E498 | Micah Smurthwaite, Pipeline Ventures: Path to Market: From Zero to Market Leader, A CRO’s GTM Playbook [Seedcamp Series]

0:25Welcome to Path to Market, the podcast where we unravel the art and science of the of go-to-market strategies for startups and scale-ups. Brought to you by Natasha Lytton from Seedcamp, the day one partner for Europe's most exceptional entrepreneurs, and Micah Smirthwaite, seasoned investor and sales leader, this series dives deep into the challenges, opportunities, and insights that define a company's journey to market success. Together, Natasha and Micah will share their own learnings, uncover practical advice from seasoned go-to-market leaders, and dispel the myths surrounding what it really takes to master go-to-market.

0:55So whether you're a founder, operator, or investor, the series will empower you with actionable insights to navigate your path to market success. Let's dive in. We're really excited today to talk to a CRO who's been at multiple startups and grown multiple startups from small amounts of revenue to hundreds of millions of revenue. So Tim Bertrand, we originally got to know each other when he was leading sales at Acquia. It's the company behind the open source project Drupal. He grew revenue there from 2 million to over 200 million. He went now the market leader in supply chain logistics. And now Tim is the president of HAProxy, one of the world's fastest and most widely used load balancers.

1:36So Tim, would love if you could give an introduction to our audience. And as part of that introduction, there's a narrative that if someone has been a CRO and scaled a company, they probably wouldn't want to do it again. But you've done it once, twice, now you're doing it a third time. So maybe you can share with the audience why you joined these companies and what made you go from a large org going back to a company that's just starting to scale? Yeah, well, great. Well, thanks for having me on the podcast today, first of all. So as I mentioned, came back late from a business trip last night.

2:09I still get out in the field a lot. It's one of my favorite things to do. And we'll talk about that a bit during some of the questions that you guys have for me today. But I'm really a builder and I really enjoy watching a startup go from those kind of early stages of growth through scale. And I saw it at Acquia. I started off at Acquia working, sharing an office with the CEO, working off of milk crates. We were 20 people. We were making our first hires. We were trying to figure out the go-to-market. We were trying to figure out the product market fit. And then it was really fascinating to see that company scale.

2:46It taught me a lot. I tell people that I never went and got an MBA because all my jobs have really given me a real life MBA experience. And I got to see that at Acquia. Then after 10 years at Acquia, I went to Project 44 and that was a fantastic opportunity as well for me to really understand what a vertical SaaS company looks like. So Project 44 focused on the supply chain and inventory visibility space. It was just a completely different way to use my brain. I had been in infrastructure software for my whole career before that. And throughout this whole time, for about eight years, I had been helping out the founder at HAProxy.

3:24So he had started the kind of commercial entity, HAProxy Technologies, about a decade ago or so. And he was beginning to scale that company. And it was really my way of giving back to the startup community to go back and help a founder like that. And that company I watched over the last few years and made the decision to join full time as president in the spring of this year because they were really hitting that same inflection point when I really enjoy joining companies. It's that, you know, kind of$15 million revenue range. All of the things are starting to come together to where you can start to see that the company's got some legs and it'll start to scale.

4:03So that's what I've done. joined HA Proxy back in the spring, and it's been nothing short of amazing so far. We've got an incredible product and an incredible team, and we're having an absolutely fantastic year. And the company really checked all the boxes that I would want to check for what a modern day startup should look like today. It's highly profitable, which is great. In our case, we don't have any venture capital investment. So it's been all bootstrapped by the founder, and the company grows over 40 % a year. So it's just a fantastic place to be. I think if you were to talk to any leaders these days, they say, oh, that's the kind of company that I'm looking for.

4:41Profitable, growing quickly, excellent product, really, really unbelievable customer satisfaction and a fantastic team. The people here are just absolutely world-class. It's been a great, great move for me. Amazing. I'm sure many founders listening wish they could find somebody like you He would be willing to keep kind of going back into the early days and the trenches again. Now, look, conventional wisdom is that a founder must create a sales playbook before they bring on go-to-market hires. What would be your advice to founders about this? Like, is it necessary? When should they be bringing on their first go-to-market hires?

5:18I think the answer is it depends. Some founders come from a sales background, right? So they have a bit of a leg up in that they've been in the field. and they come through the sales background. Other founders are highly technical, right? And they have a highly technical co-founder as an example. And they really don't know what a go-to-market playbook looks like. And although they're involved in the early days of selling the product, I would say the answer is it depends. Some advice that I give a lot of founders is I wouldn't go to senior too quickly, right? So I've talked to founders and they asked me, they're a$2 million company.

5:56They say, hey, we're thinking about hiring a CRO. And I said, that would be a terrible decision, right? So a CRO is a role for scale, right? They understand process. They understand how to scale teams, hiring processes. They bring in the right systems. They understand that element of the business at a very, very granular level. A lot of times what companies need when they're a million or 2 million or 3 million or even 5 million or 8 million in revenue is they need feet on the ground that really understand the early days of how to go after a market, how to understand product market fit, how to evolve very, very quickly the messaging for the company out in the field.

6:36And I would give a lot of founders advice, make that first sales hire, someone that you could see evolve into a sales manager or director of sales. They're super excited to get in and help you as the founder get out there and make those first sales. I oftentimes give advice as well that sometimes in the early days, you can't measure revenue as much as you can traction. So landing pilots, landing strategic logos, getting that kind of early wins for the company is oftentimes much more important than the actual revenue traction. So those are some pieces of advice that I've given to founders. I think I've seen companies just hire way too senior too early in their life cycle.

7:15And then the person comes in and they need sales engineers and they need more salespeople and they want a sales ops person and just, they want to build a big infrastructure for a company that doesn't really need a big infrastructure. I'd say the one thing that's unique about myself is I still get out there and do a lot of the doing. At HAProxy, everything except for R &D and HR are kind of under my teams, but yet I was out in the field this week selling with the team. So I think that you still have to, in early stage companies, no matter what your role is, you have to be willing to get out there and put your feet on the ground and actually do the work.

7:48attitude, I guess, being a really important to that. So I think that's really great guidance. And we definitely see founders sort of fall down by trying to hire too senior too quickly. So if you take it as the, you know, you're looking for that more junior, the sales sort of field rep who can actually grow into the role, how would you actually structure the hiring process trying to find somebody like that? And what are some of the questions you'd be asking them as part of that interview process? So that's a great question. First of all, I probably wouldn't hire someone that had been at large structured organizations their whole career.

8:25As much as they might say they want to get into a really gritty startup, I would say that you got to be very, very careful to make sure that you don't put yourself in a position where you hire someone that hasn't been through a journey like this before. I believe that there are in many cases and in many roles, people that are right for certain stages of a company. I'll even admit, I'm a person where you get to that 150, 200 million revenue range, and then it's a lot of process, and it's a lot of things that I don't enjoy as much as I do the building phase. I'll be fine to be, hopefully, the third time in a row, someone that comes in and runs all of GoToMarket that goes from 10 million to 150 million.

9:07I think it'd probably be in rarefied air to be through that journey three times in a row. But I think that there's also roles in companies where people are good fits for a certain point in a company journey. And I think that when you're looking for those first sales hires, you need someone that's been through that experience before. They're not going to get frustrated that this week, this month, this quarter, we didn't close much, but we're gaining traction in other areas. So I think that's some advice that I give is make sure that you hire someone that's been through that journey before, that understands the process of obtaining product market fit, that understands you have to go in and land small and then expand in accounts and things of that nature.

9:49In terms of the actual hiring process for an earlier stage company, I think it's really important to make sure that you're hiring someone that fits with the team. In an early stage build, you're going to be spending a lot of hours with your colleagues, many nights, weekends, lots of weekends building the company. And you have to make sure that you hire someone that fits in that environment, that's dedicated to that environment, and understands that they're in for this build phase. Those are some really important elements I think that founders need to understand when they're making those first sales hires.

10:21And you listed a couple things that great sales hires have at early stage companies. They need to be comfortable with ambiguity. Maybe they're not hitting quota metrics, but they're hitting these pipeline and pilot metrics. When you're hiring, and hiring is both art and science, are there common traits that you've seen for the best hires you've made or common traits for the mishires you've made? Yeah, that's a great question. I like to use the words moxie and grit. The best hires that I've made at the early stage companies are real hustlers, right? They don't even necessarily have domain experience, but they're really willing to do whatever it takes to help the company get to the next level, right?

11:04They understand the product really well. They help develop the messaging on the fly while they're in the field. We've got a working committee at HAProxy building our next generation sales presentation, and it's all the sellers involved. They're very passionate about making sure that we're changing the messaging as the company is evolving. So really having the grit to go through those early days and help the company make those early decisions are something that I think is really important. And in terms of mishires, a lot of times it's just the wrong fit. I like to think about it like this. If you're coming from a MarTech SaaS company, single product, you literally just turn the product on, limited configuration, and you start using the product.

11:48That's a much, much different sale than selling infrastructure platform that has to be implemented, that's highly complicated, that takes a system integrator or professional services to implement, and so on. And the seller that's been in those roles, selling that kind of point, click, turn it on, configure and go software, I found 95 % of the time those folks fail. When you put them in a solution-oriented, complex implementation, professional services, they just get really frustrated. They just don't understand how to work with customers in that kind of an environment. They end up just, you know, typically either quitting or they end up becoming very disgruntled because they come from such a different world.

12:31The other thing is hiring, I've mentioned this earlier, hiring someone that's only been at big, highly structured organizations into a really small company. I think oftentimes they get frustrated because small companies, you have to wear many hats and there's not five other people to do the five other jobs. You just have to do those jobs yourself. I remember when I joined my first startup, it was an Irish-based company. and one of the guys that was in the Boston office, maybe there was three of us, he said, hey, this is the kind of job where if we need pens for the office, you get in the car and drive down the street and go to CVS and buy some pens.

13:02And if we run out of coffee for the Keurig machine, like you go to the grocery store and buy some K-cups for the Keurig machine. I think that's a really good way of thinking about it, right? Like there's just certain people that either they're done with that point in their career or they don't like that or they've never worked at companies where they've had to do that before. Yeah, the people who are great at a resource-rich organization may not flourish in a resource-constrained organization where there's just more work to do than there is people to do it. You alluded to this about domain expertise.

13:32So you built these world-class teams in distinct industries. When you're interviewing candidates, does domain experience matter? I think in rare cases it does, but I don't really think that it matters generally. I like to use myself as an example. When I was 26, I built a$11 million federal government business in two years and I had zero domain experience. Our head of our federal sales business in DC has no federal experience, but I just had the will to succeed and I just figured it out. I learned the acronyms. I would go down to DC four days a week and I would have a breakfast meeting, a coffee meeting, a lunch meeting, an afternoon office meeting, and a dinner meeting.

14:17I would do that four days a week, every single week until we succeeded down there. I would meet partners. I would meet anybody that would talk to us about what we did. I did a lot of unorthodox things that helped us grow a lot faster than a traditional federal business. We hired folks at Project 44 that had just infrastructure experience. They came from places like Acquia. In the past, they didn't have supply chain experience. They were some of the best sellers that the company had. I've taken people out of recruiting jobs in a company that, if you think about it, recruiting is really a sales job, but they weren't enterprise sellers.

14:51They were some of the best enterprise sellers in the business. So I think it's much, much more about all the things that we know that help you succeed in life. Work ethic, understanding the product, getting really, really deep into the product and the messaging, committing yourself to success, based upon what industry you're in, really understanding the industry and the trends in the industry and so on. I think those things are a lot more important than people that either have domain experience or come with a Rolodex. I do think that there are certain roles like a biz dev role or an advisory role for a very specific vertical.

15:25And you've got lots of folks that you know, and you've been in that vertical for 25 or 30 years or what have you. I think that that can add value for companies at a certain stage, but I would not over-index on domain experience. It's something that I think I've made that mistake on earlier in my career. And I don't necessarily think that it's one of the top things I look for. I think that's really great guidance. I definitely see a lot of times founders want the person who's built in that sector to come and sort of rinse and repeat what they've done there with them. And what I often wonder is, well, what's in it for the go-to-market leader or the individual joining, right?

16:01And there's the opportunity for the learning when you've got the new sector and experience and people often do want to have that new domain expertise to add to their bow. So I can totally see the validity there. So, okay, we've talked through the attitudinal things we need, the type of characters that we're looking for. So say you found this salesperson that's going to join you on your mission. What do you think are the best practices for onboarding sales reps? And again, what are some of the biggest mistakes that you've seen when it comes to onboarding and where people haven't ended up working out?

16:32Yeah, I think the three most important things for onboarding a sales rep are, number one, really understanding the product at a super granular level. I've always been a person where if I feel like I'm the dumbest person in the room because I don't understand the product, I know I really have to do my homework and I want my reps to feel the same way. It's really embracing and understanding the product at a very, very fundamental level. I think that's super, super important. The second thing is really understanding and embracing the messaging and value proposition. I'm a big medic and force management disciple.

17:05And I really think that their whole command of the message training is incredibly important. You want everybody in your sales order and really everybody in the company to be able to talk about what you do, how you do it, how you do it differently. And the proof points that you have with other customers, you want that to be a very, very consistent message across your team. So I think that's really important as well. And then the third thing is mirroring the best sales reps who also follow the best sales process, right? We know we have a few maverick reps in a large org that just get their deals done and they never use Salesforce and they never update their records and so on.

17:43But then, you know, that's not a best practice, right? You want your new reps mirroring the reps that follow best practices, that follow the sales process, that do a great job understanding the messaging and so on. And I found this kind of a buddy system or mentorship system with your best senior reps and taking the deals and deconstructing the ideal deals for the company and then teaching that to the new reps. Those are really, I think, the three most important things you have to nail when you're onboarding a rep. I love this idea of the buddy system that if somebody joins a team and doesn't succeed, the team can look at themselves internally and say, shoot, maybe part of it's our fault because we didn't set them up for success.

18:23So it really puts an individual's success back on the entire team. So let's talk about some tactical sales execution tips. So you mentioned medic, force management. Some technical founders may not even know what those acronyms or frameworks mean. So just starting with the very basics of that great salespeople ask great questions. Yeah. What does a great discovery and qualification process look like? In the end of the day, we're all trying to, as sellers, determine a very common set of attributes about a customer and about a deal. First, we're trying to understand, do they have some pain that we can help them with?

19:05The second thing is, are we talking to a qualified buyer? Do they have some interest? Do they have a project on the horizon where we believe we could be a fit? There's a lot of tire kickers. They're just downloading things off your website, and they have no propensity to buy. They have no ability to buy. They have no timeframe. They have no budget, things of that nature. So those are some of the basics that we're looking for. The second thing is understanding kind of where they are today and where they want to go. Using, again, the force management nomenclature. It's about being able to paint a picture of here's where you are today.

19:37Here's some of the things that you're frustrated with or that you have pains with. It could be cost. It could be efficiency. It could be technical capabilities that you don't have or what have you. And then in an ideal world, here's where you want to go, right? And then it's the seller's job to then map what are the required capabilities or requirements to get you from where you are to where you want to be. And then as the sale starts to evolve, it's making sure you also understand, for example, am I talking with someone who is a coach? Am I talking with someone who could be a champion for us?

20:10They're willing to run this up the flagpole to their executives. Who is the executive buyer? I find that 99 % of the time when deals push, get delayed, or deals don't happen, it's because the team is not talking to the economic buyer early enough in the process. The team is afraid of talking to the economic buyer. They're talking to a coach. They're not even talking to a champion that can run something up the flagpole for them. They take deals really, really deep into the sales cycle without ever talking to the economic buyer. I, for example, got an email from an investor that I know who apparently has a portfolio company who's trying to sell something to HAProxy.

20:50And the person that they've been working with now for months at HAProxy is an influencer, but not an economic buyer. In this particular case, I wouldn't even be the final approval for what these folks are trying to sell us. So the fact that now they've been selling to us, and I learned about this six months later, I don't even know about it, right? Certainly our founder doesn't know about it either. So these are really, really big mistakes that sellers make, like not getting to that economic buyer fast enough. There's a lot of ways that you can do it as well. That's actually a lot of what I do in the sales process is I help what we do call the team level up in the sales process.

21:27If I'm coming to the meeting that we need to make sure that we have access to the economic buyer, I build a separate relationship with the economic buyer. And this is a really, really important element in the sales process. So I think, you know, those are some of the key fundamental attributes of discovery that you have to do when you're kind of figuring out, do we have a real deal here? And are we talking to the right people? And do we solve a pain that was big enough for them to spend substantial money on our platform? Is it as simple as just asking? How do we find out who that economic buyer is?

21:58Yeah, I think that's a great question. I think it is just as simple as asking, right? I like to ask it in a very tactful way. if we were to do a deal together, can you just walk me through everything that has to happen between now and when the deal would close? Who would need to be involved? How long does it take? What does the procurement or paperwork process look like? Can you just rattle off a bunch of these questions? And if you build a good enough relationship internally, the person will typically just talk for 20 minutes. Oh, this person's got to be involved. And then we have to go to a committee and then there's going to be red lines.

22:31And by the way, every one of them takes four months to get done here and get through legal. And then as a seller, you can say, oh, wow, like this deal is not going to happen for the next five months. I see sellers forecasting deals in quarter. They haven't asked these questions and they find out it takes four months to get a deal through red lines. So I think sometimes it just really is as simple as figuring out the right and tactful way to just ask those hard questions. Sellers oftentimes are afraid of asking those questions or they'll ask it too bluntly. Like, are you the person that signs the deal?

23:05So why not just ask, hey, what are all the things that would have to happen? Who else needs to be involved in order to get a deal done? What have you seen in your last five, 10, whatever years at the company in order to get deals done? I think it's just as simple as that. Really valid advice. So I guess beyond just asking those, let's say probing rather than just sort of blunt questions, are there any other tactics that a salesperson can use to create urgency in the sales cycle? Well, I think it's really important to make sure that there's some type of compelling event. If there's no compelling, and by the way, price is never a compelling event.

23:38A discount, a price, that's never a compelling event. That's just a great way to give away value. I've learned it even more here at HAProxy where we don't work in quarters, right? The founder doesn't really care about quarters, cares about annual growth year over year. But he said to me one time, giving a 10 % discount to get a deal done on a Friday when we know it's going to happen in two weeks from now or three weeks or even eight weeks from now. That's crazy. Why are we giving away 10 % of the value? There's no pressure coming from anybody to get the deal done by a certain date. I think I see a lot of reps just try to lob discounts out there in order to get deals.

24:16You can fix this with great compensation systems. You can even tell a rep, hey, we know it's the end of the year, but if we're going to get 10 % more to get the deal done in January, then I'll just figure something out with your own compensation in order to do that. There's ways to fix this that any CEO, any board, any investor would be totally fine with because we're generating more value in a very, very short incremental period of time. So I think that's really important. But making sure that there's some type of compelling event, they have a launch coming up, they have use it or lose it funding at the end of the year, that means the deal has to get done or the budget goes away, they have some pain that's costing them a lot of money.