Scale with Strive Podcast
Welcome to the Scale with Strive podcast - the place where you come to listen to some of the worlds most influential leaders in the SaaS industry!
Scale with Strive Podcast
Scaling Your SaaS Venture: Strategic Alignment and Operational Efficiency with Pablo Dominguez
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Welcome to the Scale with Strive podcast, the place where you come to listen to some of the world’s most influential leaders of the SaaS industry. 🚀
I am your host, Adam Richardson and on today’s episode, I am excited to welcome Pablo Dominguez, Operating Partner at Insight Partners, a leading VC firm in the B2B Software Space!
Pablo has over 25 years' experience in the SaaS industry and today I tapped into his incredible knowledge of the industry, focusing in on achieving more by doing less through operational efficiency.
Some of my key takeaways from our conversation were:
💡 Ensuring goals are aligned from the overall company strategy and the importance of cascading objectives throughout the organization.
💡 Achieving more by doing less, by not allowing distractions to take you away from your core focus.
💡 The different stages of growth throughout the lifetime of the software business - and knowing when the right time is to launch new products, expand into new territories or when it's time to pivot.
If you're a founder in the B2B software space, looking to scale your business, this is certainly worth a listen!
Let’s Dive in!
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Watch the episode on YouTube 🎥 – https://youtu.be/OyckYHKDXfE
Connect with Pablo here - https://www.linkedin.com/in/pabtexas/
Connect with Adam here - https://www.linkedin.com/in/saasheadhunter/
Learn more about Strive here - https://scalewithstrive.com/solutions/
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11:02 Focus and Alignment in Business Strategy
25:09 Vendor Growth and Maturity Stages
31:19 Aligning Product, Engineering, Marketing, and Sales
37:18 Product-Led Growth and Sales Strategies
51:14 Strategic Decision Making and Growth Planning
Welcome to the Scale with Stride podcast, the place where you come to listen to some of the world's most influential leaders of the SaaS industry. I'm your host, adam Richardson, and on today's episode, I'm excited to welcome Pablo Dominguez, operating partner at Insight Partners, a leading VC firm within the B2B software space. Pablo has over 25 years experience in the SaaS industry and today I tapped into his incredible knowledge of the industry, focusing in on achieving more by doing less through operational efficiency. Some of today's key takeaways ensuring goals are aligned from the overall company strategy and the importance of cascading objectives throughout the organization. Achieving more by doing less, by not allowing distractions to take you away from your core focus.
Speaker 1The different stages of growth throughout the lifetime of the software business, and knowing when the right time is to launch new products, expand into new territories or when it's time to pivot. If you're a founder in the B2B software space, looking to scale your business, this is certainly worth a listen. Let's dive in, pablo. So thanks a lot for making the time to meet with me today. I've really been looking forward to today. So, yeah, I really appreciate you giving up your time. I suppose, yeah, for the listeners' benefit, it'd be great as a starting point to introduce yourself. Talk a little bit about yourself, your background and, ultimately, what you're doing today.
Speaker 2Yeah, adam, thank you so much for having me. I really appreciate it. My name is Pablo Dominguez, currently an operating partner at Insight Partners, a venture capital and private equity firm in New York that invests in B2B software Spent really my entire career in go-to-market. Started at a small consulting firm, the Alexander Group, here in the US doing GTM efficiency. Spent two stints at two different public companies with a various number of roles and before coming to Insight, was at a startup here in New York for five years helping them scale from 40 million to 400 million Very exciting time. So I've really enjoyed my time seeing a lot at what different companies go through as they scale to their next journey.
Speaker 1Yeah, no, definitely. I mean, you know I've had a good look through your career and you know you've had a great run. What, what originally got you into the world of technology?
Speaker 2A chance honestly. So I mean in consulting, I touched you know pretty much everything because that's what you do in consulting and then worked, you know, in public companies that were doing software, some hardware services, and then decided to go do a startup just to try something a little different. And then Insight called almost six years ago to come run the sales center of excellence here for them.
Speaker 1So yeah, it's been exciting spending the last couple of years really focused on, you know, the breadth of companies, that insight as helping them scale yeah, and, and I suppose, in case anyone has been living under a rock for the last 10 years or so, just tell us a little bit about like insight, high level. Um, you know who are they. You know, if you're in the ecosystem you'll know. But just for everyone's, absolutely so.
Speaker 2Insight partners has been around for 30 years. Uh focused on B2B SaaS software investing. We have a lot of presence in the US and in Europe, in Israel and LATAM we have over 500 portfolio companies, all ranging from early stage to mid stage to late stage, so we've got some of the best software investors in the entire industry coupled with the best set of advisors right. So if you're a lot of the times reasons people come to Insight is one to get the expertise in software investing, but then they get access to people like myself and my peers that help them scale in marketing or product or engineering or sales or customer success talent. So we have a wealth of information to help founders on their journey from when they join us to when they have a successful exit.
Speaker 1Yeah, and just like touching on that, you know, for those of people that are listening to this episode and aren't familiar with the center of excellence that Insight have, like can we just talk in a little bit more detail specifically about the center of excellence that Insight have? Can we just talk in a little bit more detail specifically about the center of excellence that you run and, I suppose, the value that you're driving for your portfolio?
Speaker 2Absolutely so. One of the strategies that Insight's employed is having a team called Onsite, which is made up of former operators, former consultants that really help with exit prep strategy diligence. We have a team that focuses on executive hiring right. A lot of companies are struggling with hey, I need to make an exec hire for a CXO role. Can you help me find talent? Can you help me interview individuals so I get the right person right.
Speaker 2We help our portfolio companies get introductions to the global 2000, right, which is great if you're thinking about a company that's trying to get into enterprise sales or they've got a deal stock. We have relationships with the entire G2000. So that's great. And then, functionally, we're structured from an advisory perspective to help a founder CEO as a team. You know, like every company has a marketing function as a product function, engineering, etc. And so we have experts that you know, as you're looking to go into a new market or roll out a new product or rebuild your brand, we have individuals that work with CEOs and their teams to achieve those goals as they scale. So we do a lot of that in-house. We also leverage external partners, but our on-site brand is something that we're very proud of, that we've had for over 15 years. That really differentiates us in the market.
Speaker 1Yeah, and I know selfishly, speaking, from a first-hand way yourself, you've actually been involved in hiring processes that we've been driving for some of your portfolio similar with with jeremy as well so I know, like you know, it's not just hiring that you have a massive impact on, but I can speak firsthand for the the positive impact that I've I've seen as an external partner, um, and how that's had um in terms of attracting and and and hiring the best people for specific roles.
Speaker 1So so, yeah, um, but it's great to, I suppose, just get a bit of a better understanding as as to what it means to be part of that center of excellence, to be leading it and and the value that you're driving for for your portfolio companies, um, so, and then I suppose, just on a bit more of a personal level then, pablo, like tell us a little bit about yourself and we were having a bit of a joke before about your sporting fan. But yeah, you know, for the listeners that want to get a little bit, a bit more about yourself, you know what you do in your spare time.
Speaker 2Yeah, a little IBM. I'm originally from Mexico, grew up in Texas and, as any good Texan for those of you that are familiar with Texas, but I'm sure you've seen it in the movies, depending on where you are globally I love to smoke meat on the weekends. I love smoking brisket and steak, et cetera, and I've loved a mountain bike. I have two kids, one in college, one in high school and a wonderful wife, and so that's usually where I spend my time on the weekends.
Speaker 1Ah, good stuff. I'm a big mountain biker myself. Um, I've got a specialized turbo lever on an e-bike, which can sometimes be a bit controversial, but then stay, staying true to the British manufacturers. I've got an orange uh five as well. So I like to get out in the uh uh, the peaks and in the over in wales and, yeah, go and blow off some steam on the uh, on the downhill that's great.
Speaker 2Yeah, I'm on a. I'm gonna pivot switchblades, so uh, spend a lot of time here I live. I live in new jersey. There's great mountain biking here with the mountains and the hills. And uh spend a lot of time also in moab once a year with the colleagues out in utah, where we've got phenomenal writing, good stuff.
Speaker 1So, obviously, leading up to this conversation, pablo, we were talking about, I suppose, hot topics and what value this conversation could bring to our listeners. And I think, given what's been going on over the last few years or so, we look at the false bounce back of 2021, where huge spike in hiring, huge spike in terms of cash influx into the industry from BCs, followed shortly after by a sudden hit of the brakes huge amounts of layoffs, you know people tightening their purses, sales cycles being extended and I think you know the last two years have been pretty turbulent for our ecosystem. One of the things I wanted to ask you is, like, if I'm a founder listening to this conversation and I'm looking at my year ahead and you know the next couple of years, like what, what's the headline message that you'd want to convey that would enable founders, enable leaders, to be successful in scaling their company in today's current climate?
Speaker 2Yeah. So I think we went through a turbulent time predominantly driven by growth at all costs. Capital was extremely cheap if you were raising from venture capitalists or private equity firms or SPACs. So with capital is cheap, you can tend to spend more freely to grow headcount to achieve targets, and that growth at all costs.
Speaker 2I think we've all experienced how that's changed now, where it's more about efficient growth, right? And can you grow effectively and efficiently and be more focused, right? And so I think the feedback I would have for any company, regardless of size, is are you thinking carefully about how to get that next point of growth? Are you making trade-offs in terms of the most effective and efficient way to do it, and are you really focusing your resources right across the team to achieve those goals in a united way? I think a lot of companies had misaligned it because they were just throwing money at every problem to see what stuck, and I think now we're seeing companies refocus on one, two, three things that really are going to move the needle. So for us, it's really all about focus and being very metrics driven on what's moving the needle. Do you understand the levers? Are you reporting on them right? Holding your team accountable for those things as well.
Speaker 1Yeah, and one of the reasons why I really enjoy speaking to individuals like yourself is you've got such a holistic view over the market. You're not so consumed within one business and it's like well, this is just the way that we do things. You get that bird's eye view of an entire portfolio and when you're talking over 500 companies within the portfolio of insight, there's a lot of opportunity for pattern recognition, seeing where people have made mistakes, seeing where people have really excelled and seeing what's transferable between organizations. So one of the things that'd be great just talking in on that like focusing on fewer things rather than just throwing cash at a problem and seeing which one actually does move the needle. Are there any examples, anecdotally, where you've seen great initiatives, where people have really doubled down on something and it's had tremendous upside value, or even on the flip side, where things haven't necessarily worked out? Anything that springs to mind?
Speaker 2Yeah, there's a common phrase going around, right, Like let's do do less with more. Right, Sort of we've we've gone from growth at all costs to do less with more, which is fine, Right, but resources are finite and time is finite, so that's sort of a fallacy if you really, if you really break it down right and think about it. So one thing we try and say is you know, do less to achieve more right. And going back to the focus thing, and you know, to make it real for the listeners, if we think about Apple, right, when Jobs was ousted and was asked to come back, you know he rejoined Apple and you know, for those that are younger generation, Apple used to make printers, right, Apple used to have I don't know, tens and tens of SKUs and jobs. Basically, when he came back, made it pretty simple right, we're going to have one product per category. We're going to have four categories. Right, we're going to have a laptop, a desktop, iPad and a phone and that's it. That sort of was their core when they came back, when he came back. So, again, think about re-entering and having 50 SKUs and reducing that to four, right, and the company rejecting that and going, oh my God, that's not going to be possible, right? So it is possible to be much more focused. And you saw the growth for Apple really take off, right, that sort of second coming of Steve Jobs, and so the same goes for any of our portfolio companies or any public company or other companies that are out there.
Speaker 2Right, as we go through these turbulent times, are you focused on the right areas or are you trying to do too much? Are you focused on the right areas or are you trying to do too much? And that could be everything from you know, you're trying to go into too many new countries. Right. Let's say, you're doing business only in the UK and you're thinking to expanding to other countries in Europe, and you've picked France and Germany and the Netherlands and Norway I don't know. Pick one or two more versus five more, right? Or, if you're in the US, should you double down and go into Europe or refocus in North America and really get traction there? So that's what we mean by focus, right? Do I need to roll out three products this year versus two, right? Or double down on the one I have? Do I need to hire 50 people or just 15 and be much more focused?
Speaker 1So, yeah, and I think you know it's not just software where I think that rule applies.
Speaker 1You know, there's a saying in recruitment, when it comes to like becoming an expert and focusing in the specific areas, is to try and be inch wide and mile deep. And that's where you really start to build out your, your expertise and your niche and trying to avoid that whole that crow theory where you you're always drawn to the next shiny thing and you never really focus on on a specific um, specific area. But, um, I suppose, from from that in terms of focus and and making sure you're not trying to, I suppose I suppose, dilute your focus, like, where are the, where are the sort of um initiatives internally that can help um, or like just decision making process or frameworks that you can think of which can help you decide on what's the right thing to do? Like, from your experience, what would, what would it be, the advice that you'd be giving around, making a call on we've got two products, which one do we actually double down on? Or new countries? Is there a framework or best practice that you can think of that you'd be recommending to people?
Speaker 2Yeah. So two things right. That really comes down to, I guess, three things. One are you aligned on your strategy? Right, because strategies change depending on what's going on with your business. What's going on with you know when you can no longer win right, and I'll come back to it. But strategy communication right. And alignment communication, alignment between your leadership team right.
Speaker 2You can say we have a strategy, but if product is off, building products that don't align with how marketing and sales are deploying resources, then you don't have alignment with the leadership team. And so you see that a lot with companies, but from a framework perspective. And there's a couple of frameworks, but we work from a lean perspective on one called the play to win framework, where you really very carefully rethink your strategy on where are we going to play and where are we not going to play right. And if you think about strategy, michael Porter, sort of the grandfather of strategy, basically says it's about choices. Right, strategy is about choosing what not to do, right. Go back to the Apple analogy with Steve Jobs right, we're not going to make printers, we're not going to make peripherals, we're going to focus on four things and be really good at it, and that's all we're going to do.
Speaker 2And so when you sit down with your leadership team and you start to map out, well, what do we want to be right, where is the competition coming at us from when? Where's the market strong? If you choose to go into France, but your total addressable market is tiny, why are you wasting your time there, right? Versus, if your addressable market is huge in the UK and you only have finite resources, maybe you should only stay in the UK. Sure, it sounds sexy to go to France or Germany, et cetera, but you've got to look at where you can actually win, where you can make an impact, drive growth, and where you're going to step back.
Speaker 2Now there's a misnomer when we say, hey, well, you got to stay focused. Right, pick a couple of things. Well, what happened to experimenting? I thought we were supposed to experiment and try things right, because your focus doesn't mean you can't experiment. Right, the best teams, the best organizations are always doing MVPs right Minimal, viable products and they're testing things before they go broad. But you don't need to test 100 things to be successful, and I think that's where you stretch yourself too thin when you try to do too many things versus being much more focused.
Speaker 1Yeah, and you mentioned there about like alignment across the, the senior leadership teams. If you think about like that whole cross-functional alignment from the different sort of parts of the organization, what are like, what are some of the best practices that you've seen and like positive impacts that's had from from your experience? Because if I look at you know one, one part of the leadership team might think expanding into a new territory is a great idea from a market opportunity, but the product team might be thinking, well, hang on a minute, our product doesn't necessarily fit with that market. It might be regulatory, uh requirements. You know it could be anything. How you know what. What would be the advice that you know it could be anything. How you know what would be the advice that you'd be giving to people around making those decisions and avoiding the common mistakes that you've probably seen throughout your career and particularly through having that holistic view of such a large portfolio.
Speaker 2Yeah, I think it all goes back to alignment right, which is easy to say, but it's very hard to be aligned in an organization, especially as you scale right. When you're smaller it's a little bit easier because you got a 20 person company or a 50 person company. There's not a lot of room for misinterpretation of a strategy right as your company scales, or you're a public company, et cetera. Sometimes a strategy doesn't cascade down, sometimes goals are not set effectively. So when we talk about alignment is first and foremost going back to what I said before, like is everybody aligned on the strategy right Of what are we and what are we not? Where are we going to focus? So, for example, if we said we're only going to double down in the UK, we're not going to go in France, then there should be no reason to go spend time hiring people in France or building product for the French market. You're focusing all your efforts on the alignment to the strategy right. Are there common goals? We see this everywhere Products measured on one thing, engineering is measured on something else, marketing is measured on something. Sales is measured on something different. Customer success and post-sales right, legal HR, other functions are measured on something totally different. And so if you don't have a common goal that people can assign themselves to, if you don't have, you know.
Speaker 2Some companies use objectives, key results, okrs, right, there's a lot of different things to use. It doesn't really matter, as long as you can cascade the top-down strategy from the CEO and the executive team down to the different departments. Again, your department could be two people If you're a small company. It could be a thousand people if you're a larger company. As long as there's alignment, we know where we're going. Typically, that avoids 90% of the problems. Right Now, companies are built with people like you and I. Right, we have egos, we have preferences, we like to do things our own way, so you're never going to rid yourself. There's no utopia where there aren't people tripping over each other and having issues. However, you can move from being 90% misaligned to at least being 90% aligned if you do things correctly and then allow for the human element to cause a little bit of disruption, which I think makes our lives interesting.
Speaker 1Yeah, and I think we actually implemented OKRs into our business last year. We've always had quite clear targets from a revenue perspective and individual contributor and targets. But that overall business objective and then casking that down to create that alignment and also sense of ownership, and it had a real significant impact, I think, the strategy itself and targets cascading down. But then I suppose what about going upwards from a like a vision perspective, because you talk about the strategy and common goals and metrics which sort of give you a bit of a steer on like leading indicators. But what about from like an alignment, from a vision?
Speaker 2Yeah, so I argue, that's the same thing, right, like, do you have a common vision and, more importantly, do you have values that people believe in? Because those values are what's also going to help you build culture. Right, and the culture is sort of, you know, leadership and the culture you build is the glue that keeps the company together. Right, you can have very strong culture. You know, there's the famous saying culture eats strategy for breakfast. Right, without strategy, if you only had culture, where are you going, right? So, matt May, who's my co-author on the book we wrote, we talk more. You know what we talk about is, you know, culture and strategy have to have the same meal, because one without the other doesn't really work. You can have a very strong strategy on where you're going, but a horrible, toxic culture. You're going to lose people. You're not going to be able to attract people. Right, people aren't going to want to go above and beyond if they don't feel like they're driving towards a common goal. And so you've got to balance both. And the best companies, the best leaders, have found a way to provide as much clarity on not only the strategy of the business, but what's our vision, what's our mission, what do we stand for? Are our values clear and is it something that resonates with people?
Speaker 2I love seeing companies that have values, that are things that are unique versus. You know not to make fun of companies that have sort of stereotypical values, right, but you know respect, I mean anybody can put down respect. But you know one company has a value called childlike joy. Right, we like to work with childlike joy. That's something you can relate to and when you read that you go, huh, that's somewhere where I'd like to work because I can relate to that, versus just having a standard hey, chad, give me five values. And so we see. Companies that actually spend time with their executive teams building out values really do care about the culture and the direction that the company is going.
Speaker 1Yeah, and it's. It's interesting so like, particularly around culture. One of the one of the things I've experienced myself as a business owner over the last couple of years and things that I've seen working with founders and sales leaders, is it's when things are going well, like culture can sometimes be, you know, quite an easy thing to create in a positive sense. But when the market gets tough and things get difficult, that's when it's a real test of the strength of your culture and and and seeing how people step up, um, and how committed and aligned they are when, when they go and gets tough, which a lot of, a lot of organizations have faced over the last couple of years, um.
Vendor Growth and Maturity Stages
Speaker 1So what we've talked about, I suppose, being focused there now, what one of the other things I wanted to talk to you about was around like, was around change. So I remember from our conversation a couple of weeks ago you had a you know, some interesting anecdotes around change, but you know, if I'm a founder listening to this, this, uh, this episode you know our sort of audience is typically anything from early stage right the way through to late stage. What are the common stages and changes throughout a vendor's journey that you've seen and the change management that people go through on that journey. What are the common stages that you've seen and observed throughout your career?
Speaker 2Yeah, no, it's a good question and I've had the benefit again of being part of Insight and having 500 plus companies is you get to see a lot of patterns between early stage companies let's call that zero to 10 million where at that point it's a founder-led company, it's founder-led sales. You may or may not have hired an executive team yet. You've got people that you've built a company with. You don't have functional expertise yet You're potentially looking to hire your first executive, whether typically, that first executive is somebody in sales, because you're trying to get somebody to go talk to customers and stuff. And so the challenge is can you build a repeatable motion, right? Well, you know, first and foremost, have you found product market fit? I'm jumping ahead or you had product market fit, right? So is your product something that is, you know, generating demand in the market? Typically, if you have product market fit, if you're getting too many leads and you don't have people to deal with the leads, people are ready to buy your product. So, assuming once you have product market fit, you're really then trying to find go-to-market fit, how am I going to get leads? Do I have the right demand generation engine with marketing? Does my messaging resonate in the market. Am I differentiated right? Do I hire a sales leader? Do I hire reps? How do I get the message out of the founder right? Because founders invented the product. They can. Probably they're the best salespeople that you'll always have in a company because they know exactly the value. So the question is, how do you extract that out of the founder to the rest of the company so that they can go scale right? That's sort of the journey from zero to 10 is getting the right people on board, moving out of founder-led sales to more of a repeatable process. Making sure your product market fit starts to transition to go to market fit and then as you get to 10 million and you start to scale to 100, right, you're potentially maybe you're starting to roll out a new product somewhere between 10 and 100, right, you get to 50 million. Now you have a second product you are potentially going. Let's say you started mid-market SMB, right, small medium business You're thinking about okay, now I can sell into the enterprise. Or maybe you've been dabbling in enterprise. Is my product ready? Do I have the right people to go into enterprise? Do I go into a new market? Maybe I started in Europe or the US or Israel or APAC or LATAM, and you're like let me now go into a new market, right? So it's a lot of growing up.
Speaker 2It's probably one of the most difficult stages after you get out of 10. It's like the teenage years, right. There's a lot going on. The people that got you to 20 or 30 are probably not the same people that are going to get you to 100. So you're changing leaders and that's difficult. And you've got also people in your organization that now the org has gotten too big. I don't like the process, I don't like this structure. I like being in charge and I liked it when it was just all of us in one room making decisions, right, and I could write whatever code I wanted. Now there's a code freeze and all these regulations, and so you also lose the worker bees that were doing a lot of great work, that want to do more startup, and so the organization goes through this turmoil of getting new blood in that can help you grow and exiting some of those, that other blood that wants to stay maybe downstream. So it's difficult.
Speaker 2You're also trying to find out. You know, now you've got more customers, so you've got more expansion revenue. Before it was all new, new, new. Let me just land a customer. Let me land a customer. Now your customers are renewing. You can't afford for them to churn right. You're trying to sell them new product and buy more of the existing product.
Speaker 2So a lot of changes and the org has gotten bigger for the founder. Right Now I'm managing 50 people, 100 people, 300 people. I had to hire somebody in HR. Right Like now I've got people problems, so there's a lot to handle.
Speaker 2And then, once you start scaling past 100, that's sort of the maturity stage, not that you still don't have those issues, but you're looking at M&A transactions, you're getting closer to potentially thinking about an exit right, whether it's in a year or two or three.
Speaker 2And now you've got very seasoned executives that you've brought in and maybe you're resegmenting your organization to be regional or functional, and so different layers of complexity have been built up and all through that phase, by the way, like the difficult thing and this is really on product and engine internal IT is there's a lot of technical debt that gets built up right from stage to stage that you end up living with and you wonder why some public companies have to move so slowly because they've got all this technical debt. So a lot of different challenges, and so when we talk about focus right, it's debt. So a lot of different challenges, and so when we talk about focus right, it's hard to focus at each of those stages to figure out exactly what you should do. But hopefully that gives you a little bit of sense of the variability by stage.
Speaker 1Yeah, and one of the things I want to zone in on there was particularly about your comment around new products. So this is something we spoke about briefly last time. We spoke was around the importance of aligning your go-to-market to your product development teams. So, whether that's moving horizontally into new markets internationally or whether that's moving up the value chain from an SMB mid-market product to an enterprise product, talk me through some of the most important lessons that you've learned or successes that you've seen, and, I suppose, the importance of alignment between the go-to-market function and product development.
Aligning Product, Engineering, Marketing, and Sales
Speaker 2Yeah. So there's a lot of literature out there around like, hey, you got to make sure marketing and sales are aligned. Marketing and sales are always fighting, right, et cetera. But honestly, the best companies have figured out how to align the product and engineering teams to go to market and vice versa. And the companies that we see struggle are where products are inventing new things and building things with engineering without really a close alignment with the downstream teams that go to market teams and vice versa. Right, where go to markets out pitching stuff that product did not build right or come up with?
Speaker 2And so there's got to be a feedback loop where product and Eng very clearly communicate to marketing, to sales, to customer success. Right, the post-sales teams. Here's what we're building. Be prepared. Here's the training to make sure you understand the value prop. Right, here's how to talk about it. That's why product marketing is very important there as well. Right, how do I talk about this in the market? How do I handle objections when my customer or prospect says, well, hey, somebody else is doing this. I don't think you guys do the same thing. I've got to be prepared for that.
Speaker 2So there's that tie in upfront, but, more importantly, the people closest to the customer because they're talking to them every day, are the sales and post sales people, the customer support people that are also getting tickets from customers requesting I've got an issue with the product, or hey, this is working really well, can you add this feature? And so the teams that are phenomenal have a feedback loop where they're collecting information from sales, from sales engineers, as they do demos, to say, hey, this worked really well or this isn't resonating. People don't see value in this and let's connect the dots with you know, upstream product and edge. Now, it doesn't mean that marketing, sales and customer success are right. It just means that you're providing more feedback so you can make an informed decision on what the next release should be.
Speaker 2What bugs are we going to focus on? Where do you want your customer support team focused? Right, as you're seeing all these tickets, if you're seeing issues, is it a product issue? Is it you oversell it? Typically, most things end up being a product issue. The product's not doing something, or sales overcommitted it to do something that it actually doesn't do, and so that's why you have to have that close alignment between all the teams to make sure that you're building the right things, fixing the right things at the right time and that your go-to market teams are positioning the product effectively in the market.
Speaker 1Yeah, and what about like when to pivot? Like you know there's times where you know bringing the right product to market is one thing, but also like timing is also key and sometimes if your timing's off, like, it can be a flop. What about like knowing when to pivot, like if the product just isn't landed and you have this completely course correct?
Speaker 2Yeah, that's where like one thing I would recommend for companies is whether you do a monthly business review or quarterly business review with your executive team. You use those QBRs and MBRs internally because I know a lot of companies do those with their customers right. But internally, that's when you're getting that alignment. When you're reviewing the metrics of hey, we rolled out this additional product, we're not seeing traction, why not? A lot of companies go, well, let's change the comp plan and just pay reps more for it. Well, you can pay me 3X, but if the customers aren't buying, then something else is wrong. Our messaging is wrong, maybe competition or maybe the product isn't doing what it is. So those alignment meetings are super critical.
Speaker 2And on the point of rolling out a new product, one thing I've seen once you get product market fit with one product let's say you get to 50 million with one single product right, or 10 or 20, and you claim success. There's this fallacy that hey, when I roll out my second product, people understand me, they know my company, they know my brand. The next product is just going to take off. I mean it asks right, no, you don't have product market fit on your second product. You have product market fit on your second product. You have product market fit on your first product. You have a brand and people know you exist, so that helps.
Speaker 2But you still have to make sure you have product market fit, and so those alignment meetings are critical. To figure out like do we have traction? If not, why not? Right, and really getting to the root cause of what is causing it. To be laser focused on how to fix it, and fixing it to your point might be maybe we just don't do this right. Tough choice. But we rolled something out. It's not working, or the competition beat us to it, or customers aren't seeing value, or the cost to fix it is so great we should go back and re-pivot to product one or product three, versus focusing on product two.
Speaker 1Yeah, go back and re-pivot to product one or product three versus focusing on product two.
Speaker 1Yeah, no, it's, um, it's.
Speaker 1It's great to hear, obviously from from from your, from your experience of how, yeah, I suppose, the importance of products and and sales and the alignment there between the two, because you know as a as a software buyer myself, you know I'm always going to our customer success, our account managers wanting new features added or asking if it can do X, y and Z, and it's, I suppose, also knowing about what were the areas that you should be, what customers you should be paying attention to, which new features you roll out, when the timing's right to focus on those kind of new releases and when to completely pivot. So that's like a great sort of area to finish on from a go-to-market and a product alignment. A big part of, I suppose, the journey that a lot of founders go on and businesses are going on is that change from a go-to-market perspective. So, within, like what you've seen from a change management within a go-to-market, what are some of the key, like key success stories or like key stages of your go-to-market and how that needs to evolve as your business evolves?
Product-Led Growth and Sales Strategies
Speaker 2yeah, so there's. So there's a couple things to keep in mind. Right, there's product-led growth right, which which a lot of companies potentially start with. Some do so now. What that means is your product is basically selling itself. I'm oversimplifying it because nothing sells itself. Right, there has to be some sort of marketing done online so people know it's there. Right, and someone's going to have a question, so somebody in support or post-sales is helping to answer that question.
Speaker 2But for all intents and purposes, the demand is being driven by word of mouth, your website, a community, and it's low touch from a. There's no sales motion per se, right, like I can just log in and download, for example, to make it real for people Salesforce licenses. If I'm a small business and I want five licenses, I don't need to talk to anybody. I put my credit card in and I just buy five licenses. That's product-led growth. And so that demonstrates that you can also have sales-led growth and mid-market enterprise. Because if I'm a global 2000 company, I'm orange in Europe, I probably have an enterprise rep that is selling me millions of dollars of Salesforcecom licenses. Right, I don't have the PLG motion, so Salesforce has the breadth of being able to touch the very small customers that don't need to talk to anybody, to the largest customers, and so figuring out are you starting out with product-led? Are you starting out with sales-led? A mix of both? Right is super critical from a GTM perspective.
Speaker 2Are you going to leverage a channel right, and what type of channel, to help you sell your product? I'll make it. I'll bring it back to Apple, right. I can buy Apple at an Apple store globally. I can also buy an Apple product at multiple retail stores that are brick and mortar. I can also buy it on Amazon, right. So I have different channels that Apple has. Provided that they work. With that, I get access and I can choose, as the consumer, the best way to do that. So, as you scale your company, depending on if your product could be sold by a channel and a channel could be an Accenture, a Deloitte, it could be a different systems integrator, it could be a VAR, it just depends. That gives you broader reach, right.
Speaker 2Especially as you think about expanding into certain regions, you might need a leveraged channel partner. So, for example, if you're going into Japan, you don't go into Japan, cold turkey, and cold turkey is an American term, so apologies if cold turkey does not translate to the global audience. You don't go into Japan without really thinking about it, right, you have to leverage a partner, someone that understands the ecosystem, the decision-making, et cetera. And so that's also part of an evolution of go-to-market, right, how you mix your sales team. So when you start early, your sales reps are doing everything I'm selling new business, I'm doing expansion, I'm doing renewals, I might be doing collections right, let's hope they're not doing that for too long, and that maturity changes over time. When you start growing up and you pass 10 million, maybe now you have a rep doing only net new and a rep doing cross-sell and up-sell.
Speaker 2At some point you get really large and you need somebody focused on renewals, and so that changes as you start to scale and you've got to make the right decisions. Now I would warn people don't do it, because everybody else is doing it. Sometimes I hear like, well, hey, maybe I should do PLG or maybe I should have a channel. Well, leveraging a channel is not for everybody, right, plg is also not for everybody. Now, if it is for you, obviously, if you can find a PLG motion, a sales-led motion, a channel partner, direct sales, you have a global footprint, you've really matured and are able to do everything. But that may not fit everybody's model, but that's technically the ideal model where you've got a full breadth of ability to reach your audience with your product.
Speaker 1Yeah, and I think some of the conversations I've had with other people that are leaders within channel is a lot of the time some people think, oh, go down the channel route because just give someone the product and expect it just to get sold, but don't take into consideration the amount of time and effort that needs to go into it from a marketing perspective, an enablement perspective and ultimately, yeah, enabling those partners in the channel to go and sell that product as effectively as a direct sales team would. One of the conversations I actually had this week was around pricing. So they were currently very early stage, all PLG. They had a freemium product. They'd built out a really good, I'd say, customer base. They weren't paying for the product but a huge user base. It was a DevTool product.
Speaker 1Their users loved the product but, like a huge user base within, it was a dev tool product. Um, that that their users loved the product and what they were then trying to do is transition from that freemium product or plg to like an actual go-to-market sales motion where they can start to sell that to their mid-market enterprise businesses and so on and so forth. What? What have been some of the challenges that you've seen in making that transition Because as a recruiter I've seen that myself where we built founding teams, founding sales teams that have then faced real challenges of actually getting customers to pay for a product that's previously been all done, sold through PLG and in some cases on a freemium service.
Speaker 2Yeah, no, it's a great question, right. And I mean, as you build your product and you think about deploying it, you've got to realize at some point you're going to charge the customer for something. And if you've given everything away initially, why would I pay, right? So part of your strategy has to be, because I build out my product and the functionality, I'm holding back certain features to say, okay, you might be using these dev tools, et cetera, but if you want an enterprise license to connect your organization or if you want to have access to additional features, okay, you've got to upgrade to an additional license, Right. Or if you want to have access to additional features, okay, you've got to upgrade to an additional license, right. So you're sort of gating functionality so that people see the value in paying more. And if you don't do that, I as a consumer feel like I am getting the short end of the stick if you will, right? And so have to have some sort of strategy on your pricing. Are you also going to price differently for smaller companies, mid-sized companies or larger companies, right? Is there enough differentiation for a larger company to say, okay, I'm willing to pay $100 per user per month versus $10 per user per month for a smaller company. What am I really getting? I think you can look at some of the larger companies that make it very clear what you get with an enterprise solution versus a mid-market solution, versus the PLG solution. Typically, the freemium solutions don't get you a lot of accessibility and power, and so that's where pricing really comes in. And then going back to like the value you provide, right, If you are in a market where you have a lot of competitors, it's very easy to fall into this trap of well, my competition just dropped their prices 10%, or I'm in a deal and they're offering 30% off list.
Speaker 2Should I also discount? I don't know. Is your product commoditized, right? Or what are your margins? You got to think through some of those elements and are you willing to give away points of margin if you're selling that your product is unique and you add a lot of value, Because the best companies walk away from deals and say you know what? You're probably better off with that other vendor that's selling you something, but we believe our product is worth what we're positioning it, even at whatever discount you gave, and believe it or not, that might sway certain customers to go. Oh well, maybe I'm missing out. Right Like maybe I do want to pay the premium and we all know the brands. Right Like a Mercedes costs what it does because it's quality. Right, A Rolex costs what it costs because of the quality. So just keep that in mind when you're thinking about how you price and also how you discount when your sales teams are out there with the competition.
Speaker 1Yeah, and I think you know talking into like pricing and I suppose it feeds quite nicely into you know, from a comp perspective. You know, one of the things that I've seen in the market and is sometimes music to my ears is when a vendor makes a big, significant change to comp plans and you get a lot of disgruntled salespeople. And you know, for me that's like easy pickings from a talent perspective but like from a change management perspective, like what are some of the best practices and best ways that organizations you've seen when it comes to making those kind of changes, particularly when you've got a lot of money hungry salespeople that are driven by that comp plan.
Speaker 2Yeah. So I love this question because I started my career designing sales comp plans and it's something that I don't do as much as I used to, but I still love. It's such an important lever. And back to strategy. Right, if your sales comp plan is not aligned to your strategy, then you're not really doing the right things. Right, because if the company is heading towards hey, we're going to grow this year with this new product and I'm carrying one quota and a euro is a euro, a dollar is a dollar, I'm going to sell whatever is easiest. Maybe it's the new product, maybe it's the other five products I have. And then you wonder well, why did we miss our targets? Well, I don't know, I just sold whatever I thought I wanted. You didn't tell me to sell the new product, and so how you set quotas, how you incent people, is super critical.
Speaker 2To answer your question on change management, you do not want to piss off the salespeople, right? You don't want to lose your best people, and so two best practices. One, before you're going to roll out a comp plan, talk to some of the best reps or the leaders that you trust to get their perspective on. Hey, we're pivoting as a strategy. Here's what we're thinking about doing. Let them react to it, right, and again, no one, no one, loves a comp plan. Jane's comp plans never get better. They're. They're always, you know, changing to meet the board's objectives and the company's objectives. And you want to make sure reps get rewarded for their best practice, but typically it changes is received with you're going to take something away from me, right, and so if you're designing the comp plan, if you're taking away something, make sure you give it away somewhere else, over reward for, over performance.
Speaker 2I think there's this hesitancy to like just pay more for over 120%. Who cares? Right, that's, those are people that are like killing it. So talk to like just pay more for over 120%. Who cares? Right, those are people that are like killing it. So talk to people, get their feedback. So that way you can handle objections when you roll it out. Or those reps and leaders might have feedback on how to position the change right. They might have suggestions on like okay, to overcome some of this, what if we did a contest between the first half of the year and the second half to bridge some of the gap? Right, and so there's different ways to do it effectively, but you don't want mutiny on your hands, because those are the people that are driving revenue for you at the end of the day.
Speaker 1Yeah, you want to keep your soldiers fed, so to speak. But, yeah, I think, definitely echo that point around. You know, aligning into strategy and rewarding the right behaviors, but also like having a comp plan to that's designed to reward the right people. Um, you know, we we changed our comp plan a couple of years ago because it was it was ultimately rewarding the wrong sort of percentage of of of our sales people and not rewarding the the kind of people that we really wanted it to. So, um, but again, yeah, getting people involved. We really wanted it to. So, but again, yeah, getting people involved in that decision-making to to understand and do a bit of a litmus test before you, you know, pull the plaster off and it's like too far to too far gone to go back on it.
Speaker 2Yeah, and, by the way, real quick, the best advice I can give everybody that's listening is the comp plan is not a substitute for poor management, right? I've seen too many companies where I look at the comp plan and I'm like why are there eight measures in the compensation plan? Well, because marketing wanted to make sure that reps were qualifying leads effectively and finance wanted gross margin in there, because gross margin is important and HR wanted I don't know NPS or employee satisfaction, and you go. Well, that doesn't align to this strategy. Those are things you can hold people accountable for differently. Right, the comp plan should reward me and be super simple to drive revenue and profitability, and that's it, right. And so don't throw things in there to check the box on. If everything's important, nothing's important, right. And then you dilute the plan and as a rep, I'm like, well, what am I supposed to focus on? Like there's 20 things in here. So keep it simple and don't manage people through the comp plan.
Speaker 1Yeah, no, that makes sense. And then I suppose, from like we talked briefly before about, like expanding into new markets and new territories, from your experience again, what have been some of the success stories around Territory Planet in terms of verticals, locations, moving up the value chain from a SMB into mid-market or enterprise?
Speaker 2What advice would you be giving to founders who are currently looking at? Should we make the horizontal move into new territories or should we be moving up the food chain? What's your two cents on that? Yeah, I mean data is everything right. What does the data tell you? Is the addressable market?
Speaker 2We want to allocate 10 reps and part of our marketing team to only focus on financial services. Okay, Is the product different in financial services? Do you need a different product or can it be the same? Because you could go over rotate resources, but if your product doesn't meet certain requirements for that segment, then, okay, you failed right. So does it require investment or is your product? Doesn't matter.
Speaker 2Second, what's the size of the market? Let's pretend my product does not need to change. I just want to allocate resources and dollars because the market in financial services is enormous. Okay, that's something we should consider. What does the competition look like? Right, is this a red ocean or is it a blue ocean? Is our product differentiated? What's our messaging? Do we have any anchor clients where we can demonstrate the value that we bring, et cetera?
Speaker 2If you're gonna focus people on a market, your messaging probably has to be tailored to those people also, even if the product is indifferent. Your website probably has to have language specific to financial services, because if I come to your website and everything looks the same like okay, whatever, and your competitor has something specifically for me, right, they've got use cases, they've got examples, but it ultimately starts with is the market large enough to go after? Can you see yourself growing in there? Who are the incumbents? Are you taking share? Is there enough share to be taken or not? Right? So think about Apple, right, I'll stay on Apple because it's so common. Right, when they introduced a phone, how many phone makers were there Like tons, right, but they saw an opportunity to bring something new to market and look at the market share that they were able to capture. Right Now, that doesn't work for everybody. Microsoft also tried to roll out a phone. Failed miserably, right, for a whole host of different reasons. So you've got to have a very sound strategy on if you're going to go into a vertical.
Speaker 2You talked about going into a different country. Same thing, right. If I go into France, are there language requirements? Do I have to change my entire product to French, or is it okay if it's in a different local language? Right, how hard is it to go into France. Are there cultural norms that I need to take into account? Do I need to hire people locally or can they work out of the UK? Right, that might influence you. Is the French market growing at the same rate as, let's say, if we invested going into the Netherlands? Maybe, sure, france is 10 times larger, but maybe the opportunity to grow more quickly is in the Netherlands first. So the economic and the market data will guide you as to whether you should place certain bets there or not.
Speaker 1Yeah, no, it seems like there's a reoccurring theme, no matter what it is within the organization that you're looking to change or develop, it sort of comes back to some of those same same points around you know, the data, the leading indicators, aligning it to strategy.
Speaker 1And I think, to sort of wrap this conversation up like, some of the key takeaways that I'm getting from this are, you know, most importantly when it comes to decision making within the business, um, change management, expansion into new territories, developing new products, making changes internally that affect your sales rep, whatever that may be, is making sure that ultimately, everything is aligned to that strategy.
Speaker 1Making sure that, if you are going to make change within the organization, that that it's supported by data and insight and not just, you know, on a whim, um, and and ultimately, you know, given in the current market, is, is, is, do, doing more to achieve, doing less to achieve more, should I say? Um, and remaining really focused in fewer areas. So, um, I've, you know, even in the short time I've been speaking there, pablo has given me a lot of things, a lot of food for thought and usually, to sort of wrap the conversation up, I try and bring it into like one punchy question. So one of the things I'd like to ask you you know, given your experience within the industry, the amount of organizations that you've had such a huge impact on. If I've got to this point in the podcast and I'm still engaged and I'm still listening one of the things I'd like to ask you is what's the best piece of advice that you've been given in your career.
Speaker 2Yeah, so that's a tough one, but I'll pick one that I think is relative to founders. As you're building your company, hire slow and fire fast the mistakes that I continue to see when I was leading teams in public companies and in a startup. Or you hold on to people that you know you should not hold on to longer than you should and, again, easier said than done. Right, maybe it's your co-founder, maybe it's somebody you hired, your second engineer or whatever, but the longer you hold on to people, the worse it is, and your gut is right 99% of the time. With talent I mean, you're an expert in this, like you know when it's time to go, you got to make the choice quicker. And on hiring, you know, make sure you get the right people on board.
Speaker 2Sam Altman, ceo of OpenAI, did a really cool talk with Lex Friedman and he talks about the amount of time he spends on hiring and he doesn't think it's enough time and he's spending over 30% of his time I think it was 30, 40% of his time making sure he gets the right people into the company, because that is such a difference you get the wrong person in and you know these numbers right that the cost of getting the wrong person in them, sticking around for the year. Rehiring retraining far outweighs spending the time up front to really hire the right person. So again, hire slow, fire fast.
Speaker 1And I think on that point, pablo, it's not just the CEO. I think that trickles down Sales leaders, the best sales leaders I've ever worked with. They are always, always recruiting. Even if they've not got open headcount, they're always in the market looking out for top talent. And I find that the sales leaders that don't enjoy that part of the job. It makes me seriously question whether they're in the right role. But no, it's great, great advice, something that resonates with me massively. But no, to sort of bring things to a close, then, pablo, thanks again so much for your time in this. I've thoroughly enjoyed the conversation. I've got pages of notes here that I'll be flicking through afterwards and things about areas within my own business. But conversation, I've got pages of notes here that I'll be flicking through afterwards and thinking about areas within my own business. But I'm sure the listeners are going to get a ton of value from this. So, yeah, just thanks again and yeah, it's been a pleasure speaking to you.
Speaker 2Likewise, thank you for having me.
Speaker 1Thanks for listening. I hope you enjoyed today's episode. Don't forget to subscribe and if you want more information about the podcast, head over to our website. Scale With Strive.
