Jason Lemkin moderates a panel of some greatest-of-all-time SaaStr speakers taking questions from the audience and over Twitter. The panel discussed navigating a future recession, building great office culture, app exhaustion and more.
Want to see more content like this? Join us at SaaStr Annual 2020.Jason Lemkin | CEO and Founder @ SaaStr, Inc.Maria Pergolino | Former CMO @ AnaplanAnthony Kennada | Former CMO @ GainsightAaron Ross | CEO @ Predictable RevenueFULL TRANSCRIPT BELOWJason: We wanted to do an experiment this year of, what if we just brought back some of our most popular speakers from the past, the greatest of all time. So, we’ve got three of them here. Aaron’s going to talk about what in a few minutes?
Aaron: The playbook for reigniting growth.
Jason: All right. So, Aaron and I wrote a book together in 2014 or
Jason: 2016. We wrote a book together. I mean, Aaron did all the work, and I was on the right side of it and contributed some content. And then, we ripped it out and Aaron went and talked to some of the top SaaS companies from today and added the case studies. He’s going to talk about those learnings from Twillio and on down, right?
Jason: And then Anthony and Maria are going to talk about what next? Right after this session, right?
Anthony: CEO relationship with the CMO.
Jason: Yes. And was this inspired by the comment that you made to me in Paris like a year ago or something like that?
Jason: This title?
Maria: This is something that every CMO thinks about, and I think every CEO thinks about. When it’s successful and done well, it can be a big multiplier for an organization and when it’s not done well, it can cause a lot of waste. So, putting a little bit more money in everybody’s pocket and creating a little more growth is probably a great topic for today.
Aaron: I’d love to see a CEO-CMO relationship spectrum on the fluidity chart. A CEO-CMO relationship, where do you fall?
Anthony: That might be in there, actually.
Aaron: Just a request.
Anthony: You’ll take time to find out. I think that might be it.
Jason: Well, this will be fun. Maria is one of the top SaaS leaders in marketing, just finished up the CMO Vanna plan, which IPOed. Was CMO at Apttus before that, which was bought out by Thompson Bravo, right, Marketo before that. And what am I missing from your journey.
Maria: No, that’s great, that’s great.
Jason: That’s pretty good, right? And so, she can, and Anthony just finished up basically going from the first sales hire at Gainsight at almost 100 million in revenue and has just retired. So now, you’ll be able to go upstairs and you’ll hear the honest stories, right, of how a marketing leader, the CMO, works with the CCO.
Jason: And maybe it wasn’t inspired, but a year ago we did SaaStr Europa with the first time Maria was at the speaker dinner, and she said the key to surviving as the CMO is knowing that the CEO is really the number one marketer, the CEO is really the CMO, and if you don’t at least sort of kind of do what she wants, that’s the fastest way to be shown the door.
Jason: And I thought about that a lot. And so, I want to hear what they have to say. And then I’ve watched, since she made this comment to me about 13 months ago, then I’ve watched with some startups I’ve worked with, where the first marketing hire comes in, and I asked them what their top five priorities are, and then I asked the CEO. And when they’re not the same, that marketer’s never there in 90 days, like just never, right?
Jason: So anyhow, they’ll do a deep dive. That’s exciting. And I think we’ll, I think probably half this room is running brain dates, so I’ll have them all day, which are mentoring sessions. Please sign up. If you haven’t signed up on the mobile app or whatever, it’s cool. Just go to the little sign-in kiosk this next registration, and I think there’s 30 or 40 top revenue leaders that want to mentor you on questions. So, that’s always good.
Jason: So, I think Deborah, our head of content, will take some questions but we’ve got some on Twitter that I wanted to do. And the first one is, hold on, let me just, because I actually want to write about this, but I haven’t gotten around to it. But this is helpful for folks, if you have an anxiety. This is the best of times in SaaS, right? We’re 11 years in the bull run.
Jason: The question is, if there’s a recession, what can we is SaaS companies expect? Right? And at some point between year 2012 and 20 of the bull run, there may not be as good as it is today. So, what did we learn last time and what do you think will happen this time? Any thoughts?
Maria: Yeah, I think, coming from a marketing side and thinking about that as a marketer, marketing is all about investments. There’s none of the brands that you’ve seen get to an IPO or continue on to a Fortune 500 company that is not making some significant investments there. And notice that I said investments, not cost or spend. You have to put something in to get something out of it, and I think that obviously sounds biased coming from a marketer, but that is just the case.
Maria: It’s like saying, “Hey, you want a sales rep to carry 10 times the quota they do today. You can’t, you have to invest in that sales infrastructure.” And so, when you think about a recession, how do you, one, you may just have to think about a little bit less growth. You’re going to put less in and you may get less out. The goal is to keep the company successful for that.
Maria: I think for many of our organizations, we’re automation, we are technology. We should actually help companies out of the recession. We are what is going to make companies more efficient. So, when I was at Marketo, it was not an easy time in the market but it is part of what caused the growth. And I think just planning for that now, thinking about not having to have that happen, and thinking about your messaging twice, but creating some efficiency.
Maria: And then, I think every marketer should be trying to be EBITA-friendly and making sure that you know the markets today. And I know we always think about the public markets, but investors are market too. They want to see some process profitability faster than traditionally, and I think all of that really comes into play there.
TWITTER QUESTION 1: If there’s a recession, what can we as SaaS companies expect?
Anthony: I’ll add more too and this sounds like a sponsored answer, but customer success becomes even more important as we sort of think about where growth is coming from. Obviously, marketing and investments are expensive and we know the cost to keep a customer is obviously a lot less. So, I think as we think about that world, how we sort of focus in on our existing customers, ensure they stay and help make them successful is going to be even more important.
Aaron: Well, also, as someone who went through this, especially like the 2000, 2001 times. If your customer base is mostly smaller businesses or other venture funded startups, you’re going to be screwed because they’re all going to cut their spend, unless you’re too small to for them to worry about or, well, I guess that’s the only reason because they’re, if they get into cashflow conservation mode, the contracts won’t really matter. They’re just going to cut spending, especially if you are in kind of like media, or advertising, or short term marketing.
Aaron: And they just have to do it. You can argue all you want about investment, but their cashflow management. So, if you can, the faster you can balance out your customers with some bigger ones, you’re going to be more stable, and some smaller ones, and just kind of be smart about it. It’ll help de-risk that. Because there’s going to be recession at some point. You just don’t know when.
Jason: Yep. I remember about three years ago, Marc Benioff gave some interview and he said his biggest regret was not continuing to hire sales professionals through 2009, his number one regret. And I remember being at that Dreamforce in 2009, which was awful. And every vendor was just staring at each other like the world’s dead. I mean, literally.
Jason: I worked in downtown Palo Alto then, not San Francisco. Every retail shop was closed by 2000. I mean, half of downtown Palo Alto was boarded up. And people thought the world ended, but we were wrong, actually, right? We were wrong.
Jason: And two things, I founded EchoSign because we had SMBs and enterprise customers. The SMBs during the recession churned at a massive rate, right? Our monthly self-service churn went from like 3% to like 9%, right? Because everyone got their credit card bills out and just like, what, can I cancel Netflix? Can I cancel, like, anyone who was paying monthly canceled everything.
Jason: But what we didn’t realize, I think, was two things. One is that we were budgeted, right? In bigger companies, we were budgeted. And some folks would come back and say, “I want to renegotiate because the world has ended,” but enterprise software is budgeted. It is budgeted for multiple years and no stakeholder that wasn’t fired or laid off wanted to give up Marketo, or Gainsight, or Salesforce.
Jason: So, account growth got a lot harder, right? And churn got higher than the SMEs, but we all came out of this recession saying, “We kept all of our logos.” Like our Googles, our Comcast, our Dells, our BTs, they didn’t cancel my product. And the other thing, just for folks in the audience, that I learned from that is, a lot of us struggle with this vitamin mineral, what is it, vitamin painkiller thing?
Aaron: Yeah, vitamin painkiller.
Jason: I know we talked about it and we’re like, does anybody really need Anaplan, or Marketo, or Gainsight, or even Salesforce, like do we need these things? I certainly didn’t know if people needed my product. It turned out they want all of us, right? And we’re not all building the most mission critical software, but our stakeholders don’t want to rip us out. I’ve spent three years deploying Gainsight. The last thing I want to do is rip it out just because of a minor little recession.
Jason: So, my only learning is stay the plan. If something bad happens, you’re going to have to cut your burn, probably. But your enterprise customers aren’t going anywhere.
Jason: They’re not going anywhere. So don’t get too caught up in-
Aaron: Actually, I’d add one more thing, because one of Jason’s ideas is this year of hell, which is in the From Impossible book. And some of you are going through a year of hell right now, guaranteed. And when you go through recession or anything else related to like a year of hell, you come out stronger in some way if you can survive it. It goes back to that cashflow management.
Jason: Yep. All right. One other one, I don’t want to get too [inaudible 00:09:12] on this one, but another one that we don’t quite talk about enough, but I want some actionable ideas. One was this recession thing I haven’t talked about. The other one is what the veterans have learned from culture, and this question is from Jose who’s here, but what’s the best method to establish intentional culture and what are the bare minimum principles to adhere to?
Jason: You don’t have to answer that exact question. But what have we learned about what … I mean, culture is not foosball and paintball, and it’s something, but I think what we’ve learned is it’s one of the most enduring things that we have and we’ve, I think we’ve all worked in companies with different, different cultures, right? And challenging ones and great ones. And not to ramble, but what would you, what’s a top piece of advice you would give folks here to improve their culture or to create a great culture?
Maria: Oh, I’ll take the number one thing to improve your culture. There is one thing, I love this quote and it’s a little bit of a crude quote, not that it’s bad language-
TWITTER QUESTION 2: What’s a top piece of advice you would give folks here to improve their culture or to create a great culture?
Jason: We’re among friends. We’re among friends.
Maria: But it’s just the idea of it’s a little bit crude. I think it’s from John Madden, which I think is football. It’s sports.
Jason: I think it was shoes, wasn’t it?
Winning is the best deodrant.
Maria: And I think that the quote is like, “Winning is the best deodorant.” And so, I have watched the best of brands, you look at their glass doors and they went from a 4.84 to a 4.2 when they weren’t winning, when the deals were getting harder, when they weren’t hitting the numbers.
Maria: And so, ultimately having a good plan and then hitting to that plan I think is the number one piece. It’s going to keep everybody happy. People are going to feel like they’re doing something with purpose. And, you know, the second thing I’d probably say is then having a clear purpose, so that when you’re winning it goes to that purpose.
Anthony: I was going to say actually purpose. And I think purpose fuels the values and sort of the how we’re going to operate together, what are the different operating principles, and how do we sort of bring purpose and values to life in our interactions.
Anthony: And so, I think in a world where there’s so many opportunities today, best of times, right, to join companies, teams and talent wants to really kind of work in places that are purpose driven and that aligned to their own values. And so, I think being explicit about it and sort of not just having values like up on posters on the walls, but something that people deeply resonate with and believe really goes a long way.
-Listen to People -No Surprises
Aaron: Yeah. I’d say culture is a pain in the ass to, you already have one. And speaking of a company where I have a co-CEO, and I’m virtual and they’re not, it’s just, it’s complicated. But two things I think is like, as long as people there feel like they’re heard, I mean, by the way, purpose I think is way overrated and confused, because everyone needs to find their own.
Aaron: And purpose gets boring after the first few months. Why you joined a company may not be why you stay. But to me, it’s like two simple things. I’m not sure they’re best but they’re probably the simplest. So, one is just make sure people feel like, like listen to people, especially people who might work for you. It just makes such a difference if they feel appreciated.
Aaron: And no surprises. No surprises is probably the simplest technique. Again, I don’t know if this is the best to increase transparency, but no surprises. No one likes surprises. CEO doesn’t like surprises. Employees don’t like surprises. It’s usually one way, but just help that more communication, right? It’s like relationships.
Jason: Well, let me do that one question and then we’ll open it up to the audience. But because a lot of us make this mistake in terms of, winning is great and the purpose is great. What do you do when you have someone, one of your reports that’s not on that journey, that is lightly toxic, right? Not so toxic that he comes in and like, burns, physically burns the office down, but what have we learned?
Jason: I think, years back, we were just learning SaaS, right? And we didn’t know that these companies would last decades, right? Now we know they last forever, right, if you nurture them properly, right? What do you do with that lightly toxic person on your team? Do you fire them the next day? Do you try and fix them? Do you take more time hiring than you used to in the old days? What’s the answer to the lightly toxic?
Aaron: I know that if someone’s not working out for one reason or another, and we just had this, maybe they’re lightly toxic, maybe we had someone who was promoted from a customer success role in our company to sales.
Jason: Does it work that way? I think the other way works, but-
Aaron: He wanted it. He was passionate about it. And-
Jason: We’ll come back to that question next.
Aaron: Yeah, I know.
Jason: That’s a good one from the audience. Does that ever work?
Aaron: Well, actually they go from customer success, they really know the product and they have the desire-
Jason: Yeah, but do they know how to close? Are they a good closer?
Aaron: Well, they had the passion.
Aaron: It didn’t work out, yeah.
Jason: How can I solve your problem? Maybe next month’s a good time to buy too. Like, I don’t want to scare you. How would I give it to you for free? How about 110% discount?
Aaron: Okay, digression. So, the next book is going to be called Predictable Closing. It’s all about how salespeople become too soft, but who knows when that’ll come out. But I think the point is, we gave him, maybe it’s a month. It was like a specific amount of time. We wanted to give him a chance and then it just didn’t work out. But it wasn’t three months, it was like a month.
Anthony: You want to give him a chance, but I think the risk is toxicity spreads and you know-
Jason: Fast, right?
Anthony: Very fast. And so, that’s why I think non-action isn’t an option either.
Maria: I think it too, is like, I’ve hired people that people have said, “Hey, they’re not great in an organization.” And then they’ve been great. I think the environment has something to do with it. We like to always blame the people. That doesn’t mean change your environment. Maybe it’s just the wrong company for them.
Maria: And so, it’s, you want to have the right team at the right time. But in any of these fast growth companies, the success is having those people move on to other places because you’ve had that success that now they can go into something new and different. And so, trying to plan for that, and know what you need in the organization, and then making sure that their succession plans, I think all of those things are sometimes undervalued and could really help in those situations, right? If you feel stuck and you have to keep somebody, you’re going to be making bad decisions. That’s on you, not on that person.
Jason: Yep. Have you guys seen, Aaron gave an example. Have you seen in your organizations this either sales to customer success or customer success to sales, and when does that work? Because a lot of founders think about this. They’re like, I love Jason. He’s such a good kid. But like, I don’t know if sales is going to be for him, I’m going to put him in customer success.
Jason: Or you have this customer success person. The customers love her, right? They love her and I’m not going to put her in sales. Then she would just crush my mediocre sales team because the customer like … Have you had experiences there?
Anthony: We’ve seen, actually, I’d love to hear your take on this. We’ve seen SDR folks that were sort of on the proverbial sales kind of path that opt out and say, “Hey, we think we’re more aligned to a customer success type of goal.”
Aaron: They could go anywhere.
Jason: SDR? It’s early in their career, right?
Aaron: I think it really, a lot of it comes down to their, what they really want to do. You can go any way they want as long as they’ve got that desire. I mean, there’s definitely paths that are more well-worn. I love, like to me, the best, sit back, go way back when at Salesforce, some of the best salespeople started as sales engineers, because they knew the product inside it out, but then they also had a real desire to go into sales. It was a real desire.
Aaron: And so, they had that ambition and drive to learn it. And I’ve seen everything, it just comes back to that, do they want it? How badly do they really want it? Or is it more of like, I think I should do this because there’s more money. It’s like that’s not going to work out if they don’t have the attitude.
Jason: Have you seen this, Maria, on BDR teams you’ve worked with or others? Have you watched this journey?
Maria: Yeah, I think we, all of us as we are hiring, we’re trying to get somebody with some experience. And so it’s really hard to get that first job. And so that’s why I think people are just coming out of school trying to get anything. They may know, hey, I like tech, or my parents were tech, whatever it is. And they’re taking any job, that doesn’t mean that it has to define the rest of their future. And I think we’ve all seen great conversions from one to the other.
Maria: I think in the situation that you explained, that sales engineer becoming a sales rep though, you’ve just put them, if they were sales engineering for two years, you’ve put them to a two year sales training program as they’ve watched the rep, like, how do you align to the team, so you do it efficiently.
Maria: Where it doesn’t work is I’ll have an SDR or somebody who’s early in career come and say, “Hey, I don’t understand why the company doesn’t offer a rotation program, and why can’t I work three months here, and why can’t I work three months here and see what I like?”
Maria: And we’re just not in this environment where we have the ability to often do that. And so, asking them to do the research, understand where they want to be coming to you with a plan. I think we take too much on ourselves. I see not only myself as an executive, but founders, for sure. You know it’s, I have to do everything.
Maria: I would suggest everybody give that person the work back and say, “Tell me how you’re going to do this. Put this plan together. Let me see the work you put into it. Hey, I want you to go talk to somebody else and refer somebody into that job because you’ve networked so much. Take some pressure off me and then I’ll give some to you.” And so, I’ve found a lot of success that way.
Employee Transitions, Sales to Customer Success/Customer Success to Sales: It does work sometimes. I would just challenge you, sales to customer, customers to sales, just assume it’s risky. And listen and pay attention to those metrics on a monthly basis, and don’t just evaporate, because I think it’s super risky.
Jason: I’ll just give you my purse for what it’s worth. I would say companies that have training programs, which are wonderful, I think that can facilitate these migrations, right? I will say, personally, my simplified SaaStr view is, say, under 20 million. I’ve never seen like, customer success to sales work, not once. And I’ve seen every founder want to do this. They all want to take the one that the customers love and try to put them into a closing role, right, even sometimes in support, right? There’s that one support person that’s so good at the product, and if only Scott went into sales.
Jason: I mean, it’s so appealing. As a founder, I’ve never ever, ever, ever seen this CSM to sales work. The sales to customer success, I see it sort of works, but sometimes, if they were even pretty good at sales, there’s like comp challenges, right? Like, it’s good in the beginning and they’re like, wow, am I … Like, my comp’s okay but my OT is half of what it was. And like, Aaron down the hall, he just drove in in that Tesla, he’s got the watch, he just got back from Cabo, and I’m on an 80/20 plan. Like, it started off great. But like, I’m making these guys happy, I’m not getting paid.
Aaron: Well, the hunters are going to want to stay in sales, the farmers are going to be like, well, I might want to go back to account management/customer success.
Jason: It does work sometimes. I would just challenge you, if you’d go either way, sales to customer, customers to sales, just assume it’s risky. And listen and pay attention to those metrics on a monthly basis, and don’t just evaporate, because I think it’s super risky.
Jason: One last question, then Debra, we’ll open it up to questions, but related to this, because I think this is helpful to folks. Talk about, Maria, you kind of teased at this. For building out your teams here, talk about promoting from within. Talk about, if you can’t even a stretch hire you made, that maybe outside the organization you could have brought in a better qualified candidate but you promoted someone from within because you knew them, right? And it totally worked for you. You crushed it. They accelerated. Any examples of taking the risk on promoting within versus without?
Maria: Well, go ahead.
Anthony: I have one example of that.
Maria: Go ahead.
Anthony: Oh no, no, go first.
Maria: If you have more than just you in the company, there is somebody you can give more responsibility to. I watch, every time I watch somebody leave an organization, somebody rise up and do more that they could have been doing before, then let go of stuff that was wasting their time, that wasn’t productive. And so, why wait till somebody leaves to have them jump up and fill in the role?
Maria: I think, give people as much opportunity as you can. What that takes from us is a lot of planning, right? You have to say, this is what you’re trying to achieve. You have to communicate to everybody so that they can be empowered to go do it. And then, you have to have good kind of rails on either side so that they stay within the lanes as they come and take that responsibility. But in every organization, there’s people that can more.
Anthony: I raised my hand because I’m an example of someone who was promoted from within. I came in like marketing hire number one and chased the ghost of being hired over for six and a half years.
Jason: Were you hired a CMO by Nick?
Anthony: Head of marketing.
Jason: Head of … and how big was Gainsight at the time?
Jason: 19, okay. So you had a ghost hanging over your head all the time.
Anthony: For years, and that drove me, right? So for me, I might be an example of someone in your business who you do take that chance on, and they’re pushing themselves because they know this is their career moment. Now, there are a lot of examples where it didn’t work out, right? But I think there is certainly a motivating factor for the folks on our team that we do sort of take the bet on, and that’s powerful.
Anthony: But then there’s of course the prevailing wisdom of, gosh, is this the right person for that next chapter? Somebody who had seen the story, that sort of thing. So, I appreciate that it’s hard, but as someone that fought against that prevailing wisdom, I think-
Jason: And how big a team did you ultimately build?
Anthony: 65 in marketing.
Jason: Okay. 65?
Jason: So from the first marketing hire and a big stretch to 65-
Anthony: Yeah, that includes SDR as well. Yeah.
Jason: And what were, since it was a fast promotion and you were a stretch hire, did you under hire in your early hires?
Jason: I see this a lot of times, the first time stretch VP, they want to hire, you’re not someone that would be threatened, Anthony, but they either get threatened or they get nervous, and instead of hiring someone more experienced than them, they go, I just want a content marketer. I just want to like, I want someone to do social and they don’t build out. They don’t try to convince Maria to work for him when there’s no rational reason for her to. So, did you under hire?
You can’t be affraid to hire someone with more experience than you.
Anthony: I think we did early. Phase one, it was like my job was basically managing all the agencies. I mean this was earlier-
Jason: Okay, well you knew how to do that, right, and they’d work for you.
Anthony: Yeah. So then, we started sort of replacing agencies with a few folks, but it was like demand gen and then we were over-indexing on events, and so we had an events person. It was the three of us for years. But the question’s a good one, because I think you can’t be afraid to hire someone with more experience than you if you’re not that person.
Anthony: Because I think if they’re successful, that builds your credibility internally as well as a leader, to kind of check your ego, I guess at the door and bring in great talent that can kind of build the cumulative kind of profile of your organization, your company. So, yeah, so we under hired early because we had to, but once budget opened up, we weren’t afraid to go get folks that were tenured and done it before.
Jason: All right, one last question. I’ve got to get you as a case study. And then Deborah, let’s definitely open it to questions. So you, Nick Mehta was Anthony’s boss. You can see a video they did together at this annual … Nick is an iconic leader. He’s a great person. But you’ve had this hanging over your head. You weren’t Maria, like, you didn’t know if you were going to be the VP of marketing or the CMO forever, right?
Jason: And we as CEOs, we go through this. How did Nick manage you? How did he manage your expectations without demotivating you? Did you see CMOs scurrying into the office and him taking meetings in conference room C without telling you? This is challenging.
Anthony: That’s horrible.
Jason: What? How would that make you feel?
Anthony: That would have been horrible. Yeah. That did not happen.
Jason: So you guys don’t do that?
Anthony: No, we don’t do that.
Jason: Don’t do stealth hiring on the side?
Anthony: No. Well, we did it in this case, thank god, at least it was super stealth, I have to say.
Jason: Super stealth?
Anthony: What was interesting with Nick is, and he has everything you just mentioned, a great, great leader. He asked me, so he upfront, he’s like, “Do you want it?” And then he’s like, “If we’re going to go down this path, I need to be able to give you feedback. So on a scale of one to 10, what type of feedback do you want?
Anthony: And I said 11. And for years he’d be like, “Hey, I’m going to give you some 11 out of 10 feedback.” And I had to take it, and sometimes it was freaking hard, and sometimes I didn’t agree, and sometimes it pushed me, but each time I realized that, to the earlier point, this is Nick’s vision for this business.
Anthony: As the CMO, I need to help bring that vision to life, and him believing in me, and giving me the opportunity to sort of receive that feedback, and decide how I was going to put it in action, that was sort of, I think the, kept the foot on the pedal in terms of both motivation and Nick ensuring that he was getting what he needed from marketing.
Jason: All right. Deborah, we got a question from the audience? You’ve got a good one?
Aaron: There’s one up here.
Jason: Yeah. Just make sure it’s a good question.
Jason: Sales or marketing? Yeah.
AUDIENCE QUESTION 1: Sales or marketing.
AUDIENCE QUESTION 1: How do you feel about remote work when it comes to sales reps in the SaaS space?
Maria: Remote work is not about the individual all the time. Somebody comes to me and says, “My manager is not letting me work remote,” or, “I can’t work from home and I know I can do it.” I think it all has to do with the manager’s ability to manage it, as opposed to the individual’s ability to do it. If the manager can’t, doesn’t have the plan, is off the … it doesn’t matter how good that person is in the field, it doesn’t, it’s just not going to translate.
Maria: And so, but often the manager can’t articulate that. They don’t know how to say like, “Hey, I’m not good at this, so that’s why I’m telling you no to this or that’s why this doesn’t work.” And so, being able to manage up, give some of that feedback, say, “Hey, I think this is a skill you need to build out.” I rarely see it. And it can be the individual, they need the discipline of it, but if the manager who can manage remote team knows how to see for that, and manage that, and then should just be giving that direct feedback.
Aaron: I’ve had a lot of companies or clients say, “I’m only going to hire remote workers if they’ve already proven be that they can remotely work. Because if I hire people who haven’t done that, who want to do it, it doesn’t work out.” That’s just what I hear. I’ve heard that a time and again. Be careful.
Jason: I think my mental learning, I remember the first revenue team, when JD went to Trello in the beginning, he’s like, “My whole marketing team’s distributed.” I’m like, “What?” I’m like, “I get that we kind of have figured this out with engineers and it’s still hard, right?” For engineering teams it’s hard, but we got there earlier and he’s like, “My whole marketing team,” he’s like, “This is crazy.” He’s like, “This is how Michael and the team went and I thought it was crazy.”
Jason: But what I’ve learned since then in the five years is we all have to get ready for this, and I think sales teams are going to be the last of the functional areas to go distributed, right? I mean you manage your team from another state, but it wasn’t distributed, it was just remote. Remote is not distributed. We all got good at remote about 20 years ago, okay? We had an India office, we had a Utah sales team.
Jason: But the way we all did that as we had someone that we trusted that we threw in, and go into that country, and that’s no different than an EMEA office as a Salt Lake office. So, that’s not distributed. Distributed as crazy. It’s like, I’m going to hire a hundred sales reps and they can work wherever they want. And sales is so collaborative. It’s so like learning by osmosis. It’s so like, latent stress. It’s so like, make the plan for the week and the thing, and how are we going to do that on Zoom? Right?
Jason: And I don’t know-
Aaron: Some people do it, but it’s hard.
Jason: But if you can’t figure it out in the next five years, I think you’re going to fail. You cannot, and you’re absolutely going to fail in the Bay area. It is so expensive here and complicated. And if you can figure this out, and then what happened is everyone in SaaS, especially in sales, they’re like, “Oh, we’ll go to Atlanta.” You know what unemployment is in Atlanta for sales today? Minus 7%, okay? It’s worse in Atlanta. It is worse in Phoenix. It is worse in these so called secondary markets. It is now worse than Salt Lake than it is in the Bay area. It is worse.
Jason: So, there are no secondary. You got to go to like, I don’t know, Tulsa or I don’t know, maybe Key West. And they’re like, how deep is the talent pool in Key West? So, because we’ve exhausted these so-called … we have to learn how to build distributed sales teams. And I don’t know, if someone’s great on this, raise your hand and come speak at SaaStr annual, because I’m trying to learn this myself, even with my little team. How do we do … It’s hard.
Jason: And we grew up in these collaborative environments where we would work together and we would share learnings in the hallway, right? And it’s exhausting. The amount of overhead in a company to manage a distributed team is so high. It is so high. It’s not only the tools, you have to over-communicate and then it’s really hard. What I’ve learned watching other folks now and doing it is, priorities are really hard to communicate. Like, people get confused when you’re remote. The CEO says SaaStr scale is really important that everyone drops everything, and it’s not that important. Okay? It’s just a thousand friends getting together.
Jason: But I don’t know. But if you’ve got to learn, if you want to go long in SaaS, you got to figure this out and then you can do what we figured out in engineering in the last five or seven years. You can run the playbook because you can recruit people from everywhere, right?
Jason: And we learned that my number one rep at EchoSign, who’s now the number one rep at Outreach, was completely remote, right? Nothing, like, literally worked from his study, usually he wasn’t fully dressed, okay? He would just roll downstairs into his study in his sweats, in his t-shirt, but he was a monster closer and he was our number one in it. Outreach, he’s done like over a million a year every year he’s been there, or more.
Jason: What’s that? I’m not going to tell you. Reilly Devine. But that was my first-
Aaron: I did think-
Jason: But I didn’t know how to find 50 Reillys. But if you want to be a great leader and you can find 50 folks like this, you will crush it versus all the primadonnas in the Bay area, right, anyone that’s just going to go from Gainsight, to Anaplan, to Marketo, to Twillio, that does an 11 month run. I mean, you don’t want that, do you? You want four year people, right?
Aaron: Yeah. I think too, there’s extra challenges when you have, for example, SDRs, like newer people who aren’t as experienced, who don’t really know themselves.
Jason: Really hard.
Aaron: And so, I don’t know if that’s going to work. I know that one of the … Yeah, he’s like, yeah, that’s me. But I know that we, even in predictable revenue dot com, are getting sort of building remote teams for people, because it’s complicated.
Aaron: So, I think there’ll be different ways to create that distribution. It’s just, it’s a lot to do all by yourself and again, there’s some places it’ll work, like more experienced reps and some places I don’t think it’s going to work, like new reps. They need to be around other people. They have to be.
Jason: Still, I think if you can develop it, it’s a superpower. It’s just a superpower in 2019
AUDIENCE QUESTION 2: It’s a question on sales development. There’s research in challenging the customer that now there is the purchasing committee in B2B, and then companies are already past the awareness phase, and then hovering around decision phase. How do you guys see, say, outbound sales develop and evolve five years from now, pure call outbound sales?
Jason: What’s the future of outbound for the next five years or what’s changing or is it-
AUDIENCE QUESTION 2: Yeah, for the next five years, how do you see it evolving, the outbound SDR role or outbound sales development, where a company does not know about-
Jason: I’m hoping for more unpersonalized emails.
AUDIENCE QUESTION 2: It’s a question on sales development. There’s research in challenging the customer that now there is the purchasing committee in B2B, and then companies are already past the awareness phase, and then hovering around decision phase. How do you guys see, say, outbound sales develop and evolve five years from now, pure call outbound sales?
Maria: I’ve been saying that a lot.
Jason: I’m hoping for more, dear, blank, buyer. I think that’s just really going to work five years from now, in 2024. That’s going to like-
Aaron: It’s when the merge tag doesn’t work and it says, “Dear first name.”
Jason: Yeah, date, yeah.
Maria: Dear first name is our number one lead driver at all the companies I’ve been at.
Anthony: That’s right.
Maria: I’m kidding.
Jason: I have no idea what the … What does it look like over the next five years? What’s changing?
Aaron: I mean, I can tell you. So, it’s kind of like marketing, in the sense of, first the marketing is out there, it worked, and then it just gets busier and busier. There’s more apps, there’s more channels, there’s more content. Same with outbound. There’ll be more apps, there’ll be more channels, more content, more confusion. So, how do you stand out from the noise?
Aaron: So a lot of it’s come down to, From Impossible book, nailing your niche. Do you know your ideal buyer? Do you know why they care about you? Do you have a way to reach out to them, whether it’s through email, or LinkedIn, or carrier pigeon, that they can interest in a conversation? So, the noise is going to be the uber trend for the future, more of it.
Aaron: Also it’s confusing to your salespeople, because salespeople are like, who do I talk to? I mean I got, there’s all these targets and I, what do I do? I’ve all these case studies, and all these things, and too many apps, right? App overwhelm most sales people. So, confusion and overwhelm on the buyer side, confusion, overwhelm on the sales rep, SDR side.
Anthony: Yeah. I think for us, if we looked at the world through inbound and out, looked at the data from inbound performance versus outbound, it’d be somewhat misleading, because those, some of those outbound touches into folks that might’ve been to an event or downloaded a piece of content that might’ve been like the kind of right place, right time to capture that conversation, that might’ve had some context nested in inbound, but like effectively was that outbound call that drove the op.
Anthony: So, I think there’s still a massive opportunity and honestly I’m learning from these guys on how to actually do it, but I don’t think it’s going to be going away or anything along those lines.
Maria: The other thing just there, like, I see, when somebody comes to me and says, “Hey, we did this through like just pure outbound. Marketing wasn’t involved, whoever else wasn’t involved.” I’m like, that sounds awful. That sounds so inefficient, like it wasn’t somebody in our name list that we had warmed up with some branding and who knew who we are. We hadn’t told them anything about our pains. We’ve never seen them anywhere. And you just uniquely decided that, hey, this is a good prospect.
Maria: I mean, that’s where you get into these fringe deals that don’t align to what you’re really trying to sell and now you’re pulling your engineering resources. I mean, the reason we have sales and marketing, the reason we don’t just do it all with distributed sales teams is because marketing creates an efficiency on the front and you have to figure out how much of that efficiency you can gain.
Maria: And a great example of that that we all know is Zoom with their billboards, right? We know that brand and that is an efficiency that’s then helping that sales team. And so, just try to know who you’re selling to, and then try to get some things out to them, before doing, trying to think of pure outbound, it’s highly inefficient.
Jason: My one, I wish I was, I am a student of outbound. I’m not very good at it, still am not. But my one observation from the companies I work with and otherwise is, going to Anthony’s point is, two things I want to get to in these points.
Jason: First of all, buy every vendor that’s here in our expo. Go buy all their products. They all are amazing. But you have to use technology right. I see reps becoming lazier and lazier, and I do want you to use Mixmax and other products to set up your cadences, and use all these products, and use Gainsight to manage your customers, but that doesn’t mean you don’t have to do the work.
Jason: And I see this horrific thing happening where people use these incredible tools that are much more sophisticated than they were five years ago, right, they’re so much better. But I recently met a customer success leader that I was interviewing and I’m like, how would you approach, like at SaaStr, we have a hundred core sponsors. I said to him, “How would you approach this?”
Jason: He’s like, “Well, 10 I would go talk to, and the rest, the other 90 I’m just going to deal with technology.” I’m like, F. Okay? We have 100. This is not 10,000. The right answer is, I’m going to use technology to identify … I’m going to visit all of them, and I need three people. And I’m going to visit all of them because these are decades long relationships.
Jason: So that was laziness on the customer success side and I see it on the sales enablement side all the time, like the laziness is an excuse. But related to that, the reason that I think it’s a double fail is what Anthony said. You know, Okta said the average enterprise now has 140 SaaS apps deployed. The average, 140. That probably means they’ve tried more than 140, don’t you think?
Aaron: That they know about.
Jason: It probably means they’ve piloted at least 280 or 512 and they have evaluated 1,000. SMB numbers are harder to get with, but it’s like 60 or 70 for SMBs. So the problem with folks, veterans you hire is they’re using this old playbook that assumes customers are idiots. Okay? It assumes you can convince a customer to buy 1,000 seats when they need to. It assumes you can not even do a pilot. It assumes that pilots, pilots are bad, that trials are bad, that downgrades are bad.
Jason: Like, outbound has to evolve to show incredible respect to veterans. It has to treat every buyer as the most sophisticated buyer that knows exactly how to buy a SaaS product. And I don’t know exactly what that means, but it sure means beyond ABM. This ABM idea of like targeting, it was a good idea, but we just built in a whole another set of tools, didn’t we? They’re not magic, are they, these ABM tools? You think they’re magic?
Maria: No, they’re filling a deficiency for more tools.
Jason: They help, right? You have to go further. Veterans want to be talked to like veterans, right? You know, you wouldn’t, you go up, and whether it’s email, or a phone call, or a webinar, or a white paper, the tools are going to be the same, right? It could be a zoom instead of a GoToMeeting. It’s the same thing. But treat them with respect, treat them like sophisticated, and let them buy the way they want to buy, right? Including, let them be prospected the way they want to be prospected.
Jason: And I’ll give you an example. Like, we almost bought a product at SaaStr this month, okay? It was $18,000, which we can afford, but it’s not zero for us, and it has to come out of someone’s budget. This rep, this seasoned rep, he refused to give my head of marketing a demo. It wasn’t worth his time. And he increased the price from 12K to 18K during the buying process because he said the discount expired, which she didn’t know about.
Jason: Like, how do you think that went over? Like, we may still buy that product, but not in August. It’s not going to go in his, and that’s only a small example, but that’s treating us like idiots. Okay? Really like, like basically, my head of almost everything at SaaStr, you won’t give her a demo for 18,000? Like, back in the day, we thought $18,000 was a huge deal, right, 10 years ago. Now it’s a snack. Now it’s a Dorito, right? But it’s not to the customer.
Aaron: He’s really that busy?
Take a look at your playbook, no matter how good your team is, and if you do nothing else, look for disrespect. Look for games. Look for sales games. Look for shenanigans. Look for lies. Look for FUD the wrong way. That stuff did use to work, and it’ll still sort of work, but it won’t build you into a Zoom brand. It won’t build you into a Gainsight. It’s not going to happen if you do that step. Better to give up a few nickels today, close the deal faster, and keep a customer for 20 years. -Jason Lemkin
Jason: $18,000 is a lot of money, right? And it’s going to come out of our profit sharing in our team. And treating them with a lack of respect or with the old playbook, so I think all these sales playbooks need to be thrown out right now, and the customers have to be treated with respect.
Jason: And that’s what I would challenge all you CEOs to do. Take a look at your playbook, no matter how good your team is, and if you do nothing else, look for disrespect. Look for games. Look for sales games. Look for shenanigans. Look for lies. Look for FUD the wrong way. That stuff did use to work, and it’ll still sort of work, but it won’t build you into a Zoom brand. It won’t build you into a Gainsight. It’s not going to happen if you do that step. Better to give up a few nickels today, close the deal faster, and keep a customer for 20 years. Right?
Aaron: I got, I would say respect. I think what I see is that a lot of buyers, most of them are just, everyone’s overwhelmed and busy getting so much information. And they’re like, to take, again, if there’s like a strategic project, they might really dig into it, but a lot of other things are like kind of, they wouldn’t say this, but I’m going to paraphrase, just tell me what to do. Just kind of make it simple for me to understand what I need to do. If I trust you, great. If I don’t trust you, it’s going to make it, but just tell me what to do. What should I buy? How should I use it? How do I deploy it? Just make it as simple as possible for me to just do this.
Jason: Yeah. That does not include having a 15 minute call or coffee with an SDR or BDR, does it? Does that make my life easier?
Aaron: It can.
Jason: Does a break up email make my life easier? I’ve sent you 12 emails, Jason, and the 13th is the last one I’m going to send you for a vendor you’ve never heard of, that I don’t know what you do. That doesn’t make my life easier, does it?
Aaron: Ironically, no, but I would say a lot of people, people say they want to buy a certain way, but that doesn’t always match their behavior.
Jason: That’s true.
Aaron: Because people will respond to stuff, but yeah.
Jason: One last thing and then we’ll take one more question. Then we’ll break so we get to the next session.
Aaron: You can’t take their word for it. It’s like Steve Jobs. You can’t rely on customer to tell you what they want.
Jason: Aaron had a really good insight, which I wish I’d fully understood as a CEO.
Aaron: Sure, yes.
Jason: Which is that, but it’s true, especially the enterprise, your buyer, your core decision maker’s only going to deploy one or two new apps a year max. Right? Even as a CMO, how much time do you have to make a big frigging bet?
Aaron: Maybe once.
Jason: Yeah, maybe one a year and sometimes less. But in these big Fortune 500 companies, their incentive in innovation to bring in, but it’s like one or two a year, but they might buy more. But if you’re the one or two a year, they’ll do the RFP, they’ll do the bake off, they’ll ask 100 questions, they’ll do what we’ve been through.
Jason: But today you could be vendor three through 10 that year and still crush it, but you got to like, they have to instantly, they have to be no objections, no issues, no terrible raising the price during the deal. No dumb thing of not answering my questions. No like, I’ll only let you do a pilot if you give me this.
Jason: Because I don’t have time, like for three through 10, right? I have to know instantly-
Aaron: If there’s any scene in the gears, I’m just not going to give it to you.
Jason: Instantly, I’m out because, and don’t confuse apps three through 10 with one through two, right? With Anaplan or even Gainsight, like, great apps, but I might take my time, right? Because these are big deals, I think, for the functional areas. But for most of you, you’re three to 10.
Aaron: I’ve got a lot of people to inform and…
Jason: Yeah, this a big business process change, right? But if you’re not huge business process change, that’s what you need to know. Are you core business process change or not? You better be their best friend, right, if you’re not. Be like Zoom, right? As great as Zoom is, this is not fundamental business process change, okay?
Aaron: It’s simple.
Jason: Yet it’s the fastest growing task app that we have. All right. Deborah, are we out of time?
Jason: You want one last question?
Jason: Okay. It’s a lot of pressure for the last one. It has to be good.
AUDIENCE QUESTION 3: So this is a little bit of a follow on. We’re seeing that the marketplace is becoming like more and more noisy, right? There’s tons more SaaS companies, spam calls, robo techs, like all this stuff. My question is for marketing. Do you see marketing taking on a bigger role, and maybe not replacing SDRs but having more ownership in that initial part, where it’s not just awareness, but you’re doing more because it’s becoming more difficult for SDRs to get in the door. What are your thoughts?
AUDIENCE QUESTION 3: We’re seeing that the marketplace is becoming like more and more noisy, right? There’s tons more SaaS companies, spam calls, robo techs, like all this stuff. My question is for marketing. Do you see marketing taking on a bigger role, and maybe not replacing SDRs but having more ownership in that initial part, where it’s not just awareness, but you’re doing more because it’s becoming more difficult for SDRs to get in the door. What are your thoughts?
Maria: Yeah, I think all of us is we think, whether we’re in marketing, and sales, and SDR, we need to think of revenue as one sales and marketing motion. This whole nonsense about sales and marketing alignment needs to just go away. Like, we are going to the exact same place and if we can’t agree on how all of us are going to drive over to whatever Target. It’s the one place where we have the exact same goal. There should not be friction there, and if there is, I would get to the root of it.
Maria: For a marketer, there should be much more friction between marketing and like the CFO, who’s giving out the money, or maybe HR where you have the pressure to hire quickly, whatever those are. And so, what the team needs to do, and I think you start with a lot of voices in the room, and you really try to hear them, and say, “How are we going to get this done”
Maria: And you have to know your product, and you have to have a clear definition of who you’re selling to, or be willing to narrow it enough so that you can do some trial and error to figure that out. If you’re really small and you’re going to look in everybody’s Rolodexes and say, “Who do we know, and who can we just take down, and let’s all get hands in here.”
Maria: And I don’t think that’s just for a small company. I would encourage larger organizations to think that way as well. And then you can decide, hey, is this a deal where sales development is going to be critical, and then go hire really amazing sales development reps with experience, because you just said it’s critical, and let them make that job important.
Maria: It’s like pipeline building is like the ugly job of sales, it feels like, when actually it’s the hardest part of a deal. Why aren’t we embracing it? Why aren’t we celebrating it? It’s because we’re not thinking about the overall go to market and saying what’s important for us.
Aaron: By the way, the thing is a lot of technology is making the SDR projects lazy. That sense of, managers will be, hey, just get outreach or sales loft, and go back to the same old, just send more email, just make more calls, rather than, if they’re not doing it, they’re sitting down and just coaching SDRs for two months, who the customers are, how to speak, make them really smart about the markets and the customers so they can think for themselves. They’re getting treated as robotic button pushers because we’ve got too much technology.
Jason: Because we’re out of time. I just want to hit one last thing, because I think you asked what should marketing own? And Anthony just said he had 69 reports.
Anthony: That’s right.
Jason: So, you took over all the SDR function or most? There was no BDR, SDR line, they all reported to you. You had no classic sales experience, right, other than your early job selling sunscreen or something. So, how did you, just quickly, because we’re over, but how did you guys decide that that all should be in marketing?
See Scale Session release 2/18/20: “The Playbook to 10 Things a CEO Should and Should Not Expect From the CMO with Anthony Kennada and Maria Pergolino”
Anthony: Yeah. And we’re going to talk about this actually on the top of the hour as well.
Jason: Yep. So, let’s do a 30 second one and then we’ll go upstairs and do more of it.
Anthony: Yeah, I’d say two parts. The reason we wanted it in marketing is, we wanted to be the champions of that job and to help them get trained, enabled, and effectively move wherever else they want to go in the organization. But at the time, sales was focused on closing. Sales was not prospecting-
Jason: The closers close, right?
Anthony: Closers close. And we’re like, well, we’re generating all this activity. We’ll take it down the field a little bit further, and then warm them up and make sure they’re ready for sales. And so, we raised our hand and said, “This is indictment on our work.” So we want to own it and be able to work with sales and sort of a servant leadership perspective, put them in a position to prospect.
Anthony: But the second thing I was going to say, and this is a big part of what we’re going to talk about is, as products are increasingly becoming sort of commoditized, there’s so much out there, brand is what’s going to win. And I want to be the one and two on Jason’s list and not the three to 10, and that’s where I think marketing can play a role and help put our SDRs in a position to perform.
…when you do go to hiring your first head of marketing or even your second, in today’s world, if they’ve managed an SDR team or a BDR team, all things being equal, hire that person. -Jason Lemkin
Jason: And one last thing and then we really should break. We’ll have these great sessions you can talk with more. But when you do go to hiring your first head of marketing or even your second, in today’s world, if they’ve managed an SDR team or a BDR team, all things being equal, hire that person. Okay? The set of management skills, the set of fluidity between sales and marketing that they’ll understand, versus someone that never had that experience, it’s okay, you can learn it on the job.
Jason: But boy, when I meet a marketer that’s also managed some part of this SDR bit, I’m like, hire her, because that extra set of knowledges is … And then, the other thing you get if you’re early is worst case, they can be that manager for until you find the right person. And if your sales person, some sales teams want to own SDRs, some want to own some of it, and some folks just, I just want to be closers.
Jason: And you get like the super power if your marketer is flexible and she’ll own it for now, but maybe not forever. But if you don’t have that DNA and the salesperson just wants to close, you’re going to have this gap that, that’s minor. Anyhow, talk to the rest of the team. They’ll each have their sessions in a few minutes, but thanks everybody. Talk to you in a bit.
Aaron: Thank you.
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