Copy Vanta's Revenue Engine Framework to Grow beyond 100M in Revenue (ARR) | Predictable Sales Engine | Hiring Sales Talent | Selling to SMBs with Vanta CRO Stevie Case

00:00:00: There's one sales skill that every founder should learn and it is the most important skill to have at this part of the journey.

00:00:09: And that is... VENTA is one of fastest growing B-to-B software startups out there, crossing a hundred million ARR in the fiscal year.

00:00:19: I wanted to know how does the revenue engine look like?

00:00:22: That's why i invited Stevie Case, The current CRO of Vanta giving us in this episode a very specific coaching on what makes great sales and then also What Makes A Great Sales Organization.

00:00:35: Who Is The First Person To Hire?

00:00:36: How Do You Incentivize

00:00:38: It?

00:00:38: career started in gaming, I think that the two disciplines are actually extremely similar.

00:00:45: I'm extremely competitive.

00:00:46: my competitive nature is The single unifying force that organizes.

00:00:51: the way i think about My work organizes.

00:00:53: it's a where on my team That drive to be the leader In this space.

00:00:58: so if you can describe?

00:01:00: The math of that entire journey end-to-end If I put five more dollars in I know exactly how many dollars come out at the end.

00:01:09: That's what a predictable revenue machine looks like!

00:01:12: We knew exactly HOW to get those leads, we knew how many Dollars every lead cost and we could increase our spend and know with certainty How many leads would come in the door?

00:01:25: The single most important thing as you are Starting to figure out, like what is that repeatable pattern really just boils down to asking really insightful questions.

00:01:37: Asking second and third level questions you should seek out those things You maybe don't want hear or get to the know because then you've gone deep enough To some truth.

00:01:47: Stevie welcome to The Unicorn Bakery.

00:01:50: Thank you excited be here.

00:01:52: There's so many ways to start this conversation.

00:01:55: in general I would love to explore how to build a predictive Revenue engine for a venture that's fast-scaling venture.

00:02:05: So now the fun part.

00:02:08: you have A bit of a diverse background, so The first question is not like what?

00:02:12: Is they predictable revenue engine or anything Like That?

00:02:15: but What similarities between building a revenue Engine and Gaming did You find throughout the Years?

00:02:25: I think that the two disciplines are actually extremely similar.

00:02:29: You know, my career started in gaming first casually and then as a pro gamer And I did mostly play First Person Shooters.

00:02:39: so That is My primary Gaming Frame of reference.

00:02:42: Quake was my game.

00:02:45: The thing i love about quake number one Is Im Extremely Competitive.

00:02:50: Honestly In my day to Day my competitive nature is the single unifying force that, you know, organizes the way I think about my work.

00:03:00: Organizes the way i run my team and That for me translates today in a more professional setting to urgency To prioritization to focus And that drive to be The leader In this space.

00:03:16: Beyond that I think there are a number of elements in gaming really extremely similar to my role as chief revenue officer.

00:03:25: There is resource management, strategy and human psychology.

00:03:31: it's this beautiful blend technology feelings humanity logic And math, honestly.

00:03:44: It's a little bit of everything and that same kind of strategy in the way that blends together into game translates as like maybe mechanics about how different weapons work or what you might navigate on map.

00:03:57: A lot those strategies come to play in slightly different ways than a CRO and alot.

00:04:03: my time is spent mapping out world understanding where I've got a competitive advantage and then figuring out how to double down on that.

00:04:11: So, i actually view them as very similar skill sets.

00:04:15: It's super interesting like...i enjoy gaming not at the pro level but still some nights also.

00:04:24: it is just fun And..I always try to find similarities in my day-to-day.

00:04:31: therefore happy too see others pursue.

00:04:37: When we dive into the go-to market part, every startup has a problem of hey.

00:04:42: We need to find first customers that feel like they actually love their product and not that I oversold them.

00:04:53: And then you have to find something repeatable about it called Product Market Fit.

00:05:04: The real journey starts in building out an engine that can drive growth for years not only For inception, but four like a Journey.

00:05:13: That might look Like the Vanta one like after five years or to fifth year After Inception crossing a hundred million and ARR mark which is absolutely crazy.

00:05:23: Or also the slower journeys that are Out there as at least As great as the Vantalan.

00:05:31: so What would you Tell me as a founder of the company that feels like, hey there is some kind of product market fit.

00:05:44: And now I have to think about how can i scale?

00:05:47: What are the things that you should think About?

00:05:50: what Are The Things That I Shouldn't Think About?

00:05:53: Yeah!

00:05:54: There's one sales skill that every Founder Should Learn and it Is The most important skill to have at this part of the journey and that is discovery, And to me, discovery really just boils down too.

00:06:21: Asking really insightful questions being curious but then asking second and third level question.

00:06:28: so I also invest... You know i'm a chief revenue officer that run a big go-to market team But I also invested in startups The best founders That I meet.

00:06:38: the biggest indicator of success often for me is when find founder can do incredible discovery.

00:06:44: So Then it's what you deal with right?

00:06:47: spend a tremendous amount of time meeting with your customers who do love the product and deeply listen to why like let go over preconceived notions about what you should build, listen to them.

00:07:01: And use a framework to try to uncover Why are they willing?

00:07:06: To pay for what you're doing?

00:07:09: This seems simple, but there's a discovery framework out there called MedPick.

00:07:14: It is kind of like the go-to standard for salespeople.

00:07:19: you can look it up.

00:07:20: that stands for a variety of areas that you should be asking your customers questions about and all of things she should ask about are important.

00:07:29: MS for metrics.

00:07:30: so But the one that founders should focus on at this point is actually, The Pain and it's implicating The Pain.

00:07:39: And what that means can you understand for your customer?

00:07:43: What Is The Pain That They Are Trying To Address When They Buy Your Software?

00:07:49: How Do they Think About Quantifying That Pain?

00:07:57: whether that's in dollars or time saved, or something else.

00:08:01: Because truly like

00:08:03: companies

00:08:04: only people will buy software.

00:08:07: they'll be buying anything really for three reasons there going to by some things drive revenue because I think it can increase their revenue.

00:08:17: the number two reason would be save money and is a Very secondary reason to driving more revenue and the third reason would be to reduce risk in their business.

00:08:26: Those are only three reasons people buy at number one is a much stronger reason.

00:08:32: so if you can figure out like which of those three reasons is driving the purchase, Their ability to unlock a million dollars in new revenue this year if they buy your software, then you can start to quantify that and if you can nail back math.

00:08:50: And figure out how to tell the story of repeat that math other places do that at scale.

00:08:56: That is the single most important thing you can do at that point.

00:08:59: And I think, a lot of founders get distracted at this point and they start looking for other types of buyers in other use cases and all that At this point around product market bit.

00:09:07: You just want to be able to repeat that success pattern over and over it Be able to really nail who is the ICP?

00:09:15: How on?

00:09:16: where do i find them?

00:09:17: What's the ROI?

00:09:18: what's that pain?

00:09:19: How do I

00:09:26: ask the questions in a way that i don't get the answers?

00:09:31: That Don't help me.

00:09:33: So, The key is asking open-ended Questions and you know it does take practice.

00:09:38: there are tons of classes out.

00:09:40: There are free classes for salespeople.

00:09:42: as founders You should not be afraid to like.

00:09:45: Take some of that sales training but truly It really just does boil down too.

00:09:50: ask open-ended questions and an example of that question.

00:09:54: if you're trying to understand what is the pain, it's sort of asking things like as your'e trying solve a problem we are talking about today.

00:10:06: What happens If You Don't Solve This Problem Sometime In The Next Year?

00:10:10: Like What Would That Do To Your Business?

00:10:13: And You Can Ask This in A Lot Of Different Ways.

00:10:18: Potential buyer is telling you like here are the negative consequences if I don't take action on this thing?

00:10:26: and The truth, Is it they aren't able to give?

00:10:29: You an answer or the negative Consequences.

00:10:31: Aren't that bad?

00:10:33: you Don't have a great Product necessarily And you don't have great product market fit.

00:10:40: you know i think A lot of times It's easy to get sucked into the excitement of like, oh people wanna talk me about this product and it might make their day-to-day work a little easier.

00:10:52: But if what you hear is like Oh!

00:10:54: You know we don't solve by next year I would be frustrated.

00:10:57: that not great answer your looking for.

00:10:59: I won't be able to do business with a certain kind of customer, or I won' t be able sign this deal that i've got in my pipeline.

00:11:07: Or...I won''t be able hire team from Europe and I will not be able X Y Z material for my

00:11:13: business.".

00:11:14: So thats what you're trying get too!

00:11:15: You want ask these questions like how does it impact your work?

00:11:21: Is is your leadership uh, aware of this problem and like does it?

00:11:27: how much do they care about it?

00:11:28: And why you're trying to get too late.

00:11:30: Does this really matter?

00:11:31: and Why doesn't matter?

00:11:33: and what is the impact of not doing something because The alternative to that is buying your product to solve the problem?

00:11:41: How did I differentiate between It's an honest answer and a hard truth that i Didn't expect and don't want to hear or Something that I think is not the correct answer and doesn't help me further, And i need to uncover more To get to the actual truth of what a potential customer tells Me.

00:12:09: Well The Truth Is That You're Almost Always Gonna Have To Go Multiple layers deeper to get the real answer.

00:12:16: It's it's rarely The first answer that gets you the information You need and That is one of the most common mistakes when people are starting To do discovery as they will start with a First-level question, And They get an Answer and I just sort Of go okay?

00:12:30: And then they move on.

00:12:32: the key Is like dig A little Deeper and That second Question Can Often Be As Simple as Tell me a little bit more about that.

00:12:41: or like walk me through what you mean by that.

00:12:44: Or, Walk Me Through What Happens After That?

00:12:48: But the key is drill deeper.

00:12:51: and then to your question about if it's something you don't want hear but doesn't help you... The most important thing is not disregard information As as it's so tempting to do.

00:13:03: we have a concept of say in sales called happy ears and happy years is when the salesperson just sort of like believes what.

00:13:11: The person on the other side if they call us telling them and I don't question it often with that sounds like his yeah i really want to buy your software it's great, Yeah, let's get back together and maybe we'll make it happen next month.

00:13:26: And this is one of the most common failure modes I often see with founders as like they're getting a lot of positive feedback and their'e getting that yeah your software really cool i want to buy but then nothing happens.

00:13:38: steal so out.

00:13:40: The happy ears are here.

00:13:41: what do you wanna hear?

00:13:45: When somebody says... The key is then to go that second level and the third levels say great.

00:13:53: Okay, what does that process look like for you to purchase this software?

00:13:57: Like talk to me about how would you go about buying it.

00:14:01: What are the boxes you have to check to make a purchase?

00:14:04: How do get budget approved?

00:14:06: Like how were thinking of an appropriate budget For this project?

00:14:11: Going deeper is the key.

00:14:13: So if only heard things validate your opinion, you probably haven't gone deep enough.

00:14:22: You should actually want to seek out contrary opinion and like... ...you should seek out those things that maybe don't wanna hear or get the know because then y'know you've go deep enough to get some

00:14:32: truth.".

00:14:34: What would say is first point I can use as a signal of there might be an chance this person wants to buy?

00:14:46: Or

00:14:47: could buy.

00:14:48: if I explain better what we're doing and make it more transparent, that can make fit to the problems they talked about.

00:14:59: So... ...I would go back into that med-pick framework so things i'd be looking for.

00:15:04: do you have an ability to describe a pain your going to address if they buy software?

00:15:12: Do they sense of what metrics matter in that business.

00:15:16: So it's not just like, oh yeah this is cool I'd like to have

00:15:18: it.".

00:15:19: It's like Oh yes!

00:15:20: i would like to Have This because I believe if buy your software That's gonna help me sell a hundred thousand dollars more of my own software this year.

00:15:30: You know If they can start to articulate those metrics?

00:15:33: Thats A great checkbox thats a sign.

00:15:35: Then you want To Start digging into the process Of How Because That Is Often when it falls apart if they're not serious.

00:15:44: So, you know a few of the other letters in MedPick come back to paper process decision criteria.

00:15:51: so you want to start asking them how are you going to make a final decision about the purchase like?

00:15:56: How do you approach making Final Decisions When You Buy Something Like This?

00:16:02: Have You Bought Something Like this Before?

00:16:04: Who Else Needs To Be Involved In The Decision?

00:16:07: Once You've Made A Final Decision How do you get to signing a contract?

00:16:13: Uh, how long does that normally take you?

00:16:15: How long should I expect?

00:16:17: and then You know.

00:16:18: I think one thing that founders are often so scared to do is really ask for the clothes They think you know once i've heard that like yeah, i'm interested but that's it.

00:16:28: That's not it!

00:16:28: You've got to say...you know..I-i'm hearing that we're gonna move forward together.

00:16:34: I would love to have this deal done in sixty days.

00:16:38: Do you think we could get a signature on paper within sixty-days?

00:16:43: You're looking for that concrete reaffirmation, but the answer is yes.

00:16:48: and if it gets a little bit of like ah!

00:16:50: I'm not sure...I don't know.

00:16:53: then..you might have some excitement…but thats' not an actual commitment.

00:16:59: So get to the level of specificity, ask for a commitment and that's how you'll know it is real.

00:17:06: I think from our side, it would be ninety days as an actual timeframe.

00:17:33: This is a good sign.

00:17:34: if then the other side but If they say hey i'm not sure let me check and just doesn't want to commit To anything that's a bad sign.

00:17:43: Exactly yeah you Want them to come back with?

00:17:46: That tension to say actually It's ninety days that's great sign because it means that They also believe your heading towards completing The transaction And they might have other information that tells him its gonna take longer.

00:17:58: What you want to do next is then really start working on a mutual close plan.

00:18:04: And, if they give you a wishy-washy answer as well... You could say okay!

00:18:08: Well If your telling me that you WANT TO DO THIS like let's work together writing down the plan for what would look like step by step and this can be very simple it just in a spreadsheet and you wanna detail every step of process.

00:18:23: That should be steps on both sides.

00:18:25: So you should have a section for the steps that your prospect is going to take, and then a section Here are the things we need to do, get into a final decision and make a purchase.

00:18:39: And then here is our boxes that would be needed for check-in.

00:18:42: We have to go through security review, MSA, legal process... The CEO has to sign off or maybe the board must sign it down.

00:18:52: You want them to start writing this down because especially if you're trying to sell somebody who's at a larger company they might not know what all of these steps are.

00:19:02: And what you want to try and encourage them do is go figure that out by writing it down.

00:19:07: You challenge them, like oh actually I'm not sure how we'd do this?

00:19:11: Like let me ask somebody!

00:19:13: Then you can treat it as a joint project plan.

00:19:16: so your working towards the mutual outcome also.

00:19:19: if writing down that plan, you know?

00:19:24: You don't really have a deal.

00:19:25: And if they are then you can help them go figure out how to get the deal done.

00:19:30: but it shows intent and then they've got skin in the game...you want to put date on every one of those actions as well even If It's A guess!

00:19:38: Then do a regular check-in..are we tracking against these dates or not?

00:19:42: We can readjust.

00:19:43: That is fine But you wanna put flag into sand.

00:19:46: say this what were aiming for together?

00:19:48: Quick question for understanding What an MSA?

00:19:51: An MSA is a Master Services Agreement, A Master Subscription Agreement.

00:19:56: It's the legal agreement that you're going to get in place between you and The Buyer And if your selling to startups or these are smaller deals That might be very simple.

00:20:08: Maybe they don't have In-House Legal Counsel.

00:20:12: If you're looking at something that's more like an enterprise sale, That could be a multi-month process just to have legal review.

00:20:18: They might have their own agreement they want you to review.

00:20:21: it can Be a big part of the process The bigger the company gets.

00:20:24: Fair point from.

00:20:27: take me through different mutual action plan sizes.

00:20:30: when we look at the Vanta sales I mean You do A lot of Sales into startups that you Just mentioned Can be quite fast.

00:20:39: How long Or how many points are listed in such a mutual sales or action plan?

00:20:47: Yeah, it looks very different depending on who our buyer is.

00:20:50: So we sell today three distinct segments at Vanta.

00:20:55: So Vanta started as an automated compliance platform helping mostly startups and startup founders to complete a compliant certification for the first time.

00:21:06: so whether that's SOC-II ISO That is still a very large part of our business.

00:21:12: So when we sell to startup founders, it's actually very short sales cycle.

00:21:16: It's normally at sixteen days on average Very quick.

00:21:21: You sometimes were even seeing one call closed.

00:21:23: where will have One Call with the founder and then they'll be signing The agreement right after the call.

00:21:29: so you can Be very quick.

00:21:30: in most cases We do not Have A written mutual action plan because its Not needed At that level Of complexity.

00:21:37: Then we've got our growth segment.

00:21:38: so in the growth stage were selling to companies that have between twenty and two hundred employees.

00:21:44: They're usually selling like a security person who might be the first dedicated person at company is building a security compliance program.

00:21:53: In that case, they are beholden to other stakeholders in the org.

00:21:56: And so it does make sense to have a mutual action plan.

00:22:00: They can usually be very simple.

00:22:02: There're usually only one or two of their stakeholders involved.

00:22:05: It might be that buyer plus there CEO Or maybe plus a CISO But usually only two or three people involved and not Mutual Action Plan.

00:22:14: Maybe Only like Two or Three Steps on each side Aren't two or Three steps On our Side?

00:22:21: Now when we get into our upmarket segment, that's where it really starts to get meaty.

00:22:25: So there we sell everything from two hundred employees up to thousands tens of thousands and you get the upper end of that bound in an enterprise.

00:22:35: We might have a multi-page plan That we share To Get That Deal Done Together.

00:22:42: The Mutual Action Plan Could Have Dozens Of Action Items For Each Party.

00:22:46: In that case, we might even break it out into.

00:22:49: here are the action items for multiple people on our team.

00:22:53: Multiple People On Their Team.

00:22:54: We Might Even Be Thinking About Implementation Postsale At That Point.

00:22:58: So Those Can Be Like Very Rich Living Documents.

00:23:02: But You Want To Really Purpose Fit.

00:23:03: It Doesn't Have to be Overdone?

00:23:05: It Should Be As Simple as It can Be To Get The Deal Done.

00:23:10: How Do I Figure Out During The Mutual Action Plan Who To Actually Pursue the sale with and who to throw out of the process, two safe resources.

00:23:24: To also save in the end turn rates and also cut us customer satisfaction scores because I understand.

00:23:34: so in short form what are signs that i shouldn't pursue a customer?

00:23:40: Yeah So you want to qualify That this person actually has pain that you can address That this isn't just sort of a hobby for them and that there's a real project with pain attached.

00:23:54: Then you want to make sure, budget is an interesting concept here because in the traditional sales often sellers will get hung up on do-you have budget?

00:24:05: The truth is if you're talking to a real buyer who owns a budget they can create budget for you.

00:24:12: If your addressing a real pain point from then as a CRO I've got like multi million dollar.

00:24:17: I might not have budget carved for a project, but if somebody shows up with the solution that can solve a material problem.

00:24:25: All make a budget for

00:24:26: it.".

00:24:26: So you just want to make sure that either the person has budget already allocated or they are able to get budget-allocated... ...that they've got the ability to really influence the decision.

00:24:37: and If You've Got Real Pain And You'Ve Got Budgeted And You've got Somebody With A Certain Amount Of Authority To Get It Done And The Urgency That person is probably a good fit.

00:24:48: I would say early days, it's also very important that you sort of stay within that core ICP and the main use cases.

00:24:56: your trying to solve like really try get repeatability before you wander or explore other edge case.

00:25:08: So it's not that I'm asking like is there a budget, but i'm trying and That's why we're trying to do the discovery properly To find the use cases in pain points.

00:25:17: Then say hey this Is Why our solution?

00:25:20: Um is what you're looking for?

00:25:23: so then they are In The worst case in quotation marks Are creating the budget because They understand the value even when they were Not Looking For It Before Because when they did their budget planning might not have known that such a solution exists.

00:25:40: That's right, and the way you can explore that is very rudimentary.

00:25:46: kind of junior sellers will just say do you have budget for this?

00:25:49: That's not a good question.

00:25:50: what you actually want to ask is When you try to solve problems like this or when you're looking at software like ours how do you approach Finding funding to buy it?

00:26:02: like do you?

00:26:03: Do you have a budget that you can pull from if you're able To show sufficient cost savings by buying my product.

00:26:09: Can you free-budget That way, Like how do you do It and what are the different levers You can pull And who makes those decisions?

00:26:16: can you make The decision?

00:26:17: does your boss Make the decision?

00:26:18: is it somebody else?

00:26:20: you want to understand Who and How Because it's rarely so cut and dried that there is a budget, I'm now going to tap into.

00:26:28: That does exist but i'd say not how typically works for start-up in the earlier days.

00:26:36: You're gonna be much more about like budget creation Stealing budget from other things From other lines that already exists Displacing legacy software.

00:26:45: So you gotta be little creative To understand How people approach dollars they spend.

00:26:51: How do we handle?

00:26:53: when the answer is yes, somehow.

00:26:58: But the budget or framing of like hey that's how much we are thinking about?

00:27:03: Or anything?

00:27:04: sometimes you have very concrete answers of yeah that's the budget we have and your'e not at all matching with what I would need from you to make everything happen and solve a problem.

00:27:19: How do i handle it?

00:27:21: dig into how they got to that number.

00:27:23: And not as common and often what will happen is, That Is How a Buyer Sort of tries To Get A Discount Or Keep Things Under A Certain Threshold.

00:27:32: They'll Just Say Like What My Budget Is?

00:27:34: Twenty Thousand Dollars And Thats All I've Got!

00:27:37: I Would Then Be Asking Well like How Did You Arrive At That Number?

00:27:41: What Was Your Process?

00:27:42: How Did you Think About It?

00:27:44: Like How did You Approach Building A Budget?

00:27:46: Who Made That Decision?

00:27:50: You know, then you want to start tying it too.

00:27:52: Like when you identified that budget originally what problem did you expect?

00:27:57: To solve with it?

00:27:58: because you're trying to explore again like is there creative another creative option here?

00:28:05: How do they approach dollars?

00:28:07: for me What this has looked as a buyer Is I might not have budget carved out.

00:28:15: We recently bought an AI tool For our SDRs.

00:28:19: I did not have budget set aside for it.

00:28:22: But we worked with the seller And we were able to talk through like, oh okay this is gonna make our SDRs x percent more efficient.

00:28:33: We think they can generate a more pipeline per SDR by buying this tool.

00:28:40: We got to a sufficient level of confidence about that and then I was able to say OK well i can justify buying this thing and spending money on it because i'm actually going get more money out.

00:28:50: And that was enough for me.

00:28:52: We brought that through procurement and the CFO, showed them the same calculations.

00:28:56: so there are always ways to justify.

00:29:00: if you get somebody senior enough look beyond just like I've got twenty thousand dollars on my balance sheet?

00:29:06: That's what you want to get too with your

00:29:08: questioning.".

00:29:10: The honest answer is more of an inexperienced side.

00:29:14: as a seller be like, oh yeah that's probably just to tear down pricing.

00:29:25: So let me ask this and the questions what are hacks had helped yourself?

00:29:33: Probably at first trained then now they're part of everything you do That help you in such situations To Be Like Sure.

00:29:44: Let Me Not Be Too Quick And Say Oh Yeah Let me give you a discount.

00:29:50: Oh yeah, but also like using the tension to... Also starting on one hand more discovery and then negotiating as well.

00:30:01: Yeah there are a couple of hacks here that are broadly applicable to Discovery And work very well in these kind scenarios.

00:30:11: The first is You want let other person talk until they stop talking.

00:30:18: Don't interrupt, even if there's a bit of an uncomfortable pause.

00:30:22: Let it play out like let the silence sit and If you are Uncomfortable in that Silence just a little too long then You know your doing It right?

00:30:32: Like let The Silence Sit because what you'll find is buyers often will fill the silence And they'll Fill with more information or They'll fill With something to maybe help you get To next step.

00:30:43: so sit In the silence And then when they give you an answer, don't respond to the answer.

00:30:53: Ask us ask another question especially if it's something that you don't like... If you don' t like what you just heard Don't try to counter and don't try address It!

00:31:03: Ask Another Question To Try Get To More Of A Root Cause Behind

00:31:08: It!!

00:31:09: If You Approach Discovery That Way Especially When It Comes To Pricing And you don't get put on the spot to resolve the tension in the moment.

00:31:18: You will always have a stronger

00:31:20: position.".

00:31:21: So, you know... In case like this your negotiating they're going be pushing lower and lower or lower.

00:31:26: Your goal should be lots of silence Lots of pauses.

00:31:30: let them talk Let the call play out do not resolve it On The Call.

00:31:36: Get to the end of the call, acknowledge what they have asked for and then take that off-the-call.

00:31:43: And come back to them either on a second call or you can come back in writing depending on how do want work with him.

00:31:50: but don't resolve it in the moment because your gonna feel emotionally pressured.

00:31:54: give into what I want he wanna get pause given space an income back gives chance against strategic offline and then comeback.

00:32:02: was something works free?

00:32:05: In my opinion, when I then for example write an email and be like hey... ...I realize that your budget you're trying to or currently working with in your head is X. And X is whatever short of what we are looking for this-and-that and everything.

00:32:25: It gives me the feeling it's super easy on other side say yeah!

00:32:29: That doesn't work.

00:32:30: And then it's cutting off the conversation, how do I approach this follow up with when i know there is tension that needs to be solved in a way they are not also using.

00:32:49: don't talk anymore, like rather on a call?

00:32:52: or also how do I give them the chance not to push back too fast but engage in discussion and negotiation?

00:33:00: Is that...I will leave with question without suggesting anything.

00:33:07: Yeah!

00:33:08: Part of it is you need let some tension play out such as That you should never leave that call and then send an email and surprise them by saying, oh, by the way your budget's not enough.

00:33:21: Like they should be aware in that conversation that they've got a budget that is NOT matching your list

00:33:28: pricing.".

00:33:29: You want to take the approach that look this our list price for the solution.

00:33:35: I hear I want to get creative and work with you.

00:33:40: That's why we're going to spend this time really talking in depth about how, uh-how you got into that budget?

00:33:46: How do you quantify the

00:33:47: pain?".

00:33:48: That's what I wanna go deeper on discovery so we can work

00:33:51: together.".

00:33:52: The next key is once you've done all of that discovery... You don't just wanna leave it without a next step.

00:33:58: then send an email say oh by the way were still like way far apart!

00:34:02: ...you wanna have warm connection ongoing.

00:34:05: The best salespeople will do this as like get the person on text, create a warmer relationship.

00:34:11: Make sure you've got an next follow-up set on the call so they can't just... So it doesn't just fall to like the black hole of email where they can ghost you because that is so common!

00:34:21: You want keep up with warmth and rapport?

00:34:23: You wanna set the expectation that your gonna be able come into some kind creative middle

00:34:28: ground?!

00:34:29: You don't wanna cave immediately ask for the call.

00:34:33: Tee Up A Next Step.

00:34:34: Make sure you're going to get them back on the phone, make sure that you've got a good way to reach them.

00:34:38: That isn't just email.

00:34:40: and make sure they understand that your'e gonna bring some value to them.

00:34:45: so I always like also challenge our sellers...I think it's real easy about budget and all this when we say oh well i have a discount.

00:34:56: there are other ways approach situation where persons budget Ask isn't matching what you're offering, You can modify.

00:35:05: What are selling them?

00:35:06: You can pair down the package.

00:35:08: I like to do discovery around that because then you can get a sense for delay today.

00:35:12: really if you've got a platform like did they really value?

00:35:15: all of it gives your chance is say well what If we took this out at The Bundle and We could Get in Your budget?

00:35:22: If they say oh no i actually need that thing then you know really matters and he got some leverage.

00:35:27: so your doing using the pricing tension to discover what they really care about.

00:35:32: And when come back rather than discounting, I like instead add more value.

00:35:37: it's okay i know this cost more than you'd like but what if we actually added this extra layer of service, a higher SLA more support another module like add value instead of subtracting price.

00:35:52: And if you in many cases You'll find that it's not That they had a hard limit on the budget.

00:35:58: They were just trying to kind of negotiate down.

00:36:00: and If he can make them feel Like they got more value by giving them or?

00:36:10: pushback too fast, that might also be a sign.

00:36:14: That they don't actually need your solution that much and it's not that big of a pain point?

00:36:21: Yeah!

00:36:21: It is very true And you've got to be comfortable knowing like what is the bottom line?

00:36:29: how low are you truly willing to go versus?

00:36:31: at which point will you walk away?

00:36:34: And, you know there are cases.

00:36:37: we had a negotiation like this last year with the company.

00:36:40: We really wanted their business and great logo!

00:36:43: We know the products aren't the same.

00:36:56: Of course, The Prospect always says oh these products all look the same.

00:36:59: so this thing that's like way cheaper.

00:37:01: we're going to go with

00:37:01: that.".

00:37:02: So they negotiated us down and at a certain point we just said you know what?

00:37:08: The price your asking as to match is when were are not willing to meet And At This Point Were Gonna Have To Bow Out!

00:37:16: And We Totally Respect Your Decision.

00:37:18: But This Is Beyond Our Comfort And We Can't Get There.

00:37:20: Thank You This Has Been Great but maybe next year.

00:37:24: And so we walked from the deal and three weeks later, they called us back and said actually uh... We spent more time on this-we've changed our minds and were willing to pay what you are asking.

00:37:36: So y'know.. You gotta really like decide where your boundaries are and hold firm for them and mean it.

00:37:44: Sometimes you'll lose a deal but in other cases you will win at right value.

00:37:50: I'll shoot into question that i didn't have my mind before.

00:37:53: When we talk about logos, which is especially in the earlier stages of startups super important to get some kind of stamp off approval that my product.

00:38:03: Is used by great logos and great companies when you want?

00:38:09: To win a logo very badly and you're like hey We need this.

00:38:13: This will make such difference.

00:38:16: How much are you trying to give them extra value or Give in special cases and occasions, discounts.

00:38:26: Like what is the extent to which I try to make it happen?

00:38:32: And where should I set boundaries?

00:38:35: because i will regret it six months twelve months twenty-four months from

00:38:39: now?".

00:38:41: I mean... In that case like logos are incredibly important especially early in the life of a startup but that's social proof incredibly valuable.

00:38:53: so getting the right to use.

00:38:55: The logo is it's worth a lot and think number one, as you gotta decide for yourself what?

00:39:01: Is that worth to you in dollars And then have that figure in your mind.

00:39:06: But I would say if you're starting position As you go into this is You want to win the logo but you also want them To be real customer.

00:39:13: don't wanna just give It to them for free because Then you get Into dynamic where its like.

00:39:18: well Got the logo, but like they're not a real customer and you know sometimes use set that.

00:39:24: The idea of value of your platform or software with price and if it's free might struggle to get them adopted.

00:39:33: take seriously.

00:39:34: so want make sure there A real customer and you're starting position should just be to ask for the logo rights without anything in trade.

00:39:43: Sometimes if you've got a really strong champion, And your just human about it.

00:39:47: You say hey look?

00:39:48: Your gonna Be design partner of ours!

00:39:50: You are getting a discount off our list price... You an early customer.. Your logo really matters and its going To help us build traction in the market, and also that is good for you because if our company gets stronger.

00:40:05: That allows us to invest more in the software we built for you.

00:40:08: it's Good For You.

00:40:08: It's Good for Us.

00:40:10: Would You Allow Us To Use Your Logo?

00:40:12: Sometimes you'll get it for free!

00:40:14: If you've got a strong champion they may go to bat for you.

00:40:17: I have gone to Bat for some of this small companies that i've worked with as A Design Partner And just given them The logo rights Because I want Them To Succeed.

00:40:26: And you know, in bigger companies it may take more.

00:40:29: You I have seen that like kind of a standard trade for them might be ten to twenty percent discount on the price of the contract or use of the logo?

00:40:38: You just want to make sure that your comfortable with the trade off is reasonable and i would never do it for free.

00:40:45: Just get the logo!

00:40:47: You wanna have real commercial relationship...just find out right balance.

00:40:53: Other than putting the logo on my website or also saying in a sales process, hey this company is actually working with us.

00:41:01: What's best way to make use of the logos that I want?

00:41:07: The best ways are case study like you wanna do it as early and possible for couple reasons.

00:41:13: one obviously social proof.

00:41:15: two its little bit easier Like, have that get that logo use approved because then you're telling a story together.

00:41:24: Often it can be seen as positive by the company as well because they are doing something innovative with you.

00:41:30: their marketing team will very likely see that is a positive of them want to say hey we're innovative or do interesting things here's.

00:41:39: It also is a repeatable way to prove what you do and what kind of pain you solve, until that story over-and-over the new prospect.

00:41:48: So it makes when you more concrete You get logo usage It like makes the whole thing easier to understand from the outside.

00:41:55: So case study is the best way to go.

00:41:58: and if you can do that in lots of different forms, Like a written case study as great If You Can Do A Video Case Study As Well Just Make it Sure Doesn't Have To Be Super Buttoned Up.

00:42:06: Short Informal Interview Over Video.

00:42:08: That Kind Of Stuff Goes A Long Way And It Truly Does Help People Understand What Kind Of Pain Your Software Addresses Is.

00:42:14: Well

00:42:18: What Makes A Great Case Study?

00:42:20: Because It Sounds so Easy.

00:42:22: But In General What are the points that I want to transport through?

00:42:28: showcasing the case study so that somebody who's spending time on the case-study thinks, oh wow.

00:42:36: That is actually what i needed and not just a report generated by chat GPT?

00:42:43: Yeah It goes back to that discovery.

00:42:46: You want to make sure that case study describes not just the use-case and sort of what it does, you obviously want that there.

00:42:54: but you really want to articulate clearly What is that pain?

00:42:58: That you were solving for And then The metrics associated with that pain.

00:43:03: so the simplest version Of that would be.

00:43:06: we bought this software To help us serve our customers in a different way.

00:43:14: It did XYZ and then that helped us drive a hundred thousand dollars in additional revenue.

00:43:22: And it also increased our customer NPS by two points, you know?

00:43:27: You want to quantify it and make it super clear.

00:43:30: what was the pain?

00:43:31: What Was The Savings or The Revenue Or The Other Metrics Associated With It...and really if you hit those points Those are going to be the strongest case studies.

00:43:42: When it gets super verbose and like lots of words, but no metrics.

00:43:46: those are not impactful Like keep it clean use case pain metrics.

00:43:51: And that's it.

00:43:55: so we went through a tonne Of things by now and Still haven't answered The question that I put out at the beginning Because all the things were talking about.

00:44:10: We're talking My sales process as a startup, more predictable.

00:44:16: More repeatable from your definition.

00:44:22: what is a predictable revenue engine?

00:44:25: What's?

00:44:27: how does it define itself?

00:44:28: What are the characteristics?

00:44:31: What am I looking for when we say building a predictably revenue engine?

00:44:36: in the simplest way to describe It Is that it can be defined by math And you know that math and the math is repeatable.

00:44:46: What that looks like in practice, I can describe to you That i've got one channel that I can consistently find leads from For different businesses.

00:44:57: thats different things.

00:44:58: Vantas first Channel was search engine marketing.

00:45:02: We have lots of inbound leads through Search Engine Marketing.

00:45:06: It's very effective for us and efficient.

00:45:09: We knew exactly how to get those leads.

00:45:24: We would know what percentage of those leads convert to a qualified opportunity.

00:45:29: we wouldn't know the percentage of Leeds that then convert from Qualified Opportunity, To A Closed One Deal.

00:45:37: so if you can describe The math Of That entire journey end-to-end and You've got control to say If I put five more dollars in i Know Exactly how Many Dollars Come out at the End And that math is rational.

00:45:53: That's what a predictable revenue machine looks like, and the journey to take that from a single channel, single ICP with one equation that backs up that math—the predictable revenue machines just means adding more of those equations over time.

00:46:12: so Diversify your channels and diversify the places you're leads come from.

00:46:17: Start to diversify use cases that sell for a specific customer, and it may change your conversion rates or outcomes.

00:46:29: Then start selling additional ICPs in different segments with different geographies.

00:46:36: Once we've got our first path defined—and it works!

00:46:41: then the goal is just add more.

00:46:44: And you know, when I work with this really great guy who's been go-to market leader or revenue leader for decades and he described us as like engines.

00:46:55: You almost wanna create these engines in your business that are independent.

00:47:00: So, in Vantus Business some of our engines would be like we sell to startup founders?

00:47:04: We sell to growth stage companies?

00:47:07: We sale to enterprises?

00:47:08: We expand with our existing customer base?

00:47:11: We selling Europe?

00:47:13: Like this is different.

00:47:13: engines can operate independently.

00:47:17: every company by the time they go public should have at least four independent engines.

00:47:23: more is better, but it's one of those things that you can do to reduce risk and find other sources of revenue.

00:47:31: And it's a concrete way to break down how you do TAM expansion and how you create that predictable machine.

00:47:41: At first what we talked about was finding the first or at least... We didn't talk much about finding their first lead source.

00:47:52: the qualification of a lead to deal.

00:47:55: And when we think about the first lead source and the first channel like SEM in your case, in Ventus' case how long am I trying only pursue this one channel?

00:48:13: Let's say that i find this channel... where is the sweet spot?

00:48:20: I'm doing this for too long without establishing and experimenting with new channels versus.

00:48:26: I am doing, that's not long enough.

00:48:29: Therefore i should spend more time here before doing to many experiments.

00:48:34: The most common mistake is actually diversifying Too early.

00:48:38: so often you know people get one thing working And they're like ah gotta go Get More Channels They Gotta Get More Things Working?

00:48:44: That's Actually A Mistake.

00:48:46: You Want To Keep That First Channel Going longer than you likely think.

00:48:52: It does depend on what the channel is, who the buyer is and y'know way to sort of work into that.

00:48:58: if want first define like Who Is The Buyer Of A Solution That Actually Owns The Pain?

00:49:04: You Want To Think Through Where Does That Person Live In The World?

00:49:08: Where Do They Encounter Media?

00:49:10: Where Would They Possibly Encounter Messaging And Maybe Sit Events?

00:49:14: Maybe it's billboards.

00:49:16: Uh, maybe digital marketing?

00:49:18: like you've got lots of options and none of them are bad.

00:49:21: It's just very specific to who your buyer is.

00:49:24: You know once you have identified that?

00:49:28: You should start to really scope out how far do you believe That Channel and that tactic can scale?

00:49:35: And the truth is they can usually scale a long way.

00:49:40: One truism I do not know why this is, but it's something that an investor once told me and i've now seen at play out in a lot of companies.

00:49:50: Is there- There is this rut?

00:49:53: That companies tend to get in around eight to ten million dollar quarters.

00:49:58: so when they're like approaching that sort o'like thirty two fifty million in ARR That's usually when you really need to start diversifying.

00:50:09: And the reason I think companies hit a rut in that timeframe is because often they're coming in with a single channel working and and a single product.

00:50:18: And then it's like, they kind of hit that point where it gets harder and harder to scale that one thing.

00:50:23: and I need to go either multi-product multichannel or diversify in some other way.

00:50:27: so i would say as you start to get over that like twenty million an ARR threshold That's when you want to start thinking about Other channels TAM expansion second products something to diversify the way your building revenue and The Way You're Building Pipeline.

00:50:47: Ton of founders in the audience think this point would be somewhere between three and ten million an AR.

00:50:54: Yeah, that's too early.

00:50:56: In my opinion There are undoubtedly edge cases where that might be true.

00:51:01: But if your channel is any good it If you're ICP is clear And if there's a real market here That first engine should take you further than just like three to ten million.

00:51:13: It really should have more legs.

00:51:15: then that, if that's all it can give you I would start questioning is the market big enough?

00:51:20: Is the opportunity big enough ?

00:51:23: Is the pain we're solving acute enough?

00:51:26: because If You Can Only Really Eek Out Like Three Or Five Million And Then Your Sort Of Like Slowing Down...I'm Thinking The Market Is Too Small

00:51:37: Which would be a hard statement because then I'm not a venture case and then i have A lot of different problems.

00:51:43: Yes

00:51:46: Let's not assume that this is the case, Because otherwise we will have completely Different conversation.

00:51:50: now We define what a predictable revenue engine means.

00:51:59: so When it was first time That im thinking about it Am i thinking About It from The day that i think oh I might have some kind of product market fit, and now i'm just trying to align everything towards that.

00:52:14: Or is that point also later in the journey because they just have to do some homework before then?

00:52:23: You know...I think it's from day one!

00:52:30: about what that predictable revenue engine looks like and what the math is.

00:52:35: And you need to be constantly testing and refining that hypothesis as you go, and that means there is no point that it's too early but there is also no point at which you should stop doing that.

00:52:47: It is a constant process of refinement and then expansion of what that looks like.

00:52:53: so from your very first conversations with prospects It's not that, you know it takes a lot longer to get the product market fit than I think most people.

00:53:02: Think they kind of thing.

00:53:03: oh i've done a few deals have got Product Market Fit.

00:53:05: To me That is Not at all what it looks like?

00:53:07: I would probably define as much later Than that.

00:53:10: You Know.

00:53:10: if first round Capital actually has A great course on Product Market Bit Is very worth checking out For Me Like Those First Conversations Should Be About.

00:53:20: Okay!

00:53:21: I can do one deal.

00:53:24: If I can do two deals, like what commonalities can i find?

00:53:27: Do they look the same.

00:53:29: Can I start to understand the math commonalities between my first opportunities.

00:53:34: Could I repeat it?

00:53:35: and then once you get to ten plus of those Is there enough commonality to start to write down on one page?

00:53:44: Like, what is the equation that drives your opportunities.

00:54:01: the results of your hypothesis, you're test.

00:54:14: You don't really have it.

00:54:15: a few first deals does not equal product market fit.

00:54:18: It is truly that repeatability and its like.

00:54:21: yes I've proven my hypothesis.

00:54:23: true i am able to repeat the experiment And had the same outcome.

00:54:30: So what was the first step towards?

00:54:33: A predictable revenue engine because The chances from me selling and having the first repeatable sales to your level of revenue engine.

00:54:48: The chances that this happens overnight are very, very small so or zero.

00:54:55: So what are the first questions?

00:54:57: That I have to ask myself And the first homework that i have to do that our easy Or at least the first steps to implement to not start with an overkill.

00:55:11: I think that is actually a great question, because often there is a lot of overkill here and the way that that overkill shows up often with founders as founders are sort of like...I don't want to do sales it's not fun.

00:55:24: i'm going to hire my first sales person and they're gonna figure this out for me.

00:55:28: That Is Almost Always A Mistake.

00:55:31: You Know It.

00:55:32: Sales Have To Be Founder Led Until you Achieve real repeatability.

00:55:38: It is extremely rare that you're going to hire a salesperson early on and have them figure out that repeatability for you, they just can't tell the story or do the discovery.

00:55:55: To avoid that overkill, the single most important thing you can do as a founder is get out there and have as many conversations.

00:56:01: And do as deep of discovery as you can in your area of interest as possible.

00:56:06: so rather than going out and thinking like okay I Have a notion what i'm gonna build?

00:56:11: i'm Gonna Build this Thing and then i'm Going to go try to sell it too A few people and see if That works!

00:56:16: I would actually flip It...I Would start with The Discovery.

00:56:19: Start With an idea Of the use case.

00:56:22: Go have A dozen conversations with folks that look like who you might want to have as your buyer and ask them, what matters?

00:56:30: Really understand.

00:56:32: What's their day-to-day experience?

00:56:34: What is the pain they experienced?

00:56:35: Is this a problem they wanna solve?

00:56:37: How would they solve

00:56:38: it?".

00:56:40: Then move from there... And then come back build an MVP and see if that's of interest to them.

00:56:48: You know, when Vanta started I love this about how Vanta starting Christina our founder she had experienced the pain of like building software and trying to make it compliant in going through the SOC-II audit process And she initially went to start exploring solving this problem at Vanta.

00:57:08: The first thing she did was take this SOC II audit journey.

00:57:13: She just made a spreadsheet.

00:57:16: She took that spreadsheet and just like really made a checklist for, here's how you would get through the SOC to audit.

00:57:22: And she went.

00:57:22: other founders in an just had conversations.

00:57:25: it was this helpful?

00:57:27: The response she got Was stunning.

00:57:30: they were oh my gosh I'd pay her.

00:57:33: yes This is incredibly helpful.

00:57:35: It's just a spreadsheet.

00:57:37: That's how painful the problem was.

00:57:39: They're willing to pay her For something wasn't even software.

00:57:43: They were just like looking for help.

00:57:44: So then she knew, okay I can build down this path there's real pain.

00:57:48: and then she went from there

00:57:53: And let us say we talked about metrics that i'm observing in a predictable revenue engine.

00:58:02: What are the first metrics they start with?

00:58:04: to define my own engine?

00:58:09: You know one of them is going be.

00:58:13: you want identify where leads are going to come from for you.

00:58:18: And then, you're gonna want to start understanding what does it cost to generate more of those?

00:58:23: So that could look like in practices... Okay!

00:58:26: We'll sell two startup founders and maybe we will do this using search engine marketing.

00:58:33: so we sold software to these founders who know our deal value.

00:58:38: let's say we've got a deal value for the software at fifty thousand dollars And you want to go out and find more founders to sell too.

00:58:46: So if you wanna do that through search engine marketing, what I would be thinking about first is how many dollars Do i have spend on Search Engine Marketing To drive a qualified lead?

00:58:59: Is That Within Reason Given What Im Going To Charge From My Software If it's within reason for what I'm gonna charge and that acquisition cost is reasonable.

00:59:09: So you're really looking at CAC here, customer acquisition costs.

00:59:12: if its with in reason You've got a flywheel And then It's just like okay Can i get enough funding to put more dollars?

00:59:19: In there and What I'll tell you Is if you find A source of leads where That Customer Acquisition Costs is you know Within a one-to-one ratio To your contract value Your golden Like You will find investors very willing to give you money because they know that you're going get better and more efficient, it only improves from there.

00:59:40: So if you've got a payback period of year or less, you are in great shape.

00:59:45: And then you just are pouring gas on the fire and like going out and acquiring more opportunities and more leads.

00:59:52: What If My Payback Period Is Longer Than A Year?

00:59:57: I think at that point...you want to investigate why.

01:00:03: situations where that could be a huge problem.

01:00:05: There are situations where that might be okay.

01:00:08: You know, and the situations were it could be a huge problem or going to be the ones where maybe you're selling something That's not very sticky.

01:00:15: so if you are selling two founders And you know that?

01:00:19: You know your selling just small companies.

01:00:22: You know that Your solution may Not Be as Sticky.

01:00:25: May experience churned and you've got A payback period longer than a year.

01:00:29: That's probably a really serious Problem and you want To reconsider either like is that The right persona to target, or should I find a cheaper way to acquire those customers?

01:00:41: If you can't do either of those things, it's probably not worth pursuing.

01:00:45: Now It's a different story.

01:00:46: if your selling in the enterprise right?

01:00:47: Because In The Enterprise what You see is that you often get much higher net retention and Those deals Can Be Very Sticky ,You Can Do A Lot Of Expansion.

01:00:56: So In Those Cases You Might Be Willing To Overinvest And Say On Our First Opportunity Maybe We've Got A Two-Year Or Three Year Payback Period But We Know That In Year two we're Going to be able to Sell Them More Software.

01:01:07: Their Usage Of Our Software Is Gonna Expand.

01:01:10: You just have to think through the multi-year journey, and if it's going be worthwhile over You are a very happy person and you should seek to do as much of that is humanly possible.

01:01:35: So what I would say then, Is?

01:01:37: That's when you really want to start building your team.

01:01:40: so if you don't have a sales Team yet...you wanna Start Building A Sales Team To Feel That.

01:01:46: Then You Want To Think About What Does That Talent Profile Look Like.

01:01:50: I'm A Big Fan When You First Build Your Sales Team That You Want to Start With At Least Two Sales Reps Never Start with One.

01:01:58: I'll start with two, then you get the comparison point.

01:02:01: You also get competition between them.

01:02:03: so bring those to folks on Get Them Selling give them a reasonable ramp period and a quota And if they can reasonably hit Quota?

01:02:12: You should keep hiring salespeople and Then you know from there.

01:02:17: it's really just about growing that and scaling It and Scaling your inbound lead flow as much as humanly can.

01:02:26: now You're going to start hitting a wall in there after awhile.

01:02:29: You'll want to start thinking about other lead sources, you wanna think about outbound lots happens later.

01:02:35: but your first mission is gonna be grow a sales team and scale it.

01:02:38: as long as they are able to achieve like we I like to aim for eighty percent of my sales team hitting eighty percent off quota.

01:02:48: what Is A reasonable ramp up period especially when i'm starting To build My Team And have not Like I have sold most of the things at FounderLat.

01:02:59: What's a reasonable ramp up period?

01:03:00: How do you find

01:03:01: that?".

01:03:02: Yeah, so couple factors matter here.

01:03:05: one is what kind of customer are selling to.

01:03:09: So if your sell it and what the sales cycle Is on that...so If You're Selling To Smaller Customers With A Short Sales Cycle A Reasonable Ramp Period May Be Quite Short.

01:03:18: For Our Startups Team At Vanta The Ramp period To be Full Productivity Is Three Months.

01:03:25: Now, if you're selling to a large enterprise those sales cycles can be much longer.

01:03:29: The sale cycle could be six months or twelve months.

01:03:31: A ramp period for somebody's selling in the enterprise would have been fully productive and hitting quota as long it was just one year.

01:03:39: So think about who they are selling at how long their sales cycle is... The other thing to take into account especially with your first-sales people might not actually make sense to put them on a quota even when you give them a ramp right away.

01:03:53: Until you understand your math fully, it might be better to put them on a target that maybe is like a logo acquisition target or some kind of objectives.

01:04:06: The most important thing and reward them well if they achieve that goal, especially overachieve.

01:04:18: So what could look like is say you're going to hire your first two salespeople?

01:04:22: You know...you are not really sure about an appropriate quota but in the first six months you would be happy with each of those people brought on five new customers.

01:04:35: Great!

01:04:35: There's nothing to say.

01:04:36: You can't just say, okay for the first six months your goal is to sign five customers and if you signed five customers ,you got your variable component of your compensation And If you sign more than that I'll give you X dollars For every additional logo.

01:04:49: you sign something along those lines.

01:04:51: That's a little more creative Can work really well.

01:04:53: while you're still figuring out Your math.

01:04:56: One are The biggest mistakes and shortcomings Of sales people incentives.

01:05:06: Yeah, well I think in the early days especially as founders are building sales teams they're like often really resistant to this idea of commission and the idea that salespeople should be on a commission plan?

01:05:21: And you know truth is like in SAS in particular salespeople very highly compensated.

01:05:30: And I think there's a resistance to the idea that these compensation plans drive behavior and outcomes, but you know, we've shown that it works again and again.

01:05:41: So often what'll happen is like either founders just want the salespeople to really deeply value the equity in the same way that the founder does and doesn't wanna put them on a variable commission plan or they just wanna keep that commission part really low.

01:06:04: When you have that early sales team, You want them to be really bought in but also like feel successful.

01:06:11: So I'm a big fan for Salespeople of putting on fifty-fifty plans where fifty percent is their base salary and fifty percent is what's called their variable.

01:06:24: That variable commission, if you add the base in a variable that we call on-target earnings.

01:06:30: You'll hear it called OTE.

01:06:32: So OTE In the example i gave earlier.

01:06:41: if you put somebody on a plan where it's like in six months, I want to sign five new customers and if he signed those five customers.

01:06:48: You get paid your your own target earnings your full commission.

01:06:51: but if you sign a six customer or seven customer actually make more than your ote.

01:06:56: lot of founders resist that idea and they think oh.

01:07:00: I'm not gonna do with that way i will tell is always mistake.

01:07:04: just do what?

01:07:05: It works, people sales good salespeople perform.

01:07:09: The other thing that founders often do wrong here is they look at shiny logos on a salesperson's resume and I think oh this person was out of great company!

01:07:18: They were at Google...they were at Slack....They must be great when a sales person has been apart of the great large team?

01:07:27: They might be great.

01:07:28: They might also be terrible.

01:07:30: It does not mean they were good just because they would have a nice logo on their resume, you've got to really suss out.

01:07:37: is this person entrepreneurial?

01:07:39: Do they know how to operate in a startup environment where they're not going to have a playbook and all the resources that they might have on a larger team?

01:07:47: so you gotta be really thoughtful about the kind of person There

01:07:54: are chance, or did you see people who performed very well at a company before getting fed up and being like the next time I might not be as hungry anymore?

01:08:11: Yes.

01:08:11: This happens a lot!

01:08:13: You want to strike this rate balance of somebody is late enough in their career that they know how to sell.

01:08:22: They've got skills, they're independent and can do great discovery like the fundamental skills because as a founder you are not going be able necessarily teach them those fundamentals.

01:08:31: sales skills so have come with baked-in.

01:08:35: but if person has had too much success They are not gonna have the patience and tolerance for like, the hustle it takes to sell in a startup as one of the first sellers.

01:08:46: Like you need somebody that's got a chip on their shoulder.

01:08:49: That is entrepreneurial.

01:08:50: they do have to value the equity to some extent.

01:08:53: You know another failure mode when your hiring early salespeople Is just hiring people who were mercenaries or like Just give me hundred percent commissions.

01:09:02: all I care about is the cash.

01:09:05: That's not necessarily the person you want either.

01:09:08: You do what somebody who cares about equity and future of start-up, just that fine line like to be hungry enough.

01:09:16: they still really value true outcome for long term.

01:09:21: yeah I got a guy on my team right now at Vanta.

01:09:25: he was our number one seller two years in a row.

01:09:27: actually He kills it, he makes a huge amount of money in his on-target earnings.

01:09:33: Like he crushes this quota and he makes way above that OTE.

01:09:37: He also deeply cares about the equity because he believes in the future or the business.

01:09:42: so like... That is exactly the kind of seller I want.

01:09:44: somebody who cares about both.

01:09:46: And they're scrappy enough that they are willing to deal with not having all their resources and have me figure out how sell new thing thats never been sold before

01:09:56: As we talk Revenue engines and how I start building them.

01:10:02: Would you mind giving us a look?

01:10:04: Behind the scenes at a company like Venta when you have to describe what their revenue engine looks like At this stage that your currently yet Maybe with a quick definition of where?

01:10:18: X amount of people in team on the go-to market side The numbers that you can want to communicate.

01:10:26: but also How does it look like?

01:10:29: What would you describe the engine-like.

01:10:32: Yeah, so Vanta today is about seven hundred employees total.

01:10:37: of that about three hundred during go to market.

01:10:42: and You know, we're going to market now globally.

01:10:45: So we've got teams a very large team in North America, a large team and Europe across two offices in Dublin and London.

01:10:54: We also have an office in Sydney that's starting to tackle the APAC Market.

01:10:59: so we are going after global customer base.

01:11:11: And so today, I would say the two primary buyer personas that were focused on one is startup founders.

01:11:18: The second is CISOs.

01:11:19: So Chief Information Security Officers and Those sales look very different for us.

01:11:24: so those are very diversified parts of my revenue engine today.

01:11:28: So i've got you know a sales motion and the machine that's going after that like first time compliance experience better founder needs, I'm helping them run their entire security compliance program.

01:11:47: So they are typically like, They've got a GRC practice and they're going to run that practice on Vanta as a platform.

01:11:53: That sale looks wildly different.

01:11:55: So we've diversified the market.

01:11:58: segments were going after in that way, then We also have this base of now ten thousand customers.

01:12:04: so we got ten thousand Customers and we've gotten an entire account management team whose responsibility is to sell more products To our customers.

01:12:13: because while we've diverse fight or go-to-market engine?

01:12:16: We've also expanded Tam And we've gone from being a single product company focused on automated compliance to now being what we call a trust management platform.

01:12:27: And there's a real big difference in how you build the revenue machine for a single product versus a platform, and That machine that is multi-threaded.

01:12:40: So, that's kind of how I view this multithreaded global revenue machine today and my mission in my goal every year to continue diversify the products we're selling.

01:12:52: The personas were selling too And sources from which drive opportunities on pipeline.

01:13:01: How can i imagine management?

01:13:07: I am a SDR or AE inside of Venta.

01:13:15: How do i get prepared to also function inside the engine?

01:13:22: Because it's not wild west like when as founder start selling, It is more like very structured environment from transparency point of numbers.

01:13:33: So how did we put into this environment and then Do I get managed throughout the weeks and months so that you, or at least my manager.

01:13:46: And I Get along in C if i'm contributing to this engine?

01:13:52: Or not?

01:13:53: Yeah So SDRs and AEs today at Vanta have a very clear playbook for how To succeed and That Playbook is extremely metrics driven.

01:14:05: one of The things our team developed over the last couple Of years is this thing we call the balanced scorecard, and that-the purpose of the scorecard was really like... We have had a lot of success.

01:14:28: Really doing the things we knew, We needed them to do.

01:14:31: To continue to evolve The business.

01:14:33: so you know how I would describe that set of Things Would be like one really focusing on selling the platform instead Of selling a single product.

01:14:41: is One going outbound and Generating their own opportunities?

01:14:46: Is another?

01:14:47: So there's this list of things That we expect A great AE to Do.

01:14:51: There's a similar List for SDRs And what we started Doing as we built This balance scorecard that recognizes AEs and SDRs who not only hit their quota, but also do the other things we expect them to do.

01:15:06: That drive that predictable revenue machine forward.

01:15:10: so what it does is this really rolls up in math an equation that ranks our teams from number one to the bottom And takes into account all of those other activities.

01:15:26: And since we've developed that, what we found is that really helped the team understand.

01:15:30: What matters?

01:15:30: That yes it matters if you hit quota but It's not The only thing that matters.

01:15:34: You need to be doing these things and also create pipeline.

01:15:37: They drive up the value We're delivering To customers that reflect that your selling in the right way.

01:15:43: So that balance scorecard Is a big part of And AEs and SDRs really like.

01:15:48: it's about consistency at this point.

01:15:51: We know what works, we understand the math of the business...we are continuing to evolve the way we sell.

01:16:00: so a great-like top performer would do is truly deeply learn the product follow the training understand those metrics that reflect what success truly looks here deliver on that playbook, on a daily and weekly basis.

01:16:16: And it really does involve showing up every day and doing those things consistently rather than like waiting to the end of the month to create outbound opportunities for example has got to be a daily activity.

01:16:30: you were tripling down right now on SDRs For example...and..for SDR's It's funny-it so old school but picking up the phone we are finding is really key to success.

01:16:43: We've got SDRs who do fine sending email, but when they start picking up the phone They get really good at that outbound cold calling.

01:16:50: We find that their numbers just go through the roof.

01:16:53: we see great outcomes.

01:16:54: So follow the playbook always hustle and just like put yourself out.

01:16:58: there seems to be the keys.

01:17:00: What would you say is the hardest part about a maturing revenue engine?

01:17:07: You know I think it's not.

01:17:09: There's

01:17:10: almost

01:17:11: like the golden handcuffs of success.

01:17:14: When you have a revenue machine that's working, there is the temptation to continue just doing what you're doing.

01:17:21: There's like this tremendous inertia to say we are winning!

01:17:28: We're driving a lot of revenue.

01:17:29: it's great but that is exactly how you can risk slowing down growth?

01:17:36: The only way to continue and stay in hypergrowth is to go back to that idea of having a hypothesis and constantly refining it.

01:17:46: The way you sell, the way you find opportunities or drive your conversation with your buyer has to change all the time!

01:17:58: And if you can drive that iteration in learning really create feedback loop.

01:18:05: That's the key to having a machine that continues to grow and gets faster, better over time versus something that sort of stagnates and stalls out.

01:18:13: And at the heart of that revenue machine for us has been moving from like a transactional sale where we've got to playbook in our process, but it's very mechanical.

01:18:24: We really moved our team to value-based sales and that value based sale is... The conversation.

01:18:31: instead of hi here's our software Here's what does would you buy?

01:18:35: The conversation becomes much more What I described earlier about uncovering understanding how we address that pain and then really articulating, how Vantas solves that problem in addresses the pain for a customer.

01:18:49: Then quantifying with them if you can do that well?

01:18:54: And You continue to evolve an iterate on.

01:18:56: That is really The secret two building something that is sustainable and scalable over time.

01:19:04: So when I as listener now after all this conversation think it's Time For me To build more predictability into my revenue engine, or at least maybe even set it up and start.

01:19:21: What will be your final words to me myself?

01:19:24: And building a revenue engine of like hey do this don't do this otherwise This might be harder than It has To Be.

01:19:35: The single most important thing you can Do to whether You're establishing that predictable Revenue Engine for the first time Or Your trying to scale it is to clearly identify goals and then assign people to achieve those goals, and give them that one singular mission and nothing else.

01:19:58: The focus of that single goal... ...is what will make the Predictable Revenue Machine easy-to-debug—easy-to understand… …and truly something you continue building an iterate

01:20:10: on.".

01:20:11: Where things get hard and messy.

01:20:14: And what makes it truly not predictable is when you ask people to do a lot of different things because, What?

01:20:20: You'll find maybe got sales person then given them like dozen different products sell in different buyer personas they're gonna gravitate towards the easiest thing.

01:20:31: that's most likely have them hit their quota.

01:20:34: That doesn't mean those other product aren't viable.

01:20:37: It just means gone into the easy as think so Every step of that journey, whether it's the first or the thousandth step.

01:20:45: Simplify the mission of every person on the team give them one goal and then measure them against that goal consistently over a period of time And seek to get better and better at achieving those goals.

01:20:58: if you do That You can't go wrong?

01:21:06: It's been such a pleasure.

01:21:08: Thank you so, So much.

01:21:10: I will absolutely link to your LinkedIn because you can read and also see if when you're doing other podcasts but Also You are posting from time-to-time quite unique insights that i really enjoy.

01:21:24: And then additionally of course i'll link to banter as well.

01:21:29: it has Been Such A Pleasure.

01:21:31: Thanks for taking the Time Hope To Speak Again.

01:21:35: Thank you so much.

01:21:36: this has been really fun.

01:21:41: This was an insight and vantus playbook for building a predictable revenue engine.

01:21:46: therefore thank you to steve case who took the time, end good in depth with us on sales of first part what's just like how do actually sell and work through process and then additionally how do you build a team around that and bring the team into a predictable review engine, which is probably one of the hardest parts.

01:22:08: Like there's a lot of companies out there who make it to the first million in ARR or at least two or three million and then there's the death valley between like three and twenty million an ARR.

01:22:19: Then you need to professionalize And its not that easy.

01:22:23: It super super hard!

01:22:24: Therefore Its just incredibly helpful To have these insights laid-out by someone Who did it twice Not only at Vanta but before Twilio.

01:22:32: So therefore I hope This helped.

01:22:35: If you found this episode helpful, please share it with your sales team but also with befriended founders who can use it to become better at selling and building predictable revenue engines.

01:22:46: You listened to the Unicorn Bakery.

01:22:48: My name is Fabian Tausch And I'm looking forward to welcoming me back To one of the next episodes!