Why Great CROs Stop Managing Numbers and Start Building Systems with Sam Costello

0:00The ingredients of great companies is actually pretty hard to find. And so when you get inside of a company where you've got a great founder, you've got a big market you're selling into, you've got differentiated technology, you've got a sales team that you're inspired by or leadership that you're inspired by, that ain't nothing. And that's hard to replicate.

0:19Sam Costello: Welcome to the Revenue Builders Podcast, a weekly show featuring B2B sales leaders and executives. Hosted by five-time CRO John McMahon and force management co-founder John Kaplan, the show takes guests in the barrel, behind the scenes with the people who've been there, done that, and seen the results. Revenue Builders covers best practices for scaling and growing your business while sharing the pitfalls to avoid.

0:47I'm John Kaplan here with John McMahon, and today we have a guest who built something rare. He's grown with one company for over seven years, from Series A to a category leader. Sam Costello is the Chief Revenue Officer at Harness, the AI native software delivery platform. He joined back in 2019, right at their Series A, as the company's first sales leader under CRO, Jason Eubanks. From there, he helped take them from under a million in ARR to$100 million in five years, and has climbed through nearly every senior sales leadership seat on the way to the top revenue job. Before Harness, Sam cut his teeth at Oracle, leading transformational deals inside Fortune 500 accounts and at Perfecto, where he had scaled the business ahead of its sale to private equity.

1:43He's built his reputation on recruiting elite talent, running disciplined sales processes at enterprise scale, and never losing sight of the customer outcome in the middle of a deal. In this conversation, we get into what actually changes when you move from carrying a number to owning the whole revenue engine. Sam walks us through Harness's approach to building champions, what he calls their Duplo sales process, how they qualify and structure proof of value with multi-threaded technical buyers, and where he spends his time today between recruiting, enablement, and staying close to the deals. If you're building or scaling a technical sales motion, this one is jam-packed.

2:30Let's get into it with Sam Costello. So Sam, hey, congratulations on your promotion to be CRO at Harness. Just to give the audience a little background, tell them just a little bit about what Harness does. Well, first of all, thank you for having me, John and John. It's great to be here. and thank you for everything you've done for the industry, especially this podcast, which I know so many of my friends and peers consume and enjoy. So it's an absolute pleasure to be here. You should think about Harness as AI for everything after code. So there's a lot of companies out there, you know them that are writing code and creating it.

3:07We are how that artifact gets out to production safely, securely, reliably, dependably every time. So it's a very governed deterministic way of ramping up the software velocity inside of your organization. That's pretty precise. So, hey, so you move into the CRO job, right? And you had to hit the number in the responsibility you had before. Now you have to hit the number, but you basically own the revenue for the company, right? Has that changed your perspective on things once you stepped into the role? Totally. I mean, actually, I had kind of an interesting journey. You know, I started at Harness seven and a half years ago.

3:43So we were sub a million dollars of ARR. I was the first leader under Jason Eubanks, who was the CRO and leading the East. And, you know, when you're early, you're just trying to find product market fit and do some deals. And fortunately, we were able to accomplish that. And I'd say of the first five years, it was build the teams and put the revenue together and the goal of building a$100 million company. You know, back then, one to 105 years was not nothing to sneeze at. And we were able to accomplish that. And then Carlos came and joined the organization, kind of rewired the way I thought about how you build go-to-market.

4:15Because at that point, I was mostly focused on the revenue. Like, how do we get pipeline created? How do we go then execute against that pipeline to deliver the top line goal? And Carlos kind of rewired me in thinking about like, how do you build the execution machine that delivers the revenue? And so, you know, today, I think a lot about recruiting. How do we find the most elite talent in the world and bring it into our business? How do we then develop and enable those people so that they feel that they're becoming a better version of themselves in their time and harness? How do we run a really crisp and qualified sales process?

4:47So we're in command and control of the outcomes. And then how do we forecast a business that we can continue to grow the company at the pace we want and hopefully take it to an IPO? And so I spent a lot of my time today, especially in this role now, thinking about how are we elite at those specific functions. And then the revenue is kind of an output of that. And I still love deals. If you ask me to, my favorite thing, it's probably being out with the team in front of the customer pitching. but most of my time today is spent on actually building and harmonizing that machine. And which one? So you talked about recruiting, developing, training and developing, sales process, forecasting.

5:25Where are you finding that you're spending a lot of your time now as CRO? Definitely today we spend a lot of time on recruiting and developing with people because we're growing so quickly that the business needs heads fast to continue that pace of growth. And so I spend probably 40 % of my time recruiting today. One, because we're growing fast. Two, because we have a high bar for what we consider excellence. And so we want to, and I want to maintain the standards across the business. So I invest a lot of my time in making sure that the people that we're bringing in fit the caliber of the folks we want.

5:56And then after that, it's, you know, the development enablement. Are we running crisp bootcamps? Do we run good enablement in between at the second line level in each region and those things? And then, of course, we're doing medic reviews or metric reviews, as we call them now, to go into the deals and inspect. Are we on track? Do we, do we have what we need to go win here? So, but I rotate and then probably 20 % of my time is actually customer facing these days and selling. Yeah. Well, I know that Carlos has always been a really good recruiter and always pretty nails down the recruiting process.

6:27So I'm sure you learned a lot from him there. Talk a little bit about training and development. How do you decide like what you're going to train and develop your team on? Well, I think there's always like multiple buckets. The first one is like, at the corporate, all of go-to-market, what are we training on, right? There could be new products that are coming out or new themes in the industry that you're training around. And then we call our second lines here the chief enablement officers for their region. And they're developing custom training that's specific to the needs of their team. Now they might work with our enablement teams and folks to build that content, or they might bring in outside speakers or someone inside the business, but they need to have the pulse of their region and be providing customized training that hits the needs for where their people are.

7:08And sometimes that's a mix. You might have folks that are ramped in that business that are senior, and they need something different than an onboarding rep that's ramping in. And so we expect our second lines to customize and deliver that content in that region. Yeah, well, that makes sense. A lot of companies don't do that. That makes a lot of sense, especially even from a marketing standpoint, to start to regionalize some of the marketing because of the different needs and different idiosyncrasies of a market. Talk a little bit about sales process. And we're bouncing around here, but what do you think for what Harness does?

7:40What's the most critical step in the sales process? We have developed a Duplo version of the sales process, which is that you guys are familiar with Duplo? No. What is it? How do you spell it? D-U-P-L-O. If anybody listening to this that has young kids will know what I'm talking about. But Duplo, like you have Legos, right? small tiny pieces you put together. Duplo was a version of that where they made that was much bigger so kids could put it in their mouth and swallow it. So we have the Duplo sales process, which is the following, find a champion and then do everything else. And so when we teach sales process, it's like, can you find a champion and develop them?

8:16And then everything else from there, of course, followed shortly, right? Is there pain that the company cares about they want to solve? Can you get to an economic buyer? But it all starts with a champion with us. And so we spend a lot of time around how do you identify them? How do you then go build one into a champion? How do you test them along the way to find out are they made of the metal that you think they are during the sales process? Yeah, well, I know when you were at Oracle, you closed some big deals, I'm sure you closed big deals at Harness. Talk a little bit about some of the critical factors besides a champion.

8:50So you got a champion or you're looking for a champion. What are some of the critical factors that you've found when you're navigating, let's say, a multimillion dollar, multi-threaded deal because there's multiple stakeholders? Yeah. What have you found? Yeah, I think a big deal is a component of a couple of things. One, a big problem. Like, you know, one of the things that Carlos and I've been talking about actually quite a bit lately is what's the ingredients for a big deal? Because there's a trap I see sometimes today with sellers where they get excited. They go find some pain. They get very excited about the pain.

9:23They And they start to pitch the idea of a large deal inside of these companies. And I'm really a believer that you end up into a large deal. You know, you don't like you probably never walked into a shop and said, you know, I have a five-ender idea and they just struck you in order for them. Like it's like you walk in there, you find pain that's important to the company. You start to build a champion around that. You get to an economic buyer. You build a business case that makes sense. And when the company and the champion starts to develop confidence around that, they start to pull you into a large deal.

9:51It's not the other way around. And so what I see today is we need to be very methodical about how we're going to build these things. And when the ingredients come together for a big deal, the customer is going to be pulling on you because they've got confidence and now they want economies of scale. How do I get this technology at a price that I want? Because I've got to buy a lot of it over a period of time. And so that's how you end up in a large deal. And I think we're very happy with a land and expand model. Let's go in. Let's land where it makes sense. Let's delight a customer and make sure they're very successful.

10:19Once we've done that, we'll end up in the right transaction from there. I think you're right. I mean, the big deals that I've been involved in over time have been where you feel like you're inquiring, inquiring, discovering, quantifying. You feel like you may not be going anywhere. You feel like you're getting a champion and stuff. And then all of a sudden you get a champion and now they're getting engaged. And all of a sudden there is this, to your point, there's this dynamic shift where all of a sudden now they're pulling on you, right? They can see that this is really going to benefit them for a personal win and benefit the company in a big way.

10:52And now they want to be part of your team, right? And that is the definition of a champion. But there is this dynamic shift, and you can feel it. You can sense it. So I think what I'm seeing sometimes as a trap is people, you'll go in there, you'll build a champion for a deal, and then the excitement starts to build in the organization around what's possible, and you start to head towards a larger deal, but you don't rethink about your champion during that process. And the champion you built was for a$500 ,000 deal, but now you're trying to do a$5 million deal. And you haven't got up to the new champion that needs to be the person that's going to champion the size of transaction you want to do now.

11:27Has that changed during the process? And you get stuck now at the end where it's hard to nail down the decision criteria and the process and how's the paper going to work and all the things involved because you don't have the right person with the right influence to answer those questions. Sorry, when you talked about land and expand, Again, you're talking about champions in the sales process. I'm having a lot of conversations lately with CROs that are struggling a little bit with the mechanics of the qualification of the land to then expand. And so there's a lot of proof of value. I'm going to ask you in your business, do you have proof of value, proof of concept?

12:09how does that play in how does it qualify early and what's kind of significant about your process that you think gives you guys an advantage yeah we have a we sell a very technical platform and that's made up of today 14 different products and so it's a it's a big lift technically and to the point john was just making about multiple champions we must go win usually two to three champions to do a deal because there's some kind of platform team that has built the tooling that we sell. There's a developer engineering team that's consuming that tooling. And then there's a security team that's got standards and governance and policies they want followed.

12:45And if you don't win a champion, or at least technical mindshare in all of those places, you will get stuck in your deal for sure. And so even when we land, like, you know, we're going to come in with 250 or 500, we still have to cover up on all those bases to get ourselves in a place where we want to go do a POV. You have to set it up first, like, do you have to demonstrate it inside their working environment. So you have those three parts of the platform. Talk about the nuances that with multiple champions, multiple technologies, is it multiple POVs? Is it one POV with a collaborative showing of all three of those?

13:21I can't say we've never done more than one POV, but we pretty much got to the place now where we can do it on one because we do more qualification ahead of it. But I think in the early stages of the business, we always POV because it was the only way to get mind sharing the organization to get them confident. You know, fast forward the clock, we're now the magic quadrant leader for this space. We've got a thousand customers, champions that have moved from one organization to the other. And so I'd say probably 30, 40 % of the time, it's some kind of workshop where they show the features and functions, but it's not actually installed in their environment.

13:51But still like 60 % of the time, we're going in and installing the technology in there to prove that it works in their environment and that can solve the complex problem they're trying to solve. And so we're looking for a few things. One is, do we have champion, at least one, but multiple champions ideally? And then do we have mindshare in those other places I talked about? Two, do we feel good about the criteria for the POV we're going to go run? And do we have confidence that we have aligned with the EB, that if that criteria changed, we'd have a conversation about it? And then do we know the competition we're going up against?

14:20We want to know who we're competing against. Oftentimes for us, it can be do nothing. They don't necessarily have to change. We didn't invent software delivery. They do that today. So that's always a factor in the conversation. And so we're very methodical in our POV structure and process. And I think Carlos has done a lot to help us there. But we don't, we don't, there's very few times now where we go into a POV that's not well-structured, well-qualified. And the only reason we shouldn't get a deal coming out of that, because our win rate's very high technically is M &A or someone, or chart changes in a way we couldn't predict.

14:51So otherwise we're pretty solid coming out of it. On the POV, you talked about certain criteria. I'm assuming that there's like a threshold of highly differentiated criteria that we would want to have a part of the POV. You're growing very rapidly now. Is there a process where people say, go, no, go inside your company of, yes, we'll do a POV. No, we won't. Whereby seven years ago, it was like, hey, just get in there and show them some stuff. Well, how has that grown? And what are some of the guidelines around it? because I think this is what a lot of CROs are struggling with today is the more customers they get, the more mature they get, the tightening down of what we've learned about how to make a successful POV.

15:40Tell us kind of what you've learned and how that's shown up in the sales process. Yeah, I mean, we are very buttoned up in the process of how we define do we have a champion, how we test them, not just the rep in the first line, but somebody above that. do we feel great about the criteria for the POV? Do we feel confident that we're highly differentiated if we go into the cycle? We're very structured on that. And then the SE leader globally signs off on POVs as well as me. So if we don't put our hands in the middle and say we want to do it, then we're not going to go do it. Awesome. So every POV has your sign off on it.

16:11Correct. That's legit. Yeah. I think the one thing, John, that I would say, though, is like the biggest challenge I see is total commitment to the process. Because the thing that you'll find is like, you know, So when you're close to the closer you are to the deal, the more emotional the moment is, you know, and you want to convince yourself, this is a unique situation. I've got this highly differentiated champion or we don't need the EB in this one because of this reason or it's so competitive and everyone's going so fast. If we try to slow it down, we're going to lose. And there's always a reason why you shouldn't follow the process, I find.

16:43And so what I see is the biggest thing is you have radical commitment across the company to like, we're going to follow this process because we know it's the best way to win. And if we decide we want to deviate for some reason, then, man, Carlos and I are going to make that call. We're not going to hand that down the line. We're going to call the shot if that's the right thing to do for the company. What about when the customer wants to deviate? How many times do you lose when you deviate? Well, I can think of one time we did in the last two years, and we got a deal, but not the deal we wanted.

17:09So I wouldn't say it was a wildly successful strategy on that one. But that was a particularly unique company that we felt a little bit handcuffed. How do you get the customer to participate in the POV? meaning it's not just a stop me when you see something you like type presentation. It is purposeful. The customer has got some type of commitment in it. Do you charge for POVs? Like, how do you get the customer to participate in the process? No, we don't charge for POVs today. We do that out of our pocket as long as it fits our process. But I think the biggest way to get buy-in is you have to get in alignment with the champion or building or champions that you both want the same thing at the end of the day.

17:48And because we've done this a thousand times now with a thousand customers, that I have a unique set of experiences around how you get to the end outcome that would benefit that champion. And champions don't buy software very often. You know, most people that we would call a champion, they might buy software once a year. They're not doing this all the time. And so they don't know all the ins and outs of how you get from point A to point B and be successful. But if you know what their personal win is and what they get out of this, if they're successful and you can come alongside them and you demonstrate your intent, like, hey, John, I'm here to make you successful.

18:20It's the most important thing to me. And I've done this a bunch of times and I've got some experience. Could I show you what I've seen be really successful and how that would work? Oh, sure. Okay. Here's the, one of the things we're going to have to do. We're going to have to prove the technology, right? Because your boss's boss is going to want to know, does it work in your environment, right? Okay. Let me show you some pitfalls I've seen. Like as an example, if you're in the central team and you want to do a POV, but I don't go include end users in that POV, as soon as you say this is success, they're going to say, well, we never tested it.

18:46We didn't get to see it. We don't want to do it until we get that opportunity. Now you're in POV number two and we wasted another 60 days. So it's like, let's be structured methodical. And so a lot of success, just showing them you have experience, showing them how this benefits them. If you can walk through this process together, and it's not about us like jamming some process on them so that we can get a closed one deal. It's about helping them be successful and get to the outcome they're looking for. And we just have a lot of experience on how that works. Do they have like verifiable outcomes that they have to do?

19:17The reason why I'm asking these questions is I get this question a lot from CROs that will ask me, you know, how do we get the customer to participate in the process where there is a revelation of, you know, how hard it was to solve that or how hard it was to demonstrate that. So they have to be involved in it. And then also the commitment aspect of champions and economic buyers to say, if we do this, we're done. We're going to buy this. So how do you build those two things in? But I think ideally your POV is tied to a business case. You've done some straw man. It doesn't have to be fully baked, but you've got some straw man business case that says, this is the value to the organization of solving this problem.

20:08And the things I'm going to prove in the POV tie out to that business case. And with some kind of metric, you know, it used to take this long to do it. Now it takes this long. And I demonstrated this capability is how you close that gap. And I showed it to you, the POV. So that's the first most important thing is creating that linkage. And then secondly, is going to see the economic buyer before you do the POV. Like, is this the problem they care about? Is this the criteria they'd want to see? Do they have faith in this straw man business case? And it's not fully baked. Are we directionally accurate here?

20:36Is this the person that you're going to be looking to, to say, yes, this solves my problem? Or is there other people that should be involved? If something changes, can I come back to you? That is the most important part of the whole process, is getting alignment before you actually go do the POV. I love that concept. why is it so hard to get in place with customers, with sales teams? I mean, you could have that where you're saying, okay, we're not signing off unless an economic buyer has said that if you guys do this, this, and this, then we'll go ahead and execute. Why is that so hard to get in place?

21:07I know what I'm being facetious. I know it's not easy, but why is it so hard? It's super hard. Super hard. I think it's hard. My experience has been when a champion doesn't want to take you to the EB, it's always down to confidence. They lack confidence. If you were 100 % sure if you put this person in front of your boss, your boss is going to think you were a genius, you'd do it every time. Yes. That's human nature. So if I don't want to put you in front of my boss, I'm telling you there's something I'm not confident about that you need to find out about and then solve for. That's the brass tacks for me.

21:38But doesn't that all come down to even connecting the dots to the required capabilities or the decision criteria? It all comes down to your rep doing a really good job in the discovery process, right? If they don't do a good job in the discovery process, you can't connect the dots. You can't lock down the criteria. The customer doesn't know what problems I'm really solving. Why am I solving them? How much pain I'm in? They don't know any of that if you don't do a great job in discovery. Isn't that true? That's it. Yes. And you run a great sales process. The champion will be wanting to show the executives in their business what they've been working.

22:14it's when it's been a little wonky or you skipped a step or you didn't quite tie out on that thing and then the champion's like feeling a little squirrely. Now they're like, let me just do this POV. Then I'll know if it works and then I'll feel confident to go tell somebody about it. And so, you know, you got to solve for that problem. How do you ensure that you're doing such a great job on this, Sam? Thank you. I think this is really valuable. How do you ensure that a technical validation gets connected to a business outcome. Because one of the things that I see is a lot of POVs create technical awareness and understanding, but lack connection to business outcome.

22:57Therefore, struggle with how to connect the EB to it, if that makes sense. How do you deal with that situation? There's only one way I know how to solve it. You got to get to the true economic buyer and you have to ask that question. If I could show you this would solve that problem. And if I know, you know, is that something you want to make an investment in? So the people that we're selling to, they have no problem signing up for the validating the technical connection where they seem to have the struggle is taking that technical validation and connecting it to a business outcome. Because many times they're not thinking that way.

23:36They're thinking about developing software. Does that make sense? It does make sense. And I think what you're describing for me is probably a technical coach or a technical champion. You're not talking about a true champion because a true champion has influence and access across the organization. They understand what's happening in that business. Now, they might not be able to tie it all the way out to NPS scores and increased revenue or something like that. But they can tie it out to, hey, this is a problem that my EB said they want solved. And I know this, if I can prove it, would solve it. And that's enough, usually, business connection to get a deal done.

24:07But if they can't articulate that or they're not in the room where those problems are being discussed, you've probably got someone that likes your technology, someone you want to spend time with because they're going to give you information, but you probably need to go look for a real champion. Well said. It also ties into, Johnny, I always think that it ties into how the economic buyer is measured. Whatever level that EB is at, how are they measured? And then I want to try to tie it to one of their job measures. Yes. I would say, you know, in the, and I think it's getting worse right now than better.

24:40In the majority of the companies that I interact with, it's amazing to me, if I ask the question, no matter who I'm talking to inside of the selling company, what's the biggest business issue facing this customer? that I don't get a technical issue that comes back, which is great because you can't have this discussion. We're selling technical solutions. You can't have this discussion without having technical superiority and technical understanding. And it's amazing to me how our own sellers, and if our own sellers aren't doing it, then therefore they're not communicating it, can't answer that question.

25:20What's the biggest, try it, listeners at home. So on every deal that you have, just start off with what's the biggest business issue and see how many times you have to go back and reframe that question. You'll get great technical answers, but they'll have to continue to go to a business issue. I find that it's Egypt old. And I think it's getting worse too because of all of AI, how we're doing it technically. There's so much focus. Look, your name as a company, Harness, is almost like Kleenex because people say Harness. No, they say Harness, but there's hard. Like when people say Harness, are they always talking about your company?

26:05It's kind of become, you with me? Yeah, totally. Not yet. I wish they were, but not yet. We're on our way. You know, what's fun too about that is like, you're right, it's probably worse than ever. And it's also probably easier than ever to solve. Like if you go prompt any LLM and tell me what's the biggest business problems at this company that I'm about to go sell to. And then how does my technology tie to actually solving that business problem? Like it'll do most of the work for you. 100%. I agree. That's the wild part. Like it's actually never been easier to solve that problem and have an understanding that you can go like at least a hypothesis.

26:35You can go test with a potential champion and say, hey, does this land? I agree with you a thousand percent. I just want everybody listening. You can do exactly what Sam just said. And then ask yourself, if you're leading these businesses, why are those discussions not being take place? Because the LLMs will identify it. But why do we struggle to connect it with our champions inside of accounts? And I believe it happens, you know, it's with the confidence and conviction that's especially in technical solutions. I want to be ultimately sure that it does everything technically that I need it to do before I go have any business conversations with anybody else in the company.

27:15I find that it's just like, that's Egypt old. And I think it's worse now because I see more and more deals, more and more instances where deals are, the time it takes to get a deal is actually getting longer and longer. I don't know what you're seeing there, Sam, but the propensity in the industry is they're getting longer. I think we're seeing, we're not seeing a material uptick in the length of it, but what we're seeing is priorities shifting really fast. What you think you knew about that company, even three weeks ago, four weeks ago, could be materially different today. I was on the phone this morning with a very large financial institution.

27:54We were talking about the funding for our project, and they're in the middle of a cost overrun in a data center that was unexpected to the tune of$60 million. And the hardware providers are picking up all that spend, but there's no money for software projects right now in that environment. And that's shifted in the last 10 days. Wow. So it's like we're living in the most exciting time in technology ever, and it's wonderful to be a part of it, but it's also the fastest moving. and any assumption that you have about the business or your deal needs to be tested like very frequently because there's a lot of shifting uh shifting ground right now which means you have to have access to the right champions because the only way you're going to learn that stuff is either early or late there's no between there you're either totally yeah i love and oftentimes they're i mean you know they're second to find out the eb is more than no about what's happening at the top of the pyramid and how fast is this stuff moving and then it's getting down to the champions then down to the technical people.

28:48So like, ideally, you've got some cadence with the EB that's telling you, is something shifting that I need to be aware of? So good, so good. And I wanna go back to this discovery, Sam, because a lot of reps have told Johnny and I that one of the most difficult things for them is they can find the pain. They have a very difficult time for some reason quantifying the pain. Why do you think that is? And what's your experience with your reps quantifying the pain? I think quantifying the pain is usually, okay, there's a couple challenges there. One is you think you found pain because you're trained to find that pain, but the company doesn't care about it or the champion doesn't care about it.

29:27I see that all the time. It's like I go to bootcamp and enablement. I work for this one company. There's this one thing. I find that pain statement. I'm looking around trying to find it. And as soon as I think you have a problem that I lock in on, but you don't think you have the problem. That's the first breakage. so it still could be a problem because it has to be discussed or maybe it really isn't a problem right it's a problem it's just not in their top 50 they care about right so you're gonna wait three years before it becomes top of the stack right um that's the first thing then quantifying it usually after that is like about asking the right questions it's like okay if you find pain and it's important to them then i'm down to what's my question asking how do i get down to like what are the metrics that they care about that relate to that pain and if i then once you get to metrics then quantification is not that difficult.

30:10It's usually getting the metrics that they actually measure that pain by. That's the hard part. I actually think a lot of times it's because they think they have a champion, but they haven't built any trust with the champion. And it could be a champion, but they haven't built any trust yet. And they just start to timer the poor guy with questions on quantification. A person's like, why would I want to tell you that? You know, I don't trust you yet. So then they think, well, I can't, it's really hard for me to quantify. No, you haven't built trust yet. So then I can get that type of information, which is like some of the most critical information to really build, as you stated earlier, a business case or a cost justification.

30:51You have to have that. Totally. You're right. You got to make champion deposits to get into a give-get situation. Early on, champion deposits are usually education and awareness. that person's probably trying to solve a problem and they're out in the market trying to get educated and learn about what's the best way to do that for their company and so early stages you know make giving them education awareness is a way to build some measure of trust that you can then get into a good situation where they're getting things that they need and you're starting to get things that you need to understand is there something here worth solving yeah now with this we're kind of bumping up against you know medic and med pic and you know this is a machine that's as old as dirt.

31:34It's amazing. I say it's old as dirt. I mean, it's Egypt old. Those things are priceless for me. And when I say it this way, what I mean is the process has been around a long time. The way you maneuver and the agility that you need inside of qualification today looks nothing like it's looked in the past 30 years in selling. And what I mean by that, like you talked about, everything is related to speed and the expectation of the information that you have. Could you give me your thoughts on that a little bit? You've been a student of the game with MedPIC for several years, and you've used it very, very successfully.

32:23Where we are today, what are some of the pressure points that are created in MedPick with the expectation of the customer, with AI, with just the state of enterprise selling today? Yeah, I think the first comment I'd make is if you do MedPick well in an organization, it should be very, very much embraced by the sales team. So MedPick is an incredible tool for qualifying. Where do I stand in a deal? And how do I get to the place I want to get? End of the day, we want to win, of course. We want to close deals. The reps want to make money. And MedPick is a beautiful thing to help you understand what are the gaps.

33:03And when, you know, I always feel very strongly like the rep is the most emotional around the deal. The first line is the next closest person, probably the SE. And as you get layers away, the emotion disappears. And you start to be able to think more logically about what's happening in this actual opportunity. So MedPick is a great way. So when we do a MedPick review, like I would tell a leader, if that rep didn't leave that MedPick review, really excited that they did it, something didn't go right. Because you should be helping them uncover the gaps in that opportunity so they can go close it so they have a better chance of winning.

33:33And every rep wants to do that. So that's first, like, how do you think about it and how do you implement it in your shop is super important. And then I think, you know, you got to be hyper aware today that things are changing quickly. And so examples for us right now are, There's now AI committees are being stood up. So if your tool has any kind of AI in it and your champion thinks they know a buying process from six months ago, it's different because there's now an AI committee that wants to review all AI investments. There's probably an AI addendum. It's like, hey, I'm forecasting this deal.

34:02It's in commit. And I've already got an MSA with the customer. And then as soon as you get to purchasing and you only got two weeks left in the quarter, and they're like, well, hang on. We don't have an AI addendum on this MSA. So we got to send you to legal. That's a six-week process. You just slipped your deal. so like there's a lot of things happening in these processes right now and so we need to be uh you know what we're we're having success with a doing that for conuse to talk about it and then b we're talking a lot in the ecosystem around other software providers like what are they seeing in these shops when they're interfacing with our new steps being introduced does the champion we think we know about actually have they done it before somewhere else do they have a track record here is this eb you know usually consistent with their word will they honor what they say that kind of thing like we're having to do a lot of triangulation to try to find pitfalls and make sure we don't step in them and even that it's still very difficult community sure you can call other students all their software companies are non-competitive that you know and we can call leaders in other companies and go hey i hear you're running an opportunity here so are we what do you know what do we know what great idea love it yeah it's one of the best ways to get real-time information about what's playing out because they might be four weeks ahead of you in a buying process and they know things that you don't know or vice versa.

35:11Now, in the old days, we would say that, yes, I'd smile at you and say, yeah, but how are you not competition for access to funding? You don't compete with them, but there's only so many funds available. Yeah, that's fair. I think my experience right now is the buying environment is so difficult that you're looking for any information you can get to know where you stand and what the pitfalls are. That's more important than will they steal my funding? Because there's funding out there for these projects. If you're tied to the right things, you're going to get money. The other thing I'd like to highlight that you said, Sam, so good, brother.

35:48This is so good. The other thing that you said is if they don't come out of it excited, then something didn't go right. I love what you said on that because I'd like to encourage people to go to these deal reviews and you do MedPIC reviews or what have you. You should expect gaps. Because that's where the golden nuggets are. And so I think that people go to these MedPIC reviews and they're like, I can't show any chinks in the armor. Like, I got to try to convince my company that I have a champion. Too much time is wasted in these reviews. That's it. Yeah. You agree? Yeah. Oh, yeah. I mean, if it's a compliance effort, then you're just trying to prove that you already got what that person wants so that you can get off the phone as fast as possible.

36:33Right. If it's an exercise on until we're in close one, we should assume there's something we don't know. and if we learn it, we'd have a better chance of winning and let's find any gaps we can, then it's a hunt. Now it's a hunt to figure out like what's going, what could go wrong and how do we get ahead of it or what's not going right and how do we fix it? And then the other important thing is like, it's very important that you don't leave all the work to just the AE. Like when I do a med pick review, when we come out of there with a strategy and what we want to do next, I'll always have at least one action item in my plate that I'm going to go do for that rep.

37:02Might be call a board member or reach out to an executive or look at the pricing or unpack the business case or something. But I don't want reps to ever leave that thing going, I got to do all this work by myself. And I'm like, it's like, no, let's divvy up the work here to the appropriate person. Let's go execute on it together. And let's circle back in two weeks and find out where we stand. I love that. I heard one great leader say one time that it's not a crime not to know. When doing a MedPIC review, the leader said, it's not a crime not to know, but it's a crime punishable by death not to be doing anything about it.

37:32Yeah, which was which was just I mean, it kind of sets the stage for stop trying to defend. And if there's value in the gap, let's go close the gap. Yes. I think that's just a really good mindset for listeners to, you know, leaders to like you said, don't turn it into a compliance because that's it's it's over. You lose so much. And then people that are experiencing it with their leaders expect to get great value out of the discovery process of MedPick. If it becomes compliance in a shop, imagine this. It becomes compliance. A rep follows your process. Then does it win the deal? What does it say about your process?

38:15The process isn't worth following. Like you lost knowledge. You did not get what you wanted. Then you lose the mindset of the organization around that process. So it's like the process has to work fairly well. They use MedPick as like a checklist. They check, check, check. But they don't really use it as like a true deal qualification weapon. They don't use it to say, as we talked about, like, here's what I'm really missing. Here's where I am in the deal. Here's the information I have. Here's what I don't have. Here's who I have to go talk to next. They don't use it as a tool to understand, like, here's my roadmap on how I can win this deal.

38:51They just think it's a checklist. Oh, yeah, check. Yeah, I have a champion. when you really don't. Yeah. I filled out the field in Salesforce. I'm good. Yeah, you got it. And it's the story behind the triangulation. Like, I love what you guys are saying here. Because for me, any one answer, any one understanding in MedPIC is not the answer for the deal. People ask me all the time. They'll say, hey, what's the most component? What's the most important component of MedPIC? And I've refused to answer that question for 30 years or however long it's been around. Not because I don't think it's a good question, but it's totally irrelevant to any unique scenario.

39:35What I mean by that is like, I can look at and triangulate the identification of pain. And if the identification of pain, I ask myself if that, is it big enough? And if somebody says it's big enough, and then I look at the economic buyer, And I can triangulate the identification of pain that that buyer is going to care about that level of pain. I can look at competition and I can look at differentiated decision criteria. It's like it's how it all works together as the story of the opportunity. And I can't say that enough for people listening out here. It's not a check in the freaking box. Totally.

40:16Which a lot of companies use it for. Because if you ask them to walk me through MedPIC and then how you utilize it, they fall apart. Well, look at what all the AI companies are doing now, Johnny, trying to automate all this. They're just trying to automate whatever is in Salesforce to give you a faster answer of whatever slop you have in Salesforce. Just because it's in Salesforce doesn't mean that it's qualified, right? 100%. It's like if you stand up in front of me and say, I got a$2 million deal, and I say, you have a champion? You say, yeah, well, what am I going to do now? I ask you 20 questions to figure out if you really have a champion.

40:50And just because it's in Salesforce doesn't mean it's qualified. You've just articulated to me the exact definition of AI slop. That's what AI slop means to me in the sales world. That's what it means. One of the comments I'd make too about just MedPick in general or MedPick reviews, I think there's things leading up to that that are, if you get right, make that much better. Well, I'll give you an example. Like in our recruiting profile, we really have a strong bias for coachability. I think many people would say that we screen hard for it. Okay. And then I've, I've built an environment with the rest of the team around radical candor, speak openly in the environment about what's going well, what's not going well.

41:32And we find problems. We go aggressively running them. Okay. If I, if I hire people who are coachable and I build an environment where we should talk openly about what's going on. And then I get to a med picker view. The expectation is not that everything's rosy and there are no problems here. It's like, no, no, we speak openly in my culture and you want to be great. So let's start to unpack this thing and figure out how we can win. That is like, those leading indicators coming up to that moment, if you've got the right people, it's like, to my point earlier, it's like, it's a great exercise. They walk away feeling awesome.

42:00They got five things to go work on. They're going to help them move that deal forward when they walked into the deal, kind of feeling stuck. Aren't sure where to go next. Like, it's a really great opportunity. But if it's like, hey, my coachability is low and I just want you to think everything's great and I come to this process and tell you everything's great so I can get out the other side of it. And then I go struggle through my deal. It's like, that didn't work out very well for anybody. Talk to me about how that shows up in recruiting. Because what you just said, I'm sure everybody on this podcast is listening to it and say, I agree with that 100%.

42:29And yeah, you'll see people get into companies that don't have to prove that they can do what you just said. Yeah, yeah. Are you talking about specifically, like how do I find out if someone's coachable? If I'm recruiting? Coachable and - How do you? Coachable and they have the adaptability and the agility inside of qualification. How do you do that? Yeah, yeah, for sure, for sure. Well, I think the first thing is you look at their background. A person's trajectory over time is one of the greatest predictors of who they are as a person, not the story they tell you on the interview. So, you know, you probably won't be surprised.

43:04We teach our leaders go bottom up on the resume and LinkedIn from the very beginning to where they are today. Then you're looking for things along the way. Yeah. Like, you know, we tend to go towards athletes because athletes got coached, but there's all kinds of things you can coach. You can be part of a debate team where you got coached. You can be in a band where you got coached. Did you, somewhere along your journey, did you spend time around a team and did someone give you direction and did you follow it? Secondly, I love to ask, what's their favorite thing about a leader that they worked with?

43:34You know, the answers to that question are super telling. You'll get people that are like, oh my gosh, man, I worked for Johnny Cap and man, the guy was incredible. He would just told me this, taught me that, it made me better. And four years later, I was like a different person. Or it's like, I liked working for Sally because she just got all the problems out of my way and just let me sell. It's like, well, that's not someone like that person doesn't clearly value the environment of education and development. You know, you can ask them what kind of books they like to read, what kind of podcasts they like to listen to.

44:02What's the last time they got feedback and how did they handle it? You know, what's the biggest thing they've learned in the last year about their professional career, their expertise? You know, there's all kinds of things you can ask to find out who's the, what's the person you're dealing with and do they value coaching? And then oftentimes, like in my environment that we've created here with Carlos and Tina is like, they know that we've, we value this. So they'll come to the interview like hungry. Like I want to be in your business because I want to be developed. And I hear that's what you do.

44:29You'd probably deal with someone that's coachable, right? That's their number one driver. It's not tell them about the technology, show me the compensation plan. You know, did someone make a million dollars? Like, can I be great? And will you show me how to do it? and another one I love this I you know these seem so simple but I hope people are writing these down because they're they're so powerful another one I like is you know what is the deal you're most proud of yeah and then actually this should be an interview actually walk me through how you qualified it and how they talk about how they qualified that deal is going to tell you everything about how they're going to, you know, do it inside of your organization.

45:09Yeah. You want to hear another great one? Yeah, please. Tell me about a deal you lost and what did you learn from it? What'd you learn from it? Yeah. Well, my SE screwed up the POV and then we, you know, it's like, okay. Or it's like, Hey, I, you know what? I found out I thought I had a champion and then I got there. Yeah. Yeah. But it was like, Hey, I thought I had a champion, but then I found out I didn't. And you know, we lost the deal. It's like, okay, that person took ownership. Not a fun experience. They probably won't do it again, but they took ownership of that moment and learned something from it.

45:37Can you imagine recruiting a person today and interviewing a person today and not asking them in a way to prove for evidence that they understand actually what MedPIC is and how it actually manifests itself in an opportunity? But yet, if you're listening to this podcast, ask yourself, did you ask that question on the last interview that you did? And if you didn't, hey, it's not a crime not to do it, but you're going to not get a great situation going forward if you hire those people. I don't know why they don't do it. Assumption. They say, oh, yeah, we work. We got force management training. We got that force management training.

46:17I do the MedPick playbook, and they tell you about all the great leaders. No problem. Just give me an example of how it manifests on your favorite deal and on a deal that was an area of opportunity for you. get right to the point. So true. It's a lot of, we make, you know, interviewing is so interesting. I've gotten a lot better at it. I probably interview 400 people a year right now. So I've honed it a lot over the last couple of years. I would say I was not a great interviewer a few years ago. What did you change? What did you change? It's separating the story from the facts. Yeah. That's the biggest thing.

46:52And then learning a pattern of asking the right questions at the right time in the interview to get what you're trying to suss out. And then one that's a little bit uncomfortable, but I've had to get better at it, is interrupting people. I prepare them for it now because time is constrained and I need to figure out what I need to know to make a decision. And so I will, like, oftentimes they're in the middle of their story that's, they practiced it, they're trying to win a job, right? They know what they want to say. And so kind of breaking the flow and getting in the questions you need to get in to make a decision is super important.

47:22But I think a lot of people are just sitting there listening and trying to parse through the kernels to see if they got what they wanted versus like kind of directing the dialogue and voting that discussion to make sure they're bottoming it out. Really qualifying is what you do. Exactly. Exactly. And what about the war on talent? Because you're in this tech stack. Yeah. And the war on talent. Johnny and I were just talking earlier today about certain companies that are sucking the life out of the industry with all their resources. and they're sucking the talent out. They're offering huge amounts of money with this world talent.

47:56How is interviewing changing for you as it relates to how much you're qualifying an individual and how much you're actually developing a value proposition to draw them into your company? Has anything changed? What's the situation today? I would not say on that front, nothing changed. We're always selling until they're buying. Once they're buying, we qualify them. So we're in sell mode until we have a candidate that's leaning into what we're doing. And then we want to qualify that we're getting what we want out of it. What has happened today though? Yeah, it is a talent war. Like we had one a few years ago during Zerp when every VC was flush with cash and wanted to expand their sales team.

48:31This is different because it's OTEs and guaranteed compensation and things that we haven't seen in the industry before. And so, and based on companies with like crazy product market fit out of the gate with up to the right revenue curve. So that's an interesting situation we find ourselves in. I think that's when it's really important to have built something that gives them more than just money. I'm big on, if you're in sales and you're good at your job, you'll always make money. So is that the number one determining factor for how you're going to pick your career path going forward? For me, it's not.

49:12I'm motivated by things that are outside of money, although I do like to make it and I don't have enough of it yet. But the things that really drive me are could I build a durable company? Something that really exciting to me. Like, could I build something that would stand the test of time and that someday when we put our bag away, people would talk about the thing we built and they would do it with like, the way people talk about you guys. Could they do it with like a measure of respect? Like, wow, that was incredible. They accomplished that business is exceptional. Could we build an exceptional team and develop them so that in our industry, we'd be known for having the most elite go-to-market team?

49:43Like that's something I aspire to try to accomplish. and people that are motivated by those kinds of things, they want money, but they want to do something great. Could we build a leadership tree? Could we take people and develop them over time to be exceptional leaders that are well-qualified to go run their own company someday and build their own go-to-market teams? And would they be able to do that in their shop? And would they value that in a way that would make them want to dedicate themselves to the career here? Small things like I talked about radical candor earlier, but that's a big deal.

50:10Like there's not many companies that talk openly with each other about what's going well what's not going well and give each other honest feedback. You're doing great here, John. I really value what you're doing there. Or, hey, I see a gap. I think we need to close it. Here's how I think we need to close it. Are you up for doing it together? And doing that consistently. And like that's, so we're trying to build an ecosystem where the most elite people in the world are attracted to that because they can make money and, and, and they get a bunch of things with it. At the next QBR, for people that are listening, I would prepare yourself, if you're leading a team, to be prepared to talk about why you're here.

50:51Because what I would do is I'd tell people in the beginning, I'd get one person up and I would say, why are you here? and the first person's going to do it and they're going to stumble on their story a little bit, but they're going to find their way. And then you tell the next person. And by the time the QBR is over, you have people understanding that if I'm not excited to be here, why would anybody else be? And in this war on talent right now, if you don't have your value proposition down and you can't honestly say like why are you here like what's so exciting about this place you're you're not going to compete with the because left to its own devices where are you going to go you're going to go to OTE you're going to go to equity opportunity if there's no other comparatives so I just highly highly recommend that I love that I mean you're right You nailed that.

51:53I shouldn't have had that in my answer. But knowing their why is what motivates them and what are they trying to accomplish is super important to keeping, not only attracting people to your business, but keeping them in the business. One of the things that I'm really passionate about is can we stop moving people every two years across companies? And can we actually stay somewhere and build something? Building things is very hard. It's very difficult to build a company. And you're moving around every two years or so as a seller. What are you really accomplishing? uh or what are they really learning to your point like because the money will come and go but the the skill set and the knowledge that you gain over time that's going to propel you the highest in in any organization but if you're just making money but you're skipping jobs every 18 months at 24 months you're probably not going anywhere always you know how how funny is it that we're having this conversation when we were growing up they were you know if you moved around a lot you were some type of an enigma and then it went to if you stayed someplace too long you were an enigma and now we're back to if you you know if you move around a lot you're an enigma and i think that i think that if you're offering the opportunity what do i what do i get to stay like what do i get to be a part of this because i can go make money anywhere that's And it's the company's responsibility.

53:22Yes. You know, I remember, Johnny, when you stood up at Blade Logic and you sat there and you talked about, you know, Johnny did an incredible job. He said, I'm going to paraphrase it, but the purpose of their organization was to be the most dominating and feared sales organization in enterprise sales. Do you remember that, Johnny? Yeah, sure. That's every meeting I would lead with that. I put that slide up first. Okay, now we can go. Everybody that was in that room remembers that day and says, like when John McMahon got up and said that we are building the most elite enterprise software company on the planet.

54:08And they did. and so somebody somebody coming and offering somebody twenty thousand dollars more of an OTE versus I was on the blade logic track that went to BMC that went to MongoDB or to app dynamic or I mean that is what you're selling it is and it's it's special when you get the ingredients right like the thing that I've learned and you guys know this very well is like for every great company, there's a trail of carcasses of ones that didn't make it. And the ingredients of great companies is actually pretty hard to find. And so when you get inside of a company where you've got a great founder, you've got a big market you're selling into, you've got differentiated technology, you've got a sales team that you're inspired by or leadership that you're inspired by, that ain't nothing.

54:54And that's hard to replicate. And so I feel excited to put my head down and build inside of a company like that because i just think the ingredients to do it somewhere else are are not that easy to find and if you get it wrong man you waste two three years of your life doing something you're bummed out about and then you try to find the next one you've seen it yeah you build those ingredients like you talked about sam which you guys have done a great job at at harness when somebody leaves a lot of people know the industry they're like why did he leave harness You know, the thing's grown like this.

55:30It's got a great culture, great leaders, great product, big market. And the person left like, why? Yeah, it's almost a red flag. You know, certain companies I was associated with, if somebody left the whole industry would be seeing it like what? Something didn't doesn't smell like right. Why would you leave that company at this stage? That's right. It's a great point. The last 10 minutes, I'd encourage people to go back and put it on replay. if you are getting your teeth kicked in by these frontier companies, or I don't want to bite some of these people that are throwing some money around out there, and you don't get value in the last 10 minutes that was just talked about, go back and listen again.

56:13Yeah. Here's another thought for you, and I'll be thoughtful about my wording here, but I'm selling a very technical, complex platform, middle and top down, based on value to about 10 different personas. This is very elite level selling that the folks at Harness are doing and they're doing a great job at it. If you go to one of the companies that you're probably describing that we don't have to say the names of, where the biggest job you have is like finding the email address of the person you send the order form to. You do that for a couple of years. It's like not going to the gym for a couple of years.

56:45Like you're atrophying muscles that you spent time building and developing. and while somebody else is out there lifting every day and running and staying in shape. And then fast forward the clock a couple of years when the next great round of jobs are up, who are they going to be wanting to hire? And there's tons of examples of that. We're going to have the knowledge and the skill set, right? Sorry, Johnny. Go ahead. No, I'm sorry, you guys. It's such a good point without mentioning any names. There's tons of examples of that when places have gone and gone through the roof or what have you. and the great product market fit, when you actually look at some of the people on the back end of that that start to go out into industries and interview, you really find gaps.

57:33And that was something that was surprising to me in my early days when back in the day at the Oracles or the, you know, just because they made it at one company and they killed it at one company did not mean that they were going to make it in the environment that we were in. And so what I started to see is exactly what you just started. It didn't make them bad people because, hey, if I'm on the end of that and I'm bailing the hay while the sun shines and I'm, you know, you just got to know that that's part of the value proposition. If you're leading, this is actually what we're doing and learning while we're here.

58:07Like this is why we're marketable. This is why we're the best. I think it's a great reminder that you guys landed on. Really good. Thank you. It's also early days of AI. You know, I think, you know, it's exciting. It's moving super fast. It's, like I said earlier, it's the most exciting time to be a part of, but it's also very early innings. You know, I was, I'm listening to podcasts and reading like you guys are to try to stay abreast of things that are happening. And it's like, you go back to the internet era. I mean, you used to pay to get onto the internet. You know, you pay ALL or one of these folks to get onto the internet and used to pay for operating systems.

58:40And, you know, then the internet was given away for free and it became ubiquitous. And then the value creation was actually in the application. you build on the internet, not the internet itself. And operating systems became free. And now it's about what you build around those things. And so it's like, it's very early days right now. And it's super exciting and I'm thrilled to be a part of it. But, you know, what we think is valuable is still undetermined right now. And there's going to be a bunch of great companies that come out of this AI area, but who they are is yet to be seen, I think. I think you guys are obviously...

59:10I don't even think we're in the early innings. I think we're in the top of the first. yeah, it feels that way. Sam, are you guys hiring? You talk about 40 % of what you're doing or 400 interviews or whatever. How do people get a hold of you, the company? What suggestions would you get there? We have a careers page, so they can go there. My reps and leaders are probably outbounding to them in the market, hopefully trying to find them. So find a leader in your market and ping them on LinkedIn. ping me, ping Carlos, anybody you want. We're happy to take an inbound from anyone and then get you connected to the right person.

59:49I mean, hell, we didn't even talk about Carlos, Johnny, but what a great draw for a company. He's in that league. I'm happy to talk about Carlos. Oh, my gosh. Well, that's what I mean. That's part of a value proposition. Absolutely. Carlos is a great leader. I mean, if you're committed to excellence and you want to be a leader of your craft, it's hard to find anyone that's better than he is, And he has shaped me in the last three years, unbelievably and grateful, grateful to join the business, but grateful to share with someone that we're like-minded. You know, we're totally committed to doing great things, building great companies, building great teams, developing people, seeing them get promoted and whatnot.

1:00:30And so we're like-minded in the way we execute the business. And I think he is doing his best work. I mean, the guy is unbelievably energetic and dialed in right now. So it's thrilled to be riding shotgun with him on the build. You made that obvious today, buddy. Well done. Thank you, Sam Costello. Appreciate it, man. Guys, it was an absolute pleasure. Thank you for letting me be a part of it. And again, thanks for everything you're doing in the industry. Much appreciated. Sure. Thanks, Sam Costello. Thank Johnny Capp. Thanks to everyone for listening to another episode of the Revenue Builders Podcast.

1:01:08Sam Costello: Thanks for listening to today's episode. If you enjoy the content, please subscribe, rate, and review the show to help us reach more people. This show is brought to you by Force Management, where we help companies improve sales performance, executing the growth strategy at the point of sale. Check out forcemanagement.com for more information.