20VC: Inside Clay's Sales Playbook Scaling to $100M ARR | How to Set Sales Comp Plans | How to Read Sales Talent Linkedin Profiles | What Profiles to Hire & Fire | How to Increase Performance and Speed in Sales Teams with Becca Lindquist

19:55Harry Stebbings:So if I'm a founder hiring today, early stage company, under 10 million in revenue, what should I look for in the people that I'm hiring? Just people that press send and have a lot of energy. And remember, this is really early stage. What is that profile? I keep coming back to thinking critically about your customers. So I'll give an example. Maybe you're selling an AI widget. Does this person come in and talk about the widget or do they talk about how, I don't know, JPMC would use it or the company that they're currently at, how they would use it and the impact that it has? What I mean by impact is like, I'll give an example.

20:28Whenever we talk about AI tools, I feel like we talk about the art of possible, like pie in the sky stuff. And I'm like, hey, hey, hey, bring it back here. Why don't you give me an AI tool that automatically tells my reps when they have a close date in the past. The basic shit, when we're single threaded, let's start there. Let's help people do the basics well before we get to like, oh, it automates the outbound and then it automates the first deck. And then, you know what? It automates the rest of the sales process. I'm like, okay, great, great, great. We can get there. Let's start with the basics.

20:56So like do when they talk about your widget in the context of their company, are they talking about pie in the sky or are they like, this is actually the real problem that it's solving for us. And the impact of that real problem is that, I don't know, our forecast is screwed up or we miss our revenue target or like our rep productivity sucks because of it. Can they tie your thing to a real business problem that they are facing and other people are facing and then tie a dollar outcome to it? Like those are the types of people that I want. And then I test for, okay, do they have the drive? Obviously, I bias towards having college athletes because they've learned how to work hard.

21:32All All you gotta do is teach them how to work smart. If you teach them how to work smart, it's really tough to teach someone how to work hard.

21:37Harry Stebbings:I think they also have the discipline to do the work when no one is watching. Yeah, that's true. You're an athlete and I like to think that I am. I don't know, you shut up with those pretty cool M frames. Thank you so much. But most of the time is spent in a gym with no one else in 5 a.m. in the morning. And that black tie dinner where you hopefully look relatively athletic is once every six months where the world might see that you're fit. Yeah, that's right. But that's it. That's right. The posts are the things you post on Instagram. Yeah, yeah, yeah. Of skipping donut time and skipping everything else.

22:07Harry Stebbings:I totally get you. On the flip side of that, what you look for, we were going back earlier. We were like, oh, the FOMO of like, oh, should I join an AI company or not? There are so many well-funded AI companies today. I know. And they will have shiny VCs and they will have people who are pronouncing themselves to be replacing work for every large profession. What would you advise those sales reps who feel like they've plateaued rotting nicely which one should i choose that's honestly it's it's really tough and like i obviously like i i hadn't intended to leave dbt if i'm if i'm honest like i was like i'm gonna finish out the fiscal year and then maybe i'll start to think about what's next and i'm i met varoon and you know varoon we went for multiple walks around he lives around the corner from me in brooklyn i feel like i got a little bit of the cheat code because i do think that clay is like the most compelling company on the planet right now.

22:59And like, when you think about AI companies, a lot of people have, we just hired a RevOps guy. He's fantastic. He has this phrase. He's like, everybody has the Claude spookies. And I'm like, that's a really good way to describe it. The feeling of like, well, why wouldn't Claude just do this? Is Claude going to overtake this market? Is Claude going to put you out of business? Right. And it's like, there's a lot of companies out there that I look at and I'm like, I got the, yeah, I think that that could be a thing for you. And so the real answer is I don't really know, but I think about is there something that's not just AI that's defensible?

23:33Clay has this data marketplace. It's tough to build that. Yeah, you could go do that. You could go buy 180 different data providers and build your own, but that's a lot of work when you think about just buying software to do that for you. And so I would look for some sort of other defensibility outside of just we're automating this or like we're we're gonna automate this professional way or like a workflow and that's a really tough thing to find like like i can't even think of a company that i would shout out

24:00Harry Stebbings:that's doing that right i totally get that i would say like just look for a company with unwavering product market fit it's pretty hard to sell shit no one wants that's that is 100 right and it's pretty easy to sell shit that everyone wants yeah is it it as someone who is currently selling shit that everybody wants. Yeah. Is it easy? It is easy in the beginning because you could grow as a company a thousand percent just by doing the thing, like having a moderate execution on your sales process. And if you have a really great product, it's going to fly off the shelves. But as you grow, it becomes very challenging to grow a thousand percent year over year, 250 percent year over year.

24:41So a lot of what I focused on when I I was evaluating Clay, was like, great that you're landing these logos. How many stick around? How many double their spend with you? And like the metrics that I got, I think I can share. They're like, we haven't turned a customer. Our NDR is close to 200%. Those are the types of things. If you're talking to an AI company, that's the biggest green flag, right? Because it's not just, can you sell the thing? It's can you make the customer successful and successful enough that they want to go do more with you?

25:08Harry Stebbings:The hard thing is today, I don't know if that matters as much as top line revenue growth, as ridiculous as that sounds. But if you're thinking about like actually like personal wealth accumulation, especially in the short term, if you can go from one to 200 in a year, like some of the AI companies with shitter NDR and shitter churn metrics, if you can carry that out for two to three years on a comp basis from stock, you'll have secondary opportunities to sell 10, 20, 30 million dollars worth. Maybe. I that's when I talk building a really secure business that grows three four X which by the way is amazing which is great which is incredible but it's just like not that so you're like it's amazing but it's actually how it's amazing for 2011 right like people people get caught up on this we did Lagora and we did lovable like I mean 13 months to 100 million in revenue yeah it's it's impressive it's impressive here's like here's how I when people come to me and they're like should I take this offer?

26:03How should I think about this? A company, let's call it Acme Co., a high-flying, fast-growing AI startup, they might give you, let's say they give you a million dollars of stock and you're like, holy shit, I'm rich. And by the way, this is growing so fast, it's going to be$20 million soon. There's a coefficient that I apply to that of liquidity. How liquid is that? Do they actually do tender offers? Because I think everybody's kind of been bit by a company that's like, oh, we're growing so fast and we really care about employee liquidity. So we're going to do tender offers and then never does a tender offer.

26:34And so now you're sitting on however much stock you have that is probably life changing for you. So I actually just tell people, I'm like, what have they done? Not what they say. What have they done that's shown that they're going to provide liquidity on that equity and just apply a coefficient to that. If they give you a million dollars of equity, but they haven't done anything to allow people to, you know, There's definitely people who've been there longer than you. What are they doing with those folks? Just apply a certain, maybe you apply 0.3x to that, right?

27:02Harry Stebbings:I'm a founder and you're an angel investor in my company. Thank you. You're advising me. I don't know how to do sales comp. How do I pay sales people? What would you advise me in terms of genuinely how to think about salary, comp? We had a guest on the show that said before, 20x quota. How would you advise me? We just rolled out a variable compensation plan at Clay before everybody was just being paid a salary, whether you're the top performer or the bottom performer. As a salesperson, I saw that and I said, huh, OK. And like, you know, there's a lot of companies that have done that in the early days, like Stripe did that in the early days.

27:39Harry Stebbings:In other words, no bonuses. No bonus. No cash compensation tied to any performance in a structured way. Yeah. Yeah. OpenAI did this too. I saw that and I said, incredible that it's gotten you this far. let's figure out how how you how you reward and attract and retain the right talent because like i'll give an example we just hired a gtme our our version of a rep you think of it as like a rep and a sales engineer rolled into one we just hired a gtme out here in london and i got off i cut off a red-eye jet from jfk got breakfast with her and the conversation was how do we go make a million dollars here how do i w to a million dollars at clay walk me through the math and that's what the best reps want to know.

28:18I have a target. I'll run as fast as I can towards it. Tell me how to do it. And then they're like, if you don't have the right math, if you can't walk them through it, or you don't have the right percentages, they're like, maybe you don't care about salespeople. But in this scenario, you're hiring what? Your first two salespeople? Here's what worked at Heap. Can I push you?

28:39Harry Stebbings:Do you agree with me? It's fucking stupid not to have it tied to performance. I do, just because I'm an athlete, right? I also think it's arrogant to be, oh, don't worry, you're paid in the equity too. So like, just good luck. We'll go back to your point. If there's no tenders, we're like, thanks, but that doesn't pay the mortgage. I think what it does is it just, it allows people to just like hide. And the way that I actually say this to people when they're like, why? Oh, the variable compensation plan, what if? And I'm like, hold on here. You have a number today. You are being judged against your performance to that number.

29:10If you don't hit that number, I'm going to fire you. And if you overperform on that number, I'm not going to pay you more. Do you think this is a good deal for you?

29:22Most salespeople are like, yeah, if I overperform, I want to make more money. And those are the rules of the road. If I don't have my number, you're going to fire me. And so I understand. I think actually maybe the genesis of this is that a lot of these companies are like, they don't know how to do comp plans. Or they're like, what if, what if, what if. And so they're like, this is actually just easier. And I think that's maybe okay in certain areas. But I'll tell you the thing that Todd, who I just hired at Clay, we were the first two reps at Heap. And we had a compensation plan that was dead simple.

29:54It was, we had a base salary. And I don't know, this was like 2015 San Francisco. I think our base salary was like 60K. Pretty low. And then every deal that we closed, we had to pay back our base salary. So every month it was like, I don't know, five grand. So the first five grand of revenue was a wash. Beyond that, every dollar that we closed, we got 25%. And if it was a two-year deal, every dollar in that two-year deal, we got 33%. And I have never run harder at a goal in my life than when I knew that I was going to make 25 % of every single deal that I closed. It aligned our incentives with the company's incentives very, very directly.

30:34And we just like sprinted at it. And then we compete with each other. We'd be like, who could do the first$100 ,000 deal? Oh, I got the biggest deal now. I got the biggest deal. And it was like everybody was celebrating. Everybody was making good money. And that was it. It was simple to administer, very direct. When we built our comp plan at Clay, I feel like it's really easy to make it really complicated. I'm like, oh, 20 % of your variables is this. And I'm just like, just make it fucking simple because then it's easy to understand and it's easy to administer. Everybody understands the rules of the road.

31:04And we have accelerators. So can I ask, what do you have then? So you have a quota, obviously.

31:10Harry Stebbings:What is the quota? Our quota to OT ratio is like, I think it's like seven and a half. Quite good. Quite high. I was always brought up in the enterprise world by three to four X was kind of where you are. Well, I think below four X, it's like, yikes, right? I was always taught four to six. Like four is kind of shit. Six is like, wow, you're doing great. I think in the AI era, you have 20 X, 20 X, your base salary is your quota. Like that's pretty wild. Punchy. Right? It's punchy. Punchy. But I hit the ground running for that one. Yeah, that's right. It's punchy. You've had the first 12 minutes now, Sal.

31:44Harry Stebbings:Yeah. In the AI era, I feel like we're seeing somewhere like 6 to 10, depending on the business, the types of deals, size of deals, who you're selling to. But we're at 7.5x quota to OT ratio today. If it doesn't make sense, we're going to make it make sense. If it doesn't make sense to have that, we'll change quotas. We'll change pay, that type of stuff. We have accelerators, like you would imagine, normal. So sorry, this is where I mentioned I'm not too fast, which is why I'm a venture capitalist. So I need to hit six to eight X my salary. Yeah. And then what happens? And then I get what? And then you get paid more on every dollar that you close.

32:22Harry Stebbings:Only then? Have you worked at a company where they have accelerators before you hit 100 % of your number? I mean, six to eight X is quite a lot. And only then I get it? Jesus, fuck. So what I'm saying, what I'm hearing is you don't want to come work for me? No, this feels like be the perfect husband, bring me coffee and tea every day for 365 days a year, and only then you might get lucky on the 366th day? Well, so it depends. I'm exhausted. I've cleaned the house for a year. I've made you dinner every night, and I might get one shaggy. It's exhausting, Becca. Look, you have your OT, and we pay pretty competitively, I would say, above and beyond your quota.

33:05And this is actually the argument that we're actually having right now. Like I spent probably two hours in the last two days with my RevOps leader, Varun, Kareem, our finance leader, right? A strategic finance team on what are the accelerators? Because my perspective is if you're overachieving, it should be heavily weighted towards overperformance. If I'm giving you a big quota and you're hitting 110 % of that, I want you to be making good money. If you're hitting 150 % of that, we come back to what's the percentage of quota attainment to make a million dollars? That's the number that we're fighting over because if you have, let's say you have 100 reps, right?

33:4260 % of them are hitting their number. Great. Just hitting. They're making their OTE.

33:48Harry Stebbings:Is that a good amount to hit? The culture that I think is best is when you have 60 % of people over 100%, 80 % over 80%. You're building a winning culture. People are successful. People are telling their friends. They're having so much fun. Very successful. come work here, you get the best talent. That's a rule of thumb that I like. Our strategic finance guy was like, oh, it's 50 over 100 at my last. Great, whatever. You agree on some percentage of your team is over 100 % and a certain percentage is over 80%. And if those things are true, it builds the right culture, which is actually really important in sales.

34:22Harry Stebbings:How do you know when you are setting the wrong goals versus have a shit team? Because two different people could go, oh, we've got too high expectations. Or it could be you're just ownership people. And usually you can tell by the reaction. Actually, coming back to Heap, they hired both Todd and I at roughly the same time. I think Todd was like three, maybe three, four months before me. And they told us like a year later, they were like, we hired you two at a time. I tell every founder this, I'm like, hire two at a time because then you'll actually see, you hire one. You're like, is it good? Is it not good?

34:52I don't know. If you hire two, it's pretty clear whether one's good and one's bad. They told us like a year later, they were They're like, yeah, we hired both of you. And we were like, we're probably going to have to fire one and keep the better one. But you both were really good. So we kept you both. And I was like, oh, OK, well, thanks. But that's how you do it, right? You have, let's say you have 100 reps. There's going to be five that just bitch about quota and blah, blah, blah. But if you dig under the covers, they're probably not doing the work to go and be successful, right? And those are the people that you probably don't want on the team.

35:20Harry Stebbings:I'm an ambassador as well. And I was in Vienna the other day to try and lead a series A. Sounds fancy. Thank you. I'm leading a very glamorous life, not just short shorts. But we went into this office and there was this sales leaderboard and it had, you know, whatever, eight wraps, kind of a series eight early stitch company, so eight wraps. And me and my partner in the firm were like, oh yeah, we like this. Like we felt the competition and we felt the like, they are looking at their numbers and they are on every new deal, every pipe. That's coming to our sales floor. We've hired non-traditional salespeople.

35:50So you kind of have to like incrementally introduce some of these concepts. but like you better believe we're going to build the sales dashboard of how much revenue have you closed, how much pipeline have you generated, what's been your activity this week? Who's at the top? Probably the person who's at the top bottoms up is going to be at the top on the revenue dashboard.

36:06Harry Stebbings:100%. Is there anything that we can do to inspire that competitiveness within sales teams to make them incentivized, encouraged to kind of fight between them? Hunger games of sales. That's why if you create like a zero-sum game, everybody's kind of just looking out for themselves and they're very scared versus that's why I was like 60 % over 100%, 80 over 80 creates this culture where people are excited to help each other and they're excited to celebrate everybody else's success. You think back to me and Todd, to be fair, to like for the record, I closed the first six-figure deal at Heap and then he was like, awesome.

36:39Fuck, I want to go do that too. Okay, I'm going to go get a bigger one, go get a bigger one, go get a bigger one, right? And we'd be bouncing ideas off of each other the whole time. It's like we wanted to help each other because we knew that we were building this thing together, but we were like, I want to go beat you. And I think even a DBT, right, which is like open source product, open source company, very like open source minded. So like it's like a different approach. You're giving away software for free and then you're also trying to charge for it, which is kind of weird dance to do. Once you get big enough, you do teams, right?

37:10So like the last year that I was there, the central team closed the biggest deal in history. And then the EMEA team's like, well, fuck, we need to go get, you know, Siemens or Allianz. We need to go get a bigger deal there. And you kind of just cut, you pit people against each other in a fun way or like, you know, me and Alistair. So Alistair ran EMEA for me at DBT and he would always say, here's the percentage of the company's revenue that comes from EMEA. And you're like fighting over market share. And then I would go to the Americas team and say, hey, make sure that he doesn't get any more points, right?

37:41Hey, your goal is actually that he goes from 34 % to 33%, right? And you just kind of like, you put a little chip on people's shoulder, but in a fun way.

37:48Harry Stebbings:I totally get it just kind of demoralize them in a really fun way it's not demoralizing if the company's growing if the company's growing 3 to 4x which you just told me you're becoming inherently less important but feel good about it so we have 6 to 8x quota and then what happens so like I'm your rap say I did join did you join? no sounds like you have some reservations you're on a high base you don't need to whack it up but 6 to 8x what happens then with the accelerators? So like if I pay you 10 cents on the dollar before, it should jump. But for every new deal at Clay now, do I get 25 %? It doesn't jump up that high.

38:26You know what? I know, very disappointing.

38:29Harry Stebbings:Why did it at Heap and not at Clay? I mean, we did it at Heap because we were the first two reps. And they were like, just go fucking close as much. So you can't have that higher with scale? I think it depends on the economics of your business. So like if you think about Clay, right? Like we pay for the data that we sell, right? We pay per credit in the same way that we charge for a credit of data. And actually, our economics are very, very good. Our head of finance is really smart about all that type of stuff. But in some businesses, you have shit margins. And I've worked for companies that have less than ideal margins.

39:02And it kind of compresses what you can actually pay. So maybe that's something that you look for in the AI era is good margins. I don't actually know why we can't do that. there's some sort of flat pay that you have a base commission rate and then on top of that you get accelerators, right? All that Heap did was just jump straight to the accelerators and say you have an artificially low base. Now go work your ass off.

39:23Harry Stebbings:One thing that you said there are kind of about not great margins with AI companies and a lot of them don't have great margins because they also give a lot upfront. That's right. And inferences their kind of sales and marketing costs in some ways. How does your job change when people have tried the product already, they've got usage already and it's not the sdr outbound that it used to be i think i think if you you're talking about like a plg motion right and if you have usage your your job then becomes what are the next use cases what are the next teams you're fighting over like workloads right rather than going and landing a logo because if you think about think about salesforce how many places how many entrances are there for different ai tools and then how much market share internally at Salesforce do they have?

40:07So like if you go land a logo, let's say Salesforce is on a PLG motion for your company, your AI widget, and then you got like three people in the marketing team using it, three people in the sales team, whatever, right? Your job then as the rep becomes, how do I go take that market share in that company faster than any other AI company or any of our competitors can come in and take some of that? Because once they're in, then you're fighting with them over workloads versus fighting with inertia. So it's almost like, can you go into an account and suck the oxygen out. And that's actually how I think PLG businesses do really, really well.

40:40Someone comes in, they're dabbling in the product, right? And you as a seller, you're like, I'm going to go market that internally at that account to all of the other people and pick up all of the other use cases and secure the borders of that, not to be too American, but secure the borders on that account from anybody else. It's like risk.

40:58Harry Stebbings:Trump would be proud. But you think about going and securing your land in that account so that other competitors can't come in. I saw this with Snowflake and Databricks, right? Snowflake would own everything and then Databricks would get one small foothold somewhere and suddenly now they're fighting over the same workloads and someone's going to win that. How do you build internal champions within businesses? What's your biggest lesson? Okay, so if you actually ask anybody on my team, I hope that they don't listen to this because they're going to groan. I will oftentimes just say, okay, do you have a champion?

41:33And they're like, I have a, yeah, this person is my champion. I'm like, what are the three characteristics of a champion? All of them know. It's they're selling for you when you're not in the room. They have access and influence over the EB and they have a personal win. If you focus on those three things, if you focus on honestly just the personal win, like, yo, why are you doing this?

41:49Harry Stebbings:The personal win is they personally gain from your tool benefiting their company. Yeah. So I'll give an example of a champion of clay at a company that we all would know. Her win is she's like, hey, I'm becoming the AI person. I teach this AI course at the university in this large city. And I'm talking about how I'm using clay and I'm building my personal brand. And I kind of want to get into venture and investing and advising companies on AI. And I'm leveraging what I'm doing with clay to show that I'm that person. And I'm like, that's an incredible personal win. At DBT, you would talk to folks and you'd be like, yo, why do you care so much about this?

42:29This is just data transformation. And they'd be like, but I want to be the data guy. I want to be the guy that owns the entire data stack and does all this cool shit. And then when I leave this company, I can go to another company and be the data guy and come in, hire a salary, get more equity, whatever. If you focus on that, if you can get to that, you probably have a champion. And they're probably going to go to war for you. and they have to have the other two things.

42:54Harry Stebbings:Becca, I'm one of your reps. I'm sorry, Becca. It just slipped to next quarter. I know I said this quarter. I know I said this quarter. That never happens. Never happens. But Mitsubishi, they just slipped to next quarter. What do you say to me? Well, I'd start with why. Why did it slip? Honestly, they took longer to get back to me than I thought and we just didn't get over one. Here's a big one. Oh, this actually happened to one of my reps. Oh, you know, I didn't know how many approvers needed to sign this big expansion. The signer is actually the CEO of this big company, is on his island in Hawaii.

43:29Fuck. And I'm like, okay, well, let's break this down. Is there someone internally that could have told us that? Yes, probably, right? So then did we talk to that person? It's like, did you talk to that person? Did you ask the right question? Because those are two different things, right? You might be talking to the right person, but you just didn't think to ask the question and they didn't think to tell you because their job is not to buy software. Sometimes it is for procurement, right? And then I go to, okay, well, who's your champion? Do you have a champion? And oftentimes what I'll hear is someone mistaking a coach for a champion or a person who's dabbling in the software as a champion.

44:05They assume it's the champion versus I always use this when I say like, and what have you seen with your two eyes that tells you that this person's a champion, that they have those three attributes? What have you seen with your two eyes? and people make fun of me, but they remember, right? And now they've gotten better at it. So like we just opened a London office. I was talking to one of the GTMEs out here and she was like, oh, well, yeah, yeah. He's a bad champion. I'm like, whoa, whoa, whoa, hold on here. And you kind of have to be meticulous and like kind of an asshole about when people say like qualify champion.

44:35I'm like, no, no, no, it's binary, right? Like if you're a bad champion, is it you're really your champion, right? You're either a champion or you're not a champion. Like let's be really clear about it. And if you say they're a champion, what have you seen with your two eyes? Tells you that they're selling for you when you're not in the room. They have access and influence over the EB and there's a personal win. It's pretty simple. If you don't have a champion, you're probably not going to get a deal done. Or if you get a deal done and you're like, I didn't have a champion, you had a champion.

44:59You just didn't know that they were your champion and you probably didn't do the best job.

45:02Harry Stebbings:When we sit down and we do postmortems and we do collaborative forecasting on what we've done and what we've got ahead of us, how often do we do that? Every week on Thursdays, every one of my frontline managers goes and does a forecast call with their team. And they either do it as a team, they do it individually. I actually don't care how it gets done. But I do care that you're sitting down with your rep and saying, okay, walk me through what's the pain we're solving. And then it's like, okay, what metric is attached to that pain? And then who gives a shit about that metric? Are we talking to them?

45:34These types of questions that help us understand, do you have control of the deal? Is the deal in the right stage? Are we making assumptions? Do we need to go back and actually you get to the end and something happens and you're like, I have a bad champion. Well, actually you're back here and you skipped a couple steps, right? Let's just be real and move it back there now and go do the work to actually build the right deal. So we do that once a week. I do that with my frontline leaders on Fridays. And the way that I do it is I just model the behavior that I want them to be doing in their forecast calls.

46:05And I expect that they're in the deals in the same way that like I'm running a couple of deals with reps and it's a lot of fun.

46:10Harry Stebbings:What are the biggest mistakes sales leaders make in forecasting? At the front line, not being in the details, not being in the deals with the rep. I'll give an example. I talked about John Dalton earlier. John Dalton is like one of my favorite people. I would love to work with John Dalton for the rest of my life. He also lives in Santa Barbara. He's very chill. He has a very, very nice life. John Dalton, if you asked him, hey, what's going on with the company? He knows because he's in the deal with the rep doing the work, showing the rep, here's how you do a good deal. Let me teach you how to run these types of deals.

46:43He's in the deal. So he doesn't need to look at his notes. He's like, yeah, this happened. This is the immediate next step that we're doing to get to the EB or to, you know, we have a call on Friday to talk about all the approval processes and the signing process versus, you know, you might ask Stacey, hey, what's going on with company? And she's like, ah, let me check, let me check my notes. Ah, the last update. And I'm like, I can read the update in Salesforce. We have a specific, standardized way of writing your next steps. I can go read that too. But what is your perspective on the deal? Are you in the deal?

47:14And not every frontline manager can be in every single deal. So you have to choose which ones are the most important. And it's usually a factor of how tenured is the rep? How good is the rep? What are we trying to develop with them? Is it a high profile deal? Is it a great logo that we know we can go and expand? Is it the biggest deal? However you decide, you decide. But that's probably the biggest mistake that I see for frontline leaders.

47:36Harry Stebbings:We get that big logo. And never forget what someone told me on the show once, you never want your farmer going against someone else's hunter. How do you think about the maintenance of that relationship with the rep who's a hunter versus like handing off to pushy, cushy, nice CS and then one of your competitors, hunters, is going - Because they're competing for the same workflow in your account because you didn't secure the account. And you've got cushy CS who's now like, oh, softly, softly. And the hunter's going. I mean, look, you're kind of getting into the question of like, what's the model of the go to market team, right?

48:11And like, I've been in models where you do a full handoff. I've been in models where you do a handoff, you keep it for 12 months, whatever. My favorite model is you sell the deal, you're renewing the deal, you're comped on net dollars. So what that does is that incentivizes the rep to sell a good deal, right? And protect your unit economics. Someone on John's team sold a deal that was slightly above list price, right? Wow, they had a much easier time than the rep that discounted 40 % and is trying to go and claw that back now. So it helps protect the unit economics because you know that you wanna go and expand that.

48:45But two, you sell a shitty deal, you're gonna renew that shitty deal and you're probably gonna take some churn of contraction, right? And like, that's actually the model that I love because it incentivizes you, the hunter, to go and secure the border in that account, right? And not let anybody else come take your workflows. You look at like a Snowflake or a Databricks, that's their model. And it's because they're competing over workflows in the account. It's the same for us.

49:10Harry Stebbings:You said about like, oh, the discount, then you've got to make it up over time. Discounting is a great way to stop what I said earlier about, oh, it slipped into next quarter. It encourages urgency. I'll give you a discount if you sign. We don't like discounting at all. I think that's a shitty way to incentivize people. Here's why. Someone said this when I was at DBT. This was a long time ago. We were talking to a buyer and they just like straight up called us on it. They were like, is my money not green on April 1st? And I was like, fair play. I think everybody knows at this point that if I'm giving you a discount on the last day of the quarter, you're probably going to be able to get that same discount on the first day of the next quarter.

49:46And when we buy software, right? I don't know. The rep was like, hey, I can only do this if you do this by next Friday. And it's like, actually, I don't give a shit about your timeline. I need this software today. So like, yeah, I'm going to move fast. You know, we bought like a forecasting tool. I need this because I have no control over the business. I have no visibility into what's happening. Like I need this more than you need to sell this deal. So like, sure, I'll take your discount, but like, we're going to try to get this deal done before next Friday. Right? So like, if you find that, that's why I'm like, what's the metric that we're attached to?

50:15Who cares about that metric? Now go talk to that person and say, hey, how do I help get this in your hands? faster. And if they say, I don't really care about it, you probably skipped a step. Let's go back and let's figure it out.

50:27Harry Stebbings:You said you buy software. I am friends with Jason Lemkin from Sasta, who's like, I just got rid of a lot of my team, including a lot of my sales team. And we have AISDRs, we have Artisan, we have Qualified, we have Monaco now. Like, fuck, I don't need them. I'm doing more, I'm doing better with less. How does the world change with AI SDRs or SDRs dead? Is Outbound dead? Absolutely not. No way. So it's funny, people ask this question. When I first started Clay, they were like, oh, SDRs, what's your perspective? And I was like, I'm building an SDR team. I'm building a ClayDR team because Outbound will never be dead.

51:04You can't reach every single company and every single buyer with whatever marketing you're doing. Or if you do, it's less efficient, right? It might be efficient when you're trying to generate$40 million of pipeline because you have a, I don't know, $10 or$15 million revenue target. But like when you get into having to build a quarter billion dollars of pipeline, like it's actually probably a little bit more efficient to just put some hungry, scrappy 24-year-old on the field, pay them a certain amount of money and say, go run at these accounts, right? That's the first thing. The second thing is like, hey, you don't have an SDR team.

51:39Who the hell are you gonna promote into your closing roles? it's really it's it's it's completely de-risked if you have an sdr that you're promoting those

51:47Harry Stebbings:are the best people so outbound is not dead no outbound is not dead should aes be responsible for pipeline generation everybody should be responsible for pipeline generation everybody owns pipeline i'm out here we we have uh we call it clay day on tuesdays you might know it as its former name pg tuesday yeah every tuesday i ask my team hey who can i reach out to for you you We have a whole channel called multi-threading requests. Who can Varun? Who can Kareem? Who can our chief of staff, Julia? Who can she have our VCs reach out to for you, Rep? Because everybody should own pipeline generation to help make the Rep successful.

52:25That's it. It's so funny that just the same message coming from a different mouth.

52:29Harry Stebbings:Totally changes everything. Yeah. It gets a completely different response. And so I encourage people to think about it. One of the GTMEs that I was talking to out here in London, Tuesday rolls around, we kick off Clay Day. I'm like, hey, what's working well? She's like, you know what? I'm just doing the basics. I take an account and I think about what are all of the ways that I can go and make contact with them. So is it a VC? Is it me? Is it you? Is it our partners? Right? You get a Sequoia partner to LinkedIn message a CEO. A hundred percent. There's an increased chance of that response. Yes.

53:01Harry Stebbings:A hundred percent. One hundred percent. One of our portfolio companies, the CRO, comes in every month and gives me like the top 10 targets. I just go with them to the CEOs on LinkedIn. I have a blue checkmark and lots of followers on LinkedIn. Very important. Very important. Challenge shit on LinkedIn. Nine out of 10 respond. Yeah. They're like one out of 10. Totally different. I completely agree with you. So yes, 100%. You said about, really interesting, everyone at Clay is a social media star. do you encourage your reps to be public online we had the head of growth at lovable on and she's like the best form of marketing is employee-led marketing i i tell people i need to be better at this like i need to follow my own advice like we do really cool shit at clay so like i'll give an example um you can if you work at clay and you want to try out a new ai tool you can just go into a channel and say can i have a ramp card to try this tool out and they'll give you a ramp card Like no questions asked.

53:59Like I want to try this AI widget. Can I do it?

54:01Harry Stebbings:And they're like, yeah, get after it. Versus like a lot of other companies are like, ooh, that needs to go through our AI council and they need to evaluate it and we'll get back to you never. How's that, right? And so things like that, I'm like, whoa, hey, you should actually post about that because one, that's something that no other company is doing and anybody who's out there and sees that and is currently rotting at their company, they're like, holy shit, I want to do that. We do a lot of, you know, we talked a lot about like the cultural things that we do that are fun, right? I think that it should have some sort of learning or training, hey, I'm getting better at my job.

54:34I think that's a great way, like that's kind of modern marketing.

54:37Harry Stebbings:You said AI doesn't change SDRs, it doesn't change outbound. What does it change? I didn't say it doesn't change it. I just said it doesn't replace it. I think about this, like if I can, and this is like my thesis with the ClayDR team is like, let's say 2018, an SDR can book in a given month, say they're booking 15 meetings, right? If I can arm that rep with clay and a clod seat, maybe a lovable seat, I don't know, I can tool them with some sort of AI stack, and now they can book 40 meetings a month, I'm going to say, yes, please, thank you, okay? Now I want to grow my team of SDRs from eight to fucking infinity, right?

55:19Because I see a ton more productivity. Anybody that's like, oh, well, we're just going to cut our SDR team in half. I'm like, hmm, okay, that's an interesting move. That's a scared play that you're making because you're saying, I can get the same productivity for half versus saying, I can get this productivity, and now I'm going to go multiply that into infinity and take all the space, all the oxygen out of these accounts.

55:42Harry Stebbings:But one assumes that you need the SDR for part of the work, and the other assumes that you can replace it entirely and just hand off to an AE. If you think you can replace it entirely and just hand off to an FD, you can get an infinity with one tool. Well, I think how many businesses do you think out there can actually replace the entire SDR process and just hand it off to an A? Right now, none. Right? Yeah. So it's like, okay, you're going to have some number of SDRs. What's been the best AI tool that you've brought into the company from a sales perspective? I don't know that I have particularly found the AI tool and brought it in, but here's two tools that we use pretty aggressively.

56:18like everybody uses level, everybody uses Claude, right? Like I was talking last night with a bunch of my team about like, you know, on the plane back to New York, I'm probably just going to look at the Claude saved projects and just like steal a bunch of ideas. The two tools that I'm obsessed with right now, Granola, everybody's obsessed with Granola, great. You know, they just raised a big round, happy for them. The other tool is Whisperflow.

56:39Harry Stebbings:Are you familiar with them? It's very personal. So Granola, I was the first VC they met and I turned them down. I sent my partner a note saying someone should set up a JustGiving page for them because no one will give them money. Well, they got it. Chris is a friend of mine, and he basically came to me, and he was like, AI and notes. It's going to be a thing. I didn't have any clue how, what, where, when, but that's the thing. I've been in Rome Research. I've been in all the other students. Do you know what, though? It's very objective. I did a reference call last night on my phone, and I used Granola to take the notes, and I just sent it to Varun and my talent partner.

57:14and like it's like very cut and dry. There's like no emotion in the granola notes. And Varun was like, is this a positive? Like was this a positive reference? And I was like, yes, it was glowing. And I looked back at the granola notes and it was like just objective like, yes, Stacey helped me in this deal. Like blah, blah. And I was like, okay, got it. I'll figure out a different process. So like they got some things to work on. And then Whisper flowed to me.

57:38Harry Stebbings:I never had the chance to invest in them, but I loved them. I used them the whole freaking time. I never type anymore. Like never type. The only thing that really annoys me on the phone is the toggle. Yeah, that is kind of annoying, especially if you don't have it open. So, hey, Whisperflow, if you could fix that for me, that would be really great. So annoying. I love that. I'm with you. I don't know if you have this problem. If I open up a new email tab and I just have a blank email, I get, I'm like, oh, my God. Like, what am I going to say? If I can just press a button and say, like, that's how I send out, like, a weekly update.

58:08And if I can just press a button, I say, yo, squad, this is what's going on this week. Here's the numbers. here's the pipeline like da da da and it does the whole thing for me and i just hyperlink yeah and

58:17Harry Stebbings:you can add it a little bit if you're like i didn't want to say like yeah yeah i have that too i find it better for hard emails ironically where like you know it's difficult to know what to type yeah it's easier to know what to say say yeah yeah so i don't know if you know bill bench over at um yeah i remember interviewing him when he was at pando oh yeah yeah i i i have a ton of respect for him. And like, if you've been an operator that long, like, God, you've got some thick skin. But he he'd said the other day, he was like, no one's going to type anymore. Like, if you're typing, you're behind.

58:50You should be talking to your technology. And I was like, that's a weird way to think about it. It's like a very futuristic Jetsons way to think about it. But it's actually true. Like, I don't really type that much anymore.

58:59Harry Stebbings:I completely agree. But you haven't used the AISDR tools to boost productivity. You're not pushing them. I mean, we use clay, right? We use clay to supercharge our SDR team. Because if I can build a system that then tells the SDR where to focus, and then I can go train that SDR, let's go. Don't be a dick. It's not that intuitive. It's not that easy. What's not that easy? Well, I've tried. Varun and Bruno keep on trying to get me to do stuff. Okay. And it's a bit fucking complex. I don't know where to start. Well, so actually it's - It's a bit of a blank page problem. That's right. It's the same problem as Whisperflow and email, right?

59:39It's a spreadsheet. You open it up. It's a blank spreadsheet. So where do you start?

59:43Harry Stebbings:Well, no, Whisperflow is like, just talk. I can't just like verbal diarrhea clay. You can now. Well, you can't verbal. You can type diarrhea. Maybe if you can use Whisperflow into Sculptor, which is like our kind of like, you know, clippy from the Microsoft Word, right? Sculptor is like our little clippy, you can say. I'm trying to find the 100 best Indian restaurants in London and find out who their owners are, what is their Yelp reviews, and what are people actually saying in those Yelp reviews is the best dish, and then craft me an outbound email saying, hey, owner, I'd love to sit with you on Thursday and talk about whatever while we eat this dish.

1:00:19You can put that into Sculptor, and it will build the table for you. So you're actually not starting. because that was like when I was, I guess, interviewing or talking to Varun about joining Clay, there were a bunch of things that I was like, hey, and what about this? Because my wife uses Clay. Or we bought Clay at DBT. What about this? This is a gap. And I'd be like, yo, it is a blank page problem. How do you start that? And he was like, we're actually building. Dick, oh man, is that not Claudified? You could probably use Claude to say, hey, give me the top 50 oil companies in Austin.

1:00:51Harry Stebbings:Find the CEOs of all of them. get me their email for each of them. Actually, Open Air will fuck you on that one straight away. They're like, no, we don't provide emails. Well, that was fucking useful. But think about it. One rep could do that. How do you do that when you have 100 reps? What do you do? How do you scale that out? How do you add in something new and iterate on it? That's a lot of people we talked about. My favorite phrase, the Claude spookies, right? Like, oh, why doesn't Claude just do that? It's like, hey, have you ever tried to like get 100 people to do something different, to change something, to iterate in the same way that you iterate?

1:01:22right? Good luck. Because we're still humans, right? We're not bots yet. So.

1:01:25Harry Stebbings:I totally get that. Listen, I could talk to you all day. I want to move to a quick fire round. So I say a short statement, you give me your immediate thoughts. That sound like it. Okay. Yeah, we'll do our best. Okay. So what's the worst hiring mistake sales leaders make? Focusing on the last company that they were at and if it was a playbook company or not. So like, I'll give an example. It's actually interesting. You see, I don't know if you saw Brian McCarthy just joined Cursor from Rubric. And actually, you know, I was texting with a friend last night, a lot of people are now moving from rubric to cursor.

1:01:55Rubric, very playbook company, cursor, AI first company. And I have a ton of respect for those guys and all the playbook folks. And I think what they've done and what they've taught the craft of sales is really, really valuable. It's going to be very interesting to see how they modify their playbook to be AI first, because I think there's a lot of parts that are still very relevant, but I think there's some parts that are going to be thrown out. I give an example, understanding entire business case before you do anything in the product or you show any value, you can't really sell that way in the AI space.

1:02:27So I'm very interested to see how that works. But I've worked for leaders in the past that they have a certain hiring profile and they do not want to deviate from that, even for high slope individuals. I think that that's a mistake because then you just get the same, you get 100 of the same kind of person versus people who are going to actually push the envelope.

1:02:44Harry Stebbings:What have you changed your mind on in the last 12 months? 12 months ago, I actively resisted using AI. I was like, I think it's going to make people dumber. I think that, you know, you see some folks that just ask Claude the answer rather than reasoning about it themselves. And I was like, oh, I don't love that. Obviously, like now I work at an AI company. So maybe I'm a hypocrite. But like, basically, I went from saying, fuck that. Like, I'm not going to use this thing. I've got a brain and I'm going to use it to, okay, how can I offload some of the things? Or how can I teach Claude to think like me so that I have two of me and I can converse with myself and be my own thought partner?

1:03:24Harry Stebbings:Do sales teams have to be in person? In person with customers or in person in an office? In an office. I'm a five-day a weeker. I show up to the office five days a week. I'm here in London for these four days. Tomorrow, I'm going to go to the office on Friday. I think that you get so much more when you're working in person with your team. Like I get FOMO when I'm not in the office. Are you not pissed when you go in and other people aren't in? Like Friday is the new whole weekend now, especially in Europe. Like Friday is like work from home Friday. Fuck off. It's not work from home Friday. I would never let work from home Friday or Monday.

1:03:58Harry Stebbings:It's basically an extended weekend. Look, I don't track attendance. And like if you're productive, you work from wherever. You get a little bit of flexibility. But if you're underperforming and you're not in the office, we're going to have a conversation. What would you most like to change about the world of sales? I think everybody would say this. I think people feel like they don't want to be sellers. So maybe you're a product leader and you're like, I don't really want to go into sales because it feels a certain way. I think that if people understood that, hey, we're not just making 150 cold calls a day and indiscriminately trying to sling our product.

1:04:33No, I actually thought critically about your business and here's how I can help you. I wish people would view sales more like that, but I understand there's a lot of us out here.

1:04:42Harry Stebbings:When is the right time to verticalize sales teams? You said about critically thinking about a business. That's a good question. Thank you. 10 years of vision. Yeah, you finally got a good one. I'll tell you how we're thinking about it at Clay. We're going to spin out a small new verticals team. And the reason that we're doing it is because we don't have a complete understanding of like the data coverage or the data sources. Do we have them? Do we have the right coverage? We don't have a motion of where we land. What's the story that we tell? So I think when you're trying to enter a new vertical in a concerted way, that's when it makes sense.

1:05:20I also think when there's some sort of expertise that you need, so everybody has a finance vertical or they hire someone in Detroit to sell to the big auto companies, right? There's some sort of differentiated expertise. I think that makes sense. Here's where it doesn't make sense is where, yeah, I've got my guy at JPMC and he just buys whatever. That's dead. Like the relationship type of sale of like, well, I know all these people, I have this Rolodex, that's gone. Because I think today the buying cycle, the buying committee is not just one person. You have to have the product that can go and satisfy the needs of multiple people and multiple kind of divisions in a business.

1:05:56Harry Stebbings:What ACV is justified for a sales rep? So you see lots of PLG tools where they're super cheap and you're like, well, they could expand, but they could not. Like what's the... I mean, I'm not a math major, right? So like there's a math equation in there that I don't know the intricacies of. I'll tell you the ACVs that I'm less excited about as a sales leader, anything below 20K, I'm like, why do you have a rep? And if it's not like a very short sales cycle, like I'll talk to some founders like average deal size is 25K and our deal length is six months. And I'm like, what are we doing here, guys?

1:06:31Right. If you're spending that, you're either spending way too much time with these folks or you could add at least another zero and justify it. Right. you know you talk to like HubSpot and they're at the size where like yeah they've got reps that are working like nine thousand dollar deals right they're at a different scale and they can do it light touch with a lot at the same time yeah right and they're like our average you know we do a three call close and it's nine thousand dollars MRR and like we're just focused on logo acquisition because we know that we can go double those okay cool that makes sense from a business perspective what's your favorite win story of a deal that's a good question thank you what time what time frame any i worked on a deal with a rep at my last company it's a large bank in australia it's one of the big four banks and one we had a we had an eb she was the chief digital officer chief data officer and she just fucking got it man like she was she was maybe a little bit earlier in in career for for like a c-level role she was super innovative she would come to us and she'd be like yo i'm checking out these other tools what do you guys think how did they play like does this story makes sense.

1:07:35So like, it was almost like working with a friend that was like really smart that was putting together their data stack. The use case was the coolest though, which is they were using our product to basically create new derivatives that they were going to sell to my classification, poor rich people, people who had between$10 million and$50 million of net worth. And they were going to launch 10 of these products and they were expecting each of those products to

1:08:01Harry Stebbings:generate$100 million for them. And I was like, wow, like you've thought about like, we kind of uncovered all that and helped them build the business case. But like, it was something that was like a very intricate use case that had a huge financial impact. And it was just it was a fun team. I actually my favorite deals are not the biggest deals is the deals where like, I'm working on one right now with one of the GTMEs on my team. And like, I show up to the calls. And you know, we have our plan. We know what we're trying to do. We're like, hey, we need, you know, we need to drive these steps. But like the people on the other end of the phone are two women who like have their shit together very clearly.

1:08:40And they're like, we need to make a big change in this company. And like, here's how we're thinking about doing it. You guys have done this with other people. Are we thinking about this the right way? And I'm like, you were thinking about it exactly the right way, Christy. Like you're doing great.

1:08:53Harry Stebbings:What's the biggest deal you've ever closed? Me personally? Yeah. It was$1.1 million for three years. So it was like 3.3 TCV with a large financial services company. That's a good day. It's a good day. What's your biggest advice to a new parent? The best advice to a new parent? Actually, my wife and I talk about this all the time. If you have a rigid schedule, then the kid can be off schedule. If you don't have a rigid schedule, you're like, the baby eats when the baby eats, the baby sleeps when the baby sleeps. No way to get off schedule. No way to feel down about yourself, feel down about the kid.

1:09:31You just go with the flow. Makes your life a little easier.

1:09:34Harry Stebbings:Mark Andreessen, we call that retard-micing. Let life do its thing. And you're like, you know what? It did its thing. Yeah, there's a little bit of that in there. I love that. That's amazing. Listen, it's been so fun to do this. Thank you so much for being so amazing. And I've loved having you on. Thank you for having me. Really enjoyed it.

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