, and we’ve been honored to be a part of their ride in New York City ever since. And as we’ve talked about so much, customer success is now being moved to the center of the org. And for us to have met them as a part of our Work-Bench community so many years ago, it just feels very full circle.

Harry Stebbings: Jessica, as I said, been a huge fan of the model for a long time. I loved having Jonathan on. I’ve wanted to make this happen for quite a while, so, thank you so much for joining me today, and it’s been a lot of fun.

Jessica Lin: Thanks, Harry, it’s been such a blast.

Harry Stebbings: As I said at the beginning, huge fan of that model and such exciting times ahead with Work-Bench. And if you’d like to see more from us behind the scenes, you can do so on Instagram at hstebbings1996 with two Bs. I always love to see that.

The post SaaStr Podcasts for the Week with Work-Bench and Initialized Capital — May 8, 2020 appeared first on SaaStr.

Aligning Customer Success and Sales


This post is by Jane Podbelskaya from Georgian Partners

Aligning Customer Success and Sales

A set of guidelines, tips, and recommendations to align your Customer Success and Sales Teams.

I have a passion for Customer Success. Both at Georgian and during my time at Bain, I have been fortunate to collaborate with many companies on their customer retention and expansion strategies. Having seen many of these projects, there is one key pattern that sticks out to me. I find that teams focus on customer success operations and sales separately, when what they need to do is improve the alignment between these two customer-facing teams.

In this post, I’ll take you through a five-step process that will align objectives, incentives and processes for sales and CS to help you deliver a better experience for your customers.

Step 1: Segment Your Customers

It may seem that getting more customers in the door should always be your number one priority. But without a clear targeting and segmentation strategy, you might end up with the wrong type of customers – customers that will slow you down and drain your team’s energy.

It doesn’t feel great to turn away business, but there are good reasons to. Here are a few characteristics of “bad fit” customers:

  • They take up time: Implementation and Success teams spend loads of time ensuring that these customers are on the right track. This detracts from other customers and impacts your reputation and brand loyalty.
  • They’re not good advocates: when clients are not getting full value from your product, they’re unlikely to be good references.
  • They are prone to churn: it is unlikely these customers will want to continue to renew.
  • They may be unprofitable in the long run: the additional resources needed and lack of expansion could end up costing your business in the longer term.

Identifying your best-fit customers

So how do you get on track to targeting the right customer segments? You’re looking for segments that are relatively easy to close, easy to retain and continue to expand their usage of your products. There are two approaches that you can take:

  1. Anecdotal: Gather your customer success and sales teams in a room and you’ll soon develop a good idea of how your product meets various customers’ needs, and how easy it is to acquire each type of customer. Customer Success Managers (CSMs) often offer insights into who is likely to be a good or bad fit for any given use case. Sales can provide color into how difficult it is to acquire customers from each segment. Take this approach if you want to get to a ‘good enough’ solution quickly, and if your pool of customers is relatively small. Use your intuition to place your customers into a matrix below based on what you know. 
  2. Data-driven: by analyzing your financial data and retention patterns you can measure the lifetime value and cost of customer acquisition by customer segment. This data-driven approach allows you to go through a more rigorous customer segmentation exercise, but might take – in my experience growth stage companies require some effort to gather and analyze required data. Take this approach if you want to gain a robust understanding of each customer segments’ economics. This approach becomes increasingly important as the number of customers grows, and when there is a high diversity in your customer base (e.g. different industries, customer size, specific departments, use cases).  

 

Once you have this information collected, take a look at how many customers of each type you have to determine your segment penetration. You can then plot your customer segments onto a matrix to help you visualize where your sales teams should or should not focus. In particular, you can look for green field opportunities where you have low penetration in a segment, but high LTV / CAC.

Defining your customer segments

Customer segments can also move between the four quadrants of the matrix as your product evolves and as you produce more data and insights (see step two).

Step 2: Build a Feedback Loop

As you act on the findings of your segmentation exercise, you’ll soon learn more about each segment. Setting up a feedback loop between your customer success and sales teams will allow you to adjust to these new insights and continuously refine your segments.

A good way to set this up is through regular collaborative workshops between CS and Sales teams — usually monthly or quarterly. Let the teams discuss the following questions:

  • Which use cases work well?
  • Which industries / sectors are good to work with?
  • Which geographies / regions are good to work with?
  • Are some of your sales reps more suited to certain customers/segments?
  • Are discounts influential?
  • Service packages – do they work? Can an entry level package help?
  • Partners – do they work well with certain customer types?

Asking these questions on a regular basis and profiling your customers accordingly will help you refine your go-to-market approach and focus your attention on the “good fit” customers. I would also recommend involving your Product team in these conversations, when possible.

Step 3: Define Your Model

One contentious organizational issue that SaaS leaders grapple with is the delineation of roles and responsibilities between Sales and Customer Success. How exactly should sales, account managers and customer success managers work together? Who is responsible for what? Who is the main point of contact for the customer? Who manages upsells and renewals?

Sales alignment models are informed by the stage of your company and the complexity of your product. Check out Gainsight’s work on different org structures for a deep dive on this topic.

The most common question I get is about the division of roles between CS and Sales in upsell and renewal situations. There are two main approaches here – let’s look at the pros and cons of each.

Approach One: Sales focuses purely on new sales; both upsell and customer value management is done by the Customer Success team. 

Screen Shot 2020-04-30 at 2.35.55 PM

Pros

  • One point of contact for the customer
  • CSM deeply understands the needs of the customer and can recommend the most relevant products/features

Cons

  • Difficult to hire for the AM/CSM role; diverse skill set is required
  • Hard for AM/CSM be a trusted advisor while pursuing sales quotas; hard to focus on sales when supporting customer

This approach works best when product complexity is relatively low, path to upsell is pretty straightforward, and the renewal process is simple.

 

Approach Two: new sales and upsell managed by Sales, customer value management done by Customer Success: 

Screen Shot 2020-04-30 at 2.35.48 PM

Pros

  • CSMs focus on keeping customers happy – perceived as ‘trusted advisors’ and not as ‘pushy salespeople’
  • Sales reps do what they do best – sell

Cons

  • Several points of contact for the client creates confusion
  • May create conflict of interest between sales reps and CSMs

This approach works best where product complexity is relatively high, when upsell is usually targeted towards new business users or new departments, and the renewal process is competitive and akin to resale.

Another approach is to allow Customer Success to handle simple upsell and expansion opportunities and straightforward renewals, and engage Sales for more complex scenarios.

To avoid confusion about respective roles and get everyone across both teams on the same page, I find it helpful to create a RACI map (Responsible, Accountable, Consulted, Informed). A RACI map shows responsibilities and assignments for every task, milestone, or key decision involved in completing a project.

Check out the example below to see how this works. These maps are pretty self-explanatory—the main rule to remember is that there can only be one person or role marked as Accountable for each task, yet there might be multiple people Responsible for the activity (people actually doing the work).

An example of a RACI map, where the CSM owns renewal and simple upsell, Sales owns expansion
An example of a RACI map, where the CSM owns renewal and simple upsell, Sales owns expansion

Step 4: Incentivizing desired behaviour

However you set up your team structure, keep in mind that compensation and incentives need to be aligned to motivate the right behavior.

Start by defining your business objectives – you can use the ideas in the three categories below to get started:

Key Objectives Secondary Objectives Other Objectives
New recurring revenue
Cash upfront
Longer term contracts
Signing good-fit customers from preferred segments
Maximum renewal rate
Expansion / upsell
Capturing specific logos
Maximize number of new logos
Sell strategic or new products, or specific product mix
Keep high gross margins
Signing customers in your high ACV / low penetration quadrant
Expanding quickly to beat out the competition on green field opportunities
References
Maintaining pipeline predictability

How to Design Sales Compensation to Drive Good Sales Behavior

Compensation structure should be simple, where possible. For a good overview of comp design, read this article which provides the commission rates I’ve used below. Typically, this is split into three key areas:

  1.     New Sales

Typical commission rates: 10-15 % of first year ACV

This is usually the largest part of sales compensation. However, if reps are only compensated on new sales, they may not care about renewals and lifetime value. They may also sell into non-optimal segments, or they might be motivated to oversell by making the initial scope of the sale too big, which can lead to difficulties with delivery, future downsell or even churn. To avoid these challenges, you might want to consider negative clauses such as clawbacks on customer churn, or positive incentives for future contract expansions.

  1.     Expansion, Upsell, Cross-sell

Typical commission rates: 8-9 % of ACV

This commands a lower commission rate as it is usually easier to upsell to existing customers.

  1.     Renewal

Typical commission rates: 1-5 % of ACV

According to KeyBank capital markets SaaS survey, around 50% of SaaS companies offer a small percentage of commission on renewal sales.

Other incentives to help promote positive sales behavior include:

  • Spiffs: Offered for focused achievements such as length of contract, cash-up front, capturing specific logos etc. Can be additional 1-2% of ACV.
  • Non-cash rewards: Promotion, vouchers, team outings, “President Club” vacations, etc.

A good exercise for you to go through at this stage is to list your key objectives and decide whether your compensation structure fits with your key business objectives. Decide how often you should revisit and evolve your compensation structure as your business grows.

When you consider compensation structure based on the role, refer to the table below for guidance on how to structure incentives depending on the scope of responsibilities. Customer Success Managers whose role is to manage customer value should not be distracted by quotas and commissions. Just give them a nice 10% bonus for hitting their KPIs such as high NPS or number of referenceable accounts.

In contrast, sales-oriented roles should have commission-based compensation. The harder the sale, the bigger the variable part of the compensation: your ‘hunters’ should get ~50% of their compensation as a commission, while ‘farmers’ (account managers or customer success managers that have upsell targets) should get slightly lower variable compensation in the range 15-30% – again, the harder the upsell, the higher the variable component.

Screen Shot 2020-04-30 at 2.45.25 PM

Another good approach is to create a team of CSM and AM focusing on the same group of customers, with a set of joint KPIs for the two of them. In this case the CSM will focus on making sure customers are using the product and getting the expected value, while the AM can focus on upsell, explaining new product functionality to the customer and building new relationships within customer organization. This way AMs will not get distracted by solving customer’s problems, while CSMs won’t have to worry about hitting quotas, and can fully dedicate the time to helping their customers succeed with the product. A common KPI for this type of team is Net Dollar Retention. This metric will allow the team to offset unfortunate churn by expansion of healthy accounts.

Step 5: motivate Sales and Success teams to help each other at every step along customer journey

The final step is to understand how to best optimize your customer journey by establishing a framework for cross-team collaboration. The best teams I have seen focus on mutual support of sales and customer success teams at every stage of the customer journey.

Acquiring the right customers and setting expectations: Early in the sales cycle, CSMs can help frame up an opportunity. As experts on product implementation, CSMs are key for expectation setting. They can help the sales rep scope the implementation and ensure that the right steps and timeframes are being established to deliver customer value.  Build out a 30-60-90 day plan to make sure you are executing on delivering value quickly.

Handover from CS to Sales: The handover from Sales to CS is another crucial collaboration point. One way to ensure a smooth transition is to focus on customer goals and map those to product use cases. Identify the most pressing objectives to help prioritize those in onboarding. I would strongly encourage Sales and CS to create a Success Plan to capture target KPIs, expected ROIs, and desired timelines for each customer. This plan should become the main working document for CSMs past the onboarding phase.

This is often when sales teams tend to stand back to allow CS to do their work. However, by maintaining sales insight into the onboarding process, you can help improve the scope of future sales by watching new customers as they see value for the first time. Sales can also see first-hand any gaps between customer expectations and reality.

Expand Customers: Depending on the roles and responsibilities you set as per the previous steps, expansion may be a joint effort between Sales and CS. By maintaining regular sync ups between the two teams, it should be possible to actively identify opportunities for upsell.

Ensure Renewals: Finally, renewals can be complex – is it a renewal or is it a resale? Has the value prop changed since the last renewal? Is the customer realizing ROI? Sales can help CS team with renewals, especially with large strategic accounts. CS can help Sales identify new use cases and expansion opportunities to turn renewals into upsell.

There are many more ways to effectively align these two teams depending on the specifics of your organization. I often see companies benefit from running a workshop to brainstorm on three key questions for each stage in your customer journey:

  1.     What can Sales reps do to help CSMs?
  2.     What can CSMs do to help Sales reps?
  3.     What can leadership do to ensure alignment between these two teams?

Finally, review the workshop answers and prioritize them in terms of operationalization.

Conclusion

I hope this gives some useful insights into how Sales and CS can work together effectively to not only improve your acquisition and retention metrics but more importantly to provide a better experience for your customers.

If you have any questions about the strategies I have suggested here, I’d be happy to discuss them. Please feel free to connect with me!

The post Aligning Customer Success and Sales appeared first on Georgian Partners.

SaaStr Podcasts for the Week with PagerDuty and Gusto — April 17, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

Ep. 325: Carolyn Guss is VP of Corporate Marketing @ PagerDuty, the company keeping your digital operations running perfectly with their real-time operations platform. Prior to their IPO in April 2019, PagerDuty had raised funding from some of the best in the business including a16, Bessemer, Meritech, Harrison Metal and Elad Gil to name a few. As for Carolyn, prior to joining PagerDuty she spent 5 years as the GM of Method Communications San Francisco Office and before that spent time on the other side of the pond with a close to 7-year stint at Orange as Head of Corporate PR and Head of US Communications.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How Carolyn made her way across the pond from Head of US Communications at Orange to GM of Method in SF to then playing a key role in the marketing team at PagerDuty?
* How does Carolyn think startups and larger companies can replace the leads that are lost from having no events in a COVID-19 world? How are PagerDuty shifting their strategy? How does PagerDuty think about brand marketing? Does it have to be tied to a number directly tied to revenue? What are the challenges with brand marketing?
* What does Carolyn believe is the right tone to approach customers within this time? How can one be supportive but also drive towards business objectives? In terms of tone, what is the right tone to approach the broader team with? How does PagerDuty gain a sense of company morale at scale? What tools do they use?
* How does Carolyn think about the benefits of transparency both with employees and with customers? Is there an extent to the benefits of transparency? Can one ever been too transparent? How does one think about this in a very corporate perspective with PagerDuty now being a public company?

 

Ep. 326: Gusto’s Lexi Reese walks you through scaling high performance teams. Is trust earned or given? How do you communicate for impact?

This episode is sponsored by TaxJar.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Lexi’s session at SaaStr Scale.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
Carolyn Guss
Lexi Reese

Below, we’ve shared the transcript of Harry’s interview with Carolyn.

Harry Stebbings: Welcome back to the official SaaStr Podcast with me, Harry Stebbings. And if you’d like to leave feedback or suggestions for future episodes, I always love to hear your thoughts. And you can do so on Instagram at HStebbings1996 with two Bs. But time for the show today and I’m thrilled to welcome Carolyn Guss to the hot seat today.

Harry Stebbings: Now, Carolyn is VP of Corporate Marketing at PagerDuty, the company keeping your digital operations running perfectly with their realtime operations platform. Prior to their IPO in April 2019, PagerDuty had raised funding from some of the best in the business, including: Andreessen Horowitz, Bessemer, Meritech, Harrison Metal, and Elad Gil to name a few.

Harry Stebbings: As for Carolyn, prior to joining PagerDuty, she spent five years as the GM of Method Communications in the San Francisco office, and before that, spent time on the other side of the pond with close to a seven-year stint at Orange as Head of Corporate PR and Head of U.S. Communications.

Harry Stebbings: But now I’m delighted to hand over to Carolyn Guss, VP of Corporate Marketing at PagerDuty.

Harry Stebbings: Carolyn, it is such a pleasure to have you on the show today. I’ve heard so many great things from the one and only Jen, and so thank you so much for joining me today.

Carolyn Guss: Thanks, Harry, for having me here. It’s a pleasure to talk to you. We’ve obviously worked with SaaStr for a long time. Really enjoyed the relationship. Jennifer Tejada, our CEO, has always enjoyed speaking at SaaStr, so it’s great to be chatting to you in an unusual time for all of us.

Harry Stebbings: It is indeed an unusual time, but we so appreciate that. But I would love to start with a little bit on you, Carolyn. So tell me, how did you make your way into what I call the wonderful world of SaaS and come to be VP of Corporate Marketing of PagerDuty today?

Carolyn Guss: So like you, and as you can probably tell from my accent, I started out my career in London. I was running corporate comms for Orange, the large French mobile operator. We had 200,000 employees and were part owned by the government. So it was about as far away from SaaS startup land as you can possibly get. But it was a great experience, grounding me in tech. We launched a lot of products in emerging markets. Mobile was really booming at that time. We were getting into digital TV. But as time went on, I could really see the level of innovation that was coming out of Silicon Valley, in particular, but SaaS companies more broadly, so managed to find my way to the West Coast of the U.S. in about 2008. But my startup experience was actually a PR firm called Method Communications, where I worked with some of the most exciting companies. So Domo, Nutanix, Qualtrics, PagerDuty, of course, Robinhood. So many of the really exciting tech companies were really broken out by Method. And I ran the San Francisco office for the agency.

Carolyn Guss: So during that time I met Jennifer Tejada and the team at PagerDuty, worked with them through their IPO. What I really learned in that time was that PagerDuty was a pretty unique experience for me. It’s a complex technology, but it touches all of us every day. PagerDuty is used by the likes of Netflix, Zoom, Nordstrom, Gap. And many of us don’t realize that the digital experiences that we’re having and the apps and the websites that we’re visiting are working great because PagerDuty is there, used by the teams behind them. So I got excited about the mission of the company and the opportunity to really up level the marketing story because it is a complex technology. And so started talking to the team about the opportunities to work together and about six months ago came over from being an agency partner to PagerDuty to running the corporate marketing team.

Harry Stebbings: Can I ask, because it’s a very interesting transition. Because obviously at Method you work across a very broad landscape of clients and customers, and then obviously with PagerDuty, much more of a focus purview. How was the transition for you and how did you find that going from quite broad to quite focused?

Carolyn Guss: Absolutely. There was a real transition. I’d been working with PagerDuty for 18 months and I felt I really understood the business, but actually I didn’t. I was one step removed. So coming away from knowing lots and lots of companies a little bit to knowing one company really deeply, I think it’s helped me deepen my impact. What’s broad for me now is my remit. So I’m looking after internal comms, so really helping with the culture of PagerDuty. I’m looking after marketing, so events, brand marketing. And I’m looking after PR and communications as well. So how are we showing up in social media? Opportunities like this, talking to you, getting our voice out there in the media and making sure we’re well differentiated. So the breadth of my activities has grown and I think that’s kept me really engaged and excited to learn.

Harry Stebbings: Totally. And I think the breadth is what’s so fascinating. I do want to dive into a couple of those specific elements you mentioned there, and particularly placed in the context that we’re in, obviously the rise of COVID has meant a lot of marketing plans are quite simply out of the window in many cases. So I’d love to discuss how you think about changing strategies and pivots in the face of COVID. And you mentioned events there. Always a huge source of leads for B2B companies. How do you think about a lead replacement with such a large marketing activity now really gone?

Carolyn Guss: Absolutely. Events were a huge part of generating marketing qualified leads for PagerDuty and we had two different types of events. One is large scale customer events and the other is community events. It’s more focused on developers that use the platform. Obviously none of those events can take place at the moment. So what we did first was we mapped all the different events that we host and we mapped the value of leads that we expect to get from those events. And then we looked at how we can replace these with different digital channels. It was really a cross-functional effort with sales and marketing and product and a growth team that’s responsible for all our digital and web presence. And we’ve broken it out into a few areas.

Carolyn Guss: So most immediately we’ve pivoted to replace events themselves with virtual events. So we had an event in London, customer event, and we took that virtual. Required a lot of communication and fast action. And then the other thing that we’ve done is to create a series of webinars. So one of the things about PagerDuty where we really excel with events is that we provide a lot of community resources and information and best practice sharing. So it’s really easy to just take that and deliver it over a webinar. These webinars aren’t particularly about product push, they’re about the things that you can do to improve your own incident response and make sure that your own digital operations run well. So we had a ton of these resources already available in written form, so it’s just about having some of our execs or our experts take them out as webinars and promoting those to our customers.

Carolyn Guss: And then the next thing we’re doing is really doubling down on our digital media spending. We haven’t been really focused on above the line ever. We’ve done one or two brand campaigns, but it hasn’t been something that’s at the heart of PagerDuty marketing. We’ve been almost quite scrappy in our marketing, I’d say. So we’re taking some of that budget that was used for events and we’re moving over to things like sponsored content, web page takeovers, radio advertising. And the reason that we feel like that’s a good pivot for us right now versus the direct nature of events is because fundamentally PagerDuty keeps the Internet up and running and the whole world has just gone offline and online with shelter in place. So more than ever, companies need our services. So we are looking to cast a much wider net right now and get that message out there. So we definitely have brand awareness goals as well as marketing qualified lead goals with this shift that we’re making.

Harry Stebbings: You’re teeing me up so nicely because there’s so many things I just want to unpack from that. My first is if you take it in order, you mentioned the shift to virtual events there. A big one for me is how does it compare from a results basis in terms of MQLs, and what have been your initial takeaways from the first few that you’ve done now?

Carolyn Guss: It’s early to answer that. We have a certain number of MQLs that we expect to get from an event based on how that event performed in the past. We’ve been running our major user event, for example, PagerDuty Summit, for four years. So we’re preparing dashboards to figure out what we can expect to get from webinars and what we can expect to get. But I wouldn’t say that we have the answer just yet, Harry. I think that it’s possible we’re going to see that, but then equally PagerDuty’s really built on land and expand. That’s been the best sales motion, or the biggest sales motion that we’ve experienced as a company.

Carolyn Guss: So right now what we’re seeing is a ton of extra usage on our platform from existing customers. So what we want to do there is make sure that we’re offering resources and being really, really supportive to those customers. So I don’t actually think that we’re going to be able to say if we’ve got this number of leads from an event, the virtual equivalent of that event will get the exact same number of leads. I think it’s about taking a different approach and really leading with supporting our existing customers for that land and expand motion and then getting the broader awareness out there with bigger digital media spend so that we can be adding new logos.

Harry Stebbings: Totally agreed with you there, especially on the awareness. The awareness is an interesting one because brand marketing, there’s different views on brand marketing and awareness. And I guess my question to you is how do you think about and assess brand marketing and how do you respond to often people’s thoughts that it’s untraceable, it’s untrackable, and it’s therefore challenging as a core strategy in itself?

Carolyn Guss: So brand marketing, we ran our first brand campaign in the fall of last year. We rebranded and we ran campaigns for the first time ever. And I would agree that for a company with our culture, it’s not as obviously trackable. With our land and expand model, what we’ve always done is just really look to drive people to trial through our website. And that’s obviously extremely tangible. We know exactly how many people are coming through to trial and then how many people are becoming customers. So the brand marketing campaign, we looked at it differently. We weren’t expecting a brand campaign to generate leads in the same way that we see from our website. We were really looking at it as a way of building value in the PagerDuty brand and helping us to differentiate from other companies that are in our market or in adjacent markets that sometimes people will confuse with us.

Carolyn Guss: So we’re not necessarily expecting brand marketing to drive to very hard metrics. That said, we will be tracking those metrics and we will be running the exact same dashboards on marketing qualified leads to understand how it’s performing because there’s always the opportunity to improve and iterate. So right now, what we’ve done is created a plan for April for digital marketing spend. We’ll be benchmarking that and then we’ll iterate on our plan for May.

Harry Stebbings: Totally get you. Can I ask, you said that about using the same framework and I like that. It makes me think of something that CMO at Pendo, Joe Chernov, once said on the show. He said that all marketing activities have to be tied and held accountable to a number directly tied to revenue. Would you agree with him in terms of having to be tied directly to revenue, or is there a broader purview and a nuance to that?

Carolyn Guss: At the high level I do agree. And we use Pendo ourselves to understand exactly how we’re driving to revenue. There’s nuance within it, though. So if I think about my team, I have customer marketing in my team right now and we absolutely tie to revenue of customer marketing. We create a number of assets, we push them out through webinars, through other types of digital campaigns, and we track MQLs. If I take public relations, we don’t track to MQLs of public relations. That’s really for building brand.

Carolyn Guss: So ultimately, as a VP of Corporate Marketing, I am tied to a number, but I take my nuance within that as to which vehicles I’m using to reach that number. So my spend may be greater in one area than another depending on how I’m tracking against that number. So I think it’s about being able to pull different levers and I do think there’s some nuance in there.

Harry Stebbings: Absolutely. You mentioned the customer marketing team and it makes me think to the time that we’re in today because it’s a time where tone is something that you have to think a lot about. So I’m intrigued, given the time and actually moving to the conversations themselves with the customer, how do you think about adopting a tone of support and care, which is obviously very necessary in an uncertain time right now, but also a need to impact revenue and business objectives with the tone as well?

Carolyn Guss: This has been a really big conversation for us. So back in February, we started to see on our platform that our customers were labeling the types of incidents that they use PagerDuty for with pandemic or coronavirus or COVID-19. So we could understand then that our customers were experiencing some kind of business impact as a result of the situation. And so we began to think through, how do we support them in that situation? We were seeing some customers having really surging demand for their product. And you can imagine it’s companies in online learning, video conferencing, collaboration tools.

Carolyn Guss: And what that means is their teams are working around the clock and are working really hard to keep things running. And so it is not helpful for us to say buy more PagerDuty licenses. It’s really about showing them supports that if they’re spinning up an incident response team fast or they’re really scaling their ability to fix incidents on their networks, then it’s about us showing them with webinars, with videos, with white papers, how do you do that fast. So we have something called Incident Commander Training, which is how you train people to run major incidents. And as you can imagine with growing demand on networks, there’s going to be more people required to step into that job and help the core team keep the systems running perfectly.

Carolyn Guss: We have something called Virtual NOC Training because everyone’s just gone home. Companies were used to having a NOC in their office and they could all have a sense of the health of their systems and suddenly everyone’s gone home. So we’ve provided training on how to create a virtual NOC. So we’re already leading with a message of here’s best practices and support that we can provide to you. And we believe that that will lead to growth for us down the line. But it doesn’t feel right at the moment to be pushing product and license messages.

Harry Stebbings: I totally agree with you in terms of not feeling right there. I guess my question is it’s almost customer success, but it’s also definitely marketing. And I think more and more today we’re seeing marketing being pushed further and further down the funnel with the creation of that content being used to support and make their clients as successful as possible. Do you agree with this almost merging of the roles of marketing, especially around content, with customer success?

Carolyn Guss: Absolutely. We’re very much hand in hand with customer success now and I think account based marketing is something that’s growing within PagerDuty. Because we began with the land and expand motion, but we really, as we move up into larger companies, need to help with that expansion and that’s where customer success and marketing are hand in hand. We’re generating a lot of materials and then customer success are really personalizing them and having those conversations. But then we’re looking to amplify that, I guess, by having the same messaging show up in different kinds of channels where these customers are going to turn up. So yeah, very much cross-functional effort for us. It already was and it is so now more than ever.

Harry Stebbings: You mentioned the cross-functionality there between the different teams. It’s an incredibly hard thing to achieve. I guess my question to you, subsequently, is what do you think you do to allow yourself to do that, A, efficiently, but also with speed being cross-functional, and also being remote now too?

Carolyn Guss: We had actually just had, before all of the coronavirus changes began, we had gone off site with all of our leadership team to talk about how do we improve cross-functional working in PagerDuty and eliminate silos. And there was areas where it was working really well, but we needed to challenge ourselves to be better and more agile cross-functionally. And then of course this situation arose and it forced it to happen immediately and it forced it to happen in the most challenging way, which is with everybody going remote. So the way that we kicked it off was that we created a framework, crisis management framework, and it has four functional teams and those teams are all made up of people from different functions. One of them is about really protecting and promoting the welfare of our employees. One of them is about supporting and engaging our customers. Another one is about the resiliency of our platform. Because we like to say we are always on. When you’re down, we’re up and we’re helping you. And that promise is so important right now. And then the last one is about financial preparedness in our business.

Carolyn Guss: And so those work streams are not run individually by product or individually by finance or individually by sales and marketing. They have cross-functional team members across all of them. So that’s a new way of working for us. So it’s really accelerated a way of working that we were trying to accomplish. And I think that’s something I bet other companies are experiencing too, is that in times of crisis, it allows you to focus on what matters the most and you can work cross-functionally because people talk straight to each other and they just go and figure out who the person is and find them immediately. They don’t wait or put it on their to do list or hold back better opinion. So I think we’re going to see a huge improvement in cross-functional behavior and we’re kind of excited about it. It’s one of the real benefits of this situation that we keep talking about inside PagerDuty.

Harry Stebbings: I totally agree with you there, especially in terms of the massive transition overnight and forcing things that maybe would have taken slightly longer. I guess my question is, diving slightly more deeper into the granulars of navigating team morale, team culture in the shift, got to have this tone of empathy and support. So how do you think about the comms strategy around showing that empathy and support to the team in these very challenging and uncertain times?

Carolyn Guss: We’ve always had an internal comm strategy of ultra transparency. And when I joined PagerDuty it made me a little nervous because I was thinking, well, if we’re being this transparent to the employees, what if this gets outside of the business? But it’s really what we believe in in our culture. So that’s interesting now because we’re having AMAs every week, sometimes twice a week, with our executives. And anybody can submit a question that’s publicly seen by all of the employees. And people really want to understand what does this mean for me? So we’re being really honest. As a business we’re in a really strong cash position, but as I told you earlier, we’re still trying to figure out what this is going to mean for our pipeline. So we’re being really honest and transparent, but we’re really striking a balance there with a lot of support and empathy and also with celebrating the wins that we have.

Carolyn Guss: We are landing great deals still. There’s wins across the business with product teams, with sales teams, with marketing. So we’re really celebrating that more than we ever would. But in going back to the AMAs, what we believe is just a really, really strong cadence of communication right now. So Jennifer, our CEO, gets on video frequently. Other members of our executive leadership team do and they post that to the company. The AMA is run twice a week. We have updates to policies and FAQs that run twice a week. So it’s been sort of hyper communication.

Carolyn Guss: But we’ve also been polling the employees. So we use the survey tool called Culture Amp. We’re polling the employees weekly because the situation is so fluid, to understand are we’re getting it right, are we striking the right tone with you? Do you feel connected? Do you feel like you can carry on working in this way? Do you feel like you can carry on in this remote situation? So we’ve really been able to get a good pulse from the employees on how they’re feeling. And I think for many people their job is a highlight for them right now. We’re busy, we’re leaning into this, but it’s stressful. You’re at home, you feel heightened levels of anxiety. So we’re also trying to think ahead about what the needs will be. If we’re all going to be working from home for a long period of time, which is a possibility, what are people’s needs that we need to be able to predict? What about mental health issues, what about burnout issues and how can we support our employees there?

Harry Stebbings: Listen, I totally agree with you and I’d just highly recommend espresso martinis continuously throughout the day, on that note. And I do want to ask you, transparency is fantastic as a core ethos. My question to you is does one ever have to be careful about being too transparent? And if you were advising other comms strategists and professionals thinking about us within that companies, are there any limits to transparency?

Carolyn Guss: Yes, absolutely. Responsible transparency, I think, is the key. We need to make sure that anything that we want to talk about quite transparently today, we can see that through. We’ll lose trust of our employees if we end up having to go back on a commitment that we made. So we want to be transparent, we want to answer all questions and we do have that as a core part of our culture, but we don’t make big promises or make big commitments about the future. And I think part of that is being a new publicly traded company, as well. It’s part of the muscle that we’ve developed.

Harry Stebbings: No, I totally agree. I think that’s a real muscle that’s developed when you go public. And transparency is also tied to being real and being very authentic. In terms of authenticity and real, how do you think about being both transparent and real? And I guess on the real side, how do you think about that? If it potentially disincentivizes the team, say… A lot of founders that I work with say, hey, we lost a key client. I don’t know whether to communicate that back to the team. It’s yes, it’s not transparent, but I’m thinking about morale and I’m thinking about culture in a difficult time. What should I do? How would you advise them in those cases? You want it to be real and transparent, but you also have to think about wider morale and morale maintenance. How do you think about that?

Carolyn Guss: We think about it through the lens of vulnerability as a leader. So when we have a miss as a business, we talk about it with our senior leadership team and we talk about the learnings. We have a big culture of postmortems inside PagerDuty. It comes from the DevOps methodology that we were really built on. So anytime we feel that we’ve failed, lost, or could have done better, we host a postmortem and we really talk honestly and vulnerably with each other. So people are quite used to that. So then when is this a bigger deal that has more impact we’ll talk about it with our senior leadership team and we’ll be vulnerable there. And then we’ll ask them if it’s appropriate for you when you’re leading your teams, if you’re having a quarterly business review or just a stand up, bring vulnerability because it helps other people feel, it helps your employees feel that if they’re experiencing a challenge right now and they don’t know what to do about the challenge, they know that they’re safe with you, that you can relate to that.

Carolyn Guss: Because I think as much as we want to celebrate the positives now more than ever, if all we do is talk about the positives, it’s going to feel kind of disingenuous and we’re going to make employees, I think, disengage. So we look at it through the lens of vulnerability. It’s not that we’re specifically trying to share bad news so that everybody can level set. We’re looking to use it in a very intentional way.

Harry Stebbings: No, I totally agree. And I think absolutely vulnerability, actually, in many ways inspires a lot of strength in the team. But I do want to dive into my favorite element of any episode, being the 60 Second SaaStr, Carolyn. So I say a short statement and then you hit me with your immediate thoughts. Are you ready to dive in?

Carolyn Guss: I’m ready.

Harry Stebbings: So it’s been an incredible career in the marketing world for you, but what do you know now that you wish you’d known at the beginning of your time in marketing?

Carolyn Guss: Truncate. I used to be rather long winded, still am a bit, and not really be able to influence and land my points and couldn’t understand why I’d have to repeat something three times and it still felt like people didn’t get it. So I do a lot of media training with executives, preparing them for short soundbites. That’s actually a crucial skill in all parts of marketing because you need to influence and you need to sell a message. So thinking about the three points that you want to land and truncating the way that you land them.

Harry Stebbings: I think I could clearly do with some of your media training. I have that wonderful British bumblingness. But I do want to ask, what’s the hardest element of your role with PagerDuty today?

Carolyn Guss: Devising for good versus perfect. PagerDuty sets a really high bar, and yet we have to be very agile and move fast. So there’s the balance of being okay to ship something that’s not yet perfect, but it’s good enough when we always want better and we always hold ourselves to a higher bar and strive for more.

Harry Stebbings: ABM, is it a buzzword that’s just used too much these days, or is it a new, innovative and fundamental shift in the way we market?

Carolyn Guss: I think it’s a pretty fundamental shift in the way that we market. We were talking earlier about the relationship between marketing and customer success. One of the things that we’ve experienced in PagerDuty is we have many, many customer contacts. It is not a top down model in PagerDuty, it’s a bottom up model. Developers come in, they buy the product. It really expands through the business as a viral growth. Many teams and executives start using PagerDuty. We have to have an account based marketing approach. We have to have an account based marketing approach where we touch all of those different contacts with the right type of messaging for their need. So we feel that marketing is getting more personal than ever and that is a fundamental shift.

Harry Stebbings: If you could change one thing in the world of SaaS today, what would it be and why?

Carolyn Guss: Oh, we’re so inside in Silicon Valley we forget about the world at large. We forget about the fact that they don’t know what SaaS means, that they don’t use our tools, although they may be impacted by our tools. SaaS companies are used by traditional businesses across the world, but we tend to forget that and live in our Silicon Valley bubble. So I would love for all of us to get a broader mindset and just challenge ourselves every day on the assumptions that we make.

Harry Stebbings: Final one, but who in SaaS marketing do you think is killing it today and why do you think so?

Carolyn Guss: Zoom is killing it today. And this may be an obvious answer or a timely answer, but I feel Zoom’s always been killing it because they really put their ethos and their belief first. The narrative is that they want to make people happier. I mean, who doesn’t buy into that? And this is a B2B company, predominantly. And then I think they also really live through that values. They’ve given the product away for K through 12 educators and that’s a hard thing to do. That’s causing massive scaling for their business. But it’s living by their values that they should do good in the world. So I think they’re absolutely killing it in SaaS marketing right now.

Harry Stebbings: That’s awesome to hear and I couldn’t agree with you more there. But Carolyn, this has been so fun. I’ve absolutely loved doing it. So thank you so much for joining me today.

Carolyn Guss: Thank you, Harry. It’s been a real pleasure to talk to you.

Harry Stebbings: Absolutely loved having Carolyn on the show there. And such exciting times ahead for PagerDuty. And if you’d like to see more from us behind the scenes, you can do so on Instagram at HStebbings1996 with two Bs. I always love to see you there.

Harry Stebbings: As always, I so appreciate all your support and I can’t wait to bring you another fantastic episode next week.

 

The post SaaStr Podcasts for the Week with PagerDuty and Gusto — April 17, 2020 appeared first on SaaStr.

Segmenting Your Sales Goals by Customer Category: Growing. Struggling. And Dire Straits


This post is by Jason Lemkin from SaaStr

Everyone usually gets pretty good at segmenting customers by ACV.  Large, Medium and Small.  Or at least by splitting up sales-driven and self-service revenue.  Or enterprise vs smaller customer.  And later, we often start segmenting by vertical and industry.

More of you right now should be putting that aside a bit and segmenting your customers into 3 new groups:  Growing. Struggling.  And Shrinking.  And setting different goals for sales and retention for each segment:

  • Growing.  Almost all of you have at least one segment of customers growing now.  Maybe it’s healthcare.  Or remote workers.  Or call center.  Or esports.  Or e-commerce.  Maybe it’s just 10% of your customer base, but there’s often at least a small piece that is growing faster, at least for now, than before these crazy times.
  • Struggling.  Some of your customers may, on balance, be struggling but making do.  E.g., generic SaaS companies.   Many are doing OK but a lot of impacts today.  Generally, anyone at 0.1% growth or higher counts here.
  • Shrinking (and Dire Straits).  This category can just include clients already shrinking in size.

Most of you that I talk to haven’t fully finished segmented their prospects and existing customer base this way.  And even if they have, they haven’t broken out clear goals for each segment.

For Growing categories:

  • Sales cycles may still be lengthening, but decent revenue goals can still be hit.  Even if the overall company bookings goals might be way, way down.
  • And retention should remain close to pre-Covid 19 rates.  And there is no reason for NPS to not to continue to increase.

For Struggling categories:

  • Sales may be way down, but some deals will still close.  And pipeline may still grow.  Encourage discovery calls.  Maybe they can at least close later.   You will have to adjust quotas here dramatically.  But ideally, sales still at least covers it costs for now.
  • Logo retention will take a small hit, revenue retention a higher one.  Struggling customers are seeking to cut costs everywhere.  But they aren’t seeking to cancel vendors they trust and need.  Set an aggressive goal for logo retention in the Struggling segment — not much lower than before.  But allow material relaxation of account retention.  Seats will shrink.  If you don’t relax the goals here materially, you may break customer relationships that will last a decade or longer.

For Shrinking companies and Dire Straights Companies:

  • Sales may be on hold. Instead, just see what you can do.
  • Scale accounts down quickly, and simply, with these customers.  If their business has fallen by 90%, so should your bill.  Or maybe even just give them the next 6 months for free.  Now is the time to grow share, not revenue, with these customers.  Be proactive.  They will appreciate it.  Take a look at an innovative program from Gorgias.io for their Shrinking customers here.

Whatever you do exactly, it’s time to create 3 new categories of customers.  And create different revenue and retention goals for each category.

If you don’t do this, you’ll allow too many excuses.  Instead of finding the right goals, and right solutions, for each segment.

 

The post Segmenting Your Sales Goals by Customer Category: Growing. Struggling. And Dire Straits appeared first on SaaStr.

SaaStr Podcasts for the Week with Moveworks and Bessemer Venture Partners — April 10, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

Ep. 323: Bhavin Shah is the Founder & CEO @ Moveworks, the cloud-based AI platform, purpose-built for large enterprises, that resolves employees’ IT support issues⁠—instantly and automatically. To date Bhavin has raised over $108M with Moveworks from the likes of Mamoon Hamid @ Kleiner Perkins, Arij Janmohamed @ Lightspeed, Bain Capital, Sapphire Ventures and ICONIQ. Prior to Moveworks, Bhavin was the Founder and CEO @ Refresh which was later acquired by LinkedIn and then before that founded Gazillion Entertainment, a company he scaled to over 200 employees.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How Bhavin made his way into the wonderful world of SaaS and came to found Moveworks.
* What are the core challenges IT teams are facing as a result of the move to remote work? Where do many make mistakes here? What can one do from a structural perspective to set them up for success when moving to remote?
* What does great change management look like in Bhavin’s mind today? Where do so many go wrong here? How does this change in the world of remote? Who should be involved in executing on the change management plan?
* How does Bhavin think about the role of customer success today? Why does Bhavin believe that customer success and product should be in one org? How does Bhavin think about the interplay of marketing and customer success? Is marketing moving closer and closer to customer success with their content?

 

Ep. 324: Join SaaStr CEO Jason Lemkin and Bessemer Venture Partners Partner Byron Deeter for a deep dive on what’s going on in Venture Capital and Cloud.

This episode is sponsored by TaxJar.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Jason and Byron’s webinar “Bridging the Gap: The Current State of Venture Capital and Cloud.” You can find the full webinar here.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
Bhavin Shah
Byron Deeter

Below, we’ve shared the transcript of Harry’s interview with Bhavin.

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings. I’d love to see you behind the scenes here at the show on Instagram @HStebbings1996 with two Bs. I always love to see you there. But to our episode today, and we welcome an incredible three time entrepreneur now rocking the world of enterprise SaaS, and so with that I’m thrilled to welcome Bhavin Shah, founder and CEO of Moveworks, the cloud-based AI platform, purpose built for large enterprises that resolves employees’ IT support issues instantly and automatically. Today, Bhavin has raised over $108 million with Moveworks from the likes of Mamoon Hamid at Kleiner Perkins, Arif Janmohamed at Lightspeed, Bain Capital, Sapphire Ventures, and ICONIQ, to name a few.

Harry Stebbings: Prior to Moveworks, Bhavin was the founder and CEO at Refresh, which was later acquired by LinkedIn, and then before that, founded Gazillion Entertainment, a company he scaled to over 300 employees. 

Harry Stebbings: Now I’m very excited to hand it over to Bhavin Shah, founder and CEO at Moveworks.

Harry Stebbings: Bhavin, it is so awesome to have you on the show today. As I said, I’ve heard so many good things from pretty much every board member of yours and investor, but especially Mamoon at Kleiner and Arif at Lightspeed. So thank you so much for joining me today.

Bhavin Shah: Thanks, Harry. First time caller, long time listener. Excited to be on the show today.

Harry Stebbings: I mean, my word, that is so good for my ego. But I do want to start today with some context. So tell me, Bhavin, how did you make your way into what I definitely think is the wonderful world of SaaS, but also what was that founding ah-ha moment for you with Moveworks?

Bhavin Shah: So I grew up in Silicon Valley here in the Bay Area, and my parents immigrated in the late ’60s, was exposed to technology from a very early age. This endeavor with Moveworks is my third company. My last company was in the mobile productivity space called Refresh.io. We were acquired by LinkedIn about five years ago. Moveworks came about through a very deliberate process, a process by the four of us founders to understand where we could use machine learning in a very useful and impactful way in the enterprise. And the journey took us to a conversation with over 30 CIOs and IT leaders and analyzing a bunch of their IT tickets before taking our first bit of capital.

Bhavin Shah: The discovery was that there’s now about a billion knowledge workers worldwide, and each of those knowledge workers submits about one ticket a month. But those tickets still take three days to get resolved, and so we saw billions of dollars being spent on better ticketing systems, better automation tools, which the world definitely needed. But these tickets were still relatively slow, and when we dug into the details, what we realized is that they’re still written in natural language, and so no one had taken the approach of trying to solve the tickets directly by understanding and building machine learning frameworks to read these tickets and then solve them completely autonomously. And so that’s been our journey. How do we go from three days to three seconds?

Harry Stebbings: Absolutely, and it’s been an incredible journey to see those since then. I do, sorry, I’m too intrigued not to ask, you mentioned the two prior companies there. How did that experience with those two prior companies impact your operating mindset today with Moveworks?

Bhavin Shah: My career has involved a variety of different industries. I started off in the toy business. I went into the gaming world and it went into mobile productivity, and then now into enterprise SaaS, and if I could do it all over again, I would have done enterprise SaaS from the get-go. It’s a domain that I really enjoy, and I think I thrive in. But along the way of company building, I think you learn a lot about yourself. You learn a lot about what matters, how you build culture, how you build teams, how you listen to customers, how you don’t listen to customers. A lot of different factors went into this. But when it came down to Moveworks, there was a variety of different viewpoints that each of us founders were bringing to the table. I had spent a bunch of years thinking about how to make people productive on mobile, how to leverage that platform.

Bhavin Shah: Varun, my co-founder, was at Facebook building machine learning tools with specifically chat bot tools that were being used to optimize and improve the interview process for hiring managers. They could talk to a bot about who they were interviewing, etc. Jiang, my other co-founder, was at Google and was one of the founding engineers of the question-answer system that shows those paragraphs at the top of the Google search results, basically doing NLP on the fly and then figuring out what to show you, which is very important to our product today, and then Vaibhav, who had also been a serial entrepreneur like myself, building large enterprise scale systems.

Bhavin Shah: So I think a lot of these perspectives came together in a way that allowed us to all build from there and build this company.

Harry Stebbings: I mean, it’s such a unique blend of both backgrounds and skills associated, and so just [inaudible 00:06:23] teams. I do want to ask, though, because if we start on the most important topic that’s actually the front of every single portfolio a founder of ours has mind is the obvious move to remote work and the rise of work from home. You were on the front lines of this movement, and as you said there about speaking CIOs, you speak CIOs across all verticals really, making the switch to work from home. So I guess the first question is what are the core challenges IT teams face as a result of having to move to fully remote pretty much overnight?

Bhavin Shah: There’s so many challenges, and I think as the weeks go by, some of these challenges are getting solved, but initially connectivity, VPN issues, bandwidth, access, policies, procedures, related to all this is support, and that’s our world here at Moveworks. Now what’s interesting if you read the news, which everyone is doing right now, you hear a lot about bars closing, schools closing, gyms closing, but one thing that you don’t hear about is the fact that every walk up bar in the enterprise is now shuttered. It’s closed. We’re not able to go into the office anymore and walk up to someone in IT and say, “Hey, can you fix this for me?” And so overnight, IT teams have had to shift their strategies and deploy things like messaging platforms, remote conf and webinar tools, digital channels for IT support, a lot of other systems to ensure that workers working from home are staying productive.

Bhavin Shah: And the data, as part of the challenges that we’re seeing them face, we’re seeing a 500% gain in requests that employees are making for video conferencing apps like Zoom. We’re seeing the demand for IT support services double. We’re seeing two to three X the number of troubleshooting tickets come into the help desk. And so the good news is there’s lots of good solutions, there’s a lot of companies that want to help here, but the real test that’s going on right now is whether IT teams can put these systems in place in a matter of days and weeks, not months or years.

Harry Stebbings: You’ve seen a variety of different rollout, so to speak, from the IT teams themselves. When you think about perfecting the infrastructure stack and process of these rollouts, where do you see many maybe make mistakes and go wrong in really transitioning to work from home effectively?

Bhavin Shah: Yeah, I think what we’re seeing is it’s mostly about speed. I think a lot of IT teams were thinking that they would make these changes over the course of several years, and manage change management accordingly. I think the ones that are moving quickly now to pick up best of breed best practices and roll it out are finding that employees are quite receptive. Employees are able to make switches very quickly. I think we’re all seeing this. I’ve got kids, and overnight they’re all switched to now doing classes over Zoom. Even my kid’s TaeKwonDo and gymnastics classes are doing them over Zoom.

Bhavin Shah: So I think that where people believe that people can’t change, I think ends up getting them stuck in deliberation and where they know that if they make the change, people will adjust, those groups are winning. One thing I’ll say though is you are seeing kind of a shift in terms of the economy. While many businesses are shuttering and slowing down or weakening, there is a new type of economy, a new type of business that is starting to see more traction and/or thrive in this environment, and that is for businesses that are helping employees and individuals get work done anywhere and anytime. And I think that’s something that we’re seeing play into our business, and in general, the world of SaaS.

Harry Stebbings: One thing I’m really intrigued by is is this a flash in the pan momentary realization from traditional large incumbents and enterprise that obviously fundamentally by law, they have to be work from home? And then more of back to their traditional standards of practice and work? Or do you think this is actually fundamentally a shift in how society operates with regards to its relationship to work?

Bhavin Shah: Yeah, I think it’s the latter, and here’s our experience. So when we started the company, about 20% of CIOs that we talked to had an enterprise-wide collaboration/chat strategy. They’d be going with Slack or Microsoft Teams or Glip or GChat, etc. Last year, that percentage was about 50/50. 50 had adopted something, 50 were still figuring out when to deploy a new tool and how to go about doing that. That debate is over. Basically the next two months, every company in America is going to have decided and implemented one of these tools, and if you’ve used these tools in enterprise, once you start using them, it’s very, very hard to go back. And I think for us, we made an early bet in this world of enterprise chat being a big deal and being something that would overtake traditional means of communication like email.

Bhavin Shah: And so we see that happening in our personal lives with WhatsApp and SMS and everything else. Why not in the enterprise? And so this is actually causing that shift to occur very rapidly, and people will start to see the utility of this. I think through chat, the UI is very intuitive for everyone. It’s not one that we have to learn. We’re all familiar with writing, we’re all familiar with communicating. And so it allows us to have more interactivity, it allows us to simplify work streams, and basically work at real-time. So I think this is a permanent shift, even when we do go back to the office building.

Harry Stebbings: You mentioned an early bet that you placed in terms of the market itself and its transition. I have to ask, because now it seems inherently obvious, but it wasn’t at the time, and it was early. Why did you gain such conviction as opposed to other channels of support, like email and voice? And what led that decision making conviction?

Bhavin Shah: Yeah, it’s a good question. We are a conversational AI company, and there’s a variety of ways that you can obviously engage in conversation. I think that enterprise messaging for us provided a lot of affordances that just made sense if we wanted to provide support to employees. So just going back to the behavior, employees submit on average about one IT ticket a month, and it takes about three days for them to get a result. Now there are portals, there are self-service catalogs and things that people can use, but when you only have an issue every few weeks to a month, you don’t really know how to navigate those. Those UIs are wrought with friction, and email obviously had its inherent delays as well and it’s not real-time.

Bhavin Shah: And so what we wanted to do was find a way that employees could just do what’s intuitive, which is shoot off a quick note and send it off to IT through a chat and have that picked up and have that resolved, but more importantly, by doing it in the enterprise collab tool, we could get their attention, because they’re already checking that tool 100 times a day, collaborating with team members on projects, checking updates, etc. So we wanted to find an interface that allowed for that high volume, high frequency, and we just didn’t necessarily see that with voice, and of course, email has been clogged for years, and you can very effectively find people on their mobile devices, on their tablets, on their laptops, with these new messaging platforms, which really does a lot to help improve our engagement and overall resolve more tickets for those employees.

Harry Stebbings: You said that about engagement, and you also said that about the three day ticket resolution being the standard. I’m really interested, because I always think the definition of what success looks like is crucial, and metrics are often fundamentally quite uniform across industries and verticals. What metrics do you use to define success today? And I guess why do you focus on those specific metrics over others?

Bhavin Shah: Yeah, so until recently, I think SaaS has been mostly focused on the delivery model of the software, to go from your data center to a cloud, which that itself led to some new metrics that have been used for the greater part of a decade, which is to measure active users. And it’s pretty logical, but the problem with active users is it doesn’t really tell you how much value you’re getting. And so I think for us, we’ve been charging forward in a new way of energizing SaaS insomuch as we’re taking ownership of the actual end to end results. We’re doing the implementation and configuring overall, so looking at how many tickets did we resolve for each customer? And so that is the metric that we picked. It’s got perfect alignment between us and the customer. How many tickets did Moveworks resolve yesterday at Broadcom? How many tickets did Moveworks resolve yesterday at Nutanix?

Bhavin Shah: And we measure that, our customers measure that, and it allows us to focus on whatever might be the case to make those metrics better. Sometimes that’s engagement, sometimes that’s an additional integration that we need to do, sometimes that is triggering some other automation that the customer might already have. But the goal ultimately is to provide more workload relief for the IT teams by having a system like this resolve more and more tickets. So for us, the alignment is at a higher order around what was our output, what was the results of our system each day, each hour?

Harry Stebbings: Can I ask you, I’m on the board of many companies that face the challenge of change management. In a normal world where services, revenue, and in-person visits, meetings, seminars are possible, change management is still fundamentally a challenge. In a remote world, how does change management change, and does it get inherently more difficult given the lack of physical services that one can provide in terms of coaching, training seminars to really allow for a smooth transition?

Bhavin Shah: Well, I think that’s absolutely right. What I see a lot of, especially in our own experience of using other SaaS tools, there’s a heavy burden placed on the customer to learn the tool, to implement the tool, to train the employees on how to use the tool, and only then do you actually see the full value of what was created. With our product, and something that we strive for, is how do we take more and more of that work off the plates of our customers and how do we give them more value right out of the box? And so sometimes, it’s not just us delivering a set of tools. I always think of this analogy like Home Depot. A lot of enterprise SaaS mindset is, “Hey, let’s just give someone a tool and have them go figure this out or extract value from it.”

Bhavin Shah: At Home Depot, you go buy your tools to go do whatever home improvement project you want. Maybe you’re building a birdhouse. Maybe you’re building an extension to your living room. It doesn’t matter to them as long as you bought their tools. For us, we actually want to provide you with the end result of what you’re looking for. If you want that living room extension, let’s go build that and give you the keys when it’s ready so you can walk in and enjoy it. And so from our standpoint, the customer success motion, the engagement that we have with customers, is not just about improving our machine learning to understand yet another type of ticket utterance or language pattern, but it’s sometimes us adding a new integration into a back end system.

Bhavin Shah: Sometimes it’s us showing those customers how to clean up an old process or to change a system or record. All of that is so that we can track and show that progress with each customer, and that metric gives us the ability to know where we stand, and that’s something that’s very intrinsic with what we do. Really it’s about customer success being company success as we build this out.

Harry Stebbings: Can I ask, in terms of both customer success, I guess also marketing, but in terms of horizontal application, this is not a vertically specific tool and it’s so horizontal across so many different industries. How do you think about effective marketing in customer success, given the inherently different use cases, applications, and some challenges the different verticals will face with it.

Bhavin Shah: So one of the premises that we had when we founded the company, and this was insight that we derived by looking at IT ticket data, was that IT was homogenizing globally. What does that mean? That means that, and largely due to SaaS products, people had the same tickets that they were solving every morning about Zoom, GoToMeeting, WebEx, or BlueJeans about MacBook, Dells, Lenovos, or HPs. And so as a result, we found ourselves really excited about the opportunity to solve this problem because everyone was experiencing the same problems. So we could build machine learning models at scale that could resolve it out of the box up front for our customers.

Bhavin Shah: And so while we have customers in pharma and semi-conductor and other high tech and retail and services, we have the same types of tickets. And so as a result, our customer success team works broadly across all customers, but we’re solving the same issues. Organizationally, we put customer success and product into one org, because it’s not just important to build a feature and then deliver it to the customer. It’s about building that feature, delivering it, and then seeing how much value it delivers and figuring out what needs to happen on our side, on the customer side, to maximize that value.

Bhavin Shah: So there’s a variety of metrics that we track from a customer success standpoint, but in this sense, it goes back to this core drumbeat heartbeat that we have at the company, which is everyone in the company gets a daily report. And every morning, we all look at it and it tells us how many tickets we resolved yesterday at Broadcom, how many tickets yesterday did we resolve at AppDynamics, at Nutanix, at Freedom Financial. And for me, I get that report every morning, but others in the company are looking at that every hour, every few minutes, to understand really what is the impact that we’re having and what can change and evolve as a result of knowing that?

Harry Stebbings: Can I ask, you said there about CS, like sitting actually with product? Do you engage with a product postmortem, and what do you do to weave that very tight fabric between product and CS strategically other than sitting together?

Bhavin Shah: The journey of building a product or a feature inside of our company is perhaps different than others. So instead of it being a top down motion of the market saying, “Build this use case,” and then the product marketers figuring out the details of that going down to a product manager, going down to an engineer. It’s actually quite the opposite. The engineers are looking at ticket data every day, and they’re saying, “Hey, there’s these tickets, these 300 tickets we skipped at this customer today. What could we build? What kind of machine learning models? What kind of integrations can we build to solve that?” And that leads to further research, further discovery, customer conversations, and ultimately ties into well, what’s the impact going to be? Are we going to increase overall customer resolution by 5%, by 2%? Great. Let’s go do that. Let’s put that in the next quarter’s product plan.”

Bhavin Shah: So today, we’re resolving between 30 and 40% of all tickets on average across customers, and it didn’t just happen overnight. We were two years ago bragging about three to 5%, and over time, the analysis of ticket data, the understanding of how customers perceive that value but ultimately building these features, it’s not a black box. It’s not one of these things where we build them, then we market them, and then we sell them, and then we all pray that people will buy it. It’s something that’s a lot more fluid and a lot more certain before we even start writing the first line of code.

Harry Stebbings: Gosh, the joy of doing the show is I can take the conversation in any way I want. You said there about the improving efficiency of the resolutions there. It made me think we chatted before the show about information network effects with regards to podcasting. When you think about network effects with Moveworks, is there not data network effects where every subsequent ticket actually improves the efficiency of the subsequent thousand tickets, building higher efficiency and resolution speeds.

Bhavin Shah: 100%, and I think that’s something that we haven’t seen a ton of in the enterprise world. In traditional settings, if I buy a database and you buy a database, the same database, the database doesn’t get smarter because we’re both using it. For us, we are absolutely benefiting from that, and our customers are, too. Think of different forms of AI. You hear about in the academic circles, weak forms of AI, which are basically making a prediction or a suggestion or better ranking things. Then you have strong forms of AI that are trying to take entire problems and solve them end to end. A level five self-driving car is a strong form of AI.

Bhavin Shah: We’re sort of like that in the IT world. You want a self-driving car that’s been driven a million miles before you get into it, or a billion miles. With us, similarly, our product is seeing now over 70 million tickets and we keep processing them. We keep getting better, we keep understanding, okay, what actions need to be taken for this kind of language pattern? What actually needs to be taken for this other? And so we are getting better. What that means is a variety of things. One is customers who become new customers of ours, and which today we’re doing almost one customer launch every day, a large enterprise, they’re seeing immediate time to value, like the first day we might resolve 20% of their tickets. The first week we might resolve 30% of their tickets. So they don’t have to wait around for six months, a year.

Bhavin Shah: And that’s where I think we’re breaking from the traditional SaaS model where you have a toolkit, have a lot of professional services, they get attached to it, and then you configure it, that’s custom, and then you see the results. You can’t get to the same results that we have with machine learning because we’re able to aggregate, but also we’re able to learn very quickly and to your point, have this true network effect, which ties into the homogeneity and ties into a lot of the other factors, which really gets down into how did we and why did we start this company? This is exactly why. We thought of all these things, these things were somewhat still hard to figure out how we were going to achieve, but the concepts were there, and that got us very excited.

Harry Stebbings: Can I ask, thinking large enterprise and some of their challenging requests, do you ever get pushback on the data sharing between companies in terms of allowing you to provide better efficiency across the client base because of the knowledge sharing and data sharing that allows you to do so?

Bhavin Shah: Yeah, so security’s super important to us from the get-go, very early on we made investments to ensure that we could keep customer data separate and not commingle data, but at the same time, build machine learning understanding across ticket data so that when we learned something in one environment, we can leverage it in the next. So we do a lot of abstraction tokenization, things that keep what’s proprietary proprietary, but also allow us to more generically learn from that. Our customers review that with us. We go through extensive discussions around how we handle that, and for the most part, I think people are starting to come around to the fact that they want an AI system that has been trained, that has learned, that delivers value out of the box, because if you’ve been tracking a lot of this AI space, there’s a lot of AI initiatives that crash and burn six months later, a year later.

Bhavin Shah: And it’s because these things are very hard to stand up on your own. They’re very hard to maintain. They’re very hard to make smarter and evolve. And so the real benefits of going SaaS with AI is that you get all that benefit right up front and you get that continuous improvement over time. So that’s how we’re seeing it and our customers are excited about getting those results without the kind of effort that they would normally have to put into it.

Harry Stebbings: We may be diving a little bit into the ML world here, but I am just interested, have you noticed this kind of asymptotic moment of data ingestion really where there’s decreasing efficiency with every additional dataset? Because once you hit 70 million, there must be some moment of asymptote. Does that make sense? And how do you think about that?

Bhavin Shah: Yeah, so instead of thinking about it as one machine learning model and a monolithic concept of 70 million tickets going to one model, think of it as thousands of models. Think about it as hundreds of techniques. Think about it as different capabilities, and so today, we’ve seen so many tickets, but we’re not solving 100% of tickets. In fact, we think the asymptote of tickets that can be resolved rises up to about 85 to 90%. There’s still some tickets that will always have to use people to better understand… Sometimes people are very vague in their tickets. It’s like, “Hey, I just got back from Hawaii, and everything’s broke. Can you help?”

Bhavin Shah: Well, in that case they really just want a hug from IT or they want someone to give them support, so it’s not intended for a machine to solve. But if you think about it from how we’ve gone about this is we’ve stitched together a framework of looking at all the intents in IT, all of the entities that we see in IT, and we’re building machine learning models to understand every intent entity pairing that’s out there. But as a result, it isn’t just a singular effort. We have to constantly review these things. We have to have human annotators that look at thousands of tickets a day and see are our models drifting? Are our models getting over fit? Do we have to inject noise into the training data? There’s a lot of other factors that go into this that we work on to ensure that this stuff works.

Bhavin Shah: But to your point, absolutely, models, techniques, are evolving very rapidly, and we see models peak in performance all the time, and so this idea that there’s one model and you just train it once and it’s modeling as a service, then you bring it back and you use it, forget about it. We’re changing stuff so often that sometimes we’ll remove entire sets of models and retrain them, some get retrained on a continuous basis, some on a weekly basis, some on a monthly basis, some don’t get retrained until we have a committee meeting, but it’s all towards the goal of what I’ve been saying this whole time, which is one metric. How many tickets did we resolve across all customers? How many tickets did we resolve across these customers? And that drives our behavior.

Harry Stebbings: Well, I can clearly chat to you all day about data asymptotes and the machine learning model. So I think it’s best we move onto the 60 second quick fire round, Bhavin. I say a short statement and you hit me with your immediate thoughts. Does that work well for you?

Bhavin Shah: Sure.

Harry Stebbings: So it’s a war for talent, as we always hear. What’s the hardest role to hire for today and why?

Bhavin Shah: That’s easy. Machine learning infrastructure. I think with machine learning systems, they’re both computationally and memory intensive, and so the challenges are just intense, and finding people with that experience is really hard.

Harry Stebbings: What’s the biggest challenge about your role today with the company and with Moveworks?

Bhavin Shah: We’re going through fast growth and I think nailing forecasting is still an art, still figuring that out. Sometimes we overshoot, sometimes we under call, and I think that’s something that we’re all focused on now, especially as we’re seeing everyone work from home and how to right size our investments accordingly.

Harry Stebbings: Sorry, this is kind of off schedule, but how do you think about transparency within the org, especially with regards to goals? Because you want people to drive towards something. You want to set ambitious goals. But you also don’t want to set too ambitious goals so people will be discouraged by it if they don’t hit them. How do you think that balance of ambitious but not discouraging if not hit?

Bhavin Shah: One of the folks that I had a chance to recently meet is Rob, the CEO of Coupa, and he has hit his target as a company I think for something like 44 quarters. It’s some larger than 40 quarters in a row. That is a hero. That is someone who has really figured out the right balance of making sure that you set a goal and that you hit it, even through good times and bad times. And I think that is super important. I don’t have a specific answer other than you do want to strike that balance, and the transparency is key, and so the good news is for us, a lot of our stuff is inherently transparent just given our product, and even today, later today I’m going to be reviewing the operating plan for the year with the team based on what we’re seeing now change in the market. And I think it’s just keeping everyone updated and keeping everyone tuned into the same channel.

Harry Stebbings: What’s the biggest area where investors have actively helped you and really moved the needle for the company?

Bhavin Shah: CIO introductions. Investors seem to know every CIO out there and their help with prospecting is huge.

Harry Stebbings: If you could change one thing about the world of SaaS today, what would it be?

Bhavin Shah: I think increase expectations from SaaS products. It’s like, let’s hold ourselves more accountable for the outcomes and deliver real results. Instead of just being a tools provider and making customers do the heavy lifting, let’s give them solutions. I think that’s something that I’d love to see the world of SaaS talk more about.

Harry Stebbings: Hit me. What’s the next five years for you and for Moveworks? Can you paint that vision for us?

Bhavin Shah: Yeah, so we’re doing IT today, but our goal is to go into many other domains and departments. I think ultimately, if knowledge workers need help, we want to be the company that solves it for them, and I think we’re on that journey and we’re super excited by the reception so far. So we’ll keep plowing ahead.

Harry Stebbings: Bhavin, as I said, I heard so many good things, as I said, from Mamoon, from Arif, so thank you so much for joining me today, and I’ve so enjoyed chatting.

Bhavin Shah: My pleasure, Harry, and these are obviously challenging times, but it’s been fascinating to see how SaaS apps and other products like that or like Moveworks are allowing folks to stay connected from afar.

Harry Stebbings: I have to say, I really could not be more excited for the time I had with Moveworks, and if you’d like to see more from Bhavin, you can find him on Twitter @Bhavinator. I do love that username. Likewise, it’d be great to see you behind the scenes here. You can do that on Instagram @HStebbings1996 with two Bs. 

Harry Stebbings: As always, I so appreciate all your support and I can’t wait to bring you another fantastic episode next week.

 

The post SaaStr Podcasts for the Week with Moveworks and Bessemer Venture Partners — April 10, 2020 appeared first on SaaStr.

14 Things You Can Do Now to Be More Customer-Centric


This post is by Jason Lemkin from SaaStr

Things are crazy now in SaaS.  If times are tough, it isn’t sales that is going to pull us out, or demand gen. Its your existing customers. Being so loyal, so happy, that they keep your engine going.  That they keep renewing. Telling their friends.  And spreading the good word.

So even if other parts of your engine are struggling a bit, here are 14 basic things you can do right now to be more customer-centric:

  • Launching new features that matter every quarter — that they don’t have to pay more for. Your product continually gets better.
  • A named Customer Support Manager they can talk to. Not just bots, not just automation, or tickets. A real, live human being with an email address and a phone number that can help. The same one each time. Linda or Lou or Larry is there. To help.
  • No material annual price increases. Inflation is low, and your sales and marketing costs are amortized across Year 1. Why does that mean a price raise in Year 2? It shouldn’t.
  • No rip-off contracts. If the customer can’t deploy you, that’s on you. You let them out of rip-off contracts. A bit more here: What To Do When A Customer Wants to Cancel A Contract | SaaStr
  • Downgrades are fine, no drama. If you need less the next year, the next month, we are here for you. More here: A Pause is Better Than a Cancel. And A Downgrade is Not Churn. | SaaStr
  • Every customer would be OK if they knew the price every other customer paid. If that’s the case, everyone got a fair deal. It’s OK to grandfather in early customers — everyone gets that.
  • Pilots are fine & even encouraged. Without drama. If you need a pilot to get comfortable, you get one. A bit more here: When Not to Offer a Free Trial. Answer: When Your App Simply Can’t Pull it Off. | SaaStr
  • Downtime is disclosed in real-time. It can be painful to share when your app is down, even just slow. But you owe it to your customers to be honest here.
  • New solutions to more of their problems. Raising prices for the same software isn’t cool. What is cool? Building new, fairly-priced solutions for customers that already trust you. If you already help me with support, make you can help me with outreach as well. Etc. Thank you.
  • No need to talk to an SDR if I don’t want to. Don’t qualify me out. If I didn’t care, I wouldn’t in-bound.
  • Year 2, 3, 4 .. and 10 are earned. What are you doing to earn the renewal? Just because you may get it in SaaS fairly easily in many cases … did you earn it?
  • Customers can buy the way they want to and are used to. Monthly instead of Annual? So be it. Maybe for a higher cost, but so be it. 3 Years for a discount? Well, OK. There often have to be limits here. But wherever possible, allowing customers to pay and buy the way they are used to paying and buying takes a lot of friction out of the process.
  • Professional services that are awesome. Free though not always important. If your product benefits from professional services, having a truly A+ team really helps. Services don’t have to be free, especially in the enterprise. It’s more important they are awesome. A bit more here: Don’t Forget the Services Revenue | SaaStr
  • Support in minutes, not hours or days. If I need help, I should just get it. A human being should answer the chat. Should pick up the phone. Should respond to my email. Not in hours or days. But now. Your customers’ time does matter. Why do they need to wait? Yes, doing this right is hard.

The post 14 Things You Can Do Now to Be More Customer-Centric appeared first on SaaStr.

A Pause is Better Than a Cancel. And A Downgrade is Not Churn.


This post is by Jason Lemkin from SaaStr

Many of you will come under a lot of pressure these days to pause accounts, to downgrade accounts, and more. It’s challenging almost everywhere. And even where it isn’t, there are at least big pockets of customers under severe stress.

Should you let folks easily downgrade? Should you let them even pause their account, and pick it up later when their business picks up?

You should.

This is a Customer Satisfaction lesson we should all take away from Slack’s early hyper-growth and Stewart Butterfield. In 2015, it seemed crazy that Slack would auto de-provision un-used seats. But it didn’t stop them.  And it won’t stop you today in 2020.

  • A pause is better than a cancel. They will come back later, if they love you and need you.
  • A downgrade is better than a cancelYour top customers will grow with you. You should also take care of them when they go through more challenging times. Downgrades are not churn. They are just less need for your product — for now. It may be time to segment your “churn” into lost customers vs. downgrades. They both may have similar hits to your MRR. But they aren’t the same vis-a-vis your long-term growth.
  • Not charging customers for more than they need, at least below the Site License level, is better than a perpetually frustrated customer. Fair pricing is always the best pricing. Assume every customer knows what everyone else pays. Especially right now.
  • A positive customer experience, even for a customer that leaves, is a new brand ambassador for your product. You need a lot of these to win.

Beyond that, you need to take a long view. The 7–10+ year view.

In a recurring revenue model, a customer that churns is a customer you never really had at all.

But a customer than pauses, and comes back later (or downgrades, but upgrades again later) … is just a customer with a somewhat lower CLTV.

Focus more on logo retention, and logo happiness today, than raw ARR growth.

That’s your future (vs your present). And in SaaS, it’s really only the future that matters.

___________

View original question on quora

The post A Pause is Better Than a Cancel. And A Downgrade is Not Churn. appeared first on SaaStr.

What To Do When A Customer Wants to Cancel A Contract


This post is by Jason Lemkin from SaaStr

In today’s crazy world, more and more vendors are seeing customers that want to cancel annual or longer contracts.

What should you do?

The simple answer “of course” in that yearly contracts can’t be canceled — per se. That’s the whole point of whatever explicit or implicit discount you give for doing a yearly contract (vs. monthly or quarterly). And the language likely will plainly say the contract cannot be canceled.

But … it’s just a contract. So a few qualifiers:

  • If you haven’t received pre-paid cash, it doesn’t matter. Do NOT threaten to send the customer into collections – period. Especially now, these days. There is no effective way to enforce a customer contract if the customer doesn’t want to pay and doesn’t need the service any longer. Do not create drama. This won’t work, and it will turn someone who just might be a customer again into someone that won’t be a customer again. Any “annual” contract in fact at a practical level is only dated as long as the pre-paid cash attached to it.
  • They may come back.  Make sure they want to. Why are they canceling? Think long. They may come back, or at least, refer a colleague or friend to your app. Make the exit process as positive as the entrance process. Thank them for being a customer, for however long. For taking a chance on you.
  • Move on. Issues like trying to get out of an annual contract can get the whole team’s dander up. But if it’s 0.1% of your ARR, it just doesn’t matter. Move on.
  • It’s either your fault, or the economy’s fault. It’s not their fault. Remember, any customer that cancels, cancels either because of the economy (now), or because you didn’t deliver enough value. If you neither was the case, they’d still be a customer. It’s not their fault. It’s not us-vs-them. Don’t let it become them.
  • Champion change creates a lot more risk today.  Champion change (i.e., loss of your core advocate at the customer) is a big deal in general, but it’s accelerating in many cases in today’s economy.  They may take a red marker to the entire stack their predecessor brought in.  All you can really do here is get ahead of it, be proactive, and brace yourself for impacts.  The more you get ahead of it, and tell your new champion you are there to help, the more you can mitigate the accelerating impacts here.
  • Allow seamless downgrades today.  If your customer has been hit hard, and doesn’t need half their seats, make downgrades easy.  This doesn’t mean returning cash, but it does mean making renewals, etc. simpler without drama and stress.  And if they are on a monthly program, make it even easier to downgrade.  Support them in tough times.
  • There’s no need to refund any cash, 95%+ of the time. Some customers may want their money back, if they cancel say 6 months into a 12 month contract. Usually, a polite We Are Very Sorry But Per Terms of Contract You Prepaid for a Discount is enough if you are still able to provide the service.

Until you are large enough that cash doesn’t matter, annual and multi-year contracts really only matter if they are cash up-front contracts. If you don’t have the cash, and they want out, they get out. One way or another. So you might as well leave on good terms.

And let the team solve bigger and better problems than this one.

View original question on quora

The post What To Do When A Customer Wants to Cancel A Contract appeared first on SaaStr.

The Playbook to Running Growth Experiments at Scale with Growth Ex Machina Founder Guillaume Cabane (Video + Transcript)


This post is by Louise Lee from SaaStr

Founder Guillaume Cabane provides information on when and how to run a growth team and provides multiple examples of growth models. Use these tools to determine how to run growth experiments at your organization.

Want to see more content like this? Join us at SaaStr Annual 2020.

 

Guillaume Cabane | Founder @ Growth Ex Machina

FULL TRANSCRIPT BELOW

I’m Guillaume Cabane and today I’m going to talk about The Playbook To Running Growth Experiments At Scale. The first thing that I want to put out immediately for growth people and for founders is that I want to trash out all the KPIs and we’re going to focus just on revenue. That seems obvious because, see most companies don’t do that. But before I go into the dough here, who am I, what have I done, very quickly, I worked at a few of those recognizable companies, most notably lately in the Bay Area Segment and Drift where I’ve driven significant growth. And If you wonder what significant means, I’ve been at those companies while we grew in about 18 months from 50 to 200 and 300 people in 18 months.

My focus is SaaS and my job is to create a defensible go-to market moat, right? My focus is only revenue. When we talk of hypergrowth and I go back to Drift and Segment to give you an idea of how fast and how much growth there is, we did 3X revenue at Segment in 18 months and we made 5X revenue at Drift in 18 months. And you wonder like, “That sounds good, but how good is it?” Right? Well, if you look at the KeyBanc Capital 2018 distribution of growth, so you get all companies here that are surveyed for their growth over one year, right? What you see is that Segment is up here and Drift is off the charts in terms of year over year growth. And these days I do advisory. We don’t care about that. That’s fine. So the first question that you should ask yourself is how do you compete? Okay. And the thing is most of you have founders here.

Can we have a show of hands here? Who’s a founder? Cool. Most of you have founders. Okay. Within those founders who is a product technical founder? Okay. And who is a more like marketing or business founder? Okay. The more technical and product people kind of make sense. The issue is most I’d say technical product driven founders, is that they don’t see the value. They don’t value marketing as much as they value the product, which means they under invest in marketing. They don’t see marketing as a way to compete. And I’m going to show you what the difference and how that works. But first I want to focus on how I compete, right? And I compete by doing insane innovation on the marketing side, investing as much on marketing through engineering as you can invest on your product.

Okay? And through creating an insanely good user experience at the very first step at the top of the funnel. Okay. But if we go into details, what that means is that when I build growth teams, I always get the commitment from the founders to get engineers on the team, right? Because that is how you’re going to be able to create a differentiable marketing. How you can compete differently. Okay, that team’s going to be independent and I’m going to talk in a few minutes of growth team structures. Okay. I split out traditional marketing, so events, branding, that’s great. That’s just not measurable on the revenue scale. So I split it out completely, which trash KPIs for marketing, we keep only revenue. And then we have a high pace experiment framework. And I’m going to cover those elements. Okay. But first, why growth team? We talk of competing, we talk of being better than others, and then we say, “Well we’ve got to have a growth team.”

But why? What’s the benefit of having a growth team? What do they do differently than product? What do they do differently than marketing for example? Well, if you want to compare growth and product for example, is that if you think of product, product has to succeed every time. Okay? If you’re a founder and you have a product leader, a head of product or a PM and that person fails two launches or three launches successfully, that person is out. That person is fired, right? Because that person failed at doing that job, which is launching product successfully. That’s not growth. The difference is that growth is like a VC model. Okay? We’re not trying to be smarter, we’re just trying to say we don’t know what’s going to work so we need to experiment, we need to throw a lot of things at the wall.

If you know what’s going to work, then do it. Don’t experiment, don’t try. Do, okay? The principle of growth is that you don’t know what’s going to work and you want to find stuff that your competitors haven’t looked at, okay? So you’ve got to come with that new paradigm and that paradigm is that just like a VC, you’re going to have nine out of 10 experiments fail, okay? And so the only way that you can win is by testing a lot, by lowering the cost of testing and by being really good at measuring what’s happening. And if you look at the typical I’d say hype cycle, this is the typical curve of hype cycle. As a founder, your company is going to do like that. You are going to launch a product or a company and you’re going to have some early success, okay? And you can think everything’s going great, and then you’re going to reach the maxima of that first, let’s say a strategy or channel or target market, and then the conversion rates are going to plummet.

The CAC is going to go up, and then you’re going to be in this valley of fear here in the middle, right? And that’s going to repeat over and over and over again. All right? And so if you think of when do I need a growth team? This is when you need a growth team, okay? When you’re going up, you have no product market fit, okay? And you’re starting to find that product market fit. Once you have the product market fit and you’ve reached the maxima of the easy to close customers, then you can hire a growth team, okay?

Let’s go into innovation. We talked of doing insane innovation, but who wins when we don’t innovate? I’m going to tell you who wins. Who wins is the big brand advertising networks. That’s Google and that’s Facebook. They drive around 70% of all the Ad Spend. So what that means is that you are transferring your hard, let’s say acquired VC money, directly into their pockets, right? That is not innovation. That is not what your VC wants. Okay? You’re not building anything sustainable if you’re just competing on Facebook, on CAC. That is not a good strategy. That is not what your VC wants. And when you look at I’d say the challenge that we have here is that the CAC has grown, year after year both on B2B and B2C, right? We’re now at 70% higher CAC then we were five years ago. And that trend is not on a slowing down path.

It’s not going to stop, right? Which means that if you think of the ACV in the market, how much you sell is more at stable. Your CAC is going up. What that means is you’re going to hit the kind of sound barrier where you’re going to crash, right? Because you’re just not making profit from those leads anymore, okay? Cool. So the smart CEO’s, what are they doing? The smart CEOs, they are transferring their budgets to technology. So if we look at this slide here, what we have is that all the CMOs are transferring their budget from Martech, from agencies to technology. Even labor is going down. What I wanted to explain is that the budgets I have a graph on Gartner here. I’m going to explain the graph. Okay. So bear with me. So what you see is that there’s all these categories of spend, okay?

And the spend a budget is going down in all verticals for the top 100 CMOs, but Martech. Martech is the only one going up. What that means that the smart CMOs have understood that to compete, advertising is not a good solution, hiring more people is not a good solution. Being smaller through MarTech is a solution, okay? And what that comes with is actually engineering. All right? You can do stuff by hiring engineers in your team, in your marketing demanding and growth, however you want to call it, right? By having engineers to build products like stuff, you can do stuff that you can’t I’d say just with marketers. One thing that you’ve got to think is we got to calm down or egos, right? That’s what really what you need. When you think about it, you’re trying to compete with… Most of you have competitors. Who has a direct competitor here on the product?

Okay? So for those of you who have a direct competitor, even those who have an indirect competitor, think about it. If your marketing team has Marketo and then does ads on Facebook, how are you going to win versus your competitors? You think you’re just going to have better branding, you’re going to have better ads, you’re just going to have better marketers? That is a weak proposal. It’s very weak, okay? There’s only two things. One, you can rely on product. So that means that your marketing isn’t doing a lot and so either rely on your product exclusively. But that means your marketing team isn’t driving a lot of value, okay? If you want them to drive value, it means they should be able to sell a product that is no better than your competitor. That is a good marketing team. That’s how you should evaluate them, okay?

And the thing is that no growth strategies, growth tactics diminish over time. Which means whatever we talk about today has a shelf life of if not a couple months, at least a year. All right? Because your first Saastr strategy, your first Saastr channel, eventually if that works, everyone goes to that channel, that strategy. And the benefit, the conversion rate up with what you had to actually goes down. To give you one example, you look at that Ad banner at the bottom right here. That Ad banner is the very first Ad banner that ever existed, okay? That is 1994 for HotWired. That banner Ad had a conversion rate of 74%, that’s 74%. I’ve been doing marketing for the past 15 years. I’ve never seen something click for 74% ever, right? And so yeah, that was a first-mover strategy that worked well. And the same thing is true for video. Right now that we’re having emails.

So all the videos and stuff like that, it works really well. Eventually that’s going to diminish and also SOrevert to the mean. So we talked to why you want to create a growth team, innovation. When do you want to build it? Easy, after product market fit. Okay. Once we have enough engineers that we can I’d say afford to have engineering dedicated to building demand generation. Okay. And when the initial growth stalls. For the other founders in the room here that are wondering how should I structure the growth team? Who should they report to? I got a couple of examples for you. So the first model is the cross- functional model. Okay. And so that model has I’d say a growth team that is kind of peppered around your organization, all right? And as you can imagine, it doesn’t work that well to create innovation.

It works really well to I’d say minimize the rifts and conflicts because there’s basically no growth team, right? But because the product and the engineering are incentivized to minimize risk, you don’t have a team who is incentivized to take risk, so there’s little innovation. The second model is the independent model. The one from Facebook, okay. That one has a dedicated growth team with Growth Pod that is completely separate. That creates really good innovation, fantastic innovation. It has the opposite problem, lots of cultural faction and rifts and conflicts. Why? Because you’ve got people in product engineering and design and marketing owning basically your entire business. And I have a team that is going to say, “Hey, we’re going to work on that one thing, right? And we’re going to own it and we’re going to hack with it. And then once we’ve finished playing, whomever owned it before can get it back.”

Obviously, I did that. I took the signup from the marketing and engineering team and said, “Hey, we’re going to kill the conversions. We’re going to be much better.” When you do that, you are humiliating whoever owned that part of the product by taking it, by saying that they did a poor job. And then there’s only two outcomes, either you succeed so you humiliate them a second time, right? By showing that you are right and they actually did a poor job or you fail and they’re going to point the finger and say, “You see these folks in growth, they thought that they were really smart. They’re not.” Right? Sothat doesn’t go well. That can work if you have a really clear charter throughout the organization that the growth team is here to experiment, fail and help find stuff that is unique.

Okay. If you don’t empower the team through that very strong charter, you are setting them up for culture of failure. This model, the embedded model, is a very common one and unfortunately we don’t have the animation here. But basically what happens with this model, which I don’t recommend, is that it’s a power war where the growth org is going to move from product to engineering to marketing depending on which exec has the most power with the founders at a given time. And you can see those teams, they’re just moving back and forth, which means their KPIs, their incentives, their strategy is basically aligned with who, which org they belong to and not the entire organization. Which means an aspect I really like, the one I’ve been implementing is this one. So this one was created by my friend Sean calls it Atlassian. It has this kind of mixed model. We have the engineers and the designers reporting into their guilds, right?

And a few core functions are going to growth. This optimizes for both and the real good reason why I like it, think I need engineers in my team. Am I an engineer? No. Can I help an engineer grow in their career? Can I help engineer debug code? No, I can’t. Which means that person needs help from the broader engineering team, from the broader product team and same for designers. Which means they need to be embedded in some way in those teams. Okay. So this model works really well. So we talked of when, we talked of how, let’s talk of how do I fail? Because my ability to fail defines me better than my ability to succeed.

And to be honest, it’s actually easy to reproduce failures if you don’t look at how other people have failed. It’s really hard to reproduce successes because they’re really unique. So when you think of in your role and when I consult these days and I help CEOs, my first question is like, “What does the boss want?” Okay. So boss is CEO and so the boss wants good KPIs, okay. And a good roadmap and basically not breaking their culture and being reliable. To be honest, I’ve failed at all of those four, sometimes multiple of those. Okay. When you think of growth teams, most growth teams fail at being able to communicate what they’re doing, why they’re doing, and what impact they have on the bottom line. So let’s start with KPIs. Okay. And KPIs, when you think of KPIs, it means like, well growth teams is here to build demand generation.

So does marketing and it ends up with something where you have sales versus marketing is that it doesn’t end well. Okay. So if you think of sales, sales are incentivized to do a good job because they have a clawback clause. A clawback clause for those who don’t know it’s basically that if you oversell to a customer and that customer churns within a given amount of time, three months, six months, the commission is lost. Who in marketing has a clawback clause? No one, which means we can push hardly bad leads on the funnel and have no consequence, right? And that’s why we have a riff and conflict with sales. We’re not incentivized to long-term quality. We’re not incentivized to LTV, right? We as marketers, as demand people as growth people, we should be financially incentivized to long-term customer success. Okay.

The same is true for forecasting. When you look at how growth teams work, this is one example. This is a growth team tool to have all of your projects and your ideas and lists which ones you’re going to work on and why. There’s a couple of issues here. The first one is that it’s a laundry list of ideas. The second one is there’s no revenue, right? And so when the boss says, “Hey G, what are you working on?” And say, “I’m going to work on that project because it has a 6.7.” What does that mean? It means nothing. What are you committing on? Nothing really. And look at the other tools, the same thing. I ask a lot of my friends which tool they use. It’s the same problem over and over again, there’s no revenue, there’s no commitment. You’re not committed to revenue.

You’re not aligned with the sales team, okay? I tried implementing that ICE, Impact Confidence and Ease that I score three times, I failed three times both with my team and with my CEOs. And the last thing is visibility and forecasting. Okay. Because you don’t know what’s going to work, okay? You can’t give that visibility, you can’t give the forecast. And so you have the problem of not being able to forecast what you’re going to do and what impact it’s going to have. The new model I want to implement is trashing all KPIs, trashing the systems that are laundry lists of ideas and moving to revenue. And if you want to move to revenue, this is how you do it. Okay. This is fromfounder Christoph, so they are a VC firm in Germany and he has proposed this model.

Where your entire funnel is just revenue and revenue flows from stage to stage, just as in sales, it’s true in marketing. It means the maximum value you will get from your prospect is at the beginning. Each stage after that you just destroy revenue by losing people, by not being at the most efficient that you could be. And so the revenue flows from one stage either to the next stage or to close last. And so you start having that mindset that you could use the revenue as a metric for marketing, even the very early stages. And so you convert all of those KPIs such as New Visitors and Returning Visitor into revenue metrics. You divide how much revenue has gone through that stage by the number of people you get a revenue per unit object. And now you say, “Well this is how much I have at each stage.” And you can start having those metrics.

Okay. I’m going to show you now how I have my actual dashboard. This is my dashboard for one of my companies. Okay. And that dashboard has the future value. Okay. That’s added to stock, weighted by the quality. So what you have here is that the top at say left most number here, which obviously is blurred out, it tells me how much I’m adding to my pipeline, okay? And you got to think of this like your shop. Okay. Just like a shop, we have revenue that comes in, revenue that is in stock and revenue that goes out. Either close won or close lost. And each of those bubbles shows one of the stages. How much I’m adding, how much I have, how much I have closed, how much I have lost. And that is a marketing dashboard. And so you can run your growth team just like that.

If you want to think of your sales team best metric, which is sales velocity, which is the Number of leads time the Average contract value times Conversion rate divided by Time to conversion. The sales velocity is how you measure your sales team efficiency to add revenue over time. You can do the same for growth, which is how much revenue or potential revenue your growth team is adding over a period of time, right? Then you can do that at all stages of the funnel. Let’s look at how we do it. You take the metrics, as I said, you convert visitors into revenue, right? And so you track all your conversion points. You now have, let’s say visitors. It’s like each visitor is worth $10 and then you have a new metric which is qualified visitors, and you’re going to have qualified and so on and so on. Then you have all of your projects, all of your ideas like this.

Now you have all of the revenue, okay. The total per column, and you’re going to have all of the ideas. And you can say at each stage of the funnel, I know exactly how much potential revenue I have. So here we have in the gray area, impact approved. You have the total value of all ideas at that stage. I know also how much time I’m going to take to work those ideas. Okay? And so I can say, “Well, if it’s going to take us five days to drive 100k, I know my value per day. And that’s how we prioritize all the ideas. It’s revenue per day. Now, one interesting thing is that of course we track week by week, okay? And so we know the performance of the team on a revenue basis, right? And you can start having stuff such as when the boss asks, “What project are we doing next?”

Well I know exactly. Why? Because those rank as the highest grossing per day of work. What impact are we going to have? I can commit on $270,000 out of 5.5 days of work, okay? And that is highly predictive because it’s based on past historical data. Okay. So now just to nail the points, the questions we can answer is like, “What are you working on? How do you prioritize? How do you forecast?” If we want to think about it, it means that I’m just like a sales team. I have a number of people and those people bring revenue from the top to the bottom, some of which will be closed won some which will be closed lost. It is marketing, but the organization is the same and that’s super important. Okay. Because all CEOs that I have met understand basically two things really well.

Revenue and sales team organization. Okay. The rest is like marketing wise, it’s muddy. And so instead of trying to change the mindsets, I’m changing how I structure my team at how we report. By having marketers commit on future revenue, by having marketers actually structure the team as sales teams you have amazing results. And one thing I want to say is I actually I did that at Drift. We had engineers who had bonuses based on revenue per day achievements. Okay. It’s very important on the Marketing Demand Gen side, okay? Just like sales people. Why do I do that and how does it work? Well, it’s very easy. As I said, I have the VC model. I don’t know what’s going to work. My only impact is moving experiments faster through my pipeline, okay? Moving faster means that I want to be able to have my engineers actually code faster and ship expands faster.

I don’t care if the code isn’t great. So I’m trying to incentivize them to go faster and money is a great way. They don’t really care about the money. They care about winning, right? And so I have engineers winning with money to move things faster. And so that’s what we have in the end. What we have a process aligned on I’d say on the sales structure, we have predictable output and we have a commitment on impact and that’s it.

Thank you. I think we have a couple minutes for questions.

QUESTION 1: So the question is what was the tool?

So the tool is built on Airtable. There’s actually a template of that Airtable that was shared by my friend Darius Contractor. The link I believe is bit.ly/airtable-evelyn. If you search on Google Airtable EVELYN, you’re going to find it. It means Experiment Velocity Engine. Yes.

QUESTION 2: For the revenue projections for each step. How are you determining that? For example, the …, reduce the friction it was assigned maybe 5 figures.

Yeah. How do I forecast the value?

Yeah.

So unfortunately we had the wrong slide back here, but basically I use a tool called MadKudu. So they’re all like an AI machine learning company based in Mountain View and they do advanced regressions based on past data to predict the value, F, let’s say leads at each stage of the funnel. And so I leverage their insights into my model. Okay. And so it’s pretty reliable.

Other questions? Yes, we have questions back there.

QUESTION 3: What are some examples for typical SaaS company that maybe engineers might create in order to help with growth?

That’s a good question. If you look on the internet, you’ll find a couple of videos of me on tactics and strategies. Mostly what I try to do is to try and build products for acquisition that are tangent to your core product. Okay. That would push people to register low friction drive value. You see my goal is to deliver as much value as possible to people with as little friction as possible. So a couple of examples, if people need to sign up to get the value, the question is, “Well, can you pre-create all the accounts, screenshot the value and send it into an outbound email to prove the value to the future customer?” I’ve done that once. It works really, really well. I worked at a company called Mention doing news aggregation. And so we thought, well news aggregation is really good for people who are just launching a product. Okay. But they don’t have the time to sign up and set up the tool when the launching of the product on Product Hunt on day one, right?

So how can we help with that? Well, we pulled the API feed from Product Hunt, we created the news aggregation accounts for each of those launches everyday and then we outbounded an email with a screenshot and a link with a token to claim your account. Okay. Which means as a future customer, you have in an email the proof of the value, very little friction. It’s click here and claim your accounts and the data is already there. That obviously requires engineering, but it really helps I’d say the customer on the right path. That’s one example. I’ve done stuff at Drift for example. Drift is a LiveChat bot and so the principle of LiveChat bots is to get yourselves to move faster, people to engage with you faster. And so we did a tool as an acquisition that was meant to measure the response time of your sales team.

So there was a website which is now down, but there was a website called getmyresponsetime.com where VP of sales and sales leaders could go, sign up with the domain or the email and we would have contractors go and automatically request a demo with a generated email and it would measure the time between the demo requests and the demo followup in hours. And we then measure that against the industry standards to tell them how long they took and how much conversion they’re losing. And then the VP of sales is like, “Damn we’re losing opportunities. We’re not converting as high as we should.” And the obvious followup is like, “Maybe you need a LiveChat.” But it’s tangents, right? So a lot of those things require some level of engineering and it’s much more than just building a landing page, right? It usually requires some level of backend engineering and stuff like that, but it creates value. I’m trying to use engineers to push value up the funnel. That I think is the core strategy is push value up the funnel. Cool.

QUESTION 4: I was wondering if you could quickly elaborate on how you compensate the engineer’s for hitting the certain growth targets.

How I compensate?

Yeah. Is it like a commission or a flat rate? Just what’s worked for you?

Yeah, so basically the target is to have them produce at least a thousand dollars per day worth of experiments. The $1000 dollar mark is there because it’s more or less what they costs in San Francisco? No, 220 days of work, 150-180 case cost plus bonus and whatnot, they more or less the same. And so can they add $1,000 per day worth of value to a pipeline? Okay. And if they do that, they get bonuses. Now, if you think what’s going to happen? Okay, so basically they want to win. There’s this laundry list of ideas that are rated on a scale by experiment value per day, projections of how valuable is that idea?

Obviously they all want the one at the top. Okay, so how do they compete for the best experiment idea? Well someone’s going to say, “Well, I can do this project in five days.” And the other one can say, “I can do it in three days.” And I’m going to say, “Commit.” Right? And so now they’re committing to going faster and it’s forcing them to make some shortcuts and to work extra hard, which is exactly what I want because I don’t care about the code quality at that stage of the process. I care about having the answer really fast, right? Because remember we’re trashing 9 out of 10 ideas. So we can take care of code quality later, okay? So that’s how how we do it.

QUESTION 5: Smaller stage companies. Sorry, I couldn’t quite see the slide there, but it sounded like you were saying dedicated people for this kind of experimental team. Smaller stage companies, they can’t really dedicate a four person team across these different gilts and then a followup to that, how do you think about reporting and who’s driving that? Who’s who’s typically in that seat?

Yeah. That’s a good question. So at a small stage it might not make sense. You might not need a growth team as a separate function. You probably don’t actually, right? Because the question is have you hit product market fit and have you exhausted the obvious channels? If you haven’t exhausted the obvious channels through obvious marketing strategies, you don’t need to experiment. You should just execute on those first channels, okay. The need for growth team comes when you have exhausted the obvious things and you’re getting trouble continuing on the same growth I’d say path, in terms of month over month growth and your CAC is going up, now you need to experiment. That’s the first thing.

The second thing is for me, if you really want growth as an experimentation engine to figure out stuff that is not obvious, you need two things. One need a very clear charter throughout the organization that this team is taking risks and they’re going to fail often. And two, that team needs to report to the CEO, okay? Because stuff’s going to break and stuff’s going to fail and they need our cover, right? Otherwise, that team’s not going to survive longer.

Cool. Thank you very much.

The post The Playbook to Running Growth Experiments at Scale with Growth Ex Machina Founder Guillaume Cabane (Video + Transcript) appeared first on SaaStr.

You Need To Zoom With At Least 6 Customers a Week


This post is by Jason Lemkin from SaaStr

One long-term theme at SaaStr is Getting on Jets.  Something I never really enjoyed, the travel part of visiting customers. But over time I learned two things.  First, you learn so much more when you visit customers in person.  They tell you things about the product, about what they need, about what they are thinking, that you never get over email or a quick phone call.  And second, it built relationships.   We literally never lost a single customer at Adobe Sign / EchoSign that I visited in person.

I Never Lost a Customer I Actually Visited

Of course, that’s impossible today.

But something new is taking its place.  High-velocity 1-on-1s via Zoom.

You can do something now your calendar didn’t permit before.  And that maybe only sort of made sense before.  You can Zoom with 6+ customers a week.

And it’s awesome.  Zoom is great but before all this change, in many ways for SaaS customer success, Zoom was just a tool.  It was really just WebEx and GoToMeeting 2.0.  Better, but the same basic paradigm.

Today though, you can do something wonderful with Zoom.  Customers, at least your customers in tech, are WFH.  And they are ready to Zoom.  To Zoom and talk about your product, the industry, hear from you.  Customers love to talk to the CEO.  And the magic of course is that you can do more of them.  Of course this worked before, but people didn’t think of Zoom interactions the same way before everyone in tech was WFH.

So set a goal of at least 6 Zooms a week with at least your top customers, every week.  Carve out 45 minutes for each one, with a simple agenda and maybe 3 slides on the company and what you want to check in on.

If you set a goal of 6 a week, that’s 1-a-day plus an extra.  You’ll get into the habit of just firing the Zoom up straight from your calendar and just talking.  Talking 1-on-1 with your top customers.

In a way we didn’t quite do with Zoom before.

And you’ll be closer.  Maybe not in the same way as before when you visited your customers in person.  But maybe, with more of them.

 

The post You Need To Zoom With At Least 6 Customers a Week appeared first on SaaStr.

SaaStr Podcasts for the Week with Qordoba and Gainsight — March 27, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

Ep. 319: May Habib is the Founder & CEO @ Qordoba, the platform that helps everyone at your company write with the same style, terminology and voice. To date, May has raised over $21M in funding with Qordoba from the likes of Upfront Ventures, Aspect Ventures, Bonfire Ventures and Michael Stoppelman to name a few. Before entering the world of SaaS, May was a vice president at one of the world’s largest sovereign wealth funds, where she was the first employee on the technology investment team, building a portfolio now worth over $20B. Before that, May started her career in the New York Office of Lehman Brothers raising capital for software companies.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How May made her way into the world of startups and SaaS from being a VP at one of the world’s largest sovereign wealth funds in the Middle East?
* How does May think about and assess operational survival in times of such uncertainty? Why does this downturn feel so different to prior downturns? Operationally, what needs to fundamentally change about your processes?
* How does May think about when is the right time to engage with preemptive burn cuts? Where does one look first in the organization when making these cuts? How does one structure those discussions? What is the right way to do it? What is the right way to communicate the cuts to the team, customers, and investors?
* How does one keep the existing team’s spirits high when they have just seen many of their friends be released? What is the right way to manage those discussions? What can founders do to build unity in their team now everyone is WFH? What has worked well for the Qordoba team? Where do many go wrong here?

 

Ep. 320: We’re obviously in a very unique situation today. The pace at which Corona is impacting us all right now is so fast, it’s hard to keep up.

Today is different from other times but in SaaS. It will probably be like ’08-’09 downturn — just faster.

Join Jason Lemkin, CEO and Founder of SaaStr, and Nick Mehta, CEO of Gainsight, as they take a look back at what happened to them as a SaaS vendor in ’08-’09, and what learnings you can leverage.

 

This episode is sponsored by TaxJar.

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Jason and Nick’s webinar “What We’re Doing Now. And How We Got Through ’08-’09.” You can find the full replay here.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
May Habib
Nick Mehta

Below, we’ve shared the transcript of Harry’s interview with May.

Harry Stebbings: We are back on the official SaaS to podcast with me, Harry Stebbings. And, now I’m in self isolation,. I’m getting up some weird and wonderful stuff on Instagram, so do check it out at HStebbings1996 with two Bs. It’d be great to see you there.

Harry Stebbings: But, to the show today and I’m thrilled to welcome back an old friend and incredible founder to the hot seat today in the form of May Habib. May is the founder and CEO of Qordoba, the platform that helps everyone at your company, write with the same style, terminology, and voice. And, to date, May has raised over $21 million in funding with Qordoba from the likes of Upfront Ventures, Aspect Ventures, Bonfire Ventures, and Michael Stoppelman, to name a few. Before entering the world of SaaS, May was a vice president at one of the world’s largest sovereign wealth funds, where she was the first employee on the technology investment team, building a portfolio now worth over $20 billion. Before that, May started her career in the New York office of Lehman Brothers, raising capital for software companies.

Harry Stebbings: However, you’ve heard quite enough of me. So, now I’m very excited to hand over to a dear friend, May Habib, founder and CEO at Qordoba.

Harry Stebbings: May, it is such a pleasure to have you on the show today for a very special round two. Now for those that missed our first episode, I do want to kick off today with a little on you, so tell me, how did you make your way into the wonderful world of SaaS, and how did you come to found Qordoba?

May Habib: Well, I started my career in banking and then I moved over to the investing side. I worked for a super large sovereign wealth fund in the middle East and it was a great adventure. I loved that, but I always knew I wanted to start my own company and once I had the seeds of an idea, I tried to kick myself out of corporate life before it got too comfortable. I moved to San Francisco in 2015, and I started Qordoba. Today we are a team of 28 based here in San Francisco and our product is an AI writing assistant for businesses.

May Habib: If you are a company of a reasonable size now, you’ve got people in marketing, customer success, of course sales, all talking to your market, all talking to your prospect, and making sure they all say the same things is a really tough job. So, Qordoba provides an editorial style guide. We are a single source of truth for those writing and messaging guidelines. We’ve got a browser extension that sits in the browser and it helps correct and align writing to that style guide. And, our customers are folks like Twitter, Intuit, Braintree. We use Qordoba to help the writers write well, write on brand, adjust things like terminology, messaging, writing style, getting the voice and tone right. And, I was a college journalist, a high school journalist, and so there is a lot of founder market fit right now and helping people write well.

Harry Stebbings: I do want to ask though, because you mentioned there, the time in banking and you also mentioned about the time that the sovereign wealth fund, when we look at the landscape today, it’s a challenging landscape, that has to be very clear. I have to ask, when you think back to that time in 08 at Lehman’s and then 09 in the middle East, how does today compare and how do you think about that as a comparison standpoint, in terms of landscapes?

May Habib: Well, it was an incredibly scary time. I have been here before in terms of this being a very scary time too. I was at Lehman during the financial crisis and I was one of those people, Harry, you saw on TV, walking out of the building in Times Square with my life in a box, and then your countryman, Larry Diamond, saved us the following week. So, I went back into that building with the same box. But, it was certainly months of anxiety leading up to and after the bankruptcy. And what’s crazy about this time is those months of anxiety have actually been compressed into days. And, so it’s an incredibly high amount of stress in a very short period of time for everybody.

May Habib: Then when I was in the UAE, a couple of years later, I was working for the government when Abu Dhabi bailed out Dubai and I was in the heart of the region a couple of years later, when oil prices fell from a hundred bucks a barrel, which is what they were when I moved, to $50 a barrel when I left to move to San Francisco. So, even though this is my first recession in tech, I am no stranger to scary times and it is absolutely scary. I think the suddenness really differentiates this particular economic crisis from previous ones that I’ve had a front seat to, and it’s going to be about survival.

Harry Stebbings: I mean I totally agree with you. When we chatted about it a little bit beforehand in terms of VCs speaking to their portfolio founders, I mentioned to you about mastering it in terms of speaking to portfolio founders about, as we said, their survival, operational survival, so I’d love to ask, how do you think about operational survival in times of such uncertainty?

May Habib: It’s about a few things. Number one is do you have the cash to make it out to the other side? We’ve all just blown our Q1. If you have a listener who’s made their Q1, I would love to hear it because it is a frigging impossibility right now and super impressive if they made their numbers. So, not only have most of us come in under on Q1, we have no idea what Q2 and Q3 hold. I’ve had customers who are incredible fast growing tech companies to prospects who are enterprise and mid market companies, household names, who have said, “I can’t buy software this month. I don’t know what next month will be. Let’s stay close.” And, these are deals that you know we had gotten really close to the finish line. It feels like this may be over by end of Q2 from a health crisis perspective, but it certainly does not mean back to normal.

May Habib: There is going to be a ramp up and that means a ramp up in your prospects going back to normal and your industry going back to normal, so operational survival is going to be about making your revenue projections zero for Q1, making them zero for Q2, having them in Q3 and Q4. And, on that basis, figuring out what it’s going to take for you to survive long enough to be able to see the other side. I just don’t see outside capital being a realistic possibility for most companies. So, that’s one. Do you have the cash to survive?

May Habib: I think number two is what’s happening in the minds of your team. Who is anxious? Who is worried? Who do you really need to talk to, to make sure they’re not freaking out? Now, you know that managing our own psychology as a founders part time job that during society-wide crises, having been through them before, you really need to make sure you know what your team is thinking.

May Habib: If you’re a team of 30-ish like us, then you as a founder, those are one-on-ones with everyone on your team to figure out where their minds are at. If it’s a larger team, focus on your leadership, but focus on your core folks, how are they doing at home? How is it like having their kids at home? Do they still believe in what you’re trying to do? Those are just going to be really important things to make sure the team survives to the other side, because you could have the cash stockpile you need, but if you’ve got people really not able to hit the ground running once you’re out on the other side, then you are going to have to have the team reset as well.

May Habib: And, then I think survival is also going to be about staying really close to your buyer and staying close to the market in a very empathetic way. Not in a way where you’re trying to sell them things, but really understand how their position has changed, how their jobs are changing. Most of us, most of your prospects are going to have VPs of finance and CFOs putting a pause on budgets until they can figure out what the markets are doing. Do you have a good handle of how your prospects lives have changed? It could be a permanent change. So, talking to them without trying to sell them anything, I think it’s going to be important for this period that we’re going into.

Harry Stebbings: I mean I have so many things to unpack from those. I mean if we take it kind of one by one, you mentioned there about kind of what to expect in Q1 being totally blown in terms of the first instance. Do you think there’s anything you can do to mitigate that in terms of discounts? In terms of much, much cheaper pricing for the first year and then second year where it ramps up so you preserve their cashflow and then it gets to normal pricing the next year. Is that anything you can structure a deal as to eek them out, quite frankly?

May Habib: The kinds of discounts that you provide are going to be dependent on the stage of the company, so we are absolutely doing things like that because adoption is just very important for us. The initial land is really important. There are still going to be lots of folks who say, “I just can’t roll anything out right now, whether it’s free or not.” And, so I think it’s going to be hard for people to commit to things that work when they’re trying to stock toilet paper in their bathrooms. It’s just the psychology of it and they could be there, but then the decision maker may not be, the budget holder may not be. So, just so much has to line up for somebody to make a decision right now. My advice would be try to be as high IQ as possible when talking to prospects and really back off if folks can’t do anything because it could be damaging to the long term relationship if you press, even if you’re giving things away.

Harry Stebbings: No, absolutely. I do agree. You said also about kind of being really close to the hoop and being really close to the buyer in that non-transactional way. If you think about the questions to ask to really gather as much information as possible, what questions should we be asking?

May Habib: I think working from home when companies are not used to that can really fundamentally change what organizations are able to get done. We’re lucky, I think in tech and startups in particular, that we really have a years long headstart on the rest of the global economy. We have built entire software stacks that make this possible. There are an incredible number of companies who are just being introduced to Zoom right now.

May Habib: So, I think having empathy for that and really just trying to dig in on how people are staying in touch. How are they talking to their boss? What’s happening to their direct reports? What about all those contractors they used to have? We are a cross functional product, so those questions are pretty natural for us to be curious about. But, I think that gives you a really good sense of how anxious somebody may be even if they’re not necessarily letting it on.

Harry Stebbings: You mentioned their team there in terms of the customer’s team, in terms of your team, when the customer does provide that feedback that ,”Hey, we just can’t roll it out, free or not,” or the pipe goes to zero or whatever kind of negative unexpected consequence comes from this. My question to you is what do you do kind of deliberately to keep morale high and to ensure that the team members are as empowered and as happy as possible in this time?

May Habib: We have really tried to ramp up the amount of good news sharing. So, customer success has got their cadence of calls, and if anything, people want human contact. And, so customer success has had just a busy calendar as ever. So, really being able to share those nuggets to the rest of the team is important. We had our first virtual happy hour last Friday and very lightheartedly someone came up with the idea of a toilet paper finding service and while on the call over beers, the team launched, findmytoiletpaper.com. It’s live, you could actually go to that site.

May Habib: So, trying to focus on the people versus the business because taking care of that people will take care of the business is what we’ve tried to do and checking in on each other. We’ve got a couple survivalists on our team who would be okay in their homes if all of electricity and water were to be shut off. And, so we’re making fun of them. They may have 15 people show up at their house at any given time. So, really getting to know each other as people, making a real effort to turn on our videos when we’re talking to them, turning any social activities to virtual ones. That’s what we’ve been trying to do these past couple of weeks

Harry Stebbings: And, I think findmytoiletpaper.com will soon be a viral sensation, by the way, I love that in terms of an output. I do have to ask though, because in these extended periods also, a lot of people are considering cuts in certain ways, especially if it’s potentially more prolonged than one expects. These are actions that often preemptive burn cuts. How do you think about when’s the right time to think about and then to do preemptive burn cuts?

May Habib: Well, we did one when we looked at our operating plan for 2020 at the start of this crisis a few weeks ago. We saw that it would be pretty difficult for us to make the numbers work if Coronavirus was going to be more than just a blip. And, we took the extraordinary decision to reduce the size of our team by a third. And, we did that very quickly. So, it was days from making the decision to announcing it to the people impacted. And, we did that the first week of March and literally two days later we went to work from home.

May Habib: I mean I can’t underscore the speed at which this entire crisis has come on. If we really think about where all of our heads were at 10 days ago, and that day was the hardest day of my professional life. The day that we did that, a third of the company is 17 people and it was 17 people who had become close friends to me, close friends to each other, who we had recruited painstakingly. So, that was a really tough day and I am grateful that we got to the other side of that because it makes the likelihood that we will survive what comes all that much higher and that is a win for the team that remains. That’s a win for our product existing in the world. It’s a win for our customers.

Harry Stebbings: I mean, there’s a couple of questions that I have to ask your advice on. One is that I hate conflict, honestly, and as you said, they’re friends, you have relationships with them. I never know the right way to do it and the right way to approach it. Advise me, what is the right way to do it and how do you think about structuring that conversation?

May Habib: Yeah, structuring the entire day was my number one job from when we made the decision to when we did it. I literally didn’t do anything else but prepare for that day and I talked to other CEOs who have done it. Lynn Perkins from Urbansitter was an incredible resource. I talked to former CEOs who have done it. Tony Levitan from Leaders in Tech was an incredible resource there too, talking to me through this. And, we ended up planning for the day that we did it and literally 15 minute increments starting from 6:00 AM to 5:00 PM exactly who we were going to talk to, in what order, what we were going to say, who was going to be doing what in kind of the core people that knew about it. Then who was going to be told in what order in terms of the folks who needed to know because there was people on their teams who are impacted.

May Habib: So, we decided on a Sunday, we did it on a Thursday and my life from that Sunday to the Thursday was only this. And, we had to speak very candidly to those departing. I had to take full responsibility. I let the company grow a little too fast and we were coming into a really incredible economic period that none of us had seen before. I mean, the vast majority of folks that were on our team were people who had never been through any economic crisis in their career. At mid thirties, I am one of the oldest people on the team and so that was really tough. And, I did see a range of outcomes. Folks for whom this was their first job out of college were impacted to a degree. Folks who went through the previous downturn were not. And, so just speaking really candidly about what happened to those folks, taking responsibility for it, rallying the team that remains is just as important.

May Habib: Now, rallying is difficult when two days later you move to work from home. And, so I really feel for the companies that are going to have to do these kinds of workforce adjustments in the next few months because they’re not going to have kind of the benefit that we had benefit in air quotes because it was a really shit day, but we were all together at the office. And, I do think there’s nothing like being able to put that whole office in a room after something like this happens to have those frank conversations about the health of the company, the health of the balance sheet, and the fact that we’re all together to run as fast as we ever have towards these goals.

May Habib: So, yeah, there’s a lot there, but I guess that’d be my advice in a nutshell.

Harry Stebbings: When you think about keeping the morale high there, for you, what do you think works in those situations? And, if you were to advise people that you now have to do it in a remote situation, what would you advise them given your experience having done it in person and kind of now being worked from home, how would you advise?

May Habib: I think being as high EQ as possible. People are going to want to grieve and so moving to a “rah rah, we’re going to get shit done” mode too quickly is not the right thing to do. In your mind, you’re already on the other side because you’re the one who had been planning for days for this and the folks that will be doing it over the next few months, I can’t tell you how many startup founders have told me that they’re going to have to do something like this soon. Not trying to be too positive, honestly, about where shit is going. And, what I have tried to do for myself is really hold lightly to the outcome.

May Habib: The best I can do is lead with my mind, with my heart, create a place where we love and enjoy the journey and that we all feel like we’re playing a fun, challenging game with people that we like and if we win, that’s frigging awesome. And, sharing that and really giving people the room they need to grieve. People that they loved who aren’t working with the company anymore and kind of go through their own cycle of emotions versus being kind of so focused on getting them to a good place really quickly. If you are able to be authentic and open, they will get to a good place on their own and they’ll meet you there. But, you have to meet them where they are emotionally right now.

Harry Stebbings: In terms of being authentic and open, it’s, as you said, it was the hardest day of your career. It’s a horrible and shit situation. And, so in terms of the psychology, I am really intrigued, how do you fundamentally manage the psychology of being CEO and how do you handle these really pretty shit situations?

May Habib: My friend Nick Flanders is a CEO also, and he told me a phrase a few weeks ago that just really encapsulates how I get through the tough times. And, it’s one that I just said, “holding lightly to the outcome.” You can be really obsessed with the process, really focused on the process. If you can hold lightly to what that process gets you to, you are able to be so much more present or able to connect much more deeply and show up more authentically and openly. And, I think it leads to better outcomes for your own psychology and the psychology of others around you.

May Habib: You are leading from a place of joy and love versus fear and anxiety and I think that makes all of the difference in leading. And, our own psychology’s important so that we can show up every day and get out of bed every day, but it’s also important because if we’re not managing our own psychology, there’s a transference that happens whether we like it or not, whether if we feel it’s happening or not. And, people know when you’re leading from a place of security and love versus fear and anxiety and especially in this period that we’re going through right now and I think it’s going to last a couple of quarters. Leading from a place of true peace, it’s going to be more important than ever.

Harry Stebbings: Can I ask you a really weird, quite deep question and I hope it’s okay for me to ask. Where do you find true peace and security in what you do today, in terms of now being also work from home? What is it that gives you that kind of mental secure place?

May Habib: I feel mentally secure knowing that no matter what happens, me and the team will have left it all out on the field. We don’t leave a stone unturned and knowing that you’re giving it your best and they’re going to be all sorts of things that are outside of your control, I think gives me a lot of peace and truly trying to do good things for people. Whether that is your customer, whether that is a person on your team, whether that is contractor who you’re working or no longer working with. I mean trying to do it peacefully is what gives me security that I’m not wronging anybody.

May Habib: Nobody on my team is wronging anybody and we are all just trying to do our best. If we take care of the people, I really believe this, it will take care of the business, and I believe we are going to win and make it through the other side, but these are challenging times. These are unchartered waters, for sure. There is no playbook for this.

Harry Stebbings: Can I ask, how do you communicate the team changes to kind of two very important and specific segments being one, your customer base and two your investor base. Do you need to really convey the changes to the customer base one, and the investor base, two?

May Habib: Definitely to both, for sure, and there are different communications strategies on the customer and the prospect side and we went customer by customer, prospect by prospect. They don’t need to know the ins and outs of everything that happened. They do need to know that somebody that they worked closely with is no longer with the company. Depending on how big that relationship was, it involved me also getting on the phone to just let them know that the company’s in really, really strong position, stronger than ever. And, we wanted to make sure that we were in a position to weather what may, and have our own future in our own hands. And, those conversations went very well. Certainly with investors, they’re part of your initial decision and so the investors have got, for the most part, a head in advance view on what’s coming. In our case it was pretty specific.

May Habib: What’s nice about investors is they’ve got a portfolio. And, so they’ve seen, especially if they’ve got decades of experience and we’re very lucky with our very experienced investors. They’ve seen this dozens and dozens of times. And, so who is impacted and how you do it, they are so well positioned to give you advice on that. So, we brought them in very early and then they’re also there to help you get folks back on their feet and so we created a list of folks who were impacted that was shared with the portfolio companies who are hiring and hire mode of our investors and so investors are very empathetic. They’re very supportive. If anything, they’re asking you to cut even more than you think you need to, because they’ve seen this story before and they’re really incredible and also trying to help us get people back on their feet.

Harry Stebbings: Every investor is calling every portfolio founder they have right now and telling them to cut everything they can in terms of burn and really just maximize runway as long as possible. Are founders a little bit annoyed by this when they have every investor they have calling them for the very same call? And, then how do you think about that? Because, it’s something that I’ve been concerned about it as I’ve been making these calls.

May Habib: So, much advice is really hard to internalize and action until it’s lived experience. Every time I’m annoyed by a question or frustrated by somebody asking me something, that’s a moment for self reflection, and we don’t want to do the hard things. It’s just human nature and no matter how annoyed they are at you, Harry, still make the call, still give the advice. I also resisted making our cuts as big as they ended up being and I am now grateful that I took that hard advice and a lot of it is just the founder coming to terms with what they need to do and I think they will thank you for it.

Harry Stebbings: No, I agree. Are you worried about the psychology of your team in this time? A lot of founders I speak to are very worried, especially if they don’t have a remote first team initially. Are you and have you been worried about the psychology of individual team members, loneliness, isolation, fatigue? Is that a concern for you or do you feel that given the infrastructure set up already, it’s a storm that can be weathered quite easily?

May Habib: It’s my number one concern is making sure the team is okay at home, isn’t feeling anxiety. I mean we have had our fundamental needs challenged when people go to the supermarket and the shelves are empty. When people are afraid for the lives of their parents. I think that the psychological impact of this goes deeper than we even think right now and you have to be empathetic to that as the leader of a company. It’s going to impact productivity. It’s going to impact the way folks show up and the only thing you can do, I think, is make yourself available and have these kinds of candid conversations with people very early, very frequently. We try to stay in touch as much as possible on a daily and weekly basis through Zoom and I think it’s going to get a little worse before it starts to get better. But, yeah, I have so much empathy for everybody who hasn’t had a remote first team until now.

Harry Stebbings: Can I ask you, the other thing that we’re seeing is obviously school closures. It also just causes a huge, not burden, but time responsibility, on working professionals who had previously had their days unencumbered when children were at school. How do you think about being a leader when many employees or employees suddenly have children that they need to homeschool and look after all day?

May Habib: Oh, so much empathy for that. I have an 11 month old at home who is being pushed around in a trolley outside right now because I am doing this call. So, I think we’ve had really, from the beginning, a culture where there’s not a really a stark line that divides home and family. I had my newborn at the office at 10 days old and then at three weeks old and that’s same for other folks in the company. I have done calls with candidates with my baby in my lap or you can hear him in the background and it’s just part of life at Qordoba. We’ve got a lot of parents on the team and I think we are all going to have to be okay with kids coming in and out of the frame.

May Habib: Everybody knows this CNN clip from a couple of years ago. I think that’s just normal. I was literally just on a call with a great contractor that we work with and his wife walked into the frame and said hello, the baby ran in and she joined him on his lap for a little while and it was just really lovely and there is a lot of silver lining,, I think in this phase that all of our economies are going through and if it is a bit of the blurring of the line between home life and work life, I think that’s going to be a very positive thing.

Harry Stebbings: Can I ask you a weird one and a slightly messy question, but I’m too intrigued and I’ve been thinking about it a lot over the last few days and it’s, do you think it we’ll be fundamentally so much more appreciative of human connection and human relationships after this period of isolation? Or do you think that the health concerns and the virality of the virus itself will just actually lead people to be more skeptical, more germaphobic than ever. And, that might be the wrong word, but do you know what I mean? More isolatory than ever. Which way do you think it will go?

May Habib: Oh, I think we’re going to become so much more connected. I leaned my head out the window today and told my neighbor that the Walgreens had restocked toilet paper and his dog barked up to my baby and it was just moments like this happening now throughout our day that just didn’t happen before. I think one of the benefits of working from home is going to be feeling much more present in our communities and especially in San Francisco. We’ve got such a transitory population and being able to just breathe in to the physical place where you’re at because, I mean right now San Francisco is on lockdown and we are not supposed to leave our house for non-essential anything for the next three weeks till April 7th, and that is a forced step back. It’s a forced reckoning in a way and that I think is going to have really positive impacts in the kinds of bonds we all make and just the physical communities where we live.

Harry Stebbings: That makes me super happy to hear. No, I’m very pleased to hear that. And, I do hope for the same. I do want to move though into my favorite element of any episode though, May, being the 60 Seconds SaaStr. So, I say a short statement and then you hit me with your amazing immediate thoughts. Are you ready to dive in?

May Habib: Okay, great. Let’s do it.

Harry Stebbings: Okay, so let’s hit with what do you know now about the process which you wish you’d known at the beginning of your time with Qordoba?

May Habib: That advice would be useless. And, what I mean by that is once you’ve learned the lesson yourself with your own lived experience, you can kind of look back and say, “Ah yes, that’s what that advice was about.” But, nothing I would say would be as helpful as if you want to start a SaaS company, please just get started and get all your mistakes over with.

May Habib: It’s like when you start a company, there should be a syllabus of all the mistakes you’re going to make, some of the multiple times in different flavors. And, just pick yourself up, check it off the list, take the lesson with you and move on. I wish I had known that that’s what it was going to be like.

Harry Stebbings: If you could change one thing about the world of SaaS today, May, what would it be and why?

May Habib: I think they would do an industry founded nonprofit whose purpose was an education effort for the mid market enterprise on just what SaaS can do. It’s not just about CRM and ERP and accounting software. There’s a whole software stack that makes us startups super efficient and innovative and if non startups could really understand that flow, I think it would change the speed at which they bought and adopted software.

Harry Stebbings: What’s the hardest element of your role with Qordoba today, May?

May Habib: I think on the work front, I would say the hardest part is going back to build that inbound and organic engine. We just got so good at outbound that we never did that and now we have to because the buying journey is changing and it’s a fun and it’s an interesting skill set for sure, but it’s just a different one than the one we had been developing and I would say that it’s been challenging, fun but challenging.

May Habib: And, then I think from a leadership perspective, the hardest part today is really just trying to keep the team together, keep us positive and get us to the other side.

Harry Stebbings: Tell me, when you’re stuck, who do you turn to for advice and what’s been your big takeaways from that relationship?

May Habib: I turn to books, and I have lots of great conversations with people in the industry and investors, but I kind of have this like three-part Bible that really helps me when I’m stuck, stuck now, because I feel like when I’m stuck I just have to go into my own mind for a minute and in the rereading of this canon and with the new lived experience, it’s where I think my insights happen for me and my three go-tos are the 15 Commandments of Conscious Leadership by Diana Chapman. That really changed my life. It was recommended to me by Karen Norman.

May Habib: And, then you had him on your show last week, Matt Mocharyi, The Great CEO Within. Loved the episode and I’ve been rereading chapters of that book for months now. And, then Disciplined Entrepreneurship by Bill Aulet for those of us who are gut driven, it’s just, it’s a great balanced, very data-driven approach to building product. Those are sort of my Old Testament and New Testament and Koran, I love those three books.

Harry Stebbings: Listen, I loved doing the episode with Matt and it’s been such a pleasure to have you on the show today so thank you so much for joining me today and I really do so appreciate it, May.

May Habib: Thanks so much, Harry.

Harry Stebbings: My word, I absolutely love May and such exciting times ahead for Qordoba. And if you’d like to see more from me you can find her on Twitter at May_Habib. Likewise, it’d be great to welcome you behind the scenes here. As I said, self isolation and so doing some very weird and wonderful shit. You can find that on Instagram at HStebbings1996 with two Bs. I would love to see you there.

Harry Stebbings: As always, I so appreciate all your support and I can’t wait to bring you a fantastic episode next Monday with Anthony at Front.

 

The post SaaStr Podcasts for the Week with Qordoba and Gainsight — March 27, 2020 appeared first on SaaStr.

The Playbook to Recruiting Your Sales Team with Brex Chief Sales Officer Sam Blond (Video + Transcript)


This post is by Louise Lee from SaaStr

Nothing matters but recruiting and using your personal network. Sam Blond, CSO at Brex explains why recruiting, networking and employee happiness is the key to this playbook on recruiting your sales team.

Want to see more content like this? Join us at SaaStr Annual 2020.

 

Sam Blond | Chief Sales Officer @ Brex

FULL TRANSCRIPT BELOW

My name’s Sam Blond. I’m doing The Playbook To Recruiting Your Sales Team.

Before I start, what an awesome event. I attend these types of events periodically and these SaaStr events are just always a cut above. Once again, amazing job to the SaaStr team. I’m really honored to share this stage with some really bad ass speakers. Several of my former bosses, Kathy Lord that was just up here actually started at Intacct right out of college. She was my first VP of Sales. Hi there. Brendan Cassidy, second VP of Sales at EchoSign. Jason was the CEO at EchoSign, so pretty cool. I’m doing The Playbook To Recruiting Your Sales Team. Jason had emailed me a few months ago asking if I wanted to participate and unlike other events where sometimes I have to really think about what I want to present on, this came really quickly to me and it’s because he prefaced it with, “We’re doing The Playbook too and then you got to figure out what you want to talk about.”

And for me, I’ve learned throughout my career that I can and probably do suck at just about everything else, but if I’m okay at recruiting the sales team, everything’s going to be okay. Recruiting is the only thing that matters. We’ll start off … This is a picture of our sales organization or some of our sales organization. This is why we are successful as a sales org. It’s all about the people. I wish that I could say I had some silver bullet with regard to strategy or something like that that has really taken the company out from a growth perspective. It’s the people, that’s it. And so when I started putting this deck together, I wanted to see if my experience around people in recruiting being the most important thing was something that resonated with others, so I was just Googling recruiting quotes and just about every major leader of a large business had something.

And so I found a couple that I took out. The first one is, “Acquiring the right talent is the most important key to growth. Hiring was and still is the most important thing we do.” That was Marc Benioff. The second one is, “The secret to my success is that we’ve gone to exceptional lengths to hire the best people in the world,” and that was Steve Jobs. And I just picked these two but I could’ve done 10 or 12 and just done a slide deck on quotes, but that would’ve been a little boring. And then

I was putting this deck together, it was actually last week. I think it was three weeks after the due date for the final draft, so sorry, team SaaStr. And then Jason posted this on Twitter and it says, “NMBR, after $2 million in ARR, so nothing matters about recruiting.” So lots of social proof people that I really look up to that have had this experience around recruiting being by far the most important thing that you can do to build a successful business.

For today, I’m going to start pretty high level just with a few recruiting principles and then get really tactical around the evolution, who to hire, when to hire, introduce strategy and some things that you can do to make recruiting easier. But starting with the recruiting principles, the first one is hiring the right people is the most important thing you can do to build a successful business. This really hits home for me personally. When I look at joining a company, the primary reason that I join is the people and really the leadership team. I remember when I joined Zenefits a number of years ago, I met with Parker who’s the CEO and I left that meeting just thinking he’s going to build a really massive business and that’s why I joined. The same was true when I was meeting with Pedro and Enrique and our CFO, Michael at Brex.

It didn’t really matter what the company did. It was just like these people are going to build a massive business and that’s why I want to join. I think that transcends throughout the entire organization where even individual contributor sales reps and SDRs, they’re joining the business in large part because of who that leader is. Hiring the right people is the most important thing you can do to build a successful business and you’ve sort of seen that is a recurring theme through the Steve Jobs and Mark Benioff quote.

The next one is make recruiting part of everyone’s job. We don’t pay referral bonuses when somebody at the company refers somebody that we ended up hiring. Oftentimes we’ll get asked the question, do you pay for referrals on hires? And the answer is actually yes, it’s your salary because it’s part of everyone’s job at the company to refer candidates and to recruit and so that’s the second principle. Recruiting is part of everybody’s job. It’s one of two things that we hammer home on a consistent basis around making recruiting part of everyone’s job. The other one is customer focus. That’s a different presentation for another day.

And then the last one is hiring is all about mitigating risk. And so what I mean by this is what you’re really trying to solve for is this risk reward ratio where it’s really a low risk and high upside in the types of hires that you’re making. There’s a lot of things that you can do to find these types of people, so we’ll talk about some of those.

Again, now we’re moving to the tactical stuff. What I’m going to talk about is when you want to hire people on the sales team and then who you want to hire, so the profiles of those different people. In the early days, what you really want as a CEO is to actually be the first sales rep, so you want to find some sort of product market fit. You really want to bring on several non friends and family customers. And part of why you want to do this is you want to learn the type of profile that you will be looking for in your future sales rep. How long does it take to close these deals? How much can we sell the product for? And then you can use the information that you have learned by educating yourself on selling the product and you can design a profile of who you then want to hire. Once you’ve done that, you are ready to hire your first salespeople.

Here I have, after a handful of customers hire your first couple AEs. Emphasis on the couple and we’ll talk about that in just a minute, but we’re going to spend a fair amount of time on use your network. If there’s a second major takeaway that you take home from this presentation, the first being nothing matters about recruiting, the second being use your network. This ties back to the mitigating risk. When you use your network, a lot of different things happen. You know from prior experience, from working with this person, if it’s an in-network hire that you’ve actually worked with, what their performance historically has been like. You don’t take their word for it in an interview setting. You know that they were a top performer. You know their strengths, you know their weaknesses, you know their probability of success very differently from when you hire an unknown quantity that was sourced from a recruiter or from an applicant on your website.

There’s also this dynamic that exists when you hire somebody that’s a referral where they feel a personal responsibility to do everything that they can to be successful, because it’s a reflection on the person that made that referral. When Jason introduced me to a Parker at Zenefits, I felt this personal obligation to just really work my ass off and do everything that I could to be successful because I knew that Parker and Jason were in constant communication and my performance was actually a reflection on Jason. I had this sense of moral obligation to perform. The same is true at the rep level. If you have a referral from one of your top performing reps, the referral wants to come in and perform because they know that their performance is a reflection on the person that made that referral. You also have the dynamic where the person that made the referral wants that person to be successful, so they’re going out of their way to try and help the hire be successful in ways that somebody that sourced from an external recruiter or somebody that applies on your website, that doesn’t happen.

And then the last thing is this concept of mitigating risk. It exists both ways. The same way that the company wants to mitigate risk on the hires that they’re making, the top performers want to mitigate their own risk on the companies that they are joining. And so what I mean by that is, if you’re a top performer at a business, you’ve earned this reputation, you know that the leaders within the company think that you are really great. You don’t want to go start at a new company where you’re an unknown quantity. So oftentimes you will follow the best leader or you will get a recommendation to join a company, rather than doing something like applying on the website, because you’re not taking advantage of your past success if you become this unknown quantity within a company. I can’t overemphasize the importance of using your network and really forcing that indefinitely.

We have about 60 people in the sales org at Brex today. Every single one of them has been sourced internally, so we haven’t used any external recruiters. We haven’t used internal recruiters for sourcing. They are all in-network hires and we’ve missed once, out of all the hires that we’ve made. The next one is hire more than one AE. The reason that you want to do this, if you just hire one AE, you don’t know if they are good, which is why the product you’re really selling and the product is taking off. If they’re not successful, you don’t know if it’s product market fit. If you hire two people, they’re able to leverage one another. They’re able to play off of each other and see what’s working, what’s not working, and then you also can see if the product is selling because they are successful.

We’ll talk about a few scenarios. If both of them are really successful, you know you’ve got something and you want to continue scaling the team. If one’s successful, one’s not successful, you know that one of them is probably pretty good and you may have missed on the other hire. If both of the hires that you make are not successful, this is systemic and you know that it’s a problem with your product market fit and you probably want to slow down and fix things and make it easier to sell. You don’t get any of those insights by hiring one person, which is why when you make your first sales rep hire you want to hire two.

And then lastly on this slide, some things that you want to solve for and then one that you don’t, so solving for the stage of the company. You want somebody that understands what it’s like to work in a startup. You want somebody that knows the only constant is change. You want somebody that doesn’t need a four to eight-week training program that tells them how to sell that you may receive it a large company. You want them to know what to expect at an early stage startup.

The next one is around deal size and cycle time. If you’re selling a hyper transactional product, you don’t want to hire somebody that has done big data field sales to Fortune 500 organizations. You want somebody that has seen what hyper transactional sales look like and you want somebody that has seen what a deal size in your deal size range looks like. And then lastly, there’s no better indicator of future performance than prior success. And so if you’re hiring somebody that has been a top performer at a company historically, and you’ve confirmed that, their probability of being a top performer at your company is super high.

You want to solve for people that have been at the top of the leaderboard in companies that they’ve previously worked at. And then lastly, one thing you don’t want to solve for is domain. Oftentimes, judgment can be clouded if somebody understands the space pretty well. The reality is it’s pretty easy to pick things up. I’ve sold electronic signature HR software, QA. We’re doing credit cards now. It’s just easy to learn this stuff. And so when you solve for domain, oftentimes you miss on what’s really important and it’s not a sacrifice that is ultimately worthwhile. Oftentimes people that go and join their competitors, the top performers at fast growing startups, they don’t want to leave and join the competitor. It doesn’t really happen.

Okay. So scaling the team after a couple of reps are successful, it’s time to hire your first sales leader. First bullet point, again, recurring theme, use your network. I’ve been a sales leader now at a few different companies. Jason’s introduced me to two of them. The third one YC introduced me to Brex. And so same dynamics exist with leaders as they do with AEs. You really want to use your network and hire somebody with all of the things that I talked about when we had this bullet point on the previous slide. The next one is you want somebody who has seen what great looks like at an early stage. Don’t hire the Salesforce director that inherited a team and you want to bring them into your startup because Salesforce is this really amazing company and so they probably really understand how to sell. It’s just so totally different.

You want somebody that has been part of a really fast growing business at similar stages. They’re likely not going to be the person that ran sales for the hottest company, but they might be somebody that was like a manager that progressed into director and now they’re ready for their own shot. The probability of that person being successful in an early stage startup organization is so much greater than somebody that has seen this large enterprise scale sales, because they’re just totally different, again, mitigating risk.

And then the first thing you want to solve for and almost the only thing you want to solve for is around recruiting. I talked about, I probably suck at everything else, but we’ve built a really good team and because of that we’ve been able to be successful in sales. If you go in with that mindset where recruiting is the most important thing when you hire a leader, you’ll want to ask them things like who are you bringing with you? And be specific, show me those people and why will they be successful here? How did they perform at your previous company? Specifics, names. When are they coming with you? Are they ready to come? Maybe even talk to those people, see why they want to follow that leader. And if all of those signals are positive, almost nothing else matters.

And so you come in, you have this sales leader, the first thing that they’re going to want to solve for is prioritizing recruiting. At this point, I probably spend 60% of my time on recruiting. I now do that naturally because I understand the importance of it. If you’re a new sales leader, you probably want to block off time because nothing is more important. Just spend a bunch of your time recruiting, finding people, talking to top performing reps within the company. If you join and there are two sales reps there, one of them is crushing it. Spend a bunch of time with that person that’s crushing it, asking them for referrals. Make recruiting part of their job. Again, that dynamic, if you refer your friend, you’re going to be bought into their success in ways that an unknown quantity or random person that you bring in that doesn’t know anybody. Again, you’re trying to solve for probabilities of success here and mitigating risk.

And then lastly on this slide, when you hire a sales leader, their skillset likely doesn’t transcend. If they’re really good at recruiting and motivating the team, their skillset likely doesn’t transcend into things like sales operations. This is systems. This is analyzing data. What you’ll want to do is you’ll want to backfill in there. They’re going to need that support and allow your sales leader to focus on, again, the most important thing and that’s recruiting.

I’ll fly through these next couple slides. I’m showing 30 minutes, but actually think I came on at 2:30, so maybe I have a little bit more time. On interviewing, you want the candidates to be themselves. A lot of people try and do these high pressure interviews where you ask questions and try and throw people off and see how they react. I really don’t like that style and it’s because when somebody is ramped and they may be talking on the phone, if it’s an AE, they may be talking to candidates. If they’re a leader, they’re going to be comfortable in those scenarios because they will have learned the product. And so by throwing them off and seeing how they react in uncomfortable situations, that’s not really applicable to how they’re going to perform once they’re within the company.

And so you want to start making them comfortable, just shooting the breeze for a little bit, talking about things that they’re very comfortable with. And then you really want to spend a bunch of time talking about them. You want the interview to be about selling themselves and asking them questions to find out about their strengths. Where do they need support? If you ask a question about where they may need some backfill or some support and they give you a real fluffy answer that’s nonspecific, I think that’s a red flag. You want people that are self aware enough that know where they need help and you want them to identify that early on. You want to talk about goals, you want to talk about historical performance, all things that these people should be really comfortable talking about.

And then the example that you probably don’t want to do, or at least my experiences that I don’t want to do is the tell me about a time when questions that really see how people think on their toes. Oftentimes people will make up shit when you ask this question. What you might solve for is somebody that is a good interviewer and not somebody that is a really good performer. A few interview questions that I really like. What does success look like for you personally in this role or some variation of what are your personal goals if we were to hire you here? I think that generic answer there is I want to hit my quota. For me, success looks like I’m going to come in here and I’m going to hit my quota for you. And the problem with that is 90% of sales reps at Brex today hit their quota. And so what you’re really saying when you answer the question that way is you’re going to be in the top 90%, which isn’t that good.

And so what I’m looking for and I’d say like the better answer for this question is I’m going to come in and I’m going to figure out what everybody on the team is doing really well. I’m going to learn from the top performers and I’m going to be number one on the team. Because unlike when you say I’m going to hit my quota and you’re saying I’m going to be in the top 90% of people on the team, there’s only one number one. And so you’re looking for somebody that wants to be the best. Another question is what do you do different from your peers that makes you a top performer? The reason I really like this question is there are answers that are more applicable for a certain sale types and what I mean by that is if you have a hyper transactional sale where success is determined by at bats and somebody answers the question. They say like, “I grind harder than anybody else in the team today. I’m the first one in the office. I’m the last one to leave and I will work harder for you than anybody else.”

Great for like a transactional high volume sale, a lot of cold calling. If you have a really complex product that requires a deep understanding of how to sell it and somebody answers the question to what do you do differently, it’s like I go really deep on understanding our product and understanding the pain points within the customers that I’m selling to and I provide them solutions. Perfect answer for like a complex product. And so you asked this question and you’re looking for answers that are applicable to your sale type, so I like the question.

All right. There are few things that you can do to make recruiting easier. The first one is draw during the ramp. We don’t actually give a full draw and to define draw what I mean is sales reps will get a base compensation and a variable compensation. A draw is you just give them their full-on target while they’re ramping. What we do is we actually set ramping targets for the first few months. They’re pretty attainable. Nobody ever really misses them and if you hit the ramping targets or the milestones that you’re supposed to be hitting during your ramp, we will pay you your full-on target. We won’t pay you more. But the thing is sales reps oftentimes and specifically with junior sales reps, joining a new company can be really stressful from a financial perspective because oftentimes they’re using their commissions to live. And so you want to create an environment where it’s a lot less stressful and makes it easier for them to join and they’re not worried about financial obligations they may have during the first three months at the company and instead they’re worried about performing.

The next one, maybe no surprise, sales reps care about compensation, so pay top of market. This is just a pretty easy thing to do. Oftentimes you pay for what you get. I really like to create a reputation within the companies that I work at for paying top of market and when you do that people want to work there. 70 plus percent of the team over quota. People talk about really high on targets and if only 20% of the team is hitting the OTE, it doesn’t really matter what it is. And so what I do and I’m interviewing sales reps is I actually show them without showing the names, commission checks from the previous months, what people are actually making. On targets are largely irrelevant. What actually matters is take home. We want to show that if you think that you will be in the top 70% of people on this team, and of course everybody thinks they will be, the baseline for what you can expect to make is the on target that we’re talking about here. It’s very different in a lot of other organizations where maybe 50% or 30% of the team is hitting their quota, so you actually want to pay what you promised to pay.

The next one is promote from within. In addition to compensation, salespeople really care about progressing their careers. And so when you can, you should try to promote your first line management team from individual contributors that have been really successful. There are two things that I do to determine if I can promote from within. The first one is I ask myself, would I like reporting to this person? I’ve made the mistake before where I’ve promoted people that I actually wouldn’t like to report to and it’s been a nightmare, so ask yourself that question. If the answer is yes, that’s good signaling. And then the second thing that you can do is you want to promote out of want and not out of need. And what I mean by that is if somebody has really killed it as an individual contributor and you want to put them in a more strategic position within the company because they’re going to have a bigger impact, that’s really good signaling to promote that person. If you are growing at a rate and you need to promote somebody into a management position and somebody is the least bad option, that’s not going to work out and so you may want to look externally if you’re promoting out of a need and not out of want.

Okay. The next one is set attainable company revenue targets to develop a culture of winning. We launched at Brex about 15 months ago. This month will be our 15th month in a row of just crushing revenue targets and what that creates is an environment where we have 90% of the reps that are hitting their personal targets. We’ve never missed a company revenue target and winning just becomes the expectation. Losing is not acceptable within our company. And so that becomes a really positive environment to work in and leads to the last bullet point here that is obsess over employee happiness. People are happier when they’re in an environment where they’re successful, where the company is successful and you can create that environment by setting targets that are challenging, but you will hit them and you want to solve for this culture of winning, because losing becomes acceptable as soon as it is repeated.

I think just a few recap on the takeaways. The first one is, as Jason said it best in MBR, nothing matters but recruiting. The one that it would be sort of the second one that I think is really important is use your personal network. I can’t emphasize that enough because the probability of success with an in-network hire is just exponentially greater than somebody out of network. And then this last one around, obsessing over employee happiness. When you create an environment where people can be successful and people want to be in the office, good things just sort of happen. It looks like I have four minutes left. I did do a slide for Q&A. I don’t know if anybody has any questions we can spend … Yeah, there’s somebody over in the back.

QUESTION 1: And what guidelines do you use to set the targets earlier?

Yeah, so the question is what guidelines do you use to set the targets? At inception what you want to do is you want to create very conservative revenue targets because the possible outcomes are you crush that target, which is a good problem to have or you meet the target and you just sort of continue pacing. What you don’t want to do is set these unrealistically high targets and miss them because that then becomes ingrained in the culture where you missing targets. I think you want to be conservative upfront and I mean the real answer is you kind of figure it out like that. Then over time you set the targets through data. You have some historical performance in previous months that you use to set targets. One thing that we still today are really setting targets and this is company level targets on a quarterly basis, we have an idea of what we want to do at the beginning of this year. We kind of knew directionally where we wanted to finish this year. Same thing is true going into next year, but we’re really setting the company level targets as we go quarter over quarter because we have the most recent data available that we can use to decide what that sort of dynamic of not easy but sort of challenging, but something that we’re going to hit. Yep.

QUESTION 2: One question I want to ask you is, I know at EchoSign you were an AE and then you came out of college, you moved up at the beginning. At Brex, what’s the percentage of college kids you hire for the inside sales and moving them up to be closers or versus hiring people who’ve done SaaS sales?

Yeah, it’s a really good question. Just to repeat, it was around … I was fortunate enough to have the opportunity. I started the EchoSign as an SDR and then sort of worked my way up and was in an environment where those opportunities were given to me to move into more strategic positions. At Brex, how much are we hiring at in early stage and then promoting from within compared to just hiring senior leaders externally. We’ve only really been around at this point for 15 or 16 months when we really started scaling the team. We had two sales reps 16 months ago. I think there needs to be some period of time that people remain in roles for them to really learn the role and be prepared for success in the next level. That period of time at an early stage startup can be as little as six months, but more likely it’s probably 9 to 12 and so we’re just now reaching that milestone where people internally have been in their roles long enough that we are ready to promote them.

But going back to the concept of hiring is all about mitigating risk, that couldn’t be more true when you are promoting somebody that has been successful within your company, selling your product into a more strategic role compared to an external hire. And, again, we talked about there’s no better indication of future success than past performance. The top performers that you’re creating in this funnel system, their probability of success is just super high, so the top performing SDRs that become AEs, we’re now starting to have those. They’re going to crush it. All first line managers within our company right now and I think there’s maybe six of them were promoted from within and they all passed this test of would I like working for them and are we promoting them out of want and not out of need. No. Yeah.

QUESTION 3: Thank you. Apart from network or referrals, what sources or sites of hiring have you used?

The question is, outside of using in-network hires, what are other sources of hiring that you’ve used? I feel really strongly about this. I think it’s possible for people to just rely on personal network and people to apply on the website or sourcing candidates from LinkedIn. You’re just really risking the probability of success there. And so I think if you really prioritize recruiting and force yourself to use your personal network. If it’s not somebody that you have worked directly with before, talk to somebody that you really respect, talk to a bunch of people that you really respect, get referrals from them. Just try and stay as close to in network as you possibly can because each layer you sort of move out, I think the more risk you insert into the process. That isn’t an answer to the question because we don’t really use anything besides personal networks.

Thanks so much for having me. This was a blast. Really appreciate everybody attending and hope it was good.

The post The Playbook to Recruiting Your Sales Team with Brex Chief Sales Officer Sam Blond (Video + Transcript) appeared first on SaaStr.

No One Wants to Cancel A Trusted Vendor


This post is by Jason Lemkin from SaaStr

It can really tough to think through the short-term pressures of churn.  SMBs are hurting the most, and the churn will be highest there.  Enterprises are churning less, but slowing new purchases way down.

Just remember one thing as your North Star here:  No Customer Wants to Leave a Vendor They Count On.

You may have 1000s or more customers.  But often, your key stakeholders only manage a few key, core applications they need.  And that the organization looks up to them to deliver with:

  • No one wants to lose their CRM.
  • No one wants to cancel their call center.
  • No one wants to lose their core ERP, what they run their business on.
  • No one that has spent the past 2 years deploying a new solution wants to rip it out.  Not unless it was a failure.

Etc. etc.

If your NPS is high and your utility is real, your customers will want to stay.  Help them do that.  You’ll be surprised how many are not just rooting for you, but will do their darndest not to churn.

As part of that, maybe:

  • Let customers downgrade if they need to.  Take the pressure off.
  • Be prepared for upgrades, too.  Make them easier.  Capital will flow into existing, trusted vendors.  Eliminate gates & games around upgrades.  Make upgrades easier.
  • Let SMBs “pause” if they need to.  A pause is a lot better than churn.  Think about your gym membership.
  • Produce more content and more help.  Help your customers learn how to use your product even better.  A weekly webinar can be great here.
  • Try to give each customer a named Customer Support manager.  A real human that can help.

Your customers will want to stay if they can, and you are important to them.  That’s your North Star.  Help them stay, in whatever way you can.

The post No One Wants to Cancel A Trusted Vendor appeared first on SaaStr.

The Playbook to Building a Customer Reference Program with Talkdesk SVP of Client Services Gillian Heltai (Video + Transcript)


This post is by Louise Lee from SaaStr

Learn from Talkdesk SVP of Client Services how to build a Customer Reference Program. How to create boundaries and norms with the sales team, how to find customer advocates, how to build and scale your program, as well as the difference between incentivized vs. reward program. Without considerations and principles Customer Reference Programs can falter.

Want to see more content like this? Join us at SaaStr Annual 2020.

Gillian Heltai | SVP, Client Services @ Talkdesk

FULL TRANSCRIPT BELOW

Hi, everyone. My name is Gillian Heltai. I’m the senior vice president of client services at Talkdesk. At Talkdesk today, the client services organization is 90 people strong and we are responsible for making sure that our customers both in the pre-sale and the post-sale process are able to design and then achieve their desired outcomes. I’ve been at Talkdesk for a little over two and a half years. In that time, we became the first ever or the youngest company ever to enter the Gartner Magic Quadrant, the Gardner CCaaS Magic Quadrant. We raised $100 million. We became a unicorn. Really importantly for the purposes of today’s topic, our average deal size increased by three 3.5X over that two and a half years.

Customer reference program went from something that was nice to have and important to absolutely critical to our new business sales cycle. That’s what I’m going to talk about today. I also entered the customer reference program space totally cold. I came from a company where I worked for 10 years. It was very well-established. It was a category leader. We had really high saturation of the market. We didn’t really have to do customer reference programs. I remember in my first week or two at Talkdesk I had one of the sales leaders come up to me and say, “Hey, we’re going to need a reference for this customer that we’re trying to close to help us help sell the deal.”

Frankly my honest reaction was like, “Wait, isn’t it the sales team’s responsibility to be closing this customer? Why do I have to go ask one of my customers that I’m trying to protect and focus on kind of core Talkdesk product advocacy or product adoption. Why do they need to be involved in that process?” I don’t know if any of you have ever experienced that, but me coming in to Talkdesk, I wasn’t familiar with this. A lot of what I’m going to talk about today is my learning experience and how we went from a relatively small customer reference program to what we have today, which is really kind of a humming machine.

If you’re anything like me, you may have entered a situation at some point saying, “Do I really have to do this. Do we have to do these customer references? Is there another way? Do we really want to be introducing this motion to our customer team?” The answer is probably. There are very few situations in which customer reference programs aren’t going to be really, really critical to your new business sale cycle. You’re probably going to have to be doing customer references unless there’s very small contract value, right, where there’s not a ton of pressure in making the right decision on the part of the prospective buyer. Another reason you may not have to do references is very flexible contract terms or maybe your company’s already huge, right?

Like you are very well established and you don’t necessarily need to run this program. My guess is that if you guys chose to attend today’s session, these do not apply to you, so I’ll just kind of move forward into think about how you actually build a customer reference program. I’ll come back to some of these buts a few minutes later. You’re going to create a customer reference program, but there needs to be some criteria boundaries in order to supply customer references. We’ll talk a little bit about how you create those boundaries and norms with the sales team. Then you should also really be striving to amplify your advocate’s voice through 1:many activities.

Those one-to-one customer reference calls are really critical, but there are so much more that you can do to amplify their voices to create 1:many opportunities for them to share their voice with multiple perspective customers. I wanted to start by talking a little bit about the Talkdesk evolution. I joined kind of at the second stage. At the very beginning, you’re in your earliest days as a company. You’re excited to be closing your first customers. It’s often really rocky, but if you’re in this stage, and you probably already know this, it is so, so, so critical that you do everything to keep these customers happy. Years from now they’re going to be your absolute best references. Today at Talkdesk, we had a lot of our kind of big momentum starting in 2014-2015.

Those customers are some of our most powerful references because we get to bring them in and they tell the story not only of what it’s been like to work with Talkdesk over many years, but they also get to tell our innovation story for us. So much of what Talkdesk sells on is innovation and trust. To be able to have a customer who’s been with you for years and even from the early days to come in and tell that story with you is, is really helpful. Now, I joined Talkdesk kind of in the second stage, which is, hooray, you’ve got enough customers that you’re able to do references potentially at scale. It’s really nothing a little bit of elbow grease can’t solve. At that point, often you’re using your customer success team, your AE team to really kind of manually manage this process there.

It probably looks something like this. AE has a deal that is getting close to closing. The customer that they’re trying to close says, “Hey, I’d like to talk to some of your customers.” Maybe they send out a message on Slack, maybe they send you a text message and they say, “Hey, do we have anyone who in Talkdesk could probably be say like of a certain size, with certain number of integrations, maybe in this regional vicinity or in this country?” Maybe you send out an email to a bunch of folks and like, “Hey, do we have any customers like this?” That’s kind of how the process runs and that was what it was like when I joined Talkdesk. That was okay for six to nine months and then we started hiring really aggressively on sales. We started investing a tremendous amount on the enterprise side.

This is where that growth into kind of mid market and enterprise really kicks in as I referenced that 3.5X deal size growth. We hire all these new enterprise account executives. Now they’re coming to my team not with a, “Hey, could we get a customer reference,” it’s, “Hey, I need three customer reference calls, I need an onsite visit, and I need all of that done within the next 48 hours.” Some of the emojis that I had built in this slide are missing, but it’s like that big yellow face with the big eyes and the red cheeks. I think it’s called bashful. That was the emoji that I had on this slide because it’s literally like, “Oh my God, how are we going to accomplish this?” That was a very short window for us because that is the point at which you need to hire specialists.

That is the point where your regional vice president, your managers of customer success, your vice presidents of client services can no longer manage this on their own. You really need to start building a machine. That’s the point at which we hired a customer marketing team and they helped us to refine the reference program and focus on this notion of scale again. How do you start to amplify those voices and get from a 1:1 customer call to a 1:many customer advocacy program? How do customers become advocates? There are a couple of things that we need to consider in thinking about like, okay, I’m now in a position where I know I need to invest, essentially I’m hiring customer marketing. What are the things that I need to be thinking about in building an advocacy program?

I need to know how do customers become advocates, right, so that I can try to harness that. Then we’re going to need to talk about how do I find them, what are the tactics that I can use to identify who my advocates are. Then once you’ve started to identify like what is the composition look and feel size of my advocacy pool, then we’re going to talk about what do you actually do to start building that program out. In terms of answering the question, how do customers become advocates, we can probably all relate to this emotionally, right, because we’re all buyers of one service or another. The number one reason is going to be love for your product. This is something that when I joined Talkdesk I was so fortunate. Engagement with our product was already so high.

Our net retention rate was over 130%, so we have this really great pool of customers that all we needed to do was kind of find them. One great way is to figure out who your advocates are or who are the people that love your product. We’ll talk in a couple minutes about how do you actually find those people. Another great opportunity is improvement versus the prior provider. Many times your customers maybe choosing your service because of some sort of pain that they had in the past. If you’re able to identify the customers who had really explicit pain with their prior provider that drove them to choose your solution, these are going to be really great customers to enlist as advocates as well.

This also ties, by the way, into a really good presale process around documentation of new business opportunities. What’s the pain point? Why are they going to choose Talkdesk over another provider? What are we trying to solve for? Making sure that all of that is documented on the new sale opportunity allows us to very quickly mine that to identify who may be an advocate for us. Another way that customers become advocates is a personal relationship with the account team. They’re going to develop a really close relationship with a sales representative. Hopefully you’ve got a good client services team, a customer success or support organization that’s building one-to-one relationships. You can seek to find customers that that talk about those relationships as well.

Great support experience. Then finally, one that I love and we spent a lot of time talking about a Talkdesk is this notion of overcoming a challenge together. I think often we think about the customers that have experienced pain with our company as customers that we need to kind of tip toe around or that may be unlikely to want to be an advocate for us. But honestly, it’s generally the exact opposite. When you are able to overcome a challenge, and sometimes it’s even Talkdesk’s fault, right? Let’s say we messed something up in the implementation. We thought we were going to be able to do something in a week and it takes 10 days or 14 days.

You may think like, oh, that customer is going to be angry, but actually if you manage that communication really properly and then you end up succeeding in the implementation, that’s someone who gets to join you in telling kind of the story of overcoming a challenge together and coming out stronger on the other end. These are really, really great customers to look at as potential advocates. Then you’ve got a profile of the types of experiences that advocates have. How are you actually going to find those people? There are a lot of really great tactics that you can use for this. The first one are your support CSAT surveys. I imagine if you’re not, you should be. After completion of a support related case, there should be some sort of a CSAT collection for those users.

People who you find that are repetitively thanking your support team, they’ve got an emotional connection to your organization, these are great people to target as advocates. NPS surveys. We run a NPS survey right within Talkdesk. We get a couple thousand responses every single month. We look at those in real time. We’ve got a Slack bot set up and we see every NPS survey that comes through one by one. Those are great people for us to engage with to be advocates. This is for references, but also the broader advocacy program. Targeted customer feedback surveys. This is actually something that we’ve only just started. We’re identifying what we consider to be our primary contacts for our customer relationship, technical users, business users, budget decision makers, primary administrators of the product.

We’re sending them surveys that help us collect key information for the marketing team, the product team, but also general feedback on the services organization. Positive sentiment around that and willingness to fill that survey out, these are going to be people who are willing to be your advocates. The way we normally do this as companies is really this fourth bullet, but there’s so much else that we could be considering, but let’s not forget the one-to-one relationship. CSM, account manager, AE, whoever is kind of running point as the quarterback of the relationship, they can also just ask. They can ask formally in a QBR setting. You could create some slide where that says, “Talkdesk customer advocacy program. Here are the benefits to you. Here are the benefits to us. Are you willing to sign up?”

Right? We have to be brave enough to just kind of throw it out there and ask the question bluntly. We can also ask informally during a catch-up call, a site visit, personal email out to a ballgame, would you be willing to be an advocate for Talkdesk? Then a third thing that you can do is incorporate it into the contract. Either in a new business deal or in a renewal engagement, there’s always that negotiation that’s happening. What am I going to give? What am I going to get? One of the things Talkdesk likes to think about at that contractual phase is, okay, so a customer may be asking for discount or customer may be asking for like specific payment terms that we don’t offer, whatever it is, we can say, “Okay, well, if we’re willing to give this few, might you be willing to be an advocate for us?”

That’s another point in time where you can start to engage around that topic. Then finally, local event attendance. Talkdesk has invested a lot in the last year in local event attendance for both customers and prospects. This is a really great way to find your advocates because generally speaking, the customers who sign up and come out to the happy hour or the luncheon or whatever it is, they like you. They’re good folks to talk to, to engage with in your advocacy program. Now, we’ve talked about who your advocates are and how you can find them. Now, we need to start thinking about, I’m ready to build and scale my advocacy program, what are the things that I need to be thinking about? What are the decisions that I need to make as I build that program out?

 

What are the considerations? I want to spend a couple of minutes on each of these because I’ve debated them and we’ve also changed our tactics a little bit overtime at Talkdesk. The first one that we go back and forth with a lot and it is a basically philosophical decision is, is this going to be an incentivized program or is it going to be a rewarded program? An incentivized program, you often use a software solution, one that’s very popular as Influitive, that you encourage people to join this program, and they know that if they do whatever it is, the customer reference call, the case study, the live presentation, the webinar, the onsite visit, that they’re going to get something, right? It’s almost like a point system where if you do this, then you get Y. That is an incentivized program.

It works really, really well in some industries. It tends to work really well also with more junior folks. If you are in an industry where what you’re trying to do is kind of engage maybe at the kind of independent contributor or supervisor level, this may work really well for you. It tends to work not as well for kind of VP plus budget holders because they are less interested in participating in a sort of an incentivization program. The other way you could do it is through ad hoc rewards. Rather than saying to the customer, “If you do this reference call, then you will get X,” you ask the customer for the reference call. You ask the customer to do the webinar and then you thank them with a reward. It isn’t something that is always consistent.

The reward doesn’t always happen, but it is a generous thank you approach for rewarding people for signing up for being your advocate. Again, this is a big decision that you have to make. There’s big cost decision with this. In one situation, you probably need some sort of a software solution. In the other, you could probably manage it in a Google sheet. That’s one big decision you need to make. The next is who is going to ask. I have seen companies totally fall apart over this because if you don’t define who is going to ask, then either everyone is going to ask or no one is going to ask. It’s critical that you figure out who is going to be the voice of Talkdesk or the voice of your customer in making the decision to, A, who are we going ask to do this advocacy event and how are we going to ask them.

The worst thing that can happen is no one makes the ask and then the second worst thing can happen is that customer gets an email from three different folks from Talkdesk making the same ask. That makes us look very disorganized and it’s not something that we would want our customers to experience. The third consideration is do you want this to be a wide program or a deep program? What I mean there is Talkdesk has 1,800 customers. We need to make the decision, do we want our advocacy program to tap into all of the happy people within that 1,800 customer base, or do we want to identify maybe a hundred of those customers that are going to be like our identified advocates and they’re going to do higher volume of activity?

Again, this is a really important decision to make because it’s going to frame how you hire, how you structure, and how you incentivize. If you’re doing a very deep program, what you might do is kind of engage with a large organization and say, “Hey, we want you to be part of our advocacy program. Here are the handful of things that we’re going to ask you to do on a monthly basis, and this is how we’re going to reward you or thank you or incentivize you for this.” If you’re doing a very wide program, you need to rethink that because there’s going to be higher volume, higher velocity.

You’re going to have to manage business decision maker turnover, but you’re strengthening your capabilities by widening the pool of folks that you can talk to, and it means that you can do better matching of advocacy program needs. Then finally, and this is where I’m spending a lot of my time right now, is what are our effective alternatives to one-to-one references? A lot of times the ask from the sales team is going to be, can you get someone on a call with my prospect to help them tell the story of what it’s like to be a Talkdesk customer? But as we get bigger and bigger and our sales team gets larger and larger and our pipeline gets bigger and bigger, this just becomes harder, right? It’s like we’re having a hard time fulfilling those in a timely manner.

It’s a lot to ask of our customers. Now we’re starting to spend a lot of time thinking about what are the things that we can do to amplify our advocate’s voices so that we don’t have to do so much of that one to one matching. Great examples of this are webinars, particularly vertically-based webinars, customer video testimonials, case studies, reference letters, local events, either social or kind of more targeted in nature. These are all really great ways that you can create content and experiences that deflect the need for a one-to-one customer reference.

I’ll come to this in a minute, but you need to start coaching the sales team on how to introduce those opportunities or that content earlier in the sales process because that helps to, again, kind of deflect the need for a customer reference call. I’ll talk about that in just one minute. Then the principles. The principles that you need to be thinking about as you’re building and scaling your customer reference program. First of all, it needs to be 100% measured. This is something that I am really dogmatic about. You do not want to be doing dozens or hundreds of customer reference engagements in a given month or a given period and not have all of that measured. Because whether or not it’s rewarded or incentivized, do not forget to thank your advocate.

If you do not have this measured, you are going to forget to thank someone and then you have turned an advocate into someone who is never going to do that again for you because there’s no worse feeling than doing something for a partner and then like not even getting a thank you for it. If you’re not measuring it, you’re not going to thank them, and you’re not going to be able to move into measured outcomes, which I’ll talk about now. The third principle that I have here is that boundaries must be defined. You do not want your advocacy program to be a free for all. At Talkdesk, we define boundaries based on what stage the deal is at, certain criteria that the AE must meet for us to be able to engage in a one to one customer reference.

If you’re not measuring, then you’re not going to be able to use a measured outcome approach to define what that stage is. What I mean there is, let’s say you start with everything. We’re only going to be able to do customer references. If a customer or a prospective deal is at a certain stage, let’s say in verbal stage, if you’re not measuring the outcome of that and whether or not those are actually converting, you can’t decide whether or not that stage requirement is too early or too late. Again, that’s why the measurement is so critical and why defining those boundaries is informed by that measurement process. Then finally, protect your customers. I think there is so often this habit of focusing on the new business deals, right?

This advocacy program, the purpose of it, of course, is to help Talkdesk grow on the new business side, but our customers, frankly, they matter more. They already made the decision to join Talkdesk. They’re staying with us. They’re working with us. They’re growing with us. It’s really important that sales leadership is aligned with that value of making sure that customer is the number one priority.

They said to leave a couple minutes again for Q and A. I don’t know if there are anyone with a mic, but I’ll just reiterate your question. Yeah.

QUESTION 1: What are some examples of local events you mentioned you folks do?

Yeah. The question was what are some examples of local events that we do. We invested a lot in a local event marketing team. We’ve got events that go on all over the U.S. and in Europe as well, but these are going to be like… One of the kind of themes that we do is cocktails and conversations where we’ll give a CX related topic that’s going to be the primary point of the conversation or the primary point of the event, and then we provide it to prospects and customers who attend like kind of in a happy hour setting. We’ve done these CX tours where, again, the intention is, in this case, a little bit more around thought leadership, but we do half day events where we seek to get… In those happy hours, it’s looking more for like 30 to 50 people.

For these tour events, we’re looking more like a hundred or 200 attendees to engage in a little bit more structured learning exercises around CX. Then just kind of general meetups on topics that our customer success or sales team here is about that we think will lure people into attendance. Yeah. Yeah.

QUESTION 2: Can you tell us the strategy a little bit around your G2 Crown and Capterra reviews? Specifically, how do you incentivize customers who have a corporate policy that they can’t accept a gift?

Yeah. Okay. So good question. The question is talk a little bit about Talkdesk’s online reviews strategies, specifically G2 and Capterra, and then separately, how do you reward customers that aren’t allowed to be rewarded by their own company policy? One the first one, online reviews is a huge area of focus for our customer marketing team. They leverage, I mentioned on the how do you find them, support CSAT and NPS. Those are our highest volume opportunities to identify advocates. We’ve built a process, it’s actually so manual, we don’t have any automations around it, where a human reaches out to them and ask them to go say something nice about us online. Generally speaking, these people are primed to give us good feedback.

They love our product, they love our services team, whatever it is, and they’re willing to go do that. We see a pretty high response rate on that. Then related to your second question about what do you do when people can’t get incentivize, you have to ask before you give them something, right? If it’s something that’s online like a gift card or something, they have to press accept. If it’s something that we’re going to mail them, we have to ask them for their mailing address anyway. We usually uncover in that moment like, “Hey, actually, don’t send me anything. It’s against policy,” and then we just note it on the account level so we don’t make that mistake accidentally. Yeah?

QUESTION 3: How are you able to measure how much of video, like the one you just showed us, has reviews that need for one-on-one references?

Oh, I wish I could say yes to that. We haven’t worked on actually measuring the impact of that. We’ve invested a lot in our video content over the last year or so. One of the things I’m actually still working with the AE team on is can we insert into the general flow that they send these sorts of content ahead of time so that we can see if that helps to kind of self-manage deflection. We’re not quite there yet, but I’m hopeful that it does serve that because it’s so powerful, right?

It’s like if you got a bunch of this content ahead of time and you’re making a buying decision, you see all these people, they’ve got like the right title, they look friendly and knowledgeable, you can look them up on LinkedIn, so maybe we don’t need to kind of go through the whole rigmarole of the one-to-one reference. But I don’t have data on that yet. Yeah?

QUESTION 4: Does your CSM teams, do they own renewals and upsells and if you can talk briefly about the comp plan that you follow?

Yeah. CSMs do own upsell and renewal. We have a bonus program. It’s not commissionable, but we’ve got a percentage-based bonus that is entirely focused on retention, so what’s the logo retention and the revenue retention. Yeah?

QUESTION 5: At what point in time did you implement reference program in terms of the size of the company and revenue or employees?

I joined in April 2017 and we already had… We’re already doing references, but we weren’t calling it a reference program yet, right? It was literally what I talked about, like someone sends a Slack or an email or a text and we just kind of shoot an email out. We weren’t measuring it. We also weren’t really thanking our customers, which was a problem. We would implicitly, but we didn’t have any gifting strategy. We really started to invest in customer marketing at the end of 2017 and that’s when we started to look at software options. We gave a dedicated headcount to all of our customer marketing activities. That’s now a five person team, so we’ve seen the benefit of that investment. But that was when we started their nesting.

I would say I feel like we’ve really started to get good probably like middle of 2018. It takes some time.

QUESTION 6: At what stage were you are or what percentage of the employee population did that make up?

We hired customer marketing when we were about I’m going to say 400-500 employees.

Okay.

Yeah.

That’s helpful. Thank you.

Yeah. Yeah?

QUESTION 7: We’ve talked about the net retention and the local retention. Do you guys set goals for net retention and logo retention and has it changed over time?

Yeah. We set goals for net retention and logo retention. I talked about our enterprise segment being really high growth. Our logo retention target on enterprise side is 100%. We work really, really hard to retain those customers. Our net retention targets are probably between 120 and 130% with some benefit to the customer success manager if they’re able to exceed that. Yeah?

QUESTION 8: Who really should be making the ask, is it sales or marketing?

Or customer success.

Okay. It really depends on who owns the relationship, right? Ideally you get to the point where customer marketing is able to make that ask, right? But they can’t go in cold, right? If you’ve got an AE that owns this relationship and they talk to that customer let’s say a couple of times a month, like some random customer marketing person making that ask is going to have a lower yes rate than the AE. What you have to do is like invest in that team, start getting them into the mix on customer engagement. It’s like maybe they’re attending conferences with your customers, they’re doing a customer advisory board, they’re building trust somehow. Maybe they’re sending out the customer newsletter so it becomes a name that they get used to, then they can start kind of being empowered to make that ask. Yeah?

QUESTION 9: How does that relationship work?

We have customer success managers and we have account executives. We don’t have an account management function. I was more meaning… My point there was like whoever owns the relationship is often the one who starts to promote the advocacy program. Yeah? Okay.

QUESTION 10: You were talking about the references and getting them ready, but let’s say if an AE has all the accounts, does it often happen that the AE actually bypasses you guys and reaches out to their accounts directly?

The question is do the AE sometimes bypass the program and make the ask directly? The answer to that is yes. That’s why the measurement piece is so important. What we try to instill with the account executives is trust, which is okay, I know that sometimes you’re not going to want to follow our process. That’s okay. At the end of the day, what we want is to connect the customer to the prospect, but you have to tell us. Where all of this falls apart is if you don’t tell us, then you get reprimanded, right? Otherwise, as long as you’re being honest with us, we’ll be okay.

Okay. All right.

Thanks, everyone.

The post The Playbook to Building a Customer Reference Program with Talkdesk SVP of Client Services Gillian Heltai (Video + Transcript) appeared first on SaaStr.

SaaStr Podcasts for the Week with Pipe and MessageBird — March 13, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

Ep. 315: Harry Hurst is the Co-Founder & Co-CEO @ Pipe, the startup that gives you control of your cash flow by giving you access to the full annual value of your monthly subscriptions, upfront. This month they announced their $6M seed round led by David Saks @ Craft and joined by Fika, Weekend Fund, Naval Ravikant and WorkLife Ventures to name a few. Prior to Pipe, Harry co-founded Skurt raising over $11M in the process before being acquired by Fair.com. Harry has also angel invested in the likes of BreathePod and Try.com.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How Harry made his way from the UK to founding one of Silicon Valley’s hottest SaaS startups with the founding of Pipe.
* How does Harry think about when is the right time for a startup to raise VC funding? How does Harry stress test the alignment between the founder and the VC? Alternatively, when is the right time for a founder to take non-dilutive capital from Pipe instead?
* Pipe’s lending model is so centered around churn prediction, what does their churn analysis look like at Pipe? How does Harry think about the right way to structure churn postmortems? Why does Harry believe investing in customer success is far more important than customer acquisition?
* How does Harry think about the importance of brand for enterprise startups today? Do you have to invest in it from Day 1? What mistakes does Harry see many founders make when it comes to investing in their early brand?

 

Ep. 316: The startup journey moves in waves—whether you’re ready or not. After finding funding and product/market fit, your next steps as a founder in the hypergrowth phase can determine the future of your company. Harry Stebbings of Stride.VC and Robert Vis of MessageBird will walk through lessons learned to survive hypergrowth and what will make a difference when it comes to scaling. Hear how to navigate fast growth and how to look ahead as you travel forward.

This episode is sponsored by TaxJar.

 

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Robert’s session at SaaStr Europa 2019.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
Harry Hurst
Robert Vis

Below, we’ve shared the transcript of Harry’s interview with Harry Hurst.

Continue reading SaaStr Podcasts for the Week with Pipe and MessageBird — March 13, 2020

What Things in SaaS Were Like in ’08-’09. And What They Probably Will Be Like in ’20.


This post is by Jason Lemkin from SaaStr

We’re obviously in a very unique situation today.  The pace at which Corona is impacting us all right now is so fast, it’s hard to keep up.  Even just in the past 2 weeks, SaaStrAnnual.com has gone from what we thought was one of the safest events out there to … rescheduled for September.

Today is different from other times.  But I suspect in SaaS, it will be like ’08-’09 downturn — just faster.  I suspect the moment we’re past some point in the Corona virus cycle, everyone will be anxious to get back to work and resume normalcy.  We’ll see.

But for as long as business is in flux, let’s take a look back at what happened to us as a SaaS vendor in ’08-’09, and maybe what learnings you can leverage there.

At least right now, ’08-’09 was much more brutal.  The DJIA had plummed to a 1/3d of what it is today.  Every single retail store in downtown Palo Alto was shuttered.  It was truly bleak, in a way we aren’t remotely close to yet.  And yet, even through those bleakest times, here’s what happened:

SaaStr Podcasts for the Week: Lessons from the Best in Tech — March 6, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

Ep. 313: Today we deep dive into what startups can learn from the large SaaS incumbents of today.

Sarah Varni: CMO @ Twilio on her biggest takeaways from her time at Salesforce.

Erica Schultz: President of Field Operations @ Confluent on her biggest takeaways from her time at Oracle.

Whitney Bouck: COO @ Hellosign on her biggest takeaways from her time at Box.

Leyla Seka: Partner @ Operator Collective on her biggest takeaways from her time at Salesforce.

Ryan Bonicci: CMO @ G2 on his biggest takeaways from his time at Salesforce.

Ryan Barretto: SVP @ Sprout Social on his biggest takeaways from his time at Salesforce

Tien Tzuo: Founder & CEO @ Zuora on his biggest takeaways from his time at Salesforce.

Paul Albright: Board member @ Clarizen on his biggest takeaways from his time at SuccessFactors.

Jaleh Rezai: Founder & CEO @ Mutiny on her biggest takeaways from her time at Gusto.

Eugenio Pace: Founder & CEO @ Auth0 on his biggest takeaways from his time at Microsoft.

Liat Bycel: VP @ Airtable on her biggest takeaways from her time at Twitter.

Mark Goldberg: Partner @ Index on his biggest takeaways from his time at Dropbox.

Pssst 🗣 Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

 

Ep. 314: According to a study from SiriusDecisions, the majority of buyers (81%) today make purchase decisions based on buying experience, over product or price. To meet buyers’ high expectations and manage the challenging sales landscape, companies must involve their entire organization in maturing the sales process- including after prospects sign on the dotted line. This session from Showpad CMO Theresa O’Neil will outline a practical approach to growing revenue and retention by aligning sales, marketing, and customer success.

 

This episode is sponsored by TaxJar.

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Theresa’s session at SaaStr Europa 2019.

 

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Harry Stebbings
Sara Varni
Whitney Bouck
Leyla Seka
Ryan Bonicci
Ryan Barretto
Tien Tzuo
Paul Albright
Jaleh Rezai
Eugenio Pace
Liat Bycel
Mark Goldberg
Theresa O’Neil

Below, we’ve shared the transcript of episode 313.

Continue reading SaaStr Podcasts for the Week: Lessons from the Best in Tech — March 6, 2020