Why RevOps Shouldn’t Be a Cost Center: Strategies for SaaS Growth with James McKay

Carl: Hello, and welcome to the SaaS growth podcast. This week, we're here with James McKay, the founder and CEO of Ven, a RevOps studio based in Toronto. How are you today, James? James: I am doing well.

How are you? Carl: I'm great. It's we're coming into autumn here now in Finland, and that's super fun at the moment. James: I'm in Canada, so I Carl: I know, same problems, right?

James: Yeah, Carl: Same problems. So give me a rundown of Ven and how you came to be. James: Yeah. for sure.

Yeah, I'd call us a boutique rev ops consulting agency for lack of a better term. I think I'm going to hit some focus in the next couple of years but right now we're broadly helping series A, B, C, D, Tech companies, B2B SaaS and FinTech companies. I started about a year and a half ago. So we haven't been around too long.

The decision making to start a RevOps agency in which may go to answer a little bit about why the company is brought in its mandate is it was not. Exactly my intention to start this business. So I'd come out of a long career in tech. I had spent, about 15 years.

The first half was in sales to the point I started basically an SDR through a director of sales. And then I made a mid career pivot to follow the. Operational side, which I really enjoyed. And then after my last full time role, I determined like Hell or Highwater, I'm going to start a company.

And I started toying with a tech concept. And it was like consumer app travel and I started. Developing it and then talking to people like friends and families, VCs, people that like, in the network though, I hadn't gone out beyond the friends and family. And the, I kept getting the same response, which is this might be a good idea, but do RevOps.

Why don't you do RevOps? You're known for RevOps. So eventually a contract emerged and I took it and tried it and liked it. And from there, I was like, okay, cool.

I'll just start a company. And here we are a year and a half later, 20 plus customers, like logos under our belts across, I think almost 40 contracts across those 20 customers now. And five full time people got my architect, project manager, a roster of part timers who come in and help on projects. So it's been great.

Carl: Sounds like you're really starting to grow and hit your stride. So for people who don't know, could you explain what RevOps is? James: Yeah, it's the operational side of the customer facing functions. I think that there are, there's a little bit of dispute, I would say, on the definitions of where it begins and ends.

To me, it starts, at the very first customer facing function, which is typically marketing and ends through customer retention, which is usually your success support, whatever team it is, depending on how you're organized. And so all of the operational components of that. And so what's an operational component? It's like your actual workflows and how you do your job.

It's the tooling and the tech stack. It should be in my mind. Numbers, data, information, reporting, and then the, this is disputed too, but in my mind, enablement, so making sure all of these systems, tools, processes, and things are hot and adopted by. Your users, which is effectively the frontline people on these teams.

Carl: Cool, and so where does RevOps fit into that? Because it's such a broad scope and such a wide area of responsibility. Where does RevOps sit in those sort of marketing, sales, retention sort of scope of things and how do you get in there? James: So within the scope I'm not even sure if I know how to answer that.

Carl: I may have asked James: I would say Carl: What should I have asked? James: We, in my mind, the rev ops org is intended to partner with. The leaders and the executors of these functions. So within an org chart, that is actually a very hot topic in this line of work.

I'm like, who does this role answer to? But in terms of what its scope is, I think it should be. If you're fully staffed and you are organized the way I think that you should be the scope should be all of the tools, tech stack processes, data and information that are produced by and consumed by the go to market, which to me extends through success. Carl: Makes sense.

So what's the kind of things that you often see as a RevOps expert that people aren't doing so well and you have to go in and optimize? James: The number 1 thing people do is. Don't consider it up front and then buy a CRM and then screw up the CRM and then need RevOps to come fix it. It's a very hot market these days, to be honest with you.

Carl: What sort of screw ups do they have with a CRM? What kind of mistakes do they make? James: If you're talking about a high growth tech company, the most common story is we knew we needed a CRM. So the head of sales picked the one that they preferred.

They didn't know how to implement it or work it. So they took their worst BDR and the one that always kept their records clean and made that person, the CRM admin. And then that person was thrown in the deep end and was trying to create a system that scaled. And those people end up actually being great RevOps people, mostly because they're given way more room than they should to try and figure out how to do something.

But the downstream effects of that are many, like you're not collecting the information, right? The sales process is murky because people are applying their own definitions to it. The automation is like non existent or poorly designed and causes more problems than it, it solves. You either have no data or your data has to go through all kinds of hoops and do back flips in order to be coherent.

Like all kinds of problems come from just not considering it. And then oftentimes the first job of RevOps at a company is Fix a whole set of problems, which is too bad, but that's really the state of the union on RevOps. Carl: So you said that one of the big mistakes is not considering rev ops early on in the process. How should I set up RevOps?

James: think that the, one of the most pivotal moments is. The transition from founder led sales to having a sales function. So it's become very common. And I think for all kinds of good reasons in the tech industry for the founder to lead sales at first, or one of the co founders, usually the less technical one all by themselves.

And then once they believe that they have some degree of product market fit, or they are able to generate velocity, then they go and hire somebody. And usually this comes in two forms. They'll go and hire somebody who's too senior. Or they'll go hire somebody who's too junior.

Notice there's no right answer here. There are only wrong answers. This is a very rocky transition. However, the most wrong answer is to go hire somebody too senior.

The worst thing you can do is a seed or series A startup. With some fresh funding and some good signals is to hire a CRO with 20 years of experience from a series C or enterprise company, right? Those people don't haven't for a long time. Typically gotten their hands dirty, especially on things like systems, but even usually on things like.

Talking to customers. So I always recommend that the person you want to hire when you're transitioning is the account executive level person who's just about ready to become a manager who's super hungry and who's nailing it at their job and they're looking for more. You bring in that person, they can do it all and they're ready and poised for growth. Again, in either of those scenarios, you still haven't solved for rev up.

So I think in the second scenario and it's, it often sounds like a shameless plug when I'm asked this question, but I think that the consulting and fractional people are really good options temporarily at this time. To come in and work with somebody to take the process that your founder has developed and turn it into something that can be tracked, measured, and it can be efficient and scalable. And then I think once you get a few more people, like once you get to the point where it's established, like the process has established itself enough that, you need to hire against it your rev ops person should probably come in your full time person as part of that cohort, and then maybe you transition away from the.

The fractional or the consultant, by the way, I run a consulting firm and I'm very adamant that the work we do is designed to make us obsolete. Like I, I don't think folks should get involved with consultants who are trying to find a way to be there forever. That's to me, counterintuitive, especially in rev ops where you're trying to create efficiency. So that I usually pitch that to folks and.

I often win those contracts because they're, I'm up against somebody who's trying to convince a company that doesn't need it to sign a 12 or 24 month contract for some reason. Carl: I'm a consultant as well. It's the same thing. it doesn't make sense to me to have these two, three year engagements, because at that point it's like hire someone.

Like it's, you're at that point where the engagement's too long. Like they're too embedded in your systems to have that external. James: Exactly. Carl: That's a very sidetracked sort of discussion though.

Going back to RevOps. Let's keep on this topic for a little while longer. So CRM is obviously just one part of RevOps. What other parts do you normally touch as well?

So you've gone from, again, that sort of sales process, marketing side of things. How do you tackle RevOps as a whole? What should I be looking for as a CEO or a founder to know whether my RevOps is working or not? James: I love this.

I get asked questions of this nature so much that I'm developing a mini course on what I think the first thing that you need to do when you know you need RevOps is, and it's a little exercise that has three components. So if you do not have your stages. Defined that's the number 1 thing you need to do. And once you define them.

You also need to establish the entry and the exit criteria for those things. What do I mean by stages? who's worked with CRM knows that all the records they're dealing with have some sort of stage or status associated with them. Those things are supposed to be reflective of what the actual customer is experiencing to some degree.

I think in a lot of cases, they're way too configured to just how I want to sell this product, not how this product is going to be sold to a customer that's going through some motion. What I like to do is Imagine the customer from the point of I've never even heard of you through I've bought this 2 or 3 times, or I've been retained and I'm shouting out nice things about you into the market and posting on Reddit about how great you are. I like to divide that into stages. And those stages need to be objective.

And so it's things like, I've never heard of you to, I've heard of you. I've heard of you to, I've engaged with you. And I've engaged with you to, I've talked to you, right? Then crack open your CRM.

And look at, so if you're HubSpot, you've got your contacts, your companies, and your deals. If you're Salesforce, you've got your leads, your contacts, your opportunities, and your accounts. And just plot where they fit into all these things. And these stages all just need to have definitions themselves as well.

Very simple. Very objective. They should be things that everybody can talk about and then figure out what needs to be true in order for things to move to these stages and write them out and put them in fields and start collecting them. if you are doing that you are way ahead in rev ops and it's bizarre because it's not that hard of An exercise.

And it seems like almost nobody has done it. Carl: Seems like one of those things where people emulate much bigger companies so they think they need all these sub steps, all these different branches, but it's, the truth is a lot simpler. James: it's so yeah. And you're actually touching on how RevOps gets so convoluted.

what our job really is to take something that's true and that's happening and make it work in systems and processes. And by true and by happening, the customer is going through a journey and your Company is interacting with them. That should exist outside of your CRM, outside of any of your documentation, like that relationship and those decisions and the thought processes and the actions that those people are taking happen, and then we should understand them and reflect them in the systems.

But what people instead do way too often is. Oh, I can build this cool automation, or, oh, I can build all of these other custom objects, or, oh, I can track every information or every data point that I can possibly think of and buying tools and inventing processes and workflows and automations that just do things and those things may be. In a standalone way, it might be cool or might look interesting, but that's not the job. The job is to reflect what is happening as simple as possible and make it as easy to use as possible for people, and then get the information to make really good decisions.

Carl: What would be the effect of, so when you talk about this customer journey, That happens in real life. And then what, so the CRM reflects what happens when those two are out of sync, especially in a dramatic way. And what does the customer experience in that case? James: Yeah, and this is one of the most common problems I see as well, which is You get some kind of leader believing in their process for selling something.

This is by far the most common example of this. And in their mind, stage one means this stage two means this. You have to do this. You have to talk to me.

I have to qualify you, whatever. And you actually just start upsetting your customer because you're forcing them to go through steps that. they don't need to go through in order to decide whether or not they're going to buy you. Practically speaking this happens all the time with poorly designed go to market functions at, say, a very well known HR tech company that pissed me off once, who I just wanted to buy.

And I know I'm not going to name them, but I wanted to buy it. And I knew I wanted to buy it because I had used it before at a different company. And I can't get ahold of anyone until I fill out a form. I understand there's some friction and when you're buying, there needs to be a relationship.

So you got to give, you got to take. And then I have to wait a few days for an answer. And then finally someone answers me and they say, I have to talk to. BDR and I don't need to talk to a BDR because I understand everything about this product because I've bought it before and used it.

And then I have to wait two weeks to talk to that BDR. And then when I finally get to that call, they just asked me three questions and then start scheduling me for another call two weeks later. And I'm pissed now, right? Like This isn't helpful to me at all.

All you're doing is delaying an initiative of mine that I want to have done by now. But some executives somewhere in your organization believes, no, they need to go through this step and then they need to talk to this person. And then we need to collect these data points. Then we need to go through that step.

We are out of sync and I'm pissed. Carl: You've actually just, you've hit a pet peeve of mine too. I've seen it so often, especially in B2B, it's just that the only thing you can do when you're on the website is book a demo. That's all you can do.

You're like, you don't see pricing, you don't see anything. And especially as someone who runs, It's very small. It's usually just me. I just want to get in there.

I don't want to schedule something for a week and then be a salesperson, talk me through the whole thing. I just want to get in there so I can totally see that, but you lose that initiative and just you, I, again, friction can be a very useful tool, but you're right. I get annoyed. Yeah.

James: For sure. Like it, there's needs to be at least some level of flexibility in how this happens, you have to accommodate me and show me, you understand me as the buyer to some degree, and this is in no way a slight on these salespeople. I think poor BDR is you get beat up so bad. I think it's a lot of case.

Or in a lot of cases, it's because someone more senior than them has screwed something up and made customers have to go through something they don't want to. And then they lash out at the person that they're talking to. But sometimes it just doesn't make sense. So you got to meet me where I am.

Carl: I don't want to like, again, from, I come from the tech side of things. So for me, like the, if you need someone to go through a demo, it says there's something wrong with your product and your onboarding. There should be simpler ways of at least getting slightly acquainted with it. So it's not necessarily a bad thing especially for big enterprise level stuff, which you want that red carpet treatment, but it's a smell from the small side.

If you're a small company, it's a dealing with small businesses, especially it's a red flag. James: Yeah, for sure. It's funny, you're, what you're saying is reminding me of a conversation I had earlier this week with a very senior sales leader about the track for RevOps. And he was saying about.

How he thinks that there's going to be more rev ops people and executive level roles, which I agree with and hope for, but I was, we got into a conversation about the track to a CRO. And my prediction is that we're going to see a lot more rev ops people ending up in the CRO seat. For tech companies. And to your point, I think that they are the rev ups.

People are really well poised to be the CRO of companies that are product led growth, that are transactional, that have fast sales cycle to deal with small business, that deal with a lot of customers in a short period of time, because there's so much operational complexity, but there's not a lot of. Human complexity in that, especially if you have a really good product, because the product absorbs a lot of the human complexity where our person who was an account executive at Yahoo in 1989 is going to, and who are most of the VPs of sales now, they are still poised and still absolutely the best people out there to be selling.

Oracle or Salesforce to enterprise or things that like the most primary thing you need to do is deal with an seemingly unending network of stakeholders and opinionated executives at a giant company that can't make a decision. Like your rev to help you. You need a. people, person, relationship, person, to be able to navigate that sort of thing.

And your systems are probably going to be really simple. It's opportunity, 55 million dollars, going to close in 2029. Here are the 50 people I need to talk to. There's not going to be data on this thing.

Like just go come back and put big, long notes on what you've done. And that's actually the data we need. Carl: but it's not scalable. That's the thing.

They have these huge, big, bigger deals. But if you're trying to do that with even a thousand people, that would be far too many to deal with or even a hundred, you go a lot lower, a hundred would be a lot to deal with for one person so I can definitely see that. Is there anything like you'd say about RevOps that you see a lot of people do well especially people you come into what's their natural inclination? James: When I know there's something that happened this week.

It's actually the same conversation I just referenced. A lot of the calls I get are from revenue leaders who just changed orgs to come to a new company. And a lot of times. when somebody needs to bring in a new sales leader, they probably also need to recalibrate their whole PrevOps org.

Not necessarily just because there's a new leader and they need to accommodate that leader, but usually because you're hiring a new leader because things aren't where they need to be, or you need to get to that next level anyway. And the ones who are getting into jobs and calling. On rev ops resources right away. To me, that's a green flag and that's something I'm really happy to see.

And when I get into those situations, though, my favorite question to ask them is how do you work with rev ops? Tell me what your relationship was at your last company with. Rev ops, and usually you get all kinds of flattering answers. You get people telling you stories about how, the VP and the, or the CRO and the head of rev ops were super, super tight.

Or you get sales leaders saying things like I left my last company because I couldn't convince the CEO to invest in this. Like I needed the visibility. I needed the operational support. I needed better systems.

I needed better tools. They wouldn't give me that. So I left but yeah, I think it's becoming more, more common to just appreciate it and to know you need it in terms of the execution of it, I don't know if we're at a point now where it's like, Here are the things people do well, and here are the things people struggle with. I think that these are the RevOps person is burdened with.

A series of things that it seems like almost everybody struggles with exclusively tasks of that nature. Carl: Focusing on that, the CEO not wanting to invest in RevOps, what are the sort of objections people normally have? Why if they need it why don't they use it? James: There are a few 1 and it's a cost center.

I think RevOps has been hurt the least by the economy not going so well since 2020 and 2021. However, still there's lots of people will be like I just don't want to pay for extra stuff. That's not revenue generating. That's something that every function except sales and marketing deal with to some degree.

And RevOps is not exempt from that because it's still hard. It can be done, but it's so hard to make a case for like directly attributing revenue to RevOps. The 2nd 1, and I think this is probably more typical of older leaders is they just don't like, they believe that their head of sales should be able to do this job like that. It's part of the mandate and that they're the right person to do it.

And it should be handled that way. When you get in those situations, it's a tough. It's a tough conversation for me because I've got to, I don't want to, I don't want to do a job with a head of sales who appreciates me, but whose boss sees me as just a drain on their financial resources. It's a really hard position to be in.

Carl: I appreciate you're a little biased on this, but what is this sort of viewing RevOps as a cost center and trying to cut back on that saved money? Is that a false economy? Do you think that ignoring RevOps is more expensive than just paying for it and investing in it? James: Yeah, absolutely.

Oh my goodness. Yes. so there's the day to day friction that you're going to deal with when nobody's taking charge of systems and process. That'll be felt every day.

And then there's the decision making that comes with not having clean, actionable data. that decision making can be very costly. And unfortunately, I don't get to be in the room when everybody gets frustrated that they can't find an answer to a question. Cause then it's really easy to pitch it.

But oftentimes. not that close to some acute problem that you can point at it when you're in my position. But yeah it's not a good idea. And there's so much data now about it's the fastest growing role on LinkedIn in North America for I think two years running now.

it grew. Really fast when the economy was hot, then it grew as a role faster, at least relative to other roles when the economy slowed so you can look at the macro trends. You can go talk to anybody in a revenue org and more and more things are pointing to an opinions pointing to this is a really necessary thing. Even if it's hard to articulate sometimes.

Carl: It does seem there's a lot more of a trend towards the data driven model for everything, including product development. Everyone wants to make decisions off data, like it's even with the past, what, 10 years to a fault. Yeah. Cause data can lie, but so it does make James: hard to articulate non data driven justifications for things to certain types, but I really believe in the power of intuition.

So sometimes you have that working against you, but yeah, but I still think good clean data is good. It's a good thing on a whole, like you can't argue against it. Carl: In general, how does, RevOps as you said, it sits really weirdly in the old tree. So who should RevOps have a relationship with and, like, how much authority should they really have in how things are run?

James: So obviously your heads of any. GoToMarket function should have a close one to one weekly, daily, probably daily relationship with your head of RevOps. I think they should have a seat at the executive table. I think that there are lots of, there are a lot of arguments about people being like, they should roll into a CRL.

And Montague's and Capulet's, this problem should they roll into a CRO or not? The people who say not think COO or CFO and many think the CEO. I think the answer actually depends on the type of org you are and the mandates of those people. But I think.

A typical revenue leader of today can't tell the story with a level of depth. That. A typical executive team needs without a RevOps person there helping them like it's some can, but I think by and large, you have a qualified data brain and a quantified data brain together and the most effective when they're working side by side. And I think that having them in a hierarchy.

Can create problems. And by that, I just mean, if you're head of RevOps answers to your CRO, but the CEO wants answers. And those answers are not flattering in terms of the picture for the CRL, what are they going to do, right? Some people are going to going to have to speak against the person they answer to in order to tell the truth to the org.

And that's a really difficult position to be in. Again, it depends on how your org is designed, but that's one of the big problems I see about that reporting line. And it's a very common thread. Carl: What sort of questions would a RevOps person help make decisions about?

when would I call the RevOps guy into the room when I'm trying to think about something? James: Headcount is one of the big ones, headcount and planning and hiring. I think you call the RebOps person into the room when you're trying to figure out what's going wrong. You call the RebOps person into the room when you want to figure out if your marketing or partnerships efforts are yielding results.

You want to figure out where in the funnel something is broken, whether it's top of funnel and maybe your BDR aren't performing well, or there's a problem in that org, or maybe it's farther down and you get really good qualified opportunities and your account executives are struggling, or maybe you get people all the way through to sales and they become customers and then you have churn problems like diagnosing any of these sorts of go to market problems. I think you want the RevOps person in the room to speak to it, paint that picture, bring the data.

And hopefully if you have a good one. Offer some solutions. Carl: Feels like we're about to wrap up. Is there anything you want me to ask you at this point?

Or anything you want to talk about? James: Anything I want to talk about? I don't know. I would, I think I gestured at this earlier on interested in the journey of van and my company as a boutique RevOps consulting business just follow me on LinkedIn and interact with me because we're probably going to sharpen the message and the positioning we might tighten up on a segment and we might get a little bit more product eyes and how we're approaching the market.

That's something that I'm working on. I'm not going to say too much about just yet, but some changes are coming for us. So that's something that I'll just shamelessly plug a little bit. but other than that, I'm just, anyone who wants to talk about anything, particularly the RevOps landscape approach me.

I'm always open to it. Carl: Awesome, thanks so much for being here. This is James McKay, the CEO and founder of ven.studio is the website for that one.

And of course, as he said, you can reach out on LinkedIn or just contact him through his website. Perfect. Thanks for being here, James and everyone else. We'll see you next week.