(650) The 3 Pillars of GTM Success - YouTube https://www.youtube.com/watch?v=A8lov65xWgo

Transcript: (00:00) with the evolution of AI the amount of CopyCat products and how fast you can copycat someone is ridiculous right now I know people that are good at Dev that are can launch a new software app in 24 hours now could copy 80% of the features in a sauna or monday.com and launch a verticalized project management tool in 24 to 72 hours and take a little slice of that market it's an entrepreneur's dream something that's really happening [Music] right now today we sit in here and there is a new opportunity just like the (00:48) demand gen wave in 2020 to 2022 and a lot of people changed their career and their lives for their family there is another big wave happening right now which is that uh the way that uh marketing and sdrs are combined to create Pipeline and how that is all measured and the data around it I don't really want to call it revops I think that revops is actually should just get back to being calling sales Ops and everyone should get a lot more clear about what it is and uh so right now I've been framing it as go to market (01:18) optimization so you have Strat go to market strategy which is who are we targeting what's the competitive intelligence who's our ICP what Persona how are we going to price is it usage based subscription base is it AI or is it a product What markets are we going to go after verticals you have your strategy which is a lot of art a lot of qualitative insights a lot of intuition on top of that you have go to market optimization go to market optimization for a developed company 10 million AR or more when things start to get complex (01:50) and you have a lot of Investments going on you have different teams and accountabilities how are we going to measure the success of these Investments what data do we need how do we report to the board how do we hold people accountable how do we make our go to market more efficient how do we combine financial data with the go to market data in order to have true visibility into the performance and efficiency of our go to market that is a whole different element which is a lot more science and then you have go to market operations which wraps (02:17) around the entire Factory and builds the architecture and the data model and updates the processes and things like that and then inside of that you have marketing Ops and sales Ops not rev Ops sales Ops and csna Ops that are responsible for optimizing and running the processes inside of those Sub sub functions in the factory I think uh and I wrote I had a nice diagram it's like written on a piece of paper no one can read the words but I did sort of draw draw out the revenue Factory and what it looks like and I think how it should be structured (02:50) um and again I never recommend companies change their org structure I'm not here to do that you all organize the way that you want but when we sit at the table and we look at our analytics we make strategic decisions we can't look at it by Department anymore we can't and almost every Company still continues to do it uh the reason is because the financial data is built around what department spent the money and that's how they decide how they're going to scrutinize it and it's a massive flaw anyway I digress I didn't that (03:16) wasn't planned topics there but sometimes we just you know I'm just feeling it and so I'm coming out today with uh uh first off just want to welcome everyone we have a new link so anyone that's listening to this afterwards you can go to pto.com click on event there's a new registration link if you want to attend live I myself got a little confused and went to the Old Link and I hope that there's not people waiting over there there's a new link here I think 2025 is going to be a massive year for everyone um obviously (03:44) there was some slowdown and challenges we had that big wave and then 2022 and 2023 were hard I'm talking to entrepreneurs and pretty much everyone is like it maybe some people had a good 2022 cuz they had annual contracts and it took a little while to lag and then they really felt it in 23 but parts of 2022 and 2023 were hard I went back and I looked at because I write a like a one-page simple strategy for my companies every single January or December and I went back and looked at what did I write about 2024 and crazy like pretty much (04:15) everything that I wrote about the metrics how much revenue we're going to have how much customers how many they're going to pay us how many team members we're going to have how the products going to develop and things like that pretty much everything of those was like crazily spoton but the first sentence that I wrote about 2024 was 20 24 was the setup year it was the transition from the grind and the hard stuff to where the momentum's coming back and I don't know if you all if you're all in business right now I think you can feel it (04:41) there's a whole different energy coming into 2025 like my both my companies are pipeline's never been better our retention rates have never been better um I'm sure a lot of people are feeling uh some of those impacts too and I expect that it will continue to improve um and just even having the mindset that that there's wind at your back and you have momentum just makes it going about things uh a lot easier and uh what I wrote about 2025 um and I think a lot of people can take this 2025 for me is the year of strategic advancement I'm not trying to (05:15) scale my business from a million to we did a 1.2 million last year in collected Revenue to 10 million this year I'm actually not it's the idea of strategic advancement and I want to spend a little bit of time talking about this because there's been some interesting patterns and Trends uh and I'm talking to some people um and sharing some thoughts especially for product oriented early stage companies but I think even later stage companies need to be aware of what's Happening they probably already are I don't think I'm sharing things (05:44) that people aren't aware of with the evolution of AI the amount of CopyCat products and how fast you can copycat someone is ridiculous right now I know people that are good at Dev that are can launch a new software app in 24 hours now could copy 80% of the features in a sauna or monday.com and launch a verticalized project management tool in 24 to 72 hours and take a little slice of that market it's an entrepreneurs dream uh something that's really happening I'm positive that there are people that set up demos with my (06:18) customers uh sales team bring an AI recorder onto the thing get a demo and use that AI recorder to copy their features here's what some people are doing so I uh because I've been talking to people Adam Robinson is one that just talks about this so I'll share that one first because I'm not sharing anything that's not public all of a sudden his his business that was once like differentiated now is 37 competitors they all use the same data source they buy the data from the same place and all they do is have a different SAS UI and (06:48) workflow strategy super commoditization of that market but it'll happen in almost every Market really fast I heard about a couple of uh of AI companies recent that are at 3 million 5 million in revenue and don't have a website and are per B basically permanently in stealth or at least up until this point have been permanently in stealth mode and they get their customers through networking conversations whatever type of outbound messaging they want to do and things like that um and I think that's something that people (07:23) should consider I think that might be a smart strategy um but the the point here is to be aware of how easy it is to to copy things inside of your product and to to be aware of it and have a strategy around it that's why recently I haven't been sharing a lot of our intellectual property to be honest like a lot of people come to this event because they want to know the they want to know the how they want to know how the sausage made how can I do this myself um I don't share a lot of those things anymore because someone on this Zoom might be (07:52) asking that question and going to share it with somebody who's going to copy the product next week um so just being transparent around the expectations around how this how this event works there's this idea you have like the traditional or the Legacy SAS products um we'll just stay in sales and marketing tech for right now but that have been you know started their company in 2010 to 2015 went on the Venture train maybe they sold the private Equity or they did a growth Equity round and all of a sudden they're at 100 to 500 (08:19) million in Revenue they have a huge customer they have a huge customer base and now all of these AI products are eating a slice of what they got and so and a lot of companies are saying hey I don't need that quarter million dollar a year ABM technology tool anymore I'll use these five point solutions that each cost $1,000 a month and I'll replace this entire tool at 20% of the cost and I'll get better better results better impact at way less of a cost I'll get month-to-month contracts instead of them forcing me into a two-year contract I (08:51) don't have to worry about them increasing our price every year blah blah blah and so you know account-based marketing technology is one that's very obvious you can somebody showed me they were tracking uh the amount of insight tags or the you know for demand Bas and six sense and Terminus you can track how many people have their script tagged on the site you can look at that over time and gosh from 2023 those those tools are getting a bunch of uninstalls of their script so it's not a perfect Revenue calculation but it does show less people (09:19) it seems like less people are using the product right now um and uh Even in our own experience we see a lot of companies just ripping it out um uh but I want so that's something to think about uh as a as an early stage company because many early stage companies right now that I talk to the founders all they're thinking about is I want to take 1% market share for one of those companies I want to copy I want to not copy I want to take one of their features make it better go after their customer base and get that one feature and displace (09:49) something like that it's a great way to go from you know zero to 10 million in revenue and then after that you're probably going have to iterate and innovate on your product and your Market we're talking strategy right now and I love it another thing that sort of goes into that with the AI copycats and the AI Dev um it's always been this way um but I just want to continue to reinforce the message um it's not about how fast you can Dev or how many features you release it's about building the right stuff based on Market insights that solves the (10:20) customer problem and so you don't have to be the fastest Dev you don't have to release the most features you don't have to release on a 3-day schedule or whatever some people are promoting that they do you have to build the right stuff that solves the customer problem um and I think that a lot of the people that are either either develop companies or in the copycat sort of area in space just think that AI is and building a feature is the solution but many of these tools don't actually solve a customer problem (10:48) and that will be exposed really quickly cool okay so we got some strategy and product stuff now let's transition to what I think what most people come here for I've been spending a lot of time uh particularly recently thinking about how uh how the message and the things that I've been working on and the things that I've been learning uh could really benefit the marketing department and I shared a lot of my predictions on the podcast and some of people might have heard the the interview that I did recently and I (11:18) shared it on LinkedIn as well um but I want to even go like even more uh further um with some of these topics related to marketing um and some of the things that I've learned and so uh as we mentioned many episodes ago um and when I talk on Discovery calls like I had one yesterday and people come in and they say you know we've been trying to figure out how to solve marketing measurement and they're like and and what we're doing is we you know we're looking at you know a multi-touch attribution tool and we think that might (11:48) be a good option but we've also been thinking about building a data warehouse and using that data warehouse and we can put you know chat GPT on top of it so people can like you know try and figure out based on our powerbi dashboard and chat GPT and uh what I say back to every single one is there's there's no Silver Bullet to fix this problem and the real problem is the process and this process has many steps in the process and the what what is the process defined as how do we get data turn it into insights and (12:17) then turn it into action at the executive level that's the process um and so buying a multi-touch attribution tool might improve a little part of that process but it doesn't solve the process and so there are multiple layers to this problem um there's a CRM layer that nobody thinks about or considers if your CRM data sucks and you put seven different tools and integrate on them like the seven different tools are just using bad incomplete data to try to do something for you and produce reports for you that are also bad and (12:51) incomplete and even get worse um many people try to start with the Tactical solution so it starts as as tactical as you can get touch point data you know uh channels campaigns all this stuff at the bottom and they try and build it back up and then they get it back up and then you have a deck at the executive level and people at the board are like what the [ __ ] are we talking about here why are we talking about keywords and campaigns at an executive meeting and so I think many people should consider rethinking that entire process from a (13:21) tops down perspective instead of tactical up and start with growth rate and go to market efficiency what we now have rebranded to cost of of growth everyone has been asking for that right so go to market efficiency right doesn't really make sense go to market efficiency is going up but that's bad the terminology was wrong David spits had named that Co coin that term and I'd been using it but when you actually think about it what is it measuring it's measuring the cost of growth and when the cost of growth goes up that's bad (13:48) just like CAC when CAC goes up that's bad and so start at those two numbers which is basically a performance measurement and efficiency measurement and then work slowly and methodically work your way down which is the API stack that we've reviewed for a while so just the take-home Point here is don't think about that there is one solution to fix this problem everyone thinks that way I just need one tool I just need if I just get one better like a little bit better CRM data it'll be fixed it's not true um there are there are probably (14:19) five steps in this process and there is technology and people and process that you need to fix across all the different layers and I'm not trying to overwhelm people here I'm trying to be honest because many people are going to in 2025 say this multi-touch attribution tool or mix modeling tool is going to solve this problem this critical business problem for us and they will be sadly disappointed at the end of H1 when they go back to their board and they look at their results and they don't know what to do next I think that (14:50) uh uh and I mentioned this before but to reinforce we need our marketing leadership to have clear visibility into unit economics and if people have caught the one of the most recent episodes or what I posted on LinkedIn today about the portfolio I want to spend a little bit more time on this if you think about it as a marketing leader that I have a portfolio of Investments and you actually look and you look at all the places that you spend money that hit your GL in marketing you'll see that there are 50 minimum but likely hundreds (15:21) of individual line items inside of your budget that where money gets spent and so it's not like we just have a couple of things that we need to scrutinize there is a lot of stuff and a lot of complexity many things that I think marketing leaders just assume oh we're in marketing so we have to do that and I would encourage us to get rid of that status quo and evaluate every single investment as if it as if it's not required or needed and just think about it with a blank slate so you have all these different Investments and you can (15:53) look at the how much of the pie each of these line items take um number number one is going to be headcount for every well not every company but most uh if you break it down that way yes everyone will be headcount will be number one um after that is most likely certain advertising channels and certain event types I've watched many companies promote how they're trying to shave you know cut their Tech stack and save money on the tech stack in marketing technology is 2% two two to 5% of the budget cutting a little (16:29) bit of your marketing technology spend is not going to fix your problem it's incremental at best I maybe you're wasting more time with headcount trying to cut you know one tool and save 30k a year and it's actually a net negative so just to think technology is actually not a big part of your marketing budget sure maybe we should get rid of a tool that we're not using but it will not solve the solve this problem overall you have the the portfolio that you're looking at and then a big part of it that I think many and I'm still trying to figure this (17:01) out for myself is about what is the what is the point and the purpose of these things that we spend money on and most people will say oh well that's for brand and that's for demand and I ask them every time okay well what does brand mean and if you ask a 100 people what brand means you'll get a 100 different answers you ask people what demand gen means you'll get a 100 different answers um and so we need more granularity and specificity around what is the purpose of this investment the most easy and obvious one let's just (17:29) call it out is prospecting right whether you use AI to do it or AES or sdrs or bdrs or XDS or whatever you call them you have these people that are responsible for taking signals and converting signals into qualified opportunities that our sales team has sat meetings with and qualified accounts and there's a layer right there you invest a certain amount of money in it and you need to get a certain amount of Revenue and pipeline back and it becomes very straightforward what is the purpose of these Investments and what is the (17:57) goal who cares whether the signal came from our marketing automation database or Zoom info who cares did we get the meeting or not how much did it cost we want the underlying data to know which signals are good and which signals aren't which by the way 99.9% of companies don't have and don't track but we do want that data so we can optimize headcount potentially introduce automation or AI in the future um but at at its basic form how much does it cost us to get these meetings and that is one part of the Factory and then there's (18:26) four other parts of the factory that also add cost so we need to be able to comp you know compress and understand what is the cost of that process you have a signals element of the process whether you use a Google ad to get the signal perform other types of Performance Marketing a technology or third party data provider like user Gems or six cents or an ABM platform or the trillion other copycats that and other you know tools that use the same data are coming out with how much does that cost and how much does it cost us to get (18:53) a high quality signal that our prospecting team uses and now you have two different things that you can measure in two different ways that have clear targets around how much it should cost and you basically replicate that for every single stage of the new wogo process which then because and i' had given this example before but it really needs to get uh drilled home because many and I promoted this in 2021 so like I'm not talking down to anyone like we have an eight-month CA payback on our Google advertising spend right like then (19:24) people and even me at the time were proning that as a good thing right so an eight-month C payback on the Google advertising spend but then you have all the other advertising spend the brand spend the marketing headcount the agency cost the bdr cost the data the technology the sales commissions the revops the sales different types of tools and all of a sudden that eight-month CAC payback on Google ads has now bloated to 60 months 5 years to pay back the cost of a customer which at this point means that your company is (19:52) likely worthless if you're above 25 50 million AR and you have that CA payback it's really bad about being able to measure each specific part of the process and being have a method to evaluate it and I think that um marketing measurement is just wildly over complicated today and there's a way to to just make it a lot more simple to say this is how much money we spend these are the four major categories or objectives we spend it against these are the outcomes within these four categories inside of the four categories here's our best performers (20:28) here's our worse performers we're going to cut these bad performers we're going to move some to the higher performers here are the new things we're going to do on a blended perspective we're creating enough pipeline for our sales team to have appropriate quota coverage and hit our plan and hit our CA targets boom two slides QB deck for the board done marketing's in a good spot and when things go wrong right now companies do not have the data to understand what to do about it um so all they can say is you know (20:58) sdrs missed their Target they were supposed to get 44% of source Revenue but they only got 38 the SDR suck it's not marketing's fault and that's what those are literally the convers I listen to the conversations that's literally what's happening in a hundred million dollar company right now totally useless conversation and totally useless to try to blame play the blame game between two things that do two different have two different objectives in the factory which all root from like The Silo Department nature of how people are (21:22) doing it right now and I think there's a ton of opportunity for marketing leadership right now to be able to bring in this information to havei like the financial data and Acumen to tell a clear business story around the impact of marketing and then I'll say another thing I think that and I'm seeing this trend happen at an accelerated rate right now um I think that that whoever owns pipeline creation CMOS often do if you don't own the bdrs you can or the whoever does prospecting if you don't own that part of it you can't own (21:51) pipeline creation so we've seen a lot more companies move whatever that function is called into the function that's responsible for pipeline creation which could be you know the VP of demand gen up to the CMO um because you need that to have full accountability over P direct pipeline creation um and so CMOS that don't have that responsibility should be carefully thinking about that because at at some point whether it's now next year or sometime in the future the lack of uh integration between the prospecting (22:22) engine and the rest of the pipeline creation machine will be the reason you don't hit your target so you need you need that and and the way that you hit plan oftentimes is just making a much better integration between those two functions so but right now sdrs get paid more for an outbound meeting than an inbound meeting so what do you think they're doing with all your demo requests spend $1,000 per demo request to get one for your advertising all the different programs Blended and then a bdr is not getting paid the same (22:48) way so they're going to recycle that demo request wait 30 days to follow up so they can have it be outbound they make an extra hundred bucks stupid um and that's not anybody's that's not anybody's fault but the the first team Executives for creating that level of misalignment and the compensation structure and all I'm trying to do here is illuminate these problems so that C- level Executives see it so they can fix them these are easy to fix things they they are with all that said I just called out a couple of (23:14) problems I went in a bunch of different directions from product strategy copycatting um but the best part of this show and we all know it is when people start to get involved share their perspective ask questions have discussion in the chat so I am ready to transition to that part so um thank you all for being here um we're going to continue to evolve the event I hope the people that um have been here for a while appreciate some of the higher order business strategy finance and product that I'm bringing in here I (23:39) think to be a complete c-level executive whether it's marketing or anywhere else you need to have an appreciation and understanding around all the other things that happen in the business and so I'm here to try to help uh educate and illuminate other parts of the business so that you feel uh more educated around them um so with all that said we love to get into questions uh thanks for being here cool so yeah um folks can drop their questions in the chat I have one that came up a little bit earlier Chris so on the topic of (24:09) headcount uh do you predict that marketing and sales teams will downsize in 2025 as they become more efficient what does the future of go to market teams look like in your uh from your perspective I don't think that sales teams will downsize um and when you think about sales it's closers so I don't think that sales teams will downsize I think the the um productivity and efficiency gains that happen through sales will take much longer because it requires fundamentally fixing the marketing and prospecting engine first before you can yield those (24:42) gains right so a company right now might say you know each of our reps gets 500k on average in revenue for the company on an ARR basis right and next year we hope to get it to 525k which is a 5% incremental Improvement in productivity um and in three or four years I think people should be aiming for a million right so going from 500k to a million which theoretically means that each rep does is twice as productive and you need twice or half as many reps uh to hit the same amount of Revenue um but I think that'll take (25:17) three to five years because if you keep flooding garbage into the factory from marketing and Performance Marketing lowquality people and low intent prospecting where SD R are giving away gift cards to get people to sit on meetings so they can hit their target and their comp plan and they all move to close loss your sales team's not going to get more productive overnight and so I don't see it happening in sales um I think that um regardless of the level of productivity that marketing teams uh generally are are over bloated and (25:47) unnecessarily large and I think it creates a lot of constraints having that amount of fixed cost those that amount of management layers that amount of approvals sometimes at big companies it takes them like four meetings to send a [ __ ] email right and like that is just totally unneeded at this point so I think that a combination between Ai offshor and just having smaller faster more agile marketing teams will be a huge advantage in the future um and I predict that was part of my predictions much less uh W2 fixed headcount costs (26:18) for a variety of reasons one just having less cost having less of that cost be fixed so we could spend more money on programs or advertising or be more flexible and flex up and flex down without having to lay off people um being able to move faster being able to leverage external Consultants strategically for short short certain periods of time to get that level of knowledge and experience inside of our company without having it tied up in fixed headcount and having to go and do a new budget request for it um being (26:48) able to uh through the use of AI have strategists also move to execution so the cycle like before you know one person writes the why writes the copy then somebody else makes the wireframe then it has to go back for approval then the next person makes a design then it goes back for approval then it actually has to get deved and then it goes back for approval and all of a sudden it took you six or eight weeks to build a web page where now the person that writes the copy can get it 90% of the way there on the page they can write the copy they can (27:20) have ai create the wireframe for them they can use a different AI tool to design the general layout using their own brand guidelines and things like that they could get it like you know 90% of the way they're on dev I'm not saying designers and developers are going away anytime soon I'm talking about the the the time between start and finish in marketing activities can get so compressed because the strategist now has Ai and other tools to be able to do much of the execution so they don't have to have these feedback (27:47) Cycles um and and uh I think that uh I don't on the uh on the the sales development uh layer I think that companies will keep it the same scale it up 10 or 20% or scale it down 20 20% the only reason that you would cut your entire SDR team right now is if you sell less than a 4 6K ACV product and you finally realize what I've been talking about for five years is that an SDR model does not work for a low ACV product like that unless you have 200% nrr or some ridiculous number which no SAS company has um and so if you have (28:27) that unit econom ICS pressure and you finally realize that yeah you might have to cut the whole SDR team but for any other company that's just looking to improve efficiency it's incredibly risky for a $30 million company to say you know let's get rid of our 20 sdrs and I guess we'll figure out how to get meetings in a different way it's just so risky and unnecessary um so I think it'll take longer for uh sort of like the AI and other things to play out before we see dramatic shifts in uh SDR team size and headcount I think it'll be incremental (28:59) up or down right now well thanks for answering that one lots of questions coming through in the chat I'm going to bring uh Paul on next go ahead Paul when you're ready Chris you're the man seriously dude major fan boy I've been uh listening I started back at 150 podcast 150 and I've been working my way up since then I feel like I'm going to school brother breath of breath of fresh air um first I'm not ex your first time here first time here but I've been watching a lot on yeah man glad to have you here yeah seriously um first and (29:33) foremost I'm not an executive yet uh I'm one of the leads and in sales and now I'm doing some content marketing too but you know uh cost of growth what you're calling it now or GTM efficiency I personally feel like you could feel it as a salesperson how much effort it took to win some of these deals and it never really made sense right uh and and now I'm thinking okay well if me or others want to move on to other companies once you kind of drink this Kool-Aid you can't really go back to what you've experience before so (30:08) what do you feel like you could do in my position to kind of sus out some of these companies who I think you give them more credit than they deserve a lot of times they're still behind on brand marketing they haven't even thought about the cost of growth I mean what would you do brother I think that you can uh you can see a lot about a company just based on how they how they outwardly face in the public right like many people joined refine labs in 2020 and 2021 like Garrett and many others simply because they saw Megan and me and (30:42) other people at our company posted on LinkedIn and said those people get it both the things that they're saying and how and how they're saying it and where they're saying it you can pretty much be clear and you want to look at who are the executives that are doing that okay IDE ideally the the CEO um CU yeah um there's like a trickle down effect from the CEO's mindset to all the other Executives and then that trickles down to all the different teams so um I think that like uh I think people should be uh evaluating the jockey the head of (31:15) the company um a lot more uh intentionally than maybe they have in the past um so I think that's one big thing because if the CEO gets it and they're doing certain things they're hiring in a certain way they're thinking in a certain way they're measuring in a certain way um so I think that can be a really good public easy indicator um when you're in the interview process and one of uh one person that I know told me about this like like getting really clear about asking the right questions about the financial performance I think (31:44) is super super important it also stands you out as an incredibly smart sophisticated candidate to ask those questions and if they don't want to tell you the answers say see you later um but asking about what was growth rate last year is it going up or is it going down why what was customer acquisition cost payback period is it going up or is it going down why what's happening um asking about uh oh I had a ton of different ideas how they're thinking about competition and copycats and you know how how those types of things are (32:18) working um asking about cash you know are you burning are you profitable like what's ebit percentage you have debt on the balance sheet what is like what's what's net income is it the same as Zea or is it not when are you going to have to raise again is it 6 months from now or or you're profitable and theoretically have infinite Runway and so asking some of those questions I think can tease out because many people these days are searching for a company that operates profitably um from a just from a financial discipline standpoint so you (32:48) can tease out a lot of those things in an interview process as like a final check and if a company's operating profitably you know if uh it also depends on the stage right you can be growing at 5 100% if you're 2 million in ARR but you'd almost never see that at 50 million ARR um so stage can matter for growth rate too but I'm looking for companies if I was going to join one that are a little bit more developed right you I you win bigger if you join a earlier Stage Company something that I want to talk about in The Next Episode (33:15) or maybe later today um but you uh as a potential executive or a potential like uh senior level middle manager a company that's already reached product Market it has like a good retention profile is on the way I think 20 30 50 million ARR I think is where you can really shine and learn because the elements of does the market want our product is our product good do we know how to does our sales team know how to sell it those variables are out of the equation those have been proven out so then a true marketer can (33:48) just be the gas on something that's working and so I think that's a that was I mostly worked in uh before I started my companies in 10 to $30 million companies is the range that I would start and I thought that was a great place to start you're early enough where there's 50 or 100 employees if you do stuff right you make an impact you get recognized you get promoted quickly but a lot of those other variables that you don't have a lot of control over uh have been eliminated or have been proven well I appreciate that man I'm also looking (34:17) at any uh any comments on your post if they're approving what you're saying or you know just kind of being a lite uh that's something I observe too so thanks again brother I appreciate you awesome uh we're going to bring on Tatiana next I'm going to unmute her now go ahead hi good evening it's nearly seven in the it's nearly 7 in the evening in the UK and happy New Year to everybody um I brought my colleague David on as well who's from Glasgow he's on the call and I wanted to ask about a new plg motion that we're starting in our (34:54) business previously for the last nearly 10 years our sales has been through slow relationship building going to events and so on and we're going to be selling through our website um from this summer my CEO wants to have two separate sales targets one for the sales people and one for our website and I'm a little bit concerned that this is going to misalign sales and marketing and that it'll cause the marketing department to focus on channels which might be to the detriment of ourselves um I also think that we (35:33) will you know we should also be focusing on marketing which will support salese L um growth so I wanted to ask you how best to manage this from stakeholder management perspective and expectations so yes I do think this would create obvious misalignment especially you you described it perfectly what would be the the outcome of what would happen right marketing Investments then only go to things that that benefit the website and not necessarily the sales team um and VI vice versa um and so instead thinking about we have our Target as a as a (36:10) revenue Factory right and then underneath that we want to collect the data to understand how to make our Factory better but not to goal people around it that's another problem with the inbound and outbound it's basically the same thing right in a different way it's the same thing with the inbound and outbound like yes we want to know whether we got that meeting from a third party signal from a data vendor or we got it from Performance Marketing or we got it from an event we want to know that data but we shouldn't be going our (36:36) teams around it because it it creates unnecessary competition and crediting that doesn't help anybody and so instead we want the data to be able to make better decisions but the ultimate goal is to drive this amount of Revenue and if we get 5% less from the website and the sales team beats the plan by 5% who the [ __ ] cares and secondary you don't have any Baseline data of what the website should do you don't know um you don't know whether it should be 30% of Revenue or 10% of Revenue or maybe everybody starts buying online you don't (37:10) know and so making a projection on that and setting a Target and goal is just literally licking your finger putting it in the air and just picking a number um and I think that that is also a very risky and unnecessary unhelpful type of proposition for everybody um and then I'll just say that uh there's there's a second order consequences of what you're doing that uh that you should consider before you do it because many companies that I've personally consulted have tried to do exactly what you're doing and uh 30 to 60 days later kill it (37:44) and go back to their sales Le motion um because uh what happens is that all the stuff that used to be creating a sales meeting that the sales team would develop in multi-read and sell for 100k deal now is going into a plg motion or a e-commerce motion that's Half Baked with an aov of like 70 bucks or a free trial and you're not even making any money and they get lost in the product and then your sales team's trying to chase around a pql that tried your product thought it sucks and doesn't want to buy from you instead of (38:18) having meetings for 100k deals now you're tracing around someone that paid 70 bucks in your your plg motion over and over and over again that is the exact pattern that I see specifically for companies that start sales Le have an existing sales motion that is working and then introduce this new thing called product-led growth that diverts all the demand that used to go to sales and puts it into this free trial or like uh self-service e-commerce motion and then your sales team starving for Pipeline and it just so like people (38:53) think that like oh I'll launch plg and it'll be additive we'll keep getting all the sales meetings and all the sales rep and then a bunch of people extra new people are going to buy out of our self-service motion it's not how it works um conversely it's a it's a whole lot easier to start with a plg motion get to 10 million ARR and then start adding salespeople that pick out the best people and start doing upper Market or more developed deals out of that pool of companies but the other way around is very hard and so um some people have to (39:26) do it their investors are forcing them to or competitively they feel like they have to do it or some reason like that um I just offer that one you don't have to do anything um and number two just be aware of the potential consequences so that if it's not working for you you can pull the rip cord before it destroys your company or your or your 2025 your year if I may carry on we have a very within our vertical there's a very very large spread between um private Equity backed multi- Revenue stream businesses all the way to like little M and pop (39:58) owned premises it's not feasible for our salese to cover the entire the long tail by going you know sitting down in meetings and implementation projects with you know Mom and Pop owned businesses so that was the idea was to get these smaller companies um to selfs serve and self-educate and totally get it sense from a cost of growth perspective using that term that you started with um I'm just concerned that you know our project is actually quite complex when you get onto on boarding imp and implementation and I'm concerned that yeah we won't hit (40:34) our Target and as you say we might annoy or or um alienate our salespeople because they will be disincentivized be saying well well there's this new channel which people can self- serve on what am I going to get involved in and how where and how would I be focusing my effort but also I'm concerned that we're going to over complicate the sales process by lumbering people with self education and self- implementation um so everyone um everyone that I talk to says the same thing right we sell SMB or micro SMB midmarket and Enterprise and so we don't (41:08) want to serve with our sales team it's not cost effective to sell the micro and SMB and then they assume that just just the micro and SMB are going to buy that way but what really happens is your Enterprise and your midmarket also go into that flow because it's easier they don't have to talk to sales and they get lost in the product and those companies need different sales processes and implementation and stuff like that and then they flow into your free trial motion with your micros and so that is the that's the myth that most people (41:36) don't see happening and so what like what I would offer um and this is not I'm not giving you this advice I'm just talking to everybody about what I would do in this situation is I would want I would either say we're not going to serve SMB in micro it doesn't make sense to serve those people and we're going to focus upper Market or we're going to launch a different brand that serves the lower market and is plg only those are the the mix of the two together under one brand very few can get it right and when you (42:07) look at the ones that have gotten it right um most of them uh like I hate to say it didn't even get it right like the the people that you think crushed it I don't want to say any names because I don't want to call people out and be like that and also I'm under NDA with Min but the plg many plg companies you thought Crush they have a great brand they're the poster child for plg they're [ __ ] underwater and their stocks worth nothing and they got propped up by their investors in the good Market in 2020 to 2022 um zoom's a public company so you (42:40) can reference that one like their CA pay their CA payback is 60 no 72 months right now like to to try to get a customer that is totally unacceptable you need to be three times better than that you need to be at 24 months maximum as a public company like that and so like people think that there was many plg companies that got glorified on LinkedIn specifically in 2020 to 2022 and many of those companies had a had a unprofitable ineffective business model that got propped up by investors and so many people uh should that and yeah (43:23) gosh like even look in the like sales Tech space like I I watch companies that have a great business at 50 or 100 million AR and say oh my God that one over there is doing so good at plg we need to launch a plg and the one they're comparing to is is burning $100 million a year and has a terrible CAC payback and they're going to go and copy that model because they think that it's better I just uh really CAU like really cautioning I think that the one place where I've seen it work consistently is a plg the first company that grew that (43:59) then installs an Enterprise motion to try to move up Market but many of those also fail because they have a plg product not an Enterprise product and they say oh our Enterprise version has SSO and you pay us three times as much per seat or something like that and it doesn't work because they don't have an Enterprise value proposition sometimes almost everyone that I talked to Kyle Coleman at copy AI is another one he said we beat our head against the wall and they were an early stage company we beat our head against the (44:25) wall for 20 24 months trying to do a plg motion we switched over to sales Le we increased our price we sold to higher order companies in the lower lower regular Middle Market and all of a sudden our business grew by 10x this year and so I just look at what people are saying I I have lots of data about what companies are doing and the companies that try to do what you're about to do uh it always creates second order unintended consequences that are typically very negative I'm going to bring on on Tanya next we've got a few other questions in (45:00) the queue but if we don't get to them I'm saving them for next week so just calling that out for everybody go ahead T it's Tanya that's okay no worries lot T hey Chris I've been following you for about five weeks I want to say now and every time I'm on a call one I I like that you're so transparent and you throw the f bomb out there and like it's no [ __ ] anymore I love that in you um but I learn something new every every time and I think my question is really about the mindset it's a little philosophical so that mindset is I'm a (45:36) gen I'm a Gen X and I think we have an issue right now within our infrastructure um specifically in B2B um meaning that we're very siloed and we're not thinking about the buyer when we're making our decisions we're thinking about that mql or we're thinking about the Clos sale or we're thinking about all these minutia things that really at the end of the day hey I just want to know what our Roi looks like or I want to know you know I want to look at this more holistically and I think those silos really need to be broken and torn (46:10) down I I wrote on this I write on this on LinkedIn um I'm a huge advocate of really trying to look at the business holistically and I think some of it's a mindset because today we have four unique Generations we have Boomers xers Millennials zers and I don't know what's after that but they all we all think differently and we're still in this mindset of the Boomers and xers and we have to really think about the way we're approaching our methodologies and how we look at who we're going after and what that looks like and I'm just I feel like (46:45) there's this this core issue Tatiana kind of teed me up for it when she was talking about like separating these two departments I mean that's effed up that's so messed up like we have but people are thinking that way and so to me the the progression of where we're at I think it's evolving but it's not moving fast enough because it's still like that elephant in the room that nobody's really wanting to talk about even though it's an issue because this guy doesn't want to give any of his money you know whatever he makes based (47:14) on his bonus or what have you or his you know commissions and so how do we get into a place where people can really start thinking differently and I know this is more philosophical than typically what um but i' to get your perspective on it because it's it's ridiculous it's absolutely Insanity in my opinion yeah let's go in two directions so there's one of just in the generations of marketing leadership um so I'll do that one and then we'll talk silos after that um so uh I don't uh buy into a lot of generational stereotypes although I (47:49) respect that people had certain uh experiences based on when they were born and what was available during the time of how their career evolved um but like sometimes I'll run into a 50y old person that is 100 times better at using AI than me or that has adopted social media better than most gen zers or at least has figured out how to use social media to drive business results a 100 times better than a genzer right and some gen zers are s like that I meet at some places are 22 years old and are super successful and everyone says that (48:22) they're super lazy and entitled and things like that so I every person is their own individual and stereotypes are there for a reason but I choose not to like sort of buy into them or look at them blindly um so but here's what I will say is that for uh Gen X marketing leaders at the time when they were probably started being a marketing leader and how they learned how to do marketing was probably pre-social or early social the way they could they heavy in events and sales enablement and a direct sales Channel no (48:55) Ecom no so some very little digital and they didn't have access to their customers the way that they do now so they would hire a market research firm to spend four four months to do a survey so they could get a little bit of survey data and they hadn't you know didn't use a sales team didn't use a CRM they didn't have marketing data right and and then many of them were too high in the org to truly learn the Tactical details of those things when they started to come out and so over time there's a big gap between their tactical knowledge and (49:30) how they think about how they should do market research and get sales opportunities between that and the people that are on the ground doing it there's a there's a big gap in how the internet created that divide between that happened to be at a sort of a segment between those two generations of Millennials and Gen X um which frankly I think creates a huge Advantage for a lot of Millennials like myself and others um but that's not to say that people couldn't learn those things I think the way they go about it is very different (50:00) um in terms of you know I think that every CMO should do something along the lines of what I'm doing right now they should get all their customers together they should if they're not an expert they should get one of their people whether it's a customer or an influencer on here we should have a discussion with our prospective market and understand what they're asking and they should be the person on the [ __ ] call getting the insights organizing the stuff building the community CU they should theoretically have a clear perspective (50:26) on how priced how are we competitively uh positioned what is our website saying what are the key features in our road map that we need that the product team isn't seeing because they're not meeting with the market all the time or they're not asking the right questions or not in the right forums marketing leaders need that thing and if they were in there and they and they like listen to the sales calls and they heard what people were saying they would say oh people are hearing about us on social people are doing this people are doing this like (50:50) and they would would be able to see that and hopefully start to shift what they're doing um she just got that one thing and and now on The Silo sort of side um I think that uh there are the the way that most uh companies especially ones that raise institutional Capital uh Venture Capital Money the way that they get instructed to build and scale their company is based on the success that investors had from companies they invested in 10 to 20 years ago that have EX and so they look at oh I had I invested in HubSpot in 2006 and HubSpot became a (51:34) super successful C company and so now from 2006 I'm going to bring that to my 2025 investment and tell them to do the same things that HubSpot did in 2006 or 2008 or even what hubspot's doing right now and what a company that's publicly traded is doing has no bearing not important to a company that's a 2 million ARR you have it coming from all angles you have it from the in the investors that invest in the companies that are not in the details of the work and understanding how the world is changing you have massive analyst firms (52:09) that give it are the primary way that Middle Market companies and Enterprise companies get advice about what to do that are so disconnected from how the world works and get paid to promote Ai and different types of technology and things like that you have technology the biggest technology vendors that built their product about how the world worked 10 or 15 years ago and have no incentive to change it they just going to continue to Cash Cow how the product works uh how it how we built it in 2014 like look at (52:37) Outreach I don't want to [ __ ] on anybody but look at Outreach for example right like the world has fundamentally changed since they built their product like but they have no incentive to change how the product works now so it's still a Spam Cannon which might have been fine in 2016 but is way less fine in 2025 um and so and so from and then you have the executives that were probably were successful with some companies before in their career and was R repeat what they did at the company that exited in 2017 and so from every single angle (53:10) you have people that are perpetuating the same way that we've done things over and over and over again um and so that's that's why the silos exist why inbound is comped differently than outbound why the sales commission plan is still the way it is even though the way that sales impacts a is 100 [ __ ] times different today than it was 10 or 15 years ago or even longer when those commission plans existed were started and existed and nobody's challenge them uh why marketing comp is the way that it is and hasn't (53:38) been changed before like marketers were usually not accountable to any revenue and had no data when there were salary only and so we just keep paying marketers the same way we did in 2007 to 2014 because of this I feel yeah always then goes back to the blame game and the Fall Guy is usually marketing and you know I don't think of marketing as you know I think there's a perception too you know I I do some volunteer work at my alma mat and what they're teaching some of these kids is all about creativity and you know branding and all (54:14) of those things are really important but I looked at the girl and I said no no no you want data you want to know what's driving you it's it's so it's exactly it's the right brain left brain but it becomes a it becomes a blame game and then I feel like marketing becomes the fall guide and that to me is if we could break down and start looking at this more holistically you would you would find that those issues are probably everywhere because of where it's starting and we just choose to kind of ignore it and keep moving keep moving on (54:49) yep many many times uh marketing gets blamed whether they're whether the company's right or wrong is whatever um occasionally I uh I've seen where the SDR function gets blamed because they missed their outbound Target or I've seen where the AE team gets blamed because they were supposed to Source 25% of their own Pipeline and they only hit 18% and the company missed by 6% and so like it can happen at any angle regardless of who's taking the blame it's wrong and it doesn't it's not helpful that's the that's the core thing (55:17) that I'm trying to get across here um and so yes it requires a a new way of thinking and a new way of looking at the data which is difficult for many people to sort of wrap their heads around because of all of the inertia and constraints that exist especially in more developed larger companies that as you get bigger they're harder to change which is why you see earlier stage companies be more Innovative try different things adopt new things faster than larger companies um and so that's something that that's basically what what we're (55:48) working on at petto and I think that we'll have a I think that we've already made a ton of progress and helped a lot of companies think about it differently and I think that the solution is come a lot farther um like I mentioned at the beginning it's it's a it's a it's a multi-prong problem um from how the executives think how the financial data is structured what the CRM data looks like what technology tools are being used how people are compensated how individual teams or sub functions are measured and so it's just a a a complex (56:20) issue and so the the real thing is okay we need to fix this right or our company might not exist or be valuable in five years we need to do something different what are the first one to three steps and I think that's sort of what um what we've been working on initially because it's easy to try to boil the ocean and get nothing done so it's really about focusing on how do we move forward without disrupting everything what are the things that we can do to make big steps forward and what order should they be done in so that's what we're trying (56:46) to figure out you bet awesome all right uh perfect great to have you here appreciate the kind words I know we're a couple minutes over appreciate you all staying uh we'll be back here uh every Tuesday um so feel free to join live appreciate all the questions we probably have some stored over for next week um and then next week just to hold myself accountable um I want to talk about uh because to uh I think it's Paul but I can't see the full name um to uh talk through as a prospective employee whether you're C Level executive trying (57:19) to join a company or or a manager level person the difference in the stage of the company that you join in terms of your financial up side what you should be looking for between comp and options or actual Equity um the different challenges that you're going to run into by stage um and so I'll hold myself accountable to talking through that because I think I have a clear clear perspective uh that could help a lot of people as they not not try to select the the necessarily the exact company but to try to narrow in on what what size (57:49) company do I want to work on and often times like I think the like a lot of people say I won't hire you unless you have 10 years experience in the device industry and I think the the first segment when you think about both hiring and choosing a company should be stage not industry not Target Persona I think that stage is actually the most important part um and so we'll talk about that next week something to look forward to uh thanks everyone hope you have a great week and a great start to 2025 we'll see you soon (58:19) [Music] he