Keith Kitani & Shep Maher (Guidespark): Hyperscaling Outbound Sales (Video + Transcript)

Keith Kitani SaaStrShep Maher Saastr

We’re publishing the full series of transcripts and videos from all of the awesome SaaStr Annual 2015 sessions (check out sessions with Box, Zenefits, Slack, Yammer, and so many more here.).

In this session, Guidespark’s CEO, Keith Kitani, and SVP of Sales, Shep Maher, share their experiences in hyperscaling their outbound sales team while developing and maintaining a core culture for the long haul. This session was one of my very favorites. From the rapport between a CEO and VP Salesgrew to $20M in just two years, to tactical advice on how to “hustle until you don’t have to introduce yourself”, this is one you really don’t want to miss.

If you don’t already have tickets to the 2016 SaaStr Annual it’s SOLD OUT but we do have a waitlist and are going to try to squeeze in as many more folks as we can. But once the fire-marshall cuts

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off, there will be nothing we can do.  

Jason Lemkin:  The goal of the next two sessions is we’re going to take two of the most popular case studies that we did on SaaS, or we did this one with GuideSpark about scaling to 20 million on outbound sales which for a lot of us is a new thing. It really resonated with a lot of people.

After that, we’ll do the live version of a session I did with the Zenefits team on Salesforce TV and do these SaaSter case studies live, so we can talk through the learnings.

First, let me bring out Keith Kitani and Shep Maher. CEO and VP of sales at GuideSpark. And Aaron Ross my co-author of Predictable Revenue is going to help me here.

Jason:  You’re middle or you’re side? What’s the order?

Keith Kitani:  How are you Jason?

Jason:  Yeah, thank you. We’re learning the order as we go in real time. There is a lot I’d love to talk about on this session. Keith and I first met back in ’06 when I was starting EchoSign and didn’t know what I was doing.

He had sold his last company to Adobe and was an EIR or some sort of smart guy without portfolio, I think. And I remember. I went into this meeting with like 78 people as you do in a big company, Keith was the most insightful guy in the room and I said, “That’s pretty interesting.” We kept in touch a little bit. Then we reconnected more in depth when he was, probably just before Shep joined is my guess, right? As VP of sales.

He had been working really hard at GuideSpark which had had its journey and iteration and maybe was getting up to about a million or something in revenue. It took a little more than 12 months, right? How long did it take to get to the first million or million and a half in revenue?

Keith:  It took over four years.

Jason:  Four years. OK.

[laughter]

Jason:  And I’ll skip.. But then, Keith realized it was time to go faster even if the numbers weren’t all there, right? Convinced Shep to join him, which we want to chat about, right? And over the last 25 months, they have gone from two to 20 million in bookings and become a real breakout leader in what I would have to call, “SaaS 3.0 The Next Generation of Services.” A lot of interesting things here. Two folks that I just love. The case study is fascinating of going from four years to that initial traction. Making the right hire and also making the right investments, right. To be able to scale with that level of velocity, it’s better than I could do. Right?

A lot of things I want to chat about. But let’s go back in time because a lot of folks that I almost, Shep, I want to take advantage of you and put you in a lab here.

Because a lot of folks honestly, they don’t know what a great VP Sales is or what they can do. So seeing the team together, it’s a gift for a lot of us. Let’s go back in time.

First of all. How did Keith recruit you at a time where the business had customers, right and even couple of logos but not yet velocity? How does he get you to join?

Shep Maher:  What I would say, Jason, is that it almost didn’t happen.

Jason:  OK, very good

Shep:  We were introduced by two mutual friends. One is here somewhere out in the audience. Our conversation was funny. Keith is a busy guy. He likes to multitask. I could hear him pulling up my LinkedIn profile as I was talking to him on the phone.

[laughter]

Shep:  He goes, “I don’t really know why I’m talking to you. I was very specific with Riff. I wanted to talk to an entrepreneurial guy with SaaS experience, small company guy. You look like a big company market data guy.” Which I was. I was working for Thomson Reuters at the time.  I had the same reaction where I said, “Keith, it looks like you sell videos to HR so that seem like you’re selling a “nice-to-have” to a call center and that’s a really crappy business model.

[laughter]

Shep:  There were a mutual disconnect initially but, the more I looked under the hood, you know at the time there were nine employees. A tiny one room office on the wrong side of Palo Alto. When I looked under the hood I saw some pretty special things.

I saw a very small cadre of incredibly enthusiastic clients that were begging to do more with GuideSpark, which speaks to negative churn and that sort of virtuous cycle. I saw a business that, because it was bootstrapped, had gotten to a cash flow break even very fast. And that to me, I’ve been through a couple of recessions, I’m old enough to have lived the 2001 recession and that sort of recession resistant business is really really compelling. So, when I looked under the hood I realized that there was something that was really on the cusp of getting ready to take off.

Jason:  Since you’ve joined, you and Keith have driven deal sizes up, which we can chat about in a minute. There is big mid six figure and up deals now. But even when you joined the company had one or two hundred K deals. You’re getting there right. You come in and there is no out bound sales team in place at all when you joined? Maybe one. There was Keith…

Shep:  We had two and a half.

[laughter]

Jason:  Imagine,  and Keith jump in on the story. If I’m a CEO and I’m hiring a VP of sales to kick start this whole outbound sales team. What’s the discussion? How do you figure out the budget? How to do it? How are you not intimidated by it?

Plus you’ve got a sales cycle that isn’t measured in minutes, right? And no leads. So it’s going to take a while to prove this out. You’re not going to know in thirty days whether the investments are going to work out.

Keith:  Yeah, I got to tell you a story about the first time Shep and I talked about compensation. And He told me how much…

Jason:  You said Shep, do you know about ten ninety nine reps?

[laughter]

Keith:  Exactly he told me how much he made monthly at Thompson Reuters and I looked at my expenses and I go, “That’s more than 50 percent of what I spend every month across my whole company.”

[laughter]

Keith:  Right so it’s a serious investment that we had to make but as you mentioned we felt that it was the right time and the way I thought about budgeting at that stage is certainly Shep,  but then to allocate a set of money for additional people.

And we didn’t have an exact number, that’s why I was hiring Shep to really figure out who should we hire, when should we hire. I did know we are working in an investment marketing that time we were going go for the outbound folks model.

Jason:  So Shep comes in, how many rep is he only allowed to hire a certain number of reps what’s the budget to get this engine going right that eventually it’s gone from 2 to 20 million bookings in 24 months so what do you give them to start?

Keith:  I think…

Jason:  Because most of us don’t give enough.

Keith:  Mentally in our discussion there’s only a couple but Shep being a very compelling guy, slowly a couple turned into about five or six the first four or five months.

Jason:  All right, and so…

Aaron Ross:  I am actually curious because at some point weren’t you guys nice-to-have versus need-to-have? And outbound doesn’t work if you are a nice-to-have, at least very well so how do you go from nice-to-have to a must-buy?

Shep:  Yeah, I’ll take a stab at  that…

Aaron:  Because a lot of people do this, they build a cool app and it’s very interesting but people don’t need, it consumers buy what they want and what they need but businesses buy what they need not what they want.

Shep:  Yeah that’s a really compelling question I do want to touch briefly on your question Jason and one of the keys I think to our initial success when we were first building up the sales team that is a mistake people make sometimes is, they think about starting at the top and they go, “Man I need an enterprise guy, I need a seasoned guy, or gal with X amount of experience who I can really count on.” My first two hires, one was a kid straight out of the college and the other was a CPA without a day of sales experience.

Shep Maher SaaStr AnnualShep:  I just wanted people who could hammer the phones and had passion and enthusiasm for the business and a work ethic the same or greater than mine.

Jason:  And did Keith agree those were good hires to make these zero experience reps or did…

Shep:  You know retrospect is funny, I think Keith would in retrospect, say those were good hires.

[laughter]

Jason:  By that time did you have to educate them on that? Or…

Shep:  I would like Keith answer to that one.

Keith:  Yeah so to be honest yes, when you hire sales teams you want to have people who have quota, who are going to close deals and these people weren’t going to close deals but I made a big bet and you got to trust, right? You’re taking a big risk and if you don’t have trust you are going to take that leap.

Shep:  So, Aaron,  to come back to your question and the interesting thing if my understanding of the business had stopped at nice-to-have, I would not have joined, plain and simple. What I did, was due diligence of something that everybody can benefit from when they are making career decisions and I did a really tremendous amount of due diligence on the opportunity. Most of my network was general counsels and CKeith Kitani SaaStr AnnualFOs.

I spent a lot of time talking to general counsels and CFOs about this business model and what really made amazed me was that general counsels and CFOs were jumping out of their chair to get something like this.

They have some real challenges, general counsels need content that is current, that’s up-to-date that is consistent across the organization.

I talked to one general counsel, who literally the week before had cut checks to every woman who had been out on maternity leave for the past eight years because they’d been explaining some aspects of  maternity leave incorrectly and he saw this as a solution to help address that.

Aaron:  Compliance is a great motivator.

Shep:  Compliance is a great motivator there’s also a fundamental misunderstanding of how insurance works. And most people like me maybe think that corporations operate on a full insured model.

The punch line is that for most companies with over 500 or 1000 employees in North America, they actually self insure. It’s less expensive for them to self insure than be fully insured and that means that if employees are making bad decisions about healthcare, and spending too much money and not taking advantage of benefits in the right way then it’s hitting the CFO’s bottom line and you can get the attention of literally every single CFO and CEO in America with that conversation thread, so it very quickly shifted from a nice-to-have to a need-to-have.

Jason:  So from your perspective,, Shep coming in you firmly believed on day one, it was you can make it a must Shep Maher SaaStr Annualhave. It wasn’t an evolution in your thinking. Maybe Keith learned over time but for you day one, “I know how to sell this as a must have.” Right?

Shep:  We have some funny conversations. When I joined, we had probably about 18 clients. Virtually all of them were in California, and  all of them were either in tech or health care.

Jason:  Maybe familiar to a few folks.

Shep:  Keith likes to joke that if, when I had joined the company, I had told him that, Metals and mining, trucking and logistics and agricultural, will be big verticals for us, he wouldn’t have hired me.

[laughter]

Shep:  It turns out I was very confident coming in that we could sell this to literally every company in North America.

Jason:  I want to come back to the early days but one thing that is interesting, about Guidespark is that rapid evolution relatively speaking, from tech to non-tech in middle…I don’t mean this pejoratively in the middle of America.

Aaron:  Iowa.

Jason:  Not right and left hand coast. Did you see that, did you guys…was it from the data or was it strategic?

Shep:  You want me to take the stand?

Keith:  Yeah.

[laughter]

Shep:  Yeah. It certainly wasn’t from the data. We didn’t have any data.

Jason:  It wasn’t like you got Archer Daniel Midlands and you thought whether there must be another one of them. Right?

Shep:  No. It brings up an interesting point, Jason. One of the things that we don’t do perfectly is there’s a question of how do you find a sales rep who is going to succeed in an environment like this.

There’s some elements that aren’t necessary in every sales role that are extremely necessary in an early stage startup, when you’re talking about single digit millions of revenue. Those are traits like intellectual curiosity, creativity, and just plain courage.

We hired a guy in Q1 of 2013. We gave him Texas as a territory. At the time, we had a grand total of zero accounts Shep Maher SaaStr Annualin Texas. In 10 months, he wrote a million dollars in new business in Texas.

Jason:  That’s an argument to territorializing earlier than you might otherwise because it forces you out of your comfort zone of sort of tech and media doesn’t it? You’re stuck with the Panhandle, you’ve got to where the customers are.

Shep:  We did territories immediately. We found that we could sell deals over the phone. In this day and age, especially a SaaS-based solution, you can sell large deals, six figure deals over the phone without traveling. That enables us to not give a guy, “Hit the panhandle, and the Rust Belt” and say, “Good luck.”

We’ve got to mix and match a little bit. Somebody would have a slice in New York, Southern California and maybe the Midwest, but we territorialized immediately. It drives greater accountability. It prevents people from being able to just go where the low hanging fruit is. We did that very early.

Keith:  One of the lessons that Shep taught me, is not to over analyze. It doesn’t naturally work for every business, but to over analyze who your customer is. I tend to be more of an engineering background and trying to be analytical about who to go after. Shep was like, “Let’s go find out.” He has his people calling all across the country. That was really the start of the wakening that our opportunity is every company.

Aaron:  Especially, with those first four, five or six outbound reps, what did it take to get a repeatable approach Shep Maher SaaStr Annualin place, like, what mistakes did you make? What would you tell the group here to do differently?

Shep:  That’s a great question. What mistakes did I make?  I  probably made them all [laughs] .

Aaron:  We all do.

Shep:  There’s a laundry list in my career, I’ve probably made them all. Here’s some things we did that could be beneficial for some folks in the room. One is we put everybody, all of my sales people in one room, with everybody around the table.

The most senior person down to the most junior person, and you create this environment that has a tremendous amount of energy and a tremendous amount of learning going on.

We took a decision to locate our headquarters in Menlo Park. There’s often a draw, especially, for sales and marketing. There’s a great pool of talent up in the city. There’s a draw to go build a sales and marketing office up there too soon.

The learning curve that you get by putting everybody in the same room and hearing those awful cold calls that go poorly and hearing the demos that go south and off the tracks, you learn so much from that. The other thing that IShep Maher SaaStr Annual do is I don’t have an office. I sit right in the middle of the pit.

That allows me to set a tone for in-the-moment coaching where it’s OK, mistakes are good. You learn from them. I can participate in a set of cold calls with my newest rep. I think that learning environment and creating that is critical.

Jason:  Keith and Aaron, I want to keep going down the thread, but there’s one I want to finish before we lose it. From the early days. You and I spoke at Dreamforce. You said once you hired Shep, raised a little bit of money, stepped in, it took about nine months to get the…

It’s a combination of the math of outbound. It takes a while to get the deal going, and then with the bigger deals you may have a three, four, five, six month sales cycle.

How did you know it was working? Because even in the best case you need the better part of a full sales cycle to know if Shep’s doing a good job. How do you know?

Keith:  I think for me it started with looking at the broad market. The first thing we did is hire some outbound reps to get leads. What you start to see is the receptivity of the prospect to our story. It took a few months to get those outbound reps to get comfortable with the story.

But then as you start to see that, again this is at the top of the funnel, you start to see the progression that the Keith Kitani SaaStr Annualprospects have. More interest, more moving down the funnel. For me seeing that traction was what really drove it. We certainly had big customers that we were signing along that time, but it certainly wasn’t repeatable.

You couldn’t go and say, “OK, great. I got those three customers.” It took, like you said, six to nine months for us to really get that comfort. What you started to see really is at the top of the funnel that our proposition continued to get better and better, and people would start to move through it.

Jason:  Shep’s generating a pipeline, but everyone generates pipeline. Sometimes it doesn’t [laughs] close. I’d ask you, and Shep and Aaron chime in, too, if I’m a CEO I go to hire my first VP of sales and it’s an outbound driven business.

And I have a decently long sales cycle. How do I know 60 days in, 90 days in, whether it’s working? You bring in a great VP of sales in an inbound model, you’re going to know in 30 days, 60 days worse.

It’s not like you may see a rocket, but you’re going to see. We’ll hear from Zenefits next time, that model. You close more because the [laughs] leads were there. How do you know? How do you know when to cut bait?

Keith:  I don’t know to cut bait because I haven’t cut bait yet.

[laughter]

Jason:  Shep will tell us when to cut bait.

Keith:  When I figure that out, I’ll let you know.

[laughter]

Shep:  Thanks, Jason. That was great.

Keith:  I talked about seeing the traction at the front end of the funnel, but again we had already achieved one to one and a half million of ARR. We still had a pipeline. We would start to continue to close business, so you could watch Shep and his ability to close that business.

Jason:  You would close the existing pipeline such it was better, right?

Keith:  Exactly.

Jason:  You knew something was working at least at some scale.

Keith:  Exactly, that we could close business and that we’re building the funnel. You don’t see it end to end for six or nine months, but you can start to see parts of both ends. That’s what gave us the confidence to continue to be Keith Kitani SaaStr Annual 2015aggressive.

Aaron:  What I’ve seen is that outbound works in spectrum. For companies it works fantastic. Zenefits is going from one to two hundred million on outbound. Even their inbound leads are outbound. For other companies it’s not that great a fit, like services companies.

You can always tell with every step if it’s working if you’re making progress. Are you calling or emailing and getting responses? Yes or no? Are you getting demos that go well or not? Yes or no?

There’s always something to be a feeling of yes, we’re making progress or no, it’s not working at all, even within the first few days or weeks. You won’t have a predictable funnel ’til several months later, but you always know that it will work even if you’re not sure exactly how well it’s going to work.

Shep:  Yup. Jason, you want a couple more thoughts on that?

Jason:  Please. How do I know?

[laughter]

Shep:  [jokingly] Thanks for trying to get me fired.

[laughter]

Shep:  What I would add to that is I’d love to say that it’s all about sales and genius sales leadership. It’s not. It’s about a really great product-market fit. It’s about finding somebody who can capitalize and optimize on that and make that better. You can’t fake product-market fit, and you can feel it immediately.

Aaron:  It’s like pushing a wet noodle with outbound or inbound. I call it a slog if you don’t have something that people need and you can’t find them, it’s…

Shep:  Candidates will say, “What’s your big challenge?” Our biggest challenge is that everybody likes what we’re doing. You get it on demo, and people go, “Holy crap. I wish I had this two years ago. This is great. Wow. I didn’t know this existed. I wish you had called me eight months ago when we were in our budget cycle.”

We said, “Well, we did. You didn’t pick up the damn phone.” [laughs] You can feel that product-market fit.

What we would see is we’d have a demo one minute with a family-owned grocery store chain in Hawaii and then the next minute with an EVP from Macy’s. Then we’d close a deal with Riverbed, and you could feel this energy.

We’re riding some major waves. There’s some major trends out there that our business is riding including the shift to mobile and video. People are used to it in their personal lives. They don’t get it in their business lives. They’re wondering why.

Three quarters of MasterCard’s new hires are millennials. They’re coming into the work space expecting to be communicated with in the same way that they communicate with their friends. Then they get into the office and they’re like, “Here’s a big stack papers. Go read it.”

We’re riding those major waves. What I would say is you should be looking for a sales leader who takes that product-market fit and capitalizes on it.

The big shift for me was we went from a sales team when I came in from doing about two demos a week across the sales team of two and a half people to doing 20 or more just driving that.

Jason:  That’s fun. Walk us through what the funnel is or, “OK, here’s the goals for that.” How many appointments do people have to set up? You’ve got SDRs and AEs now. You got VPs under you. What do they have to deliver?

Shep:  What I would say is we like to set the bar really high. That’s a corporate philosophy of ours. We like to set the bar really high. When I came in, the existing sales team felt that a couple of demos a week was a pretty goodShep Maher SaaStr Annual 2015 pace. We set a bar that the expectation was you would do 40 demos a month.

Jason: 40 demos a month?

Shep:  Yeah, so shifting from maybe two a week to 8 to 10 a week as the expectation. The RDRs that we hired we set an expectation that they would make 80 cold calls a day, dials. When you’re early, there’s a lot of philosophy around measuring outputs.

That’s very important. When you’re in that early stage where you’re literally kicking down doors for the first time…

Jason:  That’s all you got.

Shep:  All you have is inputs. It’s important to measure those inputs and hold people really accountable to an extremely high level of input. If you have a great product-market fit.

Then even though you don’t know exactly what you’re saying and you’re fumbling and that sort of thing, if you’re doing a high level of activity, the momentum will get going.

Jason:  Keith, how has this changed over the last minute in the firm? What’s your role in sales now?

Keith:  What is my role in sales? [laughs]

Jason:  Yes.

Keith:  My role in sales is…

Jason:  Because Shep’s got an engine working now, right?

Keith:  He does.

Jason:  It’s never perfect, but there is an engine. What’s your role?

Keith:  My role in sales is to go on the road. You’re a big proponent of the CEO going on the road. He set my quota last year at 52 meetings with customers.

Jason:  52 meetings out of the office?

Keith:  With customers.

Jason:  Got it. Prospects or customers?

Keith:  Customers. Those are customers, and prospects are about double that…

Jason:  Because up sales are a big part in the business from Shep’s perspective?

Keith:  Yeah, because he wants me to support both. If I go to a region, I go to Dallas.

Jason:  He wants you to do a hundred meetings a year. 50/50, right?

Keith:  Right, and this year the quota is 68 times two. My role is really to support the sales team because one of the trends we’re doing is going more enterprise. Some the discussions earlier today were how do you go enterprise? You’ve got to tell a much bigger story.

You need to have them have confidence that our business is going to stand behind a solution that an enterprise group is going to put their reputation on.

Aaron:  How do you explain you’re both raising each other’s quotas every year?

[laughter]

Shep:  It’s tit for tat.

[laughter]

Keith:  Exactly. His is going up…

Aaron:  …what? I’m going to show you.

[laughter]

Aaron:  Say goodbye to your family.

[laughter]

Shep:  It’s an important piece of philosophy that we have. That is that it’s not so much about really driving sales. Keith isn’t in there putting somebody in a headlock and handing them a contract. It does a few things. One is it’s a wonderful opportunity to convey our vision for the marketplace and that big picture. Two is it keeps Keith really close to the voice of the customer. There’s nothing more frustrating than being a sales person coming back from the road and trying to relay to your marketing team, your executive staff, your product team what’s going on in the market and what the market is asking for and not getting it.

We have a philosophy where it’s not just Keith where we say, “Our door is open during any sales demo.” Anybody from any group in the company can walk into any sales demo and sit and listen.

By the way, we expect them to. We expect our marketing team to do the same thing that Keith is doing so that they can stay close to that voice of the customer. It’s critical. If you lose that, you lose the product-market fit very quickly.

Jason:  What’s the metric for this year? 64 and 64 you said?Shep Maher SaaStr 2015

Shep:  68.

Keith:  68.

Jason:  68 and 68?

Keith:  Yeah.

Jason:  Shep, do you fill up Keith’s dance card? You pick who the 68 are?

Shep:  We do. We do. I don’t personally, but my team does.

Jason:  Set it up, before…

Shep:  They understand. Bringing your CEO into a meeting. We had a meeting with the UC system. We were at a certain level, and it was an incredible excuse to get the chief human resources officer of the entire system into the meeting. It changes the game.

Jason:  With those customer visits in general, as GuideSpark’s built a brand, or almost a brand, a very big mini brand in its segment, how has that changed the dialogues and changed the discussions? Does it help? Is it reinforcements or…?

Keith:  Yeah, as Shep mentioned, one of the things that we’re getting is we’re getting the higher level meeting. When you’re talking with the CHRO, it’s a lot more strategic about how communications is important to the business. Whereas in the early days, it was a lot more tactically focused.

It’s not just our brand, but the customer base that we have. People now look to us as being very knowledgeable about the market and want to learn from us. As opposed to before, it’s like, “Here, let me tell you about my solution.”

But now they’re saying, “Hey, can you help me understand what’s going on in the marketplace,” because I’m meeting with lots of these CHROs. That really starts to build on itself.

Jason:  At this point, now that I mean you’re not, it’ll be a few months till your box’s are scaled, but you’re at scale. Do most of the prospects…? What percent of the prospects have heard of GuideSpark?

Shep:  That’s a great question. One of my sales team members printed out a sign, tacked it over my desk, and it says, “Hustle until you no longer have to introduce yourself.” We have a massive total addressable market.

Jason:  And hustle twice as hard. Isn’t that true?Shep Maher SaaStr Annual 2015

Shep:  Yeah, that’s right. We still have to introduce ourselves. Our total addressable market is probably close to 30,000 organizations in North America alone. We did, as a team, about 7,000 demos last year. About 2,000 of those ended up in our pipeline; about 350 of those bought.

We are really scratching the surface. It’s something you have to work on. Creating that brand is important. One of the things that we did early on is we put a pickle jar, an empty pickle jar, right in the middle of the sales pit.

We would fine anybody a dollar if they said, “I’m calling from a company called GuideSpark,” “I’m calling from GuideSpark. Have you heard of us?” Or, “I’m calling from GuideSpark. We’re a startup located in Silicon Valley.”

All three of those things, if you think about, if you were calling from Salesforce or IBM, you wouldn’t say those things. It simply wouldn’t make sense. You need to act as if before you get there.

Jason:  As if you’re sales force?

Shep:  Yeah, we did fine one of my new reps a dollar. A dollar went in the pickle jar the other day.

Jason:  Good. One question I want to, since I have both of you and I can put you on the spot together. You had a good 2014. It was a good year. How did you plan for 2015? How did you set the goal? You don’t have to share. If you’d like, you’re welcome to share the…

Keith:  The target.

Jason:  …the…year end target. But how did you set it? How aggressive do you make it? Do you have two plans? One plan? Do you guys have an even higher plan than the company? How do you think through this next phase?

Keith:  We made a transition. In the past, we had one plan. It was a very aggressive plan. But for this year, looking forward, we created two plans. We created a core budget plan and then a sales stretch plan.

One of the key things, in terms of thinking about our planning now is that we now are looking three years ahead. In the past few years, we might have had a three year plan, but that was really a couple of guesses we give to VCs.Keith Kitani SaaStr Annual

Now, we are looking at that target, a hundred million out there, and trying to figure out, “How are we going to invest, not just this year, but in the future years to get there?” That’s been a dramatic change for us in how we think about the business, because now we actually have some data.

Before, performance to quota, we were guessing at numbers. But now we have some data from last year and understand with our reps, what performance to quota we think we can get. We now have an idea of how many sales people to hire.

Jason:  Broadly speaking, the ’15 plan’s pretty data-driven. You’re taking trailing velocity and the goals for the year and working off that.

Aaron:  Past funnels.

Keith:  Yes, but the other piece that we’ve had to look at was how fast we want to grow. Because one of the key things for our growth rate is around people. You can go and you can hire lots and lots of people, but…

Jason:  How many folks, for the audience, do you have now with the company?

Keith:  We have a little over 200.

Jason:  200.

Keith:  Two years ago, we were 20. We’ve gone from 20 to 200. One of the things that we talk about with Shep and his team is, “At what rate are we compromising quality and culture?”

What we’re trying to balance there is a plan that we think, and 20 to 200 is pushing right at that edge when you start to have really thinking about compromising that.

That’s important to us. We’re trying to keep that balance where we want to have aggressive targets, but we want to build the company, the people, and the culture that will continue to grow.

Jason:  You’re 20 million now, almost outbound or all outbound going to 100 or doubling. How do you start to think about that mix of whether it’s your inbound versus outbound, or deal sizes, so on? Are you tripling down on outbound? Are you starting to place some other bets?

Shep:  Yeah, we’re definitely starting to make some bets. It ties into the forecasting, because especially at a stage like ours, you need to let the data inform you, but not be a slave to the data.

Because if you just look at what has been done, then we’d still be selling to tech and healthcare companies in California exclusively.

Jason:  And less than half the size probably, right?

Shep:  Right. You’ve really got to open your mind. Keith would joke that he felt confident we’d get clients, like Chevron and Exxon Mobile, but maybe not for a few years. We were able to do that a lot sooner than he thought.

We’re making a huge investment in marketing. We have 5 x star investment in marketing?

Keith:  Yeah.

Shep:  A stat that I’m fond of quoting, as in 2013, we had a grand total of seven inbound leads.

Jason:  7 0.

Shep:  Seven.

Jason:  Seven.

Shep:  Not seven qualified, not seven a day…

Jason:  Sorry.

Shep:  Seven inbound leads all year.

Jason:  How did you divide them up among the rest?

[laughter]

Jason:  You get half and you get a third.

Shep:  We threw them into the cage.

Jason:  I need the zinger right there. There you are. There you are.

Shep:  It was…

Jason:  [laughs] Nice. I know it didn’t sound funny to the band. But to us, it was a little funny.

Shep:  Now, we’re up to a flow of about 100 a week.

Aaron:  Two app servers walk into a bar…

Shep:  [laughs]

Jason:  Guys, I would love to…We’re getting good. This is getting good, but it was a great conversation. We’re out of time here. But let’s thank Shep and Keith for doing this. This was an amazing session.

[applause]

Jason:  Hey…

[crosstalk]

Shep:  Thanks, Jason. Thanks a lot.

Jason:  Thanks for staying on stage.

Shep:  Thanks, Jason. Thanks a lot. Appreciate it.

[crosstalk]

Jason:  Am I staying…?

 

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