$100M ARR in 7 quarters: inside the $10B AI machine - Reggie Marable [Sierra]

0:00I believe success is a winding road. It's never straight. My whole life is built on relationships, taking calculated risk and failing. When I say handle the use case on their own, autonomously, with no human intervention, we start off with like crazy aspirational goals. And I'll quote Ali, Muhammad Ali, if your dreams don't scare you, they're not big enough. I think failure is a great way to learn more about yourself and to reinvent yourself and figure out what you can do to become better and stronger. Today on Billions, I'm sitting down with Reggie Marable, a high performer at every stage of his career.

0:35From linebacker in the Canadian Football League to one of the most respected operators in enterprise software. He joined Salesforce as a first-line manager, mentored 200 plus people, wrote a book, rose to head of sales for Slack North America and then walked away from all of it to become employee number 23 at a startup nobody had heard of. That startup is Sierra, funded by Salesforce, former co-CEO and the creator of Gmail. 100 million in annual recurring revenue in seven quarters, now valued at$10 billion. And at the center of all of it is a bet that should terrify every SaaS company on the planet.

1:13Customers only pay if the AI actually solve their problem. Reggie, great to have you here. It's great to be here. Really excited to be here today, G. Thanks for having me. Yeah, I'm super excited. I know you're like a very energetic sales leader, but you've had like a long career to transform into who you are right now. And you've done various different things among your career. So is this like something that's natural like for you to kind of like change position all along your career? And how exactly did you adapt to the different challenges that you faced? No, it's it's I believe success is a winding road.

1:52It's never straight. And my whole life is built on relationships, taking calculated risk and failing. So when I graduated from college, I wanted to play professional football and I went to a small school. Shout out to Morehouse College, which is one of the greatest schools in the world. And I knew if I didn't try to play professional football, I'd regret it. So I played in the Canadian Football League for a year, quickly realized I was never going to make it to the NFL and I was wasting my time. I needed to get a job. Came back to Atlanta and Sprint at the time was hiring college students for entry-level customer service roles.

2:25So I started my career in the telecom industry in a call center in customer service. So when you got in that at Sprint, you called in. I was the person to answer the phone. Quickly realized the money in the career progression was in sales. And especially being a minority, there's no subjectivity in sales. It's either can you produce or can you not? And I love this quote from Jay-Z says, men lie, women lie, numbers don't. So I just forged my way through the telecom industry in sales. And when I was a direct seller, then I was a first line, second line, third line leader. Then I ran Sprint's international wholesale business.

2:59Then I left there to become a CRO of a midsize media company. And at the time, I had a big ego, smartest guy in the room, had all the answers, came with my playbook, and it completely failed, got fired after my first year. So I was unemployed for six months. So, and I wanted to get in the technology industry and I've always used the Salesforce product. And I had a friend, his name was Ryan Ratting. He was a senior leader at Salesforce. And he was like, hey man, this is a rocket ship. You should come over here, but no one's gonna hire you as a senior leader. You're gonna have to come in as a first line sales leader if you wanna join this company.

3:38So I had to swallow my pride. And then because I had failed and I had gotten fired, I had to really reinvent myself and think about what real leadership means. And it's putting people first, servant leadership. And so when I joined Salesforce 10 years ago, as a first line sales leader, I approached it with humility and my career flourished. So if you would have told me when I graduated from college that I wasn't going to be a professional football player and that I end up in the technology industry and sales, I wouldn't have believed you. Nice. I love all these stories. And, you know, when you're at that stage where, you know, like you get fired as a CRO and you have to go back to, you know, like a frontline sales, like what goes through your mind at the time?

4:21Like, do you feel like it's going to be a learning experience? Do you feel like it's something brand new? Like, how do you kind of like change the mindset? At the time, it was the worst thing that ever happened to me in my life. Like, I remember sitting in my car crying because I have responsibilities, man. I have a daughter and I have a son and my wife doesn't work outside the home. And they look up to me like I'm responsible for them financially. So I was like, man, I got fired. I have no job. Like, I have no, like, belonging. So this quote that I remember from Albert Einstein, like adversity introduces a man to himself.

4:59So I just figured out what what can I do differently? How do I reinvent myself? How do I position myself so I'm never, ever in this situation again? And I started to like deconstruct what I was doing as a leader and why I got fired. And it was really just my leadership style, man. You can't be the smartest guy in the room. You don't have all the answers. You have to rely on other people. You got to put people first. It's not about you. But I will tell you, man, like failing, it's like the most humbling thing that you'll ever experience when you get fired from a job or you fail at something. So yeah, I love that.

5:35I think this is something European can learn from because obviously, like, it's not something we talk too much about. But I think you're a great example of someone, you know, who faced adversity and make, you know, amazing things afterwards. So what would you say were like your main or key learnings at Salesforce and more specifically at Slack? Both amazing companies. So Salesforce, big tech company, Slack, midsize company. So I got a feel of both environments. But Salesforce, I got my accelerated MBA on how to run a business, how to be a sales leader, like how to do operational excellence, how to run a business.

6:18And then Slack was more, how do you scale, how you scale up? And I was also responsible for helping integrate Slack into Salesforce because Salesforce acquired Slack. So how to manage cultures, merging cultures and managing people and getting people inspired to be part of a bigger company, which is a different motion. But I learned a lot from both places that have really helped me in my current role today at Sierra. But just really understanding how to run a business, operational rigor, operational excellence, inspirational leadership, all those things that need me successful today. I took a lot from Salesforce and Slack.

6:58So in the day-to-day, what's for you an inspirational leader? What are the specific things that you can, I don't know, start doing to become an inspired leader? it's a good question it's it's got to come from within so the first thing is the way i approach leadership my mentality is um you know servant leadership and i love this quote from dr martin luther king jr life's most persistent and urgent question is what are you doing for others so putting people first and then also um always trying to figure out connect to people's why Like, why do they wake up every day? What's motivating and what's inspiring them?

7:40And then it's my responsibility to create a very safe, transparent environment where people can bring their authentic selves to work. And then if I'm connected to their why and I'm leading from the front, I'm getting my hands dirty. And I believe this, I would never ask someone to do something I wouldn't do myself. I've carried a bag. I've been a first line leader, a second line leader. I've done pretty much all the roles to be successful in a go-to-market operation. so I'm willing to lead from the front. I'm willing to work my ass off, work incredibly hard, set the example, get my hands dirty and I think if you do all of those things, people get inspired by you and I always go back to this Brian Tracy quote, be the kind of leader that people would follow you regardless if you had a title or a position and that's kind of how I think about like inspirational leadership.

8:28I love this and what are the things that you've done that you feel have inspired like most people? Well, I've been able to have this thing called followership throughout my career. So I've treated people with respect. I'm responsive, I'm available, like I'm supportive, I'm proactive. Like I have high standards and I challenge people. So when I've moved to different companies or different roles, a lot of people will follow me because they believe in my leadership. So I've been able to build followership throughout my career. And many of the incredible sellers and sales leaders at Sierra are people that I worked with at previous companies.

9:11And I'll shout two of them out. Mandy St. Ledger and Kylie Maddox, I call them the big sisters, two of our incredible senior leaders. I've worked with them in previous companies. So I was able to create followership where they believed and trusted in me and they joined me at Sierra. So hopefully that answers your question, G. Yeah, definitely. And I mean, you were like number 23, I think, at Sierra. That's a good number for MVP. Yeah, Michael Jordan, man. Yeah, of course, the one and only, the one true goat. And basically, like when you join and, you know, it's the early days, it's a bit different versus what you've seen, you know, at Slack and at Salesforce.

9:57so how did it go you know in the first days? It was a lot of fun but a lot of work and this is the hardest I've ever worked in my entire career but this is the most fun I had but when I started like I was the head of sales but there was no sales team. The sales team was me, Brett Taylor, Clay Beauvoir, Elliot Greenwald, Logan Randolph, Natasha like our leadership team we were the sales team so when I first got there I were I pretty much did everything. I was an AE, I was an SE. I was a BDR. I was an SDR. I was an office manager. I was putting dishes in the dishwasher. I remember one point we had one EA, Allie, who's incredible.

10:37She went on vacation and I was Brett and Clay's EA for a week because we were getting so many meetings, I couldn't afford the meeting flow to stop down. So it's a really cool place where you wear multiple hats. You have an ownership mindset and you have to have a very, very low ego. And it's like a mentality, see a problem, fix a problem. You know, if you have an idea, like let's collaborate and make that into reality. But it's wearing multiple hats. It's having very, very low ego. But it's also like working a ton of hours to get something up and running. Yeah, I'm sure it was hard work. And if you had to pitch Sierra, you know, to a five-year-old, like how would you do it?

11:19Sierra, absolutely. So and I do this all the time because I have, you know, nieces and nephews. But Sierra, we make very sophisticated AI agents that represent a company's brand and we're integrated in all parts of the experience. And it's our responsibility to build deep relationships with our customers and their customers and help them be able to interact with the brand and take care of their business 24-7 on their own terms. That's what we do. And we're able to do that at a high clip where we're handling the majority of all inbound customer interactions are being handled by our agents. And we're creating a really, really incredible experience.

11:56We have very high CSAT scores, high resolution rates. We're able to handle really complex things. But that's what we do. We're the front door of the customer experience. And we help you as a consumer take care of your business 24-7 in a consistent, beautiful way. Love it. And what's changing versus like software when it comes to the business model? Usually people pay per seat. So here it's how exactly does it change? We have this beautiful business model called outcome-based pricing. And essentially what that means is we only get paid when our agents successfully resolve cases or deliver on the use cases that we sign up for.

12:36So you're hiring Sierra to do a job. And if we don't do our job, we don't get paid. This is a completely new model. Customers love it because they're paying for results. We have mutual aligned business interests. Our job is to take on more of your traffic at a much lower cost. And you as a customer, you're going to send us more traffic because you're paying less. It's a more consistent experience. So we don't charge implementation fees. We don't charge for any professional services work. we only get paid when our agents successfully resolve cases on their own without human intervention. That's what we deliver to customers.

13:13And people no longer want to pay for seats or consumption or the right-to-use software. They want to pay for results, and that's what Sierra delivers for our customers. And it's fun to sell. It's fun to sell this too, G. That's what I was going to ask. You know, like from a sales perspective, like on your side and with your team, how do you feel like, how do people react, you know, when they hear like they're not going to pay per seat and they're going to have to pay per outcome? People get excited because once again, they're paying for results. And we're able like to build like the ROI is like right there.

13:48If we're going to be able to handle your customer interactions at a lower cost, we're going to do it more consistently and we're going to do it like better than it's being done today. Why wouldn't you want to experience like a business model like that. So it's fun to sell. It's a clear return on investment. It's a clear return on business value. And once again, our values are aligned to our clients' values is to improve the overall customer experience at a much lower cost and be able to interact with all of your customers and build more intimate relationships. So people buy more from you. They tell their friends about you and they're really happy interacting with your brand.

14:26Nice. And can you walk us through maybe like the the sales process? Like how have you organized your team and what's kind of like the sales process? Yeah. So we are, this is a brand new category of software. So it's a different sales process than what you traditionally see in SaaS. So the way we're set up is we are industry focused. So we want to be in the industries where people live, work and play when they need to interact with the brand. So that's financial services, healthcare, telecom, retail, media, travel, tourism, hospitality, technology. So that's, and when you're aligned to industries, you understand what's happening in those industries.

15:05You understand the trends, you understand the use cases, you can speak the language and add tremendous value. So that's how we're set up. We are selling motion. It's a proof of concept generated selling motion, which means it's AI, it's new. So we want to prove our value and make this a low risk engagement for our customers. So We do a paid proof of concept where we build a production-ready agent, do all the back-end system integration work, put the agent into live production so the client can see the value that this agent is driving, the incredible resolution rates, the high CSAT scores, our ability to handle complex use cases.

15:46They also get to see what it's like to partner with Sierra. So we have very sophisticated technical sellers. And then for every engagement, we have a dedicated agent strategist, which is like a project manager, very technical resource, and an agent engineer. We become integrated with our clients' technology teams or business teams or operations teams. So we show up and we can move really, really fast. So our selling motion is POC, put the agent in live production. you get a chance to see how powerful the technology is, what it's like to work with us. It's a very low risk way to evaluate Sierra.

16:24And do you like prepare all the agents before actually like the POC or do you use it as a way to attract leads if you do outbound, for example? No, so each agent that we build is customized to the client that we're working with. So what we'll do is with the client and the proof of concept, we'll pick three use cases, one high volume, one easy one, and one really complex and early use case. And then we'll build the agent with the client. Once again, we'll build a production ready agent, and then we'll put the agent into live production and we'll ramp the traffic up so they get a chance to see what it's like to work with us and they can see the power of the technology in the wild.

17:12And we can move really, really fast. If I look at some of our really complex engagements, like with Cigna, which is a highly regulated insurance company, we were able to get their agent up and running in less than two months. Next, which is a large European retailer, hopefully you're a customer of Next. We were able to get their agent up and running, and once again, in less than two months across 83 countries and 48 different languages. Singtel, one of the largest telecoms in Asia pack, got their agent up and running in 60 days. So if we're bringing all these incredible, powerful resources to bear and we're doing the heavy lifting, it's really, really low risk for customers to partner with Sierra.

17:52And what's like the average deal size that you're closing? Depends on the size of the client, how much volume they want us to handle, the complexity of what we're going to work on. But long term, these are going to be pretty large transactions because we're primarily working with the global Fortune 1000. And many of our customers are in the Fortune 100. And these are really large, complex businesses that receive a lot of inbound and outbound customer contacts. So if we're doing our job, our agents are performing, we're showing up the right way, we're delivering for our clients, then they're going to want to give us more business.

18:31And obviously, these engagements can get pretty sizable. Only if, once again, our agents are delivering value and solving problems. So if we're not driving any value, no one's going to want to partner with us. But hopefully that gives you a sense of the different types of deal sizes that we work. Yeah, definitely. And when it comes to the price per outcome, is it something that varies depending on the industry and the company? Or is it something that's one fits all? No, it's going to be based upon how much volume that you want us to handle. What's the use case that we're going to handle? Is it voice?

19:10Is it chat? Is it email? Which modality are we going to have the agent handle? So there's a variety of different factors, but at the end of the day, it's pretty clear. Did our agent handle its business? Did it resolve an issue or did it close a sale? Depends on the use case. And if it did, we get paid. If our agent doesn't handle its business, doesn't resolve that use case, then we don't get paid. And when I say handle the use case, on their own, autonomously, with no human intervention. If we have to transfer it to a human, then it's free of charge. And oh, by the way, G, when we transfer it, we're going to tell you why we couldn't resolve that issue.

19:49And here's potentially what that human agent should do to resolve that case on the first interaction. Nice. Really cool stuff, man. It's a lot of fun to sell this. Yeah, it must be like super fun, especially coming from more traditional like software. I think it's a lot easier. But you're saying that you were focusing on Fortune 1000. So with this kind of deals, like from 500k to multimillion dollars, usually like the sales cycle can be like quite long. So can you maybe like walk us through how do you find like those leads? How do you like close deals? Is it mainly outbound, inbound? How exactly the whole sales machine works?

20:32Yeah, this is an enterprise-driven sales motion. So we have really seasoned, really talented, hardworking, intellectually curious technical sellers. Their job is to go out and generate leads through prospecting. We also do events. We go to conferences. We have customer stories. our founders are doing podcasts to kind of help generate interest and help explain who we are and what we do and the value that we're driving. But this is an enterprise AE driven sales motion. So if you want to work at Sierra and you're a seller, you have to be down to prospect every single day. So that's kind of how we go about generating interest and generating leads.

21:14So once you get a lead, then you have a couple of meetings, you do discovery, understand the environment, the use cases, and then we build a demonstration to show like what it would look like if we were to handle those use cases with Sierra, like the art of the possible. And then once the client kind of sees potentially how this would work, then we move into a proof of concept and then we execute the proof of concept. Those run anywhere from two to four months. And then after that, we execute a long-term contract. So from first meeting to signing a long-term contract, it's about eight months. Wow.

21:48Because we have to do discovery. We have to instill confidence. We have to create a demonstration to show, you know, to bring the art of the possible to life. And then we have to run the proof of concept. And in the proof of concept, we are held accountable to delivering results. And if we don't deliver results and execute those proof of concepts, we don't have a deal. And gee, I'm really proud to report we have a 90 % conversion rate on proof of concept. So 90 % of the time, if a client goes into a proof of concept with Sierra, they're going to end up being a long-term customer. And when it comes to like the part with sales prospecting, how do each AE do like their sales prospecting daily?

22:26Like do they have like, I don't know, like a CRO who basically like a split per industry and each AE will get a specific industry and a set of leads each month that they need to contact? Or is it like each AE is kind of like a full sales cycle and is focusing on the entire sales cycle from finding the leads to reaching out to them, et cetera? Yeah, so we don't have like a hunter-farmer thing. It's an AE, once they get the first lead to long-term contract, they are aligned to that engagement for the life. Their job is not only to get the client into a proof of concept, demonstrate the values on a long-term contract, it's now, how can we take this relationship to the next level?

23:12Hey, you wanted us to handle your customer service? How about we start working on some proactive sales use cases? How about we start closing deals for you? You're currently using chat. Let's take a look at using our voice solution. We have new features to the platform. We have this cool feature called Asian Data Platform. We're now imbuing these agents with intelligence and memory and context. Let's explore that. So at the end of the day, a seller's responsibility is to become the front door of that client's experience and be the way that their customers are interacting with their brand. So it's not just selling one thing and moving on.

23:53It's like, how do we build a long-term relationship so our clients are happy, they're successful, they're connecting with more of their customers? And you can't do that if it's a transactional thing, come in and close a deal and move on. So hopefully that gives you some sense of how we go about our selling motion. Yeah, definitely. I think it's interesting because in some companies, you would see that you would have, let's say, like an AE team and then you would have like the expansion team or like CS team sometimes that handles, you know, like customer expansion. But for you, it's like, because it's such a long term relationship, you want each AE to basically like handle their accounts and also be able to also do the upsell because they're bringing more value on different use cases.

24:36Is that correct? That's exactly correct. So, which is why when we're hiring for sellers, we look for like intellectual curiosity. We look for creativity. We look for people that have the ability and instincts to make things happen. People that know how to, they can, I can put them in the, in front of a CEO, but they can also go have a great conversation to build a relationship with a project leader. So you've got to have AEs that are sophisticated, that work hard, that are very curious. And that's how you kind of come in and be a business consultant and not a sales rep, but like a consultant. Like, what can I do to make my client more successful?

25:16What can Sierra do to help them improve the way they interact with their customers and make better connections and more intimate relations with their customers? You have to have a pretty unique seller to do that, which is why I'm very fortunate that we've got some of the best sellers in the world at Sierra. Nice. And is there like a particular deal you were like super excited to close or like a funny story of either the early days or with the team, like a deal that was complex or an industry that you particularly liked? I think all of these deals are fun because we're selling, this is a completely brand new technology that we're selling.

25:54Like agents didn't exist two years ago. So that's really fun. But I think all the deals are fun. One particular one, and I'll keep the company name anonymous, but I remember, and this is due to the power and the beauty of our selling model, is that we were in the final stages of the proof of concept. The agent was live. It was delivering results. It was handling some really complex use cases. Our executive sponsor and our technical executive sponsor both were let go in the ninth hour of a deal cycle. And by the way, this was the largest deal at Sierra at the time. This is our first year out of stealth.