20Sales: How to Build Vertical Sales Teams, Why No Customer Success is BS and Everyone Needs it, How to Hire, Train and Retain the First Reps and Lessons Scaling to $2.1BN Revenue and 1,300 People with Larry Schurtz, CRO @ Genesys

If you can't forecast accurately, either you don't truly understand your business, you aren't truly doing the amount of diligence with customers and opportunities, you don't have enough opportunities to be able to balance out some of the riskier things with some of the things that look better. And we might not even be asking the right questions, and we're likely not talking to the right people. This is 20 Sales with me, Harry Stebbings. Now, 20 Sales is a show where we sit down with the best sales leaders in the world to discuss starting and scaling sales teams. Today, we're joined by a sales leader who scaled a team at Salesforce to 1,300 people and over 2.1 billion in revenue. Following that, he was the CRO at Confluent, delivering more than 60% revenue growth and doubling customer count. And today, he's the CRO at Genesis. It's time to get the notebooks out. There are so many granular tactics in this one. 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Finally, based on that research, you can use Clay to auto-generate personalized email lines for each lead on your list. Everything syncs to your CRMs, like Salesforce, your email sender like outreach and even your database like snowflake clay helps gtm teams across ramp vocada intercom sendoso and many others go from campaign idea to execution in seconds they have dozens of free templates and gtm resources visit clay.com harry today and get started with clay you have now arrived at your destination larry listen i've heard so many good things from the main man mr Frank Philman. So thank you so much for joining me today first. Harry, it's great to see you. Thank you. This should be a ton of fun. So thanks for having me on. Not at all. But listen, I want to start with some context. Sales is often something that sales leaders love. I want to dive into when did you first discover your love of sales? Was there a critical inflection point? Yeah, well, so a little bit of background. When I graduated from high school, I went into college. I want to be an electrical engineer. More specifically, Actually, most specifically, I wanted to build robots. I went in, I took my first electroengineering courses, obviously heavy math, some things that I had not really been prepared for and realized that that was probably not the best spot for me. I quickly exited and got into marketing. And I did a lot of, even back then, a little bit of kind of just soul searching. It's a pretty dramatic miss of what I wanted. And I realized I actually didn't want to build the robots. I wanted to sell the robots. My love of sales really just came from my first job out of school. I graduated with a marketing and finance degree and two companies came onto my campus. One was Eli Lilly, pharmaceutical company, and the other was EJ Gallo, the wine company. So these are tough choices as a college graduate. I went Eli Lilly. I was at Eli Lilly for two years. That's where I kind of got hooked. I mean, listen, I love that in terms of an origin story. Sadly, the robot career didn't happen. I'm sorry for that. But I think it's turned out pretty well. There's so many great companies, though, that you've bluntly been an instrumental part of. I wanted to start on actually the decade at Salesforce. I mean, when I looked at the numbers, leading a 1,300-person team to $2.1 billion in revenue. I mean, these are insane numbers, Larry. What are one or two of your biggest takeaways from a decade at Salesforce in that trajectory? For me, it was a couple of things. And number one, from a learning perspective is prioritization. What are the biggest things that sales leaders do wrong today when it comes to prioritization? We try and do too much. We really try and do it all. I would look at that from one, from the personal leader perspective, the impact that has on the leader and then the impact that has on your team. So I'll kind of unpack that. On the leader side, if you're personally trying to do too much, this is where you really get into what I know are mindset challenges. These end up in health challenges. You really get spread way too thin when you're trying to do too much. And we can kind of talk about my perspective on how you solve that piece of the puzzle. But I think that's number one. Number two, the impact that actually has on your team is pretty detrimental. It all ends up flowing down. It's a very diminishing trait when you try and do too much because you flow it down and you keep adding things on. You never take anything off. The list just kind of keeps growing. And when the list grows, your teams aren't able to do it either. And the bag gets fuller and fuller and fuller and fuller. And for me, it's a little bit like a balloon. Eventually, when there's so much air in there, it breaks. How do we solve that? If I'm a sales leader today and you're advising me, which is kind of the role play that I'd love to have today. Yeah. Do you have a framework for like only focus on the top accounts? Everything else doesn't matter. Only focus on spending time with your top reps. They're the ones who are going to close the business. My framework is I think about it from a leadership perspective. There's nothing more important than people. There's just not. Some people call it talent. Whatever you want to frame it in, your human capital is the most important thing. And then in the job that I've chosen and that my teams have chosen, which is deliver the number, there's no plan B. There's no like other team that if we don't get it done, somebody else is going to. It doesn't exist. So for me, it's people. It's executing on the number. This is ruthless prioritization because I could argue this third one should be first. It's customer success. And I think if you're nailing those three things, you're probably doing a pretty good job. You know, we've heard frameworks before this question, and then we hear about kind of the blurring lines. And one thing that always strikes me really today in sales is like, to what extent is it an art versus a science? And I spoke to your coach before the show, who said that you're one of very few people who can blend the two. If I push you, is it more an art or a science, Larry? And how do you think about that? I have historically thought that it was probably 70% art and 30% science. And then I challenged myself on that because then I think, okay, well, if it's art, then like, can you learn art? Is art more talent? And is science more skills? How do you balance those? How do you recruit for those? How do you organizationally model for those? I today am probably in the 60, 40, if you press me, I still think it's a lot of art. I still think it's a lot of talent. And when I say talent, I'm talking things that you and I, like that it's hard wiring. That hard wiring was when we turned 13, man, it's in us. You can pivot, you can adjust, you can learn new things. But all the skills-based things that happen after that, I would put into the science bucket, right or wrong. What do you think is the art of sales? Is that the EQ of reading customers? Because respectfully to me, looking in from the outside, it's just more and more science based. And I put structure, frameworks, analytics, gong recordings, outbound sales tools. To me, the only art left in sales is actually the EQ of reading people, relationships, the older school, intangibles. What is the art left in sales? So yes, I do share that opinion. I would expand if I can. This is more than like reading customers. You cannot train EQ. Really, really good high-end EQ. I firmly believe that that's in you. And I think that is the art. And I would tell you, as it relates to things like empathy, which is what we're all looking for from customer interaction with our coworkers and bosses, I think it's really hard to train empathy. Trust me, I've tried, right? And when it's not something that is core to people, you're asking them to work out of their, what I think is their DNA cycling. And it's really, it's uncomfortable for them. It's not a great spot for them to be working in. So I do think it's a lot of art. I think there is a beauty, a real beauty in people that do it well. And I think it separates the incredible from the great. I totally get that. And I agree you cannot train empathy, which is a pain in the freaking ass because I would love to. And the other one that I always find striking is like playbooks. Everyone says about sales playbooks. How do you define a sales playbook? First off, let's just start there. I always start playbooks with outcome first and work backwards. You can get super playbook happy, super playbook heavy. Everybody's got a playbook. Playbooks end up conflicting with each other. I always try and work playbooks backwards. What is the outcome that we're looking for? And depending upon the playbook, I typically work it backwards into if that needs to be true, by when does that need to be true? What are the critical things that need to happen for that to be true? And who are the people that we're going to ask to go do that? I like to keep it simple. Outcomes first, work backwards, and then measurement and cadence. How will we know if we're on target? How will we know if we're on track? If we're not, what pivots do we think we're going to make? Kind of play the chessboard out a little bit. But man, I'm just a fan of keeping it simple. Going back to the analogy of me being the new sales leader or CEO who needs your help, you scaled sales teams like no one else has done. You mentioned that being an AE in an IC yourself. Help me understand, how do you structure a hiring process for a new sales team addition, for an AE today, for an SDR today? How should I do it? So first, I think you got to understand the role, right? What are you hiring for? What are the specifics of that role that matter the most? A lot of people put this in the job description, but I also think a lot of companies aren't super clear about what they're looking for. And I'll take you through how I think about the process. But I have a high confidence score that when you aren't clear about what you want, that's when you may end up missing and hiring the wrong person. It has very little to do with whether that person was talented or not. It has to do with have you done a good job with the matching process? I always like to start with what is the role required? And then I kind of work to, OK, well, like where are we going to go source those candidates? There's an incredibly, incredible availability of diverse, wildly talented people for any number of roles at any level. Today, it's really pretty beautiful. As a hiring manager, the amount of access that we have now, you need a good recruiting team. That recruiting team has to be armed with the value proposition of the company. So if I was going to interview, if I was you and you're working for me at Genesis and you're hiring an AE, I would want to make sure that you're armed with your Genesis pitch. What is your pitch about Genesis? Like what's compelling about Genesis, Harry? Like why would I come and work there if I was the candidate? You got to be armed with the value proposition. I like to keep interview teams small. This is a whole separate thing that I'm sure will rile some people up that may watch this, but I'm not a fan of panel interviews. I like doing interviews one-on-one. I strongly advocate that for my leaders because the relationship between the people that you work with for and around really matters. And I think that's difficult to get out of a panel. I like to keep it five folks at the most interviewing people. And then I think you got to move quickly. The beauty of having this wide availability of diverse talent at all levels today is just that. The curse is dragging people through long processes. Oh, I want you to do one more interview. Like speed is kind of the game. And I think when you can match speed with a defined process, you can get incredibly valuable people. My question there was actually you know if you have an amazing candidate on the second interview which often happens and you like I quite want to hire them Do I need to do 10 Or can I just hire the second How long have we worked together you and I In this process Not long Three months Okay. No, you're going to need more people to interview that person. How many do I need? Listen, I think if you've got a really hot candidate, and we hear this a lot, we've got offers. I'm a candidate. I've got three offers. I'm coming to you guys. You're early in your process. I'm late in three others. I need to make a decision, that amount of pressure. We get that a lot. But would you move on that? I don't like hot candidates. To me, it's like hot deals. Bad decisions are made when you compress timelines and don't know people in my mind. I think this is where a lot of hiring mistakes are made because you do not do enough diligence. The challenge is compounded globally because in some markets, you hire the wrong people. That could be a year to an 18-month process to get a new person back in seat. And it's going to cost you a lot of money. If you're going to spend more time, my opinion, there's no more important thing than getting the right talent on board. It is a beautiful thing when you do, and it is really, really problematic when you don't. So I'd rather invest the time, get a little couple interviews. I don't like the hostage negotiation strategy of, hey, I got a bunch of offers. You need to get me one in the next week, especially if it's that language. That person doesn't match our value statement anyway. Certainly not anyone I want working for me or for you, even though we just met. Completely agree with you. Before we get to that offer stage, you're interviewing me for a role in your team. What are the questions that you continuously go back to if you're adding me to your sales team? And there are certain few which you always like to know and hear answers to. I always get into track record and I do it a couple of different ways. I want it a little by the numbers. Tell me the story. Like if I was going to tell you the Salesforce story, which you told very quickly and probably better than I do, I would lead with results because we're in a results driven business. And that's not just sales, it's customer success, it's everything. So I want to hear the track record. Where I then go, I typically get into cultures. You know, so if you know that I've worked at PTC, Hyperion, Oracle, Salesforce, Confluent, now Genesis, and if I was you and I was interviewing, I'd be like, what culture did you really prefer and why? I've had, you'd be shocked, the range of answers that I've gotten to the culture question. What range of answers have you had, Larry? It was really fun. We had Fridays off for three months. There was always food in the office. I've heard very culture-related answers that had to do with amenities of the company. I've heard culture-related answers that if I took that to the other end of the spectrum, you know what, that was one of the hardest places that I've had to work. It was the most disciplined structures that I had to work. I didn't like quite a few of the conversations, but I grew and it was amazing. You'll hear stories about bosses. You'll hear stories about philanthropy. But I really, for me, the reason I'm asking the question, because values matter to me, they matter every place that I've worked. And I think value alignment is an important thing. I'm kind of getting a little bit of value statement out of the culture piece. And then the last thing that I typically get to is what drives people. Why are you still working? Is that bad if it's money? If I say, listen, dude, I'm here to make money. I'm a comp machine and I want to make revenue for the company and comp for me. Yeah, why? It really matters to be able to give my family a great life. I want to get a bigger house. You know, obviously want to send my kids to great schools and want to have a great life with my wife. What I just got from you is it's actually not about money. It's money so you can deliver outcomes for your wife and your family and getting a bigger house that probably is for your family. I will always double click on things to the point where people get super annoyed. It's maybe a terrible, it's a terrible habit, but I ask why a lot because I think the nuance is in the why for people. I totally agree. It's the Toyota's five whys. One aspect that a lot of people do is the case studies. They love a case study. Do you do case studies with me? Are we going to have to do that as part of the process? I don't. I have folks on my team that do and like that. This is where I go to like being open to different parts of processes. There is a lot of value sometimes out of the case study. But for me, the case study gets to what is your mindset and your thought process. It gets to the what and the how. I feel like I can get that out of talking to you for 45 minutes. You know what I always do? I say, huh, we're hiring the team around you too, Larry. And we need more great people. Who are the two or three people that you'd bring with you on day one? Yes, it's a huge sign. And I would say that imperative grows the higher you go in your role and responsibility. So like take Frank, right? Frank went from running a team to running a country. That imperative and your network, your brand is critical. You have to have it. And again, there's so many talented people. If you aren't competing on that basis, and by the way, it doesn't matter if the people that you're going to bring with you are terrible. The double click on, yeah, I can bring a team of people. It's like, well, tell me about those people. Who are they? What have they done? Like, you got to go, you got to go unpack that. It doesn't help if you hire an average person that then brings people that aren't the best people for your company and your customers. It doesn't help at all. I totally agree. It's probably the worst thing. Well, this has gone incredibly well and you want to hire me in this process. What are some of your biggest lessons in terms of getting the offer done right, the comp setting and how to get the right deal structure for the new sales edition? I think you got to do that early. I'll give you an example. We're in a hiring process right now for a super senior leader in our company. We have a certain comp structure that we think is aggressive. Some people are addicted to a different comp structure. And the intersection of how valuable those people would be for us and what we would need to pay them doesn't make sense for us. That equation doesn't pencil for us. It's really, really challenging when you discover that after two months of interviewing. That's a problem. I like to know that we can afford someone and get to a comp structure before it's time to have a comp discussion. I think you need to do that sooner rather than later. It's not the first conversation. It's not the last conversation. And this is the unpacking of the interview process for me. You got to understand what matters. And by the way, what matters most around comp? Does your on-target earnings matter more? Like, are you a commission person? Does equity matter more? How do you think about the two? What do most people care about from your experience? At a leadership role, equity. At a normal role? Like an IC role? IC role, like give me my on-target earnings. Give me the ability to crush my accelerators. Have sales team expectations changed over the years? I just saw a tweet from Jason Lankin today that said in one of his portfolio companies, the top performing sales rep just quit because she didn't like her VP sales. Next line, she made $800,000 last year. have people got more demanding in what they want? Yes. But I will say the most important for me, the reason she left is not comp. It's because she left. She didn't like her VP. Yeah, she meant $800,000, dude. At what price though? So this is where I think it has changed. And I will say this from some of the early companies that I worked for. Supercoin operated. Give me my on target earnings. Kill or be killed mentality. You know, let's see how long you can make it. And if you don't make it, then in six months you're gone. and it doesn't matter if you like your boss or not. That has changed. The impetus on leadership these days and the impetus on what I think is like true servant leadership, I think that is driving more loyalty. I think those are, for most people, I think that is a bigger driver than compensation. If that gets too out of whack, you're going to have a problem. You will get sideways if, hey, I love my boss. I love the company. I love our journey. I love our customers. And by the way, you're paying me 30% of what I could be making somewhere else. clearly you're going to have a problem. If we're into small gaps, I believe leaders make a difference. Okay. So I'm, I'm, thank you. I would like to accept your offer, Larry. I'm excited to join. No one does onboarding well, but universally sucks. What've been your biggest lessons in scaling sales teams on how to do onboarding well? It's gotten harder too, right? I mean, insert COVID in the pandemic, when everybody shut down what we all consider normal onboarding, It's gotten harder and I will argue we will never rotate all the way back to the way it was. And I'm talking a little bit about like in-person versus digital or remote. My first training, as I mentioned to Lily, I was exported. I'm an Arizona guy. I was exported to Indianapolis in the winter for six weeks. And that was the way you trained. And you did role-based training and there was curriculums and structure and everything else. I think that has shifted certainly from the remote aspect and the in-person aspect that has completely shifted today. Along that journey, you're getting bite-sized pieces of the prioritized what you need to know in order to be successful starts with basic things. And then you're on your enablement journey that lasts a year. Do we spend any time in support? People a lot of times say support's an amazing place to start. When do we get in front of customers first? Do we listen to prior sales calls? Do we tag along with sales leaders? How do we think about ramping in that first 30 to 60 days? The support one's interesting. I haven't heard that. That's an interesting thought. I think you can get real perspective there. I'm going to consider that stolen. Honestly, it is the most effective thing that I urge all founders with sales teams to. You hear the pains of customers. You speak about training empathy. It's probably the closest way to train empathy, just to listen to the customer support goals. Yeah, that's a great tip. We like to pair up in teams. We do like the buddy system. We like the mentorship system. Your question on customers, like day one, how many chances do you get to be new? You don't get many. Do you not worry that you put them in front of a big customer and they're like, I don't really know the sales cycle here. I don't know the next step on the contract. I'm not really sure how we close deals. You can't just put them in front of big customers on day one. How beautiful is that? Not beautiful at all. If I'm paying $500,000 to a company and you put a rep in front of me who doesn't know the process. I wouldn't send you a loan as a new AE. I would send you with either your boss or someone else. And the problem is the gift. Something has happened with a, you're talking about a good size customer. If it's a 500 grand is the metric, you clearly should know a lot when you walk into that customer. So you aren't blind to what's going on. Like I've been at Genesis for a year. I still sometimes will be with customers. I got, I'm still learning. I'm still new. Help me understand. I think it is a beautiful learning experience. Now, what's valuable for the customer in that? You got to bring something to the table. You got to do your homework and your background. You got to know your meeting. I'm not parking any of the discipline part of that meeting and the preparation part of that meeting. But if I could be new forever, I would do it. How quickly do you know if a new rep or a new sales hire is bad? For me, that's based on the number of interactions you have with them. There are some warning signs early. Well, let's use your example. We're going in to meet an important customer. I've given you all of the background data on the account. I've given you what they use of our products. I've given you their use cases. And if we're in prep for this meeting and you haven't been through that, or you don't have a command of that information, red flag right off the bat. If you're in that meeting and you aren't accurately representing the story of Genesis. And if you don't know about our company, it's kind of a red flag. And then by the way, just the customer interaction pieces, you can kind of draw conclusions on how people interact in those situations. So how soon do I know that they're bad? I would say it's the combination of several red flags. You got to really double click. And this goes back to our hiring conversation. And I've made a lot of hiring mistakes. Normally there is something that ends up showing up that when I was in the interview process, assuming I was perfectly diligent, which I never am. There's always something it's like, you know, like my gut was a little bit, like my gut. I hear that a lot with people. And I, my advocacy is trust your gut. Normally those things will show up later. And without fault, the hiring mistakes that I have made end up showing up in our example right now that were things that I didn't feel a hundred percent comfortable with. And for whatever reason, at that time, I gave a pass on or I didn't do enough homework on or I didn't poke on enough. You got to be able to unpack it. You got to be able to embrace that mistake. And you got to make sure that you're doing everything you can and not do it again. So bad is the sum of a lot of red flags and a lack of improvement with coaching. Do you think that's the first 30 days? Oh, yeah. So first 30 days. And you just said there about the gut. And I'm totally with you. Max Levchin from Affirm said on the show, when there's doubt, there's no doubt. Do you agree? and should you just move really fast in those first 30 days and say larry i want to get ahead of this clearly not working sorry or do you go ah it takes time it's a complex sale it's an enterprise sales cycle they're young you know give them a bit of time i would say nature nature of the flag like what is the flag what's the foul and i think you really got to unpack it this goes back to hiring mistakes cost a lot of money and a lot of time i think you need to have pretty candid conversations with people. This goes into the whole post-call recap and feedback and coaching. If you aren't doing that coaching, I think you're going to be in a different bucket. But let's assume for a minute, you go in, we have a terrible sales call. I'm like, oh my God, Harry, that was a mess, which I would never say. But I would normally start off with, Harry, how do you think that went? If it was terrible and you thought it went great then I throw another flag I really be curious what you thought was great So I think you really need to unpack that So it depends on the nature of the flag If it a coaching item and a skills related item and it not improving Like I feel as an employer, you have a responsibility to employees. You really do. It's hard to onboard. You mentioned it. It's hard to onboard. And I would break it into mental errors and physical errors. I played sports growing up. So my coach has always said that you can make all the physical errors. You cannot make mental errors. What's the difference in sales? Not a lot. This goes back to, I think there are things that there are flags that would be real issues if, and this goes to interpersonal skills. That is something you should be sniffing out of the interview process. Preparation and diligence. Those are things that are, they're kind of non-negotiables for the job that we've chosen to do. So I think you need to be candid with your communication. We have a responsibility as leaders to communicate and coach. If that coaching is not working, then I think you need to move quickly. You're just delaying an outcome that you have already pretty much decided on. Here's what also happens. By the time the leader knows it, everyone else on the team knows it. They know it before you do. Do you ever keep someone you don't like? I'm an investor too for my sins. You know, I met a founder yesterday, enterprise SaaS business. And I was talking about one of their sales people. And he said, total dick. But I mean, he brought in two and a half million dollars in revenue last year. So, you know, I can put up with it. Do I ever hire people that I don't like where I'm like, oh my God, Like, I just don't like that person. They're offensive. They're abrasive. No, I just don't even hire them. If they're that way to me, they're going to be that way with our customers. Well, no, they're not. They can be arrogant and douchey, especially in sales. Like, you can be arrogant, douchey, but you put me in front of a client, I'm going to charm the shit out of them. I'm going to close the million dollar contract. I'm going to be your number one rep. And I'm the best, so I deserve the most money. And everyone else, they're not as good as me. Well, Harry, I would tell you there's probably five of you. You just aren't self-aware enough to know that. By the way, this is not actually me. Just to clarify, for everyone listening, it's like, what a dick. Legitimately, that would be pretty much what I would say. There are so many talented people out there. The separation in the highest echelon, like there are more and more, in my opinion, wildly talented people out there. I think it's all about building confidence in the early days with sales. teams with sales people do you think that you should go for the logos or do you think that you should go for just quantity like just get as many clients or like go for that stellar logo i think it depends on where you are as a business right at your early stage your zero is 10 million an hour and i think you got to go get category killer brands why in the early stage you went for category killer brands? References. If you can be successful with the category killers, and they didn't become category killers because they're easy to work with. And if you can do it with the best, and I have a huge caveat after I finish this sentence, if you can do it with the best, it's a heck of a place to start. The caveat is closing the deal. It's like the easy part. You have to be successful. Like for them to be referenceable, they have to be successful. And Coca-Cola is not going to go on record and say, we just closed an amazing deal with Harry and we have no idea whether it's going to be successful. It's not going to happen. They're probably going to be a reference once they're successful. So for me, the entire orientation of an organization in the early, early stages, I'm talking like Saba 100. I think it needs to be figure out the industries and the verticals you can be successful in, go get brand names category killers and rotate hard on customer success because if you can't get customer success but you're dead in the water anyway okay so i had chris degnan on the show the cr snowflake and he was like uh why do we still have cs we should have professional services and then there's like support but like cs not a fan i i heard sleutman say the same thing and you should really go like unpack the titles versus the rules because that matters. And by the way, they are in a pure consumption model business, which is very different than a booking. So it's a bookings versus revenue kind of business or hybrid businesses. Snowflake's success is 100% built on customers being successful in usage. Now, if you're hiring a bunch of salespeople, and then you're going to ask your salespeople, hey, I just want you to go make sure they're successful, they're going to be like, hold on. And I'm in Snowflake land. I need to find more use cases. I need to find more applications to move onto Snowflake's platform. That's selling. Who is actually managing the technical architecture, the foundations of that customer being successful? You kind of need to go unpack titles versus roles. And some of the companies that say, we don't need customer success. Someone is playing that role. You can call them whatever you want. You can put them in finance for all I care. But someone is responsible for the correct architecture aligned to the right use case. And then someone is responsible for growing and expanding that business. How do you think about the interplay between CS and sales? I had Dave Kellogg on the show and he said, you never want your farmer going against someone else's hunter, which I always remember as a statement. Obviously your farmer is your CS rep going against someone else's hunter, which is someone else's trained killer AE who's ready to take your customer. How do you think about the interplay between the sales and CS and not having your farmer versus someone's hunter? For me, that's just segmentation strategy. That's the difference between how am I going up against competition based on the accounts that are in their patch? And do we carve out hunter farmer patches? You know, this could be a whole other five hour podcast for you and I, but that's a segmentation question. Let's say we had AEs, reps, individual contributors that just had customers. Okay. So of varying sizes, right? But they're just customers. There's no new customers or new logos in their patch. Their job is quote unquote farming. I actually kind of don't think that farming is a thing in the cloud world. It's just not. I mean, you're responsible for finding new use cases across the entire bag that you have to sell. So you're always hunting and farming. you have to have interlock stacked hands between cs and sales i'll take my team that's organized that way up against anyone else's all day chris degnans yeah i don't know chris but yeah that'll be a fun show one thing i want to discuss you mentioned like use cases there i'm such a fan of vertical sales playbooks you've been a master of vertical sales playbooks i think it's so important to mean something to a specific set of customers your messaging is tighter everything is better in a vertical sales world in my mind, really. But so many founders are like, it's too expensive. It's too expensive to build that. I'm too early and it's too expensive. How do you answer that question? If I rewound to when we started doing this at Salesforce, it was really born out of customer requirements. We got feedback that we weren't showing up understanding the customer. And really, you said it, right? There's very few things worse than that. So when we started that business, we were just very focused on enablement, enablement and organizational alignment. And there's depths that you can go when you think about verticals. Some companies start with industry. So building out industry teams that can come in and have that conversation, but your AEs are still aligned. You may have an AE that calls in healthcare in the morning, financial services in the afternoon, and is going to dinner with a three-letter agency at night. Content's created for them, they can kind of get a couple steps down the road. Do you think that's really as effective as someone who just lives and breathes aviation or hospitality? And it's expensive. Does it need to be though? You hire a junior rep and you say, hey, you're in charge of hospitality, which entails large hotel chains around the world, become a freaking nerd on it and go sell. Why does it have to be expensive in that way? So it's a great question. When that AE goes to their SE or SC, the technical person on their team, and says, I need to come in and show an airplane demo. And I'm sticking with the metaphor. And that SE is like, well, kind of don't. Like, we've got a really generic one. Like, what do you want? Then there's a disconnect at the technical teams. Then you're bringing in an AE that is super smart, super knowledgeable, and the SE isn't. So clearly a disconnect. And then, by the way, for our earlier conversation, you're going to bring in a customer support person, probably professional services, and you're going to bring them in early in the sales campaign, the customer is going to go, so tell me, like, how many aviation implementations have you done? Tell me what you know about the industry. And that person's going to be light. So my point is to truly verticalize and to truly deliver value for customers. It can't just be the AE. It has to be every single person that touches the account. And then you end up in these sub verticals. Financial services is a lot of things. The reason I think that it gets expensive and again, you can like be on this journey where you don't have to eat all this cost up front and you can try things and fail quickly. If you're truly gonna deliver the benefit, what I think is the benefit of a verticalized sales team, it's every person that touches the customer. Can we do one at a time? Do we need to do three at a time? Yes and no. This is another cost implication. This is another like prioritization implication. This is like, how much risk do you wanna take on? We started with financial services at Salesforce and it became so successful. They actually developed a product for financial services that became more impetus. And now the industry products team at Salesforce is just crushing it because they've actually went out and built products specific to the industry. If I was advising you and you're thinking of building out a vertical, I would pick where you think the biggest bang for your dollars. And I'd try. I wouldn't go do three. To what extent is one customer enough to bet on a vertical? And what I mean by that is that I quite often meet founders and they're like, well, we got, I don't know, Chase. We feel that actually the social validity of getting Chase means we'll be able to get X, Y, and Z bank also. Do you really see it like, oh, you got one so you can get another and another? Do the dominoes fall when you have a big name or not? Don't say it depends. I think you pick banks, which are super difficult as it is, but I would not make that step. I would not think that just because you got one that you're going to get the rest. Because by the way, you could have gotten it by accident. I didn't mean to be abrasive about it, but there's a lot of reasons you can win a customer. I would be more focused on what is the use case? What is the value statement? How pervasive do we think that value statement could be or that problem statement is for customers? I think you've got to look at a lot of variables too. And that all rolls into how we should be thinking about TAM or total available market. But just to say that you got one, I don't know, like you kind of need to make a line. What size customer does it make sense to have a full lifecycle, like a CSM, the full management of the accounts? The biggest problem I see in SaaS today is I see people doing enterprise teams with 10k ACVs. There's a big operational cost implication to doing that. There's how many accounts is an AE going to be covering? yeah there's what's the ratio of accounts for customer support and customer success there's you should consider appropriate ratios for solution consultants solution engineering so you can work into this process i think when you get down into the maybe your question of what size customer do i have one a covering it that i have one sc that that's all they do that i have one customer success person that's all they do man it's got to be a pretty big customer Is that 100K? Well, it depends on your business. If I thought about Genesis, you'd probably need to be close to a nine digit customer. It's tough to get on our top 10 list, which we're blessed and grateful for. If I was starting a business and that rotation made sense for customer success and you're going to place your bets there, it's always a tough trade-off. How do you think of scale across teams? Never perfect. How do you think about discounting? I want to get some logos. I'm a new hire. I hate it. So if I'm on your team and I do discounting, how do you feel? Well, discounting is kind of a part of life. I think there's appropriate discounting based on scale. What's appropriate and what scale? Here's the thing. If you're playing and you got to put yourself in the customer's shoes on this too. Let's say you're a small company and you're going into Chase. You're kind of an unproven company. They're taking a flyer on you. They love you. They trust you. You're on the hook for this thing to be successful. you're going to pay a pretty price at Chase to win that business. It's pretty risky, depending upon your value proposition to them, but you're an unproven quantity. I think the higher just general industry practice, not being a victim here, but just the way things have been in enterprise technology, there's a linear correlation between volume for the size of the investment and the discount. And that varies by whatever you're selling or if you're in the experience orchestration business or if you're in the supply chain business or ERP. companies are pretty adept at buying these days. Companies have gotten really good at buying stuff. So they're doing their compares. Gardner advises on pricing. There's plenty of places you can go do benchmarking. The difference for me when someone asks for a discount, if it's my team that's asking me for a discount, I want to see the value proposition. I want to see the business case. If we don't have a business case, if we haven't articulated when they're going to get their money back what those outcomes look like if we haven done a good job on value and we just looking for a discount that the stuff where I you know I not a fan of that I just not It means we haven done our jobs Larry I sorry I sorry I on your team And I know I said that the deal would come in this quarter but it just slipped to next quarter. I'm sorry. It slipped to next quarter. How do you respond to me as a sales leader? No problem. Are you a sales leader or AE? Who are you? I'm an AE. You're the sales leader. Help me understand, Harry. Like what, what happened? This was a committed deal, Harry. Like what happened? I know, honestly, they just, they just didn't have it as a priority this quarter. And so they just said, hey, you know, we're going to punt it to the next quarter. When did it get deprioritized? They went cold on me and they just got back to me yesterday. Okay. Who are you working with over there? Who's your highest level contact at the account? I don't fucking know because it's a hypothetical situation. We've got a break. It could be anyone in the company. I am a huge fan of people doing what they say they're going to do. I put an incredible premium on it. Do you think you're good at sales forecasting? Yes. Why? How are you so good at sales forecasting? Teach me. Ultimately, you have to balance risk with commitment. Pipeline is everything. So the more at-bats you have, the more likely you're going to get a hit. It's the same thing in sales. And forecasting accurately is, in the job that we do, a critical part of your brand. If you can't forecast accurately, for me, it's one of a couple of things. Either you don't truly understand your business. You aren't truly doing the amount of diligence with customers and opportunities. You don't have enough opportunities to be able to balance out some of the riskier things with some of the things that look better. And we might not even be asking the right questions. And we're likely not talking to the right people. Let me say all of that. And it's really hard to do well. I've missed months. I've missed quarters. I've missed quarters back to back. It's a hard thing to do. But there is a real premium in the world that I've chosen to play in on forecasting accurately. In particular, I kind of own the number myself and my peer in the CSI don't the number for the company. how we think about investment and strategic priorities kind of depends on us doing what we say we're going to do. My roll up is based upon my directs doing what they say they're going to do that's dependent upon their directs doing what they say they're going to do, which is dependent upon their directs and dependent on all the AEs. And managing that with agility and accuracy is very difficult. And I think it's incredibly important. Everyone says today is so hard in sales, so hard in sales, all budgets have centralized back to CFOs. People aren't spending like they're used to you know larry they're not and you're like yeah that's true you're like that's bullshit uh the latter there isn't a company out there today that doesn't have tam data that maybe there are but like in the companies that are really playing the game today that are winning they know the tam data they have there's so much information about accounts there's so much information on ptb or like propensity to buy that information is kind of the table stakes when aes start, they're kind of like given all of this information, like here's your territory. Here's the opportunity inside of your territory. Now, you could be in an industry that gets hurt macroeconomically. A perfect example, the travel and transportation industry during COVID, tough spot. That's a tough putt. You need to have a little humility with the narrative and a heavy dose of empathy that, listen, some of these are hard. If you've given a patches of customers that are upset and you're working through a bunch of issues, I think you need to have some empathy with that situation to understand that. But I would really push back on a leader or an AE that barring force majeure some macroeconomic pandemic or a financial crisis, if you're selling to the banks, I would really push back anytime today of someone saying, you know what, people just aren't spending the way they used to, so I'm not able to sell anything. That's a mindset thing too, by the way. Have you ever had bad culture in one of your sales teams? Why did that happen? What did you do wrong? The biggest lesson that I would say that I learned early in my career was, I didn't even use the word then. The word to me a long time ago was like a soft word, was empathy. I completely lacked empathy. It would be the narrative of an AE in the financial crisis who only called on B of A and Chase came to you and said, hey, it's really tough sledding and these opportunities are going to push for a quarter. And if you just said, I don't care, go figure it out. Like there was a point in my career where that was okay. There was a point in my learning as a leader where that was how I was wanted. And it was uneducated. It was very difficult to maintain loyalty. And I think you learn some very expensive lessons that normally show up through attrition. When quality people start leaving, this goes back to our first conversation, when quality people started leaving, is comp an issue? Sure. Yeah. I mean, comp is likely always an issue. I don't think comp is always the issue and I'm prioritizing the issues. I think it comes down to your leader. And I, early in my career was not a great, not that I'm great now. I'm on the journey, just like the rest of us that are in this, in this role. I was pretty poor. Were there one or two moments where you really felt you improved as a leader? Like the floor fell from beneath you and you improved in that way. Yeah. So this goes back to our deal conversation, probably. And it's very hard for me to do. I would say that I've tried to work my DNA to respond to things a little more masterfully than I used to. But generally, when things would come to me as a problem, I would respond with finger pointing, somebody's doing something wrong, very little accountability for myself in that equation. And it was really how I responded to things. I learned a lot. I talked about kind of my career journey. Godfrey Sullivan was the CEO at Hyperion. And I learned a ton from Godfrey. The empathy score with Godfrey and customers, I learned a lot from. I'll never forget it was a meeting. I'll leave the account name out of the picture. But we were not doing well with this account. Super senior level C-suite meeting. The way he handled that situation, remarkable. What did he do to handle that? Just listen. Listen. Empathy. I know I'm using that word a lot. He listened. He was prepared. He showed incredible empathy. He knew the details of what was going on. And he had a plan. You can tell when someone's genuinely listening or when someone is sitting there with a prepared answer, hoping that you asked the right question. That was a great example for me as a leader. I was blessed to have the same boss for a period of time when I came into Oracle all the way into Salesforce, who had a remarkable ability to hear things that weren't going the way the teams anticipated. And you'd leave that meeting and like, we got this. No problem. Really comes with listening and empathy. Those are probably my two biggest career journeys, I think, personally and professionally. Larry, I could talk to you all day. I am cognizant that you do also have a job. Listen, I want to do a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Yeah, careful what you ask for, but yes. What would you most like to change about the world of sales? I think value creation. The ability pretty universally for teams to be able to convey value to customers. I think that pretty dramatically changes things. I think that changes the optics of selling completely. It's not a sales game then. Tell me, is Outbound dead in 2024? No, no, no, no, no. Not at all. Outbound done well. What an instrument. What an incredible instrument. So no. Do you not worry that with AI, the outbound supply will be infinite in the way that everyone will be able to create so many personalized emails, messages? There's going to be automation gains from AI. So efficiency gains that were largely, by the way, things people didn't want to do anyway. They hated doing anyway. And then there's going to be augmentation benefits from AI. So helping people do their jobs better. The way I see this going, that's going to be like 30-70. I think 70% of the benefit of AI is going to be for people to do their jobs better. So no, I don't think outbound is better. I think, or anything outbound is gone. I think AI will help enable the right outbound teams to do it better. What sales strategy do you think is dead that was prominent? And now it's like, nah, we don't do that anymore. You know, fab selling is pretty dead. FAB. Do you remember this one? Feature advantage benefit. This was a big deal. This was actually how I learned. And this was when I said Eli Lilly, that was the training. So you were trained feature, advantage, benefit. That was how we learned. So I think that one is dead and gone. It goes back to, you know, there's so many value selling frameworks now. I grew up in my tech job at PTC, which was Medic at the time or MedPic. So there's an unlimited choice of them. But I think I'm pretty sure fab selling, nobody's writing a book on fab selling these days. What are the most common ways that fast scaling sales teams break? Prioritization for me is the most common. Then I would think, generally speaking, it's waiting. Even though you're fast scaling, what are the things that you're waiting for something to be different on before you go and try that could create a different outcome? I think waiting is just a really dangerous way to go. I'm a founder considering a vertical sales playbook approach. What's your number one piece of advice for me? Focus. Pick your spot on where you're going to go do the vertical. On the playbook, work outcomes backward. Final one. What recent company sales strategy have you been most impressed by? None. I'm not a sales strategy, ironically, given the job that I have. I'm not a sales strategy like entrepreneur or wizard. So I probably don't see as many or enough in the cloud world. You have to be in a land and expand and retain sales strategy. And that's not just sales. That's customer life cycle. If you're not in that business, I think you're going to lose. Listen, Larry, I can clearly speak to you all day. I can't thank you enough for doing this. And this has been so much fun. And it's been a blast. It's great to meet you. Thank you for everything you're doing. I just love shows like this. For me, I started these vertical shows because I wanted really actionable takeaways for founders to learn from and implement in their businesses today. Larry was incredible there. And if you want to watch the full episode, You can see it on YouTube by searching for 20VC, that's 20VC. But before we leave you today... Have you ever wondered why spending company money is so broken? Employees want to follow the process, but they're confused and frustrated. It takes forever to get anything approved. It's so tedious to get anything paid. And folks in procurement, finance and other stakeholders are just as frustrated too. 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As always, I so appreciate all your support and stay tuned for an incredible show this coming Monday with Tom Blomfield, partner at Y Combinator.