(26) From Startup to $11B: ServiceTitan's CRO Breaks Down Their Sales Playbook - YouTube https://www.youtube.com/watch?v=6xgdrmxaeu8

Transcript: (00:01) This has translated to me like overseeing our sales organization as a learning of how we do things internally and how we want to leverage AI to make decisions that were historically otherwise determined by territories and named accounts and like how pipelines created. And so we had this really I think unique way in which we think about customer acquisition which is if a lead comes in that looks like a particular type of lead it gets distributed to the account executive that has the highest propensity to close that type of business and so it's not roundroin it's (00:40) not named accounts it's based on merit. [Music] Hey everybody, the best dots are taken or overpriced. I was literally looking for a domain name the other day. It was $10,000 just to make an offer, so you settle on a workaround domain for your website. Don't compromise. Get a cleansharp.te domain that instantly says is a tech startup. (01:06) Grab yours at get.te/saster. That's get.te/saster or on domain registers like GoDaddy. Stop compromising. Get the domain you need. Hey everybody, Sasser annual will be back May 2026, the world's largest SAS and AI gathering for executives. Just this last May, we hosted 10,000 attendees with 68 VP level and above attendees, 36% CEOs and founders and 25% were AI first professionals. (01:40) It's the very best of STER attendees and decision makers that come to SAS annual and AI summit each and every year. But here's the reality, folks. The longer you wait, the higher ticket prices get. They're cheap now. They're cheap. So just get them early lock in your spot today. Use my code Jason100 for exclusive savings. Get your tickets at podcast.sasterangual.com or just use code Jason 100 when you check out. See you there. (01:59) Saster Annual and AISummit 2026. It will rock. Please welcome Service Titan Ross Beastman and managing partner and co-founder of chemistry Christina Shen. [Music] All right. All right. Well, welcome to Sasser. Uh, show hands. Whose first Saster is this? Wow. Is it your first Saster? No, this is your second SAS. Second Saster. I was here exactly seven years ago, right around the time I joined Service Titan. (02:37) I think I am on Saster number five. So, thank you for having us back. It's always an incredible event. I am Christina Shen, one of the co-founders of chemistry. We are a new $350 million early stage fund investing in seed and series A and I am more than beyond thrilled to get the chance to interview uh Ross Beastman who we've known each other for now how long? I'm going to say almost two decades because we were at one point uh undergrads together and you were in the business school with all the people that were going to be venture (03:09) capitalists and I was in the political science department for those that become salesman. Uh well it worked out great. Start in the same place two different paths. We were just reflecting backstage. Um it has been a long time. I feel like we're in a boardroom right now. Well, let's get started. (03:27) when you first joined Service Titan um as the head of sales talk a little bit about what attracted you to Service Titan. So originally I didn't want to love it and when you were at Bessemerf along with the other fantastic team there I was tapped to say there is this incredible opportunity in vertical SAS and they need someone to come and run their go to market organization. (03:46) I said what's the name of the company? They said service. I said where is it? They said Los Angeles. And I was living up here at the time and I said what do they do? and they say, "Well, we build software for plumbers." And I said, "Wow, I don't know anything about plumbing. (04:05) The customers that I work with in enterprise software are companies like Bloomberg and United Airlines and Sprint." And at the surface, I wasn't sure that this was the right fit for me. And it was ultimately the time that I spent with the founders of the company, Ara and Vah, who are still the CEO and president respectively to this time that I really was able to see the gravity of the mission that they had. (04:32) Their parents worked really hard as trades people, plumbers and HVAC contractors in Southern California, and they invested every dollar they had not just into their business, but also into their families. But instead of going into their parents' garage to create Apple, they went into their dad's plumbing shop in Los Angeles and said this is an industry, the trades industry. (04:51) And they said that these businesses have been ignored and they have been trapped in the past doing everything manually. When all these other industries had been disrupted for the better, they decided that there's a better way. And when I saw the deep commitment to not only their dads but also the opportunity to positively impact the lives of really hardworking people, that was what really put me over. And it's so special here. (05:16) I mean, even back in 2018, vertical software was not really a known category today. I'm curious, how did you evaluate the opportunity? Like, how did you compare it? I was told I was crazy. Um, and it it's the second time in my career where I was told I was crazy, you know, evaluating this opportunity. (05:40) The time that I actually spent in the due diligence process, not just on the company and the founders and the mission and the actual technology, it was actually spending time meeting with their customers. And when I walked into these customers place of business, which we call shops, HVAC shops in places like Fresno, California, where it's 110 degrees outside, and you walk into a building that doesn't look like the Bloomberg Tower in Manhattan, but you walk in and you see every single person in this business that is deeply embedded and committed to using this technology as their operating system, whether the person that's answering calls at the front desk, you're the CFO, you're the (06:16) owner, you're the person in the warehouse checking inventory or you're the technician in the field. I recognized the criticality of the software to an entire industry. And then when I sized the industry and saw that it did over a trillion dollars just domestically in gross transaction volume, I said there's a huge opportunity. And I called my wife. I said, I'm going to Los Angeles to sell software to plumbers. (06:42) I remember way back in the day when we were at Bessemer, it's myself, Byron Deer, and Tyler Goldberg. Uh, we wrote now this very famous memo about service. I think we put what do we say a 2% chance at a billion dollar outcome. Uh, and what we just checked the market cap today. (07:00) What do you have today? Uh, according to 30 minutes ago, I think it's about 11 billion. I mean, first of all, congratulations. You know, big IPO in the last year. What an incredible outcome. I just remember the early days when we were talking about Service. It was always that missiondriven approach. I mean vertical software was a new category. (07:17) No significant venture dollars in the first few years and yet they had that grit and mission driven. I remember we talked to customers and the first thing every customer said was don't tell my competition. This is my secret weapon. And I knew it's by far the best customer calls I've ever done in my 15 years of venture. It's awesome. (07:37) And I think that what's you know interesting and as I think about the different paths that I've had in my career and when I now have the opportunity something I really enjoy is talking to founders of earlier stage companies when they think about like the business model or even if you're a venture person and you're thinking about the investment thesis is just the order of operations as it relates to what it takes to create a successful business. (07:57) And one of the principles that we operate on as a business is that every decision we make, every dollar that we fund raise, every product that we build, every person that we hire is solely focused on how can we create a better life for contractors and how do we create better business outcomes for their businesses and then and only then if we do that we in return will have an incredible business ourselves. (08:24) And it's almost like how do I think about this from the value that we're bringing to the customer and their ability to drive successful outcomes in their business as ultimately the prerequisite to anything that we become the beneficiary of. All right, let's jump into let's jump into your time at Service. So 2018, first year in, what does Service look like? How big were you? What the or look like? Any buyers remorse when you first joined? Any pleasant surprises? Okay. So, I'm employee number 354, 354. (08:55) We were series B company doing less than $30 million in ARR. And I would say that it was organized chaos in the best possible way. We were very focused on customer acquisition, a new logo acquisition and we were a one product company that was only one version that was brought to market to just one particular set of trades businesses in plumbing, heating and electrical. And that's literally all that we were at that time. (09:26) And we were predominantly an inbound focus engine. And we needed to identify the path to get to 50, to get to 100, to get to 500. And there were a lot of different experiments that we took along the way. You've been in sales for a long time, almost a decade before you joined Service Titan. (09:46) How much of sales and say the tech and enterprise world translated over to the trades world? It's a great question. So when I was uh running go to market for companies here in Silicon Valley, I would often get into my car um whether I was going to see a customer or meeting a sales rep and I would drive from San Francisco to San Jose down 101 just like many of us all do all the time and I would look on the side of the freeway and I'd see whether it's billboards or logos of buildings in this incredible part of the world and say I can sell software to any one these companies and being in vertically focused software actually (10:25) taught me I think a really valuable lesson that I fervently believe now having been in this experience translates and would translate to any company even agnostic of vertical which is the focus on ideal customer profile I know that a lot of people use that term and I'll tell you about the way in which we define ICP as it relates to how we go to market everything that we do is intentional. (10:55) And when we think about the marketing dollars that we're pouring in, the R&D dollars that we're pouring in to create products and workflows, we effectively put blinders on and say, "We know who we are. We know who we're for." And I think that that exercise and discipline as it relates to knowing what your target customer is pays real long-term dividends. And I know that it's really hard as I spend time with companies that are at earlier stages trying to chase dollars. They're trying to chase dollars. (11:21) Maybe it's because they want to hit a specific target and they're going to be deemed more valuable in the venture community. Or maybe it's literally at the point that we need to get these dollars in to make payroll. And I find that that approach just allows for too much thrash in an organization. (11:39) whether the product's not going to work perfectly for this end customer. Potentially it means that this customer that we sign up is not going to have successful outcomes and is going to be quote unquote born red and heightened propensity for churn. And that ultimately the discipline and the ability to say as much as I'd like to take your money and take your sales order is not conducive to long-term really strong unit economics and I am much more focused on saying we're going to be really disciplined and really focused on serving a particular type of client that has these attributes because if we do that and we know that the (12:13) opportunity is really large you can create incredible repeatability in your business and your go to market motion. What about what didn't translate? Were there any initiatives on the go to market side that you tried that worked well in maybe the tech and enterprise world that didn't translate over to the trades? Yeah, there were so many things that I had learned throughout my career as it relates to just basic things like thinking about how to build a capacity model of I need this many AES, they're going to perform at this level of productivity and then that's going to (12:44) get us to this number. those preconceived notions and things that are commonplace and like the industry best practice I find aren't perfect translation and those things need to be challenged and so it was really clear to me that one of the secret sauces of achieving scale was parking a lot of those best practices or those conversations that many of you may have in your organization says well I did this at my last company I would really challenge those things every single day to determine if it's actually right for your (13:16) How big is the or now? Uh we're over 3,000 people uh today and based on the last earnings call uh we did just north of 770 million in revenue. Wow. Incredible. 30 million to 700 plus million in revenue in the last seven years. That's pretty incredible. Been very fortunate. I'm curious uh what's been hard since you've joined Service Titan? You know, you talked about your first year. (13:47) What about preipo before the fantastic IPO at Q4 last year? Yeah. So, I think that what has been challenging is every curveball that's been thrown our way, whether it be the pandemic and people look, if you think about our customers, right, they by definition are responsible for going into strangers homes and fixing their plumbing or fixing their air conditioning or fixing their electrical sockets. And the the pandemic changed the world. (14:16) And interestingly, like that turned into a major tailwind for us because people were spending times in their homes. But we were really intentional about figuring out ways in which we could help the industry survive and be durable during this time of uncertainty. I think other things that have were changes to the global economy and the macro. (14:35) It's just been curveball after curveball after curveball. And you it really tests your metal it. And I think that one of the areas that I remember very vividly was we were actually in the process of trying to take the company public in Q1 or Q2 of 2022. And we were a business at that time that was not unlike a lot of other SAS businesses which was focused on hyperrowth. (15:02) And I'm not going to say growth at all all costs because you you limited me to specific CAC payback constraints, but the idea of having to be profitable was, you know, we can worry about that later. And when I got the call saying that we're going to pull back from taking the company public, that was a gut punch to not only me, but also to so many other titans and people that had believed that this huge milestone was a goal that we were shooting for. (15:30) And I was reminded a conversation that I had with my rugby coach. You and I are both Cal Bears. And I was rugby player at Cal. They just celebrated their 34th national championship and the coach today is still the same coach that I had when I was there. And I was telling him about this experience and it was deeply affecting me psychologically. (15:49) And he said, "Let me tell you about when I recently did some work with the Army Rangers." and told me this story about how as you go through to Ranger school and you ultimately want to become this elite warrior within the Rangers, one of the things that you have to do is go through this very arduous physical conditioning test. (16:09) And it's a test that is known and you know that you have to complete it under this time period, but you don't know when it's going to happen. And so sure enough, it's three o'clock in the morning and the sirens go off. It's dark. There's fireworks going off. There's loud music. (16:26) And you got to jump into your boots and you got to go and perform this really physical, arduous test. And you're disoriented. and one of these amazing things happen to where you've trained this test for months and you see the finish line that's out in front of you and a bunch of your commanding officers are there encouraging you to finish and you see the clock and you see the time but it actually wasn't the destination. (16:52) They had messed with these people's minds and said that this is the end of the test but it was actually another couple of miles. And what happened was is people didn't actually fail physically, they failed psychologically. They couldn't bring themselves to the fact that this is not the destination and they just broke down. (17:11) And it took this level of kind of recognition through this story to help me realize that the IPO is truly just a milestone. it is not a destination and completely helped us reorient the way in which we think about the long-term durability of a business. I mean what an incredible journey and like you know I'm sure as many in the room look to service as probably one of the most marquee vertical software companies and also probably one of the early companies that actually figured out how to go multi-vertical and so maybe talk about that a little bit. uh in the most fun way had always referred to like well we never knew sen (17:49) be more than plumbing software obviously you've now covered all the trades help us understand that journey a little bit of how you stayed focused on your initial market as well as moving into Jason verticals yeah so you know we we've had for many years now we've had this mission of becoming the operating system of the trades but um it really started with how can we make our customers in one specific vertical so successful that we can use that as the currency to potentially enter new verticals as well. And there were three really important things that I look back on that we did (18:23) that were really impactful in our ability to do this. Number one is that we hired as many industry professionals as possible um into our organization. We hired people from these specific trades that had been technicians, that had been call center agents, that had been FOs, that had been owners, um, and said, "We want you to come work for us. (18:48) We want you to come report into our R&D function, and we want to learn from you how we're going to build product that's going to be conducive to these other verticals that we're not in today." The second thing that we did is that we spent countless hours in the field actually with our potential market that we wanted to build product for. (19:06) And whether it be ride alongs with technicians and seeing how they did their work either at commercial properties or at residences or in the office to identify every point of value that we could infuse into the product that would ultimately be conducive to a completely tailored solution. And the the last thing that we did is that we didn't open the floodgates right away. (19:31) We were really methodical about testing and establishing success criteria in a very tightly confined incubated test to say, "Okay, we're going to take the big bet that this is something that's worth testing. We're actually going to pull our top performing people in an already established market and we're going to put them into this really hard, really new place. (19:49) " And that was scary for me as the person that's responsible for the P&L and the the top line because I don't want to take my 10 best salespeople that are helping us keep the lights on and helping us grow and have them focus on something that is possibly going to be a failure. (20:08) But it was really that discipline around establishing the success criteria, knowing that we've done the work and then establishing the best practice there that earned us the right to go into multiple trades. I mean, it's been one of the biggest success stories across multiple industries. We're going to get into some fun customer stories, too. But we were talking in the backstage about what's the most shameless thing an investor has done to try to invest in service titan. (20:28) So, I I think that during the the early stages of venture, one of um the uh venture capitalists that was I think chasing our series A and congratulations to you and your team at Bessmer at the time uh for earning that. I wanted to get very creative and this individual called our founders's executive assistant said hey are R and Vah going to this trade show in Las Vegas um around plumbing and she said yes they're going to be there and acknowledging that the closest airport to our office was Burbank said investor flew from Menllo Park down to Burbank and I think fought (21:07) six southwest flights in a row and just kind of waited around the TSA checkpoint point to see when said founders were going to be getting on a flight. And of course, they brought some Armenian pastries and sat right in the middle between the two founders and said, "What are you guys doing here?" and gave him a couple pitch books and said, "This is why you know, you should take our money." So, you know, that is one of them for sure that goes down into the their record books. (21:31) And interestingly, that individual did not get the series 8 funding, but he today is the chief business officer at Service Titan 7 years later. That's not me, but that's one of my teammates. Well, I think that's one of the biggest wins and probably one of the uh you know, when he was interviewing at Service, I'm sure was a big component of accepting and now he's obviously crushed it as a business. Um I I'd love to shift gears a little bit. (21:56) Uh hard to get on stage without talking about AI. Um when I initially asked you this question, you're like, "Hold on, hold on, Christina. I want to talk about how AI is for our customer." So, let's start there. How are you thinking about both building, buying, using AI for your end customers? For sure. And yes, it is funny. (22:16) When I checked in this morning, they gave me the Wi-Fi password. It says stop hiring humans. Um, so I got a shuckle from that. So, we have been really intentional about um AI in our product to deliver uh the best AI solutions to our end customers for quite some time, like at least two years. We hired a CTO three years ago that used to run the Einstein product at Salesforce. (22:42) And so this is something he's deeply passionate about and has deep expertise in. And so, you know, we ended up thinking about what are the challenges that our customers face um as it relates to decisions that are made by human beings. And one of them happens to be in dispatching. So when a customer calls in and says that they have this type of problem, we rather than having somebody subjectively say, "Oh, this person is available and they have this skill set and let me figure out how to reschedu this forward to get this person to this job." Said, "How can we create an AI model to ultimately allow for automated (23:16) dispatching?" And so to send the right technician to the right job that's going to minimize drive time, that's going to maximize their ability to not only serve the customer, but that they have the skill set and also the propensity to close that job to translate to revenue and a successful outcome for the business. (23:35) And so this has been awesome for our customers because as they grow and they hire more technicians and they serve more parts of their respective markets, they can do so without having to hire the same level of dispatchers that used to have to support you know a finite number of technicians and they then get not only better business outcomes on topline but they become more efficient by way of IBIDA. (24:02) This has translated to me like overseeing our sales organization as a learning of how we do things internally and how we want to leverage AI to make decisions that were historically otherwise determined by territories and named accounts and like how pipelines created. And so we have this really I think unique way in which we think about customer acquisition which is if a lead comes in that looks like a particular type of lead it gets distributed to the account executive that has the highest propensity to close that type of business. (24:36) And so it's not roundroin, it's not named accounts, it's based on merit. And it's something that I look at across our sales organization where every single month we score the team based on their ability to hit quota. We score the team based on their efficiency defined by close rate and then also the quality of their performance by leveraging tools that will score their pitch, their demo quality, etc. (25:02) And if they perform really really well, they get the best type of pipeline in that next month. And if they perform poorly, they get relegated. So it's not unlike the premiership in soccer, this concept of relegation and promotion. And if you get good, you got to stay good to be good. (25:21) I love how you still bring your rugby DNA into the day-to-day lives at Service. Well, I'm actually curious on talking to customers. Do they understand AI? Do you talk about AI? Is it a positive? Is it a negative? I think that two years ago it was a little scary for them, but I think that they are fully embracing that this is the way of the future. (25:41) I mean, the trades business has been consolidated in a massive way. The amount of private equity that has gone into this. It used to be that if you were in private equity, you wanted to buy companies in different verticals. People are buying businesses every single day in the trades. (25:59) And I think that as they build these platforms out, they're looking for opportunities to drive incremental leverage in their business that is not dependent on human-based labor and looking at every part of the funnel in which they can compress the cycle time, the close rates, the average price per ticket. And AI is one of the ways in which they can do that. And I think that it is being welcomed with open arms. (26:17) And we even talk about this all the time. No one calls uh a company a mobile company anymore. No one really says a cloud company anymore. I think that just becomes table stakes. Everyone has to have a multi-tenent cloud offering. Everyone has to have a mobile offering. Everyone will have to have an AI offering. (26:35) In fact, in the end, we're just going to be talking about these just companies. One of the things that differentiates Service Titan beyond the great product um and the great end market. It's the almost the old school mentality in the way in which we think about ways in which we can differentiate to win the right to serve the market. (26:57) And I'll just tell you that in this age of doing everything over Zoom and an inundation of AI tools that are going to make people hyperefficient, the one observation that I have, and I am obviously biased, so take it with a grain of salt, is that good things happen when you go on site and you spend time with your customers. (27:15) And whenever anybody is hired into the organization, whether they're an entry-level sales development representative or hiring a new seuite member of our executive management team, the first thing I tell them to do is learn the product, learn the industry, learn the customer. And I often see people complacent in their ways of saying, "I've done this this way at my company, and if we're not going to go visit customers, everybody should do it. (27:39) " Whether you're in marketing, whether you're in sales, whether you're in R&D, whether you're in HR, I think that you need to spend time with the customers way more than you spend time in the boardroom for preparation or in the strategy sessions because you will learn that much more. (27:57) And one of the things that I love about AR and Bah who started this business in Baji's dad's plumbing shop and now run a business you know as of an hour ago is worth 11 billion dollars is they spend 95% of their time with customers whether it be on calls or in the field. I'm going to meet one of the founders in Ohio later tonight. I'm flying out right after this to go do on-site all day with customers. (28:17) And I think that what hasn't changed and maybe it will and maybe I'll be wrong is that people buy software, they buy solutions from people that they are familiar with, that they trust, that they like, and that they respect. And for those that are not doing it, I think there's opportunity there. (28:40) And for those that are doing it, I think it's a massive differentiator. All right, one last question. Yes. What is your most fun or crazy customer win? Got some good ones. It's been planes, trains, and automobiles the last seven and a half years. This one has come like full circle. So, my first ever spec onsite. (28:59) I was living here in the Bay Area and I knew that I need to learn the pitch, learn the customer, learn the technology. So, I called one of the sales reps and I said, "Hey, when's your next available on-site meeting? I want to come to it." And he said, "Well, it's tomorrow." And I said, "Fantastic. Where is he?" He says, "Rodgers, Arkansas. (29:16) " And so if you know where Rogers, Arkansas is, it's like on the border of Oklahoma and Arkansas and there is not a direct flight from San Francisco. And so I'm at SFO and I'm furiously trying to learn everything about the product, everything about the pitch. I've got my noise cancelling headphones on and I don't hear that the gate agent has changed the gate and everybody has left because I'm so fixated on preparation. (29:35) I miss my flight to Bettinville. And so I rush over to the United desk and I'm like, where can you get me tonight? that is somewhere near Arkansas. And he said, "Well, we can get you to Kansas City, but it's like not that close." So, I was like, "I'll take it. (29:54) " So, I jump in there and I get to Kansas City at like 1:00 in the morning, get the last rental car, and I'm, you know, almost out of battery on my phone, and I'm driving through country roads in the middle of the night with no light, and I finally get to my sales rep at like 7:00 in the morning at the Hampton in Rogers, Arkansas, splash some water on my face, and eat the free Froot Loops and end up going on site. (30:12) And again, there's the difference between, you know, enterprise companies and electrical companies, but I walk into what I can best describe as a small brick house with a tin roof. And uh there's this business owner in there, and he's so intelligent. This guy knows business better than anyone in my business school cohort. Knows how to read a P&L better than anyone I've ever met. (30:32) And about 40 minutes into this 2hour presentation and demo, he stops us. And I think that we've pissed the guy off and that he just isn't liking what we're laying down. And he slides his American Express across the table and he says, "Stop talking. I know if you guys do anymore, the product's just going to get more expensive. Here's $70,000 and charge my credit card. (30:57) " And so I was astonished, but it helped me realize like, you know, if you can provide disproportionate value to customers, there's real value that you can create for your business. And the coolest part about the story is that while that was my first ever customer win, fast forward over six years later, I come to find out that he was part of this advisory group of other contractors that was part of this family of franchises and brands. (31:21) And he was one of the references and one of the prime endorsers of Service Titan having a positive impact on his business. and it translated into the largest deal that we've not only ever done, but the largest deal I've ever done in my career in August of last year. You never know what's going to be the most important customer, the most important meetings. (31:40) You always got to put your best foot forward. All right. All right. All right. All right. Thank you so much, Christina Shen. And also a huge round of applause for Ross Fman. Thanks, guys.