Lenny's Podcast: Product | Career | Growth - "Sell the alpha, not the feature": The enterprise sales playbook for $1M to $10M ARR | Jen Abel

Starting point is 00:00:00 You need to vision cast. You need to sell to a gap. Don't sell to a problem. When you're selling to a leader, you need to be selling an opportunity. The market doesn't want to be sold to. They want to buy. Most founders would rather get 10, 10K deals than lose 9 and get one 100K deal. In the very early days, people will discount till the cows come home because they think that's the way to get a deal done.

Starting point is 00:00:24 The best clients are not going to do that to you. If they're sitting there nickel and dime in you, they're not for. fully bought in on what you're selling them. It might be giving you a false sense of success in product market fit. As soon as you become a comparison, as soon as you become one of three that they're testing out, you've already sort of lost. It's all about differentiation. Here's what you will be able to do tomorrow because of how we're going to serve you today.

Starting point is 00:00:48 Something else that you talk about is that enterprise sales is very creative. It's more of an art. It's all about deal crafting. It is a relationship you're building with someone. If they know they can call on you, people will. turn over rocks for you. I have a client at a Fortune 10 company where I was like, it's so important we get the deal done this year. Is that possible? And she's like, it's a tall order, but like, if it's going to help you, let's do it. These are how enterprise deals gets done. It's relationships.

Starting point is 00:01:15 What's kind of like the state of the art on go-to-market, outbound tooling? I don't use a tool. The thing about AI tools is they're all pulling from the same databases. I want to email someone not in the database that's getting hit by a million folks. I want to take a backdoor in. not the front door where everyone else is trick-or-treating. Today, my guest is Jen Able, co-founder of Jellyfish, where she and her team help early stage founders learn how to sell and out GMF Enterprise at State Affairs. If you want to become better at selling your product,

Starting point is 00:01:45 this episode is going to blow your mind and make you so much better in every way. This is the second time Jen's been on the podcast. Our first conversation was focused around getting from zero to one million ARR, essentially founder-led sales. This conversation is part two, going from around $1 million in AR to around $10 million. This is the most tactical and in the weeds discussion you will find anywhere for free on how to actually become more effective at selling to enterprises.

Starting point is 00:02:13 I'm so excited for you to listen to this conversation. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It helps tremendously. And if you become an annual subscriber of my newsletter, you get 17 incredible products for free for an entire year, including Devon, lovable, replete, bolt, N8on, linear, superhuman, D-Script, whisper flow, gamma, perplexity, warped, granola, magic patterns, raycast, CHAPRD, and Mobbin. Head on over to Lenny's newsletter.com and click ProductPass. With that, I bring you Jen Able after a short word from our sponsors.

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Starting point is 00:04:29 So if you've been sitting on an idea, now is the time to bring it to life. Get started for free at lovable.dev. That's lovable.com. Jen, thank you so much for being here. Welcome to the podcast. Lenny, it's starting to feel familiar and I like it. I should have said welcome back to the podcast. So I actually shared on Twitter that you're coming back and I had so many people ask so many questions. Clearly, there is a lot of confusion and a lot of need for

Starting point is 00:04:59 learning how to get better at the stuff we're going to talk about sales, enterprise sales. To frame the discussion, our first chat, which we're going to point people to if they want to start there, we focused on founder-led sales, which is essentially the beginning phases of a startup kind of going from zero to about a hundred million error. This discussion is on the next phase, which is going from about a million AR to about 10 million error in enterprise sales, not like PLG or anything like that. You have a bunch of really strong and counterintuitive, opinions and piece of advice on how to be successful at this. So I'm just going to go through a bunch of these things.

Starting point is 00:05:34 We'll see where it goes. Before I get into the first one, is there anything broadly? I don't know. Is there anything broadly you want to share anything you want to say before we dive in? No, let's dive right in. Okay. Okay. So the first thing that I haven't heard anyone talk about before is this point that you often

Starting point is 00:05:47 make that the mid-market does not exist. People often hear about enterprise companies. There's obviously SMBs and startups. There's also people just like, oh, I'm going to go after the mid-market, somewhere between. You don't think that's real. Talk about your experience there, what people should know. It's fascinating because if you ask someone to describe the mid-market, actually, if you ask someone to describe the enterprise, every single person has a different answer, right? It's either based off of revenue, it's either based off of market cap, it's based off of employee

Starting point is 00:06:17 size. And I think a lot of people can get lost because selling to a hundred-person organization is a radically different game than selling to a thousand-person organization. And there's no, there's no like hybrid approach. So the best way to think about it is you have small business, which is typically can be really powered by marketing. And then you have enterprise, which is typically going to be sales led. If you bucket them into these two very specific silos, it makes it much, much easier to understand what game you.

Starting point is 00:06:55 you're playing. Now, when we talk about mid-market, I usually will say, are we talking about the upper end of small business, or are we talking about the lower end of enterprise? And most people are usually seeing the lower end of enterprise. And I say, great, know you're playing the enterprise game, know the type of people you need to hire, know the type of ACV-day need, because it makes it a lot easier than trying to have this middle ground that catches everything that doesn't distinctly define SMB and enterprise. So I say the mid-market doesn't exist because what is a mid-market hire? It's either low-end enterprise or upper-end SMB. And if you bleed those two games, you're going to lose.

Starting point is 00:07:32 They're so distinctly different. So that's kind of my theory on it. You have this chart that you shared with me that will link people to where you kind of show the number of companies within each of these segments. And there's basically nobody in this kind of middle segment, talk about that a bit. That's right. And just like the power laws. I mean, if you look at the Fortune 1000 and then the kind of the kind of

Starting point is 00:07:55 the lower end enterprise from there, the gate, like, it trails off so fast. Like power laws totally exist in these like large corporations. And I, I, and we can't be treating everyone the same. This begs the question, where do you, uh, suggest companies start? There's obviously startups classically are just like innovators, move fast and make quick decisions. Enterprises have all the money.

Starting point is 00:08:20 Uh, usually the advice I hear is just don't go after the fancy companies to start because they take a long time. You don't want to screw it up. What's your advice on where to start for most companies? The exact opposite. Early adopters are those logos because they have to continue to stay at the number one spot. So they'll take tons of, you know, swings to continue to stay in the number one. Stay in the number one spot is the hardest part.

Starting point is 00:08:49 Right. So those number one logos are like, if you can give me just a slight bit of alpha, just a tiny bit, that's where I get, that's where I get promoted. That's where I get the pat on the back because we are the world's leader in our industry and we cannot be disrupted there. So there's this running joke where, not a running joke, there's this running statement where a lot of VCs will say don't go after tier one logos, go learn down market or go learn from like logos that don't necessarily carry a lot of weight. The ones that carry all the weight are the ones that are willing to take a shot and want to help, right? Because they also want to be a part of,

Starting point is 00:09:28 they also want to be able to dictate the roadmap. Now, it's the founder's job to decide what, what can be done and what shouldn't be done. But their voice takes you a hundred thousand dollar deal into a million dollar deal in a very short period of time. They will literally guide you there. So when someone says, hey, go after startups at just short sales cycle. Yeah, they're like, That makes sense. I totally get that. It's very easy to define the decision maker. It's very easy. You have to go through procurement. But in the age of AI, where it's all about sucking the oxygen out of the room and winning the deal and getting your foot in the door as quickly as humanly possible before someone else tries to take that, you want to get to the enterprise as fast as humanly possible. Just so folks understand what we're talking about here. When you say Tier 1, what's a good way to think about what Tier 1? The first one is like your Walmart, your McDonald, your Navidia, your Tesla, your Exxon Mobil, your United Healthcare. The logos that like are the leader in their space and, you know, their job is to stay in the number one spot.

Starting point is 00:10:35 Wow. So your advice is, because this is very counterintuitive. This is exactly what you hear not to do. Your advice is go after like the Chevrons and the mobiles and the Walmarts as a startup. Because if you can get them, that's all the proof you need. How do you approach finding someone? Let's just get tactical there. Just like say you're going after Walmart.

Starting point is 00:10:54 I know this is like not like a five second answer, but just how would someone approach finding someone at Walmart to sell to? First of all, make sure the founder's involved, right? They love, everyone loves talking to our founder. So like don't. And there's, we'll start with let's get the founder involved as fast as soon as possible. The second is you need to vision cast. You need to sell to a gap.

Starting point is 00:11:17 Don't sell to a problem. There's a very big difference between problem selling and gap selling. Problem selling is highly specific, more technical than not. And it's the way that every salesperson is going to go about it. Find the problem and anchor to it. When you're selling to a leader, you need to be vision casting and you need to be selling an opportunity, right? Which is, they are here. Here's where we can take you.

Starting point is 00:11:43 You know that that image where it's like Mario or Mario Mario Mario and then there's like the mushroom and then there's like Mario on blast and everyone's like don't sell the mushroom sell Mario on blast. Well, that's exactly what it's saying. It's about selling the opportunity. That's what gets the tier one logos excited and that is the best thing for a founder to sell, selling the vision versus the problem. And also it's it's what gets them to want to take a swing.

Starting point is 00:12:12 Who wants to take a swing because you can do some small problem? They're not going to go to back for that. What's an example of a vision cast in a company you've worked with just to make this real? What does it look like when you've done a great job? We have an ability to deliver alpha, meaning we have information, we have data, we have a way of working that no one else can do or is going to unlock a new way of thinking for you or an ability to deliver to a customer or an ability to solve a problem. Right now, you have an ability to solve a problem. you have an ability to access this, this level of information.

Starting point is 00:12:45 I have an opportunity through our resources or through this like gated data we have access to to get you much further upstream so that you can get information faster sooner. It's kind of like the high frequency trading that one second, that one second. They didn't do much. They, you know, they didn't sell, oh, we're doing fiber cable connectivity. We're giving you one second of alpha before everyone else. it's more of like that ability. And that's not problem selling.

Starting point is 00:13:13 That's opportunity selling. I like this phrasing of just giving them alpha. That's such a simple way to imagine what this should feel like. We'll link to that image you're talking about with the Mario. You know that image? Yeah. The person that made that image originally is Kathy Sierra. If you remember her, do you remember?

Starting point is 00:13:29 So there's this person, Kathy Sierra. She's from back in the day. This was a big, I don't know, the lesson she taught is you want to not sell your people on like a feature or product. you want to sell them on them becoming a superhero. Yeah, that's right. They are now a superhero because of the thing you've built for them. And so the vision here is here's how you become a superhero. This alpha will help you become more successful.

Starting point is 00:13:50 And that's why founders are so good at selling because they naturally go to vision selling and vision casting versus a typical trained salesperson is find the problem, you know, ask these questions. And it just kills the vibe. It just feels like you're talking to a salesperson, right? It's like, what's your script? And it's like, that's not vision selling. That's like playbook selling.

Starting point is 00:14:12 And in the age of AI, where a lot of it is about alpha. It's about speed. It's about getting access to information. It's about training data. And look at them, look at how the market's reacting to it. Right? It's all opportunity. And it's all, yeah, it's all about the alpha.

Starting point is 00:14:30 So just to make it more concrete for people, say I'm like salesperson at cursor. What would be an example of vision casting? Like the obvious idea there is your team will be more productive. You'll get more dynamo faster than everybody else. Is that a big enough vision to cast? I think it may be more of like you will be able to actually hire the 10x engineers that you don't necessarily have access to because they want to be able to use this type of tool. It's about letting them get better, letting them get differentiated talent. Right.

Starting point is 00:15:04 or that's probably more of what I would anchor to of like this is the 10x engineers use cursor. You don't. Do you want access to 10x engineers? Like they won't even join your company if you're not using cursor. Yeah. Like think about there's so many so many people are so specific about what they're able to. I think especially technical folks. Like I'm not a technical person.

Starting point is 00:15:26 But I would imagine that they're not going to go to, you know, they don't like to go to these corporations because they're forced to use some like incumbent, incumbent tools. going back to the going after these larger companies. I asked your colleague, Justin, what he sees you do that most impacts the success that teams have with their sales process. And there's a bunch I'm going to touch on. But one is most founders are insecure about asking for large ACVs for charging. The way he put it is most founders would rather get 10, 10K deals than lose 9 and get one 100K deal. Talk about your advice there and what you see. There are in the very early days, people will discount till the cows come home because they think that's the way to get a deal done, right?

Starting point is 00:16:14 The best, the best clients are not going to do that to you because they, they like, that's like a qualification criteria, right? Which is like, if they're sitting there nickel and dime in you being like, no, I don't, I don't, I don't believe it's worth this. I don't believe it's worth that. They're not fully bought in on what you're selling them. So when when when when when I say I'd rather get $100,000 deal than $10,000 deals, I'd rather have one rock star client that's going to help me figure out the next stage of where this is going than 10 or maybe five that are a good fit, five that are not. And I still have to serve those five that are not a good fit. And that's going to distract me.

Starting point is 00:16:55 So this is why I love enterprise sales is they are not going to do the whole. hard work of bringing you in if it's not critical. Or if it's not, when I say critical, it's not going to, it's going to impact them in a way that they're going to make it successful. That's what I love about enterprise sales. They have the resources to ensure that it gets implemented because most in today's day and age, if people are not using the tool, you just get rid of the tool. Right. So they're going to want to make sure whatever they bring in, what they go to bat for. Remember, they get a, they go to bat once every year. two years, maybe once every three years, you've got to make it feel incredible. You've got to make

Starting point is 00:17:39 it feel like they're going to be a superhero going back to it. Otherwise, what's the point? Because the way enterprises are structured is it is designed today to make it hard to buy because they want to make sure whatever you're bringing in you really, really want. It gets rid of the mediocre, I think this would be good. And it gets to, this is going to change the way we work. It's going to impact our ability to capture some form of alpha however you want to define that for them. And it's sticky because of that.

Starting point is 00:18:16 So your advice here broadly is don't pay attention to the smaller 10K-ish kind of opportunities for a bunch of reasons. One is it might be giving you a false sense of success in product market fit. two, those companies are maybe not as innovative and won't lead you in the right direction. Three is it probably discounts, just like your product and your pricing is just gets thrown off. Yep. And also, like, you don't really get taken seriously for 10K. You get way more taken seriously for 100Ks.

Starting point is 00:18:45 It's much harder to get 100K deal done. And like an executive use needs to be involved. I'd much rather have an executive sign off on something and spend two more months getting the deal done because you know, that they are bought in. You can now ensure what kind of value do they want to unlock and maybe you have an opportunity

Starting point is 00:19:06 to turn them into a user which to me, in today's day and age, with our generation being the ones that are now the executives at these corporations, this is native to them. Who is this true for? Is the advice here basically

Starting point is 00:19:19 if you're trying to build a successful B2B company, everybody should be aiming towards these 100K sort of deals? Is their world where you can be successful with 10Ks for a long time. If you have a super high win rate in a massive market, because all you have to do is reverse

Starting point is 00:19:34 engineer the math. If you need to generate $100 million in revenue, how many 10K deals do you need? And the expansion on a 10K deal is in parallel to that, right? What can you go 10 to 15 if you're, that's a 50% growth, right? Much easier to go to 100K to 500K because they want more bodies or they want more value out of you. For an enterprise, they'd love to get more out of an existing customer. You're already trusted. So it's also about, you know, the type of company or if you're venture-backed, you can't be selling $10,000 deals to the enterprise. You'll get killed. Or, or you've already

Starting point is 00:20:13 lost the game because you're playing a small business game in the wrong sector. Have you seen startups you've worked with succeed in that 10K, 20K bucket? Or is it really, really rare? If they're going after the enterprise? Yeah. Yes. If it's the first three months, and then after three months it turns into a 50K and then 100K and it ramps up quickly, sure. That makes sense because you got your foot in the door and you can expand it exponentially in a healthy manner. I think that that's fine. $10,000 a year, then going to 12, then going to 15, the math will break. This is great.

Starting point is 00:20:45 I feel like most founders listening to this are like, no, no, we're kind of in that exception. We'll be all right. 10K. We'll do 20K. That's crazy to consider 100K. Yeah, the math will break. and also a really good salesperson, your commission on a 10K deal,

Starting point is 00:21:01 you're not going to get a great salesperson. They're going to want to be anchored to like, how can I sell $250,000 deal? How can I sell a half a million dollar deal? That's a type of person you want. And this is like a big part of this is this is a good lens to force you to build the product that you can sell for 100K, 500K. Yeah, absolutely.

Starting point is 00:21:20 And again, this is about playing that enterprise game. if you're trying to sell, if you know, you're a small business, if you're in the small business place and an enterprise company comes to you and is like, I like this, ensure that you structure it for an enterprise, don't play the small business game with an enterprise company. Talk more about that. What does that mean?

Starting point is 00:21:40 Let's say your PLJ. And a big company like Walmart comes to and is like, hey, can we get access for three of our users? And they're like, this is so exciting. And then they sell them the small. small business pricing for three users to Walmart. Very, very hard now to go from those three users that you just price them in a small business way. Turn turn that into 100K because now it's documented what they're actually paying for this.

Starting point is 00:22:07 So you're stuck. You've kind of like anchored yourself to this price. Not to mention like what's the, how are you going to unlock the executive high level value so that you can get that. So you can get somewhat. you can get that senior executive to buy in and stamp this as well. Otherwise, it's just going to be throwing it on the credit card. But like, again, you've just ruined your enterprise game because you're anchoring to a small business price.

Starting point is 00:22:34 So this is why like when you bleed these two games, it's very, very, very dangerous because these are really smart companies. They're going to say, well, wait a second. I just paid $9,000 last year and now you want to charge me $90,000. Well, what's the step change in value? What's the 10x value I'm now getting? That's super hard to prove. So the tip here is your initial price will really screw you if you get it wrong. And so obviously we're not going to give people the answer on their pricing strategy fully.

Starting point is 00:23:05 But is the advice just charge more? Like, what would you recommend? It is enterprise companies are very used to a land. When I say like the first initial contract, this is somewhere between 75K and 150K. K. Very used to that. In fact, that's probably where you want to start because you also want to understand where can you grow from this. Start contain. Don't say 150K and sell the farm. Say it's 150K. Here's who gets access. Here's the value we're going to deliver. And here's where we're going over time. You also want them to know, here's what, here's what we plan to do roughly in year two,

Starting point is 00:23:41 year three. I know it's hard to look that far out. But like, plant the seed with them in terms of where this is going. If you come in at $10,000, it's so, even if they want to bring you in and want to spend $100K with you, they have to be able to defend that. And now they see a $10,000, it's just, it can get really messy, especially because a lot of them are using AI now to understand like contracts. So they're going to quickly say, oh, wait, you spend $1,000 with Lenny and now Lenny's asking you for $100K, great. Just help me understand why or defend it. I could totally see chat Chavit you being like, hmm, this is interesting.

Starting point is 00:24:19 Used to be 1K, now it's 100K. What might be going on here? Totally. But people don't realize, you know, how, again, know the game you're playing

Starting point is 00:24:30 and don't be sloppy about it. So your advice here is really interesting. There's the land that expand. Expand is very important, but the landing may screw your expanding because it sets the wrong reference point. 1,000%. That's exactly.

Starting point is 00:24:46 right. You said it better than I did. And so you may see, like, Matt, like in theory, if you land a 10K, go to 100K, that's like an amazing NRA. Everyone's going to be really impressed. But you're saying people won't, won't buy into that. It's going to feel absurd and wrong. Unless it's defendable. All it needs to be is defendable, but who can really defend? That's very hard to defend a 10x, 10x jump. They're going to want to see 15x value. Let's talk about design partners. Oh, yeah. This is something most founders try to do. They find a few folks. to work with to help them build the thing. What's your advice on when to start finding design partners, how to find design partners, what a good relationship looks like? Design partners are incredible. They are the hardest logos to upsell, meaning go from design partner to full rollout customer.

Starting point is 00:25:33 So like, don't expect these people to be your million dollar pipeline. Expect these people to be the guide to help you understand. maybe design partners could be, you know, a technology company in the Fortune 1000, so they're used to experimenting, they're used to technology, they're used to, they were once a startup so they get it. Those make really good design partners. Most of the design partners that I've closed are usually like technology based, right? They get it.

Starting point is 00:26:04 And they also are excited about, you know, advancing the org and also giving the team an ability to have that startup feel. So like, you know, if you're a large, massive corporation like, Stripe, right? Stripe doesn't get that startup vibe as much, like that 50 person startup vibe, but like this can be a gift to give them that lens and give them that voice and give them that, like, excitement that they, you know, don't get as a larger company. But those are great types of logos to be, you know, early design partners because one, they want to make sure they're on the, they continue to stay on the, that cutting edge. But two is they are, to try and build something without that guidance is really, really, really hard because they're not using it. So you need that you need that user feedback. And you also need to tie that to the executive value.

Starting point is 00:27:00 Right. So it's actually a lot. It's very hard to do. But if you can come out of it and upsell a design partner to a full rollout customer, such huge. such a huge win for the market for you, for your team and also for your investors, because it's the hardest customer to actually truly convert. They've been it when it was messy. They usually got a low price point, but if you, again, frame it. Say, listen, I would love for you to be a design partner. I want a little skin in the game to get you to put it.

Starting point is 00:27:33 Here's where we want to go. And you'll get a discount because you were in the beginning, but I'm setting the framing. Here's where we want to go with. pricing, here's where we are today, you'll always have 30% concession in perpetuity because you are there with us on day one. So again, it's not about, you know, asking for $10,000 and then not expecting that design partner to upsell and keep it flat because there's no growth there. It's a flat, you know, it's about getting that early design partner, set the framing, own the framing, and let them know where you're going. Again, $100,000 to these large logos. If they want it, it's very easy for them to get it in.

Starting point is 00:28:11 There's this really interesting underlying piece of advice of finding a company that pulls you in the direction that leads to success. A company that's kind of a visionary. Like, there's like the obvious companies that everyone's always trying to get these days Open AI and Anthropic and Stripe, I think, is one. Any advice for just like picking the right early? What are signs that this is a company that will point you in the right direction? I think they have to be part of a logo that is deemed, you know, startup friendly, right? Or, you know, in that world. And then I think it's the person, right? Like, is this person excited to give feedback? Does this person buy in to where we're going? Do they see this

Starting point is 00:28:53 world differently like us? Do they buy, are they in locks up with the founder vision? Are they excited to to use a tool that's janky? Because it is janky in the beginning. But they know, they know that where this can go can be incredible. So it's, I think it's really about the person and making sure that they're aligned for what they're getting into. And I think a lot of people, I think a lot of salespeople oversell it. I think that's a common thing that happens, right? And that leads to churn. That leads to frustration. That leads to sometimes just canceling the contract. They oversell the initial kind of design partners phase of the product. They oversell everything. Yeah, design partner even full rollout. And it's so, is so important to tell them, here's where we are today. Here's what we cannot do, which is just

Starting point is 00:29:43 as important. It builds trust. Here's what we will allow you to do in the next six months. Do you want to be on this journey with us? And it's really ugly right now. Right. Barely anything exists, but like we would love your voice to be a part of it. One of the biggest fears I think founders have is having a company basically build just for their use case and then it ends up not being used by a lot of people. And so like how far do you go fixing their specific problems? Any advice on just how far to go with one company? That is the founder's job. The founder's job is to have a clear vision and do not let anything delineate from that. It's important to take feedback in terms of what is the market's

Starting point is 00:30:22 reality. But like it is the found and this is why being a founder so hard. It is the founder's job to interpret that because a lot of feedback you get is this is the old way. They're responding this way because it's the old way of working. They want you to build this because it's the old, that's how they're traditionally expecting to do that. It is not, here's where we're going. This is why we're not doing that. I hear you, but here's why we're not going to do that

Starting point is 00:30:48 because we're going to completely change the way you do this. That is the founder's job. And I think, you know, we did a bunch of design partnerships, you know, late last year. and there was a lot of feedback given, a lot of feedback given. But the founder had such clarity with where he wanted to go that he was like 80% noise, 20% had I not asked this question, like I wouldn't have gotten that gold in terms of where they are today.

Starting point is 00:31:21 And like, it's that 80-20 role where 80% of what they're going to tell you is probably going to be not related to where you want to go or based off of the old way, but that 20% of like, oh, I did not think about it that way, that drives everything. Have you seen a design partner pull a company in the wrong direction, just kind of screw their path? Have you seen that? Or is that pretty rare? No, I think that I don't think it's that rare because we hear people complain about it all the time. But I think it's more of an excuse. Coming back to this question of going after the enterprise versus SMBs, and again,

Starting point is 00:31:54 early advice you gave is there's no, don't go in between. Either pick SMB small company, which I know you said there's a million ways to just to kind of differentiate what this means, but what I guess I think of employee numbers like, you know, like under some number over a thousand is maybe enterprise. Is that like a good way to think about just like. Yeah, I mean, it depends. Are you selling per seats or are you selling, you know, based off of usage or are you selling off like I think it also depends on the pricing model a little bit?

Starting point is 00:32:24 I look at headcount too because it's just like it's just such an easy way to think about it because you can also gauge usage. off that and a bunch of other things. But sometimes, like, the small companies, like, I think we're going to see a lot more, like, a lot more larger companies become smaller because of AI. Not, like, significantly smaller, but also, like, high margins allow them to experiment more, too. That's such an interesting point you're making there that, like, the way we designate enterprise

Starting point is 00:32:53 versus S&B, like, may shift because a number of employees may go down with AI. Yeah. Oh, yeah. So interesting. So where I was going to go with this question is when people are deciding I'm going to go enterprise versus I'm going to sell to startups. Like YC companies are the typical example they sell to their own YC batches. And he just brought advice of picking. Okay, we go enterprise versus no, let's actually go startup.

Starting point is 00:33:16 I think it's about, and I read this somewhere and I wholeheartedly agree with it because I've seen it live. I think it's about like what game does the founder best understand? are they like an incredible marketer and have some like competitive edge for how they can like win a massive audience? I would say go SMB and marketing led. Or are they a bit more, you know, really understand how large corporations work and really excited to deliver on a hundred thousand dollar plus type of opportunities or the value that they are building for is way more relatable to an enterprise versus a small. business. That is really interesting. I've never heard of it described that way. I think about linear, which started very startup-y. And my take is they did that because changing the way you work is really hard. And that was like, let's start with companies and grow with them.

Starting point is 00:34:13 And over time, and that becomes the default. Any reaction to that? I think that it sounds like that that's a great way to work because that's a technical tool, right? So you also need to have the right, you also need to have the right infrastructure to sell, right? Like, I think Slack, I mean, look, Slack and Microsoft teams are still battling it out at the enterprise. I think it's also like how you plug in and how you integrate and do they even have the right systems to support you? The thing with Open AI is like they didn't have to connect to anything. Say more about that. So like the value, people were bringing their own use cases to it.

Starting point is 00:34:52 right and they don't it's not like they in well they can ingest and they built that it's a brain new thing and they started they started I think I this is someone told me this so this is this could be hearsay but I believe that they had they were already speaking to CTOs even well before they released to help them explain where this is all going and get their buy in and it's and it's much easier to get into the enterprise when you're like we won't even touch your data Won't even touch you yet. Just drop, like, use it to solve problems. And then we can build trust and then start to integrate and connect the pipes.

Starting point is 00:35:32 But like, part of the challenges with selling in the enterprise, they're like, all right, well, let's connect all your consumer data. And like, in the, whoa, that's extremely risky. So you have to start small and low risk, which is like, hey, here's, what is the subset of consumers that churned? let's figure out how we could have made them happier, whatever it be. So that data is lower risk. So again, it's also understanding your market and understanding, you know, what their ability to experiment is. It's interesting in this distinction between Open AI right now and Anthropic.

Starting point is 00:36:07 I don't know if you've been seeing kind of their growth. It feels like Open AI is very consumer first, and Anthropic is more and more winning on B2B. I saw this chart recently where they're like overtaking Open AI now on, on B2B. I don't know. Any reaction there of just like these two different approaches? I don't because most enterprises I'm talking to mention Gemini. Oh, interesting. Yeah, or Microsoft co-pilot. So I don't hear much about anthropic, to be honest. So that might be more of like a small business startup-y, I don't know, or it's a different part of the organization

Starting point is 00:36:44 that's using it. Yeah, that's a whole discussion of a bundling right there of like Slack and teams and then just, yeah, Gemini just kind of coming in automatically. People don't have to adopt anything new. Yeah, totally. There's something else that you talk about that I love that I don't think people talk much about, which is that enterprise sales is very creative. Oh, yes. Talk about that.

Starting point is 00:37:05 So I personally believe that small business sales is really a, I used to think it was more science than art, right? It was more like, you know, figuring out what didn't. work, running experiments, you know, testing and validating, which I do believe. That's that's, that's, that's, that's to get to like foundations. Like, where do we play? What do we want to do? Like that early, early, early, zero to one.

Starting point is 00:37:33 From one to 10, I think it's more of an art, right? Which is how do I take my learning and how do I package it up where I own the framing? I can speak to very specific alpha. I can vision cast and where I better understand the problem over time better than the market does. And it's all about deal crafting. They just need to feel like the value they're getting out of it is way more than the cost. And it's sometimes about giving away things that don't really cost much to you but are super expensive for them. For example, hey, we're selling X tool.

Starting point is 00:38:19 We can build out this. We can build out why specifically for you over the next year and integrate it. Because I know that you would have spent X number of dollars on engineering resources or you wouldn't have gone in engineering head internally to do this. But we're just going to leave it to you. You've got to give us a year to build it out. Again, you're not letting them sidetrack you too much. You're kind of containing it. We'll do that for you at no additional cost.

Starting point is 00:38:44 That's huge value. right or hey we're going to run an event and we want you at the forefront of it we want you to be a speaker huge value right so it's like all of these additional things that add value beyond just the product but are all part of the product and the vision right you know everyone keeps thinking the product is just what goes into their hand the product is pricing the product is the um the opportunity the framing and not letting them compare you to something else. And I know we talked to that on our first call, which is as soon as you become a comparison, as soon as you become one of three that they're testing out, you've already sort of lost.

Starting point is 00:39:27 It's all about differentiation. Right. And it's all about here's what you will be able to do tomorrow because of how we're going to serve you today. So along those lines that reminds me in our first chat, you actually made this point that I've never heard anyone else make, which is that services are a really good way to start getting into companies that were most founders here, like, no, don't just like, don't do manual stuff for the company, build a product that you can scale. Your advice is the opposite. Actually start with sell services. Talk about that.

Starting point is 00:39:59 Enterprise is the number one thing they buy services. They know how to do it. It's super easy. They, like, they do it all of the time. It's like the most consistent thing they do. It's their largest budget I'd like them, right? External resources, consultants, whatever. if they have a very immature way of understanding the problem, or they've never purchased technology to solve it to some extent, right? Either one, you are doing something that's never been done before, which is like, you know, rare in today's day and age. Or they might just be like laggards on the journey.

Starting point is 00:40:37 So you have to decide, is this someone you really want to be working with? and if so, selling them as service, even though the technology is powering it on the back end, is the fastest way to get your foot in the door. It's what they know how to buy. Now, the idea is that once you sell that service, once you get that foot in the door, then it's to guide them towards the product.

Starting point is 00:40:59 Hey, you're spending so much here. Why don't we move, why don't we get you to come in and leverage the tool that's been powering this the whole time and move this more into technology serving you versus the human. Wow. I think this will blow a lot of people's minds. Talentire, this forward deployed engineer. That's exactly what you're doing. Right. Like, you know, it's there's, you know, there's a lot of companies out, like I'm sure, open AI.

Starting point is 00:41:24 And this is what someone told me. They were in and talking to CTOs and helping them better understand how AI and their organization can better work together. And it was them coaching them and educating them, whether they did it for free or not, I don't know. But they got their foot in the door. They started to build trust and then it gets adopted. This is the epitome of doing things that don't scale. That advice we always hear. This is like, okay, this is what that looks like. Like, we will solve this problem for you. We are using software to do it.

Starting point is 00:41:49 And then over time, oh, you could just do this yourself. It'll cost you last. You can scale this. Yeah, that's right. And they don't even need to know at first that software is doing it. That could be the magic part, which is like, guys, we literally, we are literally doing this with our technology. Today's episode is brought to you by Coda. I personally use Coda every single day to, to,

Starting point is 00:42:10 manage my podcast and also to manage my community. It's where I put the questions that I plan to ask every guest that's coming on the podcast. It's where I put my community resources. It's how I manage my workflows. Here's how Coda can help you. Imagine starting a project at work and your vision is clear. You know exactly who's doing what and where to find the data that you need to do your part. In fact, you don't have to waste time searching for anything because everything your team needs from project trackers and OKRs, the documents and spreadsheets lives in one tab all in Coda. Kota's collaborative all in one workspace, you get the flexibility of docs, the structure of spreadsheets, the power of applications, and the intelligence of AI, all in one easy-to-organize tab. Like I mentioned earlier, I use Kota every single day and more than 50,000 teams trust Koda to keep them more aligned and focused.

Starting point is 00:42:59 If you're a startup team looking to increase alignment and agility, Koda can help you move from planning to execution in record time. To try it for yourself, go to Koda.com.i.o slash Lenny today and get you. get six months free of the team plan for startups. That's CODA.com. I. slash Lenny to get started for free and get six months of the team plan, coda. dot I.o slash Lenny. There's a lot of talk these days about this idea forward to plate engineers, something Ballantir was really famous for just essentially an engineer sitting in your office,

Starting point is 00:43:31 solving problems with you, like basically as an employee. And then through that, they learn what software to build. Is that something you're seeing too? Oh, yeah. I think, you know, I think that a lot of companies, a lot, sorry, a lot of folks that serve the enterprise, they have a, they have a butt in a seat in their office. Like, you look at these large consultancies like McKinsey, they're not in their headquarters, they're in their client's office all the time. And the other interesting thing, and proof of this is how many people go to a Deloitte or Accenture and expect them to be a channel partner? This is exactly what this is all about, which is they sell the service, they come in, and then they introduce, hey, look, look, look at what this startup is doing over here, you might want to give them a shot. The problem with channel partnerships

Starting point is 00:44:13 and why I don't believe them is there are a hundred of you on this list. And you're expecting them to sell it on your behalf. Biggest no-no, they're not vision casters. They're not visionaries. They're consultants. But it goes all towards like go, you know, I remember startup saying,

Starting point is 00:44:31 oh, I'm going to go, you know, win over Accenture and then have them disseminate me into their clients. And I'm like, as if that's a workable strand. Okay. You know what it might be helpful is let me try to summarize some of the best pieces of advice you've shared so far. And this is specifically for folks trying to go from about a million error

Starting point is 00:44:51 to about 10 million error. And then I want to ask you just what's the most different about these two stages, but let me share this first. So advice one is go for Tier 1 logos earlier than you think you should because they're early adopters. They can move fast. They can pull you in the right direction. direction. And they exciting investors too. Yeah, for sure. And other and other leads. And yet. And other and other, you know, talent, future employees. Yeah, exactly. So the counterintuitive insight here is you think they will move slow and be too busy. But in they are actually the early adopters. That's right. They have to maintain that number one spot. And also all of the people that are in the number two, number three, number four spot all want to do what number one is doing. So it's also. So it's also.

Starting point is 00:45:38 like pure referenceability too. And the point about them being the early adopters, like the people that join the stripes and opening eyes and anthropics are like the, like they individually love technology and love the latest stuff. So like as a human, they're like, oh, this is cool. That's exactly right. I'm just agreeing with myself, aren't I? That's kind of funny. But yeah. That's a good sign. So two is ideally try to price closer to about 100K, like 75 to 150-ishk is what you said. most enterprises are used to buying. So instead of starting or even sticking with 10K, 20K for too long, you need to make yourself go towards 75 to 150K. That's right. Yeah. And if you were to sell a service, because I know we're talking about selling services first, pro rate that over time. So maybe it's 10K

Starting point is 00:46:24 a month. So they start to get used to what that pricing looks like. So this is a way to make it feel this is like how you get to 75 to 150K is there's a service attached to it. It's not just here's my SaaS product. We will solve this problem for you. Our person will be sitting there doing this for you. Yeah. Or it's a technology too. I mean, you can add the services.

Starting point is 00:46:45 I always, well, let me take that back. The service, whether the services is bundled into it or not, some people will unbundle it. Other people will say the services is a part of it. But yeah, it nets out to 75 to 150K. That's right. Okay. And you said that it's okay to start lower on ACVs and deals,

Starting point is 00:47:01 but you need to push fast towards 100K,000, like over a few months. Yeah, that's right. Like, if you can get into an enterprise for 10K in a month, which is not doable, but if you could, and you could go from 10K to 50K in four months through an expansion strategy, all game. That makes sense. But it's really rare and very hard to do. And so there's two different paths there.

Starting point is 00:47:24 One is land cheap and grow quickly. The other is move your ACV average up quickly. That seems like both. The latter is probably the more common strategy is just to keep increasing prices. Because the former you can get tripped up because they could say, okay, now give me an economical price for doing this for 100 people. And then it all kind of evens out because now you're at the 100K deal anyway, you know. But it's hard.

Starting point is 00:47:47 It's much, there's more room for error, which is why I say go in and try to land 100K. By the way, in our first chat, we talked a lot about the procurement process, which is what trips a lot of people up and is really painful. And I vividly remember that conversation still. So if people are having issues getting through the sales process and procurement, a lot of good advice there. And getting stuck in procurement is usually because you're not speaking to a senior enough person and they don't know how to navigate it, which is why I'm like that executive needs to be involved. Because as soon as the executive picks up a phone and tries to get a hold of like their buying group, things move. Right. Like when people say, oh, I'm stuck in procurement, I'm like, oh, that could just be a qualification error and you never get out of it because you're still.

Starting point is 00:48:33 to someone two junior. So that's why the 100K is such a safe zone because even for 10K you might have to go through procurement. So this is like the surest way to make sure that like you don't, listen, I've seen 10K take nine months to close. No way, no. Yeah. So.

Starting point is 00:48:55 Okay. Next piece of advice is this idea of vision casting instead of problem solving. So the advice here is instead of here's your problem, here's how our products solves it is here's how you will achieve alpha in the market by adopting the software. We talked about the example of cursor where if you adopt cursor, you're going to draw the 10x engineers that are joining other companies right now. This will give you a big advantage. That's right. And yeah, it's pain versus opportunity, especially in the age of AI. And I know that we're moving into the next dimension. It's all about solving for a gap. It's seldom about, you know,

Starting point is 00:49:30 solving for a very, very specific problem. Because people, are trying to figure out what's our AI strategy. Where are we going to go with this? What is the world going to look like? I want to be a part of that new world. So it's a great time to be doing that. And then there's a bunch of advice we shared, you shared about design partners. I've just had to select them.

Starting point is 00:49:49 Your advice is definitely have design partners because they will help you build the right thing. But as a founder, you need to have a clear vision and sense of where you want to go and not just build everything. And they're asking you to build. That's right. Because it's important to say no, right? Like, and that's all part of the framing, right? Which is like, here's, here's we want a little skin in the game. Like, you set the price.

Starting point is 00:50:11 But here's where, here's what we're marching towards in the next six to 12 months. Like, are we aligned there? If we deliver on what we say we're going to deliver, are we aligned there? And do that kind of handshake. Is there anything else that I missed that you think is really important for this stage? So one to 10 is no longer the final. founder. Maybe the founder comes in in very strategic points, but you need a really good enterprise salespeople, right? Taking someone from small business and expecting them to do enterprise sales,

Starting point is 00:50:44 big no, no. It's a different game, right? Vaddle like a different game. You need to understand how corporations buy. You need to understand how executives think. You need to better understand simply just like what the enterprise business model is all about and like their ability to take on risk. People will bring in like super. junior enterprise sales reps. And I'm like, you're looking to sell to an executive and you have this like this person that's five years out of school with no corporate experience doing it. Again, unless they have like some extremely, you know, deep experience in the industry

Starting point is 00:51:20 or are just like a unicorn in terms of like, wow, this person can sell ice to an Eskimo kind of thing. A junior person converting an executive, again, a. If the founder's involved, maybe that's doable. But usually the founder can't be involved in every deal. And you need people that can, I always say you need people that can cosplay a founder, right? Which is like selling the vision, getting them excited, like running through a wall to get the deal done and getting creative on how. None of my deals look exactly the same.

Starting point is 00:51:57 Every deal looks different. And that's okay because every organization has slightly different opportunities of where they want to go. And you have to kind of build towards that. And the framing may change. So it's this ability to like adapt from what you're hearing and like let that compound over time. But like I always say like, can this person cosplay the founder? I think that that's the best type of salesperson because it doesn't feel like sales. it's more of the art.

Starting point is 00:52:30 This is amazing advice. What is a common profile that you've seen be successful? Like what level of seniority, what kind of personality needs to look for? Maybe a former founder, if you can get that. Because they're used to selling, right? They sold investors and they've sold employees. Two is someone with no sales experience, but has deep product experience or an engineer

Starting point is 00:52:53 and can think about things in a unique way where the market's like, this is so interesting. Taking a typical salesperson and putting them into a sales role almost always is where people get frustrated. The market, it feels salesy. Like the market doesn't want to be sold to. They want to buy. And I know that this is like, it's very hard to hire a really good enterprise salesperson, right? I mean, the number of people that I've interviewed, I can count on my hand the ones that I'm like, I get really, really excited by. It's a, it's a, it's a, it's almost like, you know, coming across a great founder, right?

Starting point is 00:53:33 It's like, you know, it's not as, it's not as common as everyone expects. And I think that that's true for engineering. I think that that's true for sales. And I think a lot of people, sales is like, oh, just throw a body into it the product will do the work. Advice I often hear is don't hire a kind of a senior VP of salesperson from a bigger company. Yep. Do you agree with that? How, what's like two senior?

Starting point is 00:53:55 Yeah. Yeah. So the bigger company thing, the brand was doing all of the work. The brand built the trust. You need this person to be able to build the trust. And like they're usually, the product is still so new. The product is the founder in the zero to one stage. The product is just starting to get like a case study. You probably have maybe a few references, but it's still very, very early days. You need the market to believe the salesperson. And you need that market to know that they're trustworthy. a VP of sales at a large company, I would say, they're best suited for a large company because one to ten, you're running through walls, right? You have to figure out, you know, you're doing a lot of convincing, you're doing a lot of educating,

Starting point is 00:54:37 you're doing a lot of creative deal crafting, a lot of owning the frame. It's not necessarily selling a product. It's selling that future value, which a VP of sales of a large company is a very different. It's a different game. It's kind of like the SMB and enterprise. It's interesting you said when you described

Starting point is 00:54:54 the profile of a great hire here is you said they don't need to have done sales. If they have done sales, what's like a number of years or kind of like, what do you look for that tells you, okay, this is a good fit for the first hire? I actually think it's less about experience and more about the person. Like, does this person make you feel good? Do you want to buy from this person? I think Jason Lempkin said that best, like, would you want to buy from this person? Can they sell you a pen? The classic. Yeah, exactly. You know, do they, do they mimic or mirror the they're selling to, right? It's much easier to buy from someone that looks and feels like you than it does from somebody that's like, you know, in a totally different realm. And also, like,

Starting point is 00:55:37 an executive wants to talk to another senior person, right? They don't want to talk to someone that just graduated from college and is selling them the new way of working. Like, what do they know? So I think it's tricky. I would say, like, you know, someone with no sales experience makes it feel different and special. That's what I like about it. Someone with sales experience knows how to navigate and probably qualify better, but it's almost like the blend of those two things. And that's why you go back to like cosplaying the founder, which is like, could this person, you know, could this person like close a future employee, right? Like, do they get excited about the problems they're solving internally and the vision that they get to sell to? This actually was a reader question. A listener question

Starting point is 00:56:23 from Twitter. So Peter Dedene asked, how do you make this first salesperson as enthusiastic about the product as you? Is there something you can do? Is it more just they already are and you just leverage that? Incentives. Salespeople love to make money. So if they know it's possible, if they know it's possible, you'll be shocked what people can get done. If they see how much they could make.

Starting point is 00:56:52 Amazing. Right. I imagine there still also has to be an innate excitement about the product. They have to believe in it. They have to believe in the founder, but like incentives usually make the world go around. But yeah, is this person, are they asking the right questions to the founder? Are they, you know, the best thing to do is have the founder join the first five calls.

Starting point is 00:57:16 You know after five calls if this person has what it takes. And don't be afraid to fire. Like one in every two salespeople, usually are fired. It's a very, yeah, it's like, it's, it's a very high failure rate. Because you can tell pretty quickly how it's going. You can tell or the vision of the founders is just very wrong. Speaking of incentives, do you have any quick advice on how to structure their comp,

Starting point is 00:57:43 just like how much they earn? It's usually 50-50, so it's 50% OT, 50%. So it's 50% base salary, 50% OTE. And then how much of the sale do they typically get, say the first sales hire? It depends on the price, the size of the deal. But in technology, it can be anywhere between like 8 and 12 percent. So rounds out around 10%. Okay.

Starting point is 00:58:07 Awesome. When do you hire the first salesperson is around the 1 million ARO mark usually? Yeah. It's around that 1 million error mark. And it's usually when you have your first 7 to 10 customers and there's some, there's some pattern recognition around it that you can that you can share with somebody else. There's some consistencies. Otherwise, it's just like, that would be very hard. Basically, as a founder, you have to figure out how to sell enough times so that you can show someone here's what's working.

Starting point is 00:58:40 And this is the common thing I hear. Well, I'm a $10 million business. I'm like in this small business space. You're $0 in enterprise. It's a zero to one right now in enterprise. It's a total. different game. It's a different value proposition. It's a different deal structuring. It's a different target market. It's a different risk tolerance. It's totally different. So don't, don't be blindsided when it doesn't work. There's a lot of unlearning that needs to happen when you move into a new market. So the advice here is make yourself sell up until around a million error, especially if you're trying to go enterprise selling to enterprises yourself as a founder. which is really hard.

Starting point is 00:59:23 You have so much to do and you have to be selling this thing for a long time. Yep. And then, you know, try and find someone that like you get excited by. Like, it's funny.

Starting point is 00:59:33 If you ask the founder, are you excited by your salesperson? I'm curious what the real answer is. It's like, well, it's a button to see it and it was hard to hire. Interesting. I remember, I think it was Jason's advice was to hire two people immediately.

Starting point is 00:59:45 That's right. So you can compare them. Do you agree with that? Yeah, because of the 50% failure rate. I think that's exactly right. So, yeah, even a taller order, go find two people that are good. But yeah, I think that that's right because, you know, one and two will fail.

Starting point is 01:00:02 Okay, let me ask you another reader question from Hang Huang. This is kind of in a different direction. So he says the biggest challenge is always cutting through the noise to get that initial meeting with the right decision maker. How do even get their attention? It's the vision. What is the opportunity that you're selling? that if they are excited by that, they will take a call. I see it all the time.

Starting point is 01:00:27 And don't give away the farm. Like, keep it to three sentences. Right? Like, and this is, I know I said this on our first call, but like, say something counterintuitive. Make it feel different. Make it feel like they can learn from you by taking a 15-minute call. Right? You know, you see the standards of like, oh, I came across your LinkedIn and, you know, are you looking to grow your

Starting point is 01:00:49 your business by 15%. It's like, what kind of statement is that? And this is in the cold email they get this pitch. Awesome. So this is a good segue to another reader question from Hugo Alvesz, co-founder of synthetic users. He asked, what's the best advice for going from healthy inbound to targeted outbound? Healthy inbound usually is a marketing led initiative. So that's a marketing game. It depends like what deal value you're selling. Are you selling a $5,000 deal? It's got to be marketing led to make that, to make the engine work. If you're selling a $100,000 deal, you're doing outbound day one. So again, it breaks it into those. This is like that blending of the, I see a blending of that question. This is where you're doing small business, you know,

Starting point is 01:01:33 marketing led activities or are you a sales led organization selling a $100,000 deal? And the reason this is important, just in case it's not obvious, is you're not going to make money if you're selling people are spending time closing deals that are making $10,000, just the ROI on that won't work for your business model. That's right. Yeah. Awesome. By the way,

Starting point is 01:01:53 let me just say, Jen, this is, this is like an incredible conversation already. We've got, oh, this is awesome. Through so much,

Starting point is 01:01:59 this is like exactly what I was hoping to get through. We've done through so much advice that I think is going to be so helpful to so many people. There's a, there's a few things that your partner, Justin also suggested I ask you about that I want to touch on. One is, you have this question that you ask founders a lot that opens up their mind. you ask them, if you give your product away for free, would people even use this? And every founder's like, of course. And then you ask a customer this and they're like, nah, we wouldn't use this. And that just blows their mind. Talk about just the power of that and how you recommend people approach this. I always say, ask the questions you're afraid to because that truth is going to get you closer and closer to the answer. So I'll ask a client straight up on a call. I'll say, honestly, do we think we're going to get the deal done this year? Like, is it possible?

Starting point is 01:02:48 they'll give you the real answer. Like, and people are afraid to ask. But, like, the other side is sort of, you know, if they're in it with you, they don't care about that question. Right. Can't ask that question on day one. But, like, if you are, and we didn't talk about this, but maybe this is important. Every single enterprise deal I have done, the deal is closed and pretty much done through text. It's not on email anymore.

Starting point is 01:03:20 It is a relationship you're building with someone where if my enterprise client called me, I'm picking up that phone immediately or I'm responding them to immediately because that builds so much trust. If they know they can call on you, they're going to get you to pick up and they know that you're going to do everything humanly possible to make sure that this is successful, people will, people will, you know, turn over rocks for you. Like I have a client at a Fortune 10 company where I was like, it's so important we get the deal done this year. Like, is that possible? And she's like, it's a tall order, but like if it's going to help you, let's do it. Like these are how enterprise deals gets done. It's relationships.

Starting point is 01:04:03 And it's this like, and this is why I'm saying like structuring the deal, make it feel like you went to bat for them. And in often cases you are going to bat for them. And structuring in a way that makes sense. for them. Everyone kind of just tries them pigeonhole. Pigeonholing and deal structuring consistency is important for a $10,000, sub-10,000 deal. A $100,000 deal, it very commonly will look different every time. April Dunford was on the podcast, and she shared this really interesting insight that the reason people behave this way is the person at the company buying this thing, their ass is on the line also. Like, their reputation is on the line for this thing to work out. So they want it to go really

Starting point is 01:04:45 well. That's right. Again, it's that one, they do this one in every three years, one and every two years, maybe one in every five years. Hell, I don't know. It is not at all, they don't do this every year. It's very rare. It's no one likes a new tool. No one, not you, not me, unless it, unless it changes everything. Yeah, Figma. Figma is a great example, that's slack. Everything you've touched. Everything that worked out. You said that you ask these questions that people are afraid to ask. What are some other examples of questions you often ask that people are afraid to ask? I will say, listen, this is $150,000 engagement.

Starting point is 01:05:25 I will co-author it with you where we can make this a little bit bigger if you need something else. We can make it a little bit smaller in year one, but in year two it steps up. Like, how do we get this done? So when you go to bat, it's a win. they sell them, seldom do they like take it to the wrong side and like try and discount you. I've actually never seen that because at that point you have a relationship. So I co-authoring the pricing is so important because they need to know that they go to bad. They can say, I got this out of them if we get this deal done.

Starting point is 01:06:04 Right. So this is why like when I say every deal looks the same. You're asking great questions because it's explaining. kind of why I meant by that, but like this is another example of like why every deal in the enterprise sort of looks somewhat different because a lot of it is co-authored. So again, if someone wants a slightly lower price, give it to them, but maybe them lock them in a little bit longer. There's another point that Justin makes that you've touched on a bit, but it's when you hear a no. The way you phrased it is Jen always talks about how no is the best answer to yes because no is

Starting point is 01:06:35 data that you can use. Talk about that. I am a qualification crazy person. I will not get another call with someone because on the first call, it's either a yes or no. There's no in between. Like it is people, humans are like, we're so different and we're so unpredictable, but we're also so predictable at the same time. Right. Like, it's very obvious if someone is excited and wants to do something. It is so obvious when someone is just trying to be nice.

Starting point is 01:07:05 So I will say to them on that call, like, I'm sort of getting the vibe that this might not be a good fit or might not be good timing. Like, did I misinterpret that? And they will usually say, yeah, you're right. It's probably not a good. And then immediate, great, I would love to stay in touch. You've just saved a relationship and you just saved yourself a ton of time. And the implication here is just to your point, you're limited on time. You don't want to be spending time going down or rival.

Starting point is 01:07:29 I won't get you anywhere. Yeah, exactly. I'm going to take a quick tangent on tools. What's kind of like the state of the art on go-to-market outbound tooling? I don't use a tool. Because I believe in the manual. Okay, and I'll explain why. Every single note I send is slightly different because I see a picture of them and I'm like,

Starting point is 01:07:49 oh, I don't know if that's going to land. I'm like, oh, they actually might appreciate this. It's weird. Like visual cues are so helpful. A picture is a visual cue. You know, looking at how long they've done, they've been in the role, looking how long they've been at the company. I use all of these little things and I don't, I seldom customize a note in a way that like people expect, which is like that first like customized sentence because AI does that and everyone's doing that.

Starting point is 01:08:19 So I go to the opposite stream, which is like remove it. And I customize it with how I frame it or the subject line. Yeah. So it's like if I'm talking to someone like like up here, I might be, I might say like, quick question like QQ. If I'm talking to someone that, you know, has a bit more experience, I might write a little bit of a tighter note, not all lowcase. So like it just depends on who you're speaking to. And again, this is why it's okay to spend a little bit of time on this because it's a hundred thousand dollar.

Starting point is 01:08:54 It's actually a million dollars at the end of the day because a hundred thousand dollar deal if you play your cards, right, turns into a million dollar deal over three to five years. I love how much you enjoy this. It's so fun to hear. So essentially, what are you doing? You're sitting on LinkedIn, finding folks to ping, and then you call email them one individually manually. It's so weird, Lenny. Like, I have no process. I kind of just go with, like, the vibe.

Starting point is 01:09:20 Like, I'll read an article about Tesla. And I'm like, huh, they could be interested in this. Not because that article had anything to do with the problem I'm solving, but because I'm like, This feels like a good Tesla day. Like it's hard to describe like it's a very emotional thing for me. And, you know, not to, not to my own horn, obviously, but like I've been successful in sales. And the most successful salespeople can't explain why they're good at it. It just comes to them natural.

Starting point is 01:09:53 It's just like an emotional thing. It's like the world's best founders, how do you be a good founder? It's very, very hard to define. How are you become a good engineer? Very, very hard to define. So, like, I don't believe in, I don't believe in, like, playbooks. I don't, like, I believe that, like, there's, like, a feel to it. Like, I emailed, like, the chief legal officer at a hedge fund once.

Starting point is 01:10:20 And he responded to me because I wrote to him on Saturday. I knew it was going to be busy. I made it one sentence. And it was, like, tweaked for him. Do you feel like this is going to be the, the way as AI, SDRs just kind of take over and everyone's getting billions of emails that feel AI-ish. Yes. So I guess maybe speak more there, just like is the alpha essentially just become human, don't automate.

Starting point is 01:10:47 Yeah. And the also thing about AI tools is they're all pulling from the same databases. So I'm like, I want to email someone not in the database that's getting hit by a million folks. I want to take a back door in, not the front door where everyone else is, trick-or-treating, you know? And this is effective for very large deal, which is what you need to be doing anyway, because it takes a lot of time to do this, to do it this way. Yeah. Interesting. So you're not like sitting in clay.

Starting point is 01:11:15 You're not like Apollo. I don't know all those tools. You're just like finding people yourself. Yeah. Do you start with a target prospect list at least, just like here's the companies that are the perfect fit for this and let's work through them? It's all in my brain. because I've been doing this for soling. I have in my brain.

Starting point is 01:11:30 I'm like, these are my early adopters. These are I'm going to go to after I close those logos because they get excited by those logos. So it's just like experience of like, you know, you land, I don't know, you, you land a Walmart. You're going to go to, you know, the rest of the industry

Starting point is 01:11:46 and say, hey, we're working with Walmart, you know. Versus like you go to, you know, some, you know, lower end enterprise company. and they're like, wait, what do you do? What? Like, I can't even comprehend. Like, also the most strategic people, some of the most strategic examples are at these tier one logos. That's why they're tier one,

Starting point is 01:12:07 because they've got like super smart, like really capable folks. They also extract the best talent. The best talent likes to experiment and continue to improve. So it's like it's this, it's like this compounding thing. For someone that isn't Jen and has all this experience, say like their founder, they're hit a millionaire AR. They're just like, okay, where do we find our customers? you have any advice for coming up with a just coming coming up with who we should go after

Starting point is 01:12:31 yeah they be using these tools should they be hiring someone like a gen like I know this is what you do for companies so you know one proud is go hire jellyfish to help them through this but the founder the founder I would say the the founder this is sort of in tune with them in a way they just have to like find it they like it's all it's so weird to say it's all va and I hate saying it because it's like it's like a commonplace thing to say but it's like there's this thing about like flow and it's like some of these brands are in flow with you right now right like um you you you you you you you found this insight from somewhere who else what's the next next adjacent ring of people that like would buy into that and so what i'm hearing is just

Starting point is 01:13:22 like pay attention to what's happening what companies are yeah news what companies are doing things. We're the kind of the early adopters in the market. If it was just a database list and it was just about figuring out the right messaging and then, you know, emailing folks, we would have known by that by now. That's so interesting. Okay, maybe one more question. This again is from Justin. He shares that when you hit resistance, you never argue. You reframe. If someone says, we already have X solution, you'll agree and pivot and totally X is great for this thing, but here's what we can do. This is why it's, sell to the alpha. Hey, I know, I, listen, that problem you just described, you're right, you have a tool

Starting point is 01:14:01 for that. We're taking you much further upstream with value. This is the opportunity I want you guys to have access to. I love it. Jen, I've gone through everything I was hoping to get through. On the other hand, I feel like we could do another hour on all these things. I feel like we need to do. You have three in a, yeah, we need around three on the next phase and all the things that people want to dig further into. Before we get to our very exciting lightning round, is there anything else that you wanted to touch on or share? This stuff is really hard. It's very hard.

Starting point is 01:14:34 Like sales is also all about like learning very, very quickly from the rejection. The rejection is good because it's a forced learning and you never want to go through that again. But you have to be, I don't like to use the word cringe. Like you can't be afraid to cringe. She's like, you know, bringing your AI recorder into a call. Like that's cringy. But like sending 15 notes to people that you can deliver serious value to, like, don't be a free.

Starting point is 01:15:07 And don't be afraid to like ask the hard questions. Be different. The whole game is about, oh, this feels different. That's what people want access to. And yet everyone commoditizes themselves. Like they try and mimic whatever, you know, they try and mimic, you know, a forward deployed engineer. Just rename it. You don't have to use the same nomenclature.

Starting point is 01:15:27 You know, like everyone gets excited by the new because the new could be the next thing, the thing that changes it all. So that's why I'm always like, don't be better, be different. An amazing way to end it. With that, Jen, we've reached our very exciting lightning round. I've got five questions for you. Are you ready? Yeah. First question, what are two or three books that you find yourself recommending most to other people?

Starting point is 01:15:54 I do Twitter accounts. Oh, Twitter accounts to follow. Yeah. Okay. Like, Lenny, the day I have time to read a book. Period. Period. I would love to be reading books.

Starting point is 01:16:09 Cool. Twitter accounts to follow. Yeah. Obviously you. Like, you produce some of the best content, truthfully. Appreciate it. Like, you get into the minds of people that, like, they're not even giving this insight on Twitter. Who else do I absolutely love?

Starting point is 01:16:28 Jason Lemkin. So for sales, Jason Lemkin is awesome, awesome follow for sales. And also he had a great, great recording with you. So link to that because that was a great piece. I actually learned a ton from it. I love Gavin Baker. Super nuanced takes, like takes a lot of like obvious statements, but like shares a lot of the non-obvious in the,

Starting point is 01:16:51 insight. He's great. Jason Cohen. Have you ever had Jason Cohen on the cast? Jason Cohen, a smart bear, Jason Cohen. Yeah, yeah. He's coming on the podcast. Yes. Oh, that's awesome. What a great plug for him right there. Yeah, those three would be great. I know they're all met, but. Great tips. Yeah. Next question. Is there a favorite recent movie or TV show that you've really enjoyed? I know you said you have time to read. This is going to be embarrassing.

Starting point is 01:17:20 Baywatch. Baywatch. Yeah. I'm watching Baywatch channel. It's just so numby. And it's like 90s classic. Baywatch. Wow.

Starting point is 01:17:31 I've never heard that one before. So this is original Baywatch. This is original Hasselhoff, David Hasselhoff, Yeah, Pamela Anderson. Pamela Anderson, the original cast. Amazing. Yeah. Okay.

Starting point is 01:17:42 Deep cut. Is there a product you've recently discovered that you really love? So the number one thing for me right now is an app called Playground. which is the pictures of my toddler that they upload into the preschool. So I can get like the daily updates on like what's going on in preschool when he's not home. Amazing. I need that. We get like emails and and Google photos. I would really love that. Yeah, there was another one called like Class Dojo. There's a few of them. But Playground's the one that this preschools on. Love Class Dojo. I'm a small investor.

Starting point is 01:18:17 Are you really? I am. Oh, that's awesome. How about that? Two more questions. Do you have a favorite life motto that you find yourself coming back to, find useful in work or in life. Yeah, be direct. Like cut the fluff. Like, give me the one cent. Give me the bullet, not the paragraph. Final question. I was told that by Justin, that you've never read a sales book. You've just learned to do this. If you were to read a sales book, if there was someone else out there that you look up to you learn from, is there anyone else out there in the world of sales that you most respect. I think Jason Lempkin has the strongest understanding of sales. His content is unbelievable. He speaks about it clearly and cleanly. I would say he like and as I mentioned like

Starting point is 01:19:02 unbelievable Twitter follow. I'm a big fan of his. I've actually learned a lot from him too. Like the 50 50 thing or a higher two salespeople, he's spot on. Failure rates actually probably higher than 50%. I love that guy. And he's so he's so like AI forward these days. He's just building. You almost took down Replit with his complaints. It was a whole new cycle of how replete did. And he should be correct. Like sometimes he says things that are like harsh, but you're like, he's not wrong. Love it.

Starting point is 01:19:31 I got to get him back on the podcast. Jen, this was incredible. This was everything I wanted to be. I feel like we just leveled up all the founders that have listened to this in their ability to close. We're going to just create all the economic value. And a lot of happy VCs from all the sales that will be closed as a result of the advice you shared. Two final questions where can folks find you if they want to either work with you or follow you online? And how can listeners be useful to you?

Starting point is 01:19:54 Twitter. Every new learning or mishap I put right on Twitter. So it's like my personal diary. And super responsive on Twitter DM. What's your Twitter handle? Twitter handle. It's double J-J-J-E-N underscore A-B-E-L. You did not make that easy for people to find you.

Starting point is 01:20:17 But we don't. I know. I know. I didn't. And the jays that from jellyfish? Is that where the extra J's? And then also, well, someone else had the handle. So I was like, I need my name. You got to go. By the way, just tell people what jellyfish is in case that might be helpful to them. Yeah. So it's a consultancy that helps folks in the zero to one stage. And now I'm at general manager of enterprise at state affairs, which is basically giving citizens and corporations and inside inside state capital building. State policy is way more impact on you than federal policy. Federal policy is written more about.

Starting point is 01:20:54 Incredible. I've only recently learned that that's what you're doing these days, and that is super impactful and important. So thank you for your work there. Stephen Democracy. That big deal. Jen, thank you so much for being here. Thank you so much, Lina.

Starting point is 01:21:07 This was a blast. Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast.

Starting point is 01:21:25 You can find all past episodes or learn more about the show at lenniespodcast.com. See you in the next episode.

Lenny's Podcast: Product | Career | Growth - "Sell the alpha, not the feature": The enterprise sales playbook for $1M to $10M ARR | Jen Abel

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