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.

How Sales Data Can Help Non-Sales Teams


This post is by Alyssa Merwin from HBR.org

The customer is every team’s concern.

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.

How to Build a Prospect Risk Assessment Model for Q2 and Beyond | Sapphire Ventures


This post is by Rico Mallozzi from Sapphire Ventures Perspectives - Medium

In our recent post on ways B2B companies can build revenue resiliency, we wrote about the importance of rigorously assessing the risk of your current and potential customers based on the recent shocks they are experiencing. What makes this economic disruption and the impact it is having on businesses unlike any other is the uneven and global effect it is having on companies. In some instances, companies are experiencing a tailwind from these events and as a result have seen a surge in demand for their product or service, while many others are facing detrimental headwinds.

Many of our portfolio companies are in the process of assessing existing customer and prospect risk — something they’ve been doing since the onset of the pandemic, but has now become much more difficult because of it. With the new quarter upon us, we know many CROs and sales leaders are once again taking a look at the next three months and are mapping out how best to navigate what’s ahead.

That’s why the Portfolio Growth team at Sapphire Ventures pulled together the Prospect Risk Assessment Model. This model is a framework for CROs and sales teams to leverage so that they can better measure and understand how potential customers are being affected by the crisis. By utilizing the following framework, which looks at four key factors, teams can adjust their GTM motions across a continuum of potential changes for each prospect rather than making a binary choice that will be less effective:

  • Location: Evaluate how your prospect has been impacted by COVID-19 based on their geographic location.
  • Size of Business: A prospect’s size (via employee count and/or revenue) is a relevant indicator of financial strength and how IT budgets may be impacted by COVID-19.
  • Industry: COVID-19 has created a wide range of business impacts across industries and sub-industries. As we know, some are being hit more than others.
  • Solution Relevance: COVID-19 is causing businesses and IT organizations to look for technologies to solve time-sensitive pain points.

View the Risk Assessment Model Here:

https://www.slideshare.net/RicoMallozzi/sapphire-ventures-prospect-assessment-model

Our hope is that this framework provides a model that you as a CRO or sales leader can use to understand how this disruption may impact your business relationships, sales discussions and commercial opportunities. We believe that those that respond quickly with tailored GTM motions will be able to continue to strengthen their relationships with prospects, preserve ARR and identify new revenue opportunities.

Disclaimer: Nothing presented herein is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Information provided reflects Sapphire Ventures’ views as of a particular point time. Such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change. Sapphire Ventures does not solicit or make its services available to the public and none of the funds are currently open to new investors. Past performance is not indicative of future performance.

Originally published at https://sapphireventures.com.


How to Build a Prospect Risk Assessment Model for Q2 and Beyond | Sapphire Ventures was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

7+ Tips On How To Build Your First Sales Team


This post is by Jason Lemkin from SaaStr

Q: How do you structure a sales team when you’ve got zero experience doing sales?

Well, first go get some experience with sales 🙂

At least, close the first 10 customers yourself. If you don’t, you’ll never have any idea how to do it. And the odds your first rep succeeds goes way, way down.

OK assuming you know how to do it (you’ve closed 10+ customers yourself) … then you do you structure your first team?

Don’t overcomplicate it. A few thoughts:

  • First, make sure your sales reps can “eat”, that they can make enough money if they close deals. This often means that for their first 1–3 months, you might even let them take home 50%-100% of what they close. It’s an investment in them. After that, scale back the take-home % to a more normal percentage. In the end, reps total comp can’t really exceed about 20%-25% of what they close. But that doesn’t have to be the case in the earliest days.
  • Second, only hire reps you’d buy from yourself. You know how to sell your product. And no one has ever heard of it. That means each lead is so precious, and so important. Hire reps you’d buy your own product from. A bit more here: The Top 10 Mistakes Made in Hiring Your First Sales Team | SaaStr
  • Third, try to hire 2 to start. If you don’t, you’ll never know for sure why anyone succeeds if you don’t have a control. More here: When You Hire Your First Sales Rep — Just Make Sure You Hire Two | SaaStr
  • Fourth, be there all day to help. Later, you’ll develop real sales training processes. In the beginning, you’ll train by osmosis. But you have to be there. You have to be there all the time to help.
  • Fifth, hire smarter folks in the beginning. The learning curve will be so steep, it’s better to have a smarter rep than average, because they will also need to become product experts.
  • Sixth, just use “round robin” to route leads. Just split the leads up evenly between your reps, for a while at least.
  • Seven, make sure your first reps have at least a little SaaS experience at your price point. They don’t have to have domain expertise. But if your SaaS product is a $299/month product, and they’ve sold a $299/month product before … they’ll know the basics already around process, pacing, etc. That helps a lot. Because you don’t.

 

The post 7+ Tips On How To Build Your First Sales Team appeared first on SaaStr.

SaaStr Podcasts for the Week with Mayfield and TripActions — May 1, 2020


This post is by Deborah Findling from SaaStr

 

 

 

 

Ep. 329: Navin Chaddha is the Managing Director @ Mayfield who just last month announced $750M in new funds split across their core and select funds. As for Navin, under his leadership Mayfield has raised over $2.2Bn in new funds and he has backed some of the best of the last decade including Poshmark, Lyft, Hashicorp, CloudGenix and more. During his career Navin has invested in 50 companies, 17 have gone public, 20 have been acquired. Prior to VC, Navin was an entrepreneur where he co-founded or led 3 startups, all of which had successful exits with one being acquired by Microsoft.

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 did Navin make his way into the world of venture from successfully founding and exiting 3 businesses? What made him take the jump into investing full-time from being an EiR?
* How does Navin expect the B2B landscape to be impacted by COVID-19? How does Navin advise B2B founders to think about how renewals will be impacted? How does Navin advise founders to think through how to approach the topic of discounting with their customers? In what situations does Navin agree to provide discounts to customers?
* How does Navin foresee the B2C landscape to be impacted? How does Navin advise founders to think through the level of aggression with which they pursue traditional marketing channels, now with much lower CACs? Will these CACs remain low priced? How does Navin expect company pricing to change over the next few months?
* How has Navin seen himself evolve and change as a board member over the last decade? What have been his major moments of learning? What advice would he give to new board members joining their first boards? What can board members do to build a relationship of trust and intimacy with their founders? What works? What does not?

 

Ep. 330: The true test of marketers. Are you a revenue driver or a cost center? You cannot afford to be the latter. Marketing leaders must focus their teams on the areas that will drive revenue while they cut costs – the biggest impact for the business. Join TripActions CMO Meagen Eisenberg at SaaStr Summit as she highlights her approach to ensuring Marketing delivers on its mission-critical role even in times of uncertainty or crisis.

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 Megan’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
Navin Chaddha
Meagen Eisenberg

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

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings, and it would be great to hear your thoughts and feedback on the show. You can do that on Instagram at hstebbings1996 with two Bs.

Harry Stebbings: However, to the show today, and it’s been far too long since we crossed the side of the table to the world of venture, and I’m thrilled to be joined by an individual who’s been on the Forbes Midas list no less than 12 times. Navin Chaddha, managing director at Mayfield, who just last month announced $750 million in new funds, split across their core and select funds.

Harry Stebbings: As for Navin, under his leadership Mayfield has raised over $2.2 billion in new funds, and he’s backed some of the best of the last decade, including Lyft, Poshmark, HashiCorp, CloudGenix and more. During his career Navin has invested in 50 companies, 17 of which have gone public, and 20 have been acquired, an incredible record there.

Harry Stebbings: And prior to VC, Navin was an entrepreneur where he co-founded or led three startups, all of which had successful exits and one of which was acquired by Microsoft.

Harry Stebbings: I do also want to say a huge thank you both to Tim Chang and Rishi Gaga at Mayfield for some fantastic question suggestions today. I really do appreciate that, chaps.

Harry Stebbings: However, that’s quite enough from me. So now, I’m very, very excited. Hand over to Navin Chaddha, managing director at Mayfield.

Harry Stebbings: Navin, it is such a pleasure to have you on the show today. I’ve heard so many great things from your wonderful partners, Tim and Rishi, so thank you so much for joining me today, Navin.

Navin Chaddha: Harry, it’s a pleasure to be here with you.

Harry Stebbings: It’s very kind of you, but I would love to start with a little bit of context. So tell me, how did you make your way into the very wonderful world of venture and come to be an MD today at Mayfield?

Navin Chaddha: Yeah, I’m a serial entrepreneur turned venture capitalist. I started my first company in 1995 while I was an engineering graduate student at Stanford University. In my early twenties I founded three companies between 1995 to 2004 which all had successful exits, including an acquisition by Microsoft and an IPO.

Navin Chaddha: I joined the venture capital business as an entrepreneur in residence in 2004 to work on my fourth company and one thing led to the other and I became a venture capitalist. As far as Mayfield is concerned, I’ve been leading Mayfield as its managing director since 2008 and it’s been an incredible decade of learning for the firm and me personally.

Harry Stebbings: Absolutely. It’s been an incredible decade for the firm and once you go into VC you never go back. So that’s very interesting to hear. I do want to start there, Navin, on a bit of a more macro perspective and where we’re at today in the environment.

Harry Stebbings: It’s a greater time of uncertainty than ever before, virtually the whole economy is down as Howard Marks actually said on the show. So if we start by taking it maybe by vertical, when looking at the B2B landscape today, what can we expect from the current economic landscape, in your mind?

Navin Chaddha: So Harry, I’m an eternal optimist and believe company building is a marathon, not a sprint. And crisis is only an opportunity for the bold. While we are in challenging times, I do believe that some iconic companies will be created and strengthened during this downturn.

Navin Chaddha: Two of my rules for the road for building iconic companies are that you have to sell painkillers, not vitamins, and that startups die of indigestion, not starvation. Companies that are crisply able to articulate their value proposition is a must-have and are hyper focused on a handful of priorities will do extremely well.

Navin Chaddha: Specifically, I think areas such as privacy and security, cloud native companies, future of work, as it relates to distributed and deskless workers, next generation training, knowledge sharing within the enterprise, and sales engagement companies will do extremely well.

Navin Chaddha: At the same time, B2B companies will have to figure out how to build market and sell virtually in this remote-first world, and here one of our companies, HashiCorp is doing an excellent job as a remote-first company, as they grew out of the open source roots and were set up as a distributed company from day one.

Navin Chaddha: At the same time capital-intensive companies will have a struggle with fundraising and companies which require an onsite visit to customers or a physical installation in person will be the most impacted.

Harry Stebbings: I mean, I absolutely agree with you there. I’m picking up on one string that you said, and sorry, going off schedule but I’m too intrigued. You said there about indigestion, not starvation, and I do agree with you normally. I guess my question is, how do you advise companies that you work with and sit on the boards of today when it comes to capital allocation and specifically burn preservation? How are you advising them today?

Navin Chaddha: So first and foremost we are telling companies, come up with your top three priorities. Secondly, make sure the current cash you have lasts you for another two years, and third, just make sure you have rational growth and just don’t focus on top line growth, also look at profitability. So I think those are the three things I would say we are advising our companies right now.

Harry Stebbings: Speaking of that kind of growth there, I am intrigued because a lot of companies that I work with say, “So far, we haven’t been impacted from a revenue standpoint.”, and I guess specifically for SaaS companies, Mark Souster said about the where, because it’s renewals and it’s discounts that will really be effective. Do you agree with Mark, in terms of really focusing on the renewals and the discounting, and the delayed impact of them?, And I guess to what extent do you think they will be hit as two significant factors?

Navin Chaddha: Yeah. The best place for companies in this environment, whether SaaS or not SaaS, is to invest in building deeper relationships with their existing customers. As they do focus on renewals and upsells, I expect most customers will bring up discounts and it will end up being a negotiation on a case-by-case basis.

Navin Chaddha: The first quarter of this year was just the beginning. Companies and customers are still adjusting to the new norm. So I think in the second quarter and third quarter we’re going to see a lot of these requests come from customers.

Harry Stebbings: Can I ask, in terms of those requests, how do you advise founders who are faced with them? Because we’ve seen in likes of Stewart Butterfield at Slack offer heavy discounting and sometimes free use of the tool, but that’s not always available to start ups in the earliest stages when capital is much more precious. How do you advise founders when faced with heavy discounting discussions? Stay strong or be a little bit more flexible.

Navin Chaddha: So I would say my feeling always is it’s about creating a win-win among the different constituents. So I would advise founders to not take a hard stance but really understand what the customer pain is and work together with them to find the best solution.

Harry Stebbings: Absolutely. And I think there’s also many ways that you can make it as a win. Offer the discount, but then you also heavy case studies, referrals and really make that win-win and give-take scenario. So totally agree with you there.

Harry Stebbings: I guess my question is, you’ve also banned some of the most iconic consumer companies in the last decade from Poshmark to Lyft. And so, if we switch hats a little bit, what does the current economic cycle do to the B2C landscape, in your mind?

Navin Chaddha: So first and foremost, consumer confidence is an all time low and staying healthy for all of us is the number one priority. With the loss of jobs, whether it’s 25 million today or as expected to be 40 to 50 million, definitely there will be reduced consumer spending.

Navin Chaddha: At the same time, we are seeing resurgence of spending on secondhand goods, so sharing economy. Companies like Poshmark, which you mentioned, are thriving. We have sustainable e-commerce companies like Growth Collaborative, and at the same time, on-demand delivery companies like Instacart and DoorDash are doing really well.

Navin Chaddha: I see some new areas of opportunity emerging to cater to the needs of millennials who want to rent things versus owning them, and that urge is only going to go up in today’s environment. At the same time, there are new technologies emerging which will change the way we work, live and play in this new remote-first world.

Harry Stebbings: You said that about the reduction in consumer spending. Every VC is talking about the reduction in pricing that we’re expecting to see. Having said that, there’s so much dry powder sitting on the sidelines and there’s so many people willing and active to engage in this environment. Do you think we will see this reduction in pricing, and how are you thinking about that specifically?

Navin Chaddha: So my feeling is, right, in this new norm there will be an adjustment on pricing and terms. And again, to what I said earlier, what is important is both the founders and venture capitalists look at the situation and take a long-term view to make sure it’s a win-win for everyone involved and not take advantage of the situations founders might be finding themselves today.

Harry Stebbings: No, I totally agree. Especially in terms of not taking advantage of them. Going back, you mentioned some of the companies that are doing very well. CACs, for the first time in a long time, are looking a lot more reasonable. I guess my question to you is here, how do you advise founding teams on how to think through the level of aggression with which they test this new environment for much more reasonable CACs? What’s your thoughts on this?

Navin Chaddha: So CACs are coming down as marketing budgets are being cut drastically by companies. However, I would caution that this could be short-lived. I’m a firm believer in playing the long game, ensuring you have rational growth and keep an eye on metrics like CAC payback, gross margin, and LTV.

Navin Chaddha: Bottom line in my mind is just the revenue growth is not enough as you need to keep an eye on profitability. So I would say, take a long view, take a balanced view, and do things accordingly.

Navin Chaddha: At the same time, rather than just spending on marketing, I think it’s a good time to double down on your investment in content marketing and social to build deeper relationships with customers where personalization is key and trust is your only currency.

Harry Stebbings: Can I ask, when you look back at your portfolio, as we said, you’ve worked with some of the best, who do you think exemplifies this most, and what do you think that they did so well?

Navin Chaddha: I would say Lyft is a good example doing this. Poshmark is doing the same. In fact, Poshmark, with most companies going down in revenue, in this environment they actually cut back on their marketing spend and are profitable and making money. So one has to continuously adjust their growth with sites to profitability and adjust the knobs accordingly.

Harry Stebbings: I’m so interested, sorry. You mentioned the knobs there of growth and profitability. Do you think that they are paradoxical? Do you think that they’re opposing or do you think that there is a balance that can be struck where they’re in unison? Because often people say, you lean towards profitability and growth declines, or you lean towards growth and profitability declines. Do you think that they are in contrast?

Navin Chaddha: My feeling is there is a rule of 40 eventually that Wall Street is going to look at, where your revenue growth plus free cash flow has to be greater than 40. So one has to find the balance on how much growth do you focus on and what is your free cash flow? And if the sum total of those is greater than 40 you’re doing extremely well. So that’s where my feeling always is. Take the long view, see what that metric for your business is, which is revenue growth plus free cashflow and converge towards that long-term model.

Harry Stebbings: I do have to ask, we spoke about pricing now on the VC side, investing in companies and as the times move, many are suggesting we’ll see the return of maybe more dubious VC behavior, akin to that, maybe many decades ago. Do you think this is fair about the suspicion of the return of dubious behavior and what do you think we can do to prevent this?

Navin Chaddha: I am a strong believer in sticking to your values and demonstrating leadership in both good and bad times. I can’t comment on what other VCs are doing, but at Mayfield we are always focused on creating a win-win situation for everyone and treating founders with respect and being fair and equitable and not proposing onerous terms, even in today’s environment.

Navin Chaddha: I believe alignment with founders is the most important thing in our business because people make products, people build companies, and it’s not the other way around. My advice to founders would be too careful about giving these nonstandard terms as they will stay forever and they’ll come into play in future rounds as well.

Harry Stebbings: In terms of those onerous terms, if we think about first time founders who aren’t maybe so aware of the intricacies and nuances of term sheets, are there specific terms that one should watch out for?

Navin Chaddha: So there are a couple. The first one would be the liquidation preference. We are seeing some resurgence of participating preferred, where preferred investor are supposed to get their money, and then they participate like common shareholders.

Navin Chaddha: At the same time we are seeing terms like two X senior [inaudible 00:14:34] pref come in, and I would say these are just not worthwhile and there is not an alignment with the founders because if you are running a marathon and not a sprint along with the founders, why come up with such terms, and at the same time founders should be really careful about giving blocking terms to VCs. Both those stones are going to show up in this environment.

Harry Stebbings: Yeah, no, they absolutely will. When I was chatting with Mark Suster the other day at Upfront, he said, “We’ve already seen the return of pay to play.”, and he said actually, it eliminates that free rider problem of someone not reinvesting in the new round, obviously. And maybe it being fair in some respects. I guess, how do you think about the pay to play element and how do you see that evolving over the next few months?

Navin Chaddha: So we are beginning to see this already. Personally, I feel mixed about this, as new investors who are proposing this are concerned about existing investors not participating and hence moving them to common stock. So my advice is let’s be careful in dealing with this on a case-by-case basis.

Navin Chaddha: First I want to understand what the concern is, and then discuss it with the existing board and management team to see if we can come up with a solution to treat everyone fairly and create a win-win for everyone.

Navin Chaddha: But if some side has the money and is still not playing, then it’s fair for the pay to play to happen. But if they really don’t have money as an investor and are still supportive and doing everything they can to help the company, then let’s be accommodative and do this in a fair and equitable manner.

Harry Stebbings: Yeah, no, listen, I agree. Especially on the case-by-case basis. I think it’s very nuanced. Post the terms that we discussed that are being agreed, often that the VC tastes a seat on the board and we mentioned some of the companies that you’ve invested in. You’ve also sat on the boards of some of the most meaningful companies of the last decade.

Harry Stebbings: I guess my first question, and I love this one, is how have you seen yourself evolve and change as a board member over the last decade, Navin?

Navin Chaddha: So I’m continuously evolving because my belief is, right, like dinosaurs never survive in any business. So you are in a continuous process of learning and improving. So having come into the business as a serial entrepreneur, the most important growth area for me as a board member was holding back on the urge to jump in to solve problems versus acting as a coach rather than being a player myself. So that’s what my struggle was for the first three, four years. How do I act as a coach rather than jumping in and start playing?

Harry Stebbings: How did you prevent yourself? Because it is such a challenge for more operational minds. How did you prevent yourself from jumping in and play more of an advisory role in those early days?

Navin Chaddha: I would say it was very similar to parenthood where you don’t do the homework of your kids. And when that triggered in my head, all kinds of bells went on. And then, at Mayfield we do believe in continuous learning and continuous assessment. And that was showing up in my 360s as an area where I could improve and do better. So that’s how it happened. It happened based on feedback and certain realizations of what the role for good board member is.

Harry Stebbings: Speaking of the role of a good board member, there is a new generation of VCs and senior VCs who are very young. When you think about advising new board members, what advice would you give someone early in their venture career when it comes to joining their first few boards?

Navin Chaddha: So the most important thing in my mind is trust with the founders to make sure you’re able to build that relationship early with these founders. You need to go beyond the board meeting interactions to understand their mental models and motivation and build personal relationships so that you’re in their zone of trust. Once you have that, just great things are going to happen in that relationship between the founder and you as a board member.

Harry Stebbings: Yeah, no, I do agree with you. I mean, speaking of that relationship of trust, how do you create an environment of trust and safety for the founder at the board level? It can be such an intimidating environment, especially for first time founders who maybe aren’t used to it. How do you create that environment of trust and safety for the founder?

Navin Chaddha: So this is what I try to do. I spend a lot of time with founders before we make an investment in really understanding their mission, vision, and values. Once we have alignment on those and common rules of engagement, the journey ends up becoming a lot of fun and I always watch the founders back and I’m there for them first, in both good and bad times. So those are some of the things which have worked well for me in over 50 board seats I’ve held in my venture career over the last 17 years.

Harry Stebbings: I mean, it’s amazing, almost 50 board seats. I do have to ask before the quick fire, you mentioned there about really spending the time on the mission, vision, and values. We’ve seen a compression in fundraising timelines incredibly over the last few years to very, very short. I think Josh Kaufman, the average time sheet for them is nine days from first meeting down from something like 100 five to seven years ago. How do you feel about the compression in fundraising timelines?

Navin Chaddha: I would say it’s a problem because decisions are being made very, very quickly without people understanding if they’re even aligned on values. So my feeling is in this new norm, hopefully you at least get three to four weeks on both sides to make informed decisions because at the end of the day venture and company building is running a marathon, not a sprint,

Harry Stebbings: I do want to, though, move into my favorite, Navin, which is the quickfire round. So I say a short statement, and then you hit me with your immediate thoughts. Are you ready to dive in?

Navin Chaddha: Absolutely. Always.

Harry Stebbings: Okay. So what do you know now that you wish you’d known when you entered venture as that EIR in 2004?

Navin Chaddha: I wish I knew how long it takes to become successful in this business.

Harry Stebbings: Yeah, no, I absolutely agree with you. What’s the hardest element of your role with Mayfield today?

Navin Chaddha: It’s balancing my role as an investor where I’m a player against managing and leading the firm where my role is that of a coach and switching back and forth between these roles is not easy.

Harry Stebbings: No, it’s not at all actually, and I don’t think many people fully comprehend and understand the fund management perspective as well as the investing perspective, and the challenges of doing both at the same time. So I do totally agree with you.

Harry Stebbings: Tell me, what motto or quotes do you most frequently revert to?

Navin Chaddha: It’s all about people because people make products, products don’t make people.

Harry Stebbings: Tell me, the most recent publicly announced investment, and why did you say yes and get so excited, Navin?

Navin Chaddha: The most recent announced investment is Nuvia where we saw a renaissance of silicon coming. Being people-first investors, we made a bet on founders who were responsible for building the microprocessors for iPhone for the past decade and now have a [bee hag 00:21:03] about building a new processor for the server cloud market to take on Intel.

Harry Stebbings: I mean, that’s phenomenally exciting and, as I said, it’s been an incredible last decade for Mayfield. Navin, I’ve wanted to do this one for a long time, so thank you so much for joining me today and this has been a lot of fun.

Navin Chaddha: Yeah. Thank you for including me in this wonderful podcast series, which is helping the founder community and is a must listen, according to me.

Harry Stebbings: Fantastic to have Navin on the show there, and as I said, it’s been an incredible decade for Mayfield, and if you’d like to see more from Navin, you can find him on Twitter at navinchaddha. Likewise, it’d be great to welcome you behind the scenes here. You can do so on Instagram at hstebbings1996 with two Bs. It would be great 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 week.

 

The post SaaStr Podcasts for the Week with Mayfield and TripActions — May 1, 2020 appeared first on SaaStr.

In The Enterprise, Innovation is Out. Digital Transformation is In.


This post is by Jason Lemkin from SaaStr

Q: What are the next big trends in SaaS?

I think the new trend, which is brand new — is that “Innovation” as a reason to buy SaaS is dead. For now.  And maybe for 18+ months.

But … this will be combined with a rapid acceleration of Digital Transformation.

What do I mean? Well, the IT spend into SaaS has grown far faster than IT budgets overall in the past 5+ years:

A big chunk of that is because the CIO’s role has become over the past half decade, in large part, the Chief Innovation Officer. Either alone or together with a Chief Digital Officer.

CIOs were paid, and celebrated, for bringing “innovation” into older companies especially. They were heroes for finding new tools that improved efficiency.

That’s now all on hold. Cost-cutting and cost management has taken over. No CIO in Q2/Q3 of ’20 is getting kudos for the latest SaaS app that will improve productivity or even efficiency. She or he is now getting credit for saving money.

But at the same time, there is new urgency on Digital Transformation. Cloud Call centers, collaboration software, and much more has gone from the “innovation” bucket into the “Must Have Right Now” bucket during shelter-at-home.  Security needs and work-from-home needs are pulling forward SaaS and Cloud projects by years.

We are seeing rapid evolutionary change in the enterprise, pulling Digitial Transformation initiatives ahead by years in many cases.

But only where they make a difference, right now. When they are either necessary in this new world, or where they save tons of costs.

The rest, the nice to haves, the “innovation” apps … well that spend is now on hold.  If that’s you, you need to tilt.  You need to focus on the parts of your value proposition that enable the New Normal we’re living in now.

A deep dive on this with Stewart Butterfield, CEO of Slack, from last week:

The post In The Enterprise, Innovation is Out. Digital Transformation is In. appeared first on SaaStr.

Bike sales galore


This post is by rich from Tong Family

Bikerumors Sales says 50% off trek and big sakes on canyon. Time to get that gravel bike!

The post Bike sales galore appeared first on Tong Family.

How To Onboard New Hires Now


This post is by Jason Lemkin from SaaStr

Lish Gates who manages global revenue enablement at Algolia put up a thread on LinkedIn on how they are onboarding new sales and revenue professionals.  Algolia is around 350 employees, so a stage ahead of many of you, but in many ways just beginning its transformation from the startup phase.

I asked her to do a longer thread on it here to help other folks.

_____

Lish Gates – Sr Manager, Global Revenue Enablement

Hiring a new employee now means facing an unprecedented challenge: onboarding during a global pandemic. Right now, companies worldwide are experiencing a fundamental disruption to their regular business practices and organizational structure. Regardless, the reality for a new employee is that those first weeks of a new job sow the seeds that bloom into a long-lasting professional relationship with fellow colleagues and the company as a whole.

While social distancing is vitally important, a side effect can be a compromised onboarding process. Where do you even begin trying to develop rapport between hiring managers and new employees with fewer options available to connect?

Start by asking and answering these crucial questions:

  • Why should this person believe in what you believe? 
  • How can you create an experience that instills culture, knowledge, and a ‘one-of-us’ mentality during social distancing?

If you’re left scratching your head, below is a cheat sheet to clear up any uncertainties about how to proceed.

You need much more than an office furniture stipend, especially during onboarding. A common misconception in the workplace is that technology and workspace setup are paramount to productivity in isolation. However, a recent survey by a Bay Area SaaS company showed that only 24% of one’s productivity was based upon these creature comforts. The other 76% comes from a transparent commitment to employee development and success, as well as old-fashioned follow through.

Routine starts with confidence and predictability. COVID-19 has rolled in a fog of uncertainty ― the last thing you want impeding your onboarding process. The remedy is providing both a clear path and a plan for new hire success. And always, show, don’t tell. Display your commitment to new hires by building a solid, tailored onboarding plan and routine that includes a syllabus of self-paced training, live sessions, expected milestones to reach, and a meaningful mentorship program.

We’re virtual now, so here are four tips for creating digital routines to support the onboarding plan:

  1. Create a Slack channel for your onboarding class. Use this channel for daily check-ins, updates, and feedback loops; consider including select VPs/C-suite members to give new employees some welcomed love.
  2. Digital office hours/Q&A time. Start a doc for Q&As in your onboarding class Slack channel to collect questions that new employees may have during the onboarding process. Engage new hires by inviting them to a weekly online office hour to review questions and share answers.
  3. Calendar time slots. Need a task or project completed by a deadline? Suggest calendar time for your new hires to comfortably and efficiently get things done.
  4. Create accountability. Provide new hires with an accountability partner/mentor (ideally, someone in a similar role who can check-in, practice mock scenarios, and provide additional guidance each week), and allow them to shadow real-life work scenarios whenever possible.

Don’t forget to interact. Human interaction is important, however, if you’re doing back-to-back Zoom training, you’re likely doing it wrong. Avoid the all-too-common death by one-thousand slides. Instead, your primary focus should be dialed in on interaction ― and steer clear of sleep-inducing slideshows.

Plan and practice. It’s crucial to introduce prerequisite reading ahead of any virtual training to offer proper context to the discussion. Talk through concepts and practice application. Zoom Breakout Rooms have become an essential component for onboarding programs, allowing large groups to break into smaller discussions or roleplay exercises with the end goal of bringing the wider team back together to share the high notes from their experiences.

Social distancing doesn’t equal being socially distant. Most businesses are a month into social lockdown. Through this experience, many companies are spotlighting socializing online. If you haven’t, you should start.

For a new hire, there’s no better way to get to know your teammates than simple gestures such as virtual coffees, workouts, meditation hours, and happy hours (extra emphasis on happy). Also, creating ice breakers at the outset of each onboarding virtual session is a great way to get to know your new colleagues, as well as encourage them to grow comfortable with sharing and talking with others. In fact, our teams have experienced a sharp uptick in engagement since starting our live sessions this way.

“Your first day, your first week in an organization is when you’re observing each detail, figuring out where you stand. That’s when your sense of the culture gets seared in.” ― Ben Horowitz, What You Do Is Who You Are: How to Create Your Business Culture

Show care and commitment. It’s the company’s role to ensure that new employees can easily see that you’re committed to them and their success in your organization. Understandably, this becomes exponentially more difficult when the new hire is remote.

At Algolia, we have five values: trust, grit, candor, humility, and care. We thread these values into our daily interactions during virtual onboarding. More importantly, we instill in our teams that these values extend to employees as well as customers.

For instance, to show “care”, we share stories of how we’ve gone above-and-beyond for customers, and also times where we could’ve done better. Honestly and openly communicating these stories imparts a dedication toward humility, grit, and care. And as the onboarding class goes through evaluations, we’ve embedded the same candor through feedback.

Share your passion for what you do. Our proven formula is that if you authentically enjoy what you’re doing and who you’re doing it with, it’s a force multiplier. Have fun with your new hires. Share gifs, memes, laugh often and be vulnerable. Everyone is dealing with this pandemic differently, and starting a new job is often an intimidating and stressful situation. However, if you share who you are, what you’re doing, the cause you’re fighting for, and the problems your team and company help solve, making them successful and one of you is never mission impossible.

 

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Your New Plan for May: Just Do Better Than The Last 30 Days


This post is by Jason Lemkin from SaaStr

Ok for many of you, everything since March 15 or so has been just crazy.  Sometimes, terrible.  Sometimes, rough.  Sometimes, just crazy.  But crazy.

If your bookings dropped, if your churn went way up, then … it did.  Things changed.

Now you have the data.  You know what your New Normal is like, mostly.  From the past 30 days.

Maybe you are only growing 20% now.  Maybe bookings are down 50%.  Maybe churn has doubled in your SMBs.

Whatever it is, you now have a new baseline — at least for right now.  As even if you don’t love what you see, it’s your New Normal.  The team is now ready to adjust.  They may not be 100% ready, mentally.  I’m not sure even I am.  But there are there at least in part.  Just like we’re half-adjusted to shelter-at-home, most of us have now adjusted to new metrics in bookings, retention, and downgrades.

So I have a very simple suggestion.  Yes, most of you lowered your forecast for 2020 and even just decided to get through Q2 without any clear goals.  That made sense.  But now you are ready for a basic plan for May, June and July.

Just to do a little better that the past 30 days.  E.g, maybe:

  • To learn a new empathy-driven sales process.  Maybe get them into a free pilot, instead of a hard sell?  A new SDR script?  You have to be able to do better here than the past 30 days.  At least a little better.
  • To learn better how to retain customers under stress.  Maybe auto downgrades?  Maybe extending payment terms?  You must some new ideas.  At least 1 or 2.
  • To learn how to evolve your marketing.  Maybe more about how customers are dealing with change?  Or perhaps, no charge for additional seats in some cases in the next few months?  I don’t know.  You know better than me.  You must have 1 or 2 ideas here.

Whatever has changed has, for now, changed.

Your team know that.  And they may not have all the answers.  You may not either.  But everyone now knows calmly how to do 10%-30% better than the last 30 days.  Challenge them to just come up with that small plan.  How can we not bounce back per se, but just improve.  Improve what we are doing in the New Normal now.

I bet your team can do this.  They know your customers and your markets so well.  And now, they know their pain.

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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.

 

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Lead Your Sales Team Through Uncertain Times


This post is by Scott Edinger from HBR.org

Don’t let fear lead to bad decisions.

4 Things Sales Organizations Must Do to Adapt to the Crisis


This post is by Andris A. Zoltners from HBR.org

How to refocus, retool, retrench, and rebound.

10 Things New Sales Reps Are Taught. That They Shouldn’t Be.


This post is by Jason Lemkin from SaaStr

Q: What sales tactics that are taught to new salespeople bother you enough that you refuse to use them?

A few that I think really do you a disservice in SaaS, especially before you have a huge brand:

  • “Be careful of prospects that waste your time.” Yes, your time is precious in sales. But this is backwards. Almost no one wants to waste a salesperson’s time. Talking to sales isn’t fun. It’s not Tik Tok. A prospect inbounds because they have a need. Maybe they are a smaller business than you’d like, or need more time than you’d prefer. But their business is just as important to them as a larger company. Treat each prospect with respect. Watch your sales go up.  More here.
  • Selling a feature you haven’t used yourself. There is no excuse, folks. Don’t talk about a product or feature you haven’t used. Don’t be so lazy. This is SaaS. Fire up your web browser and actually try it. And for real. Use it as if you were a prospect / customer.
  • Insta-discounting. Yes, discounting is part of most sales toolkits. But you don’t go there first. You go there last. And you do it fairly. A discount does not create a sale. It does not save a sale. It rarely beats the competition. What it really does is create urgency to close.
  • Relying on SDRs to always qualify your deals. Yes, SDRs are great. But they aren’t always there, they don’t always do the full job, etc. It’s still your job to own the sale.
  • Competiton bashing (too quickly at least). Yes, FUD and competition bashing can work. But if you aren’t good at it, it can also backfire. And it can immediately damage your brand if done wrong. Don’t start there at least until you know the space cold. Once you are a true expert, you can truly lay out the case for why you are better. And where they are truly weak. But you really need to know the space cold to do this well.
  • Scheduling Zooms and calls at times that are convenient for the AE. No. Your schedule may be busy, but the prospect needs to feel like you are there for them. At least give them a lot of times to pick from. Don’t send a “pick a time that works for me” link.
  • “Work around the [internal] system, it’s too slow.”. Many reps are taught where possible to sort of bypass the CPQ system, the approval process, legal etc. where practical. Yes, they can slow down a deal. But doing this damages the integrity of the company as a whole.
  • “The CEO is too busy to help.” Maybe not. If it’s a key logo, she’ll probably want to help. If it’s a deep product question that others might not get, she might enjoy helping. Don’t send the CEO a Slack asking her to do something for you. But a question or two a month that respects her time, that helps close a deal? Until the sales team is huge, she’s probably happy to help where a few minutes of her knowledge and unique skills can help you close a deal.
  • “Send break-up emails to qualify out prospects in your pipe”. Some will say this works, but IME, never send an email that insults a prospect’s time. Just don’t send the email instead. You may want to know if it’s time to break up. But that doesn’t help the prospect, does it?
  • “Dump everyone into an automated cadence”. This is the worst. No. Tools like Mixmax, Salesloft and Outreach are insanely powerful. But they have to be used correctly. They do not replace 1-on-1 emails, 1-on-1 Zooms, and 1-on-1 interactions. They augment them. You should not be doing fewer personalized emails because you use a tool. You should be doing more of them, because a tool frees you up. Just sending a cadence is not sales.

As a founder/CEO, just be wary when you hear too much of this going on. I know a lot of folks in sales will challenge some of this list. And many of these tactics may help some reps in the short-term. But you have to go long.

If you see too many on these common tactics, it’s probably time to step in and change things.

The customer experience needs to come first. You want everyone to love your product. Not just the ones that can close this month, for the most money.

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If Times Are Tough — Don’t Hide. Be Present.


This post is by Jason Lemkin from SaaStr

(Note:  I wrote a version of this in 2017 when times were good.  It’s just as relevant today, more so really, but thought it could use some updates.  So here’s the 2020+ version)

________

Hopefully, you are one of the 15% or so of SaaS companies getting a boost from these crazy times. Hopefully, things are great.  Or maybe the impacts are mixed for now, but things still seem OK.

I hope so.

But the reality is, a lot of you will have a rough year. Even a Year of Hell (more on that here). We all have at least one. I sure did.

And for most of us, there’s one natural reaction: Hide. At least a bit. Put your head down, and grind it out. Try and get that one more customer in the door. Push harder. Analyze that data more. Cut everything quietly. Lay low and just “focus” until you can get growth back on track. Stare at that monitor, until you figure it out.

It’s natural, but please, don’t do that.

As a startup, there are few things more important than Being Present:

  • Your customers need to believe. They didn’t just buy your product once. They repurchase it every month, every year. And more importantly, they are invested in you. They run their business on your platform. They need to see you out there. In the media. In the news. On a Zoom. At your (now digital) customer event.
  • Your second-order revenue engine still needs to work.  Even if sales cycles have slowed down. OK, you missed the plan. But ultimately it’s your customers that beget you more customers. Don’t cut here.  In fact, do the opposite. The worse the miss this year, the more you need to go talk to your customers. Do 20 Zooms a week with customers.  Make sure that the $2m or $5m or $20m you ended the year with at least renews as a cohort, even if for not as much revenue as you’d planned. Make sure net negative churn is at least covered and invested in. Even if the rest of the revenue funnel and process broke a bit this year. You at least know how to make your customers happier. Everyone at least knows how to do this.

CLTV Isn’t The Whole Story. Don’t Shortchange Second-Order Revenue.

  • The team knows it’s not all Daisies and Unicorns. They know. Startups are a journey. Yes, we read about Zoom and Slack and all that. But even Slack the company had a few years challenging years before it became Slack the product we know today. Everyone knows there will be ups and downs. They are looking to the founders and CEOs to guide them through the rough patches. You probably should hide some of the very worst news in some cases, at least. But be direct on what the new goals are, the new plan is, and how you are going to get there. And engage everyone with their best ideas.
  • Your investors need to know you have a plan.  Maybe they can invest a little more, maybe they can’t.  But they know things are hard.  What they need to know is there is a plan to get through it, and what that plan is.  Don’t stop sending investor updates.  Share a plan forward, and they will most likely follow you there.
  • Lead from the front If you aren’t the first one out there … no one will believe. It’s hard when times are tough. Find a way.
  • It’s your job to make your company remain as much of a leader as you can — at least to your customers and in your vertical and industry. It does matter if you are seen as a leader in your industry. It makes everything easier. If you’ve never run a hot startup, or worked at a hot startup, you may not get this. But everything really is easier if you are seen as a leader. Hiring, marketing, retention, fundraising, everything. If not easy in these crazy times, at least easier. So do whatever you can to keep momentum going, even if revenue has cooled off. Show up to that webinar. Keep doing PR. Do all the podcasts you can. Keep the positives of your brand up, even if there are a few more negatives than there were 12 months ago.

We’ve all been there. I hid a few times.

But I tried at least to always still Get Out There. Win that Award (even if it was kind of a stupid award). Get on that TV show (even if no one would really see it but my team). And close that Important Logo that the team loved (e.g., Google, Facebook, Twitter) … even if the revenue itself wasn’t that material.

Be Present. Bridge the gap between one great year and the next year at least in part by getting out there. Even if today, you have to do that somehow from inside the house.

The post If Times Are Tough — Don’t Hide. Be Present. appeared first on SaaStr.

HubSpot + SAP: New Customer Demand is Down 25%-30% Already


This post is by Jason Lemkin from SaaStr

The #1 question founders seem to be asking each other is “What are you seeing?” We’re going to do more on this at SaaStr.

Two new reports from HubSpot and SAP from today are interesting. Hubspot sells primarily to SMBs, and SAP is very enterprise, so the inputs are very different.

What is HubSpot seeing?

Well, according to them, new deal creation across their 70,000+ customer base fell 23% the week of March 30:

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That’s a good proxy for what is happening generally in new deals with SMBs. That’s different of course from renewals, and upsells, and all that. This is SaaS. Your customers should mostly stick with you, if they can.

And what did SAP announce? Most importantly, a 31% decline in license revenue.

Why is license revenue interesting? Because unlike its SaaS businesses, it’s non-recurring. And it’s a new-ish purchase. It’s something a CIO can tap the brakes on quickly. They can try to keep using the older versions of their software. It’s a decent proxy for one piece of enterprise demand.

And it fell 31%:

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Now SAP still announced a 29% growth in cloud revenue. Is this more from upgrades? Probably. Does it lag a bit, because SaaS revenue recurs (and is recognized ratably), unlike license revenue? Almost certainly. Does it should the power of SaaS and recurring revenue? Absolutely.

But deal creating, and new licenses and new logos, are better predictors of what we are seeing right now that renewals and revenue retention.

And HubSpot and SAP are saying things are down 23%-31% right now.

No alt text provided for this image

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Your Product Has to Be Easier to Buy Than to Use


This post is by Jason Lemkin from SaaStr

In the last year we’ve been leveling up a lot of our systems at SaaStr, and as part of that, moving from a lot of self-service and simple products to more robust ones. Such is the way as you grow. And one thing I’ve been shocked about is how few sales processes have kept up. Pressure tactics, exploding discounts, 48-hour trials that end on you, us-vs-them pricing, are all still alive and well. And in the end in 2020, they can create a buying process that for us at least, is just way too hard and long.

Especially now. Especially when everything that isn’t strictly necessary is getting a second look.

At this point, everyone is a SaaS buying veteran. According to research from Talkdesk, the average company deploys more than 50 SaaS products.  And according to OKTA, most industries have over 1,000 SaaS distinct vendors in them. We’ve all learned to buy SaaS. Now, it’s time to overhaul how we sell it as well.

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Exactly how can vary.

But I’ve come up with just one simple construct today: Your Product Just Has To Be Easier Buy Than It Is To Use.

  • If you think your product really is 10x easier to use than the older competition — it should be 10x easier to buy, too. SaaS buyers are veterans now. If you make it hard to buy, we know it will be hard to deploy and hard to use.
  • Make free trials as long as people want them.  Don’t hide your software if it is so easy to use. You want your customers to be on a 10+ year journey with you. If they need a little more time in the early days of that journey — just let them have it. Without drama.
  • Make pricing < $50,000 at least as simple and transparent as possible. No one has energy here anymore.
  • Your customers should know pricing isn’t a rip-off. Just put it on the website for anything less than six figures. Assume every customer that pays < $100k a year knows exactly how much every other customer < $100k a year pays. And price it that way.
  • If your customers want to switch to you before a competitive contract is ending, incent them — and don’t make them ask. Just tell them upfront you will credit them a decent chunk of the prior contract, or give them the stub period for free if they buy another year. Make it easy to switch. Tell them upfront. No games.
  • Don’t expect High NPS or referrals if it’s painful to simply buy. You are starting off at NPS 0 if you put your prospects through a painful buying process.

If it’s hard to buy, that sends a clear signal: it will be even harder to deploy and use.  In today’s environment, why bother then?

If it takes 2 weeks of negotiating to close a $30k deal, why will I possibly believe I can get up and running any faster? We can all smell good vs. bad software. A bad sales process says bad-to-mediocre software, even if it’s not the case.

Yes, truly big deals are complicated. Big deals have a lot of stakeholders, and there it’s probably fine to have non-transparent pricing, carefully managed pilots … and lots of gates. Lots of qualification.

But anything less than $50k-$100k should be simple to buy todayEven more so in today’s crazy world. Fast and easy. Like you claim your application is.

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10 Crystal Clear Signs Your VP of Sales Just Isn’t Going to Work Out: The COVID-19 Edition


This post is by Jason Lemkin from SaaStr

In the early days of SaaStr, we wrote a bunch of posts that were controversial at the time, but later, most sales leaders eventually agreed with. That you know early. That you know even in 1 sales cycle if a VP of Sales is going to work out.

Yet, in some ways, this breaks down a bit in really tough times. If sales cycles are much longer and getting even longer, how can you know if it’s your VP of Sales … or just the economy?

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Let’s take a look at our classic checklist and see which criteria apply in a downturn in your core business — and which maybe aren’t fair to use to judge your new VP of Sales. Our classic 10 point checklist of Warning Signs. That she or he just isn’t going to work out … at your start-up. Maybe at a different one, at a different time, or stage, or subject matter they might be successful. But not as your start-up:

  • The Blame Game – Down. STILL APPLIES. As soon as you hear a VP of Sales start to blame her/his own reports for missing a number, it’s over.  These are her/his own reports, after all. When a VP of Sales has lost confidence in his ability to hit a number, it’s always easy to blame someone on their team. But a great VP of Sales never does, at least not more than once or twice. They just … take care of their mishires. They blame themselves first. In fact, they don’t even take that much blame. They just come up with a new plan that is realistic, that pushes the team, and that makes sense.
  • The Blame Game – Product (too much) STILL APPLIES. A little of this is OK, and fair. The product is always feature-poor and missing critical needs for customers. But that was also true before you hired the VP of Sales …
  • The Blame Game – Competition.  STILL APPLIES. Yes, competition is brutal. But again, it was right before he started and before a global pandemic, too. A great VP of Sales gets better at competing over time. Not worse. A great VP of Sales takes advantage of fear in the competition, and of complacency, and pounces.
  • The Blame Game – More Time. STILL APPLIES — WITH AN ASTERISK. You can’t expect results overnight. But you can expect some improvement in 1 sales cycle. More on that here. More time does not cure sales woes. But … sales cycles are often way up, and close rates way down. You still will know in 1 sales cycle if she or he is going to work out. It’s just, that’s 1 sales cycle may be longer, and different.
  • An (often big) drop in quota attainment. PROBABLY DOESN’T 100% APPLY RIGHT NOW.  Quota attainment should go up when you hire a great VP of Sales. But with a mediocre one, or really, a VP of Sales that is just a bad fit … you often see quota attainment plummet. Quickly. Everyone’s quota attainment may be down now. But instead, look at your top performers. If they are sort of checking out right now … that’s a sign you hire the wrong VP of Sales.
  • Top reps leaving. STILL APPLIES. The best VPs of Sales know how to keep their winners. They never let them leave, in fact. If you see winners leaving, you have the wrong VP of Sales. Period. This may sound obvious … yet, this is very common to see.  Don’t accept excuses here. This is as clear a sign as you are going to get.
  • “We’ll make it up next quarter”. STILL APPLIES. Sometimes this is true. There are always better and worse quarters. But a great VP of Sales never, ever simply dismisses a bad quarter by saying they’ll make it up next quarter. Instead, she says “this was a tough quarter. Here’s what we screwed up: ____, ____ and _____. It’s mostly fixed now. So next quarter, ….” No great VP of Sales should be saying it will be easy to make-up a big gap now. Or in many cases, that it is even possible. Instead, by now, they should have a new plan. A real plan.
  • A crazy plan that doesn’t really make sense or tie to dataSTILL APPLIES. Related to the prior point. A bold plan can be good. But no, you can’t just magically quadruple sales in Q4 when you were only growing 20% in Q1. A crazy ramp is an excuse in disguise and waiting. It’s kicking the can on having to explain that you don’t really know how to improve sales.
  • A drop in revenue retention.  STILL APPLIES. A strong VP of Sales in a start-up is focused on the ARR goal, not just new bookings. She’ll know some of her highest leverage in hitting the ARR plan for the year is increasing upsell, increasing net revenue retention, and decreasing churn. Even if Customer Success isn’t remotely part of her nominal job description, she’ll still want to own enough of it to see flat or improved revenue retention. Of course she will. Her job is just that much harder if retention declines. A great VP of Sales still cares as much about the ARR goal as bookings in SaaS. You’ll see the great ones figuring out now what they can do to retain their customers, especially the top customers — maybe even more so.
  • Not understanding the business and/or key metrics.  EVEN MORE IMPORTANT NOW. I see this too often 🙁 A VP of Sales that doesn’t know how the company defines an MQL. That isn’t sure how many leads sales got last month. That isn’t clear on how a new key feature works. That doesn’t know the status of a key Top 10 deal (this one is way too common).

And finally:

  • Fear. Sales is hard. It’s hard to hear 50 “Nos”. It’s hard to lose a big deal to a competitor after you put months in a deal. It’s hard to be judged quantitatively every month and quarter. It’s hard to always have to do better. It’s just hard. And sometimes, it’s simply too hard. When you see fear in the eyes of your VP of Sales, it’s over. It’s even harder now. There are more reasons to be scared. And yet, somehow, the best VPs of Sales don’t let fear seep in. In fact, they are even better leaders now than they were 60 days ago.

So a couple of the top 10 excuses, the top 10 signs a VP of Sales just won’t work out, don’t apply as much in the Covid-19 era. Churn is going up. Sales cycles are lengthening.

But the best sales leaders are still outperforming their peers on a relative basis. I hired my real VP of Sales in a downturn. He doubled sales in 90 days. You can’t expect that. But you can expect improvement at least at a qualitative level today. And you can look for the signs she or he may just be making things worse in these crazy times.

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The post 10 Crystal Clear Signs Your VP of Sales Just Isn’t Going to Work Out: The COVID-19 Edition appeared first on SaaStr.

Great Salespeople Are Made, Not Born. But It Does Help to Start Early.


This post is by Jason Lemkin from SaaStr

Q: Are great salespeople born or made?

I think they are made in SaaS — but made early.

By that, I mean the best SaaS professionals and managers I know have a variety of approaches and temperaments. Some have a very intellectual approach to sales. Some shoot a lot from the hip. Some are aggressive, others are determined (similar, but different).

But all the best ones I know started early. Often, their first job or close to it. As an SDR. As a recruiter. Maybe even outside of technology. But they started there, learning, improving, and growing.

What I do worry about is someone that later in their career that wants to get into sales because they think it pays better, or is more glamorous. I don’t see that work out that often.

Getting 50 No’s before a Yes is tough. Probably best to learn early if that’s you.

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