Why AI SDRs are BS and Do Not Work

with me, Harry Stebbings. Now 20 sales is the monthly show where we sit down with the best sales minds in the business to discuss how they start, scale, and master sales teams. Today, we’re joined by Amit Bendov, cofounder and CEO of Gong, the leading AI sales platform. Now the company has raised over $600,000,000 from some of the best, including Sequoia, Thrive, Salesforce, and more. And Gong has surpassed 400,000,000 in ARR and serves thousands of customers, including multiple Fortune hundreds and is valued at over $7,000,000,000. But before we dive into the show today,

You know, if you take like Peter Thiel, said like great companies are built on secrets. Right? Our secret was that everybody thought, still do, that CRM is a single source of truth. This is not true. CRM doesn’t have truth. The only thing that’s true out there is like who your customers are, what they bought, how much they’re paying you, maybe their phone numbers. Everything else is not true. It’s like information that sellers are bothering to put in, it’s highly subjective. They put maybe like 1% of the information that actually happening.

I experienced it firsthand. In 2015, I was like a CEO of a software company, we’re growing really fast. And then all of a sudden I had a shitty quarter and then sales were just not just taking a nosedive and I have no idea what’s going on. I started digging, like, in our CRM, like, you know, do we have enough opportunities? Do we have enough people making enough calls, enough emails? Everything looked fine except for, like, we weren’t selling. So it dawned on me that the secrets is not like how much work we’re doing or how many people we have, but it’s like the essence of the conversations with customers.

And I sent my product manager to sift through CRM notes and they spent a couple of weeks, load everything to Excel. And they came back, said, There’s nothing there, Amit. I realized the problem is that CRM was built for the leaders to give them the information so they can roll their forecast and reporting based on sweat that people at the bottom in the trenches need to put in. They need to go in. So I met this customer. They’re very excited with the demo. Well, we’re gonna meet again next week.

And then nothing happens and never really know why. So CRM tells you like what you won and how much they paid and what you’ve lost, but you never really know why and it doesn’t tell you how. This was 2015, for those who remember, this was the year where DeepMind was already beating the world champion in chess. And AI was starting to diagnose cancer better than the doctors, the question I asked, like, how hard would it be for AI to tell us what’s going on better than sellers?

That was the insight that ultimately led to Gong.

Absolutely. Like, I mean, who wants to fill in forms or flip through web pages? This is like people punching cards in the seventies. There’s no doubt in a couple years at most, and I used to say like in ten years, right? Now I say like in one to two years, nobody’s going to be filling in forms. Nobody’s gonna run those, like, reports and go and, like, update their managers and all of that. It’s all gonna be done by agents automatically with AI, better, faster, cheaper than people.

What would you do if you’re Mark Benioff? Well, I think he’s doing the right thing. He’s he’s building agents. I think they also recognize the opportunity with AI and they need to move fast, as fast as they can. So it’s a formidable company, definitely capable, and it’s impressive that the way that they have done.

of

Our story is actually boring. Like, our presentation, like, I still have the pitch deck from series a. How much did you raise? We raised 6,000,000. It was really hard. Like, nobody wanted to invest in us, Harry. Like, believe it not, we struggled. Like, ninety nine percent of people said no. Passed on the opportunity. I kid you not. 6,000,000 at what price? I don’t even remember. Like 20? It was like like, you know, twenty sixteen valuations. Why did they say no? They thought that sellers are gonna hate Gong because they’re gonna see it as a big brother, that Google and Amazon are gonna own the AI technology, they’re gonna own this market, whatever it is.

Legal and compliance reason, they said you can’t really record, like it’s illegal, which is not true. It is legal. Like, as long as you have consent, everything is legit. One of the reasons like, oh, there’s no company made it in sales. Like at that time, there are companies that most of them like don’t exist inside Sales and ClearSlide. I know you might remember those. Like, so it was like, you know, is this like even worth an investment as a category, right? And these are not stupid people.

These are smart people that I know, right, personally, and to hear those no’s was gutting.

What happens then? Do we have product market fit then? It was insane. We raised the money. We started developing. First year, 2016, we haven’t been weren’t planning any revenue, and we just coerced a few friends and family companies to try the product so we can get data, so we can start training our models. We didn’t plan on charging anything and people think, oh, free product, people would be, you know, happy to try it out. No. Like, people don’t wanna waste their time, but we use anything from emotional extortion to bending people’s arms that you do us favor, they tried it.

So we started like, the system started to work. I think it was January 2016 we launched, like, not even an alpha, kinda like, hey, kick the tires, tell us if things, like, even make sense. And then we started seeing that the sellers are actually logging in, like engagement was not zero. Because, Oh, that’s pretty interesting. What are they doing over there? So we started looking at logs, we saw what they’re how they’re using the product, and we started tweaking the GUI a little bit, moved some buttons, relabeling, like we thought that people were gonna search for keywords, like a competitor name, but that’s not what you’re looking for.

They’re looking like, okay, my customer name, right? Like, where am I calling the customer or like a person’s name, like a seller’s name. So we tweaked, engagement improved, we started getting complaints, which is like a very good thing. People, Oh, missed that meeting, like why he did this, so which is a very good signal. Why is complaints a good signal? You know what’s worse than no complaints? Silence, crickets, right? Means people don’t care. The idea of the product just works amazing and nobody complains, right? The reality, most products aren’t amazing, especially Eilon, but when people complain, it means that they want it to work or that they care.

So customer complains, most people panic. It’s a phenomenal opportunity if you react. So people complained, which was good. Oh, Gong was like five minutes late. Or like, you know, I was talking behind my manager’s back. So all those things, right, that Gong captured somehow. It was good. And then around April, I was telling Eilon, Eilon is my co founder, You know what? Let’s do a little experiment. Like, let’s do a trial close. A trial close in sales is like, you go and ask for the order.

If you’re working on a deal, you’re gonna ask for money, and it tells you where you are, right, to either get a yes or a no. Do they know it’s a trial or they don’t? No. You just say, hey, are you ready to buy? And people say yes or no. If it’s no, usually it’s a no, right? But at least you know what you’re missing. So we wanted to know, we didn’t need the money or we didn’t have like any revenue goals, but do we have something that is valuable enough that people would be willing to pay?

We saw that they’re using it, they’re engaged. Is it like valuable enough? Because there are plenty of product people use and love. When you go and ask for money, they’re not willing to pay. So we didn’t even have price lease, but we said, you know what? Let’s start something like, you know, 30 to $50.50 ks, which is a nontrivial amount. We wanted to be like somewhat painful, but not outrageous. We had a dozen customers and we reached out to all of them and said, Hey, sorry, boys, the beta is over.

It’s time to pay. And they hated us. But 11 out of the 12 bought. So within six months, we had, like, paying customers, and I said, okay, like, that’s really good. And they were paying 30 to $50? Something like that. Yes. Wow. Even less. Doesn’t matter. We ask, maybe they pay less. We didn’t care, like, what it is, but you didn’t want it to be like a dollar because that wouldn’t say anything and a million. It was just an experiment that works extremely well. Okay. So these are all like people that knew us, right?

Friends and family, which is like stage one. Then the next step would be, can you sell like total strangers? People that don’t know like Amit or Eilon or aren’t my cousins, right? So I went to this first conference in Chicago in twenty sixteen, April, and I present like, I still have the deck, like how AI will transform sales. And people’s jaws dropped. You could see that, oh, wow, that’s new. And right there, I got our first, you know, random stranger. He saw, I showed him a demo and he saw, I said, this is great.

Like, I need it. And a month later he bought. So that’s how it started. So it was clear that the product market fit, we nailed it, and it

Yes. Yes. Absolutely. It is very difficult to change things after that once you start bringing like, we still think of Gong that I say, I wish we’ve changed it now because once you have the momentum, it’s never, like, important enough to change things. Now, if you’re like an extreme introvert engineer, maybe not. I think a mediocre founder can do probably the best job early on because you understand the picture, you have the passion, you understand, you know, you still don’t have a playbook. So if you’re an average, like, communication skills founder, do it yourself.

Just figure it out, like, because you understand the vision, understand what people understand, what they don’t understand probably better than anyone else. You’re not a better seller, but overall, I think it’s a great credit experience.

Our sales are doing extremely well. So but, you know, I think our sales stages, for example, at Gong, like, don’t make, like, the most sense. They work, but they’re created like in 2016 and Why didn’t they make sense? It’s just technicalities. It’s like, you know, they call it presentation one, presentation two. Some of them are kind of like more like customer milestone and activities. They’re not the best practice, But they work well, and it’ll be like very difficult to change. It’s not impossible. Maybe like one day, like, if our sales team decide, they’ll put the effort to put it in.

So little things, nothing major. But, you know, fortunately, after we started selling to stranger, a I brought like a really strong VP of Sales and he started crushing and brought like real professional salespeople and then the team took off.

You know, I wouldn’t hire that, like, high pedigree VP from Salesforce or Adobe or whatever. Salesforce is a great team. You need someone who’s still hungry, scrappy, and will figure out the playbook, right? That has like, I say, enough experience that have been successful, I’d say, ideally like two or three other companies. One company is a little dangerous. Maybe it’s not a good sample size, but have been successful. A number of companies have seen, because every company is different. Your company is probably different than the two or three others that your VP of sales have done before.

So it’s important to hire someone with a diverse experience.

your startup isn’t shitty. Like, you need to sell the dream, right? We’re That’s like a so millionaire on our sales leader that’s had three successful hours. Yeah, but you say, yeah, let’s do like a billion, like in five years, right? I mean, that’s like So first, you need to sell. Hire the best talent, it’s hard. Now, it’s not necessarily they’ve been like CRO or like three companies, but they’ve been like a seller at company one, crushed it. They’ve been, like, a like, a sales lead at company two, crushed it.

And a director at, like, company three, crushed it.

The ACV.

Yeah. Why is that? Industry knowledge can be acquired, like, fairly quickly, and salesmanship is extremely hard and takes time. Now ACV doesn’t mean it’s like, you know, between like fifteen and fifty k, there’s no difference. But you’re selling like, you know, 7 figure deals, it’s a very different ballgame than like 10 deals. One’s like very high velocity and the other is like traditional enterprise sales. So that’s these are the two categories, like, enterprise or transactional selling. How does the art of salesmanship

I think the art stays the art. The drudgery goes away. AI does not generate great art. Try it like with imagery, right? Or whatever, with Sora or whatever. So art is created by our creativity and intuition that people still outperform AI. But the numbers are sellers spend 75% of their time on non selling activities. This is insane. It’s like updating forms. It’s like the forecast calls. It’s like one on one meetings, sifting through lists, running work flows, researching information, preparing for meetings. This is insane. You’re paying 3 out of $4 you’re paying them is to do uninteresting work that can be decimated with AI and the salespeople would be willing to pay out of their own pocket for this because they hate it.

That’s definitely going away. The bigger thing is the sales effectiveness, just to know how to sell. Like, obviously, there is a very big variance between the best sellers and the worst sellers. Just look at the graphs, right, look at the tame and graphs. Even the best sellers, right, not like every deal show up the best form. Just everybody, you know, LeBron has like a bad day, right? So the performance is very uneven across people, you know, within the same people. So AI can make sure that you show up in the best form, best shape every time, every game, and maybe some people shouldn’t even be in the profession.

No. No. So sales salespeople are required there’ll be fewer sellers, I’m pretty sure. And I’ll give you some numbers to think about it. Right? There are roughly 9,000,000 sellers, like, in in the world. Let’s say 10, just for even let’s say that they’re all on average are making like a $150,000 a year. So that’s like $1,500,000,000,000 in cost. Remember, three quarters of that you pay them not to sell, but to do administrative work. So that’s the opportunity. Now that’s the petty cash. So let’s say average quota or average revenue per seller, let’s say 700 ks a year, I’m just throwing a number.

So that’s like $14,000,000,000,000 a year sold by the sales community. This is bigger. People talk about like, you know, Cursor for engineers or Harvey for lawyers. Gong or Revenue AI is for sellers. It’s way bigger because it’s not just the cost or the headcount, it’s the revenue they’re generating. It’s like a magnitude of order bigger. So this is a multi trillion dollar opportunity that AI can tap into.

It needs to reflect the value. Usage is like one way to do it. Let’s say that people pay, like, if you have like one tenth of the seller, you increase the price per seat like 10x, right? So it’s like 10,000 per seller, but they’re a 100 times more productive.

Oh, I have it in my pitch deck from 2017. I said like, Revenue AI will be bigger than CRM, not because like it has like a big ego, but just the economics, like because he needed to get your A done. Well, people that I think people dismissed it at the time. Yeah. You’re right. Whatever. You do. Mean, to get around them. Pass them to the right. Yeah. No. I don’t think it landed, but it was obvious to me. If you think like it’s not Gong, but AI is bigger than cloud, now people get it because cloud was an IT revolution.

If I’m seller, I don’t care if I use Salesforce or receivable. Yeah, one is a little easier than the other, but the IT is the beneficiary. It’s true that there is no software, but as a user, you know, I feel opportunity feels like here and there. Create opportunities here and there. I create quotes here and there. Very similar, right? The benefit is the IT. There’s no software, there’s no upgrade, no infrastructure. But IT is 6% of a company’s budget. The biggest item is payroll. And AI taps into payroll.

The 70% that people are spending on admin work goes away. Now it has to reflect the value, and that’s why it’s like a it’s a magnitude of order bigger. Well, does it?

They might have little leverage if you’re a thin rapper, and I’ll open around offending. I I’m not using Cursor. It’s it’s a great thing. But if if what you do is a thin layer over, like, LLMs, it’s very hard because now there’ll be others that are doing it and there’ll be an efficient market. So the pricing will actually go down because someone can do the same thing better or as good but cheaper, you’ll not be competitive. So it’s up to the company to develop the moats that allow it to capture the full value.

If you’re doing something trivial, then, yeah, you’re not gonna be able to do the pricing. Are you moving into the human labor budget now? We have not yet. So we’re building the foundation. The key asset that companies have, especially like in our domain and they’re like, even like in other domains, is the data that you’re sitting on. Because you could go to any of the labs, you could load a couple of cold transcripts and tell like, what do you make of this? Like, help me sell.

But it’ll not, and it’ll give you an answer, but it’ll not be like a good answer, and you wouldn’t even know it. The real answer, have you capture like everything. What’s in the emails? What’s in the back channels, in Slack? What’s like, and is it the right information? So the battle is now for two things, data or in LLM words context, and the second workflow. Is it like something that is weaved into the workflows of people? That’s where we spend like most of our effort. But future products that are coming will transition to more value based pricing than per seat.

When will you move into the human labor

already are. So sometimes, you know, I speak with a CFO and he says, Oh, we don’t have budget for Gong. Like, it’s $100,000. So he’s like, Okay, like how many servers do you have? A 100. Now, stack rank them. Surely there are two at the bottom that aren’t gonna come even close to quota. You’d say, Yes. Okay, like, do with 98, but give them the technology to do it. So you’re already like tapping into things. But if we’re asking about usage, that’s probably coming like next year.

I think it’s real. And again, it’ll be applicable to companies that create a unique offering with like strong moats that is not easily replicable by anybody else out there.

That was a pretty stupid thing. Like, we knew it. Like, and Eilon and I, my I said, like, what do you think? I said, this is not gonna work. Why did you think it was stupid? We have a framework for categorizing categorizing and and stack stack ranking ranking where where are are the the AI opportunities. So one is like the difficulty of the task for humans, and the other is like the risk, what happens if it goes wrong? Outbound calling is probably the most difficult things for humans to do.

It’s like try to ride a bull at the rodeo, right? People just wanna shake you off your back, right? And just very few people are capable of doing it. So that’s one. It’s very difficult for AI to do that, to keep someone on the phone. Second, the risk. Right? What if it says something wrong? What if it’s doing something unethical, like lying to people? Right? I mean, you give it a goal. Right? So the risk to the brand is massive. So you take on both dimensions, like, it scores, like, pretty poor.

Now that said, I wouldn’t write that direction off. I think certainly there are cases for inbound that can be handled pretty well with AI, but this was like well ahead of its time. The technology is nondeterministic. It’s not a 100% right. Now there are tasks that are perfectly okay. If I want like an account summary and if it’s not always right, actually it’s not always right, but that’s still okay. It’s like a 100 times It’s very difficult for a person to do that, right? It’s very easy to do it with AI.

The risk is not massive. So that’s like a very great use case. But I wouldn’t let it send a proposal for a million dollars. Who knows what it’s gonna put out there? Even if it works like 98% of the time really well, that 1% is a massive raise. So you wouldn’t let it sign a contract. You wouldn’t let it, like, fire people. So there are things that Does it work for low ACV

It’s good. I think that the first thing that will be replaced will be the transactional AI. If I’m selling phones, right, or cell phone plans, that’s easy enough as long as there are guardrails and there is like you know, I spoke with a customer that, you know, we’re looking to do like AI that’s monitor or supervising the AI. So it’ll be like an AI coach for AI agents, if you follow me. Yeah. You need to make sure because even if it works well, you know, there’s this famous case about the Canadian airline.

It was offering like free travel for life or something. Right? You know? AI, the agent offered it. They they had to honor it. Wow. It’s liability for companies. Who do you sit on top of model wise? We use a bunch. First, like, we have a lot of our own models. We have probably 40 or 50 Gong models. And then we use, like, Claude. We use, like or Sonnet. We use, like, OpenAI. Which do you use most prolifically? Switch between them. So sometimes they’re good for one purpose or another, costs are going down, quality is improvements, so we’re also monitoring what’s out there and what’s the best that we could get.

What

I wrote a post that is real observation that, you know, people think it’s like AI destroying the world, which is a real risk. I don’t know. I’m optimistic by nature, but I think it can drive mediocrity. The way that LLMs work, they’re very consensus driven. So they aggregate like everything that they’ve heard and create something. It doesn’t create great copy, for example. So I’m a pretty good writer, think, maybe not the best, but pretty good. Whenever I try to say create something witty or that, it’s not, it’s okay.

So the risk is, I have someone at the company says, okay, come up with a strategy for this market. And they’ve actually used like one of the LLMs to generate the plan. That’s a terrible idea because I could get like an average. It is sensible, it makes sense, but it’s not the best plan, right? So how do I know that work, strategic work that’s done by people at my company is not like a product of LLMs?

Absolutely not. I I review them all the time and I they’re okay. They’re okay. But with okay, you do not create like an extraordinary business. You need the brilliance, the spark, the always like the angle that’s unique. So, yeah, if you want like an okay company, it’s okay.

Well, should be like, okay, this is the competitor over here, create a competitive strategy for me. That’s like a simple question. That’s what most people do. What you’re gonna get, like, is not great. Wow. Yeah.

First, most of our sellers are phenomenal at Gong. I kid you not. And it’s not just sellers. Like, I mean, you could, you know, someone in product marketing. I mean, it could be like anywhere in a company. It could be in IT. You know, what should we so it’s across the company. And not necessarily Gong, by the way. It could be like in any company. I call it the the convergent mediocracy. Right? That’s like a big risk that you should pay attention. I get some work.

Like, sometimes we say, hey, was this written by an LLM? Because it looks like too too sensible. Right? Sometimes they’re a bit like

That’s an amazing idea. But if you do the creative work, you do your messaging with AI, you do the strategic plan for the company with AI, I think that’s not great.

Self prospecting by AEs, that’s a trend regardless of AI. I think the whole unit economics for SDRs don’t work for like hypergrowth companies, not for companies that are growing 20%.

Yeah, it’ll definitely not be a trend. And this is like independent of ARR. A lot of companies like, yeah, is it even worth it, right? I see like how much revenue it’s generating versus like how many appointments. So a lot are moving. They still have SDRs. The value in SDR, they do generate some revenue, right? So if you’re trying to scrape like every five, ten percent of extra revenue, that’s great, but they become the best sellers. So we at Gong see like SDRs as a sales school.

And we get some of our most amazing sellers start like doing nine months as SDRs and then they move into sales. And then they go to commercial sales, they go to mid market, then some become like monster enterprise sellers. Do you worry if we remove that SDR role, you’ll lose that training

We, no, I think that first, not necessarily us. Gong is growing at an incredible pace. So for us, it does make sense. But if companies, SDRs did not exist like twenty five years ago, the whole idea, sellers used to do their own prospecting. Remember like, you know, Glendering, Glen Ross, like, you know, here are your leads. That’s how it started. But when companies started to scale, like in the, you know, early two thousand at an incredible pace, people said, okay, you know what? We can’t hire sellers fast enough and train them.

Let’s break the role and do two. We’ll have people doing the upstream, the top of the funnel, and people like monetizing, right? The sellers. That’s a new invention that actually did not take off like at all industries. It’s a tech industry thing for hypergrowth. Now it does come with a lot of benefits because you do get like very focused team that knows how to generate appointments and qualified leads and pipeline, but it creates a fragmented buyer experience. People wanna know, like, what does Gong do or what does the, you know, Figma do?

And then they have to go through, like, a series of interviews.

Oh, first, like to create your own pipeline. People don’t like cold calling. It’s an unnatural work for most of us, the fear of rejection. So they they get really good. Know Do buy the future of cold calling? Yes. Yes. I think well, it could be like don’t know what the communication means is to be, but the idea is like reaching out to someone. Yeah, definitely. Like, you know, you reach to a stranger or create an introduction. Absolutely. I think that that’ll stay like one way or another.

So they know how to create their own pipeline. They get a lot of like, I call it like abuse, right? People like and they develop their resilience. They know how to position the product. People say, Oh, we already use this, but they build so much strength and resilience. It’s unbelievable, right? And they go into sales, it’s almost like they have the hard part behind them, now it comes the easier part. I do believe that it’s a great school, especially for people that did not come from tech.

But now there are companies that aren’t growing. Why do you need something that’s optimized for hypergrowth and have like SDRs and move it? I think we’ll have like fewer roles that are more able to do multiple jobs. Maybe sellers should be able to support customers as customer success. So I think we’ll see like a blend of these roles, like in a one person, almost like a one person band that is doing like multiple roles at the same time because they have the tools to do it, right?

They use agents. How much smaller

We said 77%. I don’t know we can reach the full potential because always be some addition. Plus there there’s a limit, like, to how much people can actually absorb. It’s just I throw food at you, right? Like unlimited, you can’t eat all that much. So there’s a limit to how many customers people can help. So most companies, they have a quota capacity, right? If you build a plan, let’s say your plan for for the year, you need to generate, $80,000,000. Right? So you wanna make sure your quotas add up to, let’s say, a 100,000,000.

Because you know, not everyone’s gonna hit it, so you build some buffer. Right? And then most companies hit, like, 66% or whatever, 70% or 70 people hitting 70%. In Gong, we’re like at 130 off capacity. We perform like well over a 100. I don’t know if it’s like exactly 120, 130, well above our capacity. So that shows the power of AI to make people more productive and more effective. Can I be direct? You said beforehand

Yeah. What happened there? Yeah. That was like early twenty twenty three. Absolutely. These are like dark times. We’re like even we’re we’re not growing, even like slightly shrinking. So we had it was a combination of things. First, like, people, like, bought like crazy in 2022 in the post COVID world. Did you know they were irrationally buying

No. I I have to say, like, I I shared the excitement of every like, everybody, to be honest. We’re excited. We’re drinking the Kool Aid. And you raised a pretty big fucking round then, didn’t you? We raised where’s a lot of money? Most of it is still in the bank. Gong is not burning cash. Like How much money have you raised? 550, give or take. I mean, don’t take the exact number. Yeah. Much have you got left? Vast majority of it.

It was a high multiple. Definitely the multiples are different today, but still, I don’t think it’s something like, you know, we’re thinking like such a big company. If you take like a twenty year view, then yeah, still think like the potential is like far greater. It was a number of things. First time got tough. We had like a lot of concentration, a lot of like companies in technology business that were hurt by interest rates. So money wasn’t cheap. So a lot of our customers, what happened like in 2022, they would buy, let’s say that they bought, they had like a 100 people and the sales are Gong, okay, like, you know, how much are you growing?

I said 50 percent, okay, I’ll throw in like 50 more licenses. So they bought like 150 seats, Comes the renewal, now not only they don’t have the 50, now they have like 70. So really high, like, downgrade and churn. So we lost a lot of seats that were not real because company didn’t have the growth. So that’s number one, and it was painful. Second, I think we lost some of our muscle tissue, like when we were told about the hustle, like when we were like three people at the company, but all of a sudden people just bought.

So our game, like we just gave them licenses and moved on to the next thing. The way we supported the customer was not as tight as you need to, but all of sudden, you know, CFO shows, ask you like, show me the ROI, why should I spend on you, right? So we had to learn things. And the third thing, we had like one product. We had the conversation intelligence product. Our customers were looking to consolidate on one platform and say, oh, like, we absolutely love Gong, but Outreach is giving us both the engagement and the CI or Salesloft.

So we’re like behind. We had the deepest AI technology, but not the breadth of the platform, and companies just just couldn’t care. I mean, we lost, you know, something. The CRO that bought Gong was out of a job, so there’s not even like so we lost a lot of customers. What are your reflections on that on breadth versus depth of product? For us, we’re just caught like in bad timing where we’re like hypergrowth, like in a lot of like licenses that people bought and didn’t get to use because of what happened with the economy.

We’re planning to expand the platform, but we this is like, okay, it’s happening now and we’re not ready. And I still remember, like, the all hands call of the company was, like, really tough, and people were not used to that. Gong is like a rocket ship. What? Like, we slowed down? Like, this is, like, inconceivable. When you say slowed down, what is slowed down? Like, no growth. Yeah. Yeah. No. It’s slowed down. Yeah. Yeah.

No. No. Absolutely not. I I I think it’s important. Like, it’s not the first time. So I’ve, you know, I’ve experienced, like, 2000, 2008 COVID. So is the first time, you know, the cycles like our thing. Second, I know, listen, we have like plenty of cash. When you have enough experience, you know, like a crisis, in a crisis, there are like plenty of opportunity. Just look around, like, keep your head up. And we knew, listen, we have cash. Our competitors are gonna struggle. We’re gonna step on a R and D gas pedal and develop like crazy.

First, we need to, right, to expand the platform and they’re not gonna be able to do it. So this is a great opinion. This is what we’re seeing right now. I knew that we’re gonna win. It’s gonna take a while. I didn’t know like how long or how fast, but I was very transparent with the team. No doubt, like this team is gonna win. I don’t know how long it’s gonna take. And we saw, like, first there was like no growth. There was like, you know, a little bit, you know, maybe like 3% and then like 510% and then, you know, 2030% and higher.

So the company is accelerating. What did you do to

Part of it was us. First, we didn’t have, like, the products that people wanted, so we we had to develop them. Second, we really improved how we support customers, like that we we measure our usage, engagement. Do they see strategic value? So we we moved to outcomes. Did you build a team that’s focused on data presentation of outcomes? Absolutely. We have value engineering. This is what they do. And their job is to prove to a CFO, we imagine the most like cold hearted, cynical person out there, and prove to them why this is the best investment that they can’t do without it.

ones. Listen, there there’s a there’s a bell curve of of companies and some are, you know, top deciles, some are bottom deciles. So not not everybody. So you need to understand what makes sense for your own business. Gong is fairly efficient as a business and it’s growing fast. So the number one thing you did was expansion of product line? That’s probably the most impactful thing. So it took us a year to get something out there that was not even like fully mature and now it’s like mature.

We also, I think that’s very important thing for us. I think the biggest benefit that we learned, how to scale from like one product to three, and now we’re reading like four and five and six products, right? So to become a big company, we need like a bigger solution, which is a skill that the company needs to learn. It’s not just like developing a product. How we train the sales team to position it is something that they don’t know all of a sudden. Do you have different sales teams for different products?

No, we don’t. We don’t because we have the benefit that we sell to the same buyer. It all goes largely to the CRO and sales operations. If we had to have other products for, let’s say, maybe like a siege or whatever Well, I we’re playing very much how verticalized sales teams for verticalized products. Yes. Yes. We have one sales team and we have subject matter experts, so people that are kind of product experts because some of the products are very technical. Like, you know, Forecasting, for example, is, like, extremely nuanced and detailed and a lot of minutia.

Listen, Gong, like, within a year added a thousand engagement customers. Most of them had like either Outreach or Salesloft or Groove, right? So think about the pace, like a thousand companies moved to Gong. And we have close to 800 customers on forecasting, like within a year. Most of them probably using Eilon Nothing or Clari or like There are a few other smaller companies. So, yeah. When you

First, I always liked the company. I liked the people. They’re a good partner for us until we became like a competitor. And even after that, I have not lost my risk. That’s another

That car is fucking happy. It doesn’t make me happy that my competitors are failing. And again, I never saw them as like our ultimate competitor. I’m extremely competitive type. Competition like fires me up, but I’m not obsessed with the competitors. Right? Because remember the opportunity we’re looking at. We’re looking at $7,000,000,000,000 being sold with human labor and sweat that doesn’t make sense. Why would they even, like, worry about, like, a little forecasting for some mid market enterprise companies? This is not like the big prize, and you should keep your eyes on the prize where you’re going and not on the other companies.

This is like what we’re building. When did you take your eyes

Not shiny object, but sometimes, listen, there’s real. You know where you wanna get and there are some things that are real that aren’t, you know, a straight line to where you wanna get and you take a little detour because you need to do it. Building an engagement product, kind of like took him from Salesloft and Outreach. We had like other plans that are like even like bigger potentials, but 2023 came and he said, If we don’t develop it now, I don’t know if it will get a chance because once a company gets like really bruised, it’s very difficult to get over.

So we said, okay, forget the strategic plans, let’s develop this right now, like really fast. So we crossed this hurdle. And then from a par position, our position of strengths, we can continue with our more strategic plans. So this was like a little detour. Again, it’s not waste and it’s created a ton of revenue and strengthened the market leadership position, but it’s always like a judgment call between the same kind of the long term vision of the company and some things that you need to do technically.

You know, the customer has a problem, right? You need to take care of it now. You know, realize our customers need like more stability with the system. This is mission critical right now. So we said we halted like all engineering work for four weeks, no features, right, just to improve the stability and performance of the system. I hate it, but you gotta do it. Security. I mean, you need to invest in security. Gong touches like very sensitive data. We have to be super secure. So we do a lot of things that aren’t necessarily the most strategic thing for you, but you just have to do it.

Are the

Yeah, I think you can’t suck at resource allocation, right? I mean, it has to be reasonable. The most important thing for the company is the strategy. So I think if the execution is like 80% okay and a good strategy, you will still win. Yeah, you could do better or worse. There are two things that matter, right? The team, which is basically execution and the market. Market is the most important thing. And this is a strategy. The strategy, like what do you sell to whom and what’s your unique positioning, unique value that you’re creating, nobody else.

That’s the most important thing for the company. And I’ve seen companies that are doing extremely well and I know the team, they’re okay. I mean, they’re not bad, they’re not phenomenal. And I’ve seen smarter people that fail. The most important thing is the strategy of the company.

First, I wish that my sons would go into sales, but they probably will not. Why do you wish they went into sales? Well, that’s a good question. I think it’s a very useful skill. I mean, they’re doing things that are, like, as interesting and not more, like, in in other ways. But sales is a very, very useful skill in life. And again, it’s not like selling like a phone. You sell ideas. You ask me how can a young founder bring like a hotshot CRO, right? You sell the dream.

Why do you wanna ditch their successful company? Because it’s not exciting and come to your company that you said is like shitty right now. You wanna sell to investors. You wanna sell to your kids sometimes, like an idea. You wanna promote ideas. So it is like it is a very useful skill and it takes So what would you advise me

Join, like, one of the best teams out there. The company is doing really well and has good culture and then you learn. It doesn’t matter what the role is. Just a learning experience is way more important than whatever you you know, even if it’s like at Extreme, like for free. Even if it don’t pay well, just what you learn is a 100 times more valuable than what they’re paying you and and have fun and pride and make sure obviously, it has to be like an ethical company.

I don’t know. I mean, I haven’t worked there, so I know this is so unique. I think that eventually every company has competition. Right? People think, oh, you’re just taking orders. But you wanna be at a company that is not like I hope that people don’t think I’m picking up on Salesforce. Say Salesforce is a great company. But again, like there, it’s like already like very structured and a known brand and all of that. So you wanna sell to an underdog on one hand, but not something that will not take off.

I mean, that’s the right trick, right? If some products are just hard to sell because it’s not good, right, or it’s not competitive with the market, right, you don’t wanna be there.

You know, I haven’t spent a ton of time thinking about it, but I think there’ll be fewer sellers. They could make like a lot more money because they’re generating a lot more. So How’s the way that you sell changed over time? Well, we’re we’re better, like, in I’m saying you personally. Me personally? Yeah. Well, they don’t allow me to sell anymore. But selling is fundraising. Selling is hiring. Exactly. We’re not raising funds. I am always, like, speaking I’m speaking with customers, like, a lot of time, and and I Will you still go and close customers?

I don’t close. The the team is doing a phenomenal job. You wouldn’t go and close a customer? I would, but they don’t need me. But I I usually go

What customer want, they want the vision of the company, and they want access to the person that can decide. So if we’re doing, like, you know, a large, like, 7 or 8 figure deals, the customer wanna know, listen, I’m making an investment. I wanna know when something goes wrong, I can call Amit, like, in the middle of the night. That’s the role that leaders are usually doing in those deals. Plus sometimes I can make things outside of the ordinary.

you have who

Any customer can call me. Like even if it’s a $10,000 account, like people reach out to me, I respond. Literally, I had like someone reach out to me on LinkedIn, hey, like, I’m a startup from YC, I just need two seats. Gong is like, I can’t afford it. Like, can you talk to I respond to them. No.

No. I didn’t say that. But I said, like, listen, it is what it is. I hope let me connect you with the sales team and see. I take a look. Right? So I respond to any customers and I’ll get if a seller asks me, again, there’s gotta be a reason, like not bring me that, you know, we failed to articulate value, now Amit will save the day by, it was his charm or whatever. You gotta do your work, right? But I get on calls with customers like almost any size.

You know, I told you about the event that we went to in April 2016, and and one of the customers that I met was the senior buyer from ADP. So it’s a big payroll and HR company globally, but mostly in The US. And he asked he was impressed with AI technology, but he told me, like, you know, I don’t think we’re ready for you, which he actually, like, was pretty impressed because not a lot of people would say that. But we met the following year and then they bought, which was incredible.

They’re using some other things that didn’t work well, they so already had a budget and they bought Gong. LinkedIn was our first customer, first large customer, like early on, before we even like thought that we will sell. We said one day we’re gonna sell to bigger companies, but there was never like an idea. They evaluated us and they evaluated like Chorus at the time for those who remember. And they said, okay, we decided to go with Gong. And now they’re, you know, they’re growing and expanding and that’s very exciting.

So there are plenty. Not naming names, What’s your single largest

Well, we’re definitely now in the 7 and and 8 figure customer. Yeah. Wow. That’s a lot of dough. Wow. Big companies. Half of the Fortune 10 companies use Gong today. Wow. Yeah. Which churn hurt the most and what did you learn? Well, I think 2023 was like a very painful moment because I was able to actually use the technology to understand what is going on. It was like a breakup conversation, right? I said, listen, we absolutely love Gong. We have no choice. Is it like we choose you or the other guys because they provide like three products and our CFO just wouldn’t listen.

Companies didn’t have a choice. It was like, you know customer like super happy and you’re still losing them. And, so that was, like, very painful. But the good news, a lot of them are coming back now. So we have a lot of, like, boomerang employees and boomerang customers. What happens to Outreach? I don’t know. I wish them the best. Like, you know, I don’t want people to This is be another

I don’t wanna, like, comment on them specifically. Think if a company, like, isn’t growing or isn’t growing fast and doesn’t have, like, plenty of cash that could go, like, twenty years, I don’t know what their cash position, they can’t IPO and somehow people need to get paid, right, whatever the investor is. So PE might make sense for There are quite a few companies like that. The

Yeah. Yeah. So, and I don’t know like which strategics would want them, but Did you ever have an offer to sell to Salesforce? No. No. No.

Listen, if someone comes like, oh, like, here’s, like, a trillion dollars, like, you know, everything is something we consider. I’m not naive, but you can’t have it, like, even as a plan. Right? I believe in controlling your own destiny. We have, like, a great company. We’re really in the early innings, and we’re growing and we’re generating cash. Like, we we don’t need anything. Like Do you want to be a public company CEO? This is not something that is like a personal desire. I mean, it makes sense for Gong to become public.

Like, one day, some, you know, people invest in the company and and need to see a return, but I don’t think it’s like a you know, some people see it as like their mission in life. Certainly it comes with a lot of like, sure, the IPO is kind of cool and some people get paid, but there’s also comes with a lot of like restrictions on what the company can do and the flexibility and where your attention goes. Do I end the next generation of AI or like focus on 3% EPS like on this quarter I mean, this new have expanding

Well, I’d say it’s actually like a pretty good, pretty good option. There are companies, not a lot, but, that are growing fast. So you go public for either you need cash, you want the brand recognition to come in, it does come with more brand recognition and some liquidity. Many companies don’t need the cash, they have enough and they’re generating cash. So that’s like one. Second, liquidity is a good option with secondary. Now the market is actually evolving and the brand, okay, like it’s real. But let’s say, you know, if you think about the cost of being a public company, take that money and buy Super Bowl ads.

So there’s an alternative ways to get the publicity that don’t come with the restrictions. But secondary, yeah, don’t go crazy with valuation. Sometimes it’ll be a like an ego thing, right, and you wanna think about the next round so you don’t, because otherwise, it can create, like, problems for employees, like, down the road. What what are you at ARR wise now? 300

Oh, we we crossed, like, 300 last year. Yeah. We’re not sharing what it is, but we’re we’re well over.

No. Not at all. Because like the difference is like how much time. If you believe that the company has like trillions of dollars of potential market value, then, you know, it could take like a year, two year, five years or ten years. But at some point, the question, do you see it becoming like one day, does it have a potential to become like a $100,000,000,000 Then all of a sudden, it doesn’t matter. Just take high enough altitude, and we’re not pricing the company right now. We’re not doing it.

So Are you ready to do a quick fire with me, Amit? I’ve got Oh, should I be nervous? Absolutely. Bring it on. Okay. What do people most get wrong about Gong today? It is a call recording. You know what the funny story? Before I started, I had call recording. We were like recording, and I hate listening to recordings. I wanted to a solution that’ll use AI so I don’t need to listen to conversations. Right? So it’s the insights that’s generated from the data that is the real value and now the the action automation.

Which competitor do you most respect and why them? I think listen. Both Salesforce and and Microsoft are incredible companies, you know, and and You would put Microsoft

They’re also Microsoft is also a great partner. They have some revenue intelligence capabilities with their own. So they’re they’re a good partner. They’re integrating Gong as part of CoPilot, but they have in CRM. So everybody in CRM is both a partner. Salesforce is a partner. Microsoft is a partner. HubSpot is a partner, but they also have their features that are competitive with Gong. What $500 purchase most changed your life? Oh, I love the question. All right. You know, I was like $2.50. Sure. My Bose QuietComfort headphones.

Why? I spend, like, half of my life on airplanes, and it makes such a huge difference. I come out of the airplane, like, so fresh that just noise canceling is is unbelievable. It makes, like, huge I don’t go anywhere without them.

The ability to look at things sometimes from the sidelines. Like, sometimes there there are problems or something great is going on. And I think for leaders in general, the ability to almost, like, have, like, an outer body experience, like, just detach yourself emotionally. It’s like, is going on here? Understand kind of what’s the deeper issue and then, like, fix it and improve. What do you know is bad but continue to do anyway? Check my email first thing in the morning when I get out of bed.

I try to be disciplined not to do it all the time, but sometimes I just can’t resist. Do you get up early? Really early. Yeah. I don’t sleep a lot. How early? Usually between five and six. When do you go to bed? Midnight, 1AM, like And you just never needed much sleep? I don’t know if I need or not. I just don’t sleep a lot. Like, I I come with a lot I wake up with a lot of energy, and I guess my body needs, like, very little sleep.

What’s the biggest challenge or worry that you have today? Well, right now, hiring. Like, we have, like, 200 open positions, and and we’re we’re behind. So Jason

We’re not too far behind, but definitely I I need to, like, step in and make sure that Would you pay 5,000,000 for AI engineers? No. I mean, we’re not a foundation AI company. We’re an AI application. Gong uses AI. I want, like, every engineer at Gong to become excellent in AI. I’m trying to get but, like, Cursor does too, and they’re paying through the nose. I have no idea what they’re doing, but we’re no. We’re not even in the same market. Does that worry, though, the hiring pipeline?

No. I’m not feeling it. But you have 200 open applications? Yeah. But they’re progressing. Like, I mean, we’re hiring people. We just crossed, like, 400, like, engineers, like, today right now. Will Gong have more engineers or

More.

Well, because the business would outgrow, right? So, yeah, they’re using AI, like, everybody, like, vibe coding. Okay. That says, like, you know, today, like, maybe like 15% productivity improvement, But the business is growing at a much faster pace. So I would need more if I can seize the opportunity. Being a CEO

biggest advice on marriage? The most important decision in your life, like who do you choose as a partner, right? This is like more important to VCs or employees. Oh my god, yeah. Yeah, by far. So choose well. Think of it really as a partnership, right? There’s a bit like helping each other, give and take, compromises, but choosing well is like super important. What

Oh, now I’m gonna get in trouble. I don’t know. It’s like, you know, sometimes it’s like little things and if you have like enough of them over time, things can tend to pick up volume because it’s a little like irritation. So there’s nothing major right now that I feel I’m compromising. We’ve been together together, like not necessarily mayor, it’s like almost thirty years now. So it’s working really well.

We are now working on a plan. How quickly can we cross the billion in ARR? And they’re like different bets, but they’re not we think within a few years we can get there. But the most important thing is that our vision is to become the Revenue AI Operating System for companies. Right? That’s the central system that we move from like a data entry world to a system of intelligence that runs the entire organisation. And we want it to be used by a more diverse set of companies.

So we’re expanding the industries that we’re in and want, like, every company to be benefit from AI. So selling becomes easy. You just need to compete on having the best products. Incredibly

Now the question is like I’m not getting to the internal discussion, but how fast? There’s like things that are like extremely aggressive and still aggressive, but a little less. Amit,

But before we leave you today,