Cold open
If you can’t forecast accurately, either you don’t truly understand your business, you aren’t truly doing the amount of diligence with customers and opportunities, you don’t have enough opportunities to be able to balance out some of the riskier things with some of the things that look better, And we might not even be asking the right questions, and we’re likely not talking to the right people.
This is 20 sales
Intro
with me, Harry Stebbings. Now 20 sales is a show where we sit down with the best sales leaders in the world to discuss starting and scaling sales teams. Today, we’re joined by a sales leader who scaled a team at Salesforce to 1,300 people and over 2,100,000,000 in revenue. Following that, he was the CRO at Confluent, delivering more than 60% revenue growth and doubling customer count. And today, he’s the CRO at Genesys. It’s time to get the notebooks out. There are so many granular tactics in this one.
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Conversation
Larry, listen. I’ve heard so many good things from the main man, mister Frank Filman. So thank you so much for joining me today first.
Harry, it’s great to see you. Thank you. This should be a ton of fun, so thanks for having me on.
Not at all, but listen, I wanna start with some context. Sales is often something that sales leaders love. I wanna dive into when did you first discover your love of sales? Was there a critical inflection point?
Yeah. Well, so a little bit of background. When I graduated from high school, I went into college. I wanna be an electrical engineer. More specifically, actually, most specifically, I wanted to build robots. I went in, took my first electrical engineering courses, Obviously, heavy math, some things that I had not really been prepared for and realized that that was probably not the best spot for me. I quickly exited and got into marketing, and I I did a lot of, even back then, a little bit of kinda just soul searching of that’s a pretty dramatic miss of what I wanted.
And I realized I actually didn’t wanna, like, build the robots. I wanted to sell the robots. My love of sales really just came from my first job out of school. I graduated with a marketing and finance degree, and two companies came on to my campus. One was Eli Lilly pharmaceutical company and the other was EJ Gallo, the wine company. So these are tough choices as a college graduate. I went Eli Lilly. I was at Eli Lilly for two years. That’s where I kinda got hooked.
I mean, listen, I love that in terms of an origin story. Sadly, the robot career didn’t happen. I’m sorry for that. But I think it’s turned out pretty well. There’s so many great companies though that you’ve, like bluntly, been an instrumental part of. I wanted to start on actually the decade at Salesforce. Mean, when I looked at the numbers, leading a 1,300 person team to 2,100,000,000 in revenue. I mean, are insane numbers, Larry. What are one or two of your biggest takeaways from a decade at Salesforce in that trajectory?
For me, it it was a couple things. And number one from a learning perspective is prioritization.
What are the biggest things that sales leaders do wrong today when it comes to prioritization?
We try and do too much. We really try and do it all. I would look at that from one from the personal leader perspective, the impact that has on the leader and then the impact that has on your team. So I’ll kind of unpack that. On the leader side, if you’re personally trying to do too much, this is where you you really get into what I know are mindset challenges. These end up in health challenges. You really get spread way too thin when you’re trying to do too much, and we we can kinda talk about my perspective on how you solve that piece of the puzzle.
But I think that’s number one. Number two, the impact that actually has on your team is pretty detrimental. It all it all ends up flowing down. It’s a very diminishing trait when you try and do too much because you flow it down and you keep adding things on. You never take anything off. Like, the list just kinda keeps growing. And when the list grows, your teams aren’t able to to do it either, the bag gets fuller and fuller and fuller and fuller, and it’s it’s for me, it’s a little bit like a balloon.
Eventually, when there’s so much air in there, it breaks.
How do we solve that? If I’m a sales leader today and you’re advising me, which is kind of the role play that I’d love to have today. Yeah. Do you have a framework for, like, only focus on the top accounts, everything else doesn’t matter. Only focus on spending time with your top reps. They’re the ones who are gonna close the business.
My framework is I think about it from a leadership perspective. There’s nothing more important than people. There’s just not. Some people got talent. Whatever you wanna frame it in, your human capital is the most important thing. And then in the job that I’ve chosen and that my teams have chosen, which is deliver the number, there’s no plan b. There’s no, like, other team that if we don’t get it done, somebody else is going to. It just doesn’t exist. So for me, it’s people. It’s executing on the number.
This is ruthless prioritization because I could argue this third one should be first. It’s customer success. And I think if you’re nailing those three things, you’re probably doing a pretty good job.
You know, we’ve we’ve had frameworks before this question, and then we hear about kind of the blurring lines. And one thing that always strikes me really today in sales is like, to what extent is it an art versus a science? And I spoke to your your coach before the show, who said that you’re one of very few people who can blend the two. If I push you, is it more an art or a science, Larry? And how do you think about that?
I have historically thought that it was probably 70% art and 30% science. And then I I challenge myself on that because then I think, okay. Well, if it’s art, then, like, can you learn art? Is art more talent? And is science more skills? How do you balance those? How do you how do you recruit for those? How do you organizationally model for those? I today am probably in the sixty forty if you press me. I still think it’s a lot of art. I I still think it’s a lot of talent.
And when I say talent, I’m talking things that you and I hit like, that that it’s hardwiring. That hardwiring was when we would turn 13, man, it’s in us. You can pivot. You can adjust. You can learn new things, but all the skills based things that happen after that, I would put into the science bucket. Right or wrong.
What do you think is the art of sales? Is that the EQ of reading customers? Because respectfully to me looking in from the outside, it’s just more and more science based. And I put structure, frameworks, analytics, Gong recordings, outbound sales tools. Like to me, the only art left in sales is actually the EQ of reading, people, relationships, the older school intangibles. What is the art left in sales?
So, yes, I do share that opinion. I would expand if I can. This is more than like reading customers. You cannot train EQ. Really, really good high end EQ. I I firmly believe that that’s in you, and I think that is the art. And I would tell you as it relates to things like empathy, which is what we’re all looking for from customer interaction with our coworkers and bosses, I think it’s really hard to train empathy. Trust me. I’ve tried. Right? And and when it’s not something that is core to people, you’re asking them to work out of their what I think is their DNA cycling, and it’s really it’s uncomfortable for them.
It’s not a great spot for them to be working in. So I do think it’s a lot of art. I think there is a beauty, a real beauty in people that do it well. And I think it separates the incredible from the great.
I totally get that. And I agree you cannot train empathy, which is a pain in the freaking ass because I would love to. And the other one that I always find striking is like playbooks. Everyone says about sales playbooks. How do you define a sales playbook? First off, let’s just start there.
I always start playbooks with outcome first and work backwards. You can get super playbook happy, super playbook heavy. Everybody’s got a playbook. Playbooks end up conflicting with each other. I always try and work playbooks backwards. What is the outcome that we’re looking for? And depending upon the playbook, I typically work it backwards into if that needs to be true, by when does that need to be true, what are the critical things that need to happen for that to be true, and who are the people that we’re gonna ask to go do that?
I like to keep it simple. Outcomes first, work backwards, and then measurement and cadence. How will we know if we’re on target? How will we know if we’re on track? If we’re not, what pivots do we think we’re gonna make? Kinda play the chessboard out a little bit. But, I I’m just a fan of keeping it simple.
Going back to the analogy of me being the new sales leader or CEO who needs your help, you scaled sales teams like no one else has done. You mentioned that being an AE and an IC yourself. Help me understand. How do you structure a hiring process for a new sales team addition for an AE today, for an SDR today? How should I do it?
So first, I think you gotta understand the role. Right? What are you hiring for? What are the specifics of that role that matter the most? A lot of people put this in the in the job description, but I also think a lot of companies aren’t super clear about what they’re looking for. And I’ll take you through how I think about the process. But I have a high confidence score that when you aren’t clear about what you want, that’s when you may end up missing and hiring the wrong person.
It has very little to do with whether that person was talented or not. It has to do with have you done a good job with the matching process. Mhmm. I always like to start with what is the role required, and then I kinda work to okay. Well, like, where are we going to go source those candidates? There’s an incredibly incredible availability of diverse wildly talented people for any number of roles at any level today. It’s really pretty beautiful. As a as a hiring manager, the amount of access that we have now, you need a good recruiting team.
That recruiting team has to be armed with the value proposition of the company. So if I was gonna interview if I if I was you and you’re working for me at Genesys and you’re hiring an AE, I would wanna make sure that you’re armed with your Genesys pitch. What is your pitch about Genesys? Like, what’s compelling about Genesys, Harry? Like, why would I come in to work there if I was the candidate? You gotta be armed with the value proposition. I like to keep interview teams small.
This is a whole separate thing that I’m sure will rile some people up that may watch this, but I’m not a fan of panel interviews. I like doing interviews one on one. I strongly advocate that for my leaders because the relationship between the people that you work with for and around really matters, and I think that’s difficult to get out of a panel. I like to keep it five folks at the most, interviewing people, and then I think you gotta move quickly. The beauty of having this wide availability of of diverse talent at all levels today is just that.
The curse is dragging people through long processes. Oh, I want you to do one more interview. Like, speed is kind of the game. And I think when you can match speed with a defined process, you can get incredibly valuable people.
My my question there was actually, you know, if you have an amazing candidate on the second interview, which often happens Yeah. And you’re like, oh, I quite wanna hire them. Do I need to do 10, or can I just hire the second?
How long have we worked together, you and I?
In this process? Not long. Three months.
Okay. No. You’re gonna need more people to interview that person.
How many do I need?
Listen. I I think if you’ve got a really hot candidate, and we hear this a lot, we’ve got offers. Like, I’ve I’m I’m a candidate. I’ve I’ve got three offers. You know, I’m kinda coming to you guys. You’re early in your process. I’m late in three others. Kinda need to make a decision that amount of pressure. We get that a lot.
But would you move on that? I I don’t like, like, hot candidates. To me, it’s like hot deals. Bad decisions are made when you compress timelines and don’t know people in my mind.
I think this is where a lot of hiring mistakes are made because you do not do enough diligence. The challenge is compounded globally because in some markets, you hire the wrong people. That could be a year to an eighteen month process to get a new person back in seat, and it’s gonna cost you a lot of money. If you’re gonna spend more time, my opinion, there’s no more important thing than getting the right talent on board. It is a beautiful thing when you do, and it is really, really problematic when you don’t.
So I I’d rather invest the time, get a little couple interviews. I don’t like the hostage negotiation strategy of, hey. I got a bunch of offers. You know, you need to get me one in the next week. Especially if it’s that language, that person doesn’t match our value statement anyway. Certainly not anyone I want working for me or for you even though we just met.
Completely agree with you. Before we get to that offer stage, you’re interviewing me for a role in your team. What are the questions that you continuously go back to if you’re adding me to your sales team? And there are certain few which you always like to know and hear answers to.
I always get into track record, and I and I do it a couple different ways. I want it a little by the numbers. Tell me the story. If Like, I was gonna tell you the Salesforce story, which you told very quickly and probably better than I do, I would lead with results because we’re in a results driven business. And that’s not just sales. It’s customer success and everything. So I wanna hear the track record. Where I then go, I typically get into cultures. You know? So if you know that I’ve worked at PTC, Hyperion, Oracle, Salesforce, Confluent, now Genesys.
And if I was you and and I was interviewing, I’d be like, what culture did you really prefer and why? I’ve had you’d be shocked, the range of answers that I’ve gotten to the culture question. What range of
answers have you had, Larry?
It was really fun. We had Fridays off for three months. There was always food in the office. I’ve heard very culture related answers that had to do with amenities of the company. I’ve heard culture related answers that if I took that to the other end of the spectrum, you know what? That was one of the hardest places that I’ve had to work. It was the most disciplined structures that I had to work. I didn’t like, you know, quite a few of the conversations, but I grew, and it was amazing.
You’ll hear stories about bosses. You’ll hear stories about philanthropy. But I really for me, the reason I’m asking the question, because values matter to me. They matter every place that I’ve worked, and I think value alignment is an important thing. I’m kinda getting a little bit of value statement out of the culture piece. And then the last thing that I typically get to is what drives people. Why are you still working?
Is that bad if it’s money? If I say, listen, dude, I’m here to make money. I’m a comp machine and I wanna make revenue for the company and comp for me.
Yeah.
Why? It really matters to be able to give my family a great life. I wanna get a bigger house. Know, obviously, I wanna send my kids to great schools and wanna have a great life with my wife.
What I just got from you was it’s actually not about money. It’s money so that you can deliver outcomes for your wife and your family and getting a bigger house that probably is for your family. I will always double click on things to the point where people get super annoyed. This may be a terrible it’s a terrible habit, but I ask why a lot because I think the nuance is in the why for people.
I totally agree. It’s the the Toyota’s five whys. One aspect that a lot of people do is case studies. They love a case study. Do you do case studies with me? Are we gonna have to do that as part of the process?
I don’t. I have folks on my team that do and and like that. This is where I go to, like, being open to different parts of processes. There is a lot of value sometimes out of the case study. But for me, the case study gets to what is your mindset and your thought process. It it gets to the what and the how. I feel like I can get that out of talking to you for forty five minutes.
You know what I always do? I say, We’re hiring the team around you too, Larry, and we need more great people. Who who are the two or three people that you’d bring with you on day Yes.
It’s a huge sign. And I would say that imperative grows the higher you go in your role and responsibility. So, like, take Frank. Right? Frank went from running a team to running a country. That imperative in your network, your brand is critical. You have to have it. And, again, there’s so many talented people. If you aren’t competing on that basis and by the way, it doesn’t matter if the people that you’re gonna bring with you are terrible. The double click on, yeah, I can bring a team of people, it’s like, well, tell me about those people.
Who are they? What have they done? Like, you gotta go you gotta go unpack that. It doesn’t help if you hire an average person that then brings people that aren’t the best people for your company and your customers. Doesn’t help at all.
I totally agree. It’s probably the worst thing. Well, this has gone incredibly well, and you wanna hire me in this process. Yeah. What are some of your biggest lessons in terms of getting the offer done right, the comp setting, and how to get the right deal structure for the new sales edition?
I think you gotta do that early. I’ll give you an example. We’re we’re in a hiring process right now for a super senior leader in our company. We have a certain comp structure that we think is is aggressive. Some people are addicted to a different a different comp structure. And the intersection of how valuable those people would be for us and what we would need to pay them doesn’t make sense for us. Like, that equation doesn’t pencil for us. It’s really, really challenging when you discover that after two months of interviewing.
That’s a prop. I like to know that we can afford someone and get to a comp structure before, like, it’s time to have a comp discussion. I think you need to do that sooner rather than later. I don’t it’s not the first conversation. It’s not the last conversation. And this is the unpacking of the interview process for me. You gotta understand what matters and by the way, what matters most around comp? Does your on target earnings matter more? Like, are you are you a commission person?
Does equity matter more? How do you think about the two?
What do most people care about from your experience?
At a leadership role, equity.
At a normal role? Like, a IC role?
IC role, like, give me my on target earnings. Like, give me the ability to crush my accelerators.
Have sales team expectations changed over the years? I just saw a tweet from Jason Lankin today that said in one of his portfolio companies, the top performing sales rep just quit because she didn’t like her VP sales. Next line, she made a 100 $800,000 last year. Have people got more demanding in what they want?
Yes. But I will say the most important for me, the reason she left is not comp. It’s because she left. She didn’t like her VP.
Yeah. She made $800,000, dude.
At at at what price, though? So this is where I think it has changed, and I will say this from from some of the early companies that I worked for. Super coin operated. Give me my own target earnings, kill or be killed mentality. You know, let’s see how long you can make it. And if you don’t make it, then in six months, you’re gone. And it doesn’t matter if you like your boss or not. That has changed. The impetus on leadership these days and the impetus on what what I think is, like, true servant leadership, I think that is driving more loyalty.
I think those are for most people, I think that is a bigger driver than compensation. If that gets too out of whack, you’re gonna have a problem. You will get sideways if, hey. I love my boss. I love the company. I love our journey. I love our customers. And by the way, you’re paying me 30% of what I could be making somewhere else. Clearly, you’re gonna have a problem. If we’re into small gaps, I believe leaders make a difference.
Okay. So I’m I’m thank you. I would like to accept your offer, Larry. I’m excited to join. No one does onboarding well. Like, university sucks. What have been your biggest lessons in scaling sales teams on how to do onboarding well?
It’s gotten harder too. Right? I mean, insert COVID in the pandemic when everybody shut down what we all consider normal onboarding. It’s gotten harder, and I will argue we will never rotate all the way back to the way it was. And I’m talking a little bit about, like, in person versus digital or or remote. My first training, as I mentioned to you, Lily, I was exported. I’m an Arizona guy. I was exported to Indianapolis in the winter for six weeks, and that was the way you trained.
And you did role based training, and there was curriculums and structure and everything else. I think that has shifted certainly from the remote aspect and the in person aspect that has completely shifted today. Along that journey, you’re getting bite sized pieces of the prioritized, what do you need to know in order to be successful, starts with basic things, and then you’re on your enablement journey that lasts a year.
Do we spend any time in support? People a lot of times say support’s an amazing place to start. When do we get in front of customers first? Do we listen to prior sales calls? Do we tag along with sales leaders? How do we think about ramping in that first thirty to sixty days?
The support one’s inch. I I haven’t heard that. That’s an interesting it’s an interesting thought. I think you can get real perspective there. I’m gonna, like, consider that stolen.
Honestly, it is it is the most effective thing that I urge all founders with sales teams to. Yeah. You hear the pains of customers. You speak about training empathy. It’s probably the closest way to train empathy, just to listen to the customer support calls.
Yeah. That’s a great tip. We like to pair up in teams. We do like the buddy system. We like the mentorship system. You know, your question on customers, like, one, how many chances do you get to be new? You don’t get many.
Do you know why that you put them in front of a big customer and they’re like, I don’t really know the sales cycle here. I don’t know the next step on the contract. I’m not really sure how we close deals. You can’t just put them in front of big customers on day one.
Beautiful is that?
Not beautiful at all if I’m paying $500,000 to your company and you put a rep in front of me who doesn’t know the process.
I wouldn’t send you a loan as a new AE. I would send you with either your boss or someone else, and the problem is the gift. Something has happened with a you’re talking about a good sized customer if it’s if $500 is the metric. You clearly should know a lot when you walk into that customer so you aren’t blind to what’s going on. Like, I’ve been at Genesys for a year. I still sometimes will be with customers. Got I’m still learning. Like, I’m still new. Like, help me understand.
I I think it is a beautiful learning experience. Now what’s valuable for the customer in that? You gotta bring something to the table. You gotta you gotta do your homework and your background. You gotta know your meeting. I’m not parking any of the discipline part of that meeting and the preparation part of that meeting, but if I could be new forever, I would do it.
How quickly do you know if a new rep or a new sales hire is bad?
I you know, for me, that’s based on the number of interactions you have with them. There are some warning signs early. Well, let’s use your example. We’re going in to meet an important customer. I’ve given you all of the background data on the account. I’ve given you what they use of our products. I’ve given you their use cases. And if we’re in prep for this meeting and you haven’t been through that or you don’t have a command of that information, red flag right off the bat.
If you’re in that meeting and you aren’t accurately representing the story of Genesys and if you don’t know about our company, it’s kind of a red flag. And then, by the way, the just the customer interaction pieces, you can kinda draw conclusions on how people interact in those situations. So how soon do I know that they’re bad? I would say it it’s the combination of several red flags. You gotta really double click, and this goes back to our hiring conversation. And I’ve made a lot of hiring mistakes.
Normally, there is something that ends up showing up that when I was in the interview process, assuming I was perfectly diligent, which I never am. There’s always something that’s like, you know, but, like, my gut was a little bit like, my gut. I hear that a lot with people, and I my advocacy is trust your gut. Normally, those things will show up later. And and without fault, the hiring mistakes that I have made end up showing up in our example right now that were things that I didn’t feel a 100% comfortable with.
And for whatever reason at that time, I gave a pass on, or I didn’t do enough homework on, or I didn’t poke on enough. You gotta be able to unpack it. You gotta be able to embrace that mistake, and you gotta make sure that you’re doing everything you can and not do it again. So bad is the sum of a lot of red flags and a lack of improvement with coaching.
Do think that was the first thirty days?
Oh, yeah.
So first thirty days, and you just said there about the gut, and I’m totally with you. Max Levchin from Affirm said on the show, when there’s doubt, there’s no doubt. Do you agree? And should you just move really fast in those first thirty days and say, Larry, I wanna get ahead of this. Clearly not working. Sorry. Or do you go, it takes time. It’s a complex sale. It’s an enterprise sales cycle. They’re young. You know, give them a bit of time.
I would say nature nature of the flag. Like, what is the flag? What’s the foul? And I think you really gotta unpack it. This goes back to hiring mistakes cost a lot of money and a lot of time. I think you need to have pretty candid conversations with people. This goes into the whole post call recap and and feedback and coaching. If you aren’t doing that coaching, I think you’re gonna be in a different bucket. But let’s assume for a minute, you go in, we have a terrible sales call.
I’m like, oh my god, Harry. Like, that was a mess, which I would never say. But I would normally start off with, Harry, how do you think that went? If it was terrible and you thought it went great, then then I’d throw another flag. Like, I’d really be curious what you thought was great. So I think you really need to unpack that. So it depends on the nature of the flag. If it’s a coaching item and a skills related item and it’s not improving like, I feel as an employer, you have a responsibility to employees.
You really do. It’s hard to onboard. You mentioned it. It’s it’s hard to onboard, and I would break it into mental errors and physical errors. I played sports growing up, so my coach has always said, that you can make all the physical errors. You cannot make mental errors. What’s the
difference in sales?
Not a lot. This goes back to I I I think there are things that there are flags that would be real issues if and this goes to interpersonal skills. That is something you should be sniffing out of the interview process. Preparation and diligence, those are things that are they’re kinda nonnegotiables for the job that we’ve chosen to do. So I think you need to be candid with the communication. We have a responsibility as leaders to communicate and coach. If that coaching is not working, then I think you need to move quickly.
You’re just delaying an outcome that you have already pretty much decided on. Here’s what also happens. By the time the leader knows it, everyone else on the team knows it. They know it before you do.
Do you ever keep someone you don’t like? I’m an investor too for my sins. You know, I I met a founder yesterday, enterprise SaaS business, and I was talking about one of our salespeople. And he said, total dick. But, I mean, he brought in $2,500,000 in revenue last year, so, you know, I can put up with it.
Do I ever hire people that I don’t like where I’m like, oh my god. Like, I just don’t like that person. They’re offensive. They’re abrasive. No. I just don’t even hire them. If they’re that way to me, they’re gonna be that way with our customers.
Well, no. They’re not. They can be arrogant and douchey, especially in sales. Like, I I can be arrogant douchey, but you put me in front of a client. I’m gonna charm the shit out of them. I’m gonna close a million dollar contract. I’m gonna be your number one rep. And I’m the best, so I deserve the most money. And everyone else, they’re not as good as me.
Well, Harry, I would I would tell you there’s probably five of you. You just aren’t self aware enough to know that.
By the way, this is not actually me.
Just to clarify.
Everyone listening,
you’re just like, what a dick.
Come on.
That legitimately, that would be pretty much what I would say. There are so many talented people out there. The separation in the highest echelon, like, are more and more, in my opinion, wildly talented people out there.
I think it’s all about building confidence in the early days with sales teams, with sales people. Do you think that you should go for the logos, or do you think that you should go for just quantity? Like, just get as many clients or, like, go for that stellar logo?
I think it it depends on where you are as a business. Right? Your early
stage, your zero is 10,000,000 an hour.
And I think you gotta go get category killer brands.
Why in the early stage you went for category killer brands?
References. If you can be successful with the category killers and they didn’t become category killers because they’re easy to work with. And if you can do it with the best and I have a huge caveat after I finish this sentence. If you can do it with the best, it’s a heck of a place to start. The caveat is closing the deal is, like, the easy part. They have to be successful. Like, for them to be referenceable, have to be you know, Coca Cola is not gonna go on record and say, we just closed an amazing deal with Harry, and we have no idea whether it’s gonna be successful.
It’s not gonna happen. They’re probably gonna be a reference once they’re successful. So for me, the entire orientation of an organization in the early, early stages, I’m talking, like, sub a 100. I think needs to be figure out the industries and the verticals you could be successful in, go get brand names, category killers, and rotate hard on customer success. Because if you can’t get customers successful, you’re dead in the water anyway.
Okay. So I had Chris Dagnon on the show, the CRO at Snowflake, and he was like, why do we still have CS? We should have professional services, and then there’s, like, support. But, like, CS? Not a fan. I
I heard Slootman say the same thing, and you should really go, like, unpack the titles versus the roles because that matters. And by the way, they are in a pure consumption model business, which which is very different than a booking. So it’s a bookings versus revenue kind of business or hybrid businesses. Snowflake’s success is a 100% built on customers being successful in usage. Now if you’re hiring a bunch of salespeople and then you’re gonna ask your salespeople, hey. I just want you to go make sure they’re successful.
They’re gonna be like, hold on. And I’m in Snowflake land. I I need to find more use cases. I need to find more applications to move onto Snowflake’s platform. That’s selling. Who is actually managing the technical architecture, the foundations of that customer being successful? You kinda need to go unpack titles versus roles. And some of the companies that say, we don’t need customer success. Someone is playing that role. You can call them whatever you want. You can put them in finance for all I care. But someone is responsible for the correct architecture aligned to the right use case, and then someone is responsible for growing and expanding that business.
How do you think about the interplay between CS and sales? I had Dave Kellogg on the show, and he said you never want your farmer going against someone else’s hunter, which I always remember as a statement. Obviously, your farmer is your CS rep going against someone else’s hunter, which is someone else’s trained killer AE who’s ready to take your customer. How do you think about the interplay between the sales and CS and not having your farmer versus someone’s hunter?
For me, that’s just segmentation strategy. That’s the difference between how am I going up against competition based on the accounts that are in their patch, and do we carve out hunter farmer patches? You know, this could be a whole other five hour podcast for you and I, but that’s a segmentation question. Let’s say we had AEs, reps, individual contributors that just had customers. Okay? So of varying sizes. Right? But they’re just customers. There’s no, there’s no new customers or new logos in their patch. Their job is, quote, unquote, farming.
I actually kinda don’t think that farming is a thing in in the cloud world. I it’s just not. Mean, you’re responsible for finding new use cases across the entire bag that you have to sell. So you’re always hunting and farming. You have to have interlock stacked hands between CS and sales. I’ll take my team that’s organized that way up against anyone else’s all day.
Chris Dagnans?
Yeah. I don’t know, Chris, but yeah.
That’ll be a fun show. One thing I wanna discuss, you mentioned, like, use cases there. I’m such a fan of vertical sales playbooks. You’ve been a master of vertical sales playbooks. I think it’s so important to mean something to specific set of customers. Your messaging is tighter. Everything is better in a vertical sales world in my mind, really. But so many founders are like, it’s too expensive. It’s too expensive to build that. I’m too early, it’s too expensive. How do you answer that question?
If I rewound to when we started doing this at Salesforce, it it was really born out of out of customer requirements. You know, we we got feedback that we weren’t showing up understanding the customer. And it it really you said it. Right? There’s very few things worse than that. So when we started that business, we were just very focused on enablement, enablement and organizational alignment. And there’s depths that you can go when you think about verticals. Some companies start with industry. So building out industry teams that can come in and have that conversation, but your AEs are still aligned.
You know, you may have an AE that calls in healthcare in the morning, Financial Services in the afternoon, and is going to dinner, you know, with a three letter agency at night. Content’s created for them. They can they can kinda get a couple steps down the road.
Do you think that’s really as effective as someone who just lives and breathes aviation or Yes. Hospitality.
And it’s expensive.
Does it need to be though? You hire a junior rep and you say, hey, you’re in charge of hospitality, which entails large hotel chains around the world, become a freaking nerd on it, and go sell. Like, why why does it have to be expensive in that way? So it’s a great question.
When when that AE goes to their SE or SC, the technical person on their team, and says, I need to come in and show an airplane demo, and I’m sticking with the metaphor. And that that SE is like, well, kinda don’t like, we’ve got a really generic one. Like, what do you want? Then there’s a disconnect at the technical teams. Then you’re bringing in an AE that is super smart, super knowledgeable, and the SE isn’t. So clearly a disconnect. And then, by the way, for our earlier conversation, you’re gonna bring in a customer support person, probably professional services, and you’re gonna bring them in early in the sales campaign.
The customer’s gonna go, so tell me like, how many aviation implementations have you done? Tell me what you know about the industry, and that person’s gonna be light. So my point is to truly verticalize and to truly deliver value for customers, it can’t just be the AE. It has to be every single person that touches the account. And then you end up in these subverticals. Financial services is a lot of things. The reason I think that it gets expensive and, again, you can, like, be on this journey where you don’t have to eat all those cost upfront and you can try things and fail quickly.
If you’re truly gonna deliver the benefit, what I think is the benefit of a verticalized sales team, it’s every person that touches the customer.
Can we do one at a time? Do we need to do three at a time?
Yes and no. I I mean, this is another cost implication. This is another, like, prioritization implication. This is, how much risk do you wanna take on? We started with financial services at Salesforce, and it became so successful. They actually developed a product for financial services. That became more impetus, and now the industry products team at Salesforce is just crushing it because they’ve actually went out and built products specific to the industry. If I was advising you and you’re thinking of building out a a vertical, I would pick where you think the biggest bang for your dollars, and I’d try.
I wouldn’t go to three.
To what extent is one customer enough to bet on a vertical? And what I mean by that is that I quite often meet founders and they’re like, well, we got, I don’t know, Chase. You know, we feel that actually the social validity of getting Chase means we’ll be able to get x, y, and zed bank also. Do you really see it like, oh, you got one so you can get another and another? Do the dominoes fool when you have a big name or not? Don’t say it depends.
I I think well, you pick banks, which are super difficult as it is, but I would not make that step. I would not think that just because you got one that you’re gonna get the rest. Because, by the way, you could have gotten it by accident. I didn’t mean to be abrasive about it, but there’s a lot of reasons you can win a customer. I would be more focused on what is the use case, what is the value statement, how pervasive do we think that value statement could be or that problem statement is for customers.
I think you gotta look at a lot of variables to and that all rolls into how we should be thinking about TAM or, you know, our total available market. Just to say that you’ve got one, I don’t know. Like, you kinda need to make a line.
What size customer does it make sense to have a full life cycle, like a CSM, the full management of the accounts? The biggest problem I see in SaaS today is I see, like, people doing enterprise teams with 10 k ACVs.
There there’s a big operational cost implication to doing that. There’s how many accounts is an AE gonna be covering. Yeah. There’s what’s the ratio of accounts for customer support and customer success. There’s you should consider appropriate ratios for solution consultants, solution engineering. So you can work into this process. I think when you get down into the maybe your question of, at what size customer do I have? One AE covering it, that I have one SC that that’s all they do, that I have one customer success person, that’s all they do.
Man, it’s gotta be a pretty big customer.
Is that a 100 k? Or
Well, it’s a bit depends on your business. If if I thought about Genesys, you’d probably need to be close to a nine digit customer. It’s tough to get on our top 10 list, which we’re we’re blessed and grateful for. If I was starting a business and that rotation made sense for customer success and you’re gonna place your bets there, you know, it’s always a tough trade off. Like, how how do you think of scale across teams? Never perfect.
How do you think about discounting? I wanna get some logos. I’m a new hire. I hate it. So if I’m on your team and
I do discounting, how do you feel? Well, discounting is kind of a part of life. I think there’s appropriate discounting based on scale.
What’s appropriate and what scale?
Here’s the thing. If you’re playing and you you gotta put yourself in the customer shoes on this too. Let’s say you’re a small company, and you’re going into Chase. You’re kind of an unproven company. They’re taking a flyer on you. They love you. They trust you. You’re on the hook for this thing to be successful. You’re gonna pay a pretty price at Chase to win that business. You’re it’s pretty risky depending upon your value proposition to them, but you’re an unproven quantity. I think the higher just general industry practice, not being a victim here, but just the way things have been in enterprise technology, there’s a linear correlation between volume for the size of the investment and the discount.
And that varies by whatever you’re selling or this you know, if you’re in the experience orchestration business or if you’re in supply chain business or ERP, companies are pretty adept at buying these days. Like, these companies have gotten really good at buying stuff. So they’re doing their compares. Gartner advises on pricing. There’s plenty of places you can go do benchmarking. The difference for me when someone asks for a discount, if if it’s my team that’s asking me for a discount, I wanna see the value proposition.
I wanna see the business case. If we don’t have a business case, if we enter haven’t articulated when they’re gonna get their money back, what those outcomes look like. If we haven’t done a good job on value and we’re just looking for a discount, that’s the stuff where I you know, I’m not a fan of that. Just not. It means we haven’t done our jobs.
Larry, I’m sorry. I’m sorry. I’m on your team, and I know I said that the the the deal will come in this quarter, but it it just slipped to next quarter. I’m sorry. It slipped to next quarter. How do you respond to me as a sales leader? No
problem. Are you a sales leader or AE? Who are you?
I’m an AE. You’re the sales leader.
Help me understand, Harry. Like, what what happened? This was a committed deal, Harry. Like, what happened?
I I know. Honestly, they just they just didn’t have it as a priority this quarter, and so they just said, hey. You know, we’re gonna punt it to next quarter.
When did it get deprioritized?
They went they went cold on me, and they just got back to me yesterday.
Okay. Who are you working with over there? Who who’s your highest level contact at the account?
I don’t fucking know because it’s a hypothetical situation. We’ve got a break. It could be anyone in the company.
Am a huge fan of people doing what they say they’re gonna do. I put an incredible premium on it.
Do you think you’re good at sales forecasting? Yes. Why? How how are you so good at sales forecast? And, like, teach me.
Ultimately, you have to balance risk with commitment. Pipeline is everything. So the more the more at bats you have, the more likely you’re gonna get a hit. It’s the same thing in sales. And forecasting accurately is, in the job that we do, a critical part of your brand. If you can’t forecast accurately, for me, it’s one of a couple things. Either you don’t truly understand your business, you aren’t truly doing the amount of diligence with customers and opportunities, you don’t have enough opportunities to be able to balance out some of the riskier things with some of the things that look better, and we might not even be asking the right questions, and we’re likely not talking to the right people.
Let me say all of that, and it’s really hard to do well. I’ve missed months. I’ve missed quarters. I’ve missed quarters back to back. It’s a hard thing to do, but there is a real premium in the world that I’ve chosen to play in on forecasting accurately. In particular, I kinda own the number, myself and my peer in the CS side own the number for the company. How we think about investment and strategic priorities kinda depends on us doing what we say we’re gonna do. My roll up is based upon my directs doing what they say they’re gonna do that’s dependent upon their directs doing what they say they’re gonna do, which is dependent upon their directs and dependent on all the AEs.
And managing that with agility and accuracy is very difficult, and I think it’s incredibly important.
Everyone says today it’s so hard in sales. It’s so hard in sales. All budgets have centralized back to CFOs. People aren’t spending like they used to, you know, Larry. They’re not. They’re like, yeah. That’s true. We like that bullshit.
The latter. There isn’t a company out there today that doesn’t have TAM data that maybe there are. But, like, in the companies that are really playing the game today that are winning, they know the TAM data. They have there’s so much information about accounts. There’s so much information on PTB or, like, propensity to buy. That information is kind of the table stakes. When AE start, they’re kinda, like, given all of this info. Like, here’s your territory. Here’s the opportunity inside of your territory. Now you could be in an industry that gets hurt macroeconomically.
A perfect example, the travel and transportation industry during COVID, tough spot. That’s a tough spot. You need to have a little humility with the narrative and a heavy dose of empathy that listen. Some of these are hard. If you’ve given a patches of customers that are upset and you’re working through a bunch of issues, I think you need to have you need to have some empathy with that situation to understand that. But I would really push back on a leader in a or an AE that barring force majeure or some macroeconomic pandemic or a financial crisis, if you’re selling to the banks, I would really push back anytime today of someone saying, you know what?
People just aren’t spending the way they used to, so I’m not able to sell anything. That’s a mindset thing too, by the way.
Have you ever had bad culture in one of your sales teams? Why did that happen? What did you do wrong?
The biggest lesson that I would say that I learned early in my career was I I didn’t even use the word then. The the word to me long time ago was, like, a soft word was empathy. Like, I completely lacked empathy. It it would be the be the narrative of an an a in the financial crisis who only called on b of a and Chase came to you and said, hey. Like, it’s really tough sledding, and these opportunities are gonna push for a quarter. And if you just said, I don’t care.
Go figure it out. Like, there was a point in my career where that was that was okay. There was a point in my in my learning as a leader where that was how I was wanted. I and it was uneducated. It was very difficult to maintain loyalty. And I think you learn you learn some very expensive lessons that normally show up through attrition. When quality people start leaving this goes back to our first conversation. When quality people started leaving, is comp an issue? Sure. Yeah. I mean, comp is likely always an issue.
I don’t think comp is always the issue, and I’m prioritizing the issues. I think it comes down to your leader. And I early in my career was not a great not that I’m great now. I’m on the journey just like the rest of us that are in this in this role. I was pretty poor.
Were there one or two moments where you really felt you improved as a leader? Like, the floor fell from beneath you and you improved in that way?
Yeah. So it it just goes back to our our deal conversation probably, and it’s very hard for me to do. Like, I I would say that I’ve tried to work my DNA to respond to things a little more masterfully than than I used to. But, generally, when things would come to me as a problem, I would respond with finger pointing, somebody’s doing something wrong, very little accountability for myself in that equation, and it was really how I responded to things. I I learned a lot. I I talked about kinda my career journey.
Godfrey Sullivan was the CEO at Hyperion, and I learned a ton from Godfrey. The the empathy score with Godfrey and customers, I learned a lot from. I’ll never forget. It a meeting. I’ll I’ll leave the account name out of the picture, but it was a we were not doing well with this account, super senior level c suite meeting. The way he handled that situation, remarkable.
What did he do to handle that?
Just listen. Listen. Empathy. I know you’re using that word a lot. He listened. He was prepared. He showed incredible empathy. He knew the details of what was going on, and he had a plan. You can tell when someone’s genuinely listening or when someone is sitting there with a prepared answer hoping that you asked the right question. That was a great example for me as a leader. I I was blessed to have the same boss for a period of time when I came into Oracle all the way into Salesforce who had a remarkable ability to hear things that weren’t going the way the teams anticipated.
And you’d leave that meeting and, like, we got this. No problem. Really comes with listening and empathy. Those are probably my two biggest career journeys, I think, personally and professionally.
Larry, I could talk to you all day. I am cognizant that you do also have a job. Listen, I wanna do a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay?
Yeah. Careful what you ask for, but yes.
What would you most like to change about the world of sales?
I think a value creation, the ability pretty universally for teams to be able to convey value to customers. I I think that that pretty dramatically changes things. I think that changes the optics of selling completely. It’s, like, it’s not a sales game then.
Tell me, is outbound dead in 2024?
No. No. No. No. No. Not at all. Outbound done well. What a what an instrument. What an incredible instrument. So
no. Do you know why that with AI, the outbound supply will be infinite in the way that everyone will be able to create so many personalized emails, messages?
There’s gonna be automation gains from AI, so efficiency gains that were largely, by the way, things people didn’t wanna do anyway. They hated doing anyway. And then there’s gonna be augmentation benefits from AI, so helping people do their jobs better. The way I see this going, that’s gonna be, like, $30.70. I think 70 percent of the benefit of AI is gonna be for people to do their jobs better. So, no, I don’t think outbound is better. I think or anything outbound is gone. I think AI will help enable the right outbound teams to do it better.
What sales strategy do you think is dead that was prominent and now it’s like, no. We don’t do that anymore.
You know, fab selling is pretty dead. FAB. Do you remember this one? Feature feature advantage benefit. This is a big deal. This is actually how I learned, and this is and I said it lately. That was the training. So you were you were trained feature advantage benefit. That was how we learned. So I I think that one is dead and gone, and it goes back to you know, there’s so many value selling frameworks now. I grew up at in my tech job at PTC, which was medic at the time or med pick.
So there’s an unlimited choice of them, but I think I’m pretty sure fab selling nobody’s writing a book on fab selling these days.
What are the most common ways that fast scaling sales teams break?
Prioritization, for me, is the most common. Then I would think, generally speaking, it’s waiting. Even though you’re fast scaling, what are the things that you’re waiting for something to be different on before you go and try that could create a different outcome? I think waiting is a is just a really dangerous way to go.
I’m a founder considering a vertical sales playbook approach. What’s your number one piece of advice for me? Focus.
Pick your spot on where where you’re gonna go to the vertical. On the playbook, work outcomes backward.
Final one. What recent company sales strategy have you been most impressed by?
None. I’m not a sales ironically, given the the job that I have, I’m not a sales strategy, like, entrepreneur or wizard. So I probably don’t see as many or enough. In the cloud world, you have to be in a land and expand and retain sales strategy. And that’s not just sales. That’s customer life cycle. If you’re not in that business, I think you’re gonna lose.
Listen, Larry, I I can clearly speak to you all day. I can’t thank you enough for doing this, and this has been so much fun.
Man, it’s been a blast. It’s great to great to meet you. Thank you for everything you’re doing.
I just love shows like this. For me, I started these vertical shows because I wanted really actionable takeaways for founders to learn from and implement in their businesses today. Larry was incredible there, and if you wanna watch the full episode, you can see it on YouTube by searching for 20 VC. That’s two zero VC. But before we leave you today
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