This Week in Startups - Sales | Scaling Your Startup S2 E3 with GRIN’s Brandon Brown and LeadIQ’s Mei Siauw | E1206

Episode Date: April 29, 2021

A high-functioning sales machine is a way to predictably scale revenue quickly. Two 8-figure B2B SaaS CEOs share the lessons they've learned from building effective sales teams including how to create an effective sales motion (2:49), structure a sales pod (12:00), hire a great VP of sales (15:10), train SDRs into AEs (28:55), deal with average performers (47:54), and more! Slide Deck Slide Deck: http://bit.ly/SYS-S2E3-Deck

Hey everybody. Hey, everybody, welcome to season two of scaling your startup. This is our third episode on episode one. We had Craig Zingerline from Growth University and Alan Chen from Fitbod. Join me to go over key growth metrics and the best way to track them. And on episode two, we had Meheck from Skill Bank and Caitlin from lately. They shared insights about social marketing, TikTok and short form social media writing, had a write great copy. You can see those first two episodes at this week in startups.com slash scale, S-C-A-L-E, as in you're going to scale your startup on episode three today, two of my highest performing SaaS startups, grin.co and lead IQ.com. These are two amazing startups. They both went through our accelerator. We invested millions of

dollars in each company. I'm on the board of both companies. Both companies are doing over $10 million in revenue, yum, yum. They're going to share their secrets about how, to scale your sales team. Both of them have dozens of people on their sales teams, but they both started when I invested with, they were two-person companies. So they really have a ton of knowledge. Stick with us. Season two of scaling your startup is brought to you by Our Crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at O-U-R-C-R-O-D-D-com slash twist.

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Schedule your free product tour right now at netsuite.com slash twist. Okay, Brandon, you're up first. Tell us what you've learned. Well, thanks, Jason. I appreciate you having me and looking forward to walking the group through scaling your startup and how we've approached sales. So what I'm going to start with in this talk is a little bit about our story. So a little bit about grin, my background, how we've got to where we're at. I'm going to touch a little bit on what I call prerequisites to scale. So these are things that you need to figure out prior to really digging into scale.

And then I'm going to go into the next section, which is things that you actually do need to figure out. So topics that need to be addressed before you can really start to scale a sales of marketing engine. I'm going to touch briefly on testing your engine. So what do I mean by that is how do you test to make sure that your investments are hopefully going to out and you minimize downside. And then I'm going to end with hiring leadership. So this is really what we're trying to get to when we think about scaling a sales and marketing org is bringing in the VP who can ultimately take the function and scale it to the next level. So as I said, I want to start with our story and a little bit about Grin. So Grin is a SaaS platform for creator management

and influencer marketing. Our whole philosophy is that there should be no middleman in between you, the brand and your creators. So we're not a marketplace. We're not a network. Again, we're software as a service. We're number one in, you know, what's arguably a very noisy and competitive category. And inside sales is how we've achieved that. We count, you know, many of the world's most innovative brands as our customers, brands like Allbirds and Fashion Nova, but 175 employees. And we're growing very rapidly, you know, at 175% year over year at scale. And we've always grown fast, right? So in the early stages, you know, we've used inside sales to scale the business, you know, very rapidly. And when you look at us on a benchmark basis,

We went from 1 to 10 million in ARR in just under two years. And to put that in context, you know, Shopify and SendGrid, it took two and a half and almost three and a half years to get to the same benchmark. So now while we're well beyond this 10 million in ARR benchmark, we went through the early stages of growth very fast. And I think that's important when we're going to walk through the strategies for how we did that. Before we get into really how to scale sales, I want to talk about a couple things I think

are very important, prerequisites to scale. And the first is product market fit. So product market fit, as I describe it, is your product elegantly solves a problem for a known market, right? So this means you've identified a problem. You have technology that solves that problem and you have a known market that you're selling your product to. And the thing about product market fit, there's lots of literature online about what is product market fit. How do you know if you have it? And I'm going to touch on that briefly.

But I think the thing that I found that was most interesting is that it comes on quite slow, which is deceiving. There wasn't this light bulb moment where all of a sudden, it's we have product market fit. The way I think about it is there's really a continuum, right? It's not binary, zero and one. And we started to understand that we had product market fit early on. And then we spent time thinking about how we could strengthen that. If you have to ask if you have product market fit, you likely don't have it because the indicators that start to show up are obvious, right?

And those are things like customer love and engagement. So how are your reviews online? How does the product engagement look? you do see your sales cycle and your sales velocity start to compress, right? Meaning that when you get prospects who have the problem on a demo, they sign up. Then you also have higher retention and renewal rate versus benchmarks. So product market fit is incredibly important to be very confident that you have strong product market fit before investing heavily into growth.

Before you have product market fit, you should just go slow, right? It's not about rapid scale. It's really about learning and understanding, talking to customers. figuring out the problems that they have and how you can build product to solve those problems. How do you sell it? And you should really go slow. After you feel like you have product market fit, it's all about reliable and predictable growth, which we're going to talk to, we're going to talk about today. This is when you start building the sales and marketing org, accelerating growth. And the whole goal here is to really build, you know, a cash generating machine where you can put in

$1 and out on the other end, you generate, you know, $5 plus. The second prerequisite to scale that I think is incredibly important is that the founder, either the founder CEO or one of the other founders, has to actually lead sales to start. This can be controversial for some people, but I think it's just critical, right? The reason this is important and that you cannot outsource this is because it's incredibly hard. Figuring out all of the solutions to the problems that I'm going to walk you through take serious grit and willpower. No one understands the market and the problem like you do. and so to really dig in, get your hands dirty, work through the problems is just critical at the founder leads that process. The feedback that you learn in this process also drives product

roadmap and product changes. You need to adjust a product quickly as you're continuing to iterate and scale to make sure that you're solving problems. And some of the early indicators and signals that you get back really become the basis for your messaging. So this is something that I think is incredibly important. As we think through how to scale, the founder actually needs to be the first one to figure out a lot of these things that we're going to walk through. We talked a little bit about our story, Grin, our story in early scale, how to think about product market fit and that the founder really needs to lead the charge. As the founder, well, what are you trying to do before you scale the sales org? There's a handful of things that you really need to figure out before you can

test the engine and then hire in the VP who's going to take it over. The first is your ideal customer profile. So what is an ideal customer profile? The idea with an ideal customer profile, ICP, is what we call it internally, is that not all customers love your product, and that's okay, but some do. And so you really need to spend time figuring out who are the customers that have this kind of insane love for your product? And not only who are they, but what do they look like? When you think about running an early stage company, you have finite resources, right? You can't invest into every growth tactic. You can't build all types of products. Early stage companies are really about focus. And we've all heard about the Pareto distribution where 80% of the results come

from 20% of the market or the opportunity. The idea with the ICP is that that is your 20%. These are the people who really love the product, have high usage, high renewal, and you can figure out and define who they are. When you think about actually figuring out the attributes of the ICP, it needs to be data-driven. So these are attributes that you can take and ideally enrich at scale. So things like location, headcount, revenue. And you really need to map this ICP. And the goal is that you want to try to get the entire addressable market as much of it as you can for your ICP. That's enriched, and then you want to put it into your CRM. So you want an existing database of prospects who you believe are qualified based on these criteria, and you want that to be in your CRM. And this is an important

piece before you think about scale. The second is a concept called sales pods. Sales pods is really helpful to me in thinking about how do we actually scale the sales organization. A sales pod, as I think about it, is really a unit of production with predictable inputs, which is your cost, and predictable outputs, which is your revenue. The inputs are typically headcount, right? So the idea is rather than hiring one account executive or spending a certain amount of money on marketing and then figuring out how many BDRs for one account executive is you really need to group all of those resources into a sales pod. And the whole goal is just to figure out one sales pod to start. And this makes scaling up much easier to understand, right? Because to scale, you actually

hire pods. You don't hire one-off people. I think of sales pods as like one cash-generating module inside a larger system that is called the sales function inside your company. And your first goal, as the founder as you're leading the sales process is just to figure out one pod. So what is the headcount makeup that has a predictable pipeline and kind of pipeline generation? How does that translate into actual closed one business? And what are the cost and what type of revenue does this generate? When you figure out one pod, it makes it much easier to scale up over time. Do you ever wish you invested early in some of the best performing IPOs of 2019 to 2020?

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expose fake news on social media. Seems like a brilliant idea. The R-Crowd account is always free. Go to O-U-R-C-O-W-D.com slash twist. R-Crowd.com slash twist. Okay, let's get back to this amazing episode. The third piece is Playboy. book, right? So playbooks are really a source of truth for best practices and rules of engagement for

the sales org. So these, you know, these are the basics of how your sales pod, your BDR and your AE units of production, how they generate pipeline, how they find leads, how the AEs actually go and close deals. This ends up being a book that you can hand a sales pod on the first day and say, here's generally how to think about winning business inside our organization. BDRs, you go to these lead sources, you use these tools to enrich and make sure that they're ICP qualified, or you look at them in the CRM in this way. AEs, this is how you actually close deals. You ask questions that understand pain, and then you do a product demo that maps the product usage to the pain, and that's how you actually close and win. The truth is that scaling the sales

org is you obviously need innovation and creativity, but you want to do that within a tested framework because you don't want every sales person trying to figure it all out again. The whole point of the founder leading sales is that you're figuring out a system that is scalable and repeatable. So we walked through product market fit, the founder leading sales, and then there's a handful of things that you need to figure out. Ideally, you've mapped your ICP, right? You have playbooks. you've figured out exactly, you know, how one sales pod works. Now what you want to do is test the engine. So what you're really doing with testing your engine is what I call like testing mini scale. So you're doing like kind of like a lightweight scale up before you really start to invest

into heavy head count growth. And what you're doing in this process is you're taking everything that you've learned, right, who the ICP is, how a sales pod is structured, the playbooks for how to generate pipeline and close revenue. And you're hiring two more pods, one to two. You're typically going from one to three pods. And the goal here is to test if it works. So the reason you want to hire two pods is you want to benchmark performance. So you don't, you know, typically what we found is you don't want to hire, you know, one AE at a time. You want to hire two AEs at least because then you can see if one of them is underperforming, you know, you have a benchmark, another headcount that just joined the organization that you can, you can compare them against. And what you're

really doing in this kind of testing mini scale is watching the unit economics and watching the system to see if it'll break. So how does the ramp work? How fast were they able to get up and achieve the targets? Is the output that you thought a pod would generate? Is that actually happening? What happens to the customer acquisition cost? Where does it break and where do we actually need to dig in in order to fix it prior to scaling up? So now you've gone from, you know, one to three pods. you've tested, you know, many scale and you're starting to get some sense into like, is this system that I've built, is it working, and does this scale the way that I think it's going to scale? And then from there, you want to move into hiring leadership. You know,

oftentimes I'll talk to folks and this is where they want to start. You know, I take a pretty hard stance against you actually can't start with hiring leadership. You need to figure out what I've walked through prior. But it's critical within a growing organization to hiring great leaders who we're going to run the functions for you and sales is no different. So why hire a VP? There's really two things. This is the number one leverage on your time. So, right, as a, founder, you have certain skills. You understand how to iterate, how to identify problems, how to sell a vision, these things. But at some point, to really scale, you need, you need somebody who's going to run it. And the second piece is, they're better than you. This is someone who's a

professional who's gone through this stage before. And you're not supposed to be an expert in sales as the founder at running functional sales. So ideally you get someone who's much better than you. You really want to look for a few things. So the first is values and culture match. So does this person actually map to the type of organization that you want to build? The second is track record of performance. This is really quantitative performance and specifics. So not were they around success, but were they responsible for success? A lot of people are able to join high growth organizations and kind of sit in the wings and draft off of the organization's success, but you want somebody who came in has very specific results in how they performed.

And then it's very important that they have the stage experience that you're in. Hiring someone to go from $20 million to $100 million in ARR is quite different than hiring someone from go to, let's say, 15 or $20 million in ARR. So they want to have this specific stage experience, ideally, that you're looking for. And then you want to empower that person, right? And so the way that I think about empowering leadership is really two dimensions. At this scale, really, numbers and culture are all that matter? So are they acting in accordance with the culture and the values that you've set forth?

Are they empowering the team in the way that you want them to? And then are they hitting the numbers? Pretty simple. You know, sales is quantitative and really nothing else matters. So if they're hitting the numbers and they're acting within the culture that you've set, then you likely have someone who's. great on your hands. I think in general, right, like managing VPs as an exercise in humility, you know, typically these people are more experienced than you, and that's the whole point,

especially for a first time founder CEO. Grin is my first company. So, you know, the challenge for me and the opportunity really is to bring in people who are much better at running sales than myself or my co-founder, Brian, who helped lead this process could ever be. And then the last, you know, piece that I'll put, which is kind of controversial, but I don't put, I don't believe in putting VPs on performance improvement plans. They're supposed to tell us what to do, not the other way around. We're not hiring someone to learn on the job in our company. We're hiring people who can come in, take a function, and scale it. And so they're either hitting the numbers and they're acting in accordance with the culture or they're not. And fortunately, you know, performance improvement plans

are reserved for, you know, mid-level management and frontline employees, but not functional owners. So in summary, you know, looking forward to the discussion after Jason, but, you know, a couple things. Product market fit is really all that matters. Don't scale sales and marketing without it. You put yourself in a death spiral and death trap. There's a bunch of things that you need to figure out. And only one of the founders is really equipped to do that. It doesn't necessarily have to be the CEO, but someone who's on the founding team. And you can't really get around that. It's smart to test the engine prior to overinvesting into growth because you really want to minimize downside. You can blow a lot of cash if you haven't made sure that it's going to scale up. And from my view,

the whole goal is get the function to a place where you can then hand this to a great VP who's an incredible leader, incredible at holding people accountable and building the org, and they take it the rest of the way. But you really need to get these things figured out prior to doing so. So that's the content that I have and look forward to digging into some Q&A afterwards. Small businesses have always shown the ability to adapt, innovate, and survive even more so this past year. I've seen it across my portfolio. Another way you can adapt is by growing. and finding the right people to help scale your business. LinkedIn jobs will solve your hiring problems.

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lead IQ. Thank you, Jason. Appreciate you having me. Today I will share our journey as we are scaling our startup, what work, what didn't work, and what did we do. So my name is May. I'm a co-founder and CEO of Lead IQ. Lead IQ is a sales prospecting sales platform and we are helping outbound themes with their workflow and efficiency. As Brandon mentioned earlier, it's really, really important for one of the founder to be the first salesperson of the company. And I went to similar journey, like what Brandon described. I was a product manager at Oracle prior to lead IQ and I have no knowledge about sales, but you just went there and figured it out. Today, we are at about 100 plus employees and I'm working with a sales team of 20 plus.

I'm going to share actually our own experience at building and scaling an outbound sales team. And because outbound sales is actually very, very important, most companies can start growing just inbound leads. However, after reaching a certain size, usually by the time they reach C-B-A or C-B, most companies have to really build out their outbound team and out-bound strategy. Outbound is even more important for a startup, because as a startup, you have no brand, you have no reputation, no credibility, and no one knows you. So you really have to get out there and tell people that you exist. I will walk you through our own journey. at building and scaling our own sales team with a focus on outbound.

So we actually launched Lead IQ at April 2015. In fact, we were part of the launch accelerator, and Jason Kalanis was actually a big part of, he gave us a lot of feedback as we are building the product and also launching that. So in the very beginning, our first few customers were all self-serve. They found us from the website, and they self-sign up using credit cards. But in November 2015,

we hired our very first marketing person whose experience at prospecting. That's when we started stepping up our prospecting and outbound game. One thing that everyone should know is that first impression always matters. Now, how do people get a first impression of you? Usually, it's either from your website

or from your content marketing or from your outbound emails. However, most people spend a lot of time preparing for your website. Typically, you can spend up to 10 or 100 hours preparing your website, or you can usually prepare about an hour a week making sure that your blog post is updated, your sharing content. However, most people do not spend more than five minutes when you are crafting your outbound email.

So most outbound emails are actually pretty generic. It's not, doesn't really stand out. and it's really hard to get attention if your outbound email is not really fully thought out and crafted. Here is what we actually did in the early days. Ryan, who's our prospector then.

He led out of growth and marketing. He spent a lot of time to really craft the cold email to stand out. He even made an individual music video for the people. You can see one of the example of the email here. Hey, I'm not a gifted musician. but I made this for you.

So, lyrics are in the description, and then do you want to talk? And then just a little brief description about what we do as a company. And here's the response. They really like it. Ryan, I'm in for a call next week, and so is my boss. Adding the whole sales team, this is how you get someone's attention. Again, today, many people are getting so many cold emails in their inbox. It's really hard to get their attention,

because most of them just gets deleted. So in order for you to really get someone's attention, it's really important for you to personalize. Making a music video doesn't really scale. We no longer do that for our cold emails today. However, we still make it a culture. All of everyone in our sales team still personalize their cold emails

and making an effort to make sure that their emails actually stands out. So after a first few months with Ryan doing the prospecting, we decided to hire our first STR or sales development rep. Sales development rep are basically a sales rep who are focusing on mostly getting the first appointment by sending out a lot of cold emails as well as cold calling. So this is our first array into the outbound team. We hired the first SDR in May 2016, and as you can see, our opportunities starts growing because the STR is actually helping us to get meetings with more companies and more people.

However, we realized that the opportunities grew, but revenue is flat. Those opportunities, we were not actually successful in closing them. This is the part where Brandon mentioned a little bit, where in the beginning, you started closing yourself, and then after that, you pass it on to someone who's better than you. So we realized that I was actually starting to be overwhelmed and I wasn't able to actually nurture and really close all of the opportunities by myself. That's why the revenue is flat. So in July 2016, we hired our very first AE.

And since then, like, the AE really helped and we started like closing more opportunities. After our first success with our first AE, we decided by November 2016, we started growing the AE team. We hired our second AE and we grew our SDR team from one to three. Actually, Brandon mentioned as well earlier that it's better to hire in pairs. It's better that you hire two SDRs. It's better that you hire two AEs. We didn't know it then, but now if we want to go back and do this all over again, we totally agree and we will probably do that the same as what Brandon advice. We'll hire two SDRs in the beginning, we'll hire two AEs. It's always better if you can hire them in Paris because they have someone almost like a fellow, a mate,

that they can actually share experiences, they motivate each other, and there's someone that actually can compare who's doing better and learn from each other. For us, we just struggled to it and then we figured things out. By the time we grew the team, it's easier to figure what works and what didn't. So it took us quite a couple of months to figure things out. Since 2016 to 2017, we grew the team into three, but they really didn't work out. Originally, when we first thought, one SDR started generating this money opportunities for us. We wanted to scale that. We grew the SDR team from one to three, but with three SDR's opportunities creation is basically stays flat. Something was wrong. What was wrong,

actually, we did not have an SDR manager then, and we were not good at training and coaching the STR team. So these STRs are just struggling and flailing, and we were not able to help them as well. So we decided to restart the SDR team, and we hired two new experience STRs at this point of time. One thing going backwards, if we had the hindsight, one thing that we did was actually we always hired bottoms up.

We hired the people first, and then we hired managers a little later. You could have done it the other way around. I think maybe knowing what we know now, If we had hired a manager and then have the managers built a team, this could have happened faster. But at that point of time, we didn't know any better. This is the route that we took.

We hired two new experience STRs, and that helps because these STRs already had the training from another company. They know what they're doing, and we just leverage that experience and help us to continue growing the team. With these two new experience SDRs, you can really see the difference where opportunity creation started growing again. And with that, by July 2018, we started hiring our third AE. So there are actually two ways to do this, as we are speaking to many early companies.

Some companies decided to build their own SDR team in-house, like what LidIQ tried to do ourselves. Or in the beginning, you can also just hire an outsource SDR agency firm. The cost-wise, the outsource SDR team would be slightly cheaper to start with. usually it's around 6K to 10K per month and you need to commit by quarter because there needs to be iteration, you need to figure out the messaging, what's the ideal customer profile,

who are the contacts that you'll be sending to. While the in-house SDR, it takes a little bit more time because you need to hire a manager, you need to coach them, you need to get them ramp up and successful. However, in the long run, if you are committed towards building

your own in-house SDR team, the long-term investment is much higher over here because this SDR will then grow and they can become an AE, they can actually become an customer success person, they will be the feeder where they can actually grow into other roles within the company. In general, knowing what we know now,

I would still recommend actually building your own in-house SDR team if you can invest and then making sure that you go for the long run for that. So don't give up too far. fast. This is some of the learning as we were building our own in-house STR team. It took us about three-month ramp time before an SDR will be ramping up and successful and start generating the appointments that we're expecting them too. In general, it could be our inexperience of hiring in the beginning. We only get about 50% success. One out of two hires work out for us, which means like one out of two did not work out. We went by quality,

versus quantity. Many companies out there actually had an activity goals for each of the SDR. Some of them can have like 50 to 100 activities. We went with lower activities goal because they really need to personalize. We want to go with quality. Every call email needs to be personalized. It needs to be really good. Rather than sending 50 to 100 activities and yet most of them are generic and spray and pray. We use multiple channels, email, call as well as social. And what? One thing that will be really clear, you need to find someone who's resilient, someone who doesn't take no as an answer. And even if they get rejections, they will just get up and then do it again. Because being an SDR, you will be on the phone, you'll be sending a lot of emails, and in general,

the response rate that they will only be getting yes, around 3 to 10%. 10%. 10% is on the high side. On the average, it's actually 3%. So for us, too, we realize a couple of things that helps us in building our own, our on sales team is we spend marketing dollar to actually promote our reps as industry experts. Our reps are our brand advocates where they are also sharing tips about how to do outbound, what cold emails work with them. They will share everything that they know about getting an outbound appointment, an outreach, and we are becoming a thought leader's in the space. And each of our reps are basically almost like a marketing person who are we are putting them out

there as brand advocates. Personalized emails is a really important aspect of outbound, and we are instilling it as a culture within our strong outbound team. You saw one of our very first code email where Ryan made that music video. Now, we don't really make the music video anymore, as we mentioned. However, we are still writing really strong outbound emails. People write back to us to our managers that your team wrote really strong. emails and many of them will ask like, I'm not interested to talk about, they like you, but I'm interested

in hiring you. So that happened a lot of time. It is a risk that our sales team are actually being poached by our prospects. However, we believe that actually sends a strong message. We know what we're doing. We know how to do outbound and that ties up with our product that we are selling as well. This is how outbound should be done well. After figuring things out with individual contributors. We started scaling our team. In April 2019, we hired SDR manager. The SDR managers then hired more people and then scaled what have worked for us and train and coached the rest to follow similar model. Then by May 2019, we started hiring head of sales and we scaled the AEs as well. Today, we have close to 10 SDO and 10 AEs right now, and we are continue scaling that. We still have not hired our VP of sales yet. We

went with her head of sales, which is more closer to the directive level. I think if you can find a VP of sales, as Brandon mentioned, it's actually very, very, very, highly recommended. A VP of sales can really scale it for you. In our experience, though, finding a VP of sales is not that easy as well. Good VP of sales is in high demand. Everybody wants them. And it's quite difficult to attract a great VP of sales to actually join a startup, convince

them of the high growth. So for us, we actually went with just ahead of sales and, you know, our next round, likely I think we'll be starting to find basically the next level of EPS sales who can continue helping us to scale for the next level. Also, we realize that typically sales leaders have their own stage as well. There will be sales leader who are good at scaling from zero to one, and then there will be sales leader who will be good at scaling from one to 10. there will be another kind of sales leader who will be good at scaling from 10 to 20 or 20 to 50. So there are different experience and different operational skills that's needed at different stages. And so that's really important as you are finding your sales leader as well.

A VP of sales is really good at a larger company may not be a good fit for you if you are still much earlier. So that's our experience as we are scaling our team. A couple of takeaways that we have is that outbound sales is huge, it's critical for most companies' success. We are working with many outbound sales team, and we can really see how it makes a big difference in people's revenue goal because it's something that you can control better usually than how you can control inbound. All companies, especially startups, have to learn outbound.

It's just a long-term investment, but it is well worth it. And one thing that most companies sometimes don't realize is that SDR are your brand advocates. It's good for you to invest in them, spend some marketing dollars and also brand awareness towards what the SDRs are doing, make them to become thought leaders in your space because when you do that,

the return is actually really, really high. And last, but not this, it's actually personalize, personalize, personalize, personalize. We cannot emphasize this enough because as a company that are seeing many companies sometimes who are just sending very generic emails, that actually doesn't really generate high response

and you are going to be failing in the long run because most emails, if it's not personalized, will end up in the spam inbox, and it will hurt your inbox reputation in the long run as well. Invest in your outbound team, and it will really help your company grow and skill. Thank you. If you're a business owner,

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Schedule your free product tour right now at netsuite.com slash twist. NetSuite.com slash twist. Okay, let's get back to this amazing episode. Great job, Brandon. Great job, May. And I think you're both in the eight-figure revenue club. That's amazing. It's been great to work with both of your companies.

I've got five questions. I'm going to start with my first one, which is, how do you find just exceptional account executives in today's hyper-competitive SaaS-based market. Is it really hyper-competitive? Or are there so many SaaS companies hiring so many people and so much experience out there

that there's just many, many more candidates available to you? It is hyper-competitive in our experience. Great sales person, great account executive, is making so much money that it's really hard to convince them to leave their pipeline in whichever company. they're working at and jump into a new company. So it's actually really hard to find a great AE.

Our take has been actually finding potential great AEs who have the traits who we believe we can train and coach to become an AE. That so far has been our route. That's why I think we hired quite a number of SDRs and then we promote and we train them to become an AE. That takes a little longer, but that has been our route so far. I think our next route would be trying to actually hire and recruit those AEs from the outside. We haven't actually done many of those outside AEs so far.

And Brandon, how about you? What's your experience in terms of getting, you know, an account executive and shaking them loose from an existing job versus training them up? But here I specifically want to understand, let's say, not training, but hiring a top one. Is it even possible in today's crazy market? And are they transient? Do they move, you know, around every two years? How do you think about getting elite account executives at Grin? Yeah, great question.

And a huge challenge for sure, just with the rise of SaaS. For the first three or four AEs, I personally recruited them. So, like, I recruited them almost like how you'd recruit a VP. I carved out time every day, went on LinkedIn, scoured my network, and reached out directly. One of our top AEs has now since transitioned into a management role, and he still tells the story of like the feeling of when the CEO reached out directly to him to recruit him. So got it. That was how we did it.

A secret weapon. Yeah, I think that was how we did it in the early days. And then what I found is that like good people follow good people as well, right? So I feel super fortunate to have the leader in the sales function who's leading the function, which was also a challenging hire, but great reputations, been through the scale at multiple companies. And so it has a big roll at X. And so we've done a good job being able to recruit, you know, heavy hitters in.

And I agree with you, May. We hire great BDRs and then train them up as well. And lots of our AEs started out as BDRs. So my second question, what do you think about remote work? Obviously, we've all had to go to remote work during the pandemic. Do sales executives work better at home or better in the office? What will drive better results and grow your company faster? We'll start with you, May.

It's an interesting question. I see it both ways. We are transitioning to become a remote company. We are getting rid of our leases. Everyone is just becoming remote now. We still have co-working spaces as collaborative spaces, but we don't see. I think people like the extra time, not having to commute. But what we are seeing is that collaboration and communication becomes more of a challenge. So we are now actually testing out, having a virtual deal room where we would actually come together and discuss as if it's a collaboration. We are testing out different things in order to help with communication. Got it. But we believe this is the future, right? We are transitioning. I think in the future, more and more companies and teams will just become remote, and we need to figure it out. Brandon, where are you at with this?

Are you going to try to get people to come back to the office in Sacramento? or are you like May just going with the flow and, you know, building and moving to a remote style approach specifically for the sales team? So we're remote, switched to remote, leaned into it. And we didn't really skip a beat. I think you do miss certain things like the in-person collaboration. But the way that I would get at that problem is it's all about the operating system for the company and the department. So the playbooks, the ICP, the cadence at which people check in, how they get feedback on deals. You actually do need a really well-baked machine and you need touch points that are documented and you need process around closing and how they can actually offer discounts and

like negotiation frameworks and you need all of that. Because I think without that, the default is like, go knock on the boss's door. It's like, hey, look, I got and you can't do that. So it works for us because we have all of that documented. But I think without that like operational, like operating system for the sales department, you're screwed. So interesting. So interesting you say that. I tell my team now, if it's not on Notion, we didn't do our job. Like I want every single thing on a Notion page when you are in our weekly meeting, pull up your Notion page for what we're talking about here. I want everything documented. Anything that's a process, a checklist, a policy, a strategy. It's got to be, got to be on Notion today. I'm just curious, of your total spend for the year, what did office space

look like in 2020 or 2021? And what will it look like in the future when you get out of these leases? Or what percentage of your spend is your leases? So I don't know about percentages of overall spend, but I can tell you we will. Or yeah, savings will be. Yeah, we will spend 15% of, of what we were spending prior on office space. Hyper-scaled-down, remote-first, collaborative work spaces, but no, like, no one comes into the office each day.

And then we repurpose that money into in-person events. So... Oh, okay. So it would be neutral. You won't be spending more or less. You'll just be spending it differently. Yeah, and we'll go to quarterly whole... Sorry, quarterly management. So leadership and then director level.

quarterly in person, and then twice a year, whole company is what we're thinking so far. But we'll talk to the CFO and see where that all nets out long term. Fantastic. And May, how much were you spending in dollar amount on office-based ballpark? And then what do you think you'll spend on an ongoing basis? Yeah. I think Paul Park, we were spending close to 300k a year-ish, maybe a little more, 300 to 400k a year. Prior to COVID, we are actually still in the list right now.

It will be ending in a couple of months. but we are definitely also like shuffling that budget towards like once COVID is over more annual company between and meetings because we are now hiring out of 10 states and out of 10 countries. So what do you think the cadence will be for your management team and for your sales team getting together? What do you think the ongoing cadence will be? We think it should be quarterly.

Okay. Yeah. Perfect. And so same for Brandon. So both saving hundreds of thousands of dollars, but redeploying it. So the loser in this situation is the landlord. The winner is company productivity and no commuting. And for the people who do have to commute, there'll be less people on the road.

And we're seeing this across our portfolio. And this is why there are, you know, like hundreds of thousands or millions of square feet in every city that tens of millions of square feet, hundreds of millions of square feet in some cities. Okay. Let's talk about SDR. It's my third question. They seem to burn out quickly. and so I was going to ask this question about how do you deal with that, but it does seem like you already answered that,

that you see SDRs as a way to get to AE. So let's talk about that. I'm going to adapt my third question from how do you deal with SDR burnout to, how do you graduate SDRs to AEs? Why don't you start with that one, Brandon, from Grin? Yeah, so we, it's kind of controversial, but we have like levels of SDRs. So there's entry level, there's like principal, and then there's senior.

And so you have, within the SDR role, there's seniority. And so we try to make it such that the high performers can always see like what's next for them. Got it. And there's little pay bumps and, you know, equity incentive to get to that next level. So there's this incentive where they feel like they're tracking. And then we have an AE readiness program where there's like high performing AEs and collaboration with leadership, they'll take the people who've raised their hand and said, hey, I want to be an account executive. And we'll start to coach them through the process. And then in order to

actually make the jump to the AE, they obviously need to apply for the role, but they need to go through like mock presentations. There's this whole system that they go through that proves that they can make the jump. Because we've had, you know, we've had in the past folks try to make the jump from AE from SDR to AE and they fail. And that's quite a bad situation. Yeah, then you, everybody loses. You lose a productive SDR and they lose because they're no longer at the company. And they've, yeah, they didn't clear the hurdle. And May, what's your thoughts on that? Very similar where I think promotion path is very clearly laid out from the very beginning. For us, we lay out three different paths, actually. Some are going to account executives.

Some can be an account manager where it's like going after expansion of existing customers instead. And then some is you can also go into implementation consultant or customer success in the future. Right. Let me go to my fourth of five questions. How do you deal with average performers? We all know how you deal with low performers. You get rid of them. But somebody who's a perennial, just, you know, year after year, quarter after quarter hitting that 50%, 60%, 70%, 75% of quota. So there's money coming in. It's not under 50% of quota where it would be easy to cut them. How do you deal with the average or slightly under average performer, Brandon. So first. And I'm not, if you're watching this and you work for Brandon, this is to your benefit that we put this out on the table here.

So our, um, look, we're trying at Grin, we're trying to build a company of that's high performance that people love to work at. But high performers want to be held accountable and they also want to have fun at work. And you can't just have fun at work if you're not being held accountable. Like the whole thing falls apart. Like it's not fun to just come have a relaxed environment. No one hits their numbers. Like that's actually a bad company. Like you're going to fail.

So number one things, you have to hit numbers. Like you have to achieve the targets. We have levels. So first level is a get well plan. So it's not a performance improvement plan. But it's like, hey, look here.

We're going to spend some time with you. The management engages, puts together a plan. We want to see performance improve in these areas. And then we move them from there onto a performance improvement plan where you need to see specific deliverables and milestones. And I think the culture that we've built is such that there's not a lot of lone wolves. Like we try to get lone wolves out. So it's very team first.

And the team rallies- What about a high performer who's a lone wolf? I'm at 120% but I don't work well with others. What do you do? I wouldn't have them work at Grin. Really? Wow. Cutthroat. All right, May. How do you deal with somebody who's hitting at 75%? 60%? percent, it's kind of like they're paying for themselves in a little bit, but they're not kind of hitting their numbers. And then do you have the lone wolf issue? So two questions, sir. Yes.

I think very similar to what Brandon has done as well. We typically try to coach them up first. We hire, like with our managers right now, like coaching is a big thing, right? We try to coach them. Can we make them better? Because as mentioned, also, like, we actually hired more junior reps. and we try to train and coach them up. So I think our patience usually is a little longer

because we know we are hiring a little bit more of the people with a little less experience than people who have had experience and we're expecting them to just go. But we do give them a little bit more time to try to get up there. If they don't still get up there after a period of time,

then that's when we start putting them into performance improvement plan. In terms of Lund Wolf, totally agree. I think culture is actually, everything, we realize that it's better to have a team that works well together rather than someone who's like doing really well, but yet not working well with the team. So. Got it.

Yeah. So let's wrap with email as a channel. Has email, and I'll start with you, May since it's your wheelhouse with lead IQ, has email been burned out as channel? Not for external communication. Got it. Internal collaboration is changing. People want to be slack.

Yes. Are people selling over Slack? Because I saw Slack edit the ability to DM people, but then they throttled it because you weren't allowed to DM people because I guess they were afraid people were going to get spammed. So they were like, it would be great if you could spam people. Or it'd be great if you could contact anybody at any organization. And then they kind of neutered that function.

I thought it was a critical mistake on Slack's part. I would have let people deal with the first 10 inbound and then change their settings instead of making it now not work. because I haven't gotten one invite to DM with people. Were you thinking that might be an interesting channel, May, the Slack DMs? I think it's going to be pretty interesting once you are part of a big Slack community group, right? Which that happened, because once you are in a big Slack community group, you're just in a general channel, and then people can start DMing you, whether or not you know about that.

Oh, you're saying, like, on a community Slack. In a community Slack, exactly. Yeah. We have a rule against that on this week in startup Slack. If you DM people and try to sell something, people will screenshot it and then we disinvite you. So don't do it on this week at startups. Right.

What do you think, Brandon? Is email losing its efficacy? And do people call people on the phone anymore? So, yeah, I mean, depends on the industry, right? So for our, we sell into marketers inside e-commerce brands. Like, it's actually quite hard to get cell phone numbers for them compared to like if you're selling into real estate or something where they're, their numbers on the website. They want you to call them up, right? So my view, email is super

powerful for outbound prospecting. However, you have to focus on quality and personalization, a lot of what may hit on in her presentation. The days of like spray and prey mass email, even if it's done in like a way that's through Gmail and throttled back, like you need to personalize. You're not going to get responses if it feels canned. So still. So less is more, more personalized, two or three times. touch points maybe per email, hey, I notice your LinkedIn, blah, blah, blah, blah. I notice you work for this company. Just really personalize that first sentence or two.

Yep. And it's not just emails. I think you need to use multiple channels. So one email and then leave a voicemail, add them on LinkedIn. Like use multiple social, yeah. That will really, really help because otherwise. That's what I do with founders. If I find a founder that I'm interested in meeting or somebody I'm interested

and having a guest on the podcast, I'll add them on LinkedIn, email them, follow them on Twitter, yada, yada. All right, listen, this has been absolutely fantastic. It's great to be in business

with both of you and to watch both of you just, you know, hit that eight-figure club. It's really hard to get to with SaaS and be such great, amazing founders and develop, really, and share this knowledge.

I think it's really great for people listening and we'll see you all next time on this week in startups.