Sales capacity models are broken

The capacity and the sales quota is only half the equation, so how do you fix sales capacity planning?

Show Notes

The capacity and the sales quota is only half the equation, there’s an entire part always being left out - and it’ll lead to you not being able to hit target.

So what is the other half? That’s what we get into in this episode.

Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

[00:00:00] Toni: Hey everyone, this is Toni Holbein. You are listening to the Revenue Formula. In today's episode, we are going to talk about capacity modeling, why it's broken in 99% of the cases, and, gonna tell you how to fix it.
[00:00:29] Mikkel: Yeah, yeah, yeah. No, that's gonna be good fun. I mean, obviously we want to continue this show, even though I'm just.
[00:00:35] Taking off for another job, being a parent. Yes. so we wanna continue the show, so we're gonna have the substitute and that should be fun at least. Then I get to listen to all his mistakes and go like, Oh, terrible, terrible.
[00:00:48] Mikkel: you know, besides that, we're gonna talk, we're gonna talk a bit about sales capacity and basically all the models there and how they're broken.
[00:00:58] Toni: Yep.
[00:00:58] Mikkel: How they're really terribly broken.
[00:01:01] Toni: No, exactly. And, especially, there's a lot of wisdom out there.
[00:01:04] A lot of, Hey, this is how it should be done. We're gonna cover that and then we're gonna say how all of that is kind of crap.
[00:01:12] and how you need to rethink some of these things. We're gonna help you rethinking some of it.
[00:01:17] Mikkel: Well, it still has merit, but we'll get into why it's crap, or at least why we see it a bit differently.
[00:01:21] So, I mean, the, the good news is, there's a problem you don't know about yet. At the end of this episode, you'll know about it. You also know what to, do, to fix it, essentially. But a lot of teams out there, they have a broken setup and they don't even realize it. And we're gonna first off, get into some of those telltale signs. We really wanna cover some of those.
[00:01:42] Toni: Yeah. So let's go into this actually.
[00:01:47] Toni: some of these things, when you think about it, first of all, where, where's some of this coming from right before we actually go into the tell tale sounds? Where's this coming, from? So, when, when you're a cfo, or when you're an fp and a guy, or even when you're like a ceo,
[00:02:02] and when you
[00:02:03] Create your, your first budget, your, your 20th budget, whatever you might go and look for, Hey, how's this actually being done?
[00:02:10] What is the best practice about it?, there might be some, some things that you, can do, like you did it before. and other things might be just, you just go out and, and research this a little bit, right? And what you will find is that basically, and, and the, the search term will
[00:02:28] be. SAS Budget SAS revenue, something like that.
[00:02:32], what you will find is that everyone is talking about your revenue line item and the sales capacity. You know, those are two things that are sometimes being used, sorry, interchangeably. and, sales capacity then here really means, how many AEs or headcounts do you need with a quota? And then there's some Cool assumptions around, ramp up and, attrition of those, folks and so forth. How many do you need in order to hit your, your revenue target? Right? And That is basically creating the capacity, that's the capacity model. And when you, this is, this is being, talented and, and, and shouted as the way to do it basically everyone, and I mean, like Predominantly, I'll just say big brand name VCs.
[00:03:22], big brand name, you know, tech companies in the space. Don't wanna name anyone. but that's basically the standard approach these days, and that's, that's what everyone, you know, already knows. Right? I think that's, that's pretty like, straightforward when you think about it.
[00:03:38] Toni: while I actually, So it's important to have that, that approach by the way.
[00:03:44] Now let's go into some of the symptoms that you might have when, when you're, when you're approaching the problem like that, right? When all you do is a capacity model with this is how many a I need, because this is the, the revenue I wanna achieve and so forth, right? And some things that you know, run into myself and we can, you know, we can, you know, riff a little bit on this, but one telltale sign I've seen a lot is.
[00:04:13] Mixed quota completion of reps. Yeah.
[00:04:16] Mikkel: So that is,
[00:04:17] Toni: So you have some reps that hit 30% and then you have others that hit 300%.
[00:04:23] Mikkel: So all over the place.
[00:04:24] Toni: all over the place. Sometimes it's, it's called productivity. Or a quota achievement that usually plans is being said to seven or 80%.
[00:04:36] because obviously not everyone should be hitting target, so that makes a ton of sense. If you look into some, benchmarks right now, average quarter completion at least in, you know, last time I looked up, a specific cohort was 54%.
[00:04:52] Mikkel: Wow.
[00:04:55] Toni: Exactly.
[00:04:55] Mikkel: I thought it'd be way higher.
[00:04:57] Toni: No, no, no, no. Average quarter completion right now, and then it depends on how you slice it in terms of what benchmark you get, but 54%.
[00:05:04] and, many, many times it's probably, you know, lower or slightly higher maybe, You know, but that is, that is one that is one item. I think another one is channels work in one market, but not the
[00:05:18] Toni: So the, the, the typical example is, outbound doesn't work in. Germany or doesn't work in Europe or doesn't work in, you know, wherever. but it works in this other spot. So you have, you have two markets and one it works in the other one it doesn't.
[00:05:34] And people say like, ah, yeah, it doesn't work because it's, it's a culture thing.
[00:05:42] Toni: The excuse, it's culture thing. people in Germany don't like the phone. They don't want to be cold called, you
[00:05:47] Mikkel: prefer snail mail. Yeah.
[00:05:48] Toni: Well, let's talk about that another time. That that is, that is, that is a til sign. Right? and you can even, you can even take this one level high up and say, this market is hitting target. And this market is not hitting target. and then you will have people say while the market that's sitting, that's obviously our home market. That's where we started. That's where we know the most. and, and the other market is just not made sure yet.
[00:06:15] Mikkel: Yeah,
[00:06:16] Toni: I've heard that a couple of times.
[00:06:18] Mikkel: So what does it even mean the market isn't mature.
[00:06:22] Toni: and, and the logic, you know, for this approach is obviously quite convincing. and, and it makes a ton of senses. while you haven't been in the market that long, maybe you need to, you know, tweak some product market fits on the product side.
[00:06:35] you have maybe, account executives and sales folks that are not that experienced yet. They don't know how you have new competition maybe there are new things to it. but usually it's, it's actually kind of something else, right? And, And when you then have all of those difference between markets, what you will then also find as, you will have difference between, the efficiency levels.
[00:06:58] You have markets that have great CAC payback. customer acquisition cost payback As an efficiency metric and, the New York markets that, that, that really don't. Right. So it's, there, there's, there's a whole cluster around this. and it's, it starts with the atomic AE that doesn't hit and does hit. Yeah.
[00:07:20] But really this is just the micro symptom of the whole thing around it also not working out. Right.
[00:07:26] Mikkel: There's a lot of smoke appearing. And I, and I think what's interesting is also one of the points we, we discussed was, Hiring an AE that has a proven track record. Mm-hmm.
[00:07:35] and that rep coming in, you'd think the person would perform and then it doesn't happen, doesn't materialize. Which is one of those other cases of, well, that something isn't right in the setup.
[00:07:45] Toni: Yeah.
[00:07:46] And so there might be some other reasons also why that rep isn't working, right. The support network that that person had in Salesforce to hit a million and now is going to your little shop. And it's not hitting a million. Surprise. There. There, there are a couple of those things around it where, where
[00:08:04] if, if you go with the standard definition of a capacity model of person going. Getting a ramp, and maybe you're generous even in your ramp. Maybe it says like nine months in the mid-market. That's pretty good. And maybe you are even good in terms of quota setting. It's you're not, you're not strict and let's just say simple in the sense of, hey, he or she gets a salary of 200 k, I need four to five x of that, That's the quota.
[00:08:32] And you don't go about it like that, but with a little bit more thought.
[00:08:35] But still basically pack it on the headcount, that then will result in these things here. Right. And, and if you, if you think about it and go through it, you, open up a new market you obviously put sales people there and they don't perform well.
[00:08:53] Why, why is that potentially right? And if you, if you think back now, well, why, why? is, why, why is it that those AEs aren't hitting as well as the ones that we have in our established market? Well, there's a gazillion reasons for that probably. Some of that, in our product market fit, but some of that might also just be funnel related.
[00:09:15] in, in your home market, you will have a lot of, traffic. You will have a lot of branded search on your brand.
[00:09:22] People know you, they have heard about you. There might be a word of mouthing happening In, in your region. so we'll get some, let's just say free inbound if you will, that that you can't expect in a new market when no one knows you.
[00:09:35] and then obviously your, your SDRs, maybe they're, having a, a much easier time because people know your brand already. So they'll reach out and they get to their 10, 12 meetings and so forth and all of that stuff, converts, and you build all of this also in one office and now you're opening up another office.
[00:09:51] Where new sales leader sits and so forth. There are many reasons why you would say like, Hey, that, that, that potentially doesn't work out.
[00:09:56] Mikkel: Yeah. So there are all these inconsistencies. They're really symptomatic of something fundamentally broken. And obviously, you know, we lead, we are tilting towards something with the sales capacity.
[00:10:09] So what is it? What's broken here? Let's get into that. And how do you then start fixing it?
[00:10:15] So what's broken is that sales capacity forgetting about half of the equation, if you will, to make this work out.
[00:10:27] Toni: The capacity and the quota that a sales rep has and how they, how it stacks, Let's call that quota on the street. That's, I think that's a common term that really is only a, and let's, let's kind of use maybe a different metaphor. you that really is just the demand for revenue. Yeah. That is, that is the demand that you as a, as a, as a company, as a a go to market engine, maybe as a funnel need to satisfy. You need to meet that demand and, and it's really important to have enough demand for the stuff that you're creating.
[00:11:04] If you. are Creating, too many opportunities. And this is really the supply side. If you're creating too many opportunities for too few reps on, on the demand side, then, then that's an issue. Right? So really having that built out in the right way, that that is super important. But, and this is, this is my point here.
[00:11:24] This is our point. that quota on the street is basically not the reason why you will hit a specific revenue number. It is enabler to hit that revenue number. If you don't have that, you won't hit that revenue number. Yes, but also at the same time, and this is where supply and demand needs to meet,
[00:11:42] you need to have enough funnel. strength, enough pipeline to satisfy that demand. Because if you don't, then basically what's gonna happen is, you might have quota on the street for a million or 10 million for, you know, whatever reason. but your pipeline is only generating half of that. Guess what? It's only gonna, you know, that that is the number that's gonna Come come out in the end. Right. and that
[00:12:06] is the reason, when you forget about. that and are not, and I don't think people completely forget about it. I think people are skipping over it because it maybe is a bit more easy. And hey, I read this in this medium post and it's really respectable guy and you know, in VC and you know, they did a lot of good investments.
[00:12:24] They see what good looks like and, they described that this is how it works out. And therefore I'll take it. And I can't be wrong with that.
[00:12:33] The problem is they are completely, totally wrong with that.
[00:12:36] Mikkel: Yeah. Yeah. I mean, it is not like we're saying the capacity model doesn't have its place. Like to your point, it is important that you have capacity to close the revenue you need as a business in order hit target.
[00:12:47] But there's this whole other realm, which is the pipeline building that for the account execs to be, to be successful at the end of the day. And that's not being talked about enough. I think if you go to Google and search.
[00:13:00] A sales capacity model. Every single post or article in there will talk about what we just said in the beginning of the show, ACVs ramp time, all that stuff.
[00:13:09] And it's good. But you do need to plan out the supply side. So let's, let's maybe get into this piece, a bit. How do you, how do you go about then, you know, building out this part of the model?
[00:13:20] Toni: Yeah.
[00:13:21] so building out the supply side. That's very much what, I think, we, we've covered in the past. Yeah. In terms of the operating model and, and maybe listen to that. But the, the important piece here is not only that, you know, that your funnel is able to generate a million AR or 10 million AI in a quarter. the important piece is that you balance that across all the different entities. Yeah. That is the important piece. And, I think the, the first step that's kind of, I everyone should sense check whether or not they're there. if you're growing a lot, you're probably not there, by the way. and, for, for CFOs, if, if there's any CFO listening,
[00:14:09] which I highly doubt, then, then please check out whether or not your funnel can actually support the headcount based capacity model that you build out. Right. Really, really think about that. But the, the reason why some reps hit hit and some don't, why some markets hit and some don't, why some markets are successful, you know, efficiency wise and some aren't.
[00:14:32] That is basically because that balancing, doesn't happen on that level.
[00:14:38] Mikkel: Yeah,
[00:14:39] Toni: so on the rep level, the reason why some reps hit 300% and some 30 is because they probably get a 10 x difference in opportunity supply. Yeah. And why? Why does that happen? Well, it happens potentially unconsciously. It happens potentially because, the sales manager is tilting opportunities one way rather than another.
[00:15:02] It might also be that one rep is getting all the hot inbounds and one rep is getting the sluggish outbounds. tho those, those differences will drive the outcome and everyone will say like, Well, but Toni, they're good sales reps and they're bad sales reps. And that's totally But I would challenge any, and I, I have, you know, sometimes I like
[00:15:25] 15 minute calls with random folks and they ask me some of those questions and, and usually this AE problem comes up and then I say, But how do you know that that person is actually bad?, they say, Well, did, they don't hit their target obviously, and they haven't hit that in like 3, 6, 9 months, whatever. And it's like, Well, have you checked how many opportunities they got versus the other folks?
[00:15:49] Have you checked that? Yeah. Yeah. And the answer is usually.
[00:15:52] Is mind blown. It's like, Oh wow, I should probably check that. Yeah. And yes, you should. Yes, you should. And you should also check the, pipeline sources. Of those opportunities, because inbound is usually working easier and better. It's shorter sales cycles, meaning you can, you know, process more of them at the same time, et cetera.
[00:16:11] We, let's not get into that, but check first whether or not the supply of opportunities that they're. getting. is, is fundamentally different. And then actually you should adjust for that. right? Is, is that person getting 20 opportunities and converting 10 of them for a super high ACV and still only getting to 30%.
[00:16:31] Versus the other person getting, I don't, 200 opportunities, whatever, conversion rate, lower acv, you know, discounting the, the crap out of it and closing it. and maybe that is leading to that result.
[00:16:44] And the list goes on. That applies for your different markets
[00:16:48] Mikkel: segments. Even we talk like enterprise, mid-market, It
[00:16:51] Toni: It goes for that as well.
[00:16:53] It goes for, and this is a little bit backwards or less obvious it goes for, the different channels. Yeah. So why is that? Well, I've seen this many, many times. I've also experienced it myself, screwed this up really nicely.
[00:17:12] basically if you have a setup where you are giving, lots of inbound opportunities to, one team and then adding outbound opportunities to it, and usually this will be your home market usually.
[00:17:30] right? You have your home market, there's nice inbound coming in. You wanna set up this outbound motion and suddenly you start pushing in outbounds. The reps usually. That are, in that case, probably really well satisfied in terms of, supply. They will basically find 20,000 reasons why those outbound opportunities cannot work because they do take more time.
[00:17:56] They are a little bit more shit. Right. And it's, I make fun of this, but it's really the, if you're used to inbound, you start an inbound demo with, Hey, what is it that you wanna find out today? Why are you here? You know, those, those really nice opening up questions. And, and The other side would be like, Well, I have this problem. I have blah.
[00:18:14] If you ask the same question in an outbound meeting and it, you know, and sometimes it obviously lands wrong, but you might get answers back like, while your freaking sdr, you know, got me to show up here. That's the reason I don't have a problem.
[00:18:32] I have fun. Have fun taking that meeting forward by. the way. And if you're not used to that, then that, that will be an issue.
[00:18:39] But then vice versa, Surprising. you have another market maybe that's newer. Maybe there are, more hungry reps around you give them outbound opportunities and see there, the channel works out. And, and again, the reason is, the, this, the demand side is
[00:18:57] actually not big enough in order to consume.
[00:18:59] those. Outbound supply side pieces in one market, and therefore the channel doesn't work out. And you might have in another market the complete opposite problem actually. And again, Right. So, so the, the, these, these micro details, it's, I recently heard this kind of, we should have done better research on this but it's
[00:19:21] it's basically something that happens on the micro level that mirrors itself randomly on the top level as well.
[00:19:28] It's kind of this snowflake. If you look at a snowflake and on the microscope, you have the, the ends of it, they kind of look the exact same as the, the overall shape of the snowflake. And it's kind of the same here actually. If you have AEs not balancing out, You might have, markets that aren't balancing out.
[00:19:45] and if you, by the way, why, why should you care if something isn't balancing out? While it is a major efficiency problem? Yeah. If you have too much demand for too little supply, you basically that gap in between, you could have frankly fired those a. taken that nice cash and put into more supply. You would've more money now. Better CAC payback. And the other way around you have, too much supply for too few AEs.
[00:20:11] while either you are able to figure out how to increase quota or find some other tips or something like that to, to, to get this up. and then I think it's doable for quarter or two, especially if you have some fluctuation in the team.
[00:20:24] But generally speaking, you should have taken some, some of that supply will now be converted worse. Yeah. And you left CAC on the table, you left CAC the table, you left cash. It's a customer acquisition cost on the table. You could have spent more wisely. So it's, it is a problem, and especially these days, it's a problem. when You need to be more careful with that.
[00:20:44] Mikkel: And I think it's, so a couple things. We've talked about the challenge of being that trusted partner, being seen as more strategic. If you're being involved in sales capacity planning, you can take it a step further and look at the supply side here. What should that dynamic be? If the revenue numbers X and we need this quota on the street, well, what needs to happen on the supply side?
[00:21:08] Because it needs to be in balance, and I think. It's absolutely hilarious. We've talked a lot about internally, people frequently ask what is the optimal SDR to AE ratio? And it's not really about that. It's, it is about the supply and demand at the end of the
[00:21:24] Toni: Yeah. So everyone is asking this AE to SD ratio.
[00:21:27] What Toni, what is, what is the number?
[00:21:30] Mikkel: give us, just give us a number please.
[00:21:32] Toni: Yeah. Is it, is it one to two? Yeah. and my answer is always, like, What do you mean, Is it, is it one ae to two SDRs or is it two AEs to one sdr?
[00:21:42] And then they cannot say something, but, but in the end, it's, it doesn't matter if, if this is, if this is your question, you don't understand all problem.
[00:21:52] Yeah, and it sounds super arrogant when I say it, and I kind of did one or two LinkedIn posts and this, was like, Hey, this is the wrong question, blah, blah.
[00:21:59] And it, it really is though because if you, if you are asking about how to structure your team, and this is, this is the crux you get to in the end. Really, really what happened here is the following, CFO created this head count plan of. capacity. VP of sales and said, Well, we need some SDRs to support it.
[00:22:22] And just as you have like this formulaic approach to, okay, one A and quota and RAM gives me this line, and now, now that I have 10 20 AEs or something like that, I now need to understand what I need to multiply that number by in order to get to my SDR headcount. that is, that, that is the exact situation that happens there.
[00:22:48] And then in the management team, there's a fight ensuing on what that number should be. And the VP of sales will always try and push it up. The CFO will always try and push it down, and then the conversation is, Okay, well let's go and do some, you know, get a benchmark.
[00:23:02] Mikkel: yeah,
[00:23:02] Toni: yeah. you know what this is the most useless benchmark you can try and pull? because it's, it's, it's just gonna be wrong all over the place. And, and the coolest thing.
[00:23:11] is, the, well, I'm not sure if this is the coolest thing, but the CFO will come back and, she will cite salesforce and say, Well, Salesforce they have, I think they have something ridiculous. they have four AEs and one sdr.
[00:23:27] Mikkel: Oh. Then you also just know they're way ahead,
[00:23:31] Toni: That, that, that, that should be our ratio. Right. If, if Salesforce can do it, why can't we do it? And then the, the, VP of sales will come back and be like, well, I actually think, funny enough, I think it should be one A and four SDRs. So the opposite, right? And these guys are just not, they're not getting closer by any means.
[00:23:50] And then it's like, okay, well let's ask someone that knows something about this. Toni, apparently.
[00:23:56] Mikkel: you were gonna take the fall guy
[00:23:57] Toni: No, no. It's, It's for the fall fall moment. and, and then it's like Hey, kind of solve, solve this riddle for us.
[00:24:05] And then I take them through this whole supply demand thing and it, you know, you see how it's over the head sometimes, but that's, that's the problem here, right?
[00:24:13] And the problems, again, you're in the spreadsheet, you have this head count line item, you need to decide another head count, line item, and you just can't figure it out.
[00:24:21] Mikkel: But it also becomes kind of simple math if you think about it. Four AEs one sdr, what is the productivity of one sdr? So an accounting are gonna get to work on two opps next month,
[00:24:34] Toni: So the thing, so the funny thing is no one is ever asking the AEs no. one, Yeah, no. And, And you know, and they're biased in so many ways and it's, it's always like, Oh, they just want more and easier time and so forth. But again, and I said this a couple of times on this show, it's like you don't want to hear it, but sometimes talk to them.
[00:24:53] And there is a really interesting kernel of truth. in there. And They will tell you, I mean, first of all, they will tell that all of the SDR opps are shit. That will be the first thing out of their mouth. but you know, once you're past that point, you're like, Okay, let's pretend they're not shit. because actually you're converting 10, 15% of those.
[00:25:07] Yeah. You know, Thank you very much. then it. how many of them do you actually need? And, and they do some quick back of the napkin kind of math. And they say, Well, I need.
[00:25:17] So many opportunities and those SDRs, you know, on a good day, maybe they do this. So I think I need two and a half. Yeah. And that is probably a much better conversation Than the CFO and the VP of sales will ever have had in, in, in the executive meetings.
[00:25:34] Mikkel: By the way, you will learn a lot from spending time on the floor. Sales is at
[00:25:38] Toni: the, the tricky thing the tricky thing is you need to know, you need to figure out a way, to decide what is good input, what is bad input.
[00:25:47] And that's, granted, that's very difficult because all of those sales people, and I love them and I hate them. They're just really good at selling whatever. They're selling this product great. But they're also selling their path to success. Yeah. And they will do both really convincingly. And it's really difficult to figure out shit, you know, what is the right thing?
[00:26:05] Mikkel: Where's the bias? Yeah. So we've recently launched an episode on, All models are broken because we, we kind of realized that this approach to sales capacity. It's not a one off. It is a model. You do need a model for it, right?
[00:26:21] Toni: So we, in the beginning, we did this once as an analysis, and then we realized we need to do this again every quarter, more or less.
[00:26:30] Because you have fluctuation in the team, you have conversion going up and down. You have maybe you wanna work on your quota, and improve that you have seasonality. Let's, let's, that's, that's such an excuse,
[00:26:42] Mikkel: we're editing it out. Sorry. It's out.
[00:26:44] Toni: and, and then we started incorporating into the model, basically. Right. So, you have a fairly extensive operating model covering the funnel.
[00:26:53] Mikkel: Mm-hmm.
[00:26:54] Toni: you know, how are things going from traffic to leads to opportunities outbound head counts and so forth to, to revenue at what time? Yeah. And then, that, that revenue needs to be matched. with The quota for that timeframe. And that is always a moving target.
[00:27:13], and if you, if you spend time and look out three to six months, adjust it a little bit.
[00:27:19] if you spend time and think about what if that rep leaves, what if we take, you know, those SDRs up and, and make them AEs because what, what will happen there? Your supply will go down your demand will go up. so that's a, that's an interesting situation all the time. And,
[00:27:35] And once you kind of play around with this, what you will realize is, while I'm trash talking, the demand side quote on the street a lot, what you will realize, it's probably one of the hardest assets to build up over time.
[00:27:49], Because you always wanna keep it on the edge. You always want to be super efficient. but you will always have reps leave, and, and building this out well, it requires you to be a bit inefficient actually.
[00:28:02] and I think, you know, playing around with a model like that, will actually give you some of those insights and show you the trade offs. Yeah. Well, if we don't do that, and let's just say not one, but two leave.
[00:28:13] Mikkel: Yeah.
[00:28:13] Toni: Then we actually won't have enough capacity for q4. Right. and then the other way around also, is, you know, trying to figure out, you know, how.
[00:28:22] much, how much staff comes through the funnel. And, do we, you know, do we have opportunities here to take some headcount way out of the, capacity side and put it actually into the funnel potentially. Right.
[00:28:35] Mikkel: I wonder we're gonna see now that a bunch of articles gonna be updated around sales capacity.
[00:28:39] Toni: Well, they should.
[00:28:41] Mikkel: I think,
[00:28:41] Toni: I think, to be honest, I think some of this article stuff it's the reason why so many people are messing up their years, Honestly, and whenever I talk to VCs, I bring this up all the time. And in the beginning, like a year ago, I was like, Yeah, you know, and some people are still like AEs Times quota and, and you know, the VCs giggling. it's like, yeah, that's totally stupid
[00:29:05] Mikkel: And then you go back quick, fix it.
[00:29:07] Toni: And now, now a year later, I'm, I basically changed my tunes. like, it's insane. Everyone is doing it. Like, this. Yeah. And you see like people on the other side nodding. It's like, Yeah, I know. And, and some of them I was. like, Yeah, maybe I'm too blame for that.
[00:29:25] Mikkel: I have my hand in causing a lot of pain.
[00:29:27] Toni: Yeah. Hey, you weren't the full guy on this
[00:29:29] Mikkel: No, it's wonderful.
[00:29:30] Toni: Yeah.
[00:29:31] Mikkel: Episode's not over, so don't, don't, you know, count your eggs. So we covered a bunch of symptoms. basically there's smoke and we also point it to where the fire is. Hopefully you are now gonna scroll a bit down in your podcast player and find the episode call all models are broken.
[00:29:48] Toni: Yeah.
[00:29:49] Mikkel: think
[00:29:50] a bit about how you can build a model. I think this would be super helpful to have in place. It will also change the conversation, like you said with the cfo. Let's just do some benchmarks
[00:30:00] and actually have a productive conversation on how are you gonna go and build pipeline for your sales team.
[00:30:04] There is a supply side to it.
[00:30:07] Toni: Wonderful.
[00:30:08] Mikkel: Thank you Toni.
[00:30:09] Toni: This time. I don't hope it was useful. I know it was useful
[00:30:13] so thanks for listening.