SaaStr 791: CRO Confidential: How Codeium Built A Billion-Dollar AI Company and a Winning Sales Machine with VP of Worldwide Sales, Graham Moreno

0:00Welcome to the official Sastr podcast where you can hear some of the best Sastr speakers. This is where the cloud meets. Up today on the Sastra Podcast. Okay, I think, you know, we talked about three topics that we want to spend time on. Three people when you joined less than 12 months ago. How many people are in go-to-market today? And let's talk about a bit of how those people landed at the company. Yeah, we're about 75 in the go-to-market organization today. Only three to 75? Right. Okay, so three to 75, like how did you grow the team so quickly? Yeah, and I mean like for any, I'd say for any founder listening to this, like you hire a sales leader that doesn't have four to six people, they can basically text and get into the seat in like four to six weeks, probably even sooner, let's say four weeks, then like maybe not ready to be a sales leader.

0:54And if you want to be a sales leader and you don't know who those four people are, I'd say think about it. So, I mean, a lot, like a huge amount. I'm in so much, so much respect and admiration for my leadership team because they are doing a lot of their direct recruiting, like me, them. We have contracts with a bunch of outside recruiters and like this has been the case at everywhere I've ever been. I think no one can sell the opportunity as well as you can if you're living it.

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3:25Sastra fans, welcome to another episode of CRO Confidential. I'm your host, Sam Blonde. Today, we have an exceptional guest from one of the hottest and most successful startups of the last several years. So we have Graham Moreno. He's VP of worldwide sales at Codium. I'll talk a little bit about Graham. I'll talk a little bit about Codium, and then I'll talk a little bit about the show. A couple of things about Graham's experience. Over three years at Mongo, over five years at Grafana, we're only one year into Codium, but I suspect the trend will continue of several years stints. Again, another really positive signal in one's career.

4:14Podium, most recently valued at over a billion dollars. When Graham joined around this time last year, the company was 30 employees. Fast forward to today, we're at 150. We're going to talk about what led to that level of growth, that level of success over the trailing 12 months. Graham, welcome to the pod and delighted to have you. Yeah, thank you. Really excited to be here. Perfect. I think we're going to go somewhat deep in three topics, at least today. A few things that I'm excited to talk about. Recruiting, 30 to 150 people at the company. I don't know exactly what those numbers are in the sales org, but let's talk about recruiting.

4:56DemandGen is something that you mentioned. Codium is sort of world-class app. And so we're going to talk a little bit about that. And I know you're passionate, as am I, about supporting roles that oftentimes don't get the level of attention that direct selling roles do. These are things like enablement, rev ops, and more. With that, give us just a bit of context on what Codium does, and then we'll go from there. Yeah, absolutely. So Codium is a generative AI coding assistant. Our first product, which is basically a plugin that works across any IDE 70 plus languages, on average generates 45 % of the code written by the developers using it.

5:39And then most recently, we released a product called Windsurf AI that is an agentic IDE. And the numbers on that are very early on. But that is kind of the next step change in development where folks who are not super technical by nature are actually able to go in and build applications like it's floating around on LinkedIn. I built Pac-Man being pursued by armadillos in about five minutes. And then what we're seeing customers that are actually technical and who are really getting into the weeds with it is hearing things like something that would have taken me four weeks is now taking six hours.

6:12So just really, really promising in terms of being able to hugely accelerate developer productivity. That's awesome. It is a category that is receiving a ton of attention right now, as is your specific company and product within this category. And so certainly, you know, some right place, right time influence and a lot of execution that has gone into building Kodium in a very short time to Unicorn. With that, let's talk a little bit about the last year and what you attribute so much of the company and revenue team success to. So I think like helpful context, if you can start by describing the go-to-market environment when you joined, which I think was around February last year, like what did the team consist of?

7:03How many customers existed? Just ballpark. And we go from there. Yeah. So I, the go-to-market organization was three people when I came in and we had between self-serve that was, that's always been a really good channel for us. And our annual contract enterprise customers had probably about 200 customers total and low, low single digit millions of revenue. Perfect. And so I think the environment that existed is the sort of stereotypical startup when you bring in your VP of worldwide sales, which is the role that you occupy. Two or three individual contributor sellers. And once those folks are successful and you're ready to continue scaling that individual contributor team, you bring in somebody to add process and recruiting and managerial experience to sort of like facilitate the next phase of growth.

8:06So many folks that are listening in, whether you're a founder or early salesperson, Codium is like the exact environment that exists when most folks bring in their first VP of sales. Can you just describe what are the things that were working really well when you joined? And then what were the things that you gravitated towards that were working less well? Yeah, I mean, I have to give our founders their flowers. It's not at all just that they grab three people instead of go figure it out. Like our founders did a couple of million dollars of founder led sales before hiring anyone. And I think that was a really good thing.

8:38So I think to that point, what was working well was they had, and like, you know, there's this concept of conscious competence. When you know why you're doing something, you can explain it step by step and unconscious competence where you're doing something, but it's instinctual and you might not be able to coach someone else how to do it. There was a huge amount of unconscious competence. I got in and the team was like, yeah, so these are the types of companies we sell to. Here's why. Here's how it disadvantages our competition. And I was like, okay, you're describing ICP, swim lanes, trap setting.

9:11And just very innately, it kind of gravitated towards this by just looking at patterns and how the deals were going and being able to say, okay, hey, when we sell to financial services companies, there's a predictably positive outcome if we do these things. when we go sell to defense and aerospace companies. Same thing, just different set of behaviors. And then these might be some industries where it's a little bit harder for us to sell into right now. And so I think that was really pleasantly surprising. And to be fair, I got the opportunity to advise Kodium for about a year before jumping on board full-time.

9:43So I had some insight, but actually getting into it and realizing how much they had fleshed out that I was not expecting to be there and how it appeared to be correct was really promising. On the flip side of that, there was no process. And this has been the impulse of every really motivated, driven founder that I've ever worked with, which is this incredible belief in the product. And if we can just get someone to see it and look at it and touch it, they'll get it and they'll want to be a part of it. And so I think at the time we were demoing really, really early, like pre-discovery. It was like, get into a conversation and immediately show the product.

10:16And I think that had worked. and especially for the technical audience, like when you have the founders on the line, probably effective because they're both like amazingly compelling, really smart and in their own way, really, really good at sales. But I think for a rep to go in and like not do any discovery and just show the product, like opens this can of worms that really doesn't allow you to qualify effectively, learn about what the customer cares about, understand their current situation. You're getting right into kind of show up and throw up, here's the product. And that was something that we tightened up in short order.

10:49Like, got some process around discovery, got some process around when to POV, what had to happen before, how we went and executed the process. And, like, basically took a look at the average amount of time that everything took on a stage-by-stage basis and said, hey, I think we can cut two weeks here, three weeks here, like, really condense it. And then we're going to go execute this for a quarter. And if it's a train wreck, we'll fix it. And if things are working, we'll go and double down on them. but just even having the intent for structure, I think, was really, really helpful in the first quarter.

11:22And it's kind of blending into the next topic, I think. But also, the first handful of hires that you make coming in are so, so important, right? They're going to set the tone culturally, they're going to set the bar. And I hired a couple of people who are some of the best humans and operators I've worked with in my career, which I actually think was tough for our founders, because they were like, why can't everyone just be like this? But I think between process and then bringing people in who immediately were like, yeah, yep, got it. Let's see where you're going with it. Let me run with it. That was a super, super important first two steps in setting the tone.

11:57Several takeaways. Let's start with, if you're a founder listening in, I'm going to describe the type of environment that you want to create to attract the best talent in a sales leader like Graham, if you are a sales leader, you'll get a picture of the environment that you want to join when you are considering a new company. One is that there was existing revenue in place that began with founder-led sales and progressed to being able to have non-founder, individual contributor, salespeople that were closing revenue. And so you already have some evidence of product market fit and revenue growth.

12:47I think the other thing that you sort of signaled existed was additional demand coming in that you could leverage to close more deals and grow faster, which is sort of a natural segue to, in addition to this really positive early stage environment that you described, you also identified several areas of opportunity. So it's like, you're a sales leader meeting with Varun, who's the CEO, companies at a million plus dollars of ARR. And it's like, we're growing super fast. And you're sitting there also going like, ooh, there are also some things that I can tweak here and really inflect the growth trajectory.

13:40And you potentially identified what those things were as you were interviewing, as you were just having initial conversations with Varun. And I think socializing those things is really valuable for both parties. Let's continue along this journey. So you joined beginning of 2024. Were you sort of like outside of revenue targets for the year, were you explicit about what success in 2024 in your role looked like? And what were the things outside of like, we're going to go from X dollars of ARR today to Y dollars on December 31st. Like, what did you sort of identify as here's success in 2024? for.

14:22Yeah. One of the things that I think our founders are so unusual about in a really good way is that they are wildly smart, really opinionated on how to build amazing tech and are doing a great job building an amazing company. But they have a huge amount of humility where like when I came in and said, hey, I want to try this stuff, they would push and they would challenge, but they were ultimately like, hey, this makes me nervous. Here's why. But go try it. If it works, we'll do your thing. If not, we'll come back to the drawing board and we'll have a discussion about it. But I think that has always very much been the environment and part of why I was attracted to it.

14:54And I think coming in, yeah, there was a revenue number, but even more of it than that, it was, let's figure out what the process is, where our swim lanes are. Are we going to go scale mid-market really heavily? Is this a heavily strategic sale where 10 ,000, 20 ,000 person companies and above? Once we figure that out, then we can go build a scale plan saying, hey, we know that our sweet spot is this type of company. There's 10 ,000 of them in the world based in these places. And based on that, this is what the go-to-market organization has to go look like. So was there a revenue number? Yeah, absolutely.

15:30But I think the other piece of it was, let's figure out what the right process is, what the verticals are, what type of rep we need to go be successful here, and what else we need. One of the things that we're doing going into next year, based on all the data that we've seen this year, is moving to a partner-first model for revenue. I know, but having a partner leader sub 10 million, pretty unusual. Going all partner first to drive revenue sub 50 to 100, probably even more so. But we believe that's the best thing for the business. And I think Barun and Anshul and Douglas are both super involved in a really good way and also very much empowered me and the other leaders that we brought in to go figure out what we believe the answer was, make suggestions, and then action them based on data.

16:17Super helpful. All right. One thing that comes to mind, and it is revisiting something that we talked about before, which is the importance of founder-led sales entering this environment where there's already a lot of success, but a specific area that a sales leader like you can and should add a lot of accelerant to growth. When a company is successful through founder-led sales, it gives you data around customers, conversion rates, some semblance of retention or customer happiness, depending on different characteristics that exist. And so much of this data existed for you, but the company wasn't doing very much with that data prior to you joining.

17:06And so what you were able to do was take the data that did exist and you were able to apply it to go to market. And so it's just increasing the efficiency of the people and go to market organization as you sort of progress from this category where the company is casting a really wide net and anyone that sort of like jumps in and is willing to become a customer and generate some revenue does so, you then start to constrain that based off of learnings that you have from the existing set of customers. So that makes a lot of sense. And then you probably, as you're doing this, you're probably informing Varun and others within the company and they're learning things about their business that they didn't already know.

18:02Like we work really well here and less well here. And this is like why I have made that determination. Okay. I think, you know, we talked about three topics that we want to spend time on three people. When you joined less than 12 months ago. How many people are in go-to-market today? And let's talk about a bit of how those people landed at the company. Yeah. We're about 75 in the go-to-market organization today. Yeah. Only three to 75? Right. Okay. So three to 75, that is very vast. Tell us about the makeup and then tell us about just your approach like like how did you grow the team so quickly yeah i mean so the makeup of the team and these are approximate numbers we've got about 30 enterprise sellers in the range of 10 mid-market sellers 10 sdrs then we've got a handful of folks two in enablement foreign partners a couple of folks in like deal desk and RevOps, a handful of sales leaders and SDR leaders and et cetera, et cetera.

19:14We've got, I think, eight, we call them deployed engineers. Solutions engineers is probably like the normal parlance. And then two really great DE leaders. And that might not exactly math, but it's about 75 people all in. Yeah. So like kind of full spectrum from SDR, pre-sale, post-sale. Oh, that's one. We have a wonderful post-sale leader who's in the process of building out what our customer journey looks like post-sales and trying to figure out where sales needs to continue to be involved and where we can have a dedicated post-sale function that she and her team are going to own. So not only has the headcount grown dramatically from three to 75 in less than 12 months, it's also what I would describe as a relatively complex organization made up of different personas, SDRs, AEs, of course you have leadership, you have partner sales, you have rev ops, you have enablement and client services and more.

20:12So like, you know, a bunch of different functions making up the go-to-market organization in addition to the headcount growth. And so that's just like the recruiting capacity required to get from point A to point B has to be fairly complicated. I guess just like tell us how that has worked for you. Yeah. And I mean, like for any, I'd say for any founder listening to this, like you hire a sales leader that doesn't have four to six people that can basically text and get into the seat in like four to six weeks, probably even sooner, let's say four weeks, then like maybe not ready to be a sales leader.

20:49And if you want to be a sales leader and you don't know who those four people are, I'd say think about it. So, I mean, a lot, a huge amount. I mean, so much, so much respect and admiration for my leadership team because they are doing a lot of their direct recruiting, like me, them. We have contracts with a bunch of outside recruiters. And this has been the case at everywhere I've ever been. I think no one can sell the opportunity as well as you can if you're living it. And so we have gotten a handful of folks from outside recruiters. Hunters and Unicorns in particular is one who we've worked with, who I think are really high quality when they send candidates along.

21:23But 90 % plus of that 73 people that we've brought in since I got here have been sourced by, recruited by us. Where are those folks coming from? a lot of folks that we've worked with before. So like the initial cohort of people that joined had really heavy Grafana and Mongo DNA. And one of the things that I just say as a heuristic is like sellers and go-to-market people in general want to go work at places and for people who they trust, who they believe care about them, who are going to make them better and who are going to make them money. If you do those things, then like people are going to want to work with you, want to follow you, want to continue being a part of, of whatever it is that you're building.

22:05And I think not just myself, but a lot of the people that we brought in early have built that reputation. And so I came in, a handful of people who knew me, trusted me, joined me, whether that was from Mongo or Grafana. We brought in a great sales leader on the West who kind of was like from the larger ecosystem, but not someone that we had worked with directly. And she's done a really great job building out her team. And I think it was a combination of really, really strong pulling from the network and bringing people in who were coming in saying, hey, I have two or three people who I really trust, who I would love to work with again.

22:42And then we've made a couple of great hires that were not folks that we knew well, but were folks that we were able to back channel deeply. And so one of the things that I think is super valuable about the sales world is it's a small community. And so if you look at Codium, a lot of our folks are from Airtable, great level of talent, just like really and really amazing humans a lot of really good folks that have great runs of snowflake like we're talking four to seven year runs who want to go do it again a lot of folks that were at mongo in the heyday similar thing they know what fast looks like they know what process looks like they're really good at pipeline generation and then grafana which you know again i think on the sales side had a lot of like mongo app d dna and there's people that like know how to run the playbook that we're running here okay so here are some things that come to mind and Initial set of hires, all should be personal network of the sales leader that you bring on.

23:40And then what starts to happen is that snowballs. And I can sort of relate where thinking back to the organizations at Brex and at Zenefits, we weren't necessarily explicit about we want to get a bunch of people from company X. but what would happen is like you know i would hire somebody from company x and and they were like you know the top performer or something and then they would know like two or three of the other top reformers bring in those people until you just naturally start to have these pockets of like three or four people from this company and four people from this company and several people from this company and i think that is that's like a pattern that i see seemingly universally with the best sales organizations because it's like you pick off one of the top reps and people are very curious like well wait where did and sheila go like sheila was crushing it here if she went somewhere it must be like somewhat interesting and then you said something you know you get to you hire 72 people they weren't all people that you personally knew that you texted because you come with four to six, you don't come with 72 people that immediately follow you.

25:01So there's certain things that you have to do or not immediate network, but sort of like second network type candidates that make Codium the most attractive place that they can possibly join. Something worth leaving Snowflake or somewhere else for. You mentioned one, and you want to pay people well any sort of like stories about things that you um really emphasize to potential candidates that make joining codium the most attractive option for them yeah i mean i think like that you know the i think the pg version of it is like who cares about your OTE, show me your comp plan. And so like, we have a very good comp plan that I'm like very happy to pull up and talk people through in an interview.

25:51And then the other thing, like this takes time, right? Early stage, it's hard. Like you really, really have to make sure that your early people are successful because we only have 10 sellers who've been here for more than six months. So like the other 30 have arrived from August 1st on basically. But of those 10, seven are already over their annual number with like two weeks to go in the quarter. So seven of the 10 are over their annual number. One, having only been here for 10 months this year, will like make into the seven figures. We have another couple who are going to be over half a million dollars in W2 earnings.

26:26And like, this is like, I started in February. The first person who joined after me started in March. They did a full annual number. They closed$1.6 million in four months and became a leader. So they're not even in this cohort because they became an RD pretty early on. So I think we have a really good evidence of people that have been here for a long enough time to tell. Because someone who's been here for 90 days, if they have a lot of success, there's a huge contributing factor that's luck, right? Because no one comes in and builds a million-dollar deal in 90 days. And if they don't, it's fully possible that they're building and they're going to have a blowout next year.

27:02And we're looking at the leading indicators, but you can't go and take that to people. So I think that is a really big piece. It's like, hey, seven out of 10 are over their numbers. We have one in 10 at a million dollars plus, three in 10, or well, three others. So four in 10, I guess, total, who will make over half a million. And then the rest of the folks are in varying stages of accelerators over their OTEs. So that is a good story that's data-driven. I think another piece is like, making money is awesome, but being somewhere that's going to make you better and give you skills that you can carry through your entire career is really compelling.

27:37And that was one of the things, I mean, when Mongo, and they're still growing fast, but when we were growing really ridiculously fast, like 400 people up to 2000, people would say, hey, I know it's like a meat grinder here in terms of intensity and expectations, but I also have heard that the enablement is so good, it'll change the rest of your career, which is why I want to be here. Like that is something that's very important to me. I want people ultimately to come to Codium to work at an amazing company, sell amazing tech, make a lot of money and work with great people. But I also want them to say, and I've heard that the enablement that you guys do is best in class and is something that will make me a better seller for however long I'm in this game.