SaaStr Podcasts for the Week: May 10, 2019


This post is by Deborah Findling from SaaStr


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Ep. 231: Jason Reichl is the Founder & CEO @ GoNimbly, the first SaaS consultancy to focus on revenue operations. Currently growing 100% year over year, working with companies to un-silo their operations and create one strategic revenue ops team to support their Go To Market strategy. In the past, Go Nimbly has helped companies like Zendesk, Twilio, PagerDuty and Coursera to achieve alignment and increase revenue by 26%. As for Jason, prior to co-founding GoNimbly, he was Director of Product Management @ TradeShift and before that was VP of Product Management @ Lanetix.

In This Episode We Discuss:
  • How Jason made his way from Director of Product Management at Tradeshift to changing the way we think about scaling revenue operations with GoNimbly.
  • Why does Jason believe that we have to remove handoffs between go to market teams? Why are they so damaging? How Jason believe SaaS companies can use a “swarming” effect to create the best buyer experience for their customer? What does this involve? How does this change the type of metrics that we track?
  • Why does Jason believe that your North Star has to be revenue in the go to market teams? Why does Jason also believe that it is damaging to have the same North Star across the entire company? How should North Star’s be segregated between GTM teams and biz ops teams? What are the mistakes many companies make when setting their internal North Stars?
  • Why does Jason believe that alignment is a dirty word? Why is alignment actually a negative for the customer experience? What does Jason view as vanity metrics? If one has vanity metrics in place, what does Jason recommend as to keeping them or phasing them out?  

Episode 232: Dave Kellogg is the former CEO of Host Analytics and prolific blogger. Join him as he takes you through lessons learned from Host Analytics on the top questions every SaaS CEO wrestles with. Dave was CEO of Host Analytics from 2012 to 2018 where he quintupled ARR while halving customer acquisition costs in a highly competitive market, ultimately selling the company in a private equity transaction.

SaaStr’s Founder’s Favorites Series features one of SaaStr Annual’s best of the best sessions that you might have missed. This podcast is an excerpt of Dave’s session at SaaStr Annual 2019. Missed the session? Here’s what Dave talks about:
  • When is the right time to raise money?
  • How can you better manage the board?
  • Should you worry about competitors?
  If you would like to find out more about the show and the guests presented, you can follow us on Twitter here: Jason Lemkin
SaaStr
Jason Reichl
Dave Kellogg Below, we’ve shared the full transcript of Harry’s interview with Jason Reichl. Harry Stebbings: We are back for another week in the world of SaaStr with me, Harry Stebbings. It would be great to hear your feedback on the show, and you can do that on Instagram at hstebbings1996 with two Bs. I respond to all messages there personally. But to our guest today, and I am thrilled to welcome Jason Reichl, founder and CEO at Go Nimbly. The first SaaS consultancy to focus on revenue operations growing 100 percent year over year. They work with customers to unsilo their operations and create one strategic revenue Ops team to support their go to market strategy. In the past Go Nimbly has helped companies like Zendesk, Twilio, PagerDuty and Coursera to achieve alignment and increase revenue by 26 percent. Harry Stebbings: As for Jason, prior to co-founding Go Nimbly, he was Director of Product Management at Tradeshift and before that was V.P. of Product Management at Lanetix. Harry Stebbings: However, you’ve heard quite enough for me, so now I’m very, very excited to hand over to Jason Reichl, founder and CEO at Go Nimbly. Harry Stebbings: Jason, it’s absolutely fantastic to have you on the show, so I have had many great things from Jason Lemkin. But thank you so much for joining me today, Jason. Jason Reichl: It’s no problem, excited to be here. Harry Stebbings: I would love to kick off today with a little bit about you. Tell me, how did you make your foray into what I know to be the wonderful world of SaaS and come to found Go Nimbly? Jason Reichl: Yeah, absolutely. So I started my career on the business side of consulting in the sales force space. I spent about 10 years doing that, working with all sorts of businesses. Moved to the bay area about 10 years ago and when I moved there and worked in the sales force consulting space we’re doing a lot of high tech companies. And like a lot of people I was seduced by it and I became a VP product in a couple companies, the largest one being Tradeshift. And when I was at Tradeshift I really loved working in product. I really love working in SaaS. I started noticing all these organizations that I had worked in they couldn’t you had to build product. They didn’t actually know how to run businesses properly. They didn’t understand how to align their go to market teams with their operations teams and be successful. So I started to Go Nimbly, which is the world’s first revenue operation consultancy focused primarily on SaaS companies. So we actually are the operators of SaaS companies, and we come into organizations and help them streamline their go to market processes. Harry Stebbings: Can I ask just for like a structural insertion point. When is the right time then that you would ideally insert yourself into an organization and really provide the value that you do. Is it from day one or is it post product market fit, series A and beyond? What’s that ideal insertion point where companies really need the help? Jason Reichl: Yeah absolutely. At Go Nimbly we primarily work with companies that are at least Series B. We are either their entire operations team, so a BPO model, or we’re augmenting parts of their organization where they don’t have those skill sets. But we are a long term subscription product. So our customers actually think of us as part of their team, and we deploy our revenue operations into their environment. So, that’s how it works. Really we’re working with a lot of series C to IPO organizations. Harry Stebbings: I’m sorry for digging. I am just too interested. In terms of a culture perspective, when you plant a fantastic Go Nimbly team within an organization, is it challenging to integrate, you know, an implanted team into an existing culture. How do you guys think about that? Jason Reichl: That has been challenging because we are on the forefront of revenue operations, which is a new paradigm in operating. We’re actually coming in and helping those organizations restructure into revenue operation organizations as well. And I think that gives us an advantage as being cultural leaders in those organizations to some degree. And then also you know we have a very unique skill set. So every one of our Rev Ops teams have someone that’s a sales ops background, marketing ops background, a technical development background, and a strategy background. And so the organizations really lean on us wherever they have those jobs. And that really allows a lot of value to occur. And so we don’t really have a lot of problems with them rejecting it. In fact, we find that having an outside source who’s been working the other SaaS companies in the same inflection point that that company’s add has actually been a big boost to those organizations. Harry Stebbings: No I totally get you, and super interesting to hear about that kind of diversity of background. But I do want to kick off say with something that you’ve said to me before that was striking. You said you believe in eliminating the handoffs between GTM teams and the redundancy of MQLs and SQLs. If we start on the handoff elements in the why, why are handoffs damaging to an organization and why do we need to eliminate them, Jason? Jason Reichl: I think before we begin in there I wanted to break down how Go Nimbly looks at roles of a SaaS company. I think it’s probably critical to understand that, so we view marketing, sales, and customer success as what we call your go to market team. They’re essentially the front end interface to your customer. And then we look at like sales marketing Ops, CS OPs as what we call your revenue Ops team and we put those into one unit called revenue team. Jason Reichl: So the reason I want to bring that up is because that’s the context in which we look to the world. We only work with a revenue team. We don’t work with your product team work, we don’t work with the business Ops team. And when we’re talking about MQLs and SQLs we’re really talking about one of these key handoffs that happen in the revenue team process, right? And any time we begin to measure the revenue team on only internal factors we tend to forget about what those MQLs and SQLs really are, which are potential buyers. We find all the time that people start to measure their own little business units,you know, marketing measures on MQLs, sales on SQLs acceptance and things like that. Jason Reichl: And I think a critical piece is missed there, which is that they are people. Those are people that want to buy your product, potentially, and you are treating them like it’s a bond game. And we found, you know, with working customers over the last two years that even if we increase MQLs or better define them or make estimates or sales but actually ends up happening is the number is going to improve that they’re not really improving to the degree that the organization wants. And so we’ve started to look at that and say, okay if the goal is to create a personalized buying experience for your buyer, what kind of new metrics do we need to put in place to gauge that? And when we would focus on the buying experience and making it very personal to the buyer we actually see a dramatic increase in revenue and so MQL and SQL are what I call maybe a momentum or a KPI metric, but they shouldn’t be how you’re driving or measuring your teams. Harry Stebbings: Can I ask, I had Ben Braverman and the CRO of Flexport on the show the other day and he said it’s wonderful to have SDRs and account managers and sales reps but it doesn’t create the best personalized buying experience when you’re continuously handed off to the separate specialized function. Would you agree with him here in terms of the loss of personalization with the handoff to different specialized functions and actually the need for one continuous relationship to guide someone through both the sales and also subsequently the customer success process. Jason Reichl: Yeah, absolutely. I think that swarming a buyer is a good thing. I think handoffs are a bad thing. So I think the more that you can involve members of your team, the more taken care of your buyer might feel like, so I don’t think it’s about having a single point of contact, but I think it’s about making sure that the buyer understands the swarm that you’re putting around them and what those functions are, but also feels very comfortable to move between your different functions without feeling like they’re being handed off. You know, all of our research and all–you know we’ve been doing this now hundreds and hundreds and hundreds of operational projects at SaaS companies about this buyer experience. Jason Reichl: And what we found is that essentially a buyer comes in now and after maybe getting qualified or spending a little bit of time on your website they kind of know they want to buy your product and what happens is all those handoffs create what we call personalized leakage or think some other people call it another term you know you have just leakage in a funnel or something like that. What actually happens is it just erodes the amount of money the buyer is going to spend. Jason Reichl: So someone comes in they start working with you or SDR and they have a bad experience there and then they get handed over to a sales rep and that goes okay. Maybe then they get a marketing E-mail that says, hey, why don’t you check out a demo, but they’re already in the buying process, and all of these things occur and what actually happens is the customer didn’t decide not to buy. They just decide to sign a contract for less time or they decide to not bring on as many users so you’re actually hurting your LTV and you’re essentially hurting your ability to get the biggest amount out of that customer from the very beginning. And so that’s what we found over time. Harry Stebbings: Can I ask you, if that’s what you find over time and absolutely fascinating to hear–If you were to present your ideal depiction of what that process would look like what does that ideal process look like in your mind then, in terms of optimizing the value presale? Jason Reichl: Well, it really means you have to have more of an engagement model so that the customer is engaging and they’re being–say something like Leadscore. doing an engagement score with those individuals. And I also am a big proponent of an ABM process even at a scaled version of it where you’re delivering a very personalized experience, either because you are going after, say, a few target accounts or you’re going after a personal experience because you really know your buyer and you’re giving them everything they need in order to basically write the biggest check they can from day one, and that process doesn’t look very different than what we do now but it looks like a layered process. Jason Reichl: So instead of having all these handoffs, what you actually have SDR a marketing person working together at the same time on that customer through the process. And that really requires a great operational team and that’s where Go Nimbly comes in or–some of our customers have great operational teams–you actually build a leak proof system in order to do this. Personally buying insurance you have to really be doing a system thinking type of exercise where you’re thinking of your buying experience as an ecosystem. How does this element play to this other element in order to increase the value of the customer? Harry Stebbings: Can I ask, I love the elements of kind of swarming them with the AE, with the SDR, and really engaging the multi relationship from the offset. I do think, though, like what value does these contrasts have to have, to really justify that swarming effect, because it is less kind of cost effective from a margin perspective, bringing more people in earlier because they can obviously work on less. How do you think about what the minimum is and what it really needs to be to get the most out of it? Jason Reichl: Well, I mean if you’re a velocity-based business you don’t really need to touch your customer that much, right? In that case, the personalized buying experience can really be almost absent of people if you’re a velocity-based SaaS company. We work with enterprise SaaS companies who have a lot of touches with their customer and so a lot of where our experience comes from comes from the enterprise space where you’re gonna touch them and spend as much time on them. In this process if we did an old way each person doing a hand off passing to the next person passing next, the total time spent is the same as if you swarm around it because you actually move people faster through the internal stages that you might have. So what we’ve found is it’s actually not an increase of time for the enterprise. It’s just a different way of organizing the enterprise. Harry Stebbings: Absolutely. Can I ask, with that personalization that you really get in that presale process in that warming of the funnel so to speak. Do you see actually a reduction in sales cycle with that increased personalized process that the customer now experiences? Jason Reichl: Yeah, you absolutely see. I think we see I don’t want to give a percentage that’s not correct but we actually see that things move faster through pipeline when the teams are highly focused together and when we talk about together–you know, an SDR has a very specific role just getting someone committed to a demo or whatever your engaged part of your pipeline looks like, and a sales rep has the unique ability to try to push people through the sales process and a marketer is through that whole thing trying to make sure that they’re marketing directly to that persona and making sure it’s a good experience in customer success. Jason Reichl: It’s coming in and making sure the implementation goes right as well as looking for upsell opportunity. Those people still have that, what I call obligation, to the organization. That’s an internal function, but to the customer it shouldn’t be obvious that that’s their obligation, right? To the customer they should feel very comfortable going through that personalized experience and really understanding that the entire team wants them to be successful. So you know a lot of organizations it’s as simple as having the SDR that was part of the process reach back out and kind of coordinate throughout the entire process. Right? Not just the initial demo and then that person becomes a coordination person and that becomes part of their role. And they also follow that customer through that process. You might bring your customer success person in earlier maybe before you close the final deal and the sales rep will continue to check in as sort of account executive for that account while they’re going through the implementation process. Jason Reichl: So, no, we’re not really talking about changing the responsibilities of these roles. What we’re talking about is changing how they’re measured for success. So typical SDR maybe meet general [inaudible 00:13:58] or something like that. Or the way that we look at it, it’s about how engaged that customer, how fast do they respond to that SDR. How much of a relationship has a SDR actually built over time. AE: Can they reduce the time that someone’s stuck by bringing in other people on the customer side in order to build, you know, more collaboration between the customer and the SaaS companies that we work with. And on the customer success side, are you already talking implementation details maybe in stage 4 of the sales cycle versus waiting until the very end, so the customer really feels taken care of in that environment. Harry Stebbings: No, I love that change of measurement and metric based approach. I do have to ask, one thing that strikes me when hearing it there is just the element of alignment and the need for it without those differing functions. And when we chatted before you said the need for everyone to have the same North Star metric, being revenue. Now I’ve had many guests on the show before, Jason, who’ve stated the importance of the North Star. But this is usually centered around MPS, usage, customer love, whatever that may be. So why do you think it has to be around revenue? Jason Reichl: Well I think of the revenue team–Like I mentioned, go to market and revenue operations being in revenue and their North Star is revenue. And I actually find that it’s the one thing in all SaaS companies that can’t lie. You know we all know how we go and fundraise how to build a narrative that makes sense and can get us to the next stage of our company. But revenue doesn’t really lie and I like to do this thing where I do a baseline metric and so every month I go in Salesforce for all of our customers and I get the volume of opportunities they have, the value of those opportunities, and each stage, their conversion rate, and the velocity rates. Jason Reichl: And I actually month over month, set that and then I measure it against benchmarks in the industry and with Go Nimbly customers and when we do that we actually find that we can find operational problems across the entire organization by just looking at the pipeline. So as an example if you have a lower than average conversion rate in stage 1 to 2 it’s probably a sign that the leads that are coming in are not of quality and maybe that’s a marketing operation project that we should do–for the revenue operations team to do. And so we actually used in pipeline revenue as a very neutral ground to bring every element of the go to market team together. It’s also pretty easy to base a lot of decisions on the sales pipeline because we have a lot of tools that are mature in place that we can actually do that with, right? Whereas other tools are still emerging and know how to measure the entire organization different SaaS companies are trying to figure that out right now. Jason Reichl: Still, I think sales pipelines that fast is the best place to work in order to look at how your revenue team is doing. And then as an operator, which is what Go Nimbly is and what I do, we look at those places and go, “Wow. Our demo to negotiation phase is really really abysmal. It’s really low. What’s going on there? And then we would focus operational projects there. And I actually think the key here you just looking at revenue is actually treating your operations team as part of the revenue team, as well, where their job is to increase revenue because we find when operators are focused on revenue they can actually have about a 26 percent increase in revenue that’s generated without hiring additional sales reps, without scaling anything else. And I think organizations aren’t really looking at their operations team as part of the revenue team. Harry Stebbings: I do totally get you and I love that a single alignment around it and what it can uncover. I do have to ask because one thing that concerns me is how do you think about creating that culture of ambition and tenacity to hit the revenue numbers but without also being afraid that maybe the team will be dejected and demoralized if they don’t hit their numbers when it’s something as tangible as revenue that, as you said, it doesn’t lie. Jason Reichl: That’s a hard question. I think that it probably could deject and demoralize. I think it matters in a culture that has that culture create a psychologically safe environment for people to really push themselves and look at themselves and here and go hey you know we didn’t hit what we’re supposed to hit. I think sales reps do that all the time. I think it’s actually beneficial for everyone to feel that pressure. I think that a lot of times in SaaS companies that we work with people are handed out targets and they have no idea how they’re going to hit them. And so I think there’s a lot of issues there. I do believe that creating what I call vanity metrics to make teams feel good is not the right answer. And I do find that what most teams do. Harry Stebbings: I see now that I’m super intrigued by. What do you mean by vanity metrics? Jason Reichl: I mean the way that SaaS is currently exists and you have your teams and marketing is really changed over time but ten years ago a marketing team might talk about open rates or click rates and things like that that show that what they’re doing has value and now we’re seeing a little bit of that in the customer success team and sales still does the same thing, right? We talk about how much pipeline someone’s created even though our closure rate might be 10 percent for this particular sales rep and we might get excited about how much they generated. Essentially it’s anything that doesn’t actually have an impact to close one deals. And I think there are such things so I have two types of when we go to organizations your vanity metrics and what I call your KPI are different for every organization. So it’s not easy just to give you a list of them but vanity metrics are things that exist only to validate that departmental function. Harry Stebbings: Can I ask, what should one do–say a founder listening today goes, “Oh shit. I do have a ton of vanity matches for the different functions that we have.” What should they do? Should they keep it in place because that’s what the teams are used to? Should they rip them out and say, hey we’re all aligning on revenue now as the core driver? What would you advise them who have them already in place? Jason Reichl: Yeah. I would say, rip them out and align to revenue. Now when the first thing you’re gonna find when you align to revenue is if you’re measuring month over month revenue impact of the different things you’re doing that’s going to take time. So you’re going to need some KPI, some momentum based metrics that show that you’re pointed in the right direction and that can still be in key roles created. For instance, it still can be SQL, but if you see that you’re generating X MQL and you’re not changing revenue, then that’s your first sign that it’s actually a vanity metric for your organization and not a momentum based metric. And maybe it’s number of demos that’s actually a momentum based metric. So what you need to find is you need you’ll find those pre-levers before revenue that actually are indicators of momentum of success. Harry Stebbings: No, I do agree with you, and I’m pleased to hear about the importance of ripping them out. In terms of the alignment itself, I do speak to many founders on the show and it kind of seems to be a commonality that they always feel that alignment should be the end goal of revenue operations. Is that the right mindset to take, Jason? How should they think about this? Jason Reichl: I actually think that once you put a North Star in place, alignment becomes no issue. In organizations that have really adopted revenue being how you know–your revenue team is measured and the go to market team is aligned to it, and the operations team–revenue operations team’s aligned to it, quickly people find that they become one team and when you become one team ,you really align. Jason Reichl: People don’t talk about misalignment between sales reps but that does occur, right? You know, one sales rep might have one way of doing something, another might have another, and there might be a discussion about it, but ultimately they’re on the same team so they work it out. I find that alignment is a precursor to this thing that I call silo syndrome which is this idea of protecting your silo and wanting to hand things over and having a handshake be the end of it. And I find in organizations that the more we talk about alignment the less we’re focused on customer. So I really do find it slightly offensive when people talk about revenue operations and they talk about it as alignment because your operators and revenue operations are working for the customer. Your marketing team is working for the customer. The customer success team and sales team are also working for the customer. Jason Reichl: So when I find it to be really confusing is that we shouldn’t be working for ourselves and when we talk about alignment, we talk about how to make our jobs easier internally. So it’s actually, for me, a dirty word or word I don’t like to talk about. I think we talk about it way too much. I think we talk about making our jobs way too easy when we’re in a career field that’s exploding. SaaS is an amazing place to work in and it should be hard. You know, some of us are doing that work and they should be difficult. But what is the thing that I think most about is that, alignment only occurs because people don’t have something else to point to, and so if you give them that North Star and really hammer on it, things can change. The other thing about North Star is that the way we actually look at organizations in SaaS–I think this is helpful for anyone listening. You have actually to fly wells in your organization. Jason Reichl: You have what I describe as the go to market team and revenue operations team, usually led by a CRO or someone like that and their North Star should be revenue. And then on the other side of that you have your product team and your biz ops team and their North Star should be growth or margin or any of your typical SaaS North Stars. But a lot of times organizations want to have one North Star across the board. I actually don’t think that works very well, right? Because often that North Star becomes a SaaS. A good go to market team, good operational operations could sell any SaaS product, right? And so really they should be tied to revenue and not based on how well the product is doing on a growth percentage. Harry Stebbings: I mean I have to say this is when I wish I created a longer podcast. I think I could chat for ages on this. I do want to move into my quick fire round, though, Jason. So I say a short statement and you give me your immediate thoughts, are you ready to rock and roll? Jason Reichl: Yes, let’s go. Harry Stebbings: Okay, so no man’s land in SaaS pricing–commonly hailed but does it really exist or not really? Jason Reichl: I don’t think it exists. Harry Stebbings: Why? Jason Reichl: I don’t have a good answer for it. It’s something that I go back and forth on a lot. But I have not really seen it in practice. Harry Stebbings: The hardest role to hire for today that you’ve observed and why do you think that is? Jason Reichl: The hardest role to hire for is definitely marketing roles because marketing is very broad and you can very easily hire a specialist instead of a generalist. And I think that slows your growth down. Harry Stebbings: Multi-year deals, are they always amazing? Is there anything to watch out for? How do you think about them? Jason Reichl: I like multi-year deals. They are always pretty amazing for validating the organization. The thing you should watch out for is discounting too heavily before you have your pricing and product fit. Harry Stebbings: Absolutely. How do you feel about channel partner sellers? Jason Reichl: Well, I think for most SaaS businesses channel partners sellers are probably a good thing in early days. I think that if you can control your buyer experience, you should, and that’s part of my messaging. But sometimes, you know, you need that velocity of having a partner channel or someone out there on your behalf if you just can’t reach everyone that you need to. Harry Stebbings: This is my favorite, Jason, of all. It’s also probably the toughest. What do you know now, that you wish you’d known at the beginning of your time with Go Nimbly? Jason Reichl: I wish that we would have understood the value of helping companies operationalize themselves better. I think that very early on we worked with some very amazing companies and we didn’t have that language yet and we were really focused on tools and process and not really reorganizing these organizations to be more effective. I think we missed some pretty big opportunities with companies that are now doing amazing things. Harry Stebbings: Jason, as I said, I’ve heard so many great things. I hate the fact that I keep my show so short. But I would love to have you back on for a second round and thank you so much for joining me today. Jason Reichl: Awesome. Thank you so much. Harry Stebbings: What a fantastic guest, and as you can hear from my excited tone, I absolutely loved having Jason on the show there and if you’d like to see more from us behind the scenes here at SaaStr, you can on Instagram at hstebbings1996 with two Bs. It would be great to see you there. Harry Stebbings: As always I cannot thank you enough for tuning in and I’m very excited about bringing another phenomenal episode next week.   The post SaaStr Podcasts for the Week: May 10, 2019 appeared first on SaaStr.

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