- So welcome back, Dale.
- Thanks, thanks.
- Yeah, your first
video worked really well
so we're gonna do another one,
and so again, for people who
might not be familiar with
scale of what you do,
so you're helping with portfolio operation
what it's called, right?
- Yeah, yeah.
- So what is it?
- Yeah, so we broadly call
it portfolio operations,
but really what we help our
portfolio companies to do
is help 'em scale to be the
next big software company,
at the point at which scale invests,
which is when they've met
that product market fit.
What they're really trying to do is scale
their go-to-market function,
and that's really what I specialize in.
- Right, so it seems like
recently one other thing
that you've been called to help with
is kind of to say you're
structuring sales,
like how should you look at
sales as a function in your company,
how should you structure your team,
and what would that look like,
and it's something that I
think a lot of companies
kind of struggle with,
and are not honestly aware
of the best practices, so
we figured we'd try to
draw it up on the map
and give people a sense of today,
if you're doing enterprise software,
this is probably what
you should be looking at.
- Right, yeah.
- So the big thing
probably is to start with,
there's all kind of sales, so
maybe we should start there
and draw a picture, like anything from
credit card payments you do
on your getup.com account
to enterprise strategic sales.
- Yeah, and this changes
as a company matures,
so some of the companies that we work with
will start out with,
it's before they've
actually sold anything,
so this is the first time
that they're doing something,
and then there's another,
another inflection point comes up
where they actually start graduating from
the web self-service all the
way up into the enterprise
and the difference stages in between,
and what I advise our customers,
one of the easiest ways to
take a look at your customers,
and this has really been used a lot,
is the segmentation pyramid.
People think about their
product, their marketing
and their sales in this perspective.
At the very tippy-top is going to be
your enterprise sales.
At the bottom is going
to be the broad market
where people will typically
be a self-service or
a VSB or very small business,
and there's a lot of different
variations in between
from an S and B, mid-market
to large enterprise.
- And again, there's very
few people at the top,
there's very few
enterprise style customer.
There's only 500 company
in the Fortune 500.
- Exactly.
- And there's a lot of
people at the bottom,
and usually companies tend to specialize
on one end of the spectrum or another,
although we see companies now also
tryin' to cover more of that pyramid.
- Yeah, and people will
typically start in one place
and they'll migrate either up or down.
We saw this in the
marketing automation space.
At the bottom end was HubSpot.
HubSpot took a very broad portion
and took the VSB and the
SB part of the market.
Marketo took that mid-market portion
and Eloqua took the very top,
and that's the way that
that market segmented out.
In other markets people
will start in one area,
maybe they'll start at the very bottom
servicing their self-service customers,
and then as they become
more and more mature
they'll slowly move up
market into the mid-market
and eventually the enterprise.
- But so usually you'd recommend a company
that are just getting
started kind of focus on
operating well in one segment?
- Yeah, I mean I think it starts with
identifying who your ideal customer is,
and this is again, going back into
defining out
your product and thinking
about your product
within this pyramid.
It's thinking about how
you're going to market
to these people, and then
how are you actually going to
sell to these people.
- This alignment is really
critical of course, right.
It takes a very different product shape
to sell to the decision-maker,
the enterprise,
than it does to sell at
the self-serve segment,
and it's also something
where at the end of the day,
because you have so few
accounts at the enterprise level
you need to be able to charge
a lot more for your product.
When you're at the bottom you can charge
a lot more people a lot fewer money
to be able to get to the
revenue you need to IPO.
- Right, and your sales and marketing
have to align with that as well,
'cause you can't have a
very expensive sales model
in the S and B and VSB market,
versus in the enterprise,
you can apply more resources there.
It probably takes more resources
in order to get the large
multi-million dollar accounts.
So when you're thinking about product,
at the very top end
it's about customization
and integration.
You have to be able to
fit within the workflow
of the enterprise customer,
and all the other products
that they're using.
So you have to play nicely with others.
- They're not gonna adjust to you,
you need to do something
that works for them.
- Correct, exactly, versus the
self-service S and B market,
it's really about that handy-dandy,
easy to turn on, easy
to use type of product
where they can come in
and almost figure it out
for themselves how to use it.
You can't have documentation
that is like several gigs,
or in the days of paper,
like several books long,
you have to have something
that I can turn on,
I can go into the credit card, charge it
and just start using it right away.
- And again, you can't afford
to customize that product
for every single one of
your customers, and again,
the trick almost there is, can you get
this one-size-fits-all product
that can really appeal to a
large portion of the population
without forcing you to
specialize in term of feature,
in term of localization, in
term any number of things,
because that would really
just kind of kill you.
- Right, exactly.
And you know, going
into the marketing space
when we think about it,
it's a very similar story.
We have 50, 200, 500 customers
in this large enterprise
segment, or strategic segment,
whatever you want to call it,
so everything there is really targeted.
You're adopting an account-based
marketing strategy,
where it's basically tailoring the message
and the value proposition
to that particular company
because we know so much about them.
At the bottom you don't have that luxury
so it really is this broad value prop
where you actually are everything,
you're trying to be
everything to everybody
at the very lower end, or
at least segmenting it out
by industry or by size
or by user personnel.
- Because again, at the bottom,
and wherein it's just so
critical, and you just want to get
as many people as
possible to hear about you
and you want to repeat
a consistent message
in a schematic way, whereas
in the enterprise level
you have a lot more
info about each customer
and so you can go and say
for a Fortune 500 car manufacturer,
this is what we can do,
and you can use that advantage.
- Exactly, whereas in the S and B market
I have to be able to speak broadly about
car or even just manufacturing as a whole.
I can't get down to the car manufacturing
'cause there probably aren't that many
down in this space.
And then in the sales arena,
you also have a much more
expensive sales model up here
because it takes more
people, more specialization
in order to sell that enterprise product.
This'll be a mix of, it can be all direct
or it can be all channel,
but you typically,
you'll see some type of crossover
between direct and channel,
and the channel will be broken out
in between people who help you sell,
so these are your system integrators,
your global SIs, it
will be your resellers,
it'll be your value-adds,
and the other part of
your channel is gonna be
your partner ecosystem going back here
into your integrations.
These are people that make you stickier
within an organization, within an account,
so people that you work well with.
If you're integrated with Salesforce,
you're integrated with Workday,
other platforms, Slack,
that just makes your
product that much stickier.
At the bottom end you'll
see the self-service model,
web, channel,
and people that sell on your behalf,
giving you a lower cost sales model,
because a one-on-one sales approach
at the very small business,
if you're hiring a high-end salesperson,
just doesn't make sense.
- Right, it's not very effective, and so--
- Well it could be very effective,
it's just not very efficient. (laughs)
- You're right, you're
right, you're right.
It's a very, very good distinction.
'Cause at a high level, again,
if you have very few target accounts,
you're closing deals for
say a million dollars,
a good salesperson can lift that price up
by literally like hundreds of
thousands of dollars sometimes
or just get the deal,
where another rep couldn't,
so putting everything on
your side to get those deals
and get max value is very important,
whereas at the bottom it's much more about
repeating it very, very quickly.
- Repeatable volume at high velocity.
I don't want to spend
too much time on this
because it actually, every small minute
that I spend on this costs me money,
and it reduces the amount of deals
that I can actually process.
- Right, so let's focus a little bit
on the enterprise picture.
What does the average team look like?
How would you suggest a company
think about structuring
their enterprise sales team?
- The easiest way to think about this is,
and I like thinking about
things in frameworks.
I think about the typical sales process,
and it comes down to
you need to be able to access the account,
you need to persuade the account to buy,
and then eventually you
need to fulfill the account.
And these will map out into
the different types of roles
that you'll see within an organization.
What I'm gonna map out
here is a very generic,
vanilla version of it, but
if you think about accessing,
this is where what will generally be
named as an SDR or a BDR.
These are your lead
gen, lead qualification,
account qualification people,
sales development reps,
business development reps.
They take inbound leads or
they'll be prospecting outbound,
then create opportunities
for the salespeople.
- So they're just trying to figure out
is this company, does this
company have the budget,
do they have the need for what we do,
who's the decision-maker in that company
and can I get that person on the phone
or responding to an email.
- Yeah, at a broad level that's exactly
what they're looking to do.
What they're trying to do,
think about them as a hospital person,
they're triaging everything,
everything that comes in.
There are people that come in
who are looking for jobs,
probably not the right place
to send to a salesperson,
there are people that
are just kicking tires.
That's someone that I want
to keep in contact with
because there might be something
coming up down the pipe,
but I want to, that's
not necessarily something
I want to have our salespeople
focus on right now.
And then there are the people that are,
we actually have an active project
or an active pain.
It doesn't have to be an active project,
an active pain that we're tying to solve,
and those are the urgent
ones I'd need to get
into a salesperson's hands.
Then once this person, the BBRS
has passed on that opportunity,
typically a sales-qualified lead,
it will go into what we'll generally call
an AE account executive
and/or an account manager.
- So that's the stereotypical sales guy
that people think about,
or salesperson in general.
- Right, and that has evolved,
and our thinking about
this has evolved a lot.
What started out as a
one-size-fit-all account executive
who handled both the
acquisition and the upsell
and cross-sell of new
products within an account,
some companies still do
that, and it works for some,
and then others have
actually differentiated into
an acquisition who's job really is
just to get as many new logos
in the door as possible,
knowing that eventually
they're going to be upsold
or buy new products or expand the number
of licenses that they have.
- And because the mechanism for software,
between lending and
expanding are so different,
and the relationship
management is different,
and the human skills or the sales skills
end up being very different.
- Right, exactly.
And typically the type of
people that you hire into those
will be very different.
What I'll say is that
at the enterprise level,
that relationship and the understanding
of what's actually
happening at that account
is usually in the head of one person,
and so being able to have that person
have that quarterback of you
is actually usually a good thing.
- [Tim] Right, that makes sense.
- And then what comes into
play in the fulfillment
is usually what we'll generally label
as customer success,
and this'll be everything from onboarding,
provisioning, professional services
to make sure that the
customer is successful.
Their responsibilities will be for renewal
and churn eventually.
- And so just to kind of
give people a clear picture,
so usually your access
people, your SDRs, BDRs,
they will tend to be younger people,
sometimes just straight off
college, just graduating,
very quota-driven, get a lot of calls,
line up a lot of meetings,
whereas your exec will tend to be
a little further in their career,
maybe working not on a weekly
basis in terms of quota
but more like a quarter basis,
tryin' to make a certain number,
and what does this profile
look like after that,
between AM and CS, what
does that look like?
- Yeah, the BDR-SDR role
will typically be someone
who is relatively early
in their sales career,
someone who is hungry, and I
would say that that actually,
that attribute falls
across the entire spectrum.
You want people that are hungry,
but the BDR-SDR is younger,
earlier in their career
and looking at actually
closing and giving leads.
Their next step is typically to move
into this AE or AM role,
and usually what will end up happening
is that they start down
here at the lower end
of the segmentation pyramid,
where they start selling
into very small businesses,
faster to sell, lower cost.
The AE-AM, there's a broad variety here.
There's no set definition,
but usually you have some experience
in this SDR-BDR world.
Then you can either stay here
and continue to move up
the segmentation pyramid
or you can actually move
into a management role,
where you're actually managing
either a team of BDRs,
AEs, AMs or customer success reps.
- Or managing like a territory,
like regional director
or something like that.
- And then the customer success rep,
that is a little bit different.
Those people will
typically come up through
either support or through the
account management function,
depending on what the
customer success person
is being asked to do.
- And usually that tends to be around
reducing churn,
just increasing spend,
extending the accounts,
but also helping make
sure that the product,
the daily support experience
is well taken care of
and the customers are giving you referrals
and staying customers for life.
- Exactly, exactly, customers for life.
That's exactly right.
- So maybe as a one last topic,
'cause that's also a
big sales distinction,
we should talk a little bit
about inbound versus outbound.
So let me just actually wipe the thing
and we can talk a little bit about that,
'cause that ends up
making a huge difference,
and I think a lot of startups don't really
think about it all that much.
- Right, right, and I
think that there's actually
one differentiation that I want to make
between inbound and outbound,
because there is
when we think about it for
marketing versus sales,
and inbound
versus outbound.
And when I think about it
from a marketing perspective,
inbound marketing I typically liken to
the world of content marketing.
You're putting content out there
but you're having people, you're fishing.
I mean you have people come
in and they'll come to you
to ask you the questions because you,
you've positioned yourself
as a thought leader,
as an expert in this category.
- And then you capture
them with some sort of form
or a webinar, demonstration.
You get that and turn into a lead,
that then your BDRs can mine, yeah.
- In the outbound world,
this is if you think back
to the days, and people
still do it and it works,
is your direct mail.
We're sending to either, snail mail,
which people actually do
now, and it's coming back,
to email,
spam, what you would get into your inbox.
And that's what I think about
in terms of outbound marketing.
- And I'm sure you somewhat target again,
you're looking at very
few strategic accounts,
you know them, you kind
of have some information
from LinkedIn or wherever
about the person,
and what they might be looking for,
and so you're trying to customize that
in a very narrow way as opposed to using
broad contact messaging.
- Correct, exactly.
And then in the sales
model what I would say
is that inbound, this is the BDR-SDR
that is taking the leads from inbound
so the form fills that have
come in through inbound
or the responses from direct,
so people that have responded
and raised their hand
and said, "Hey, your
message resonated with me
"when you actually sent me that email.
"I'm responding."
BDR will typically take that inbound
and then qualify it, pass
it on to the sales rep.
On the outbound side, this is again
where they're running
into the targeted model
where I'm basically going through my list
of 500 customers as a SDR,
an outbound SDR, outbound AE
and saying, "Hey, we just closed this,
"we just closed Ford.
"I also think that GM
would also be able to
"get great benefit from this."
So what I'm gonna do is create
a highly targeted campaign
from a sales perspective
to go into that account.
- And sometime I think it creates
a triangle of sort of where
you'll have reps having
a clear, identified account,
and say, "Oh I think
"they're gonna be at this conference,"
asking marketing to do specific
targeted marketing duties
toward these targets,
and then involve the BDRs
and feed that really quickly,
whereas traditional inbound sales,
they're more like, there's a big funnel,
there's people coming in the top,
and they'll drizzle down to the bottom,
eventually talking to a rep,
and that's the traditional
model people think of,
but outbound has been really,
getting really popular lately it feels.
That's something that's
really coming back.
- Yeah, absolutely.
- Cool.
That's really a lot of info
in such a short amount of time
so thank you so much.
- Yeah, no, absolutely
- This was a great overview on sales
and how startups can think about it.
- Awesome.
