The Revenue Formula | 5 types of ROI (With Sangram Vajre, Co-founder & CEO at GTM Partners)

There are 5 kinds of ROI software provides - and understanding the difference is critical.

With Sangram, we discuss that and much more

(00:00) - Introduction
(01:32) - Say hello to Sangram Vajre
(04:48) - Buyers and ROI
(07:10) - 5 types of ROI
(10:41) - The ROI of slack
(17:36) - What ROI do we provide?
(21:18) - Changing ROI profile
(30:26) - ROI is not just a sales tool
(34:20) - Two kinds of people
(38:19) - Where do we invest the next dollar

Check out GTM Partners here.

Creators & Guests

Host

Mikkel Plaehn

Head of Demand at Growblocks

Host

Toni Hohlbein

CEO & Co-founder at Growblocks

Guest

Sangram Vajre

Co-founder and CEO of GTM Partners, Co-founded Terminus and worked at several tech companies.

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Mikkel Plaehn, 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 from Growblocks. You are listening to the Revenue Formula.
[00:00:05] In today's episode, we're talking to Sangram. He's the CEO and co founder of GTM Partners.
[00:00:12] We get into five different types of ROI, what they mean for your business, and how to use them to your advantage. Enjoy.
[00:00:25] I have a story though.
[00:00:27] Mikkel: Okay. Does it involve me or, oh, no, no, it involves him. Okay. Then we can go
[00:00:33] Sangram: yeah, go for
[00:00:35] Toni: So, uh, no. Did you have anything? No,
[00:00:38] Mikkel: no. Go for it. Go for it. I didn't have anything.
[00:00:40] Toni: I mean, okay. So I'm really excited about today's guest, uh, because, uh, I think it's, I think it was six months ago or something like that, where I was like, you know what, we should have this guy, he's awesome, he did all of those things, he would be wonderful for the show, and you know, I reached out on LinkedIn, I, uh, we had, uh, Sam Jacobs from Pavilion on the show, and it's like, hey, can you reach out to, uh, You know, that, that, that one, because that would be great.
[00:01:04] And, and I was like, have you signed up for Pavilion Executive yet? No. Well, do that. And then I'll reach out.
[00:01:12] Sangram: Well, actually, that's, that's good. And you ended up doing that. So
[00:01:17] Toni: And, but that, that also didn't work out. So I kind of kept pinging pinging you. And then finally, you know, back then I was sitting there in a t shirt. I know actually, no, it wasn't a t shirt, but it was sunny outside. It's not sunny outside at all anymore. And finally we have Sangram here on the show.
[00:01:32] Hey, wonderful. Wonderful to have you.
[00:01:34] Sangram: man, I'm excited. Uh, I mean, obviously seeing what you guys are doing, I feel the world desperately needs some really cool people doing some cool things. So there you go. You guys have it. Um, and I think, I think the topic that we're going to go jump in today is something that a lot of people are going to be looking at in 2024, like this is, this is going to be a defining moment for a lot of people's careers.
[00:01:57] Toni: No, I think so too. Yeah.
[00:01:59] Mikkel: a quick intro? Yeah. So, we have Sangam here, CEO and co founder, co founder of GTM Partners. Uh, and I was a bit surprised looking through, I always do this. I open up, uh, the guest LinkedIn profile and kind of run through to get a feel for who they are and you, Co founded Terminus.
[00:02:13] I did not know that. That was new to me. So pretty, pretty cool. You also were at Pardot, uh, as CMO there. Obviously the way I got to know you, other than Toni, constantly trying to get you on the show was through, uh, the book you authored, Move. Uh, so the four question framework, and kind of been following you ever since.
[00:02:30] I think what's actually pretty interesting is the fact that You have the, the background and then created basically an analyst firm. Is that the right way to position, uh, GTM partners? Yeah. I don't think if you look at Forrester's and Gartner's that they have someone like that running the research. So we found that kind of, uh, kind of interesting.
[00:02:48] Sangram: yeah, a lot of people, uh, make fun of it as like, wait a minute, aren't you supposed to start another software company, a SaaS business that has multiples? Why are you going into this research advisory and, you know, services business? And. And truth be told, I feel like having done Pardot and gone through Salesforce experience, having, you know, as you said, like built Terminus, um, it, at some point in life, you get to get to a point where you say, what really truly gives me joy?
[00:03:16] What is truly going to be something I want to work on for the next decade? And not everybody gets that opportunity in life. And I feel like I feel super blessed that I do have that opportunity or had that opportunity right after Terminus. It's like. What do I want to do? Do I want to go start another software company, go through it, could raise money or all those things?
[00:03:35] Or do I want to do what I feel like is a gift of God is to, to come up with frameworks, simplify a thing that, that most people are struggling with. I struggled with all of my 20 years into market, MarTech. World and and continue to do that because there are new challenges that are coming up in the world of go to market every day The market is changing and all those so the way it all got started after the book was You know, what do, what do we want to do for the next decade?
[00:04:02] And we said, well, Brian, who's my co author and co founder, the GTM partners, Brian and I were like, you know, it'd be really cool to really help other companies do this thing, but not as a consultant, but more as a research advisory, like actually dig in and help not as an implementer, but from a business perspective, help them change the course of their company.
[00:04:24] And so that's really what we're doing.
[00:04:27] Toni: Absolutely and I think we can proudly say that we are, uh, clients of yours by now. Are we, are we Mikkel?
[00:04:33] Mikkel: I think so, yeah. When this episode airs. By the
[00:04:35] Sangram: ha ha, by this time
[00:04:36] Mikkel: hey, hey, don't get all the, give all the leverage away. Oh, that's right. No, no, no, no, it's
[00:04:40] Sangram: Oh, maybe I should play the same chord as Sam on this one. Okay, release this episode when you sign the con. No, no.
[00:04:48] Mikkel: We're gonna I'm gonna stop speaking until you sign So we still have intro going on here, that's good but anyway, so One of the things I know I mean we had a session the other day Talking about how do we show some of the ROI you want us at a vendor? Showcase some ROI and you want as a buyer also to get a feel for ROI. I think you had some pretty interesting research, uh, you shared recently.
[00:05:13] maybe you want to give us, you know, the listeners some, uh, insights to what, what are you seeing from the buyer side happening in this realm?
[00:05:21] Sangram: Definitely. I feel the, the ROI is something that most companies, most buyers, let's just start with buyers and then we'll go to vendors and then companies, like maybe use that format. Most buyers are super skeptical. When you show 1, 800 percent revenue growth from using your software, the buyers are like, oh sure, baloney, like there's just no way.
[00:05:42] So the buyers are already skeptical because if that was happening and you had three software that give you 1, 800 percent revenue, then you should not be in a problem. Like, you know, company should be soaring and growing, but that's not happening at the same time, right? So, clearly there is something wrong with the way we talk about ROI.
[00:06:00] And I think what has happened now going back from a buyer to the vendors and Companies and terminus when I started was no different was we got on this high train of saying well It is all about double double triple triple. It is all about attributable ROI So if I can't show this magic number put a dollar in and three dollars out It's not worth it.
[00:06:22] It's not doing it because that's how VCs will evaluate your business. So that's what vendors say. That's what we need to train our customers to look at it. And the customers are obviously looking internally the same way. The problem is not every single product out there is attributable. And that might be a shocking to a lot of people.
[00:06:41] They're like, wait, wait, wait, what am I, what am I building? If I'm not building something that can show ROI that is in an attributable fashion, then maybe I'm not doing something right. But that's not necessarily true. And that's where the research came about where we're like, well, how do we redefine ROI?
[00:06:55] How do we help companies think? And so we started looking at Salesforce. We started looking at Snowflake. We started looking at all these companies. And, and, and, and, like across the board from public companies all the way HubSpot and all those things all the way to early stage companies and, and seeing
[00:07:10] and looking at and we identified there are five different ways.
[00:07:13] Companies can think about ROI. So I'll give you those quick five and then we can maybe dig into one of them if you want to. One is obviously attributable. If you truly can show that, great. It's awesome. That's like we call it the green zone. You can name your price, you can change the economics around it.
[00:07:30] The exact opposite of that one on the same scale of amazing where you can name your price and people buy is transformation. So if your software can do transformation, Or if your category that you're building is transformational category, then it's different. So Salesforce, or remember email marketing, nobody ever asked the ROI of email.
[00:07:51] Right? Like once email became a thing, nobody looks at it and say, what is the ROI email? Everybody's sending emails. Nobody asked that. So it became a transformational thing where people are like, we're just gonna use it. It is, it is something. So initially it was transformation, but very quickly it went to efficiency and necessity.
[00:08:08] So you have attributable and transformation where you can name the price that people will buy because they want change, whatever is the status quo, they want to change or they want to show that attributable. So that's where you can name your price. The second layer is this efficiency and necessity where you can't really do much without it.
[00:08:25] So that's what email, email went from transformation to just being a necessity. How do you run a business without email? You just got to do it. So you move around in this even ROI zone and you've got to own that. You got to look at it or necessity where it's like ease of use or the price to value is there or The functionality is good.
[00:08:42] So necessity really becomes like well, I can't really do anything without it So efficiency and necessity becomes the the the middle layer. That's where price wars happen Because everybody else around you have figured that part out now and so everybody's gonna come up with a product similar to you and now you have to keep the game up of creating new features, new add ons that will help you to be more sticky with your customers.
[00:09:06] And the last one, which is the fifth one, which is what we, we call the instability zone, which is the messy middle, we call it the indirect ROI. And truth be told on this one, most companies have indirect ROI. So you think about a landing page, uh, addition to something, right? It only works if you have the right content, if it has the right audience and all those other things work.
[00:09:30] The landing page can do really well, software, but it is an indirect ROI. The landing page in itself is not the ROI. So you have to know, are you in the messy middle? And our research shows that over 60 percent of the companies are in the messy middle. That's the problem. So you think about attributable transformation where you name your price then you go and look at efficiency and necessity where you have price wars and then you have finally indirect ROI where you're in the messy middle and you're just trying to be an assist in somebody trying to get a three pointer at a basketball court.
[00:10:03] Toni: I feel the, the, the transformational, that's kind of, that's the bucket where, oh, this is in the green, this is in the top right, we belong there, right? Everyone, everyone thinks that probably, um, but it as well, it's like, I think other people will call it kind of a stretch ROI, or there's a bit of a BS sensor going off.
[00:10:22] It's like, ah, transformational, but it does feel a little bit like the, uh, the starting point of a, uh, successful new category, right? Kind of. That's, that's actually how it feels like. And I think in the, you had a great example that was Slack. maybe, maybe you can, uh, um, you know, maybe you can tell us that story.
[00:10:41] Sangram: yeah, Slack is also really interesting. Well, even before Slack, think about if you go back because I was at Salesforce and we all have probably just understood, we're all products of Salesforce changing the game from a SaaS business, right? So we all have to tip our hat to that, that company, but they actually had Chatter.
[00:10:58] In early 2000 most people probably don't remember that it was so early That people didn't understood that what is chatter? What is this chatter? and they had like this teeth underneath chairs and all that kind of stuff at one of their dreamforce events and you can chatter away And people were like gossip.
[00:11:14] Like what are you talking about people? The the concept of this Asynchronous conversation happening between teams across the globe and being able to give updates without email wasn't. Email was just coming out. Email was just becoming mainstream. So it was a little bit way ahead of time. And then a few years later Slack came about and Slack completely changed the game on it and it is what is transformational.
[00:11:37] Nobody was asking Nobody asked, what is the ROI of Slack? Everybody said, what can we do with this thing? Oh, so my developers can actually talk to anybody and before, instead of a thousand emails, I can actually have everything in Slack. And the communication, it's like a direct messaging platform. And so people were enamored with the idea that, whoa, This is gonna help me be very more productive.
[00:12:01] It's gonna allow us to see more transparency in the business It will unclog my email. So these are all the words that you will use when you think about transformation nobody talked about the ROI but over a period of time as slack became a transformation it kind of moved in the Necessity now most companies even in early stage startup.
[00:12:20] You can start any company They would just have a Slack as their default as a way of communicating. So they became a necessity in the marketplace. So you don't necessarily stay in it. You, in some ways, in some companies could, but most time you come in and you have to start somewhere here and then you move into this additional places of efficiency and necessity.
[00:12:41] Mikkel: So, I, it just got me thinking, winning by design I think was a Tuesday published some, uh, research when this air, it's, you know, will have been December. Specifically talking about loss of go-to-market fit, um, in this current environment that probably this is the reason, uh, companies struggle. Do you think maybe that the perception of the ROI some of the tools provide could also be an ex a part of the explanation here?
[00:13:06] Sangram: Well, here, here's what, uh, some of the research that that has made me wonder about. And we are launching this, uh, this, this third go-to-Market Benchmark report pretty soon. So I'm, I'm literally in the middle of it, so I don't have the free, the complete tea leaves on this one. But here, here's the highest level, based on when we were in the data, looking at it most.
[00:13:28] The buyer behavior, as we all understand, has changed, but it has changed more profoundly than I think most people recognize. So for example, there was a time when people would look for best of breed. Give me the best solution in the marketplace. That was 2016, 2017, 2018, like that was the time when people were like, give me the best of the best.
[00:13:48] And at that time all these amazing businesses boomed. I mean, I would say we got to to play a part in that one But you think about Gainsight at customer success, right? It just boomed into a big like, oh, this is a new category Transformational, CS needs to be at the at the decision table and metrics and compensation all these things.
[00:14:07] There was a time for that Now if you talk to a buyer, they're saying that I don't need As soon as they see top right on a Gartner Magic Quadrant, for example, immediately what's going on through their brain and the CFOs, it is pricey.
[00:14:25] Toni: Yeah.
[00:14:26] Sangram: It is probably have implementation fees. It is probably going to long for deploy.
[00:14:30] And it probably has 80 percent of the things that I don't know or I don't need. So I want to find actually the second or the third because they're hungry. They want my business and they will actually give me a great deal. So what we're seeing actual conversations with buyers of even big companies is like I don't want to go to my CFO saying that hey, we got the magic quadrant top right because the CEO is CEO is Gonna say all right So you got the most expensive tool in the world which you're not gonna fully deploy like that's the that is what's going on In people's buyers behavior right now.
[00:15:02] So in a way the reason the go to market is It's getting, from a vendor perspective, it's getting really challenging is because you actually don't want to be necessarily the best in the world. Yeah, like this market is not asking for that. It's good, but it's not asking for it. What the market is asking for really is that can you be the most integrated solution with my current tech tech stack?
[00:15:24] Can you actually give me the three things I actually need to run my business? Don't give me the other Excel spreadsheet 99 formulas. I need the three things that I actually need and can you, are you easy to work with and are you easy to buy? Those are the things that are actually going through the buyer behavior from their decision making process.
[00:15:43] Toni: And, and I think, I mean, you know, to a degree, you can probably, you know, fold everything into ROI. But a couple of things that I mentioned that do touch directly on ROI, right? Kind of 80 percent of the stuff I don't need is in here. So you feel you're overpaying by what, 5x, right? Hey, it still takes ages to implement.
[00:16:01] That's my own costs that I need to bring to the table even before I pay your invoice, right? And, you know, easy to use. This is basically an ongoing tax on me using this tool. That I then still need to bring to the table and still pay you, but not on an invoice. Right. Do you think all of these things, will you fold them into ROI?
[00:16:20] Or is that, am I, am I too simplifying
[00:16:21] Sangram: Now it is, it is, it is part of the buying behavior for sure. The, but it doesn't make it into, it makes it into the decision making process, but it doesn't make it into like, am I gonna buy or not? Like ultimately, because you may still end up buying a solution because of the needs and you have to look at what am I buying for?
[00:16:40] So as a, if I'm a vendor, I'm thinking, What am I trying to sell? Am I trying to sell transformation? Am I trying to sell necessity? What am I trying to sell here? So their messaging needs to be around that. And from a buyer perspective, they're already there. They're like, look, I need to keep my job. I need to be able to show to my CFO and the CEO that I'm smart and I'm protective of our money And I'm not just spending money crazily.
[00:17:06] So if I can show that hey, I got the second To the top and a great deal that does 80 percent of the stuff and it integrated with five of the tech stack So we don't have to buy that kind of conversation is what the modern buyer is looking for right now Best of the breed is not a problem not bad thing, but top of it Psychologically is making them think like, whoa, this is more expensive and I probably are gonna have things that I don't need and It's gonna take time.
[00:17:32] It may not be true, but that's the psychological effect that people are having
[00:17:36] Mikkel: So I want to circle a bit back. Uh, we have five types of ROI, right? Let's just rehash them here. It's attributable, transformational, uh, efficiency, necessity, and indirect. And I think potentially there's a couple of listeners out there now going. So, which one am I? How do we help folks? Because I also think you kind of said it while we are probably, you know, indirect, but we really want to be transformational attributable.
[00:17:59] Like, how do you take that conversation now and figure out, okay, where do I fit in here?
[00:18:06] Sangram: you know the first and foremost I have a 13 year old son and I'll tell him all the time he plays tennis and So, you know last week he came back and he was just upset and angry because he lost to the kid that he thought he would won and he has won one time before but he was like completely like 6 0, 6 0.
[00:18:27] He was just in that, didn't do well. And he came back upset and I'll tell you like the first and foremost thing is that you can be upset. You can, you're totally, you know, fine. You should be upset if you are upset about it. But you have to accept what happened. At that moment, like you have to go through the process of it.
[00:18:44] So the number one thing I think executives have to do is to just embrace whatever it is. If it is not transformational and if it is indirect, then so be it. Like it's totally okay, but have to accept. I think companies are internally fighting to artificially show something that they're not. And the buyers are able to look at the inauthentic behavior in that, that comes through that and the talk and then they, that's why deals go dark and all that stuff.
[00:19:15] So, so essentially the number one step as anything else is just to accept the fact and be aligned as a team. Like guys, we are either transformational or necessity or indirect. Most companies don't do that. They, they have this, this independent activity going on. Marketing trying to show ROI, sales is trying to just close the deal.
[00:19:33] So they're trying to discount it and say whatever it takes. And then the executive team is saying that, you know, we're going to build a new category. So we're transformational. So internally there is this, this complete misalignment going on all the time. And if you can pull the team together and be aligned and be honest about what it is, I think it's gonna stop burning a lot of brain calories for people internally.
[00:19:53] So that's one. Step two of it is the problem is not being in any one of these categories. The problem is that you're not messaging and you're not talking to the right ICP that actually wants you. In this category. So what happens is, if you want, if you are a transformational business, and if that's the direction you're trying, trying to go, you need to find early adapters.
[00:20:16] In the marketplace who are in maybe communities like Pavilion or others where they're like, you know what I'm learner I want to find the next new thing that's happening in the marketplace. So your marketing is gonna be very different It's not gonna be pay per click and SEO It's gonna be in a community Because you are trying to go after an audience that cares to be in the forefront of all of it You will spend time more with influencers to make sure that they understand what you're trying to build so you they can influence what you're saying in the marketplace So your mark, go to market strategy is going to be so much more different in a transformation.
[00:20:47] That's why it's so important to agree internally. What are you trying to do? And then if you're trying to move from one to another, I think it is a combination of either product. It is the combination of either category. It's all of those things are probably gonna play a big role. So, until we dissect into it, I don't know what one or two things you will have to do, but agreeing on what it is and going and your go to market aligning with that is far more important than trying to be something you're not.
[00:21:18] Toni: So, I mean, one, one aspect of this, especially in the transformational pieces. Well, once the world has transformed somewhat around you, then yes, you probably will become either a necessity or kind of, you know, one of the other buckets basically, right? It's kind of, I think this is one that will just, you know, push you in this direction.
[00:21:36] Are there, and, but that feels, I mean, obviously you're, you're driving that, that change, right? Kind of you driving as a vendor and the category and so forth is driving that change. But if you're, if you're in the, indirect bucket and you sit there with the management team and everyone is like.
[00:21:50] Yeah, it's indirect. Everyone agrees. And you're sitting in there. I mean, are there ways to get out of it? What I mean, so this, this, you know, the 60 percent that are sitting in there, they probably don't want to sit in there. Right? So kind of, that must be the next question is like, what can I do Sangram to not be in this bucket?
[00:22:09] Sangram: So I'll give you a few examples of this. One is your, uh, this goes back to more, more of the go to market. So kudos. If that's been identified, like, cause that's where a lot of people there's unhealthy tension of feeling like, well, we're not even saying who we are. Like, that's just not good for any business, any person.
[00:22:26] But if it is then maybe so I'll give you an example of Bambora like, you know Some of a lot of people listening may also know about they're a data provider, right? What they did in the early days and I remember that because it when Terminus was launched Bambora was also getting launched at the same time They and they looked at well ABM is actually a new category.
[00:22:46] So in this case, we were transforming a marketplace, right? So they're like, you know what instead of they going in and saying we are also transforming the data world They literally went came to us and said hey with every single deal We know that data is no, it's a commodity people are just buying from all different places And I didn't think that they could charge that much, but What if they attach themselves for every single deal?
[00:23:12] We are closing because we are in a in a transformation change And they would charge like in that I think at that time was I think based on whatever it was like two grand or three grand so we're selling let's say 40k deal And for every customer, there was a 2K deal that was baked in that would go to Bambora.
[00:23:30] And we would be paying Bambara for the data they give. So all of a sudden, they didn't have to hire any salesperson. They literally struck a deal with us, Demandbase, Sixth Sense, and six or seven other companies that were transforming different types of businesses, and they became a total indirect way of going.
[00:23:48] They went from zero to over 15 million literally in a matter of, I think, six to twelve months in that phase of their partner led growth. So when you think about it is that they just accepted the fact that we're not gonna go build another category It just doesn't make any sense when there is an existing category that we can draft off and number two If I could cut a deal with each one their salespeople are selling my product So we all are selling their product in our thing.
[00:24:16] So they over spend their time and energy on the engineering team and the API integration and data, because that's really what their core was. And they just became a add on along the way. And they became now they're way bigger, um, than a lot of the other companies out there in the marketplace. So there are ways to think about your go to market based on what it is, unless you want to yourself become one of that.
[00:24:39] Toni: So basically kind of what you're saying, either you You know, super bold, try and create a new category with the capabilities and technology you have. Difficult, super expensive, might fail. or you attach yourself to a transformational category. Uh, and basically are kind of, you know, behind the Behind the scenes, uh, are profiting from, from that actually, right?
[00:25:00] And that kind of, that's, that's the idea here. the, question I had then actually, so if you are, let's just say you can't do any of these things. Um, and that's just it, you're stuck in this, uh, in the indirect gap. is that necessarily, does that need to be company killing or anything like this?
[00:25:15] Will it simply just mean that you're just growing a little bit slower or does it, uh, you know, what, what are the implications when you're stuck in the indirect ROI bucket?
[00:25:23] Sangram: That's a great question. Uh, when you're stuck in that bucket you are, you may be able to close deals, but when it comes to retention and renewal, you're gonna have a lot of pain.
[00:25:35] Toni: Yeah.
[00:25:35] Sangram: Because that's really when it comes to life. Somebody may still buy you because they're like, well, great, you know, you love the guys, love what their guys are doing.
[00:25:45] I feel like it's gonna be really cool. They're gonna buy into the vision and the mission and the excitement around it and if they are They care about the problem that and they see that you care about the problem that they care about. They're gonna probably buy. So you may still have a great acquisition strategy and be able to do that.
[00:26:00] But retention, at the time of retention, no matter what, somebody's gonna ask them these questions. And these are the questions that are getting asked every day. It's like, okay, what's the ROI of this thing? And if they are not prepared To add on, bolt on internally to say this plus this, 1 plus 1 equals 3.
[00:26:17] If they're not, if you're not able to help them figure out internally. So, so if I'm in those shoes of indirect, here's what I would do. I'll continue to figure out the sales, but I'm going to focus so hard on our customers. To make sure that they are able to tell internally at the time, before the time of the renewal, this 1 plus 1 equals 3, because it is, that's really what you're really saying.
[00:26:37] It's like, hey, we buy, if you just use us. You may not be able to see the ROI, but if you use us plus this Internally, you're gonna be able to see a lot more ROI But if you don't have us as part of it You're not gonna even get the value of the thing that you already have So internally I would spend a lot more time with customers to get that story right because of the retention or renewal renewal or expansion time That's the question they're gonna be asking
[00:27:03] Mikkel: I also wonder if there's going to be some companies that now realize, Oh God, we're down here in the indirect bucket. We said it's a commoditized, uh, area, so a lot of fierce competition, uh, price race towards the bottom, all the negative signs, tough with renewals. mean, you talk with so many companies, I wonder if you've seen any cases of someone successfully moving, you know, away from that, ROI category, uh, we could call it into another.
[00:27:28] Sangram: like from indirect to something else
[00:27:30] Mikkel: Yeah.
[00:27:31] Sangram: There, I think most companies, I think about one company I would say is The Juice. Uh, it's an early stage company, it's a content distribution company. Their whole thesis is about, you don't have to fill out the form. Who likes to fill a form? You ask in a room, nobody raises their hand, right?
[00:27:47] So, what they came up with is like a look. We will scrape or we will get all the content out there on that whatever topic you want to be searching on. So instead of going to Google and then filling 100 forms to get that content, we would create this one place where you just fill the form once. And you'll get all the best of the best content.
[00:28:06] So in a way, they're just Democratizing the content and they have all these companies now partnering up with them to say, you know What can we have 80 percent 90 percent of our content is anyway unused and it's behind the gated and nobody's filling that But if it's on your website, they would they would actually read it and that's what you want So they are the one who are going from like look We're not creating content for you, so there's no direct, uh, way of measuring this.
[00:28:31] We are not engaging, we, we, you can't really show attribution on this one, because it's really showing that, hey, they're gonna read your content now, and it's among the top content, so it is gonna be a complete indirect ROI. They have to embrace that fact. And, but, when they show that, plus, they, they literally went through, in the last six months, Through this whale curve where they're like they actually it's funny.
[00:28:55] They were showing if you go to their website Oh, you have a hundred percent or more ROI and their customers at the time of renewal ask the question Well, where is that hundred percent plus ROI and they're like well clearly see your data shows that You know when you when people come and look at the juice and see your content They are converting because they've integrated with their sales force.
[00:29:13] So they're able to show that But they didn't believe, the customers didn't believe that because that wasn't how they were sold before. So now they're moving their entire messaging to say no, we are here to assist with your content distribution. We are here to assist with the way your content is actually consumed and making sure that your right audience is reading it.
[00:29:33] That's like embracing it and saying that look, we're not trying to create a user experience. We're just making sure every content piece that you create is getting consumed by the audience that you want. That's all they do. So that's an example of people, companies moving in that direction.
[00:29:47] Toni: I wanted to go back to one comment you made just, just before actually. So it had to simmer a little bit with me. you mentioned, Hey, this, uh, this indirect ROI or kind of this, this, this fluffy zone, so to speak, it, you know, it might not actually come through or shine through in the acquisition.
[00:30:05] It might actually come through in the renewal. Right. And that then for me, obviously triggers the, okay. So, Thinking about the bow tie, thinking about Jacco's and Winning by Design's recurring impact and, you know, leads to recurring revenue. is that actually then, would you, would you then kind of take you, you know, and you're an analyst guy and, you know, frameworks and all of that stuff.
[00:30:26] Would this actually be where you would, you know, attach your ROI framework then to the bowtie? Is that the area versus, because everyone, everyone right now listening thinks ROI is a sales tool. Right. That's, that's what all of this is about, but you actually kind of say like, Hey, wait a minute, you know, yes, you might use a spreadsheet in the sales tool, but you can, you know, BS your way around where it's really going to come to show is in the, on the East side of the bow tie, so to speak.
[00:30:50] Is that how you're thinking about this as well?
[00:30:52] Sangram: a hundred percent. Thank you for bringing that up. I feel that forever we have been in this world of And we say that I actually have the t shirt of this. You don't have a marketing problem. You don't have a sales problem. You don't have a CS problem, which you have and every we gotta get a really dial into this and I've realized this the hard way that what we all have is a go to market problem.
[00:31:14] What that means is when you really boil it down to is that If you only solve for acquisition and not retention, it's going to come bite you. If you only solve for, for, for, for pipeline velocity, but you're not able to look at, uh, expansion, it's going to come bite you. So all of these things in some way, it's going to bite you and it bites harder in the end.
[00:31:35] Because, you know, it's really bites harder in the end, because if you are even figured, if you figure out acquisition, everybody's up and going, the sales people aren't excited, your VC guys excited, all this stuff is happening, right? And then you have churn that is greater than your, uh, than, than your acquisition.
[00:31:52] It's really biting. And, you know, you're like, no, no, sell, sell, sell. And people are just jumping off the parachutes out there on the back end. You don't want that as a business. Nobody wants that. So you'd rather have, like the question for all of us is. What problem do I want to invite? We're all problem solvers.
[00:32:08] That's what we get paid for. So what problem do we want in the company? And a better problem to invite is Acquisition is like can I get the right people? In, in the, you know, use bowtie or any, any, How do I get the right people? And the way you get the right people is by making sure that you know the endgame on that one.
[00:32:27] Most companies get surprised at the renewal expansion and that's what's killing great businesses, great businesses. Because they, they, they're missing the point on having that conversation at that level. And figuring out like how do I change and how do I make this person super successful not because of the tool But because of how they're gonna evaluate at the end of my 12 month is 60 whatever different terms you have Yeah,
[00:32:56] Toni: maybe kind of moving a tight little bit away from ROI, if I'm allowed to. Yeah. Approved. So you have the, um, you, you mentioned the go to market problem, right? I believe, uh, the whole Bowtie and I think the GTM standard consortium model, I think that's kind of another thing, right?
[00:33:14] all of these talk about, the, the end to end aspect a lot, right? Through different ways of visualization. And you have the, the GTM OS as well. Also different way of visualizing kind of almost the same, the same problem. What. What I think has happened, and that's probably your talk track that I'm just repeating and acting like it's myself, but it's like for the last like 20, 30 years, it's like, you know, vendors have been helping the VP of marketing, the VP of sales, the, you know, recently VP of CS.
[00:33:44] Um, and, uh, and basically kind of what you guys are championing is a, Hey, wait a minute, there's something, there's some connective tissue that no one has been optimizing for. There's some gaps between the silos that no one is optimizing for. Who, you know, from, from your perspective, kind of, who are the people that are latching onto that problem actually the most, right?
[00:34:04] Because it's, it's not the VP of sales, I think, or a very, very much educated VP of sales, for example, right? What are the, what are the kind of profiles that are like, Oh shit, I get it. Yes. Now that you say it, I totally get it. Uh, wha, wha, wha, how, how do those people look like? How do they think?
[00:34:20] Sangram: So, to two kinds of people, um, one, by default, this is, this is what the book identified for us. Who owns Go To Market? Super important for us to, to really understand. Everybody to hear it and see it and, and recognize it and, uh, figure it out. And number two is who is actually be the person who can, who can truly answer this question.
[00:34:43] When I put a dollar in the business, can it actually do three dollars? This is the most horrible question in the whole idea of audit, but ideally, that's Ultimately, you still have to answer that question. Who can answer that question? I think these, that's, these are the two people that everybody has to, to think about.
[00:34:59] The first one in the book, we realized after talking to, like, from Brian Halligan, the CEO of HubSpot at that time, All the way to Mark Roberge who, you know, Stage 2 Capital, to Kelly Ford who has had 200 plus exits. We went across the board. VC, PE, CEO, CMO, CRO, across the board, who owns Go To Market. And I remember Brian Halligan, without even blinking, he said, I own it.
[00:35:23] I'm like, Brian, you are, you are a CEO of a, a publicly traded company. I understand when you say, because the buck stops at you, maybe that's what you mean. He's like, no, no, Sangam, you don't understand. I own go to market. And I'm like, okay, break it down for me. And I, at that point, I truly didn't know. I was just being a student of it.
[00:35:44] Like, I'm just trying to really learn from all of these folks. And he said, look, there are only three things as a CEO I own. I own the vision for the company. I have to be the one repeating this every day, 10 times a day, to my customer, to my partners, to my people who have invested in this, to the employees, everyone.
[00:36:02] I have to be the most repeater of my own words all the time, no matter how obnoxious it feels to me or others. I have to do that because if I don't do that, who will? Point taken, right? Number two, he said culture. I have to be the one responsible to make sure that we have the right people in the company and the right environment for our company.
[00:36:20] If we don't have the right people, I don't care who's the best product in the world. It's not gonna work. Clearly HubSpot does that really well. So that's culture. And he said the third one, which I, he said, I get no credit for whatsoever is I own go to market. And I asked him like break it down for that for a little bit.
[00:36:35] What is go to market in you, in your mind? And he's like, well, I'll give you examples of what go to market decisions mean. Should we invest in marketing or sales? That's a go to market decision. Should we open up an office in EMEA or stay in North America? That's a go to market decision. Uh, should we partner or buy a company?
[00:36:55] That's a go to market decision. Uh, should we go PLG? Or should we actually do community led? Or should we go outbound? Or should we go, uh, events led? That's a go to market decision. So as he went through all of this, he's like, most people think go to market is a product launch or salespeople doing outbound calls.
[00:37:14] Go to market, I make, he said, three to five, if not more, decisions every day. Around go to market. So there's nobody else but him who could make decisions in that case like the CEO to make those decisions, right? So CEO has to understand that they own go to market. That means other people can support and all that stuff.
[00:37:32] Now, I will tell you and without naming companies When I go and talk to the CMO and CROs of them, those companies, they would say, I think I own it. And that's the problem. It's like this combination of like, no, no, no, like you own the, maybe the orchestration, the implementation and all that stuff. But the ownership of what go to market really is lies with the CEO.
[00:37:54] So that's one I'll pause there to get your reaction on it.
[00:37:56] Toni: So I love it. Obviously, fantastic story. So we, we probably have a couple of CROs and RevOps folks listening. Yeah. So this is kind of our, would you, would you now say, you know, this the R, so revenue? Is that synonymous with go to market for you kind of in, in those specific instances or is it, is, is there a difference between those two?
[00:38:19] Sangram: Well, that's, that answers, that's probably the more, more refined answer for my second part of that question. Like, the first is, who wants to go to market? The second is, who can answer the question, if I put a dollar in, how can we, where should we invest that dollar? Like, more, more appropriate question is not that I'll give it to you.
[00:38:34] It's like, where should I invest that dollar in it? There is no better person. To answer that question, in my mind, than somebody who actually is in the RevOps role. Uh, because that person is the one who actually can have a similar insight into the entire dataset like the CEO. But hasn't, but shouldn't be assigned to a sales or marketing or CS, that person should be reporting to either the, the CEO or maybe the CFO or if they have a COO that like, they're totally independent of the go to market teams out there.
[00:39:07] That's one. Number two, the reason it's interesting is because I'll give you another quick, uh, quick story. This happened at Terminus. Mallory Lee was running our RevOps, uh, she's at Nylas now,
[00:39:18] Toni: Oh, I forgot. I forgot that in the story. We also had her on the show. I also tried to get, you know, a session with you. I forgot this in the intro actually. Yeah. Yeah, exactly. That three or four way segment.
[00:39:30] Sangram: Yeah, there you go. We got to keep going on that one. Alright, so Mallory ran our RevOps, uh, and I was blown away. I learned about RevOps from her at our company because we were having these company, like, executive meetings around, all about who moved my cheese. Right, like it was like, well, I get the credit.
[00:39:48] I get it. I get all that stuff and she came in and she ran RevOps. It was beautiful. It was amazing. It was mad. It was one of the best meetings then after that when she joined it became because she's like I don't care who's cheese it is. I'm just gonna break it down into the things that it makes sense and actually help you make business decisions and and give you business problems.
[00:40:05] So she helped us all become business leaders as opposed to functional leaders. Until she came. We were either a marketing leader, sales leader, a CS leader, talking about the cheese. When she came in, we all became business leaders and we were focusing on solving business problems. So I think that's the power of what the RevOps actually do.
[00:40:27] They, the part that she came in and did that, that really changed for us was she, she literally helped us build this go to market dashboard. And I remember one time where we were trying to figure out why are we having the sales velocity issues and, and what do we do? And we were going through the planning season of where do we spend the rest for the next few next quarter, quarter, where do we spend money?
[00:40:47] She was looking at all the data and she said, you know what? I don't think you should be spending more money on hiring more salespeople or more, or giving more money to marketing. We need a sales enablement person because what we are struggling right now is our sales teams Don't really fully understand with the acquisitions that we have done how to sell this thing.
[00:41:07] So let's spend more money there and That was like an aha moment like nobody else would have said that in the room because a salesperson would say I need more SDRs The marketing person would say I need more ads and and then we're all again going in this different direction But but Mallory was able to say I think this is what's gonna solve our problem
[00:41:26] Toni: I think this is, and maybe I'm adding to your framework now a little bit, you know, so, so do we expanding it, take notes, Sangram, no, but,
[00:41:33] Sangram: making notes.
[00:41:36] Toni: so I think, you know, Hey, you have a go to market problem and that not necessarily is a. A sales problem, a sales problem, a marketing problem is a go to market problem, right?
[00:41:44] I think this is, this makes total intuitive sense and it's also kind of breaks it super down. Hey, if the renewals don't work, you have this problem. If the acquisition doesn't work, you have that problem. I think there's, there's another problem set in go to market, which is in, you know, the space in between those silos.
[00:42:00] You know what I mean? It's not only that those silos are, uh, you know, not successful and then handing it over and then maybe something else is not successful. But it's also simply the connection between them, right? So all of them are kind of self optimizing. All of them are kind of, you know, arguably going in the right direction.
[00:42:18] All of them are doing the right thing. But, uh, you know, the gap to the next one is so wide and the misalignment is so completely there that that then sometimes leads to actually, you know, you know, while everything is excellent, You know, if, if you look at it through the specific lenses as a whole, it's actually not.
[00:42:34] It's the opposite of one plus one is three. It's like, I don't know what that math is, but it's the opposite of that idea. Basically.
[00:42:40] Sangram: well, I think you're making a phenomenal, I wrote it down. I think it's so on point. I really do. I feel like it's, it's, it's literally The gaps in between that nobody would actually notice unless somebody else was walking the corridors, right, of that thing. And in a lot of times when people right now, like, you know, people losing jobs out there in the marketplace and they would say, I don't know what happened.
[00:43:05] You know, we, we raised, you know, we created 5x pipeline and, you know, they don't know how to run the business and they don't, they ran out of cash and all that stuff, but I did my job. Right? Are they wrong? You know, in their own area, they're not wrong. But what happened was they became a functional leader and not a business leader.
[00:43:24] And I think that, so, so I totally agree the in between and, and, and part of it is the twofold, like one, we need somebody like RevOps leader, uh, who could actually come in and look at the gaps in the corridors. At the same time, I feel like the people from their own classrooms need to come out and, and make sure that they understand and they become business leaders, not a math teacher and a science teacher and all.
[00:43:49] Like, you need to really come out and just understand that, well, you have a role to play in seeing if you are hitting all the numbers and still the company's going down, you probably have just closed your eyes and closed your ears if you can't see those cracks in, in the corridor. So, I love the in between part that you just mentioned.
[00:44:08] Toni: There you go.
[00:44:09] Mikkel: I kind of hate when we get to this point because it means we're, I mean, we have, can probably do one last question. And then it's, it's, go, go for it, Mikkel. no, but I think it's so interesting this, uh, this conversation we're having now because I've, I recall having, you know, managed a million dollar budget on paid, and I could see, uh, UK super expensive. Wanted to divest and just throw that money into this obscure market. And it's like, no, because then our AEs won't have anything to work on. And I just want to like, uh, you know, how, how do you start transforming? Because a lot of companies, they're going to say, well, we are aligned. We have a sales and marketing meeting.
[00:44:45] Um, but you know, so, so how do we transform from there? And I mean, I'm setting you up probably not for success here, because looking at the clock, this is on a whole new episode, but you know.
[00:44:56] Sangram: I think it's a, it's a really good point. I feel like I, I, if anybody else comes, having spent 20 years in this, in this smart tech world, if anybody else comes and says, Hey, we're going to have a sales and marketing meeting to talk about go to market, I'm going to lose it, right? Because that is not a go to market team.
[00:45:14] So my number one ask of everybody implore on this thing is that. Don't have sales and marketing meetings anymore. Like that doesn't work. If it worked, you didn't need to have it. Like if it worked, you would do it and be on. But the fact that you still need to do it, that's the problem. What we all need to have is go to market meeting.
[00:45:33] Where you actually have people from all these go to market roles and you have to recognize marketing, sales, CS, product, RevOps. They are all go to market roles. They're not sales and marketing. They're all go to market. So, invite those people and you know, whatever frequency. In our case, in our own company and the companies we advise, we like, on a Tuesday is our go to market meeting where we literally go through the calendar so everybody knows what's happening.
[00:45:58] And we also know what people are doing. We're not going through a pipeline review meeting. Like that's, that's a very different type of conversation that you need to have. It is all about what we call the CAT process, Clarity, Alignment and Team. The week I haven't done, guys, I felt like our company, like I felt like everybody was running around with, you know, on a completely different problem.
[00:46:19] But every time I did the CAT meeting, we just don't miss anymore. We do a CAT meeting every Tuesday in the morning. Nobody misses that and that meeting is about just clarity, alignment, and team. Here's what we're doing. Here are still our goals. Here are still our targets or markets or things that are going on.
[00:46:34] And, and that's all it's about. It is not about going deeper into one or the other too deep until we have that level and now that meeting should be the most boring meeting in the company. That's when you know you arrived because when it becomes the most boring meeting, that means everybody's aligned.
[00:46:50] There's no more fire. There's no way, that's the goal is to make that meeting boring. Not that meeting the most exciting, but the most boring meeting and that's my goal and I ask everybody to think about come up with boring meetings.
[00:47:03] Toni: I love it. Quick follow up on this. Who do you think should own this? The meeting?
[00:47:07] Sangram: Uh, the GoToMarket, the CEO should own the meeting. Ha
[00:47:13] Toni: this was fantastic. Uh, thank you so much for spending. No,
[00:47:17] Sangram: ha
[00:47:19] Toni: think it's just, it's called genuine.
[00:47:20] Mikkel: Okay. Good,
[00:47:21] Toni: good. That's my genuine voice. Yeah. Okay. Uh, no, Sangram, this was fantastic. Thank you so much for spending time here. And, uh, I mean, we started out talking about ROI. And then we kind of went into GTM and we, we ended with CAT.
[00:47:36] We, we, we went through all the three, uh, three letter, uh, what is
[00:47:40] Sangram: Acronyms out
[00:47:41] Toni: wonderful. Um, so thank you. Thank you so much for spending time. Go to market partners. Fantastic firm. And, uh, you obviously a fantastic guy to, uh, preach the gospel. So thank you so much.
[00:47:52] Sangram: Thank you so much, and I, uh, what I would say to everybody is a parting thought is it, it has never been more important to me to think about that right now, wherever you are being intentional is way more important than being brilliant. And I leave that as a thought because that's something that I have to tell myself.
[00:48:13] Best ideas are not winning. That's not the part of it. It's not about the best ideas. It is being massively intentional about the one or two thing. If it is ROI, and if it's indirect, just be intentional about it. If it is go to market, you're trying to figure out your go to market motion, like be intentional about it.
[00:48:30] It is unbelievable how many companies are not doing that, and the companies who do it, who are average at best, but they're doing it, They're having incredible results. So I'll leave you with that as a parting thought. All right. Thank you guys.
[00:48:46] Mikkel: Bye. Bye.