From First Lead to Repeatable Revenue

Speaker A: Foreign.

Speaker B: It's Glenn Solomon here. I'm managing partner at Notable Capital and I host a podcast called Founder Real Talk. Um, but today is something different. We are hosting the pilot episode of From First Lead to Repeatable Revenue with Jonathan Buckley and Michael Hughes. A uh, CMO and a CRO, both extraordinary and they're going to be in conversation. I'm really really excited to have this conversation. Uh, both Jonathan and Michael have a tremendous amount of experience. Let me introduce them now. Uh, and then we're going to get into what it's like uh to build a startup from the CMO vantage point. The CRO vantage point. There's lots of mistakes you can make and lots of things you can do right and these gentlemen will really help us unpack uh, what makes for great decision making early on in these areas. Um, so as I mentioned, I'm Glenn Solomon, I've been in the venture capital industry for over 25 years, uh, have backed some industry defining companies uh, along the way I've been very fortunate to work with uh, founders of companies like Hashicorp and Slack, uh, Zendesk and Square, uh more recently companies like uh, Neon which uh, just sold uh, for reported about a billion dollars to uh, databricks, uh, Vercel which is an extraordinary company that's working really well. So I've worked with great entrepreneurs and as a result have also had the opportunity of working with great uh CROs and CMOs. Um, there's lots of challenges that come along with um, uh those roles and integrating them into startups. Jonathan Buckley, uh, who uh is with me here today is a veteran uh, uh startup cmo. He's got deep experience building high growth brands and go to market engines. Uh he's known for being very pragmatic and data driven in his approach which I appreciate uh, and specializes in turning like early traction into repeatable growth systems which is really really hard to do. Jonathan's also a prolific writer. Um, we'll touch on some of the, some of the posts he's done over the last uh few um, months uh, that are available on LinkedIn. But a few of my favorite, don't hire that CMO yet, which is a great one. Build uh, test and prove a real GTM operating system for startups. Also one that has great insights. Michael Hughes uh, is uh a uh very well known CRO, uh in Silicon Valley and in technology generally. Uh, two time founder and former CRO at Barracuda and Chargepoint. We're definitely, I mean Barracuda, what an incredible company. That was uh, and built incredible value. So I'm really looking forward to hearing more from Michael about uh, his experiences and particularly at Barracuda. Um, gentlemen, welcome. It's great to have you and I'm really looking forward to this pilot episode. Thank you.

Speaker A: Glenn.

Speaker C: Yeah, the same. Thanks. Looking forward to it as well. Thanks for hosting.

Speaker B: Yeah, thanks. Thanks for having me. Um, so I wanted to start, um, by kind of uh, talking a little bit about timing. Um, I think when startups get going, uh, they're not born with CMOs and CROs in place. Um, founders were lift a lot of the early water, um, in go to market as well as product and product vision. Um, and when that right time is to bring in a CMO and a CRO is a super difficult and vexing challenge. Jonathan, let me start with you. What are your thoughts on timing with respect to CMO hires?

Speaker A: Well, our recommendation to most of the founders that we service, uh, CEOs and management teams we service is that um, the proper time is probably around the series B financing. We recommend from the point in time of product market fit, maybe under a seed round through series A that they work with um, a highly experienced fractional marketing team. Now I'm not talking about specialists that may be creatives or SEO specialists, but bring in something, somebody with a business consulting background and experience in finding um, early stage traction. Um, that's why I founded my company, the Artesian Network, specifically for that purpose that way. There's a couple of reasons for that, Glenn. Um, number one, very early stage companies have a hard time attracting senior experience talent because they're not de risked yet. You're talking about people in the prime of their career trying to make the case to come to something that's untested and unproven. Um, it's rare to find someone who'll make that leap. And so generally the paradigm is that they reach into uh, larger companies, perhaps very large companies and find say a director level individual and then up, up level their, their title. Um, that's fine. Great companies uh, train marketing people very well. But usually there are two attributes that you find. Uh, number one, they simply don't have the time in seat to see patterns across many companies. And that is very important to pollinate into an early stage company. Number two, larger companies tend to develop their marketing staff in silos so they become content experts or email marketing experts or SEO experts, etc. Uh, what you're looking for is a marketing generalist with a business consulting background so they can speak to the CFO operations of Course engineering and the founder CEO. By the time you're ready for your series B, you should be at a repeatable, predictable model de risking the company to a great degree, showing some ability to ramp. You'll have easier access to senior experience talent and you'll have the budget to be able to afford it. Because frankly building a full marketing team too early puts an undue burden on uh, the capitalization of the company. That's, that's my opinion on the matter.

Speaker B: Makes good sense. Let me, let me um, turn to Michael for a second. But I want to turn back to um, you know the, the, the, the timing uh, and, and chat about you know, kind of what could go wrong there. Michael, uh, on really same question to you on CRO. Like when, when's that right time to bring in a CRO. Uh, you know founders are often um, unsure about this. Uh, and you know, sometimes start with a salesperson or two. You know, usually start with founder led selling and then sometimes hire a salesperson or two. But when does a CRO make sense?

Speaker C: Yeah, it's a good question. In much this, in much the same as the cmo. Too early is dangerous. One, you're not going to get the right candidate. You're probably going to attract somebody who's doing it because they want a fancy title which may or may not be a great thing. Um, and the bulk of the until you have product market fit and a proven methodology, we do this amount of outreach, the create this amount of leads, those leads turn in this amount of opportunities. There's nothing to replicate and you need this, you need the CRO much like the CMO when that time is there. So I always think it's best to start with originally a couple of really biz devi kind of salespeople that learn and listen to customers really closely, figure out what their value prop is, figure out what the product does for them, why they use it, why they keep it, how it grows. Um, they can feed back to product directly where it needs to go, how they should think about it that will lead to a better product. I don't want to say a brittle product, but a well defined product that then allows you to then say great, now we can do more and perhaps go into new segments or new verticals or whatever the case might be. But the CRO should come at a time when you really have proven that and are now trying to scale that. So Jonathan talked about it in terms of series of funding. I don't know that I think about it that way, but I definitely think about it where you say, look, if I pour more gas on the fire here, I know what the result is going to be. And if you don't know that answer, you're probably too early to hire a CRO and try to scale because those skills will be wasted at that point

Speaker B: in time when, when you say, like, uh, instead start with some. What I'll use your. Your word Biz Devi salespeople made that up. But I know, I know what those. I know. I think, uh, probably a lot of, A lot of founders know what that looks like, but they're hard to. Those people are hard to find. Um, you know, and hard to assess whether, uh, I've never really met a salesperson who didn't say, oh, yeah, I, I'm, I like to figure things out. Um, uh, how do you know if you're, if you're, you know, how do you find those people? Uh, and how do you assess whether the people that, uh, you're thinking about bringing on are really going to fit that role? Because that is a tough role to start with.

Speaker C: Totally agree. It is hard, I think, uh, ascertaining what they take away from their experiences in their career that they remember that were provided value that made them excited. Um, you know, so questions just about, hey, what did you, you know, at this job or this thing, or one thing or another, what did you really get out of it? What did you take away from it? What was your highlight? And if those answers are in revenue numbers or in quote of, uh, uh, you know, achievement or in revenue, W2, that's the wrong guy. Somebody who's like, wow, so cool. When we figured out that this market needed this. And then we, you know, this was the tweak and that was the change. Those are the people that, you know, and they might come from product management, right? Then they don't have to be pure salespeople. Salespeople. The advantage of a salesperson is they wake up in the morning and they're panicked. They're going to go find their number. You need that. I'm going to get on the phone, I'm going to call 100 people, I'm going to go work my way through this thing. But if you can find some of that energy metrics orientation in a producty person or even a, uh, systems or, you know, systems engineer kind of guy, they can be really good at that job too. So it's that, it's that mix of skills that's, as you said, really hard to find.

Speaker B: One question I like asking, uh, people is, uh, you know, in any role. Tell me about, like, what are you most proud of at this, you know, that last role?

Speaker C: Yeah.

Speaker B: Um, and I totally agree that if the person is like, I'm proud that I made President's Club three years in a row. That's great. But that's not your first sales hire person. If the person is like, well, I'll tell you what I'm really proud about is like, we were walking in the desert and I figured out, or, you know, along with, uh, you know, uh, an engineer, like, we actually figured out that we could turn the product 4 degrees to the left and start emphasizing X, Y or Z and all of a sudden, like, people got it. Yeah. Uh, that. That's the, uh, that's the person. Yeah.

Speaker C: I would add one of my questions with Glenn was, know, tell me about your last vacation. And the person who answered like, I just booked a ticket to Italy. And then I'd figured out when I got there might be the candidate. The one that booked the Apple vacation was all inclusive, and you just show up at the airport and they just take care of you. Not your guy.

Speaker A: Good point, Michael.

Speaker B: The Club Med. The Club Med vacation guy is not your guy. Okay, uh, and Jonathan, um, back to you on cmo. Um, you know, in, in your, uh, in, in the post, we, uh, we talked about that. You recently, uh, uh, wrote about don't hire that CMO yet. You know, you, you outline a bunch of reasons why. Um, you know, if, if people are, if, if you hire too early, you may end up, you know, stubbing your toe. Um, can you talk a little bit more about that? Like, if you're advising a founder and they come to you and say, like, you know, is now the right time? Or, you know, does it really matter if I hire a little early? Maybe I'm not quite ready. What, what are the dangers and what, what, what could go wrong if you end up hiring somebody too early? Even if they're great?

Speaker A: Sure. Even if they're great. Um, so a couple of things that we see in repeated patterns. Um, number one, um, it's the wrong fit. In other words, you have a CMO that's a later stage CMO that is tuned towards optimization rather than efficacy. Remember, we want this person to think like a scientist, not necessarily a mainstream marketer and salesperson. That's the point. Experiment. You know, build, test it and iterate it according to the measurements that you get out of it. So look, the, the, um, average tenure of CMOs in Silicon Valley is about 18 months. That's that's too short. It costs a lot of time and a lot of money. When, when startups are, are um, they're, they're only competitive advantage when you come down to it is speed. It takes time and a lot of money and you're risking that you're getting someone too soon that's built for optimization of the system. You need to get to repeatability and predictability. And much like Michael outlined for the salespeople, it's a different kind of marketer. It's a different kind of marketer. It's, it's the entrepreneurial marketer is, is different than the later stage optimizer. And so we, we see that the wrong person at the wrong time comes in and look, we all have to manage, burn. It costs a lot to recruit and bring on uh, for whatever, 200, $250,000 a year, um, uh, a, ah, CMO and up by the way, um, and then have that CMO turn around and then have to spend two months to hire uh, the different disciplines. It's easier really to find a fractional team that, that can carry you to the repeatability predictability. And like Michael said, I'll put it in a different way. You uh, want to get to the point where you can hit the lever and get a biscuit. You know, put a dollar at the top of the funnel and know that you can get $10 at the bottom. And once you have that then you need an optimizer because you have your formula for repeatability. So that's sort of the um, argument behind uh, this, you know, don't hire the CMO yet. One last thing. Um, Michael was correct in saying that um, Series B is not always the right demarcation. I use that as a proxy for the point in time in which you have repeatability and predictability. So to be honest, depending where the company is, it might be series C, it might be earlier than the B. Again the demarcation is really the repeatability predictability.

Speaker C: Ah, can I just add to that for a second? Um, I think um, there's downsides to hiring Sema too early. 1 Jonathan outlined a bunch of them. There's also the downside if they don't work out, then they go away. And now you look like execs can't stay here where you don't hire. Well, other things looks bad. Um, but I think the primary thing in the times I've seen, in my fractional work that I've done and in the companies that I've been a part of, cmos the most common one is they're focused on brand, uh, brand building and um, storytelling and all of those kinds of things. And early stage especially. Glenn, I would love your perspective on this. The goal is to sell something. The goal is to build revenue. And so if the reason they exist and the current CEO at ChargePoint asks this question of every employee, why do you exist? If that CMO's answer to exist is to build a brand or to build this company or to make this company known, that's a bad answer. To me the early stage answer should be to grow this company as fast as possible. And my piece of that puzzle is to provide leads and opportunities that allow the sales team to go turn that into dollars and cents. Um, and so I think the most common challenge I've had with CMOs over the course of my career or where I've seen companies go awry is when they're hiring the brand building cmo. And then that really hard, gritty, metric driven demand generation stuff is interesting but not important to them.

Speaker B: Jonathan, how does that hit you? What do you think of that? Um, when you think about the great early stage CMO hire, what qualities do you want to see in that person? Um, and what do you think might be overrated? Uh, when, when, when uh, founders are, and boards are thinking about that hire?

Speaker A: Yeah. So I agree with everything that Michael said and in many ways it was uh, different words but a reiteration of the same thought. Yes, the optimization bucket later stage. Companies need to build brand and that's uh, that goes in the optimization bucket. Right. You want to build that trust in the market, the recognition and awareness and you have your repeatable predictable model earlier. You have to have a multidiscipline CMO that um, uh, factors in speed. Uh, at all costs. It's okay not to be great, it's okay to be good, but fast rather than great and slow and get to that point in time as fast as possible where you can prove empirically repeatability. You're going to want a quant, uh, based, uh, CMO and team. So like Michael had mentioned, um, drive to metrics, understand their role in the process, understand that they are connected to sales and they're connected to product because they need to be. There needs to be a feedback loop. That is a nice feature to find in your marketing team that's helping you early on is whether products tucked under marketing or more commonly in the valley these days, a separate organization. You should have the ability, you should have a good conversation between product and marketing at all points. In time and for that matter sales. So um, being able to being technically minded since we are talking about technology companies and quant based are two um, important attributes to add.

Speaker B: That's great. That's great. Uh, um, you know your comment about also strong relationship like you need to have somebody leading your marketing effort who A works well with, works uh well with uh the sales team but B also really works well with product is really resonates for me. You know I've seen when that goes well and it's just magic. Yes. Um, and but if it doesn't go well that's a problem. So one of the things you know when, when I think about I'll ah, I'll add my 2 cents. Um early stage CMO marketing leader folks uh who spike in product marketing and content and really understanding how to um, like take what is probably rich technology at a startup and turn that into something that people can understand why it matters and like what role it has in the world is really important because if you get that right then demand gen campaigns can be um, you know, uh, very successful. Uh, if you know, if you don't really know what you're trying to sell then it's hard to, hard to build a pipeline. If you're really good at knowing what you're trying to sell then you can define an ICP really well and start building campaigns and really driving not just top of funnel but important top of funnel and like relevant top of funnel which in my mind is super important.

Speaker C: Yeah. Translating features and tech to value is hard. Making the complex is hard. And so if you can find the marketing leadership to do that, that's really important. That's a really huge skill.

Speaker B: Yeah. Uh, so Michael, let's shift a little bit and talk about what makes for a startup sales leader or CRO like really the right type of person to go hire. Um, versus you know, same question like what, what, what might be overrated, uh, or over hired for that may, may not make sense when a company's earlier in their journey.

Speaker C: Yeah. Um, again early days multi dimensional skill is really important. And so I mean I think about um, somebody who's done a variety of different roles, done some business development, perhaps started their own company, perhaps perhaps had enterprise sales roles, um, you know, run channel organizations, all of those kinds of things.

Speaker B: Right.

Speaker C: All of those are relevant and having a variety of those experiences helps understand what the right levers to pull are in any situation. Um and so I think uh, broad based experiences but more than anything curiosity. Right. They don't if somebody Brings their playbook, they're not the right person. Meaning you gotta go create the playbook for the environment you're living in. What are the assets you have, what does the product do, how does the market meet that? What is the value that the customer sees out of that? So if sales folks talk about, or sales leaders in particular talk about, oh I've got a playbook or they want to bring their playbook, I have not seen that succeed. Um, so it's curiosity, a desire to figure things out. Those are really important. And I would just say, and Jonathan talked a little bit about it relative to the marketing lead. Um, I have not, I'm over, I am over hiring big company people into small companies. And so uh, if they've been in a big company that's great. Maybe they've seen some things and some scale and how this works and all that kind of stuff. But if they spent a career there or their developmental part of their life there, not only could they be singularly disciplined as Jonathan described, but their timelines are different than a startup's timelines. Their ability to figure stuff out is different. Um, I've had sales leaders say, well send me the PowerPoint and I'll go deliver it. And I'm like, sometimes you just have to go create the thing. Right. You have to learn to tell the story yourself, adjust to each individual customer. So I think uh, it's a tired phrase but hiring an athlete um, is as important as any given skill.

Speaker A: Yeah. Michael, to your point, the sheer support requirement of people that come in from big companies can drown drawn out a company. I mean the PowerPoint's a perfect example but um, you need someone that's going to roll up their sleeves again, be multi disciplined, quant based, be able to speak to product. But um, is a doer, you know. Absolutely.

Speaker B: Yep. Jonathan, um, you know we're talking a lot about what makes for a successful CMO and CRO early on in a company's life. And it sounds like you know, both, both of you guys are really talking about that learning mindset. And in your build it post you talked about the sales and marketing learning curve. Can you, can you drill down on, on that for us and just ah, talk about what that looks like well implemented at a startup?

Speaker A: Sure. Um, some years ago I um, I made a derivative work from um, famed executive and investor Mark Leslie called uh, the sales learning curve. Of course I added marketing to it and I give full attribution to Mark Leslie for this. But um, the concept is if you treat the process of refining your sales and marketing, uh, um, sales and marketing process overall I should say, uh, as you would in the manufacturing process of starting with low volume, high cost production and then manage the cost per production down. It gives you a breaking point if you map your business at which point it makes sense to put fuel on the fire. So Mark Leslie um, said, you know, a lot of his learnings were that um, um, the capacity sales model applied too early where you make a broad assumption that each salesperson could bring in say a million dollars a year. Thus we need X number of sales salespeople, uh, and sales engineers, et cetera. Overly burdens the business too early. So if you approach the company's economic model in terms of cost per predictable unit, again this comes down to getting predictable repeatable model and then honing it to such a point where each, each um, FTE ad, full time equivalent ad in sales can predictably drive so much revenue. Um, if 85% of the people work out. So you know where your economics are going to come in the business. And that's when you should m. Move out of experimental mode into more acceleration mode and put fuel on the fire. So that's broadly the concept.

Speaker B: Glenn makes a ton of sense and it sounds like, you know, if you get to that point then you need you know, uh, as, as you called it, uh, an optimizer, um, running marketing. But until that time you need more of that, that scientist, you know, somebody who's uh, it's okay to be good but move fast.

Speaker A: Right.

Speaker B: Uh, as opposed to trying to be perfect but moving slow. Yeah, right on product. Okay, so I, I wanna, I wanna switch gears um, and put you guys in the mosh pit. Um, the CMOs and CROs get along. Can uh, they get along? I've seen some pretty tough moments between these two. Um, you know Mike, let me start with you. Should there be healthy tension between sales and marketing? Um, and you know, how do you know when healthy becomes unhealthy? If you're, if you're ah, if you're a founder.

Speaker C: Yeah, yeah, that's so good. So there absolutely needs to be healthy tension. I think the most important characteristic frankly in either hire is that they are self aware, willing to make, willing to admit they made a mistake and then be interested in collaborating. Um, you know, and, and I think of great companies. I mean if, if you spend any time with Evan Reiser at Abnormal Security, he understands from the get go that these two things have to work together and build a metric system just like Jonathan described that says I Know, I'm gonna, I'm gonna hire another sales rep because I'm gonna have them busy from day one and they're gonna go after it. So all of that's connected. Um, I would say, um, CMOs and CROs need to have a healthy tension and the connection between them has to be that what I argue is the holy grail of success in a startup. And that is everything from a name to an MQL all the way through to a closed deal and metricing and managing that process, um, on a real time basis. And Colleen, my CMO at ChargePoint, did a great job of organizing a weekly meeting in which the sales team and the marketing team got together. It was best when sales ops managed it. So nobody's egos got in the way or anybody felt like their toes got stepped on. But you got to look at that every week and that should be the means by which to really connect. Because there's really context that both sides have that is not obvious. Like, hey, we created 847 finance leads. Yeah, but those finance needs never close. Or hey, we, you know, uh, healthcare is really taking off well because there's interest there. That doesn't mean the purchase price is big enough to warrant my time. And so all of that context has to be related on an every day, every week basis without ego, um, in order for those teams to operate at a high level and there should be tension there. It should be, that's great. What could we do more? Or could we do it a little differently or whatever the case may be. Another example is that what I, what, what in the industry is referred to as hand raisers. Somebody that comes to your website and says, hey, tell me more, I would like to learn more, has a way higher return rate than a lead scored person that came to the website and filled out, you know, looked at a bunch of stuff. Marketing should not expect sales to react to the high efficacy lead the same way they react to the low efficacy lead. So leads are not created equal. If you're not in communication and have healthy tension around that, you're not going to get to that data.

Speaker A: I would like to, um, Glenn, add to that maybe a slightly controversial statement. Absolutely. You need that healthy tension. There has to be trust between them. Uh, a very good rapport, uh, based on trust. Interestingly enough, I've done a lot of reading on this because I've come across four sociopaths in Silicon Valley over the 50 companies that I've served.

Speaker B: Only four. Jonathan.

Speaker A: Well, four that I know of.

Speaker C: Two are on this call, Glenn.

Speaker A: Well, it turns out that, um, the incident of, of um, sociopathy. The. In the top five professions of sociopaths are sales executives. And of the top five environments to find them are small companies. They tend to thrive, actually. So, um, in my career I've come across this four times. And there's a, There's a problem with dealing with a narcissistic, um, person in that lead role. They're usually inflexible. And Michael talked about having that conversation back and forth, adjust and iterate. They usually come in with frameworks that they want to drive, they want to control. And um, I'll give you an example. There have been a couple of execs that wouldn't let go of the big SDR model, building out big SDR teams. And of course the digital process is ever increasingly taking over that burden that SDRs used to carry. Now there's a role for SDRs, of course, but I, uh, mean, as the primary way of dialing and smiling and getting business is well behind us now. Um, so in these circumstances it was difficult to work together. Now Michael and I have been in a couple of companies together actually, and um, he's on the board of another one, um, my company serviced. And we've always had that rapport personally, um, and professionally. Um, I mean, he's salt of the earth. He's anything but a sociopath.

Speaker C: Oh, I'm not the one. Oh, good.

Speaker A: No, you're not. Hope that wasn't too controversial. But, uh, it's just the data. Just the data.

Speaker B: Uh, that's, uh, that's helpful. Um, and um, you know, Jonathan mentioned, um, Michael, the importance of, you know, that, uh, and just pulling on something you mentioned earlier around needing, um, to be flexible as a salesperson and not, you know, not coming in with a set playbook. I, uh, do think that sometimes leads to. Can lead to um, perverse outcomes and challenges with marketing. Um, you know, I'm curious at Barracuda if you had, um. Barracuda was such an innovative and interesting young company. Maybe any, any lessons or stories you can share from, you know, that, that part of your career, um, where, you know, you guys were kind of inventing, go to market and uh, you know, what others can learn from that.

Speaker C: Yeah, I think. Thanks. Yeah, Barricut, I think, you know, was a special company in many ways, but really, um, built a brand. That brand led to a lot of opportunities that came from marketing. So the marketing team was amazing. Michael Peroni, the founder, led that. Amazing. Led. Led a bunch of opportunities. So we had to create the best inside sales team I think we could. But you know, arguably in the world at the time, I'm quite proud of. But some things come out of that that are really important and it's related to this process. The efficacy of, uh, an SQL becoming a deal is generally related to some simple things, how fast you can process it. So speed enables everything. And marketing gets mad, rightly so, when sales doesn't pick up a lead and turn it into an opportunity very quickly. So I think the first thing to focus on is speed. How quickly you pick up an SQL or an mql, turn it into an SQL on down the line. The second thing is, um, any chance for a handoff is a chance for a fumble. So if you're going from SDR or, you know, marketing person to sdr, to ae, you know, to outside AE or whatever, every, every turn, every handoff will drop. And so doing things like hot handoffs like, hi, Glenn, so glad, uh, we've had a chance to talk. This is Jonathan. He's your, he's going to be your ref from this point forward. He's going to take great care of you. He lives in St. Pete. He's a great guy, blah, blah, blah. You have to transfer that goodwill in that process, otherwise the conversion rates go down over very quickly. So speed is number one, avoid handoffs number two. And then finally, I think, and it's hard to do this in a Covid world, um, a post Covid world. But density drives learning. And I'm sure you guys have seen this, right? If you're sitting next to somebody and they're saying stuff, you start repeating that stuff you learned along the way. You got a leaderboard posted in the corner of the room and you're chasing that thing down and you want to be on top. All of that is really important. And I think in the companies I'm helping today, there's not a central office inside sales folks, SDRs, all of them are not next to each other and it hurts, right? And so I think the opportunity for density, even in a, uh, post Covid world is something that people should try to get to, right? If you're building a company, put everybody in the same place if you can. You'll get far more benefit out of that. And you learn in real time before you hire. As Jonathan talked about earlier, that expensive enterprise sales guy on the outside, you've really got a process that you've honed over time and you've made it, um, repeatable, inexpensively.

Speaker B: Love it. Um, you Know when, um, if you're, if you're a founder and you've, you know, you, you've been listening to this, this podcast and you, you know, uh, waited for product market fit for before you brought in uh, your cmo and you know, you, you hired a CRO who uh, didn't have a set playbook and really wanted to learn and everybody, everything, you know, you've kind of followed all the rules that have been outlined here. But finger pointing starts, the business isn't hitting plan and inevitably when businesses don't hit plan, fingers sometimes get pointed. How do you manage that when marketing and sales are kind of at each other's throats? Uh, if you're a founder, um, like have you guys been in a situation where somebody's done it well, um, and um, you know, any, any lessons learned from that and conversely, you know, where situations have gone awry, lessons learned from that. Jonathan, maybe I start with you.

Speaker C: Sure, sure.

Speaker A: So there are certain things you can and should do by, by due course. And um, Michael mentioned earlier the concept of lead scoring. Now it's a, it's a methodology of uh, stack ranking all the different prospects, all the different contacts and all the, in the leads that come into a company and mathematically it should, um, bring to the top the ones that sales should serve first. Um, when folks get into trouble, I found that, you know, when sales and marketing get into trouble, it's a combination of a couple of things. There isn't an agreement on the proper lead scoring. What's a lead? What's an SQL? What's an mql? Uh, the second thing is there isn't a, let me call it a service level agreement between the two organizations. In other words, when a handoff, whether it's a hot handoff or not, happens that there is a certain obligation in X number of hours or days to follow up with, with that. It eliminates and it diffuses a lot of the tension, the unhealthy tension that might develop between the orgs. But those are the two things that I've, I've seen help at least start to unite the team. And it's important for the CMO and the CRO to get dinner with each other once in a while. You, you have, you're in the trenches, you're carrying the guns together at war. You need to develop a rapport. But the methodologies I just outlined will help sort of unite them and the founder can help facilitate that.

Speaker C: Yeah. The only thing I'd add would be quick. Jonathan said exactly what I would have said. I would say two things in addition. Everyone should read Five Dysfunctions of a Team and live it.

Speaker A: Yes.

Speaker C: Most important business book ever written. Uh, and number two, as the founder or CEO, don't think it's just going to get solved. You may have to sit in the middle of it and grind through it to get to that process. I think many times we like to observe a problem, and if it's a problem between departments, it's actually the senior person's job to go mine that problem and fix it. And so just telling them to fix it is not an answer. Uh, I've worked with CEOs and they're like, well, I can't get them to talk to each other. Okay, well then just, you know, you're in the meeting, moderate the meeting. You're going to see what's rational and reasonable and you're going to make decisions. It'll move quickly and then it'll normalize.

Speaker A: You know, uh, maybe this is kind of funny to throw out, but Michael and I both had a boss at one point that, um, in order to manage the ever growing tension that was in our staff meetings, brought in a big bowl of pingpong balls. And whenever something got to a certain threshold, we were allowed to throw ping pong balls at each other. Now, it sounds absurd, but it was a way to make people chuckle a little bit without anyone getting hurt and, um, relieve tension. And I owe that to Gary Gyson, if you're out there listening. Thank you, Gary. Michael and I appreciate you very much.

Speaker C: Agreed.

Speaker B: All right. The ping pong ball method. Yes, we have to brand that. That's awesome. I might, might suggest Nerf balls. Just.

Speaker C: Yeah, they're a little softer, right?

Speaker A: Okay.

Speaker B: A little softer.

Speaker A: All right.

Speaker B: Um, okay, um, let's talk a little. Just, uh, turn, turn, uh, to some nitty gritty. Um, maybe. Jonathan, I'll ask. Start with you. Like, should marketing be driven by revenue? Like should, should a marketing leader have a revenue number? Um, or what other KPIs do you think marketing ought to be? Gold. Ah, against in an organization.

Speaker A: Right. So there's the micro measurement and the macro measurement. So ultimately, yes, marketing should be driving towards a revenue number, whatever, ARR number, etc. Um, but there are, uh, when we come into companies and help them set up their operations, what we do is put a set of benchmark metrics for all the different processes that we're putting in place. Commonly everyone knows email marketing metrics, for instance, but social metrics, um, content, readership, um, there's All I have articles in it and I believe. Build it, test it, prove it. That article on LinkedIn covers a number of them before, um, before you get to that repeatable, predictable revenue model. Because it's really unfair to attach to a number that first starts as theoretical. It's a goal. Right. Um, you have to lay the breadcrumbs out along the way and make sure that you're hitting those micro numbers in those sub processes. And then when you get that repeatability, predictability and fairly put together your sales and marketing learning curve as we discussed earlier, then you can start to shift your measurement to the macro or the, or the revenue number. That's my opinion on that matter. Yeah.

Speaker B: Makes, makes good sense. And, and Michael, um, in, in your experience, what about like, you know, SDR teams, BDR teams? Uh, I've seen marketing own, uh, own sdr, uh, efforts and I've also seen sales. What do you think makes the most sense, uh, on that front?

Speaker C: Yeah, I, I am not hell bent on either path there. I, I'm happy to have it as a CRO. I'm happy for the CMO to have it either case. I would say the success of the SDR job is tied to someone else accepting that as an opportunity. And so you're going to get a healthy tension there anyway. So if that's cross departments, then the CMO and the CRO need to be of like, mind and work together and have all the, you know, cooperation that we talked about moments ago. But where it lives has not been, uh, I haven't seen a. It's way more successful over here. It's way more successful over here. Um, it's, it depends on how often they have to integrate with that department. Right? So if they're in constant contact with the AE to say, look, I'm setting you up for a Tuesday for a conversation with so and so. Well, the CRO can say, look, you're going to get on that call AE and you're going to be there on time and you're going to be prepared if this, if that becomes a problem, then maybe you should live with the CRO. If they're not collecting the right stuff, marketing, you know, content leads, picking them up fast enough, understanding the message well enough, maybe they should live in marketing. It just depends on where the, where the challenge lies.

Speaker B: M. Okay, um, I want to um, uh, ask you guys a little bit about, you know, how to get, how to make sure a line like we've talked about when things can go awry between uh, sales and marketing. As functions and, and certainly the leaders of those efforts can, can really get at each other's throats. Um, and you guys have talked about how to try to avoid that. I like the ping pong ball meetings. Um, but, uh, are there anything like, any kind of like, rituals that you'd otherwise recommend founders try to instill, uh, to make sure that their sales and marketing leaders really kind of work well together. Um, is there like a, you know, a set number of meetings, a certain type of meeting, a way to have a meeting? Uh, and what sort of frequency. Are there other touch points other than, you know, guys you need to go out, or gals you need to go out to dinner every so often? Um, what's, what's the, um, what, what sort of advice and counsel can you share on ritual? Um, and cadence?

Speaker C: Yeah, I'll go first. I'll let you jump in, Jonathan, and probably correct me. Um, uh, I think, I don't think there's a secret set of answers there. Right. But I would say the lead conversation needs to happen every week because that is the engine of the business. And you could have events showing up and you're going to push leads, you're going to need to have more people there to receive those leads, and you got to be prepared for that. So that needs to happen every week, in my opinion. Um, strategy and planning and new market discussion happens less frequently, but is equally important. We're getting a lot of good feedback of what's happening with these kinds of customers in this segment. Marketing needs to hear that and needs to engage with those customers whenever possible so they can again continue to hone the message and sales needs to open that door for them and enable that to occur. Um, and then the social stuff's as important as anything else. Um, I haven't had a lot of success for forcing social get togethers. Um, but you know, there are opportunities that exist that create those. Like a big trade show, you're going to host an event, whatever the case might be, when you travel together, the downtime that occurs, uh, creates great opportunity to build deep relationships. And so forcing somebody to have a dinner once a week or once a month, I, I'm not sure that's going to work well. But using the opportunities that actually exist, um, and then taking executive off sites or whatever kind of thing you do there and using those as an opportunity to create, do trust exercises and do the hard work of building those things. Um, yeah. So I don't know if I have a set cadence answer other than the, the, the lead stuff. But on the rest of it, I think it's uh, it's organic in some way.

Speaker A: Yeah, the, the off sites, they don't have to be big, fancy, expensive, but uh, a, uh, chance to commune, talk about strategy. Because remember, strategy gets last on the long list of things to do every day when you're up in the operational trenches. But to the ability to speak about strategy and then personal connection I found to be pretty effective.

Speaker B: Glenn, it's awesome. Uh, I, I love it. It sounds like a mix of weekly tactical lead meetings coupled with less frequent but equally important, um, strategic get together. You know, get togethers where strategy could really be prioritized. Um, uh, that makes, makes a lot of sense to me. All right, I'm going to put. I'm sorry, go ahead, Jonathan.

Speaker A: I was going to say I worked with an incredible CEO chairman, uh, Andre Duran at Ping Identity, that always did a very good job in protecting the off site. Time for us to get together as a management team. We had a lot of tough stuff to go through and it really helped.

Speaker B: Yeah, that's, that's great advice. Okay, um, last topic I just want to. Want to cover with you briefly. Um, give, give some advice to founders here. Um, you know, m. Many of them are gonna, you know, if they, if they've followed your work plan and things are going well, they're going to have both a CRO and a CMO reporting to them before they know it. Um, any advice on how to, how to be a, you know, a good leader, uh, for both of those, those folks. Jonathan, maybe start with you.

Speaker C: Okay, sure.

Speaker A: Well, if you look at the paradigm of tech startups, the founder and therefore the first CEO tends to be, um, and have an engineering background. So quite frankly, um, you know, it's not a rule, but you know, generally that's what you'll find. So they're, they're coming into the process of bringing a cmo. In particular, we're talking about the marketing part of it, into the fold with some level of discomfort. So, um, you know, it's quite common for CMOs to hear jokes about marketing guys. We're as popular as, uh, lawyers, uh, are for any of us.

Speaker B: Right.

Speaker A: Um, I get it. But developing some m background and getting an appreciation for what marketing can do at a high level for a company, if it's done right, um, will draw the founder into the process of marketing and be a participant, which is very powerful, very helpful. It will help in the management of that CMO in the context of the whole business. But just know that, um, you know, in, in tech in particular, having the, the, the engineer come into the stuff that's seen as fluffy sometimes. There's obviously empirical parts of marketing, deeply empirical, but, um, you know, translating product features into value messages for the market looks like voodoo to a lot of people that haven't been exposed to it. There's a lot of good things to read out there, a lot of good books, papers. Um, I've written about this too. Get that comfort level up.

Speaker C: Yeah, yeah, I would just, I would just say, um, you hired these people to be an expert in their field, so that doesn't excuse you from understanding it. So you still have your business. Judgment is still really good. And it's your business. So engage in it. Understand it as best you can. Your instincts are probably not wrong. But listen, pay attention, count on their expertise. Learn from that. Be curious. Um, and then I, I would just say the other thing is, and you know, my old boss at ChargePoint, Pat Romano, recognizes pretty well that engineer that typically is the founder or the CEO of, of a young company, has a set of skills that look very different than sales or marketing. And sometimes it's hard for them to recognize that that skill is also really valuable. Right. Reading a room, uh, figuring out how to make a complex ME message into a simple message. Um, pull. Pulling a crowd together, inspiring the troops. That may not be natural to the CEO. So then the next thing would be, how do I take advantage of what's been put into this person and allow all of that to be available to this company because I may not have it. And again, that takes a big person, takes a little bit of, uh, you know, confidence. But if you let them run and let them do what they're really good at, you're going to be, the company's going to be much better off as a result.

Speaker A: Great points, Michael.

Speaker B: I agree. Awesome. Well gentlemen, this was a fantastic pilot, uh, episode, uh, and we'll make that a wrap, uh, for the very first episode of first first from first lead to repeatable revenue. Thank you for having me join, uh, you huge, uh, thanks. Jonathan Buckley and Michael Hughes. Uh, amazing, amazing, uh, insights, uh, that I know that every founder listening will be able to put into practice. Um, and uh, uh, you know, this is not easy stuff and you guys have really helped, helped uh, unpack a lot of the riddles that founder space. Uh, hope you all enjoyed the episode. Um, and if you did, please share it with other co founders and operators and follow, uh, follow each of us on LinkedIn for future episodes. Uh, follow Jonathan and Michael for future episodes. Uh, and until next time, uh, good luck building that repeatable revenue engine. Thanks, guys.

Speaker A: Thank you, Glenn.

Speaker C: Well done, Glenn. Thank you.

Speaker B: That was fun.

Speaker C: It.