a16z Podcast - a16z Podcast: The Why, How, and When of Sales

Episode Date: April 8, 2016

The hallmark of many great technical founder/CEOs is that they envision a better way of doing things, and that's why they're building a company that delivers on that better way, often disrupting the way things have always been done before. But this very mindset can backfire when it comes to sales. Why shouldn't they reinvent the sales process?? On this episode of the a16z Podcast -- with a16z's Mark Cranney (head of our sales and market development team), Lars Dalgaard, and Ben Horowitz -- we cover the why, how, and when of sales: why do we even need sales when "a really good product sells itself"; how to organize the sales function depending on what you're building (especially when what you're selling is continually changing); and when to bring on that first sales hire. Finally, how do we wrap our heads around sales culture, competition, and commissions in startups? It doesn't help when everyone in the company -- not just sales reps -- are the ones building the very thing you're selling ... so why the special rewards for sales? It isn't fair! Or is it? All this and more in this episode of the pod. The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments and certain publicly traded cryptocurrencies/ digital assets for which the issuer has not provided permission for a16z to disclose publicly) is available at https://a16z.com/investments/. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.

The content here is for informational purposes only, should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. For more details, please see A16Z.com slash disclosures. Hi, everyone. Welcome to the A6 and Z podcast. I'm Sonal, and I'm here with Mark Cranny, who heads up our sales and market development team, Lars Dahlgard, and Ben Horowitz. And today we're talking about the why how and when of sales. Everything from how to structure your sales organization, depending on what you're selling, to when to bring on your first sales hire. Sometimes the very thing that makes founders start a company, they want to change the way things are done, can backfire if they're applying it to establish processes that work, like sales. Or maybe you're rightfully worried about how to compensate salespeople, especially with commissions, when others in the company also contribute a lot to making that product to sell in the first place. So how do you approach

this tension, how do you deal with jealousy around commissions? And why shouldn't founders reinvent how things work when it comes to sales, especially when that mindset is a very thing that's made them start a company in the first place? We kick off the conversation with how some technical founders sometimes approach sales. Well, I think that, you know, a lot of technical founders just don't have any experience with sales. And there's an awful lot to it that I think that if you kind of just sit in your room and, you know, theorize, you're going to get very, very wrong and we've seen many founders have theoretical models for how they would like sales to work and those have tend to be been like extremely unsuccessful because you know there's a lack of kind

of practical grounding and like what it means to sell something you know not just to an individual but to a large complex organization with a very I would say hard to understand decision-making process. Cranney, I once heard you say, I think the best line I ever heard you say about this is that selling to a large enterprise is like getting a bill passed in Congress. And it's probably one of your most famous lines. What was the genesis of that? Why is it so complex? If you think of, say, a Fortune 500 or a Global 2000 company, these are big, bureaucratic, political, complex organizations that are difficult to navigate in. And you've got to win a lot of different groups in a large enterprise-wide type campaign to really get all of a customer's wallet or the

most potential that you can with an enterprise-type solution. So to simplify it, if you just looked at a big account in three lenses, you've got users, and then you have the managers of those users and a lot of different business units. And then at the top, you've got more of the C-X-O-type people that are getting involved in large deals. And every one of those groups has a different set of buying criteria. One of the reasons I think some of the founders, particularly technical founders, are slow to understand the need for sales, is that the products these days are so good in a lot of cases. Exactly.

That they're able to start by getting users at that bottom tier. You know, they're easy to deploy, great feature functionality. They can get, you know, individuals and or small groups on board. But when that starts to spread in the organization or after the startup has landed, it becomes tougher to expand as they get trying to get to get to other parts of the organization. So they can go on for quite some time and be successful landing. But the key is, are they going to be able to expand and are they going to learn how to go to market with those other two groups, the user managers as well as the CXOs? Because their criteria is completely different. You know, the CXO is going to be more financially oriented, how it maps up to the overall strategy. and initiatives of a company down below, it's like, you know, can I get my work done better?

Yeah, so let me just push back on that for a second, because if I see an amazing product that's going viral in the enterprise, why wouldn't the CEO just like pick up on it and say, oh, I want to adopt this all across the board? Like, why do you need this extra overhead of sales to help push that through the hallways? It's typically because there's, you know, they're set up to reject. It's like there's a rejection organism based on politics, other decisions, standards, security, things of that nature, as far as how it affects everyone. So as well as how the money flows inside these big companies like it does in Congress, right? Just because the House passes a bill doesn't mean that's going to become a law.

And that's kind of why I made that comment originally is, you know, you can go through the whole process all the way to getting signed by the president, but it could still get kicked out and thrown over the Supreme Court. And I've seen that happen. Maybe people are confused how many sales reps are at Facebook and Google, thousands of sales reps in both companies. And I think people must realize that all the world's greatest companies have a fantastic sales force. I wrote a big blog post around coin-operated idiots. And the reason I called it that is because it's stunning to me that there are people that literally say that in Silicon Valley, that is Salesforce coin-operated idiots. However, these people are the people that can inform you about what's going on with your customers unlike anybody else.

the salespeople are in front of customers every day. That's what they do. And if you don't bring them into your organization, you're missing out on one of the most important things you've invested in the company. Having product managers sit in the closet, as I like to say, and not benefit from non-a-end customers,

but they're real buddies that are out there talking to customers all the time, understand their interpretation of what product will actually sell and what product will not sell. Which one is something? That's a huge loss for an enterprise. Yeah, there's sort of a cash 22 here. we ourselves talk about investing in technical founders and product-driven CEOs.

Isn't part of what we're looking for for CEOs to have a sense of that roadmap in their head already without needing to have to get all these inputs, that vision? I mean, I'm thinking of an example, a classic example like Steve Jobs. Like, did he really ever listen to what his customer said? Well, yeah, I mean, so he's famous for saying that they don't know what they want and we will figure it out. But first of all, I don't think there's a lot of Steve Jobses. I think that there's people that have talent different areas, but he was a pretty unique person, why miss out on the opportunity to benefit from you hire great sales reps?

In our case, we had 1,000, they can give you an amazing amount of data that you cannot get otherwise. And so I made it a rule that product management would never have a meeting discussing roadmap without having sales reps in the meeting. And they have a different temperament combining with the rest of the temperament of the organizations. And one of them is that I think product management, which I love and is, important and essential for a company has a different sense of urgency than a sales force has

because a sense of urgency that a sales force has, we need to go sell something now. And so, of course, just making the whole roadmap about that becomes a problem. But you can definitely use that in meetings that get stuck run by product management, where you can fall in love with new technologies, ideas you had in your own head that nobody actually cares about. And so getting it validated instantly by the Salesforce, I think, is a massive thing to take advantage of. The other thing I would add is like if you look at Apple's products and their product position and you look at their success in the enterprise versus say Microsoft, which is selling

competing products, I would argue Apple's undershot their potential with the products they have by probably 100x. So if you're a company that's only selling products for money to consumers, which is almost no companies in Silicon Valley. So that is if you're selling, giving a product consumers and selling advertising to companies, or if you're selling products to companies, then that's when you need sales. And I think that, yeah, absolutely, if you're only selling products for money to consumers directly, that's a different situation, but that's a very rare situation. So that brings it full circle cranny to your point about it being like selling a bill in Congress.

I think there's a misconception about, you know, sales in general that they're there to kind of to communicate the value of the product that's been built when in reality they're there to create value for their customers. And the way they create that value for their customer is with a very deep knowledge and understanding of that customer's, you know, strategy, what their initiatives are, what's in place from a people and a process and a technology standpoint. You see, most enterprises, particularly when you're dealing with a startup or a new kind of technology or a new way of doing business via software, the customer doesn't know how to evaluate that because they don't know

exists. And the purpose of the sales force, as well as marketing from an air cover standpoint, is to help make that prospective customer understand there's a better way of doing things. And that only comes from a deep understanding of what's going on inside these big companies. And you don't get that sitting in a cube in, you know, San Francisco or Silicon Valley. You get that from walking the halls of these big organizations and really understanding, you know, what their initiatives are and how you're to be able to map up what your product could do for them. And then you have to go through this sales process of, you know, a lot of discovery, really understanding what that, you know, what's going on in that, that customer's business as well

as you're typically going to have to go through some kind of technical validation event. And you can't necessarily rely on the customer to tell you how to evaluate it. The sales force is there to help them through that whole process. As well as the last pieces, you know, which is really more. focused on that senior level, the CXOs, is what's the business case, right? And why should they invest in this, not only versus other technical solutions in that particular space, but why should they invest the time, the money, the energy, and the resources to go do anything with whatever you're selling versus all the other things that could be, you know, using their capital with?

Well, let's revisit a point that you guys all mentioned, which is this notion of a cultural difference in the mindset. Lars, you talked about the coin operated. idiots. I know that you say it's a phenomenon, but I don't believe that every technical founder believes that. They actually want to hire a salesperson, but maybe there's a fear that that's going to change their culture. Can you talk a little bit more about the cultural integration of, you know, engineering and sales? Yeah, so I think this is an area where you need to open your own mindset. If you want to be a strong CEO that can lead a complete and comprehensive company that has all the strengths that you can benefit from and building a real team, then you need to open your

mind that a sales person and a sales manager might not behave and think the way you did when you were in undergrad or grad school doing CS. But that's the strength. You don't want a CS person necessarily. That's not necessarily your target. You don't want people that are exactly like you. Of course, you can have a basic cultural value concept of treating people with respect, for instance, which was one of our values, and that you need to truly take care of customers. And that's what matters. But if they have a different personality, they live in a different way and they have values around how they make money that's different than yours, that's okay. You need to open yourself towards that concept and you need to include them in your culture and you need to find

them. You don't want to dilute out anybody you can find that you like how they think and talk and what their story is so much so that they don't have the true powers of what a salesperson is and what they're excited about. And so I think it's super important for all roles. but particularly sales, that you are very open-minded around how they can come in, even though they think and operate differently. That's a choice they made. You're hiring a person that's doing something different. You're looking for a compliment, not someone who's like you.

Like what motivates a salesperson? I think, I mean, I have a particular profile. I've recruited to do my whole career, and that's going to vary across different types of sales force. But if you think about the progression of a company, you know, what they go through, early on, if they have something that's really unique and differentiated, you know, there may not be a lot of competition. So there may not be the need for that sells, you know, because users are adopting it's kind of a bottoms up type approach. The need may not be there. But I think CEOs might be being pretty short-sighted that there's not going to be competition down the line, particularly as they try to expand inside an account.

So one of the first criteria I always look for was how competitive was this person and what, you know, what they'd done in their careers to really demonstrate that. And it typically goes, you know, pretty early into their career. So competitive, high courage, focused discipline, people that have a little bit of charisma, you know, a lot of intellectual horsepower and can think quick down their feet. And people that can take a beating, right, that they can actually go in and take a lot of failure to get to some success. And, you know, you can see that, you know, in their track record in the selling side. But even earlier on, you typically see this in a lot of things like, you know, junior military officers, team sports, things of that nature. So the competition is probably the biggest thing.

Can they get in and compete? And it's not just necessarily competing against another person in your space. It's competing in that, you know, selling situation for all the other things these big companies could be doing with their time, people in capital. Well, I think that's right. I think that the other thing that we run into sometimes is people will say, oh, well, you know, in my culture, I don't want people to get commissions because our engineers don't get commissions. And I think that is kind of very naive view of, for starters, the marketplace. So if you had a cultural philosophy that you wanted everyone to stay 20 years and you said, okay, I'm not going to hire anyone who doesn't have a 20-year vest, that, you know, would be.

be a good idea in a vacuum, but in the market where every other company is offering a four-year vest, it would make it hard to get the very best engineers. And if you think about the very best salespeople, the very best salespeople on a commission plan can make over a million dollars a year. So if you go in and say, well, my philosophy is that you as a salesperson can't have commissions because other people don't, then if I'm the very best of the best salespeople, and I can make a million dollars by delivering real value to the company at company A and at your company I can make $200,000. Which company would you join? So I think that you have an adverse selection problem where you automatically attract the worst salespeople, the people who don't want

to be paid for performance will be the ones who join your company. I've certainly seen that with people who try to attempt to basically go against the market. without a real strategy or understanding of what the market is. Yeah, and I think another thing you can fall in love with there is one rep does one big deal. That doesn't really mean anything. I mean, sales is a hard job. It's very easy to think that because a couple of reps do some big deals, now you've figured it all out. And let's move on to the next thing.

People get very excited when they see one big deal, even as venture capitalist. It scares me a bit. Did you just go in custom pitch and custom build the product? And now you have this big deal. Hallelujah. Who cares? How is that going to scale? How's that going to be a massive brick?

mountain as opposed to one big ply wall that just falls over. So I'm attracted to that, and I'm attracted to people who can do that. I think they come from many walks of life to answer that question. I agree with Granny. You can get some awesome people from the military. You can have people in your professional services organization that thought, hey, I see what they did when I'm out there implementing the product. I can do that better.

So they have the competitive skill set, but they want to do it. And they end up having a fantastic solution sell because they really understand the product unlike you can learn from a training when you've done it yourself. I've seen engineers that thought the reps made too much money, and we had to have a statement set of success factors was, you think you can do it. You're welcome. We're hiring reps.

And some of them failed spectacularly, and some of them found a whole new living for themselves. I think reps come from many walks of life. It's the commitment to winning. And I also think that some reps that are successful in one organization, like super successful, might not have any success in a different company. It's a very different thing, depending on what you're selling.

And I also think that reps that are very successful early on the company shouldn't feel bad if they're not successful later. It becomes very different from being an evangelistic sale and having all the leads and then later being one of the scaled reps in a territory that's kicking ass. You're all mentioning this notion of a competitive spirit, which I think characterizes any good employee. Yes.

What's unique about the sales person's competitive spirit? And frankly, why does that really justify this besides a market value that need for a commission? as a way of keeping score? Is it, I mean, what is it? Well, one is it's explicit competition. There may be like very competitive people all around the company and there's nothing wrong with that, but most of them, everybody doesn't know when they lose.

You know, like, nobody else gets knocked out. It's off for interpretation, right? And, you know, when you lose in sales, you get fired. You mean like, well, you don't meet your numbers, for example. Yes, you go in and you have five deals and you lose five. deals, you get fired. Like, that's the way it is. That doesn't happen, you know, when you lose in other jobs that regularly or that guaranteed. So it's a different level of competitiveness. And I think that, you know, one thing I always ask my CEOs is like, well, you know, do

have any engineers who love programming and, you know, just really love their jobs to the extent that they might actually do like a project in their own time, you know, do something, you know, for fun programming. And almost all of them say, oh, yeah, definitely. And, you know, I'll guarantee you they don't have any salespeople that sell software in their spare time for free and for fun. It's about the competition. It's about winning. And so if you don't embrace that and, you know, make a scorecard of it and recognize it and reward it, then there is nothing.

Like, so it has to be there. Yeah. One of the things I'm very attracted to with great sales reps that I've seen, and I've seen, thousands now is when one of my favorite reps and success factors, he was in a horrible territory and he was just continuing to put up numbers every year. And when you look at it over time, you see somebody just continuing to find a way to make the quarter, it's pretty unusual. Most people have a gap. But he was just continuing to do it. And I asked him, Tom, how do you do this? I mean, nobody else is doing this. I'm such a shitty territory. And he just

looked me straight in the eye and goes, Lars, I kiss a lot of frogs. He just earned it. He wasn't bragging or he wasn't claiming anything. And you could just look down his serum system. He was kissing a lot of frogs. And that's my favorite rep that doesn't take it for granted that they have an SDR or a support person or whatever. Or they get leads from marketing. They are going to make damn sure themselves personally that they're going to make this number.

And they have figured out the second they get the comp plan, exactly how many deals that's going to take. And how many deals are not going to get closed that they thought that were closed, that they also have in the pipe. And that type of thinking, that's a real executive salesperson. So how do you tell then that you have a good versus a bad salesperson? And part of this also is, I mean, how do you know that they don't have a tailwind in their favor that they have just a really good territory or they're just selling a product line that's going to sell itself because it's so damn good? How do you tease apart that from like the skill set of the salesperson?

How do you know? I think you start with a good sales VP. You know, there's obviously going to be good territories and bad. territories, but if there's a, you know, a geography that's particularly good, then you have one great sales rep in it, you know, that sales VP is probably going to know that maybe he or she should have three good salespeople in it. And actually, they get more productive, the less territory they have, the less amount of counts that they have, because they're able to, it kind of forces the situation to do, you know, where you're penetrating deeper into accounts, getting a lot more

intimate with what's going on in the customer's business and your success. And your success, rate, your win rate will go a lot higher because you've got that intimacy that you might not have earlier on when there's one person in the east, one person in the west. When there's 10, it goes to 100. Sales forces typically get way more productive as the sales process gets honed. A system gets putting a place and, you know, the management's putting the right people in the right place at the right time to be successful. So there's a lot more to it than just, you know, that individual contributor, there is a system that needs to be put in place of process of segmentation and targeting air cover from product management as well as marketing to make sure that you've

got great coverage and to go win the market. Yeah, I would say, of course, are you performing and are you showing up? But I think that's sort of hygiene. I think beyond that, it's essential to assess which type of Salesforce show building. So, you know, we're talked about enterprise sales forces in the field driving around. Very big part of Silicon Valley now, I think is fantastic, is inside sales. Just to clarify, how do you define inside sales? Well, so typically it doesn't ever leave the building for selling. They might leave for lunch, but they stay in the building and stay on the phone.

And so in that case, typically you sell many more deals. So it's a much higher frequency. And therefore, you have lost less time with the customer. So you need to have the ability to have that. type of pace, as opposed to having, you know, six or 12 deals you're working in a quarter, maybe even two. Now, here you have maybe eight or 20 in a day that you're working, you're touching in some way.

And so there you're assessing a very different skill set. I think there's a lot of naivete around reps' ability to move up and down that cycle, including managers. There's something very different about having the understanding of how that operating system and your brain needs to work when you're handling that many deals at a time. I do think that there's great opportunity for some of those reps to scale up and have a great sense of urgency when they go upmarket. But many people get to stay in that job for a very long time. And then I think you're really looking for people who can come across as compelling and really understand the story.

I'm nervous about reps who don't dive in on the material to understand how to position the product. If you show reps that aren't willing to continue to learn around the product, I think they don't win. There's no easy way to ban inside sales rep either. So there's clearly a difference depending on what type of sales you're doing, whether you're doing big deals, volume of deals, where you're doing it, et cetera. Yeah, so one of the secret sauces, too, to go to market is depending on the product that you have and the features and the targets to initially engage a prospective customer will determine to whether you're going to do one of the three following bottoms up, which is starting with an

inside sales organization, typically either aimed at, you know, small, medium business and or departments inside larger companies to get beachheads and or top down, meaning I'm going to have to go to senior management and sell this top down, which is typically an outside direct in territory sales organization that has deep knowledge of these accounts or, you know, B or C is do all of the above at the same time. How do you know as a CEO, though, how to make that decision? I think a lot of it depends on what you're selling and what the value proposition is. And it might, in most cases, it's a progression.

A lot of it will depend on your roadmap. A case and point is these premium to premium models typically start at a user level. So that's going to be a bottoms up where you initially, because you have premium to premium, you might be targeting developers or you might be targeting individual users on the business side that you staff up with an inside organization, starting with inbound, then you start doing outbound to qualify leads, to follow up, to help people along that buying process. Eventually, as it gets outside of, you know, starts to getting bigger companies and you start to get beachheads inside these bigger companies. where a bunch of users have to go up in their organization to a manager or a series of managers to do a larger deal because you have different kind of functionality for bigger groups, you're typically going to have to have somebody directly involved with them. And that's where you'd have to start stamping out in territory people that can go navigate the complexities of these big companies. So on the other end, if you've got this really complex solution that's going to require architectural changes,

and a lot of integration and things of that nature, that might be more of a case where you're starting with in territory direct reps in the field because you need that deep knowledge of that account and or that vertical to be able to go get your value proposition across to that customer as well as implement a more complex selling process. So bottom up, top down, or in a lot of cases you need to do all of them at the same time, it really depends on the product and your value.

Right. And, you know, it's not always, obvious from the beginning, who the target is or what the decision-making process is going to be. And we're in a company that's doing amazingly well, a company called ACTA, which provides really the definitive authentication solution if you're going to move to the cloud. And the guys came from Salesforce. And Salesforce's strategy, because they were a SaaS company, was, look, we're not going to have the features of Seabult to begin with. So we're going to sell to small groups underneath.

We're going to go where Sebel can't go. With little deals. Can't afford to go. And they can't afford to go. Their product's too complex to implement. We're going to go down market. We're going to use an inside sales force to get there. Then as our product matures, and we have more robust feature set, we'll go up market and go direct.

And that's what Salesforce did to unbelievable success. So the octa guys were like, great, well, we'll use that playbook where a SaaS, identity management, authentication solution, that makes total sense. Well, it didn't quite, and there was really two reasons for that. The first was nobody buys a pocket of authentication. If you buy in that you need to secure your users, all employees are getting it. And so everything was a complex decision as opposed to a simple decision the way it was for Salesforce.

And then secondly, it turned out that the more. applications you had, the more users you had, the more valuable that product was, even on a per user basis, which was also different than Salesforce. And that kind of drove the premium target to be more upmarket and the decision process to be more complex. And so they ended up, although they started out with an inside motion, more of a bottoms up motion being much more of a top-down motion generally as it went on. And that channel strategy actually is, I think, in retrospect, what won the market against the other startups in the field. So part of that, Anna Doge, I think is super interesting, is that obviously with a startup,

your product evolves. At the beginning as a founder, when is the right time to bring on a VP of sales? Like, is that your third hire, your first, second hire, your 10th hire? I have a pretty common answer for that one. A lot of it depends on the CEO. and what their skill set is and kind of where the product is in, you know, product market fit. But generally they have three kind of choices. One, you can go hire kind of an individual contributor, you know, let them kind of get going with the sales motion. Typically, what happens in that case is they end up being the VPSLs, the CEO, founder CEO does. And they end up with five or ten people.

And then it's like a bunch of birds in a nest. they're all sitting around, give me a worm, give me a worm, what should I do? So if you've got that skill set as the founding CEO that you can go be the VPSLs, that's a, that's a okay way to do it. Start with individual contributors. On the other hand, if you don't have that skill set, you're probably better off hiring somebody that's at least a director, first or second line manager capable. And even if they start as an individual contributor, you can go build a team around them. And then if you've got enough validation for your product and your market fit, then maybe you can go attract a real VP.

The problem with getting a real VP of sales or a big executive too early is they're there to scale. And if you're still wandering around a little bit in the desert trying to figure out the fit, you might be a little early there. But a lot of it depends on the founder. If you want to be the VP of sales, hire individual contributors. But if you don't know what you're doing along those lines, then you probably need to bring in a pro that you can rely on. I agree with that.

I have a couple more things to say about it, which is, first of all, I think it's super important to get out of the mindset that sales is some sort of necessary evil or something like that. It's the exact opposite. It's the benefit for your company you can bring in all the time. And if you make them inclusive, unconditionally inclusive in the organization, like they really feel part of the company. This is maybe one of the biggest breakthroughs and success.

Factor's history was that we made reps feel like they were as important as engineers. They were as important as anybody else in the company. And if you feel like that, well, guess what? They're going to open up a part of themselves that they've never opened up in an organization where they were coin operated. It is that nobody talked to. When I was at a very big pharmaceutical company, I came in from the sales force, I've been in training there, and I walked over to this destination where we had all reported

our sales reps, what was going on with the products and with the customer. And there was this answering machine that I had spoken about all these ideas because that's what we'd been told we should talk to. And I was sort of wondering why none of the ideas, none of us that ever had had ever ended up in the field. And then I found out why. Because there was a big blinking light and there was like 12,000 unlisted to messages. Nobody ever fucking listened to the thing. Did you listen to every single one of those? I did.

And it was actually amazing. And it was actually kind of fun. It was like something, I wish I could find that tape. Because it was amazing stories. I mean, there's the stories from the field. It was incredible. And there were so many amazing product stories on that and what customers are actually doing with. And so the point just being this is second nature for companies to just ignore all this and have all the answers.

It's very seductive to be in the head office. Everybody's felt that. And just have these ideas that we've figured it all out. And magically, sales sells it all, whatever we figured out. The net of it is bring these people in. And so if you're a startup and you can find a senior exec that wants to work for you, that's in sales, that believes in your stories, so much. Wow, you can build a company with this person. And I'd much rather have that than the opposite, right? And so what a lot of people do is, well, we don't really kind of need sales,

but some VC said that I should. So I'm going to hire this junior person that I can kind of put up with as opposed to let me hire a total rock star that it's going to think through sales for us from the start. And I think we all, this is my third and final thing is I think we all here believe that CEOs should always be part of selling. And everybody in the organization should be selling. Yeah, and I'll just add one thing to Lars's point, which I think is a great point, which is you may not realize it, but to the outside world, to everybody who uses and buys your products, your sales force is your company. Yes. Like, that's who they know. They don't know you. They don't go to the all-hands meetings that you have. They don't care about your brand

marketing stuff. They know you through the quality, the integrity, the honesty. of your salespeople. And if you put them in a position to be the best that they can be, then your company is the best it can be. And if not, you know, if you treat them horribly, you have a bunch of scumbags running around, and you're going to get what you deserve on that. And that's going to be your reputation in the marketplace. So it is, it's really fundamental. In fact, in a way, it's the most important part of your company to have great culture in because it's the part that represents you. How do you truly treat them as if they are part of your organization holistically?

Well, one thing is when you have a company party and you have 500 reps in the field, say, across the world, they get something too. Are you going to fly them all in for the party? We actually did fly all our reps in every year because we wanted to have a meeting where everybody talked together about everything that's going on. So yes. But if that gets unscalable and hard for you, then maybe you send them the same equivalent value of what you're spending to all the other employees. employees at the party so they have that spending card. And they can take their spouse out for dinner or their kids. They can have an experience that we had a great year. So then how do you make the rest of

the culture get this? Because, okay, I can buy that this is what motivates salespeople. It's not just mercenary. You know, you're motivated by this, the scorecard. How do you then get the rest of the company to come along, the engineers, everyone else, who's seeing all these benefits and perks that they might not necessarily get? Yeah. Well, one big controversy is club, which is where the reps who made quota get to go on a trip that's specific. It's an additional reward and it becomes a great company building event. What we did in that case is we gave them a vote. Who helped you the most this year? And they got to go. Talk about Darwinism and competitiveness. Mark and I are laughing because that's what we did too. Yeah, we got all the MVP program. So yeah, yeah, you're going to,

we agree. Get that bug fixed. You got a better shot at coming to club with me. Well, the other thing that we did that Lars kind of alluded to earlier is, you know, there does get to be, you know, you always have the potential in anything, not just sales and engineering or marketing or whatever, but there's always a potential for jealousy in the organization. And that's, like, that's a leadership issue. And so when you get the question, a lot of, you know, and I've heard he says, well, what do I do when, you know, an engineer asked me, why doesn't he get paid on a deal? And Lars's answer is the right one, which is like, we are hiring in sales. If you would like that job, if you would want to pick up that bag and live that life and deal with

the ups and downs and get fired if you missed your number, absolutely will pay you commission. But until you do that, you're not getting commission. You're part of a different team that has a different reward system. And people just have to understand that. If I had some advice to founders along these lines, it would be think of the sales force as another way of differentiating the company. And like Bennett alluded to earlier, that the people that, you know, who's representing the company is who's in front of that customer at any given moment. And what is the processes that you've put in place to help them get involved with your company and your value proposition and your solution? And constantly optimizing those processes and the people that are running those

process is from first contact, whether it's inbound, through having outside direct people walk in the halls of these big companies all the way down to customer success. The other thing people don't realize is, look, it's one thing to land that customer and to get a beachhead in there. It's another to expand. And there's a whole set of processes and organizations and things you're going to need to do to really become a large independent company to really optimize. and make sure that you're, you know, getting a position inside these, you know,

inside a large and or small organizations where you're going to stay and you're going to be able to continue to grow from an upsell and a cross-sell standpoint and deliver great value for your customers. That's the only way you're going to have a long-lasting company and culture. And the culture of winning the market is the culture I think that people should be thinking about versus just these subcultures that are going to exist in any company. You know, engineering is always going to be a little bit different than sales and marketing is going to be different than engineering and all that stuff. But the big culture of, you know, taking care of customers, you know, getting them first is always kind of important.

And, you know, winning from a competitive standpoint is what I think is more important. Ben, you started this whole conversation talking about how founders reinvent, they have their own theories for like how to reinvent things. And frankly, that is the hallmark of a good founder. I mean, the whole thing that took you to the business in the first place is that you're coming to a new product and hacking a solution, essentially. That mindset is what makes you succeed. So why shouldn't they experiment here? Why do they have to stick to all these, no offense, old ways of doing things that you guys are saying are long established? And yet we're telling them to disrupt industries in other areas.

Why shouldn't they reinvent the wheel? So reinventing sales is a great. thing. There's nothing wrong with inventing your own way of doing sales and really owning it and making it your own culture and your own philosophy. Where you'll get yourself into trouble is if you do it from a place of zero knowledge, where you just sit with your engineering team and figure it out that way. What we're emphasizing is really, look, understand why people made the decisions that they've made, understand how things get bought by large, complex organizations, and understand the things that you don't know

before you start making judgments and go to your comfort zone. And as Laura is saying, don't be afraid of hiring someone a little different than yourself who may be much better at that job. I would say, why to try to fix something that ain't broke? I mean, we know how sales work. And I think we're addicted as founders

that we need to change everything because everything is so damn broken and this is my shot. So now I'm going to definitely change everything. There are things you don't need to change, right? I mean, we all sort of use the same phones, you know, like basic things at work. And one way is to compensate reps geometrically based on performance. If they don't perform, they don't get compensated well.

If they perform outstandingly, then they get compensated outstandingly. I have written a whole blog around how to do sales compensation. What I can tell you is the worst thing you can do in the world is make selling so damn complicated with so many different variables that a rep can try and optimize that they don't. have the ability to actually figure out what you want them to do. Make up your own mind. What do I truly want my reps to do? One, two, max three, I think that's almost too much. And then guess what?

You will get what you asked for. If you come up with all these other complicated things that they need to do, that actually has nothing to do with selling, you will get a shit show. So just focus on letting them sell. And frankly, all of companies in Silicon Valley that we didn't have sales force up front and thought they could rethink it, have all come home to roost, and they now have great sales forces that sell with commission for a living.

Well, thank you guys for another episode of the A6 and Z podcast.