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In this episode of Recession-Proof, Kimia Hamidi is joined by Liz Christo, Partner and GTM Advisor at Stage 2 Capital. They discuss effective go-to-market strategies businesses can adopt during a recession.
Welcome to Recession-Proof - a podcast by Ramp. Join us for in-depth, thought-provoking conversations with finance leaders, executives, and investors on the current state of the market and what this means for your business through 2022 and beyond. Hosted by Alex Song, VP of Finance & Capital Markets and Kimia Hamidi, Head of Savings at Ramp.
[00:00:01] Liz Christo: Keep changing your sales stages or you keep changing how you store data, and it continues to evolve. It's really hard to end up with any historicals, you are just constantly mapping data. Thinking really carefully from the get-go about what are you trying to report on, what behaviors are you trying to drive, what are our North Star metrics, and can we report on those things?
Not trying to create this crazy burden for anybody to be putting in information in that way. Be thoughtful about what you can get, but make sure you're setting it up, so it can scale.
[00:00:32] Alex: Welcome to Recession-Proof, a podcast by Ramp. Join us for in-depth, thought-provoking conversations with finance leaders, executives, and investors on the current state of the market, and what this means for your business through 2022 and beyond. I'm your host, Alex Song.
[00:00:54] Kimia: Hello everyone, my name is Kimia and I'm going to be your host for this episode. We have Liz from Stage 2 Capital. Liz, why don't you give us a quick overview of your background? You've been in sales operations for a very long time, and give us the overview, and then we can dive in.
[00:01:07] Liz: Awesome. Well, first, thanks for having me. Fun to be here today. My name is Liz Christo, I'm a partner at Stage 2 Capital, where I invest in seed and A round B2B software companies. If I wind way back, I started my career working for a very small startup that got acquired into a public company, spent about eight years at NetSuite, building out different parts of go-to-market across sales, operations, account management, and then top of funnel. That was a really fun run.
We got to sell in every country, across every deal size and every vertical, like a true horizontal product, when you think about selling GL and ERP to CFOs. When I left NetSuite, I joined the dark side, and went into venture, and I spent about six years at OpenView Venture Partners, very similar thesis around B2B software companies. The transition to Stage 2 for me was really an opportunity to work, both slightly earlier in the life cycle of a company, and then also a little bit earlier in the life cycle of a firm, and really get to put a stamp on building Stage 2 Capital.
[00:02:11] Kimia: I love it. The topic and the theme of this seasons of the podcast is recession-proof. What I'm very curious, because you have such an extensive history across a ton of different sales topics is, what's different now that you see companies doing really well, versus call it five years ago or so, where are companies succeeding?
[00:02:31] Liz: Yes. I mean, it's funny. When you first posed this question and this idea as we were prepping, I started thinking about what would I do different in a recession? It's weird because I think a lot of the frameworks, and the way we think about building a business at Stage 2 Capital, actually, is very similar, regardless of market conditions. Part of that comes back to, if you go to our website and look at the science of scaling, we have this idea that there is the very basics of building a business, and it starts with actually identifying what your leading indicators are.
Most businesses are tracking revenue, and lagging indicators like results and output of activity, and we try to gear everybody to thinking of it earlier than that. Rather than waiting to see if your largest customer renews 12 months from now, what are the things we can track now to understand whether that client is happy engaging with your product, activated in the way you expect, because if we see those signals, we can anticipate with pretty good certainty that they'll renew.
I bring that example up because I think a lot of the ways we think about building a business come back to those fundamentals. When I broadly look at the market right now, I think a lot of businesses are doing just that, and coming back to the basics and shoring up their existing customer base, and really making sure that they have really good clarity on what renewals are coming in, which customers are expanding or contracting?
They're probably reorienting resources to make sure that that existing revenue will be there. Then, secondly, when it comes to selling new customers, I think that there's a real focus on ICP, now probably more than ever, as we're staring down the start of a recession. It's really important that we are spending our time on the deals that have the highest likelihood of closing.
That's the highest level of what I see. I think, as I think about sales leaders, generally, that piece holds true. You should be selling the deals that are most likely to close, that'll work through your process the fastest, that will actually give each of your team members a chance to hit quota. Removing a lot of those distractions and shiny objects that have become normalized for some companies, I think is a really good thing to be doing right now.
[00:04:42] Kimia: It's interesting that you say, "Remove the distractions," because one thing that I think we've seen a lot in the past little while is just, try a bunch of things, experiment on everything, and now it's really a question of focus. I'm curious if you've seen experimentation work in a downtime or a recession, how should sales leaders be thinking about, should we explore this topic, or should we just focus, ride out the wave, and then make sure we have a strong revenue base going forward?
[00:05:06] Liz: I always think people should be experimenting, but it's like a question and trade-off of resources. In my mind, the shift that's occurring, is a lot of companies are stopping thinking about growth at all costs, and so you're doing the work first to understand what is the basis that you have, what are these proven routes to revenue, how can we exploit them? Then, any incremental time, resources, energy, money you have can be pointed at experimentation.
It's funny. If you think about a business or a startup just in terms of survival in a bull market, it looks very different than a bear market. In a bull market, it's like the first to get to a big round, who can create a category or create that beachhead first, who can build the platform, who can make the most noise and have this community engagement? Then, when you flip that on its head, and you think about survival in a bear market, different things matter.
It's no longer about raising the big ground, it's cash is king. Who has the longest runway? Who has the highest customer retention? Who can actually do this work to revert to the proven methodologies that work? I think, if I put that as the baseline and the setup for that, that experimentation becomes pretty fun. It becomes, how do we actually find the next level of growth we can pull?
How do we do that in a way that is really clearly defined, that we know what results we're looking for, we know what we're going to spend, we know what hypothesis we're testing. I think it comes back to being way more thoughtful in our experimentation, and following experimentation frameworks, as opposed to, often I hear like, "We're just going to try these five things." You get to the end of the quarter, there's no correlation or causation. It's just like, yes, probably something worked, because you started growing.
[00:06:46] Kimia: Right. Do you have a framework for that experimentation? I'm curious, if you were to give maybe an example of one of the portfolio companies that you've worked with, who's doing experimentation right? How have you advised them on this?
[00:06:58] Liz: I think there's experimentation, all different kinds. Obviously, it depends first on, we're talking about go-to-market, but it depends on the go-to-market model. If you are a self-serve bottoms-up product-led business, the type of experimentation you're doing, probably, looks very different than if we're talking about somebody who's doing an outbound motion.
We can talk about examples of each of them, but in both cases, I think the commonality and the framework that comes back to, is very clearly defining the experiment. What is the hypothesis you are testing? How long does the experiment need to run? Will end be big enough to give us an answer? What are the results we're looking for that help us make a decision?
That last one, I think is one people fail to do often. You might set up an experiment, and then you wait and reflect on it two weeks, 30 days, 60 days later, but if you don't know what outcome was going to lead to what decision, I find this justification thing happens, where it's like, "Well, we thought maybe we'd get a little more uplift, but it was 1.5%, that's pretty good. We could put more resources behind it."
You didn't really scope something to make a decision, you just tested generically. Let me give an example. One of the things that I think we test a lot is, how to most effectively build outbound lists. There's a lot of ways to do that. You can go out to a vendor and buy a list, you can have your SDRs build them yourself. You can hire an intern to do research, you can turn on a piece of software to help you aggregate those lists. You can buy LinkedIn Sales Navigator, and do searches and download those and export them.
You can hire an offshore team to do list building and contact building for you. I think the question then becomes, how targeted should you be, and what's the return on each of those relative to the cost? Ways that I've done that in the past is, say, we're going to create five or six different lists, and we're going to treat them the same way, and we're going to see what the cost of acquiring a lead, an opportunity, and a customer is, so we're tracking conversion on each of those lists.
That means you go out to a vendor and you buy 1,000 contacts, you pull a thousand-person list out of LinkedIn, you augment it with Clearbit and you try that. You go and spin up a team offshore, and have them build a list with very defined parameters, and then you track what happens to each of those accounts if you put them through the same cadence, and you allocate the same amount of man-hours to them.
The output of that should be a spreadsheet that shows you row-by-row, how many leads, opportunities, and customers did I get, and what was the cost of each of those, which you can decide whether you want to include hours and overhead in it. You can have a fully loaded cost of acquiring that lead. That's a, I would say, probably much more sophisticated way of testing outbound than most people do.
I think, generally, what I see is, we hired one or two SDRs, go. That's an example of something that you might try during this time in particular. Refine a list and say, "We're going to go after this really hyper-segmented part of the market, a subset of our ICP, and let's see how efficiently we can start acquiring those customers."
[00:10:04] Kimia: How do you think about ending experiments? I think your advice on setting up an experiment, and saying, "We need to clearly define what the outcome here is and what success looks like." There are a lot of companies that we've seen run an experiment, probably, for too long. Is it just intellectual honesty? How do you think about advising companies on, "Look, this clearly isn't working, we need to test something else."?
[00:10:25] Liz: I think you start with a hypothesis, and you time-bound it, so you try to know how long it's going to take, or how many data points you need to make a decision? If you start with that, you should have some idea. Obviously, if it's going terribly, let's talk about AB testing on a website, and your plan was to like run it AB for like three days or a week, and four hours in, you're seeing like, "Okay, the conversion rates are 50% less than they're supposed to be," call it.
[00:10:52] Kimia: End it right there.
[00:10:52] Liz: Yes, I thought this [unintelligible 00:10:52] restart. I think you should be monitoring along the way, but it does matter how many data points you're looking for. That example I just gave, two website visitors came and only one of them converted, and that's 50%. That's very different than if a thousand people passed through. I think it comes down more to the data you're trying to gather, than necessarily just the time.
There's a lot of other kinds of experiments people can run in a business. I think one of the examples I give pretty frequently is around sales compensation. One of the companies in our portfolio, QuotaPath, is sales commission planning software, and AJ the CEO and I just gave a talk at SaaStr and we were talking about the ways you can test sales comp, and I think people often think of spiffs, or sales performance incentives as ways to create this new behavior.
It's also a great way to test changes to your comp plan. An example in a recession, where cash is king, what if you ran a spiff to see if you could get your entire sales team oriented around collecting cash faster? You might pay a point or two more in commissions, if somebody's willing to pay an annual contract upfront, rather than pay monthly or quarterly. You could run that as a spiff for a month to see if you can change the behavior, and if it's working, then you can roll it out as an official plan. That's a totally different kind of experiment you might consider doing in a business to drive the behavior you need at this point.
[00:12:18] Kimia: QuotaPath, you just mentioned, I think one of the interesting things too is, you're seeing the enablement of these platforms to drive experimentation, and so you can much more quickly iterate and test on incentives. I'm curious on the topic of incentives, what else have you seen work? What should our companies that are listening to this think about, "Okay, I'm just gearing up my sales team, a basic incentive plan versus a more complex incentive plan." Is there an 80:20 there?
[00:12:44] Liz: Okay. I'm going to plug QuotaPath again, because they just did a launch on October 4th, where they released what they're calling Compensation Hub, which is like, I'm calling it like a sandbox or playground for sales comp, which is literally, you can design plans, you can see what's being most commonly used, and you can test them, but with input to that, what I generally see is, plans are pretty consistent.
It starts by, what is the business behavior that we are trying to drive? That is really dependent on the stage and type of business. Then, from there, it's one or two things that drive compensation to try to keep a plan simple, and I'm giving you best practices now, and then really clear how someone gets paid out. As an example, if you like key business notion is trying to land and expand, your goal is to grow customers over time, you need to incentivize landing logos, but probably more importantly, what happens to those customers over the first 6 to 12 months.
Your comp plan probably has two things. It's oriented around new logos brought in the door, and 25% to 50% of your comp is tied to that, or variable comp, and the other part of it is tied to the revenue from expansion over time. Now, another example, let's say, you have a company who is really trying to choose the number of logos, they actually don't care about revenue right now, it's a land grab, and you're in a competitive market, you literally might just pay your team on logo acquisition, regardless of the amount of revenue attached to that logo, that looks really different.
I'm giving out some random examples here, but I think what it comes down to is comp plans should be really simple, really easy to understand, and probably even more so in a period of a recession, making it really clear how people make money, and that they're in control of how they make money. I always think of this quote, I don't even know if it's really a quote, but the great thing about salespeople is, they do what you pay them to do.
The terrible thing about salespeople is, they do what you pay them to do. If you put it in that context, your comp plan can drive a lot of behavioral change. It's like one of the key levers in your go-to-market motion, I do feel like way too often, it's just a set it and forget it, and we look at it once a year and update it, and I know there's a lot more work that could go into that to drive great behavior, and then also to like create change in a period this year, where there's just a lot of turbulence in the markets, our components can be driving a lot more adjustments along the way.
[00:15:16] Kimia: To pull this recession-proofing thread a little bit further, have you seen a change in compensation plans from, call it, five, six years ago in bull times, versus now in bear times, or is it really just boils down to best practices of simple, your reps understand it, it's very clear, and you have that outcome around experimentation on the thing that you're trying to drive?
[00:15:35] Liz: Yes. I don't know if it's necessarily a change, but I will say I've seen a much bigger conversation around how to keep high performers, and I do think it comes back to those best practices. If somebody understands how they get paid, when they get paid, and when they close a deal, they can literally look at it and understand what they're going to make.
It is way more important than the super complex plan. Keeping it simple allows somebody to understand that. I am seeing more conversation around that now, that comp plans are really important, that you want to be making sure that your top performers, who generally, in most companies are driving a significant portion of the revenue, it's not evenly distributed, that they're happy, that they understand how they're going to get paid, that they're not making less money year-over-year.
I think probably more than ever, the turnover is really scary to a business, particularly, if you're running on a lean team, or that person's carrying a lot of their revenue for the company, you got to make sure that they're actually incentivized to keep doing it.
[00:16:35] Kimia: It's a good segue into what I wanted to talk to you about team structure. How do you advise companies going from founder-led sales, to building up a sales team? Because I think there's two components to this, one is, can you scale the actual sale? Getting good reps in place who can carry a quota. Then, the other layer to this is sales infrastructure, which I actually think is often overlooked.
This is something that we were talking about before, and a lot of the thing that you advise companies on doing, I'd love for you to touch on, someone's going through founder-led sales. What are the things they should be thinking about, as they scale up their team, both the operations, and the actual go-to-market sales side?
[00:17:09] Liz: Yes. Let's start with the people, because that's far and away the most important part. I think one of the expectations that I often see that's just misguided is a founder thinks you can hire a killer sales rep, and that suddenly is going to make you have product-market fit, and that is not the case. Instead, I try to encourage people to look at that first seller as a partner in figuring this out.
This is not a handoff of the sales process. This is somebody that you are going to work with to figure out how this motion can become repeatable. The thing that works for you as a founder in telling your story, is generally, you are very intertwined with the story in the sale, and that has to get removed, and somebody almost has to cleanse it to a way that other people can tell the story.
I think that's a lot of what happens with that first hire. When I think about the first hire in a business, the first sales hire, the first go-to-market hire, it's a mix of things, but we often look for somebody who can play a little bit of everything. They need to be able to do some prospecting, they need to be able to close new business, they need to probably be able to do a little bit of the CS work.
They might do a little bit of that early process building, the very early stuff, and it needs to be somebody who's a bit of a jack of all trades. It is not somebody that comes from a 20-year enterprise selling experience at a big company. They have to be quite scrappy and willing to like try and do a lot of different things over time. Then, the other thing that I look for is somebody who's just a really avid learner, and groks the product.
They're going to be the tightest feedback loop between the customer and the early product team, and making sure that everyone has access to understand what are we hearing from the customer? What's resonating in our message? What's not? How are we iterating? What are we learning from those over a time? A person needs to be very open to doing that. I think a lot of salespeople get very heads down in their own process, and that's not a bad thing.
I just don't think it's a fit for like the first hire. Those are some of the things I look for when we get started. We've written a couple of white papers on this topic of hiring your first sales leader too, because there's this mix of like, should your first hire be the leader? The person who's going to hire under them, should it be a seller? Then, you layer them in the future, and there's different ways that that works for different businesses.
I would say my overarching commentary, particularly, in this times is to hire the person you need right now, and for the next year, and generally, that's going to be a seller first. Then, over time you add additional sellers or you add the VP of sales, but the skillset to be a head of sales or a sales manager, it looks really different than the person who's willing to go out there and prospect, and do CS, and do a lot of this work that I just described.
I think keeping the scope really refined is important too. It's like the people side on that first hire. Certainly, we could talk about more of the team around them of RevOps and CS, and what order to hire in. Maybe before we get to that, we'll tackle some of the operational stuff too.
We wrote something called the go-to-market checklist, but our concept is, basically, you need to start documenting what's working. If you are expecting a new hire to get on the phone, and do a qualification, do a discovery call, do a demo, what's the script? I don't mean that this needs to be something that you follow top to bottom, perfectly have it memorized, but, man, there should be some pretty clear direction and what works and what doesn't, and what we've learned over time.
It's sad to me when I look at a team who's got 5 to 10 reps, and everybody's doing something a little different, and there aren't those shared collective learnings, that sales playbook should be iterative and constantly evolving as you learn, but that takes somebody, actually, driving that, and making sure that that's part of the culture. Let me pause there. That was a lot to unpack. Does that start to answer?
[00:21:02] Kimia: That's fantastic. No, I think that's great. One of the things that stands out to me is-- This is a very-- I'm sure you've heard this plenty of times, this is very classic, great salespeople don't make great sales managers. If you turn your great sales manager, or a great salesperson into a sales manager, everything often goes really bad, and thinking about how that actually breaks down.
I think that makes a lot of sense. What I'm curious as well on the sales side is, what do you think teams get wrong building out their operations? What can people avoid to not make mistakes around that?
[00:21:29] Liz: I have to go back for one second before we do that, because, generally, I'd say 90% of the time I agree with you on that, but the funny thing about the sales rep to sales manager thing is, no one's a manager until they're a manager, and so like, "How do you know?"
[00:21:41] Kimia: Got you.
[00:21:42] Liz: One of the things I struggle within that is, I think there are unbelievable sales managers who are currently sales reps, and they need the chance to grow into that. I think it is situational, and what I would encourage people to look at is, what are the motivations for someone to make that leap? I do think there is this odd mentality that your career and promotion cycle is tied to becoming a manager, and then a senior manager, and a VP.
I don't want to sit there being like, I had reps working for me that made so much more money than I did when I was a director, so shouldn't we also just shine a light on the fact that that is an unbelievable career path? Anyway, motivators.
[00:22:19] Kimia: I think it's right.
[00:22:20] Liz: Coming back to the operational side and some of those mistakes I see people make, man, I'm going to use myself as an example. I was a customer support associate that got promoted into a sales ops job, and you know what I knew about sales ops when I was like 22? Like not much. [inaudible 00:22:35]
[00:22:35] Kimia: [chuckles] Sure.
[00:22:35] Liz: Yes, we usually take smart people and throw them into jobs, and let them learn on the fly, but I think that's actually super dangerous to an early-stage startup, because the person, and then the people surrounding them, often don't know what they don't know. I think there's a ton of value in finding either advisors, consultants, or outsourcing some portion of this to bring best practices into the mix.
If you have one person who opts for the company, probably, right? I'm not even going to say RevOps, just generally, that early jack-of-all-trades, chief-of-staff type person who is good enough at most of these things, supplement them with somebody who can spend 10 to 20 hours a month showing them best practices.
Making sure that, as they're thinking about the setup of your CRM, that they know the difference between creating custom fields and workflows, and how that's going to feed reporting in the future, because these foundational things you do are going to be with you for a long time, and it's really painful to redo them when you have years of data sitting in this dysfunctional setup. That's one system side.
Then, I think the second thing is, figuring out how to automate as much as you can, and taking the time on a regular basis to look at how your people are spending their time. I think it's really easy to get lost-- Not lost.
I think it's always with the best of intentions, we keep layering more work onto people, and we went from, to give an example, a sales team who had very limited tech, and then it was like, we're going to add in Salesloft or Outreach, and we're going to give them a video tool, and then we're going to give them a prospecting tool, and then we are going to give everybody licenses to this email finder, and suddenly, look at how your sales team's spending their day, and there's like 18 things they have to log into, and everybody's doing it their own way, and it needs an audit.
I think there's this ability within a startup to take a step back every month or two and just say, "What's a day in the life look like? Are there more efficient ways we could do that?" At some point, it's probably better to have someone else build that list, and give it to your sales team, or to help them think about how to structure their day, so they don't have 18 tabs open all the time, or to put call blocks on everyone's calendar.
I'm throwing random examples out, but this concept of, look at what everybody is spending their time on, and figure out if there are ways you can get that off their plates. Actually, I have a really good one for them today. I was working at a company, who has all their leads dropping into Slack every time somebody converts. In theory, that's like, "Okay, it's really quick time to getting it."
That worked really well when there were two sales reps, but now there's 12, so 12 people get an alert every time there's a lead, and they all go try to click it, but the first person claims it, and now just 11 other people clicked a link, and got disrupted from whatever they were doing.
[00:25:24] Kimia: Hugely inefficient.
[00:25:25] Liz: Yes, but things like that exist just throughout the entire process, and it's hard to make the time, but that zoom out of just giving yourself space to figure out what are the big picture things that we can change for people on a regular basis, I think matters a lot. Then, my very last one operationally, is just get the data infrastructure right from the beginning.
If you keep changing your sales stages, or you keep changing how you store data, and it continues to evolve, it's really hard to end up with any historicals. You are just constantly mapping data, and so thinking really carefully from the get-go about what are you trying to report on, and what behaviors are you trying to drive? What are our North Star metrics, and can we report on those things? Not trying to create this crazy burden for anybody to be putting in information in that way, be thoughtful about what you can get, but make sure you're setting it up, so it can scale.
[00:26:15] Kimia: Do you have any common markers, and maybe recession-proofing delays, how you think about RevOps? At the early stages, it's get someone who can just spend 10 hours to support. Maybe it's an advisor, or maybe it's someone internal who is a very smart, 22-year-old who knows nothing about sales ops, but can figure stuff out.
What are the markers where you're like, "Okay, I know I need to get someone who actually knows what they're doing, and bring in experience?" Is it just a repeated sales cycle? I'm curious what your best practice is, and what you're seeing is?
[00:26:43] Liz: Yes, it's interesting. I think it depends on the sales leader and the team a lot. As I look at the leaders that I work with, there are sales leaders who are really unbelievable, the, "Yay, rah,rah" rally the troops, big personality. There are people who have really great deal insights, and are almost like that super rep riding along, and there are really operationally and data-focused leaders.
I call that out because I think depending on who you've hired, there's not a wrong hire here, they need a very different team around them. That does matter. I do think, in any of those cases, a RevOps person getting hired earlier in the life cycle of a business is something I'm definitely advocating for more and more. I do say RevOps intentionally, siloing this to sales ops, than having to hire like ops people in every department, I don't think is the right move, but somebody who could sit across the entire revenue function, maybe even partner with finance, which is the most likely scenario to do that. I think it's really compelling.
I generally see it as, while you're trying to find product-market fit, you're in this stage of jack of all trades, maybe doing some outsourcing to get initial stuff set up. As you're moving from product-market fit to go-to-market fit, and really thinking about, how do I scale this motion that worked? That's when I start to see people bring somebody in-house, and then start to supplement with either contractors or external.
As an example, if you're bringing in somebody who's going to focus on owning the tech stack, who's going to own your data analysis, who's probably going to own your forecast, some of your renewals process, who's going on own the SKUs you're selling, and your pricing, whatever, there's lots of different things they can own. They're probably not also going to be your Salesforce admin, or no apex, so we need to get them some help there.
That doesn't mean another full-time body, that means, again, a bucket of hours they can probably call on. Then, I think you start to build that out around that person. I think that tipping points of a charter to just say objectively, I think that, that comes with the ratios, and how the sales model's being built in capacity.
[00:28:41] Kimia: That makes a lot of sense. To switch gears a bit, we've been talking about, things are great, you're scaling up, what is the infrastructure you need? I'm curious what you advise people when times are rocky, so things aren't going well, things are maybe breaking, what are some of the first few things you do when you drop into an organization where it's like, "We're just not closing deals," or, "Things are just not working, and we need help or restructuring our process." Maybe it's due to the recession, maybe it's not, but I'm curious what you advise companies?
[00:29:08] Liz: I mean, are probably pretty similar. I guess the first thing I think about is ICP. Do you know who your ideal customer is? What the qualities are? Can you identify them consistently? Then, how many of your customers fit that? Does your pipeline fit that? Why does half of your pipeline not look like the ICP you just told me? Throw it out and stop spending time on it. That's the first one to me.
Then, I think one of the things I'll just call out as we talk about a recession versus not is, you probably spent the last couple of years figuring out your ideal message for your ideal customer, and that might become irrelevant overnight, so messaging becomes really important. I don't know, I was trying to think about an example of this, and I was struggling a bit, because there's so many. Let's take a company everybody knows like Gong. If we're Gong in 2020, I'm out there pitching, "You're going to hire 50 people this year, how do you make sure they're all great? Your sales managers can't keep up, they need a more efficient way to do this." Gong 2022, I will be putting on my website, but I think what I'm thinking is, you just reduced your sales team by 20%, but you still need to grow, how do you do more with less? Your message totally changes.
I give that example because I think there's this alignment between ICP and messaging that needs to happen. Whether things are going poorly, whether it's market, it doesn't really matter, but it's really getting back to the basics. Are we selling to the right people? Are we meeting it with the right point in the buyer journey, and are we saying the right things to them? Convince somebody to buy your product. Nobody accidentally stumbled into this demo.
You're there to help them figure out if this is a fit. That, I think comes back to the messaging of, are you a vitamin or a pain killer to use the terrible analogy, but there are different ways to package that same product you have, and that message might need to iterate quickly, both on your website, in your conversations, on your demos. That's a big product marketing and sales enablement initiative to get that done.
[00:31:12] Kimia: I'd love to drill into messaging because I think-- You've described a lot of the sales. It's interesting because I was doing a little bit of reading prior to this and your approach is very moneyball to sales. Scientific, you can build it, it's a repeatable playbook. I think a lot of founders maybe struggle with, what the art of messaging is.
Is there any just tactical, maybe strategic, what would you advise companies on messaging, outside of maybe just the obvious listening to your customers and building around that ICP? Is there anything else that comes to mind?
[00:31:40] Liz: Hire someone. I know that's terrible and it's not a good answer, but I think about all the things I work on in go-to-market and I don't think that's a skill of mine. I admire those where it is. I think I can help distill down the value, and understand what the real value proposition is, and I think you can do that by having calls with customers and looking at the data, but then packaging that up in a way that's ready to be slapped on a website, ooh, not my skillset.
I do think it's actually a really astute comment. I think people struggle with that, and my job is literally looking at websites all day. I'm a BDR, who's trying to find the next deal we want to do. I am shocked sometimes between, what I hear from a founder and a conversation, or talking to their customers, and then what's reflected on the website. There's great marketers out there, who can help you do that, and I would employ them to help.
Yes. In the really early days, if you're not willing to spend the money, or you can't do that right now, I do think actually listening to your customers and understanding how they describe your product is pretty key. I'll tell you, it's actually something we do a lot in venture too. When I'm in diligence, one of the things I'm listening for is, I talk to customers and when a customer calls is, are they using your product for the same thing?
Often, what you'll find in the early days is, you are going to market with this message of what you are solving, and then your customers have hacked it into five different things, and what is the repeatable thing? What are people actually leaning into? What's resonating, and can you pull from that? I guess, the last piece is this example I gave of, are you in a market where it's super competitive, where you're trying to save people time, money, efficiency? How are you talking about this, so somebody can start to build the ROI story in their head?
[00:33:27] Kimia: Right. No, that makes a lot of sense. It's interesting too because on the comment of VC, you are selling the hardest thing, where it's broadly capital and with Stage 2, it's very-- I mentioned this before the call, before we started recording, but when I was building Buyer, prior to the Ramp acquisition, I wish I had go-to-market expertise, and the resources and experience.
I'm curious, outside of maybe hiring contractors for leverage, there's a lot of, you mentioned the white papers, there's a lot of just resources and information out there. One of the things that I read in Amp It Up the, the Frank Slootman book, is playbooks change, and playbooks are contextual. What resources do you find you keep coming back to, that you're like, "This is timeless, more people need to read this." Maybe it's some of your own work, maybe it's some other work, but I'm curious because you hear playbooks get thrown out all the time.
[00:34:17] Liz: There's a couple. The first one is ours, The Science of Scaling. I would absolutely recommend that people go read it. It's a 20-page white paper on the front of our website. Everything I'm talking about, whether it is a recession or not, it's the fundamentals of building an efficient business. I think we've moved from this place of, go hire 10 more sales reps and hope to-- We can actually look at the numbers to indicate how many sales reps we can feed this quarter.
Do we have enough leads? Will they be productive? We can try to make this bit more scientific. Let's start there. The second thing that I've come back to is just time and time again in my career is the book, Who, and it is a hiring book, The Art of Hiring A-Players. All of this that we're talking about starts with people, and to me that methodology of just thinking about how to hire, and what to interview for, and how deep to go, continues to really resonate with me.
I loved it when I read it 10 years ago, and I keep coming back to it now. I would start with those. I think there's lots of other things because you're right, playbooks, they're not forever, and I do think the context matters a lot. Those are two that I return to often.
[00:35:28] Kimia: No. I've never heard of Who, so I'm going to check out Who as well.
[00:35:31] Liz: Check it out.
[00:35:32] Kimia: I will. The other thing I hear a lot is, what general advice would you-- By the way, I've been chatting to you a lot about just advice, but it's, what general advice would you give? I find the best advices, I've tried these five things, these haven't worked, how should I think about this? I think most things boil down to, it's contextual problem because every company is different. We've covered a lot of ground and, Liz, thank you so much for the time. My final question to you, given the theme of Recession-Proof is, what are you optimistic about?
[00:35:59] Liz: Oh, I'm so optimistic about the companies being built right now. It's funny, we've probably talked about this a lot generally in the market, but there is a whole group of founders who are starting out right now, who are going to have this much harder time getting started. That means they're going to be super scrappy, they're going to be really thoughtful about their resources, the ideas are going to be great, and they're going to build these unbelievable businesses. You look back and on repeat, great businesses have come out of these periods.
I think the resiliency that founders are going to build, and the ideas I'm just seeing right now, I am very, very excited about the startup software market as a whole. I think there's a lot of interesting stuff happening.
[00:36:42] Kimia: Fantastic. Liz, I think that's a great place to close. Thank you so much again for the time. This has been a lot of fun.
[00:36:46] Liz: You too.
[00:36:47] Kimia: I'm sure the audience will get a ton of value out of this. We'll drop the resources in the show notes below as well. Thank you again.
[00:36:52] Liz: Awesome. Thanks.
[00:36:55] Speaker: Recession-Proof is brought to you by Ramp. To find out more about Ramp and how we can help you control spend, save time, and automate busy work, visit Ramp.com, and then make sure to search for Recession-Proof in Apple Podcasts, Spotify, and Google Podcasts, or anywhere else podcasts are found. Make sure to hit "subscribe" so you don't miss any future episodes. On behalf of the team here at Ramp, thanks for listening.
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