July 18, 2014
Building and Leveraging an Open Source Developer Community.
Jade Wang manages Developer Engagement at Meteor, where she runs their monthly Devshop, deputizes community leaders, and owns community stra...
Morgan Mackles: Welcome, everybody, thanks for coming. This is the third "Heavybit Sales Master Class." This is Mark Roberge. So, one of the things, Mark, about your book that I think really resonates for this audience is the fact that we have a lot of engineers and developers in the room, especially among the founding teams. Or else, companies that are selling to engineers and developers. And you actually have an engineering background.
In terms of what I think is unique about what you bring to the table, and part of why this book is so popular here in this building, is we actually saw a bunch of copies of his book walking around, pretty cool. Not staged, by the way.
You bring an engineering background and mindset into what you describe as the "science of sales growth." I'm going to let you just take off and talk a little bit about where that idea came from.
Mark Roberge: Yeah, I got the question, actually, earlier today, about what made me want to apply this engineering framework to sales development. It was actually out of survival, to be quite frank, and just where I was in my life.
Coming out of business school with a new family on the way, I was trying to grow a seed-funded business of my own and helping the HubSpot guys one day a week, while they were two guys in a garage. I just couldn't move forward in my own startup and was asked to join when they were four people and about to raise to Series A , and I was put in charge of sales. The problem is I'd never done sales before.
As Morgan mentioned, I have an engineering degree undergrad. I started my career for the first couple years writing code and did business school at MIT, which is known to be a pretty quant- and analytics-focused degree. So I've always had this lens of data and process and science that I viewed, especially the professional world, through.
Just out of pure survival, it was that lens that I wanted to apply to how to build and scale sales. And that's essentially what I did. I went through the first seven years as head of global sales and services. I scaled the team to about 400 people and got the company over $100 million in revenue. Then we decided to move outside of the marketing software space into sales software, and that's what I've been doing the last couple years, is helping pioneer those efforts.
The underlying thesis there was predictable. I took the job, and I was like, "Jeez, how am I going to figure out this sales thing?"
I wrote down four words for my own personal mission which was: "predictable, scaleable revenue, growth." And when you guys embark on your venture capital presentations, start with those four words.
All the VCs love it. You know, Dale's over here in Scale Venture Partners, and he just like, "Oh, I like this, guys. Scaleable, predictable revenue growth, that's what I like." So that's a cloud-based mission. But it was the four tactics, if I can kind of jump ahead here, that really get to the meat of what I was trying to accomplish.
I kind of simplified that mission down to: number one, hiring the same successful salesperson every time; number two, training them in the exact same way; number three, providing them with the same quality and quantity of leads every month; and number four, holding them accountable to working those leads with the same successful process.
I did my best to put as much data and science between those four tactics, and that was sort of the vision for my machine. If I could achieve and build that machine, I would likely produce predictable, scaleable revenue growth.
MM: That's great. And so a lot of the people here have read your book, but specifically, the methodology, I thought, was very unique. You took a very analytical approach and said, right at the beginning, how you were going to make this possible, scaleable, predictable revenue growth, it sounds good. But methodology, specifically, a standardized system of tracking and experimentation. So I think that that's something that really resonated for me in your book.
Can you talk a little bit about the standardization, the tracking systems that you built for the different sales formulas that you just mentioned?
MR: Yeah, they're all a little bit different. I can start with the hiring one. How many folks have hired salespeople here? Okay, so just shout out, what do you look for in a salesperson? Coachable, a reader, go ahead, what else? Confident. Creative. Okay, cool. Passion. Okay, how do you screen on confidence? Anything, Justin? Okay, cool.
All right, how do you screen on coachability? Yeah. Okay, sweet, you pose an answer to them, and you can see, based on their response, how they're going to mold that just for the purpose of the video. Confidence? Creative, yeah, creative, give that one to me. Okay, so behavioral-base interview around it. Our engineer founder about to hire her first salesperson. What's your guess here? Okay, follow up. And how are you quizzing for that? Yeah. Okay, so you actually use the interview process to screen for that, excellent.
Here's my take on getting to some of the metrics there, is I ask the same questions in my first year on the job of different sales leaders and got a variety of answers. And one of the stories that really struck a chord with me was probably about the eighth sales hire I made. I was very fortunate to convince, as a 12-person garage band across the street from MIT, this number one salesperson from a large public company in Boston to join our team. Literally 800 people on this sales team, and this person is number one.
They signed to come on to HubSpot. I was like, "This is amazing. We're going to roll out the red carpet. This person's going to come in and teach us how to sell." And when they came in, they didn't do poorly, but they didn't crush it, either. And I was like, "Jeez, how could that be?"
When I thought about it, they were coming from this big public company with a huge brand, literally running Super Bowl ads, selling a product that you could pitch in 10 seconds and close in probably 15 minutes, and they were coming in to HubSpot, which everyone was like, "What the heck is HubSpot?" "It's inbound marketing software." "What the heck is inbound marketing?"
And we'd tell them what it is, building content to attract people to your website. "Oh, that's awesome, how does that work?" I mean, it was the extreme of an evangelistic sell. And you could imagine the profile of the salesperson that would succeed with that big company brand versus the one that would succeed in our environment. That was my main conclusion from that experience.
For us to sit around and say what makes a good salesperson for you is kind of an irrelevant answer or a question for me, because my context is so different.
The right answer to that will differ from company to company. However, there is a process that we can leverage to try to engineer or uncover the right answer for us. And you'd be amazed, even for super sophisticated, smart companies, how few are disciplined enough to follow this process. And so what I essentially did was, there's nothing crazy here, but a guideline, a blueprint for yourself is I wrote down the 10 criteria that, given our context of a very evangelistic sell, what I thought would actually correlate with success.
I was clear about defining what each one was, and what a score of a one and a three and a five and a seven and a 10 would sound like for each of those criteria, and disciplined about scoring each candidate against that criteria, especially those that we hired. And it was very interesting. Five hires into that experience, probably over the first six months, I could see how these people started to perform, and I could go back and reflect on what I was observing during the hiring process.
I'd ask myself, for the folks that are crushing it, what's common about them that's letting them crush it? And for the folks that aren't crushing it, what's common about what's holding them back? What am I missing from this? Is there anything in that pattern of the folks that are crushing it that I didn't evaluate for? Is there anything in the folks who are doing poorly that I failed to evaluate them for, and how can I iterate that process?
Even for the folks in here who might go on this year to hire one or two salespeople, starting with that mindset and building that cadence of reflecting and learning will help you to get to that right answer. Believe me, when you're on the hook to hire 10 or 20 or 50 salespeople in a year, you feel much more comforted when you've practiced this cadence for a couple of years and know that it's starting to correlate.
If you're fortunate to be like New Relic folks and some of the folks in this room, you will eventually get enough data points to run a regression analysis, which is when the engineers in the room get really excited. We did that after a couple dozen hires, and it was really cool and interesting to see the stats speak to us about which particular criteria were correlating. So, I think the answer to "Where do you store all the data?" is different for each one of these, but that was the sales hiring piece.
MM: That's great, yeah. Before we move on, I'm interested in, just in general, but especially for the hiring, how large of a sample size does it take before you start seeing results that are actually applicable?
MR: Well, for regression analysis, check your R-squareds. I think it was a couple dozen. There's people in this room that probably could answer that better than I. I literally found a PhD at MIT to give him the data and go crazy on it. But this is valuable, even if you're hiring three or four reps in a year. It's something that you have to let the qualitative observation speak to you, and something that you can refine the data and learn from as you move forward.
MM: Got it, great. So, sales hiring. Everybody, I feel, has asked that question here at Heavybit at one point or another. Moving on to the second sales formula, you've just hired someone. In Edith's case, right? Our just hire one or two people. In the case of HubSpot, you had to hire dozens. So, that leads to, "How do you train them?"
MR: Yeah, okay. I asked that question, too. I had cups of coffees with probably 20 heads of sales in my first year and asked them that question. And pretty much all of them said that the way that they train their salesperson is, "Bob, welcome to the company. You remember Andy, our top salesperson. You're going to sit next to her for two months and learn how to sell."
They just shadow them or they do ride-alongs or whatever it might be. And something didn't feel scaleable nor predictable for me, from that process. And I'm glad, after a couple hires, that I followed that gut, because in my experience, even though the top performers for us fell into five particular criteria that we can talk about later.
I also found that the top performers brought this unique superpower to the table.
I had this one salesperson, Jen, who was just an amazing rapport builder. You listen to her demos, and the first 20 minutes was about kids and sports and the weather and church and everyone loved her, and they all bought from her. She was above average at the rest of the sales process.
Then I had Adam, who was this unbelievable activity hound. You walk over his desk, and he's on the phone. He's writing emails. He's taking notes. He's got 17 tabs open on the CRM. He's just crazy. You look at the stats at the end of the month, and he has 40% more activity than anyone else on the floor. Again, average at everything else, but because he had so much activity, huge revenue dollars fell out of his funnel every month.
Now imagine if Jen had shadowed Adam as her training, or Adam had shadowed Jen. I mean, it would have completely fallen apart. They would have picked up bad habits. They would have probably never leaned in to their unique strengths as salespeople. So I sought out to build a blueprint that was a guide but also gave them some room to be themselves in the sales process.
That blueprint started with the buyer's journey. And that's kind of a big mistake that I think folks make. When they build a sales process, they think about what the seller wants to do. You've got to identify some prospects and call them with these scripts and do a discovery call and put them in a trial and then send them a contract. These are all salespeople steps.
You may have, at some point, been sold to in your career where you felt like you were being brought through this process by the salespeople. And especially today, when we as buyers don't even need to necessarily engage with salespeople to figure out how to educate ourselves and buy, we need to reverse this process.
Really think about building the buying journey and present that to the sales team first as part of their training. Then present a structure on how to support the buyer through each stage of that buying journey.
And that becomes your sales process. It's not super scripted, but it at least gives them the guide of what they should be accomplishing, what the buyer's thinking at each step and how they can align themselves to help them through.
The other big thing on the training side was, in the same vein that today's buyers are so empowered, we can't, from a sales training standpoint, just think that sales training is about memorizing the content on the website, the top 10 objections, and the price book. That was literally sales training probably 15 years ago. But that is all commoditized information.
As salespeople, we need to add value above and beyond that commoditized information. In a way, we have to be translators of the information available that's generic, and the unique context of the buyer. In order to do that, we need to be as consultative as possible.
One of the things that we try to do in training was we worked on exercises that put our salespeople in the seat of our buyer. So, a lot of you at Heavybit, you're selling to engineers. For the HubSpot example, we were selling to marketers. Every single salesperson in the first month would spend 70% of that time building their own website on HubSpot, writing their own blog, creating their own social media following, doing a lead-nurturing campaign, sending email campaigns, all with the HubSpot software for a little business they start as part of their training.
By the time they got out of training a month later and got on the phone with their first marketing director or small business owner, they could school that marketer on those subjects, because they'd been within the thought leadership brainpower of the folks that were really studying this stuff. And that was important for them to be able to empathize with what the marketer was going through. They'd be like, "Does this SEO stuff really work? Yeah, I didn't think so either, but look what I built. Do a search for chinchillas for sale, and that's my website."
Literally, that was one of the most popular websites that a woman brought, and she was breeding chinchillas. So, however you do it, maybe in the Heavybit example, your best salespeople are probably not going to be former engineers. But you can find ways to get your future sales hires to live through the deployment of code, like we talked about. We'd literally have them do it. They're going to be so much better and be able to relate to these folks.
MM: Yeah, that's a great concept. I love the examples that you provided in the book about people throwing up their own sites and really experiencing the pain, really feeling that buyer's pain. Another question, obviously right into "you hired people, you trained people." Okay, managing people.
MR: Yeah, okay. This question, "What does a sales manager do?" And I ask the same question myself. When I looked around the industry, it might have changed a little bit recently, but for the most part the manager was just putting pressure on the reps and managing pipeline and making sure the forecast was accurate.
Especially as more and more sales move inside, that stuff can just be done, usually, with technology. And I found that my best managers, in fact, whenever I asked myself, "How can I truly move the needle on sales productivity improvement?" it really came down to the frontline coaching between the sales manager and the rep.
No rep joins and is crushing it from day one. I've never really seen it. But through the continual development from their sales manager, they eventually get there and beyond. And so that, for me, is the most important element of the sales manager's job, is to be a good sales coach.
Now, what is good coaching? You may have heard this example before from me, but I think it's perfect with learning to golf, a journey I've taken for 15 years without much success. But I've taken a lot of lessons. And one guy, a pro, he said, "Take a swing," and I did. And he said, "Okay, turn your grip over, lean back in your stance more, put more weight on your right foot. Think one o'clock, not two o'clock, on your back swing, and give me more wrist on contact."
I was like, "You've got to be kidding me." Like, really? And then another guy, he's like, "All right, take a swing," and I did. And he's like, "Try this grip. Now take 100 swings." And I did. Twenty minutes later, he's like, "How does that feel?" "God, that feels great." "Now try leaning back in your stance. Take another 100 swings. Now how does that feel?" "Good." So it's a simple example, but for whatever reason, I promoted 18 extraordinarily smart sales managers, they all took the tact of the first sales manager, of the first golf pro.
Literally got this salesperson out of training, saw 50 things broken with them and threw up on the sales person for an hour with feedback. And you could just see their head spinning, and nothing got done. Where do you begin?
The best coaches were really good at seeing the 50 things, but figuring out the one or two that were going to make the biggest difference in their performance, they actually used the metrics to do that diagnosis.
On the first day of every month we would produce a pretty lengthy metrics report, which today a lot of software can do on its own. Each manager would sit down with each rep at the beginning of the month and go through the metrics. And it wasn't the manager saying, "This is where you suck, and this is where you suck."
It was like, "John, thank you for a good month last month, 120%. So, what did you do well, and what do you think you could have improved on?" A little qualitative assessment. "And now let's go through the numbers. The first chart is on total dials made. Stack rank in the team, you are number four out of 15, wow. How'd you pull that off? What do you think you did well?"
"Now let's go to the next chart, the connect rate. Oh, you were 17th out of 24, kind of in the bottom quartile. What's going on there?" And then go through chart after chart after chart, and it's a lot of questioning, and then basically at the end it was, "So, based on your qualitative assessment and the numbers we went through, what would you like my help on this month?"
"Okay, so you want some help on developing sense of urgency in your demo? That's a really good spot to work on. How do you want me to help you? Okay, maybe we should have two. Why don't you record two of your demos, and we'll sit down for an hour, listen to the recording from the lens of sense of urgency development, and we'll try to figure out some learnings. In fact, let's schedule the meetings right now. We're both free on Thursday at 9 a.m. and the following Wednesday at 3 p.m.," and we get them right in our calendar.
What I've done is I've used the metrics to give me guidance as to the one or two areas of improvement. I've personalized a coaching plan to that particular deficiency, and I've booked it all in my calendar on the first day of the month, both for me and the rep. And yeah, if the rep has a killer demo at 9 a.m. that conflicts with it, do the demo. But we move the coaching call; we don't cancel it. And that makes sure, because otherwise, coaching just falls to the wayside, and people get into this very reactive mode, and that's when sales sucks.
But when you're proactive and you're developing people and you're building your pipeline, that's when sales is a lot of fun. And this coaching model really helps to make sure that you're setting yourself up for that culture.
MM: Yep, that's great. Another aspect that was covered in your book that I had really liked was when you talked a little bit about the partnership between marketing and sales, how important managing really is to keeping the sales machine moving. But also some tactics in, again, analytics around, keeping line of sight on that.
MR: How many folks in the last six months have gotten a cold call from a telemarketer, and you got into an engaging conversation with them and ended up buying their product? Usually there's one or two. How about a cold email or a direct mail sent to your apartment? You opened it, it looked really cool, you ended up buying the product? Unsolicited email, what was it? Nice, so it's really engaged with you. And how many of you in the last six months had a problem, went online, did some research, maybe some social media conversations, and that research led to buying a product?
All right, so a really obvious survey we've been doing for 10 years that illustrates that we, as buyers, have complete control. And most folks are like, "Yeah, I get it. I need to do content marketing, generating inbound leads." Where it breaks down is how to nurture and scale it. Because I've literally just had a conversation at the Scale Venture Partners event today. Pretty big company, Series B funded, all the inbound leads are red hot for them, but they can't grow any more.
I ask, "Well, how often are you blogging?" And they're like, "I don't know." The VP of sales was talking to me. "I just put one out last week, and I think our CEO wrote one two weeks ago." And that's usually the answer. That's where it's breaking down, is the other channels have matured. We understand to cold call, you have to hire cold callers. We understand to do trade shows, we've got to hire marketers to run them, or paid campaigns, we run paid marketers.
We know content marketing is amazing, but we delegate it as part-time jobs to the staff around the company.
The breakthrough moment is when you realize that the power of the journalistic arm within your company, whether it means going out and hiring a full-time journalist who, I don't want to offend any journalists in here, but their industries are not exactly on fire right now. The San Francisco Chronicle went out of business about four years ago, I mean, a long time ago, actually. And what you're left with is these really smart, talented people that don't know how to redefine themselves, not realizing that they hold the keys to the future demand generation.
Whether that means hiring a full-time person or taking advantage of the freelance market, or even going over to Stanford and finding a 19 year old in the journalism program and have them come by your office every Friday over here. That's where the key is, to look at those hours as the fuel behind your demand generation.
Don't obsess over those folks having domain experience. Let's talk the Heavybit folks, for example. You probably are in the toughest situation, because a programmer can sniff out, someone technical can sniff out, when it's written by a non-technical person. But here's an idea. Go and hire a journalist that has a little bit of a technical bend to the themselves. Certainly couldn't go out and do research on their own and come up with something thought-provoking.
However, there are probably people at your company who are thought leaders around the problem that you're solving. So sit one of them down for an hour with the journalist every Friday morning at 9 a.m. and have the journalist interview them on this topic and get super deep. And then after that hour, that journalist should be able to write a three-to-five page ebook on that topic, plus four blog articles, plus a few dozen tweets and social media messages.
They can schedule those over the course of the month all pointing back to the relevant blog article. At the end of the blog article it says, "Did you like this article on nanotechnology, or whatever? Click here." And there's a landing page that says, "The ebook is free. It's available, we just need your name, phone number and email address."
That process, which took an hour of a very valuable person on your staff's time, but it was only an hour and probably took two or three days of this really affordable journalist, it creates a really nice stream of quality blog content, a bunch of social media messages. It raised your social following, and it raises your SEO ranks. It creates a high conversion of visitors to leads.
Think about a very technical company, just as an example. This isn't something they are, but just as an example for the technical folks here. If I were selling to CIOs who I know don't have phones, they're not going to respond to, necessarily, a cold email. But they are digital natives. I mean, they're online.
Then here's an example thread, a vision that you could work towards from a content marketing standpoint. Let's say that you sold a security product, and you grew up to be a reasonably sized company. I would hire an amazing security person who was a great thought leader, and I would create a lab around that person and just let them play with stuff and try to push the envelope on the aspect of security where your value prop is on.
I would hire a team of journalists to just work with that person and talk with them on what they're doing and guess right on their behalf.
And they obviously have to approve it. It needs to be in their language, etc. But you're essentially not just building up your brand; you're building up the brand of this person.
This is something that, honestly, like the analyst companies like Forrester and Gartner have done forever, is you've got the analysts who build themselves as thought leaders, and you have a bunch of salespeople that just sell time to get them in and talk to folks. It's a pretty interesting sales pitch, because these analysts become famous, and the salesperson just wants to get time with them. All the executives would love to talk with them about what they're seeing in the industry. You can replicate that in your world, where you build up the brand of these technicians as thought leaders within your space to the point that CIOs might be very interested in getting time with them.
By the way, you're being authentic about it because this person is actually a killer thought leader, and if you do put them together with the CTO, the CTO's going to love that hour-long conversation and get a ton of value out of it.
Just some thoughts around how you can think about your demand generation strategy. Yes, you still need to cold call. Yes, you still need to pay for ads, but in some aspect, think about building an online magazine, a trade association, a video channel for your buyer as you start to scale your demand generating marketing efforts.
MM: That's great. I think it's fair to say it's been very engaging. I definitely want to give you the chance, Mark, to address a little bit about summarizing the results from the book and tell us a little bit about some advice you might have for the people in the room.
Just reading the stats out, $0 to $100 million in ARR, which is what we all live in. And then employee count, or your head count on the sales team?
MR: 450 in sales and services.
MM: Okay, everybody in the room, obviously, that's the goal, that's where we want to get. We want to get to a company of that size and scale. And I guess, probably in the room, really only New Relic is on that level today. So do you have any specific feedback or advice for the people who, like Iron.io, are Series A or earlier? What's the most resonating, the highest-resonating factor, that you think they should take away?
MR: I know it's really hard to try to be in survival mode and try to get to that Series A deck and really focus on the revenue traction, but make sure that you are investing some percentage of your time in the long-term scaleability of the business, whether that means thinking about unit economics or it means thinking about some of the sales hiring process that we talked about today.
It's very easy to push that aside when you're just trying to close the quarter and get that fourth customer or whatever it is, but just try to have those frameworks in the back of your mind, because that's what's going to catapult you to the next level of success.
MM: That's great, great feedback. Thank you so much.