SaaStr 797: GTM in 2025: How It's Changed, How It's Changing, and What Hasn't Changed (Yet) with Jason Lemkin and Sam Blond

29:43They're talking to their neighbor if they're in the office or they are doing something different if they're working remotely at home. It's 30 minutes of free time. I don't think that it actually goes back into what I'm doing that day, which I think is the like example version of the question that you're asking. Yeah, we should ask them if they have the data of, people love it, right? But do they have IRL efficiency data on the realization of it? And I mean, obviously it's going to be, he'll have the most positive spin on the numbers, but he'd probably be honest. That is the tough answer. Do any of this, that's why no one's buying these tools today because they didn't, they're burnt, they're all about, still about consolidation.

30:26They're still about consolidation, right? My perspective as a once sales leader is it has to improve that you have to be able to tie dollars to the product itself. Like time savings, I just, and it goes back to the original question that you asked, like time savings, I don't think it equates to additional dollars of revenue or faster growth. I need to see hard data around what is my, how much in sales do I have at the end of this month with product, without product? And the time-saving stuff, I just don't see it. It's a good insight. The learning from Scratchpad is the AI may just have to make you a better seller because making you a more efficient seller may not be.

31:20Even the AI version of all the scratch pad stuff, it's not going to make you close another deal a day. We are human beings. And so it's got to make you a better seller, not a more efficient seller potentially. That might be the learning. I think that you articulated that insight well. Yeah. Okay, so this next one, it's just interesting for AI. I asked Saster AI to summarize the most interesting AI related learnings from your deep dive with the CR of Toast. Toast is a tough sell. Small ACV, 10K, 20%, 30 % gross margins, a lot of competition. And he said something. And then when you interviewed the CR of Spunk, they both said something.

32:08It was really interesting that they summarize this. We know this, but I actually hadn't realized this number. in-person sales generate three times higher conversion rates. Can AI improve this? And also as human beings, where do you find these people that are willing to go in person? Are people back to it? Are sales reps willing to, for enterprise, get on a plane? And for SMBs, are they willing to go to the restaurants? Do you know folks that are willing to spend 20 or 40 hours a week on the road? first i think traditional tech sales people are willing to do so for the juicy deals got a million dollar deal with adobe it's expected you're in the cio's office meeting with them and taking them to dinner i think non-traditional tech sales people are willing to do it for the transactional deals.

33:07I work at Toast. I live in Cleveland. And my background is I was at ADP, the payroll company for years before, and I'm being hired to go door knocking effectively. I think where there's like an allergic reaction to it is tech salespeople that aren't selling the juicy deals. and I think it's probably a missed opportunity where especially if you are in San Francisco you're an inside sales team we have the data we had or you probably have the data around this at Rex we were selling to startups when we went in person to meet the startup it's exactly I don't know if this quote was from the toast CRO versus from me because the data is the same we closed when there was an in-person meeting and we like tracked it in CRM 3x conversion rates and here's oh you saw 3x too not a little bit you saw 3x at brecks 3x yeah it was like if our average conversion rate was 15 or 20 it was like 45 or 60 percent if we met the buyer in person yeah that is interesting honestly not that i matter it would be true of me too If I was trying to decide between Brex and Ramp, right, and someone intelligent showed up at the office, I'd buy that one.

34:26I'm not smart enough to know the other differences. That's why. I'm just not smart enough to know the differences, right? So if a human being walked me through it and they were intelligent, I'd buy that one. I'll give one other story, and then I'll give a takeaway that I have. All of this stuff. This story is when I was early at Brex, this has only happened one time in my career. And I remember the, this, the sales rep and I, it was an SDR. And I remember the company and the office manager from Rex came over to my desk and he said, this woman is here to see you. And I said, who's that? And he said, she's from talk desk.

35:03She said, she has something for you. And this SDR from talk desk came to our office and brought me, I can't, he was some like talk desk swag or something. And we can debate on whether that was the right thing to bring. but the only person ever who has showed up at my office trying to get a meeting and i still remember it to this day i'm sure we took the meeting and so there's some learning in there and then here's the maybe takeaway is i think a lot of this ai stuff is enabling sales people and go-to-market teams to mid-curve it and it's like the ryan peterson posted this thing on twitter that I reposted.

35:44I think it's brilliant. And you have the low IQ side of the meme and it's send the prospect donuts. And then the mid curve is send them and send the prospect an AI generated deck on the volatility of shipping lanes and like how your product can help alleviate with the fluctuation, whatever. The other end of the curve was donuts from the S tier? It's, you know, it goes back to, you know, gosh, what are the things that work? You got power dialers now that you can, you pick up the effectively, pick up the phone. You cold call people and you show up. This is exactly the slide. You show up and try and generate a meeting with somebody in person and sell them in person.

36:34I think with all this AI stuff, don't lose sight of just getting back to basics. A perfect slide. I didn't realize this was what was next and like perfect segue. Yeah. It's funny. Just on the last one, I'm at Subrex's 3X2, the most extreme one. We did a workshop Wednesday like this with Lauren Paddleford, who now is the CRO of Slice for pizzerias. Before that was head of Shopify Plus for years at Shopify, where I got to know him. And not only is Slice a tough sale, right? 10K ACV, full stack, everything from pizza boxes to software, right? Right. It's in person and it takes them up a year to do the close.

37:12So you've got to be there. You don't even just show up with donuts. You know, you have to do a slice. You have to build a relationship with the pizzeria and help them and figure out how to evolve their business. And up to a year goes on until they switch over and you've got to get to know them old school. Right. Maybe I will kill this, but all the data says it works. Right. And so I don't know how I will enhance it. We'll see. It may make it worse. Yeah. And I think there, look, there's probably insights around preparing. You can more efficiently prepare when you, if you're out trying to meet with somebody in person, you're, you're the toast sales rep in Cleveland.

37:53You're going door to all the restaurants. You can maybe listen to an update about the restaurant that you're about to visit and the owner. And that could then give you an easier end and improve conversion rates. but there's not going to be what's Tesla's robots name. Optimus, I think. There aren't going to be optimuses walking around talking to pizza owners, pizza shop owners. I don't think so. I'll give you one last data. I actually wrote up the actual data as we do at Sastr, but it was probably about a year and a half ago, but we closed a little bit more than a hundred million of sponsorships at Sastr.

38:28When I wrote it, we crossed a hundred million and we looked at it. and there's some correlation versus causation issues here, but we tagged every deal where we met them in person, the sponsor. And actually for us, the close rates weren't that different for a variety of reasons, but the deal size was 30 % larger, the deal size. So 3X a close rate is a no brainer. It's a no brainer. Another way to think, but this goes to a sales exec's time. Is it worth it for you to increase the deal 30 %? Now for that, for the half million dollar deal, it is, right? Is it worth it to drive a 60K deal to 90K deal?

39:04I think if you're hustling, it is, right? Because you're going to, but it's 30, it was interesting. I hadn't really thought about it, whether it's worth their time, but we proved it across a hundred million. It's worth 30 % more on average, if you show up 30 % more. But anyhow, let's talk about this one. Also interesting insight, like my intuition on this is there's two things at play here. One is you're probably selling higher tiers of sponsorship. The other thing is there's a psychology aspect around, I imagine like somebody that you've never met, it's a transactional sale, they'll ask for a bigger discount, something like that.

39:39Then if you've met somebody in person, it'd be interesting to see the data around is that if you meet somebody in person, what is this sort of like discount rate versus not meaning? It's a good question. I don't think it's a, And I want to talk about this AI cold call and Rippling next, but for what it's, I don't think it's the discount, although that's a fair point. You know what it is? I think it's really just this simple, which is that when you have a discretionary budget, a discretionary. So the way a marketer works is I've got$10 million a year for field,$100 million,$2 million. That's what I'm going to do into field and events, okay?

40:11I have a budget. But where I place those chips is just, it's up to me to some point, right? When I meet with someone and I can trust them and realize on a relative basis, this is where to deploy my dollars, I'll just get more. Because I trust Sam. I trust Amelia. I trust Jason. Look, I could do 100K here, right? But if I'm not sure, I'm going to do 50. But if I know, and so it gives you a chance, not just to, where I think AI is harming sales, everyone thinks it's about relationships. You don't build a relationship by having a four-minute Zoom call, right? And you may not even be able to be a relationship by building donuts, but at least it gets you in the door to add value.

40:56In person, it's just easier to add value if you do it right, is I think the reason. It's this discretionary thing. And it's like if Brex showed up to the office and Ram didn't, I'd buy Brex because I don't know. You're adding value. And I'd probably move everything to Brex instead of some of it. and i know we want to move on it's interesting because this isn't new we you and i presumably everyone else has been saying this for like years what you just said if rex shows up and does it i'm going with breck why is there is it just purely efficiency is it just like either like i guess the question is okay so why aren't there more brecks is showing up at your office If you're like, we all know this is true.

41:44I suppose the answer is somewhat obviously like you, you can just talk to, you can get more meetings done. I don't think that's the reason. I'll tell you why you talked to Jonathan from Toast and I didn't, but I read everything on Toast. I think the reason is it is a ruthless sales culture. It is ruthless. You are judged ruthlessly on daily metrics. that all I've never seen a public company that talks more about sales efficiency than toast. They share public companies don't usually share the number of meetings per app that they talk in their last call. Toast talked about territory reorg, right?

42:22And territory compression. And they said, we shrunk our, the tighter we shrink our territories, the more money we make. Okay. And we can talk about why that is right. But my point is they're relentless with this thing. And I don't think 90 % of the folks that we've worked with over the years are willing to be relentless that way. The sales execs, right? They want a six-figure job that is work from home and mainly inbound driven. And I don't think you can yell at them or give them a KPI or tell them they have to go to the restaurant and it's going to work. I just don't think it's going to work.

42:55You're right. Especially as we sit here in the Bay Area, there are options. none of these people will. And then just, it may be the most, I don't know whether you guys got into it and let's talk about Ripley. I think it's the most relentless sales culture I've studied from a distance, just fucking to build that. When you have low ACV and low gross margins and it's sales driven, this is the worst combination of the three. Low ACV, low margin, and almost no self-serve. At least if you have low ACV and you're getting half your revenue from self-serve, you can blend it together, right? you can blend the PLD and SLD, but Toast has it.

43:31It's a hard, was it a hard eight? Hard seven? I'm not a gambler. You're a gambler. Hard eight? Oh, if it's craps, it's a hard eight. Yeah, so this is like a hard 16 that Toast has. Like it's got to roll two, or maybe it's a hard 64. It's got to roll two hard eights in a row. And so they're just relentless. So get out there. Okay, this one, you did this great one last year at Sester Annual with Matt Plank, who obviously you've worked with since inception. right? But it was one of the insights was how well cold calling working. Do you think AI robocall? A lot of folks are excited about AI robocalls.

44:08They're actually excited about, in fact, I don't even know how this works. Voicemail before ring. This is a vibe today. Voicemail before ring. They want to leave a voicemail for the prospect where they don't even get the call. They just get a notification that it's a voicemail. So they'll hear it from the rep. What'd you learn? What are you learning from rippling from Matt on the board and AI cold calls, any thoughts here? I think two things come to mind. One is, and the reason that my mind went here first is you talked about like the leaving the voicemail. You want to leave a voicemail without even talking to the person.

44:45I think touch points matter. And so if you have email touch point, LinkedIn touch point, call message touch point, like you're just, you've got different forms of communication and i think different people reverse fight consistency matters you know if you see the name or hear the voice or whatever like multiple times a day or multiple times a week you're just more likely to interact with that and then the second thing that comes to mind is I get exponentially more cold emails than I do cold calls. And just, I think being different, even though cold calling isn't totally unique or innovative, of it is it is like less common than the cold email you can get somebody that was one of matt's points too of being surprised how effective it was was you can stand out that's right and i think matt's point was i don't i either don't answer cold calls or when i get them like i i maybe listen for a moment but i'm generally in the middle of something and i'm like call back and leave a message and for maybe us i i don't know that cold calls it may be part of why clank was saying is like they don't really work on him but they do work they do work for but his point was they do work for rippling he this point was they were surprised he was personally surprised how effective it was that is exactly right and i think if i think the takeaway is use cold calls to supplement other types of outreach.

46:35And if you catch somebody at the right time and they've maybe been thinking about you or they read your email or they've been meaning to reach out, if you catch them at the right time, that's what you want. You're going to progress to an opportunity. Yeah. Yeah, it's a good one. Yeah, I don't know whether AI is going to make this better. We'll see. I am worried about this whole straight to voicemail vibe. I guess it must work, right? It's a good question. I think, first of all, I think there's like some regulatory issues around this. I'm not well versed in them. Yeah. I'm not sure most startups care about the regulatory compliance.

47:14That's a good point. I do think, do you think there's an aspect of like inbound responses? So if somebody like fills out a form on your website and you can in real time have a good AI like agent call that person back where they're expecting the call, I can see that working. I don't know that you would call that a cold call or not, but I think it's a version of a sales call. and i haven't spent enough time thinking about a agents doing true cold calls voice voicemails clearly it makes sense like you're not going to know if it's a live person or an agent they're pretty good these days but real-time conversation you'll know all right i want to hit one more before we talk about time number four we can't you actually hit this was The AI thought that AI powered Codium's territory and pipeline management.

48:17But I actually think you hit this, which was interesting, that we're not all this stuff. AI should do territory and pipeline management better, right? Just like the V1 tools like Outreach and Gong and Sales Off did. But this may not increase net productivity, I think was your point. But this next one then, if you want to hit anything on it, this one I think is super interesting for AI. So you interviewed recently the CRO of Databricks, okay? and if you guys haven't watched this i think ron's done a few things but i think sam had one of the best interviews i've ever seen with him also in part because i think it challenged some of your assumptions right i think it was maybe a little different than you thought going into this interview and but he was there from 1 million to 3 billion okay that's pretty good that's that happens but not every day and one of my favorite interchanges you guys had in the i pulled it up is technical founders need technical sellers and you challenged him a little bit.

49:13Maybe not challenge is the wrong term, but you pushed a little bit. Is this real? But he was pretty strong on this, wasn't he? That as an engineer that went to Stanford Business School, can an AI do this? Can an AI, here's a meta, I think, can an AI make a generalist that can't sell to developer or can't sell in regulated industries or vertical SaaS or to defense or to sell missiles or bombs or a data lake? Do you think AI can take the average B2B sales rep and have them sell a technical product? Look, I defer to Ron. And I think to your point, you can count on probably one hand, the number of people, revenue leaders who have scaled 1 million to 3 billion.

50:03A hand or two, yeah. And I presume based off of this slide, Ron's intuition around this is like, no, at least historically speaking, he has biased towards technical salespeople with technical experience. I think Jason, while you said, I like pushing him here, a mistake that I see commonly made, and I think you do as well, is over-indexing on domain. There are examples of this where imagine if at EchoSign, we had only interviewed and hired salespeople who came from a contracting background like they either worked at an electronic signature company or like a document creation company it really limits the population of people that you can hire from and sure does it accelerate the like ramp time probably but it's not worth the trade-off and so if you apply that methodology if you apply that mindset to just broadly then databricks shouldn't index on sales reps with technical experience.

51:06I think there are clearly examples, and this is one of them, where that breaks down. And you gave an example, and I think it probably loosely correlates with the complexity of sale. You could be an example of, let's say you are at Andurl and you're selling weapons to the government. There's a type of salesperson that is probably going to be more effective at that than somebody with electronic signature sales experience. And you get Databricks and it's like probably closer to that into the spectrum than it is the Brex's of the world. So like maybe back to your, here's my intuition, which is trying to project what I think Ron would say.

51:53It is AI might supplement or support these technical sellers, but the algorithm doesn't change. I'm still hiring the same people I was hiring pre-AI to fit these roles. Yeah. Yeah, I don't know. I'll give you two just learnings I've had. One at the startup level, there's a, I believe in this person. This is my life experience. Technical, you need technical sellers to sell a technical product. We've seen other environments where you can be successful. You've done it, right? But it's my life experience. But on the AI side, there is a developer-focused startup I invested in that's doing really well, coming up on$100 million.

52:39And they got an early AI SE tool to do a solution and sales engineer. And they had their sales reps put in all the tough questions in it. And after that, they fired more than half the sales team. Okay. Because questions were so terrible. Like, what is an API? What is a data brick? The first one actually was a question that reps that had been there that were scaled were asking, what is an API? And they're asking their own internal SE, digital SE, to ask this. And it tracks all of it. And the CEO just could not believe that the quest, not asking brand new because training and enabling is different, that scaled folks were asking literally questions that were fall out of your seat questions.

53:28So maybe the V2 of that product or the V3 can somehow make these folks better. That's the extreme. The other one interesting, I did an interview a little while ago. It was really good with Tui Kordamansh, who's the founder and CEO of Procore, which is construction tech. And I got this wrong. I said to him, because I misunderstood something he'd said. I'm like, do you still, that he said in an analyst call, I'm saying, you still need reps that have like construction experience because this is like real domain expertise. He's like, not anymore. We have such a strong brand, but we have a great enablement team and we make them experts by the time they come out of our enablement program.

54:03And we have SEs. I wonder if at a Procore, an AI can do that, right? Can accelerate the, not just that, because we're still going to do enablement. Maybe AI can make it better. Maybe we can flip around that example I said where they fired half the sales team and you come out of enablement not having checked the boxes in onboarding, but actually the AI makes you more of an expert. I hope so. Maybe it's possible, right? It's your copilot. The next slide is a different version of this. But I think it's like the way that I would try and form an answer to that question is I would ask the buyers. It's like, we use the Endural example.

54:43I suspect if you go to government officials that are doing the weapons contracts, do you want to do a weapons contract with an AI agent or do you need to speak with a live person? I like assume, although it could be wrong, that they would say, no, we need to talk to a person about the - No, but I think the question is, can AI turn a salesperson that isn't a subject matter expert into one? That's the meta question, right? though i think the and maybe it was on the last side something about can it replace se's yeah and let's see can i substitute for an se or sa i this is one i gave the example earlier there's a transactional sale that i'm involved in right now as a buyer i'd rather buy from an AI.

55:30I'd rather buy from an AI salesperson. Does the CIO at Adobe or whoever we're thinking of, the Databricks buyers right here, do they envision a world or want a world where the questions that they have about the product that they are looking into, the Databricks of the world, are answered by a computer? Do they actually want a conversation with a person around this stuff. All right. We're almost out of time. I just wanted to hit a fun one and then we'll break on this one. I think we hit most of the rest. Contrasting your conversations with this and Databricks. The whiz one when you had with Colin was, I can't do one more pandemic story.

56:14It's been five years, but the pandemic hits whiz in the beginning. And so the sales team goes hybrid and it was great and made it work. And whiz is worth 32 billion, right? Databricks is going to a hundred billion. Ron's saying in this age, sales teams work much better together than remote. Can AI make this better? This is a debate. And I would say 80 % of the CROs I talk to want at least want folks selling together for different reasons. Is there anything that AI can make this better, make this hybrid sales environment more efficient, better for all parties or is AI not a solution to some of these sets to this trend?

56:54My opinion is the answer to your question is yes. Can AI or even just whether it's AI sales tools, whether they're AI native or not, make being remote better than without the tool. there there are products one one is a company called nooks that i think is oriented around this has got a lot of traction i'm not actually sure why but it has a lot of traction i think a big part of it is like getting the team together

57:32mimics information the knowledge transfer that may happen in an office and maybe it's a virtual office type product so is that better than having that product yes I think based off of the actions that companies are taking, there seems to be consensus around that you can't yet replicate the in-person environment. And I think it's a combination of things, and we've touched on both of them. One is the knowledge transfer. yeah it's just when you are when i was early days at echo sign and i was like two feet away from scott and scott told me like everything i needed to know all the time about echo sign and i wouldn't have slacked him i scott who ran support if you remember i wouldn't have slacked him i i wouldn't have called him at the time it was just like because he was there i was able to get the information.

58:29And the other thing, which I think maybe people under appreciate, gosh, if you're working from home, most people aren't working as hard. And so especially in sales. And so I think like just getting people in an office, you're going to get more hours of work out of them, especially salespeople, then if they're sitting around the house, no matter like what tools you give them access to. Yeah, we can wrap on that. I should learn more about Nooks because it's super popular. Maybe it helps bridge that gap, right? Like that and Rome and others. Those are great tools. But can AI magically turn a hybrid or distributed sales team and give it all the benefits of folks want these IRLs?

59:15Not yet, right? We'll wait for that tool. We'll see if that tool comes. All right, Sam, I know we're over. Thank you, everybody. And see everybody at Saster Annual in May. Sam will be there. We'll have some great folks. And if you watch this or here, we're also doing COCRO poker night again. We had a couple hundred folks last year. It'll be bigger this year. And even if you just want to meet a CRO, this is a place to do it, right? I think whether you work distributed remote for your sales team, meeting CROs is harder than ever. And you got to do that in person, man. Hiring someone without meeting them, it's a weird recruiting environment.

59:51So meet them in person is amazing. I'll reinforce no better place for customer acquisition, sponsoring the event and also recruiting. Saster is for Brex. It was the, for dollars in, dollars out on the sponsorship stuff, exceptional. So thank you for having me and great to see you as always. Thank you everybody for attending and excited for Saster Annual. All right, man. We'll see you at the next CRO Confidential too. Thanks for all the hard work, Sam. Talk to you soon. Thanks, Jason. See you.

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