20Sales: Everything You Know About Sales Playbooks is Wrong | How to Hire and Train Your First Sales Hires | How to Crush Pipeline and Deal Reviews as a Team | How to Structure Sales Teams and Sales Comp Plans with Julian Teixeira, CRO @ 1Password

23:38Do you agree you never want your form again someone else's hunter? I think it depends on the context. There are a lot more patient. They'll really take the time to explore all four corners, build a meaningful connection. They're a lot more curious. I'd say they're way better active listeners. Hunters are just used to operating in an environment where they're trying to outrun a whole bunch of other lines for the same gazelle. And so you've got this fast twitch muscle that's sort of working at all times. and sometimes you might miss something. Sometimes you might hurry and leave money on the table.

24:10So it really depends on the context. One will always tell you that the other's job is much easier than theirs. Should CS be calmed for upsells? Yes. I think CS should be calmed on net dollar retention. They've got a role to play in the process. And I think it's important that there's overlap between how they're compensated and how the AE is compensated. And ultimately, how I've seen that model be successful in the past is when both are working together to serve the customer. And I know there's, you know, there are really polarizing views on CS and, you know, I've heard a few folks on the show sort of bash on it.

24:42But ultimately, I think the body of work needs to get done. So whether you're in the camp of saying, well, I think one person should do all of it. Well, naturally, they're going to be able to handle fewer accounts. Or you sit there and say, well, actually, I want a cleaner division of labor and I expect individual capacity to be much higher. I think you get to the same net result. In our world, customer success is sort of this It's impartial person who the customer sees as a trusted advisor, not as somebody who's just trying to cram more product down their throat. And they are. They're ultimately thinking about how they're using the product, what more benefit they could be getting, and are sort of playing the role of orchestrator bringing the right people in at the right time.

25:19While the AES are just strictly revenue focused. How do you think about the specialization or verticalization more importantly of sales teams? And what I mean by that is one -post word is a horizontal product. But amazing because you can serve so many different people, but also difficult because you can serve healthcare, banking, consumer. I like verticalized sales teams. How do you think about verticalized sales teams? I think there's a time and place, and again, it'll vary from company to company. We're not verticalized today. And the main reason for that is we looked at our success across every vertical.

25:53We look at win rates, ACV, time to close, and we found very, very little difference across these different segments. And we have yet to reach any sort of saturation in any one segment really. And so we're not yet at the stage where we need a higher individuals who have built a career selling to specific verticals and have deep vertical and specialized knowledge yet. But we're absolutely going to get there. I think our journey is such that, you know, we're looking at segments first and foremost because SMBs buy very, very differently than large enterprise companies. Territory baseplitz are sort of where we're at right now.

26:29making sure that we've got the right people, right language, right time zone and so on and so forth. The next step will be to verticalize the team. I have Matt Plank at Ripling on the show recently and he said that five to 25k ACVs is where SAS companies go to die. How do you feel about that and what's your ACVs day across the different segments? It varies by segment. Enterprise deals for us, you know, are in the six figures. We actually landed our first seven -figure customer earlier this month which we're really excited about. But yeah, somewhere between six to seven figures, mid -market, somewhere between 50 to 100K or well into the six figures, and S &B deals will vary anywhere from few thousand dollars for a very small business to 25 or 30 thousand.

27:13Can you have a sales motion like we discussed with that SMB structure? If you're paying five to 15 thousand dollars, You can't afford the outbound, the A, the CS, can you? No, you need to be very intentional about where you deploy those resources. Most of our outbound motion right now is invested in mid -market and enterprise, because that's where we get the biggest bang for our buck. The SMB teams are a lot more transactional. They work on high volume, high velocity. Most of them pay for themselves four times over, even if I load in all costs. And then from a CS and onboarding perspective, you know, we rely on low -touch models with smaller customers to get them going.

27:55Ultimately, we'll get someone on the phone working with them if they need the help, but it is in the default switch of the team to just unload the mega machine for every single customer in deal regardless of size. If they pay for them four times over, why don't you ten times them? And what I'm trying to get out of here is say, where is that asymptote of value where you no longer get four times payback? There's a point at which you reach a ceiling. I think today, that team is largely driven by the inbound demand that we get for our product. And so, as we think about investing in that further, the unit of economics need to make sense.

28:29And at a certain point, we're going to have to make a decision to say, how do we want to serve this segment? Conversations we're having now artists that they're and say, well, can we start a leverage a different distribution model for that cohort? and we've recently got into working with MSPs and MSSPs, as well as distributors to achieve that. So there definitely is a point at which 10 -axing constantly starts to make less and less sense, which is a big part of why companies need to think about moving up market and building that motion early on. What's your inbound to outbound ratio today? Unconverted deals.

29:00We're probably just over 50 % outbound, so 54 -46 split, and I'll say that a year ago today, we're probably 99 % inbound. Wow. Yeah, big shift. And it's not just about hiring BDRs either. It's really about getting the sales team to not only participate in generating pipeline, but understanding that the level of intent of these customers is vastly different than when you're getting an inbound lead. What's the time to close on an enterprise day of the day? There's a great deal of variance, but I'd say on average two quarters. Two quarters. Yeah, so we usually think about the pipeline about two quarters out.

29:35It may be closer to three to four quarters when we're generating outbound pipeline, outbound deals typically close at half the rate, but they close for twice as much. The person we're reaching out to doesn't have a preconceived sort of notion of what they want to buy. We are defining that from the get go. So that is the advantage of outbound pipe general rebound. I've always been taught that when you have to educate the customer, don't bother. It's going to be too hard to sell. It's like when you're fundraising, when you have to persuade a VC to invest in like the category itself, don't You know, they can believe that they need password management and it's really important.

30:09Now, they've got many options and they can choose lots of them and that's up to you. But if you're having to persuade them that password management is important, no mass. I think that in and of itself can sometimes be the problem. You need to be able to educate them on the problem. And if the problem isn't clear to them or they don't agree with it, then I'd agree you've got an uphill battle ahead of you. So a lot of companies tend to anchor to their product. I'm going to explain the product and why it's different. As opposed to attaching themselves to the problem, which if you've done your job right, the person that you're speaking to should understand very, very clearly.

30:44And now you've got their interest and now they're leaning in. And your product is just proof that the solution that you're talking about is real and exists. So I tend to think that leading with the problem and familiarization with the problem is the most important way that you get them to lean in. No one will sit there and disagree that reuse or weak credentials is a problem. But how you go about solving that problem is often what the debate is. Don't start there. Get on the same page with them first on what the problem is, and then ideate closer to how you're going about solving for it. I'd love someone to take the argument against like strong credentials.

31:19You know what I mean? Like, I disagree like, okay. What if they just don't care? I didn't mean that badly, do you? But I'm just like, I don't care about credentials, trying to like... Yeah, and we get that. The security practitioners that we sell to have a number of different priorities. They've got to think about everything. It's like me telling you that that microphone six inches from your mouth is probably gonna give you cancer. You're like, yeah, sure, well, everything will. It's really about contextualizing what not solving that problem is gonna mean for them. And connecting with something that they care about, like what are they prioritizing right now within their business?

31:58Maybe it's not credential management, But maybe it is keeping employees safe. Maybe it is minimizing the threats that exist within their company. They may not agree at first conversation that solving for credential management is going to be the solution to that. That's your job as a seller to sort of guide them there. But I think the difference for me is not trying to create a new set of priorities or things for them to think about. It's about tapping into what they already care about, what they're already prioritizing and thinking about and working with them in that way. We have this great prospect and for whatever reason it doesn't fall planned whatever or it does land We need to do deal reviews crucial part of a sales process I do I'm a young founder again.

32:41I don't know how to do deal reviews I don't know what to expect to my go -to -market for deal reviews. How often do you do deal reviews? We do them weekly so we do pipeline inspection on a weekly basis What does pipeline inspection look like from a structural perspective? Can you walk me through it as granite or as possible? I'd say that from an SMB perspective, you're often looking at pacing. You're often looking for pattern matching on what's going on that month, relative to the previous month, relative to the same period last year. And oftentimes we're looking at those daily. We're also looking at the pipeline.

33:13Like, how does a drop in pipeline this week impact us next week? So it's a very, very data -driven approach, and you need to obsess over it. And it's not about reviewing it once a month or months a quarter. It's about living in it every single day, but sitting down and reviewing it as a team every single week. As you start to move up market, the classic is like, well, you know, enterprise deals take two quarters to close. What on earth could we possibly be talking about, you know, on a week to week basis? But the reality is, is you still need to have some form of objective or goal that you're working towards, even on a weekly basis.

33:42Right? What outcomes are you trying to drive? What needs to be true as part of this deal in order for us to win it? And what progress have we made towards checking off those items this week? How much pipeline have we built? Even if you're looking at things sort of, you know, two quarters in a row, what does our pipeline look like for the second half of next year? And how are we trending there? So we do this inspection weekly regardless of segment, but I'd say the larger the deal, the more focus you're putting on sort of the account level or deal level as opposed to just looking at the sum of how that segment is performing.

34:13It's really critical. Who's invited to this meeting? Is it the whole sales team? Only leads, only A .E.'s? How do we think about that? I think it'll vary on company size, right? If your team is small enough, I would get the whole team involved in the process. I think it's an important part of how you drive accountability. As you grow though, it's about creating a cadence, right? So, you know, every Monday, every AE is going to sit down and look at their pipeline. They're going to take inventory of what they've done that week, how they've progressed, what's fallen out, what's moving ahead. And then the following day, they're going to report that to their frontline leader.

34:44Their frontline leader is then going to go ahead and inspect that work, ask probing questions, ensure that there's proper hygiene and then roll that up then to their second line leader. So typically, by the time we have our weekly forecast call, I'm usually having it with my directs and we've got folks from marketing, folks from our FPNA team that are joining us as well. And then we roll a summary to the executive team. Does this not seem a bit ridiculous? And I don't mean that horribly in any way. But like an A rolls it up to a sales lead. He rolls it up to someone else. He rolls it up to someone.

35:15I have a fuck sake, can we not just get the AE to present in a more direct way? It feels like every stage is a gatekeeper and every half hour is half hour, it's valuable. Is this really how businesses are run today? I think you reach a certain size of scale where you'd end up having an eight hour meeting if every AE had to sort of come and sort of run you through, you know, your work. Can we not just hire AE's where we trust the pipeline? And so when you hire it, no, I'm being serious. But like, where you say to me, what's your pipe? And I get a dog shit. I got 200K this week. And actually, I think I'm gonna have a 50 % dropout, right?

35:51So 100K. You're like, great, thanks. It's all done by message. Unfortunately not. There's too many moving parts. There's too much emotion that's involved in selling. There's too much that can be driven on a feeling. Hey, I just had a great conversation with Harry. I think he's gonna buy. Having someone to keep you honest throughout that process, I think is mission critical. I've seen so many AI sales coaches where they are continuously prompting really what makes you think that oh Continuously pressing do you think I will continue to be human or AI lead? I think the landscape of that is gonna change dramatically like we started using Product called momentum that not only does no taking on the call and sets follow ups But it also gauges the customer sentiment on that call it also gives you suggestions on things that you should have done that you didn't do on a call by call basis.

36:38Why is going for the state of the whale? That's a great question. Look, I was one of Gongs first 50 customers. They led the charge on siding with the salesperson and saying, Hey, we get what you're going through and we're here to help. I think Gong is leaning in that direction. I'm seeing more and more AI in their product, but candidly, a lot of sales leaders that I speak to are using it as a coaching tool as a way to sort of go back and instant replay. Some are using it to manage pipeline. I think it's tough. I can spend ages talking about the sales tech stack in and of itself because I do think it's gotten very, very messy.

37:12But my hope is that somebody comes along and says rather than adding another interface or tool that you need to log into to get insight or get work done, that instead, I'm going to work through the existing channels and existing products that you're using and just augment what you're getting from them. I don't want another thing I need to log into to get customer segment. Feed me that through Slack, populate it in Salesforce, right? Surface this in the areas where I'm already getting work done. What are the core tools that you think every sales team and leader should be using today? You said about TechStyle, which are the like Hail Mary, regardless of what stage, sector you're in, you have to have this.

37:50A good CRM to start. I implemented Salesforce early on here. I've done CRM migrations before. It's a pain in the butt. Just start with what you're going to need to scale and be done with it. Outreach and Gong, I was quick to implement at one password as well. We leverage both of those. And then some form of sales and a moment tool. There's tons of great ones out there, floccier, high spot, seismic. I think inherently you're gonna end up with a lot of different collateral and information to feed your sales team. They'll digest it and then it goes into a repository that they'll never reference ever again.

38:21And so having a tool that surfaces the right content at the right time, the right opportunity based on stage and so on and so forth, I think is pretty important. When you are in those reviews, Annis, I don't have much. Yeah, no notion dropped out. Next one, Rip playing dropped out. Yeah, I don't have much. How do you maintain morale when sales teams are not performing? That's a good question. I think it's important to see the positive and call it out. I think that when the results are shit, it doesn't mean that everything is shit. I think you need to be able to call out the good. I mean, ultimately selling is a very emotional sport.

38:59And so if you've got a group of deflated, salespeople out there trying to get people excited about your product, it's really hard to do if they're not believing in themselves. So I think it's about being positive about the things that have gone right, but I think it's about bringing brutally honest about the things that are not working and getting comfortable assessing that, attacking the problem and not the person in that scenario, right? And so we do inspection often enough, and if you're doing inspection often enough, there should not be any surprises. And if there are, then there's something you missed as part of that process.

39:31There's something you didn't inspect for. There's a risk you didn't assess or that you didn't call out. What is the most common risk people miss that leads to deal attrition? More often than not, it's an understanding of what the procurement process looks like within the company end to end. There's always some surprise budget committee individual who needs to weigh in. And so not going wall to wall and understanding what it's going to take to get a deal done is the biggest mistake that I see often times, and one of the leading causes of deals slipping. Sometimes things all happen that are completely outside of the reps control.

40:04I get that. We can only control for what we can control, but more often than not, it's about missing something in the procurement chain or not getting the right amount of value established with the right individuals in the organization. Like if you're attempting to sell a half million dollar deal to a manager and a department, and their superior or their budget holder There's not even aware that these conversations are taking place. That's a huge red flag because people are inherently bad and then going back and selling the business case internally. So we actually find that we end up coaching a lot of our reps to do exactly that.

40:36Like not just sell the product to the person that you're working with, but coach them and help them sell this internally. How do you do that without being so fucking obvious? So listen Julian, we both want one password in notion, rip playing, banter, you name it. This is a pack of information that I would use. How do we do it? I think it comes like the subtle art there is not just loading them up with technical jargon, even if they understand it, but thinking, what are the questions that their CFO is going to ask them? When you try to go and justify spend for this product, what are they going to ask?

41:11And it's about giving them those answers throughout the process so that they've got it. It's at the tip of their tongue. They can answer it right away. And most of the time they can't anticipate what their CEO, what their CFO is going to ask of them. So we give that to them without asking anything in return knowing full well that they're going to end up facing that challenge at some point. So even if we don't get access to those individuals throughout the sales process, I mean our CFO often says like, please don't have me speak to a salesperson, but we make sure that our champion is armed with the right answers, the right questions, we were justified.

41:43But it's so funny you said that about the CFO. Oh, don't nod the salesperson. Are people still buying software like they used to? No, they're not. The CFO suddenly has an interest in absolutely everything. There used to be a time where, well, you're in your envelope of spend, I'm not really going to question it. Or well, you presented a logical case for why we would need this thing. That just isn't the case anymore. They want to understand. Because ultimately, their boards are holding them accountable to managing spend efficiently. Even as a fast growing profitable business, We still run through cost rationalization exercises on the tools that we use constantly.

42:17Fuck, I remember when it was good times. It was not nicer. Well, that's so much more fun. Well, I think we're being a lot more intentional about the things we're investing in. We're looking for overlap across different products that we use. We're thinking like, well, wait a minute. Could this other thing we're using? Do it 80 % as well for the same cost? What did you not spend money on that you wish you had spent money on in your time at one password? I think we had the opportunity to be a lot more aggressive investing in product and engineering, whether that's sort of like a build or buy scenario.

42:51Again, I think we had the benefit of being a profitable business with a lot of cash at a time when many companies were struggling. And so I think there was a window of opportunity there for us to substantially accelerate our pace of growth. and we chose to err on the side of caution or a middle ground. Like hindsight's always 2020. And who knows where we'd be today? Had we sort of made that decision? But that's probably one regret that I have is not pushing a little bit harder for us to do that as a company. Listen, I want to do a quick fight. I've so enjoyed this. This has been so much fun. You would want to sound for me.

43:22We put the schedules together and that's fine. But I just want to have a great chat, be interested myself, learn myself. That's why I did this show. But I'm going to say a short statement, you give me your immediate thoughts. Does that sound okay? Yeah, let's do it. So I spoke to many of our mutual friends and some of your friends and some of these are more personal than normal, which I love. So talk to me about your hair and how many people have cut it. Only three and that number is three and not two because I ended up living in New York for four years and needed to find someone there. But yeah, I'm very loyal in that sense.

43:59I'd like the ritual of going to the same person, somebody who's kind of like part way removed from the world that I live in that I can just sort of confide in and that one hour of therapy. And, you know, and so my hair's just become a thing over time. So I only really entrusted to one person these days. You've got great hair by the way, real volume. Which is a line that I've never sat in a show, but you know, it's a first for everything. What is your hotel cadence? Oh my gosh. Well, I've spent a lot of time in hotels. But if it's like that, I don't travel. I hate traveling. Do you like that? The hotel part is just like when I'm not in my own bed and I'm not in my own home, I'm sort of out of sorts.

44:40And so the aspects of traveling that I love are getting out there and meeting people face to face. I love that. I really, really do. And actually, in a lot of ways, when I'm traveling, I just sort of shuts out everything else in my life and I can really focus on work, but sleeping in hotels is probably my least favorite part. Do you buy remote sales teams? Well, I lead a remote sales team, but I believe in the importance of in -person interactions. Like we invest every year in getting every single individual together in one place. I think it's important. Within 15 minutes, you can just tell who's engaged, who's in it, who's full of it.

45:13You get that sense. I think it's so important that you hear Julian on the cool and close that deal. like, yeah, we are winning. Or he lost it because of that reason. I should watch out for that. Or huh, she's doing really well. We should actually like promote her. Or huh, they're really down. We should actually like go for a beer after work with them and make them happy. Yeah, you lose that. It takes a lot more energy and work to actually go out and seek what's going on as opposed to just being in the room and seeing it. So look, we get ourselves teams together at the end of the month, at the end of the quarter.

45:45It's a subset of the team. It's not all of the team. but it's definitely something that's top of mind for me as we continue to grow. It's sort of this idea of building out centers of excellence for our talent so that we get a little bit more of that. I get a lot of that with our leaders because there's many points during the year where I can interact with them, but I miss that, man. I miss walking the halls. I miss the casual chats by the coffee machine. Like, you know, do you tell me about a deal you've closed? You've had to do something outside of the box to get it done. I've heard some cool stories of people giving away their car to a prospect to get the deal done.

46:18That happens somewhere in Italy. This was an old boss of mine who told me the story. Of course it was Italy. Yeah. Only in Italy. I gave my daughter. You like the car? It's yours. I don't have anything like. I think the closest is like, we've definitely done like, you know, waiting for that last signature from the CEO who's on a flight, finding out which flight they're on track in their flight so we can get them right as they land. And so we've done that and gotten deals in right at the 11th hour, literally, across the line. That's about as outside of the box as it's gotten. What one piece of advice would you have for sales lead starting a new role tomorrow?

46:48Find a company where the biggest challenge that they have is one that you're actually passionate about solving for. Far too many people judge companies based on what they are today, but I'd encourage sales leaders to judge them based on their future potential and the belief that you have the ability to get them to that potential. That will ultimately yield the most amount of value for yourself personally and for the company that you join. And I think that's a reflection by the way that sales leaders should have with themselves every single year as they're sort of sizing up. Do I say or do I go?

47:16What current sales tactic will continue to reduce an importance in the next five years? This discount expires at the end of the month. I think people are aware well that that's just dead. That doesn't work anymore. We always grew up with like TV ads in the UK and it's like land of level or DFS like sofa companies And it's like 70 % off ends Friday and then you're there on Saturday and it's like new sale just 24 hours No, it's a bad thing to be trained on even procurement teams are sort of wise and up to the fact that hey I'm gonna wait for the last day of the month make the salesperson really really sweat and then salespeople sort of get desperate and start Dishing and all out, but yeah, I think that's gone by the way side There was a time and place for it, but not anymore.

47:59Final one. What one company sales strategy has most impressed you over the last year? Look, I've been really impressed with Wiz. And a typical answer in the sense that, yes, they've grown very quickly and that's admirable. Knowing the amount of talent and change management cycles, they likely needed to go through on that journey from zero to 500 million in revenue over that period of time. That is the impressive and remarkable part of that story. because the playbook of how you become a billion dollar company is pretty well understood as far as just like the typical steps whether that's international expansion multi -product portfolio working with partners so on and so forth.

48:34But doing that over a compressed time frame, that's the impressive feat that I think Wiz has accomplished so good on them. As I said, I love shows like this where it's much more natural than it was intended to be. You've been amazing. Thank you so much for joining me. Thanks so much for having me, Harry. This was blessed. I so love doing these vertical shows because you just bluntly learned so much. I started it because one of our portfolio companies didn't know what a great ahead of sales look like and I thought, well, just interview Tanner the best in the world and you'll get a really good benchmark.

49:05And it kind of dawned on me that if we did that for founders, then they wouldn't have to spend the time, they would have equal access and it would be an incredible benchmarking tool. Episodes like to say, I think are really proof that this is such a powerful tool for founders to get that benchmark. You can watch the full episode on YouTube by searching for 20VC, but before we leave you today, if you're ready to leave rigid payment terms behind, Cap Chase is here to change the game. Cap Chase brings B2C buying convenience to B2B software and hardware purchases. Cap Chase offers your buyers the flexibility they demand on annual and multi -year contracts.

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51:35Get started today at Gong .io and unify your data, workflows and teams with AI to win more. As always I so appreciate all your support and stay tuned for an incredible episode coming on Monday with Nicholas Ellis Erstberg, co -found and see your delivery hero.