WEBVTT NOTE This file was generated by Descript 00:00:00.000 --> 00:00:02.730 Michele Hansen: Did your latest AWS bill give you a heart attack. 00:00:03.359 --> 00:00:06.870 Cloud Forecast sends you daily transparent reports that help 00:00:06.870 --> 00:00:09.030 you understand your AWS costs. 00:00:09.360 --> 00:00:13.620 Find any overspends and promote opportunities to save costs. 00:00:14.459 --> 00:00:19.470 Cloud Forecast takes complicated data and produces accurate presentable reports. 00:00:19.800 --> 00:00:24.360 So you can share stats quickly and make strategic decisions swiftly. 00:00:25.215 --> 00:00:28.605 With communication integrations like Slack, Microsoft Teams, 00:00:28.905 --> 00:00:30.465 and email to share insights. 00:00:30.495 --> 00:00:34.395 You can go from managing your AWS spends in hours to seconds. 00:00:35.265 --> 00:00:37.755 Start a 30 day free trial today. 00:00:37.815 --> 00:00:43.335 No credit card is required to get started at Cloud Forecast.io dot I O. 00:00:43.781 --> 00:00:44.681 Hey, everyone. 00:00:44.771 --> 00:00:47.621 I'm so excited for today's episode. 00:00:47.891 --> 00:00:50.801 We have Ben Orenstein with us. 00:00:50.831 --> 00:00:56.771 Ben is co-host of the Art of Product podcast and co-founder 00:00:57.131 --> 00:01:03.011 of Tuple Tuple, which is one of the most admired independent 00:01:03.011 --> 00:01:04.841 software companies out there today. 00:01:05.231 --> 00:01:07.801 I'm so excited to have you on. 00:01:08.304 --> 00:01:08.814 Ben Orenstein: Thank you. 00:01:09.114 --> 00:01:11.954 The most admired is uh application I have not heard before. 00:01:11.954 --> 00:01:12.584 That's pretty great. 00:01:12.884 --> 00:01:15.434 Michele Hansen: Really, I feel like that that's kind of how 00:01:15.434 --> 00:01:16.804 people think of Tuple Tuple. 00:01:16.964 --> 00:01:17.444 Like. 00:01:18.052 --> 00:01:19.972 Ben Orenstein: As you were saying, it kind of resonated. 00:01:19.972 --> 00:01:21.952 I was like, oh yeah, I guess people do seem to like us. 00:01:22.012 --> 00:01:26.122 It's, it's that weird thing where like, I am aware of all of our flaws, 00:01:26.152 --> 00:01:29.752 but people have a more nuance or like a sort of more holistic view of us. 00:01:30.322 --> 00:01:33.402 And I was just thinking like of like various Twitter threads and whatnot. 00:01:33.412 --> 00:01:33.802 It's like, oh yeah. 00:01:33.802 --> 00:01:35.632 I guess people are mostly quite positive. 00:01:36.102 --> 00:01:36.612 Michele Hansen: Yeah. 00:01:36.639 --> 00:01:41.616 So the genesis of this conversation today was we met at Founder Summit. 00:01:42.096 --> 00:01:49.446 Um, and you were supposed to give a talk on sales for founders, which is a topic 00:01:49.446 --> 00:01:51.186 we've talked a lot about on this show. 00:01:51.216 --> 00:01:53.533 And is it like a really tough thing? 00:01:53.953 --> 00:01:58.903 Um, for first time founders, especially, uh, you know, a tough thing to learn. 00:01:58.903 --> 00:02:00.907 And so you were supposed to give a talk on that. 00:02:00.969 --> 00:02:05.917 Unfortunately we're unable to, and I was like super excited for that talk 00:02:05.917 --> 00:02:09.577 and so sad it didn't happen and so I thought it would really fun if you got a 00:02:09.577 --> 00:02:12.067 chance to talk about sales for founders. 00:02:13.563 --> 00:02:13.893 Ben Orenstein: Yeah. 00:02:13.923 --> 00:02:14.703 I mean, that sounds great. 00:02:14.703 --> 00:02:17.903 I, I have, I have the outline. 00:02:18.003 --> 00:02:21.203 I have a table of contents of a book that I would like, kind of wanted to write, but 00:02:21.703 --> 00:02:25.633 it wasn't probably gonna follow up with, and I have this talk that almost happened, 00:02:25.633 --> 00:02:29.819 but then I went on a taco crawl in Mexico City and got quite sick, don't do that 00:02:29.819 --> 00:02:30.689 the night before you're supposed to say. 00:02:31.285 --> 00:02:33.565 Um, And so, yeah, I'm stoked to talk about this. 00:02:33.565 --> 00:02:38.167 I have, I've I've learned some lessons, I think it's, it's a bit of a limited data 00:02:38.377 --> 00:02:43.807 set given that I have only done sales for one company, but I think probably there 00:02:43.807 --> 00:02:48.268 are some lessons in here that I learned going from like being an engineer who 00:02:48.268 --> 00:02:53.698 likes efficiency and not understanding procurement and IT and pricing and the 00:02:53.698 --> 00:02:56.218 sales process and what, even as a PO. 00:02:56.292 --> 00:02:58.992 And I think I, I can probably pass on some, some stuff that 00:02:58.992 --> 00:02:59.952 is possibly going to be useful. 00:03:00.703 --> 00:03:01.033 Michele Hansen: Yeah. 00:03:01.033 --> 00:03:05.323 I mean, I think that point there is something that, that really hits home 00:03:05.323 --> 00:03:08.893 that, you know, Mathias and I talk about is like, wait, why can't they 00:03:08.893 --> 00:03:11.053 just like sign up online for an account? 00:03:11.053 --> 00:03:13.723 And I'm like, no, they have like, they have procurement. 00:03:13.723 --> 00:03:15.523 Like you need to use their portal. 00:03:15.523 --> 00:03:18.373 And like, it's like, why, why can't we just build something that they can 00:03:18.373 --> 00:03:20.973 just upload all of those things to, and then we do it and then it's automated. 00:03:20.983 --> 00:03:27.703 It's like, you can the bureaucracy of each enterprise company. 00:03:27.703 --> 00:03:30.973 Cause they're all, they all have their own special way of doing it 00:03:30.973 --> 00:03:34.993 and they all want you to conform to their special way of doing it. 00:03:35.833 --> 00:03:40.303 And the idea of just signing up for something online is confusingly 00:03:40.303 --> 00:03:41.923 simple to the point of being imposed. 00:03:42.673 --> 00:03:43.753 Ben Orenstein: Yeah. 00:03:43.903 --> 00:03:48.733 So the, the outline for this book that I was going to write in the intro, 00:03:48.743 --> 00:03:53.143 the, of the first topic heading is your intuition is right, sales is kind of. 00:03:55.135 --> 00:03:57.985 Like I kept fighting it for a while where I was like, but 00:03:57.985 --> 00:03:59.455 hold on, this is, this is dumb. 00:03:59.485 --> 00:04:00.145 This doesn't make sense. 00:04:00.145 --> 00:04:01.495 Why, why can't it work like this? 00:04:02.005 --> 00:04:06.055 And eventually you sort of just learned to like, you can't refactor the sales 00:04:06.055 --> 00:04:07.465 process of everyone you're talking to. 00:04:08.005 --> 00:04:10.675 And, there are things you can push back on, which I think is kind 00:04:10.675 --> 00:04:12.145 of an interesting topic as well. 00:04:12.655 --> 00:04:16.225 But overall you are dealing with a thing that is inefficient. 00:04:16.435 --> 00:04:19.015 It is, is not the most efficient way to get this done. 00:04:19.082 --> 00:04:23.109 And so you need to sort of, you need to act accordingly and respond to 00:04:23.109 --> 00:04:24.819 that reality rather than fighting it. 00:04:25.319 --> 00:04:29.009 Michele Hansen: So you mentioned there's some key lessons that you've learned. 00:04:29.409 --> 00:04:29.829 Ben Orenstein: Yeah. 00:04:30.332 --> 00:04:31.832 Michele Hansen: What's the high level of those lessons. 00:04:33.387 --> 00:04:37.317 Ben Orenstein: It's kind of a lot, I would say there's, so again, I'll throw this 00:04:37.317 --> 00:04:40.737 caveat out there because it's important, which is I have done this for one company. 00:04:41.247 --> 00:04:45.187 And so our tool is a um, something targeted at developers. 00:04:45.397 --> 00:04:48.930 So it's adopted by engineering teams and we make it easy for the teams 00:04:48.930 --> 00:04:50.160 to come in and get in and try it. 00:04:50.670 --> 00:04:54.030 And the way our sales process usually gets kicked off is the engineers try it. 00:04:54.090 --> 00:04:54.660 They like it. 00:04:54.990 --> 00:04:57.090 They ask someone to buy it over and procure. 00:04:57.835 --> 00:05:02.095 They contact sales at Tupelo, and then now the sales process has begun. 00:05:02.598 --> 00:05:05.568 So yeah, so all of this advice here, just, you know, just, just be aware, 00:05:05.598 --> 00:05:08.268 like, it's not like I've done this for many, like I ha I haven't seen enough 00:05:08.328 --> 00:05:11.808 different viewpoints to know for sure if this works all the time, but this 00:05:11.808 --> 00:05:14.898 is what has worked for us, and so I'll speak kind of authoritatively from our. 00:05:15.558 --> 00:05:19.108 And at this point we've done millions of dollars of enterprise deals at this point. 00:05:19.173 --> 00:05:22.426 We closed like large six-figure deals, multi-year deals, deals 00:05:22.426 --> 00:05:24.556 with fortune five companies. 00:05:24.565 --> 00:05:27.959 So it's, we've had success using our approach and using our software. 00:05:28.026 --> 00:05:30.758 So maybe this is so I can at least sort of say, like, this works for us. 00:05:30.788 --> 00:05:33.868 Maybe it works for you, but you asked for a big picture things. 00:05:33.976 --> 00:05:38.206 One, I actually kind of touched on, which is that I think a bottom up sales process 00:05:38.236 --> 00:05:41.701 is vastly then a top-down sales process. 00:05:42.198 --> 00:05:47.148 So the fact that engineering has already tried our product and liked it and then 00:05:47.148 --> 00:05:52.301 asked for it means that when the sales process gets kicked off more often than 00:05:52.301 --> 00:05:54.521 not, we're just sort of taking orders. 00:05:54.911 --> 00:06:00.573 Like we are helping procurement by the software and not selling the company 00:06:00.573 --> 00:06:03.783 or selling some high level decision maker on the software and try to 00:06:03.783 --> 00:06:05.823 get them to inflict it on their uh, 00:06:06.850 --> 00:06:09.400 Michele Hansen: That's also how we do sales as well, like we, 00:06:09.550 --> 00:06:12.480 we never did any cold outreach. 00:06:12.510 --> 00:06:15.626 I don't think we've ever really tried to it to someone who 00:06:15.626 --> 00:06:17.306 wasn't already interested in it. 00:06:17.306 --> 00:06:21.536 And in many ways, I think we kind of took inspiration from slack 00:06:21.596 --> 00:06:24.596 because I feel like that was a lot of their early growth as well. 00:06:24.596 --> 00:06:30.556 Was the engineering teams using it by like liking it, wanting to use 00:06:30.556 --> 00:06:32.386 it, other teams hearing about it. 00:06:32.896 --> 00:06:35.926 And then, and then it's just a matter of filling in. 00:06:37.176 --> 00:06:37.506 Ben Orenstein: Yeah. 00:06:37.531 --> 00:06:41.974 Michele Hansen: so to speak rather than having to do cold outreach and 00:06:42.024 --> 00:06:45.804 pitching and stuff like that, which I guess I've, I've only done sales as a 00:06:45.804 --> 00:06:49.294 founder from that perspective as well. 00:06:49.294 --> 00:06:52.394 But I did work at an agency as my first job out of college 00:06:52.394 --> 00:06:53.774 at a web development agency. 00:06:54.254 --> 00:06:59.624 And we were going out and pitching and making proposals and replying to RFP. 00:07:00.128 --> 00:07:01.808 Dude that was so much work. 00:07:01.838 --> 00:07:04.148 And most of it led to absolutely nothing. 00:07:04.658 --> 00:07:09.838 And I think that's why I love this bottom up approach to sales is. 00:07:12.003 --> 00:07:13.983 Ben Orenstein: Yeah, I think it's just a nicer way to be. 00:07:13.983 --> 00:07:17.613 And I think if, I think, especially if you're a bootstrapped company, 00:07:18.243 --> 00:07:19.713 it makes life a lot easier. 00:07:19.953 --> 00:07:23.433 Like the sales process is much simpler when they're already sold on the thing. 00:07:23.933 --> 00:07:26.993 It's easier on from your side, and I also think you're more likely to succeed. 00:07:27.053 --> 00:07:32.796 Like it feels like to me getting a tool, selling a tool from the top of the org 00:07:32.796 --> 00:07:36.786 chart and then having that decision get made and then having it sort of trickled 00:07:36.786 --> 00:07:40.176 down, feels like a recipe for bad fit. 00:07:40.676 --> 00:07:44.936 Like you could imagine, like the software is being foisted on you by someone 00:07:45.026 --> 00:07:46.376 two levels above you in the org chart. 00:07:46.376 --> 00:07:48.056 And you're like, oh, I don't even like this tool. 00:07:48.056 --> 00:07:49.706 It doesn't do what I want it to do, or it doesn't do what 00:07:49.706 --> 00:07:50.816 we were trying to accomplish. 00:07:51.416 --> 00:07:54.656 I feel like it would probably lead to worse outcomes uh, that approach. 00:07:55.266 --> 00:07:59.526 Michele Hansen: I'm curious, you know, I don't want to oversimplify the sales 00:07:59.526 --> 00:08:03.306 process because we do have a lot of times when you know that person on the 00:08:03.306 --> 00:08:07.986 engineering team or even that team and their manager really liked you Geocodio, 00:08:08.006 --> 00:08:11.156 for example, but then they have to sell it to their director or their 00:08:11.156 --> 00:08:14.308 VP and they bring us to help sell it. 00:08:14.308 --> 00:08:15.538 And it's not just like that. 00:08:15.838 --> 00:08:16.498 They like it. 00:08:16.498 --> 00:08:18.658 And then a PO shows up that does happen. 00:08:18.658 --> 00:08:23.668 And that is awesome when that happens, but rarely does that happen and more 00:08:23.668 --> 00:08:27.501 so there is some sort, but there's not only like basically we are 00:08:27.501 --> 00:08:30.321 helping that team sell the product. 00:08:30.351 --> 00:08:34.941 And then of course there's, there's the whole negotiation side of things. 00:08:36.556 --> 00:08:39.788 Which speaking back to founder summit was kind of fun because I 00:08:39.788 --> 00:08:43.028 got to live one of those Twitter threads where people ask, what could 00:08:43.028 --> 00:08:44.798 you give a talk on with no notice. 00:08:44.798 --> 00:08:48.818 And I did that on negotiations when your talk unable to happen 00:08:49.328 --> 00:08:51.358 um, which was pretty fun. 00:08:51.418 --> 00:08:55.978 And so I'm curious, like, what are your experiences with when, like, do you have 00:08:55.978 --> 00:09:01.738 that happen when a team needs you to help sell the rest of the organization onto. 00:09:03.113 --> 00:09:07.913 Ben Orenstein: Um, That is totally like a high leverage opportunity, I would say. 00:09:07.943 --> 00:09:14.184 So that does happen with us so often it is a an engineer somewhere towards 00:09:14.184 --> 00:09:17.184 the bottom of the org chart, trying to sell it to their team lead or 00:09:17.184 --> 00:09:20.214 a team lead, trying to sell it to a director or a VP or something. 00:09:21.024 --> 00:09:24.894 And those are pretty critical conversations actually like that, that, 00:09:24.904 --> 00:09:26.994 that affects that can have a big impact. 00:09:27.594 --> 00:09:31.427 And so the main thing we've done around this is we made a thing. 00:09:31.427 --> 00:09:35.500 We call it the boss page, which helps is like basically like our best 00:09:35.500 --> 00:09:38.360 attempt to sell Tupelo to someone a little bit further up the org chart. 00:09:38.755 --> 00:09:41.095 Where it talks about the benefits of pair programming. 00:09:41.095 --> 00:09:44.305 Like what's likely to come like the benefits a slightly higher level 00:09:44.305 --> 00:09:48.462 manager might care about, and also answers some common objections or 00:09:48.462 --> 00:09:49.872 questions that people would have. 00:09:50.375 --> 00:09:52.445 And I think there's a lot more, I think there's more we could do here. 00:09:52.445 --> 00:09:56.725 Like this is sort of just a simple, like one pager that we send to people 00:09:56.755 --> 00:09:59.995 as a trial is ending saying, Hey, if you want some help selling this to 00:09:59.995 --> 00:10:01.435 your boss, here's something we made. 00:10:01.915 --> 00:10:03.655 But I think we could go even further on that. 00:10:03.935 --> 00:10:05.375 Michele Hansen: So you just, you just touched on something that. 00:10:05.375 --> 00:10:10.595 I think is a key part of this, which is letting people try it for free 00:10:10.595 --> 00:10:14.792 or very cheaply before they need, you know to be able to use like the 00:10:14.792 --> 00:10:18.053 corporate credit card or, or, you know, get a PO for it or whatnot. 00:10:18.053 --> 00:10:23.190 So you mentioned that after the free trial, so, so what is the sort of 00:10:23.640 --> 00:10:25.530 Tupelo model from that perspective? 00:10:26.028 --> 00:10:28.638 Ben Orenstein: Um, Right now we have a 14 day free trial 00:10:28.638 --> 00:10:30.078 with no credit card required. 00:10:30.576 --> 00:10:32.736 Michele Hansen: And you mentioned right now, you have that I'm 00:10:32.736 --> 00:10:34.026 curious, has that changed over. 00:10:34.531 --> 00:10:36.331 Ben Orenstein: Yes, it's changed several times actually. 00:10:36.331 --> 00:10:40.829 So immediately before that it was a 14 day trial with credit card required 00:10:40.859 --> 00:10:46.975 upfront which we switched away from because so many of our customers don't 00:10:46.975 --> 00:10:48.175 actually have a company credit card. 00:10:49.015 --> 00:10:50.485 So it was like, Hey, I want to try this tool. 00:10:50.515 --> 00:10:51.865 Oh, it needs to require a credit card. 00:10:51.865 --> 00:10:53.545 Let me go ask my boss for their credit card. 00:10:54.115 --> 00:10:57.325 Oh, I haven't tried the thing that I'm asking for the credit 00:10:57.325 --> 00:10:59.435 card for, which is awkward. 00:10:59.481 --> 00:11:01.430 And people have this sort of discomfort around, oh, well, what 00:11:01.430 --> 00:11:02.400 if you start charging my card? 00:11:02.430 --> 00:11:04.190 I'm not aware of it, or you like, I might forget. 00:11:04.257 --> 00:11:08.226 And so we, we moved to this, this current model, which has been popular and I'm 00:11:08.276 --> 00:11:12.606 happier with, but even before that um, we experimented with a number of different 00:11:12.606 --> 00:11:14.016 ways of getting people into the product. 00:11:14.513 --> 00:11:19.921 Uh, so in the very early days, we actually charged a hundred dollars 00:11:19.921 --> 00:11:24.620 flat for your first month for a limited usage and then we would start billing 00:11:24.640 --> 00:11:26.650 by user, after that month was up. 00:11:26.950 --> 00:11:30.010 And that was sort of intentionally a high bar that we set where 00:11:30.010 --> 00:11:31.450 we, we made it a little bit. 00:11:31.950 --> 00:11:35.130 You had to sort of show some commitment to get into the product. 00:11:35.633 --> 00:11:38.723 And we did that because we w we didn't want to grow too fast at the time. 00:11:38.753 --> 00:11:42.491 Like we were just, we were getting exposure to lots of different environments 00:11:42.491 --> 00:11:44.261 and user requests and things like that. 00:11:44.261 --> 00:11:47.441 And we didn't want to get overwhelmed with new people coming in the door. 00:11:47.462 --> 00:11:50.342 And we also wanted people to try to take the trial very seriously. 00:11:50.842 --> 00:11:52.402 So it slowed things down. 00:11:52.402 --> 00:11:55.312 Like we had fewer trials for sure, but it was kinda interesting that our 00:11:55.312 --> 00:11:56.752 trial conversion rate was super high. 00:11:56.752 --> 00:11:59.362 I was like 60% or something because like, people are like, 00:11:59.362 --> 00:12:00.082 well, we paid a hundred bucks. 00:12:00.082 --> 00:12:01.192 We have to try this thing now. 00:12:01.462 --> 00:12:03.592 And so we didn't have, we had very few of those trials where it's like, 00:12:03.622 --> 00:12:04.882 oh, they never really got started. 00:12:04.882 --> 00:12:05.602 They never really tried it. 00:12:06.099 --> 00:12:08.540 And then even before that in the very earliest days, I was 00:12:08.750 --> 00:12:10.926 pre-selling the tool by the year. 00:12:11.076 --> 00:12:13.146 And so would say like, we're looking for like a core group of 00:12:13.146 --> 00:12:15.066 teams to become our initial users. 00:12:15.486 --> 00:12:17.946 And so we want people that are really committed are willing to like stick 00:12:17.946 --> 00:12:19.236 with us as we improve this thing. 00:12:19.536 --> 00:12:23.496 So if you're interested, you have to like pay per seat per year to get in. 00:12:24.050 --> 00:12:25.070 Michele Hansen: That's really interesting. 00:12:25.100 --> 00:12:30.644 Cause I, I feel like I hear in that, that you have learned a lot 00:12:30.734 --> 00:12:35.160 about how teams acquire software. 00:12:35.712 --> 00:12:36.342 Ben Orenstein: Yeah, for sure. 00:12:36.846 --> 00:12:38.346 That was, I mean, that was the big learning for me. 00:12:38.376 --> 00:12:41.406 I originally thought that the customers for Tupelo were going to be freelanced. 00:12:42.057 --> 00:12:44.517 Just like individual developers working with clients or something. 00:12:45.017 --> 00:12:49.157 And I was like, it didn't even occur to me that like, no, no, your 00:12:49.157 --> 00:12:51.797 ideal customer is a whole bunch of developers on the team, obviously. 00:12:52.303 --> 00:12:53.113 And it just didn't click. 00:12:53.113 --> 00:12:55.393 And so there was like, there was a lot of learning that went on as we, as we 00:12:55.393 --> 00:12:58.303 actually launched and saw who was using it and how, and then how they bought it. 00:12:58.783 --> 00:13:01.593 And you know, me just being like, can't you just go put the credit 00:13:01.593 --> 00:13:03.723 card in and they'd be like, no, no, we can't go put the credit card in. 00:13:04.271 --> 00:13:07.511 Michele Hansen: So when you have those people who are using the, the $100 00:13:07.521 --> 00:13:10.986 free trial, which sounds like it was like the, I mean, the thing about Tuple 00:13:11.046 --> 00:13:12.756 you have this network effect, right? 00:13:12.756 --> 00:13:15.996 Like the more people within the organization are using it, 00:13:16.356 --> 00:13:19.536 the more value the organization is getting out of it, right? 00:13:19.536 --> 00:13:23.489 Like if you're the only one Tuple in your organization, you do not have 00:13:23.489 --> 00:13:25.499 anyone to Tupelo within the organization. 00:13:25.499 --> 00:13:29.493 So like, you'd need at least one other, one other person 00:13:29.523 --> 00:13:31.443 to use it with ideally a lot. 00:13:31.943 --> 00:13:36.700 And when you had that a hundred dollar For the trial level, I'm 00:13:36.700 --> 00:13:42.557 curious, do you know who was making that purchase at that point? 00:13:43.057 --> 00:13:44.857 Ben Orenstein: Um, Do I know who 00:13:45.207 --> 00:13:47.277 Michele Hansen: Like who was actually putting in the credit card? 00:13:47.277 --> 00:13:50.457 Cause you said the next step you switched to having credit card, trying, 00:13:51.247 --> 00:13:53.377 credit card required for a free trial. 00:13:53.617 --> 00:13:56.197 And that didn't really work because the people who wanted to try 00:13:56.197 --> 00:13:57.277 it didn't have the credit card. 00:13:57.277 --> 00:14:03.277 So it sounds like there was a shift in the buyer when you changed from paid 00:14:03.277 --> 00:14:05.407 trial to free trial with credit card. 00:14:05.907 --> 00:14:09.343 Ben Orenstein: Weirdly enough people with sometimes DME and say, I wanted 00:14:09.343 --> 00:14:12.883 to try Tuple so badly that I paid for the a hundred dollars myself on my 00:14:13.223 --> 00:14:13.973 Michele Hansen: Wow. 00:14:14.477 --> 00:14:14.807 Ben Orenstein: Yeah. 00:14:15.108 --> 00:14:15.738 Which is cool. 00:14:15.738 --> 00:14:17.118 I mean, it's a vote of confidence, right? 00:14:17.118 --> 00:14:18.258 That was like awesome. 00:14:18.258 --> 00:14:19.838 Our reputation was really good. 00:14:19.838 --> 00:14:22.002 And so like people wanted to try the software but it was also 00:14:22.002 --> 00:14:23.802 like, okay, that's seems wrong. 00:14:23.982 --> 00:14:25.812 People probably shouldn't be shelling out a hundred dollars 00:14:25.842 --> 00:14:27.282 personally to try or software. 00:14:27.781 --> 00:14:29.851 Michele Hansen: I mean, I hope they got reimbursed later. 00:14:29.971 --> 00:14:30.331 Once 00:14:30.436 --> 00:14:32.206 Ben Orenstein: Hopefully, although it's like, you know, it's one of those things 00:14:32.206 --> 00:14:33.196 where we're getting a hundred bucks back. 00:14:33.196 --> 00:14:35.296 It's probably not quite worth it from the company, you know? 00:14:35.599 --> 00:14:37.249 Michele Hansen: That is really interesting. 00:14:37.249 --> 00:14:42.696 So then when you shifted to free trial credit card required, were 00:14:42.696 --> 00:14:46.326 you thinking that people would continue to use their personal cards 00:14:46.521 --> 00:14:47.151 Ben Orenstein: They did. 00:14:47.361 --> 00:14:50.326 That happened a lot because they still didn't have a company credit card and 00:14:50.326 --> 00:14:51.346 they still want to try the software. 00:14:51.346 --> 00:14:52.216 It just got a bit easier. 00:14:52.216 --> 00:14:53.236 It got cheaper basically. 00:14:53.596 --> 00:14:56.176 Whereas before they would like eat the a hundred bucks to try it or 00:14:56.176 --> 00:14:59.506 slash get reimbursed, now they would put their personal card down and then 00:14:59.516 --> 00:15:01.606 be like, okay, I have to remember to swap this out for the company card. 00:15:01.606 --> 00:15:01.846 If we like. 00:15:02.344 --> 00:15:06.004 And so a thing we kept seeing happened was people would try it on one credit 00:15:06.004 --> 00:15:10.714 card and swap like right the day before the trial was supposed to end or cancel. 00:15:10.924 --> 00:15:12.124 And we'd be like, oh no, why'd you cancel? 00:15:12.124 --> 00:15:13.084 And be like, oh no, I liked it. 00:15:13.504 --> 00:15:16.714 We just are waiting on approval to use the company credit card. 00:15:16.774 --> 00:15:19.804 And so we have to wait for that to get, get a yes on that before I 00:15:19.804 --> 00:15:21.004 can go grab the card and put it in. 00:15:21.451 --> 00:15:23.521 Michele Hansen: So let's get down to like nitty-gritty here. 00:15:23.521 --> 00:15:30.151 How did you figure that insight out that what was happening was that people were 00:15:30.649 --> 00:15:35.046 putting in their personal card and then either canceling it or maybe even doing 00:15:35.046 --> 00:15:39.613 a chargeback or, and then trying to get it switched onto their personal card. 00:15:39.613 --> 00:15:46.093 Take me into how that insight developed that the people basically, you need 00:15:46.123 --> 00:15:49.873 to sell this within the organization, don't have access to a credit. 00:15:50.627 --> 00:15:53.947 Ben Orenstein: Um, I don't remember exactly how I got that insight. 00:15:54.217 --> 00:15:59.298 I would say that we are pretty, especially in the early days as very aggressive 00:15:59.298 --> 00:16:01.788 about talking to not aggressive, but I was, you know, I was trying to talk 00:16:01.788 --> 00:16:05.688 to everyone or like email everyone, so like if we had a failed trial like 00:16:05.688 --> 00:16:08.388 that, if a trial canceled that looked like it was good, I would email them 00:16:08.388 --> 00:16:09.258 and say, Hey, what was going on? 00:16:09.757 --> 00:16:13.679 Or, and I think we even had automated emails for when people would 00:16:13.679 --> 00:16:15.539 cancel or trials wouldn't succeed. 00:16:16.279 --> 00:16:19.429 We were sort of like, we have all these like customer feedback traps built 00:16:19.429 --> 00:16:22.549 into the product and built into the process so that we're sort of always 00:16:22.549 --> 00:16:23.959 asking people like what's going on. 00:16:24.231 --> 00:16:27.153 And also at this time where we were experimenting with like the a 00:16:27.153 --> 00:16:31.613 hundred dollars upfront approach, I was DM-ing people a lot on Twitter. 00:16:31.643 --> 00:16:34.513 like, I knew all our customers basically in those days. 00:16:34.574 --> 00:16:36.314 And had sort of contact with almost everybody. 00:16:36.824 --> 00:16:38.834 And so, I was just close to them. 00:16:38.834 --> 00:16:41.054 Like I was taught, I was taught, I was in contact with them quite a bit. 00:16:41.550 --> 00:16:45.600 And friends of mine would like, you know, be working at some company and they would 00:16:45.600 --> 00:16:48.670 message me like, Hey, just so you know, like I want to try to Tuple, but I don't 00:16:48.690 --> 00:16:49.890 have a car, I don't have a credit card. 00:16:50.340 --> 00:16:51.300 Or like, this is a deal breaker. 00:16:51.300 --> 00:16:51.910 Like, Hey, I tried it. 00:16:51.910 --> 00:16:52.330 And I paid for it. 00:16:52.560 --> 00:16:54.390 Yeah, a friend of mine just like said, Hey, by the way, that's right, that 00:16:54.390 --> 00:16:57.430 came from like, he was a Twitter DM, Hey, I paid a hundred dollars out of 00:16:57.430 --> 00:16:58.870 pocket because I wanted to try it so bad. 00:16:58.870 --> 00:17:00.770 But just so you know, this is probably hurting your adoption. 00:17:01.270 --> 00:17:02.170 Michele Hansen: Interesting. 00:17:02.680 --> 00:17:07.363 So when you shifted between those sort of acquisition models. 00:17:07.993 --> 00:17:12.853 Did you head to head test them against each other or did you go okay from one 00:17:12.853 --> 00:17:15.523 day to the next you, you changed the most. 00:17:15.568 --> 00:17:16.318 Ben Orenstein: We just swapped. 00:17:16.828 --> 00:17:17.188 Yeah. 00:17:17.488 --> 00:17:20.659 I think there's value in AB testing stuff, but I'm not sure we had the volume to 00:17:20.659 --> 00:17:25.208 like, do like a statistically significant test or really the willingness to like the 00:17:25.208 --> 00:17:28.388 interest, we were sort of like, this, this model has worked for us for a little bit. 00:17:28.418 --> 00:17:31.438 But like, this just seems like a better fit and that might've been foolish in 00:17:31.438 --> 00:17:34.378 retrospect, there are times I think about going back to that thing, that 00:17:34.378 --> 00:17:37.228 model, because, yeah, we got fewer trials, but the conversion rate was so 00:17:37.228 --> 00:17:40.858 high and the engagement was really high and it was like, people felt bought 00:17:40.858 --> 00:17:43.738 in, in a way that signing for free trial does not make you feel bought in. 00:17:44.234 --> 00:17:47.624 And so there's a big benefits and to have like a very open and permissive 00:17:47.654 --> 00:17:49.203 trials, and there are downsides too. 00:17:49.203 --> 00:17:53.333 And so I, I would be interested almost in an AB test between no credit 00:17:53.333 --> 00:17:56.933 card required long free trial versus like, yeah, no, you have to pay us 00:17:56.933 --> 00:17:59.693 a hundred dollars to even, try this thing, like go back to that and just 00:17:59.693 --> 00:18:03.643 see like what does that look like these days as we have more reputation. 00:18:04.143 --> 00:18:06.513 Michele Hansen: Yeah, that would be really, really interesting. 00:18:07.043 --> 00:18:10.373 Mean, so you mentioned that the strength of the Tuple brand and I think something 00:18:10.872 --> 00:18:14.862 else that's probably going on that I'm curious about your thoughts on is, you 00:18:14.862 --> 00:18:18.582 know, you have people who have been using Tuple at their jobs for maybe 00:18:18.612 --> 00:18:20.262 like, you know, years at this point. 00:18:20.862 --> 00:18:22.422 Um, So when did you guys launch? 00:18:22.924 --> 00:18:26.246 Ben Orenstein: Um, Launched, we will be four years old next month, 00:18:26.516 --> 00:18:29.306 but our first eight months were a little more than three years ago. 00:18:29.561 --> 00:18:30.251 Michele Hansen: Is that it 00:18:30.756 --> 00:18:31.086 Ben Orenstein: Yeah. 00:18:31.591 --> 00:18:32.101 Michele Hansen: dude? 00:18:32.600 --> 00:18:38.600 I feel like you like your legends of the indie, like software world, like 00:18:38.630 --> 00:18:43.490 quite frankly have probably, you know, after base camp, like resigned their 00:18:43.490 --> 00:18:45.710 position as the leaders of the movement. 00:18:45.710 --> 00:18:48.050 I feel like it's almost you guys who are leading it and 00:18:48.050 --> 00:18:50.420 you're only like four years old. 00:18:50.420 --> 00:18:52.250 What is this like, 00:18:52.650 --> 00:18:56.820 Ben Orenstein: Uh, Yeah, well, yeah, there was this, there was this event 00:18:56.820 --> 00:18:59.580 where a lot of people started working remotely at that happened a couple of 00:18:59.710 --> 00:19:00.160 Michele Hansen: Oh, yeah. 00:19:00.160 --> 00:19:00.790 That thing. 00:19:00.790 --> 00:19:01.030 Yeah. 00:19:01.030 --> 00:19:02.620 I feel like I vaguely heard about that. 00:19:02.735 --> 00:19:05.225 Ben Orenstein: So you could, you could argue we've had some tailwinds. 00:19:05.490 --> 00:19:06.120 Michele Hansen: So, okay. 00:19:06.120 --> 00:19:09.000 I was going to ask something else, but I want to go in on that for a second. 00:19:09.000 --> 00:19:13.788 So you started out with us, you had this pay us an upfront for a year. 00:19:14.289 --> 00:19:17.109 Period, which was your first eight months. 00:19:17.169 --> 00:19:21.399 And then you shifted to pay us a hundred bucks for a month. 00:19:21.789 --> 00:19:24.429 So then it, so if your first eight months, if we're kind of making a 00:19:24.429 --> 00:19:27.099 timeline here was pay us for a year. 00:19:27.459 --> 00:19:31.886 Then you went to a hundred dollars for a one month unlimited trial. 00:19:31.886 --> 00:19:33.416 How long did that period last. 00:19:34.462 --> 00:19:36.152 Ben Orenstein: uh, Six months, Maybe, 00:19:36.667 --> 00:19:37.147 Michele Hansen: Okay. 00:19:37.267 --> 00:19:43.485 So now we're, we're 14 months in and then you switched to 00:19:43.605 --> 00:19:45.555 free trial credit card required. 00:19:45.555 --> 00:19:46.845 How long did that last? 00:19:47.345 --> 00:19:49.235 Ben Orenstein: A long time a years? 00:19:49.735 --> 00:19:53.992 Michele Hansen: So did that shift around like 20 20 period? 00:19:54.533 --> 00:19:58.613 Ben Orenstein: Uh, No, actually it was, I mean, it was this, it was this year. 00:19:58.643 --> 00:19:58.943 I think it was 00:19:58.943 --> 00:20:00.923 a few months ago or last and last year. 00:20:01.103 --> 00:20:01.373 Yeah. 00:20:01.543 --> 00:20:02.233 Michele Hansen: Oh, oh, okay. 00:20:02.233 --> 00:20:03.103 So super recent. 00:20:03.103 --> 00:20:05.173 Ben Orenstein: That the one where we shifted note to no credit card was, 00:20:05.203 --> 00:20:06.853 yeah, was six, less than six months ago. 00:20:07.498 --> 00:20:08.398 Michele Hansen: Oh, interesting. 00:20:08.899 --> 00:20:09.589 Interesting. 00:20:10.093 --> 00:20:14.107 But, so I wonder if you, if you've had this, like, All of this growth over 00:20:14.107 --> 00:20:17.827 the past couple of, I S I'm still like in shock that it's only four years old. 00:20:17.827 --> 00:20:19.917 That's just, that's just not true. 00:20:19.977 --> 00:20:20.607 Like, I'm sorry. 00:20:20.607 --> 00:20:21.357 I reject that. 00:20:21.857 --> 00:20:25.533 Um, You have people who are moving from one job. 00:20:26.313 --> 00:20:30.093 To another, who probably used Tuple at their previous job. 00:20:30.573 --> 00:20:34.713 And then I feel like we've All had that experience of going to a new job and 00:20:34.743 --> 00:20:40.353 they're not using some like modern, you know, tool that you're used to using. 00:20:40.353 --> 00:20:42.453 And you're like, oh my God, you guys are in the dark ages. 00:20:42.453 --> 00:20:44.103 You aren't using like this thing. 00:20:44.103 --> 00:20:45.483 I can't do my work without it. 00:20:45.533 --> 00:20:48.953 You have to try it and then like selling it within the organization 00:20:49.423 --> 00:20:53.083 when they get like, do you like have, have you heard anecdotes about that? 00:20:54.033 --> 00:20:54.603 Ben Orenstein: All the time. 00:20:55.107 --> 00:20:55.347 Yeah. 00:20:55.377 --> 00:20:56.007 That happens a lot. 00:20:56.103 --> 00:20:56.763 Which is great. 00:20:56.813 --> 00:20:59.753 One nice thing about selling to developers is they are passionate 00:20:59.753 --> 00:21:04.530 about tools and also passionate about sharing them and like arguing for them. 00:21:04.650 --> 00:21:08.340 So yeah, we get, people emailing us, like probably every week maybe 00:21:08.520 --> 00:21:12.420 saying like, oh, I used Tuple at this place and now I'm here and 00:21:12.420 --> 00:21:13.470 I'm trying to get them to adopt it. 00:21:13.500 --> 00:21:15.150 I'm trying to get us to buy some licenses and. 00:21:16.098 --> 00:21:16.728 Michele Hansen: That's awesome. 00:21:16.758 --> 00:21:19.788 And the other thing running under current of that too, is it's not 00:21:19.788 --> 00:21:24.227 just that they are passionate about it, but then company's value their 00:21:24.347 --> 00:21:28.457 developers more than other employees for better or for worse, like making 00:21:28.457 --> 00:21:33.557 the developers efficient is like you, you can't really find any executive 00:21:33.557 --> 00:21:35.987 or VP that would argue against that. 00:21:36.287 --> 00:21:36.647 Right? 00:21:36.647 --> 00:21:39.407 Like it's, it's sort of like, you know, straight in the heart, right. 00:21:39.437 --> 00:21:41.297 Because, oh, well this will make the developers more efficient 00:21:41.297 --> 00:21:42.617 and they're like, sign me up. 00:21:43.117 --> 00:21:48.577 Um, and so you've kind of got these two current's really going for you or 00:21:48.577 --> 00:21:52.961 has probably as Justin Jackson would say wave of you know, of things in 00:21:52.961 --> 00:21:54.911 your favor that lead to adoption of it. 00:21:55.411 --> 00:21:56.221 Ben Orenstein: Yeah, for sure. 00:21:56.731 --> 00:21:59.491 And if you take that and then add on like a viral component where people 00:21:59.491 --> 00:22:03.561 invite each other to it and inviting people makes the monthly price go up, 00:22:04.064 --> 00:22:05.954 it's a, it's a very good business model. 00:22:06.474 --> 00:22:06.954 Michele Hansen: Yeah. 00:22:07.269 --> 00:22:08.259 Ben Orenstein: Has a lot of things going for it. 00:22:08.349 --> 00:22:09.339 Michele Hansen: That sounds pretty sweet. 00:22:09.729 --> 00:22:14.379 So I think we've only hit the first points on your list. 00:22:16.419 --> 00:22:17.229 Let's keep going. 00:22:17.289 --> 00:22:18.069 What do you got next? 00:22:18.569 --> 00:22:18.929 Ben Orenstein: Yeah. 00:22:18.959 --> 00:22:24.015 So I think a big shift that happened as I got more experienced with enterprise sales 00:22:24.555 --> 00:22:28.546 was realizing how much I could say no to. 00:22:29.180 --> 00:22:31.550 Michele Hansen: Ooh, I love this, especially when you have some. 00:22:32.405 --> 00:22:33.035 Ben Orenstein: Yeah. 00:22:33.065 --> 00:22:35.105 And so there's this sort of natural tendency, which is like, 00:22:35.135 --> 00:22:36.485 oh my gosh, I want them to buy it. 00:22:36.935 --> 00:22:38.165 I need to agree to everything. 00:22:38.702 --> 00:22:42.422 And what it turns out is like procurement and legal and everyone 00:22:42.422 --> 00:22:45.302 will sort of make, will make requests of you that are not deal breakers. 00:22:45.842 --> 00:22:48.272 And so it's natural to assume that everything is a deal breaker. 00:22:48.272 --> 00:22:51.092 And if you don't do every single thing they ask of you, it's not going to happen. 00:22:51.572 --> 00:22:55.455 And in reality, it's more like it's probably like 30% 00:22:55.455 --> 00:22:56.265 of them are deal breakers. 00:22:56.760 --> 00:22:59.010 You could probably more often than not reject the request 00:22:59.010 --> 00:22:59.910 and still get the deal done. 00:23:00.410 --> 00:23:06.187 And so the first one lesson is lose some deals or like get 00:23:06.187 --> 00:23:08.377 some deals to close, to, to loss. 00:23:08.737 --> 00:23:12.737 So like, one trick that I would do is, people be like, oh, Hey, can 00:23:12.737 --> 00:23:13.997 you fill out the security audit? 00:23:14.494 --> 00:23:15.454 And I was just classic one. 00:23:15.454 --> 00:23:15.694 Right. 00:23:15.754 --> 00:23:19.964 And I would say, sorry, no, I do have this detailed page. 00:23:20.894 --> 00:23:25.127 That has um, lots of information about our security practices. 00:23:25.577 --> 00:23:28.457 If you have any questions that aren't answered here, feel free to 00:23:28.457 --> 00:23:30.167 follow up and I'll update the page. 00:23:30.667 --> 00:23:35.397 And that like got rid of like 60, 70% of requests for like custom security audits. 00:23:35.607 --> 00:23:37.947 Most of the time they would go, oh yeah, yeah. 00:23:38.127 --> 00:23:39.027 People would say, oh yeah. 00:23:39.057 --> 00:23:39.297 Okay. 00:23:39.327 --> 00:23:39.957 I think that'll work. 00:23:39.957 --> 00:23:40.227 Hold on. 00:23:40.257 --> 00:23:42.057 And like someone would sign off on it and it'll be okay. 00:23:42.564 --> 00:23:45.184 When a big company buys a piece of software, there's this giant, 00:23:46.089 --> 00:23:48.549 that they have created over the years, so they don't get burned. 00:23:48.549 --> 00:23:50.949 So they like us and like that their legal department makes them do that. 00:23:50.949 --> 00:23:54.519 Procurement makes them do their, all these items on this thing, like security 00:23:54.519 --> 00:24:00.217 audits terms of service, custom red lines in things, payment terms, background 00:24:00.217 --> 00:24:02.617 checks for employees, pilots demos. 00:24:03.067 --> 00:24:03.817 There's this giant check. 00:24:04.422 --> 00:24:05.742 Most of them are not critical. 00:24:06.162 --> 00:24:07.722 I would say a lot of them are not critical. 00:24:08.052 --> 00:24:11.912 And so if you just do everything to ask you, it'll, it's, the smoothest 00:24:11.912 --> 00:24:15.242 version is the easiest way to get them to just, like, get through the process, 00:24:15.482 --> 00:24:17.012 but it's kind of hell on your side. 00:24:17.372 --> 00:24:19.832 And like, none of this stuff is as good or as useful as working on 00:24:19.832 --> 00:24:22.532 your product and actually making it better or talking to more customers. 00:24:23.036 --> 00:24:26.839 And so, I would recommend people say, like, say no to things and 00:24:26.839 --> 00:24:28.059 then ask, is that a deal breaker? 00:24:28.559 --> 00:24:31.559 ' cause, you could just ask like that, like, oh, can we get a 00:24:31.559 --> 00:24:33.269 volume discount on the whatever? 00:24:33.599 --> 00:24:34.679 And I'm like, oh, sorry. 00:24:34.679 --> 00:24:37.019 Like, We don't offer discounts until this many seats. 00:24:37.069 --> 00:24:38.179 Let me know if that's a deal breaker. 00:24:38.429 --> 00:24:40.479 You're just sort of, you're throwing it at them and say like, Hey, let me like, 00:24:40.509 --> 00:24:42.129 tell me if this is going to sink the deal. 00:24:42.339 --> 00:24:44.349 And if it's not going to sync the deal, no, you can't have it. 00:24:44.876 --> 00:24:47.546 It lets you gather Intel and over time you'll sort of learn what things tend to 00:24:47.546 --> 00:24:48.806 be deal-breakers and what things don't. 00:24:49.309 --> 00:24:52.932 Michele Hansen: So let's demystify this a little bit especially for founders 00:24:52.932 --> 00:24:58.212 who don't have a ton of experience with sales or big enterprises with 00:24:58.212 --> 00:25:00.462 giant checklists, you said about. 00:25:00.962 --> 00:25:05.912 30% of those things are actually required and you can push back on 70% of them. 00:25:06.392 --> 00:25:09.692 What are those examples of things that you push back on? 00:25:10.194 --> 00:25:12.234 Ben Orenstein: I actually made a list of things I've said no to, 00:25:12.234 --> 00:25:13.434 and still gotten a deal done. 00:25:15.574 --> 00:25:16.294 Michele Hansen: This is going to be good. 00:25:16.849 --> 00:25:18.619 Ben Orenstein: Yeah, this discounts. 00:25:19.122 --> 00:25:21.162 Procurement is basically always going to ask you for a discount. 00:25:21.462 --> 00:25:22.032 Why not? 00:25:22.677 --> 00:25:25.677 Michele Hansen: So this is, I'm just going to pause you on this list. 00:25:25.677 --> 00:25:30.285 So I heard and I think, I don't know if this is from Patrick McKenzie or somebody 00:25:30.285 --> 00:25:33.615 else the, basically when you're dealing with like giant company procurement 00:25:33.615 --> 00:25:38.354 people, they are basically incentivized to get like something like five to a 10% 00:25:38.354 --> 00:25:41.567 discount on every deal, every renewal. 00:25:41.632 --> 00:25:47.625 And, that can A be a point of um, negotiation where you get extra stuff in 00:25:47.625 --> 00:25:52.445 exchange for that, or if you are already, for example, discounting your annual plan, 00:25:52.455 --> 00:25:56.525 simply updating the invoice to make it clear that there is a discount in it, and 00:25:56.525 --> 00:25:58.205 then you don't have to discount further. 00:25:58.705 --> 00:26:01.345 So it looks like they are hitting their metrics on the. 00:26:01.892 --> 00:26:02.312 Ben Orenstein: Totally. 00:26:02.312 --> 00:26:06.122 Yeah, you can make this easier on yourself by inflating the base price and 00:26:06.122 --> 00:26:09.452 then giving them a fake discount down to whatever actually you want to sell 00:26:09.452 --> 00:26:12.842 it for, and this is kind of like the game that everyone, that a lot of people 00:26:12.842 --> 00:26:15.242 play, Um, but you don't have to play it. 00:26:15.422 --> 00:26:18.062 You could just be like, the price is the price and we don't do discounts, sorry. 00:26:18.422 --> 00:26:21.092 Or you could say like, we offer discounts for purchases above this. 00:26:21.887 --> 00:26:22.337 That's it. 00:26:22.847 --> 00:26:26.297 And it's hard to say, like, if that's one of those things, it's hard to 00:26:26.297 --> 00:26:29.117 say no to, because like you have this vague sense of like, if I don't 00:26:29.117 --> 00:26:31.827 give this person what they want, they're not going to pay me $50,000. 00:26:32.330 --> 00:26:35.450 And I can tell you from experience a lot of the times they still are. 00:26:35.930 --> 00:26:39.304 They, they haven't, there's no cost to them to ask, they will, they 00:26:39.324 --> 00:26:42.134 will almost always ask because it's, it's just pure upside for them. 00:26:42.584 --> 00:26:46.441 But this gets to another one of my points, procurement wants to get the deal. 00:26:46.946 --> 00:26:49.676 Procurement has been asked by engineering to buy something. 00:26:50.126 --> 00:26:53.336 Engineering has more social capital in the company than procurement 00:26:53.336 --> 00:26:56.366 does, unless you are dealing with a very dysfunctional organization. 00:26:56.876 --> 00:27:00.880 So your average, bottom of the org chart, you know, procurement 00:27:00.880 --> 00:27:06.063 specialist is not going to want to go to the VP of engineering and say, I 00:27:06.063 --> 00:27:08.703 didn't buy that tool you asked for it because they wouldn't give me a 10%. 00:27:09.308 --> 00:27:09.578 Michele Hansen: Right. 00:27:09.578 --> 00:27:10.568 That's not going to happen. 00:27:10.983 --> 00:27:11.343 Ben Orenstein: Right. 00:27:11.673 --> 00:27:13.533 And so if they say, can I have a 10% discount? 00:27:13.533 --> 00:27:17.103 And you say, no, they're not going to walk away from the deal almost ever. 00:27:17.603 --> 00:27:20.573 Michele Hansen: And especially if it's a product that they have been using for two, 00:27:20.573 --> 00:27:25.163 three years now, that is well integrated into the engineering pipeline or 00:27:25.518 --> 00:27:26.028 Ben Orenstein: Oh yeah, 00:27:26.453 --> 00:27:28.733 Michele Hansen: Like they're going to ask, cause they're incentivized to 00:27:29.088 --> 00:27:29.478 Ben Orenstein: yeah, 00:27:29.658 --> 00:27:30.018 yeah, 00:27:30.473 --> 00:27:32.873 Michele Hansen: but it's not going to tank the renewal or the. 00:27:33.619 --> 00:27:36.469 Ben Orenstein: I mean, most of the time, if it turns out your product is not 00:27:36.469 --> 00:27:40.213 as useful as they thought it was going to be, and engineering has said, yeah, 00:27:40.213 --> 00:27:41.563 we'd like it, but it's not critical. 00:27:41.593 --> 00:27:42.973 Well, now you might need to discount. 00:27:43.043 --> 00:27:45.433 It depends a lot on what the actual situation is, right? 00:27:45.433 --> 00:27:49.813 Like if, oh, we use it occasionally, we like it versus I don't, we get this done. 00:27:49.836 --> 00:27:52.086 We want this, this is, you know, please renew this, you know, 00:27:52.583 --> 00:27:54.683 signs, Marriott, VP of engineering. 00:27:54.683 --> 00:27:57.303 Like there's a difference depending on what the context is for sure. 00:27:57.723 --> 00:27:57.983 But. 00:27:58.483 --> 00:28:02.383 If you're not, if you're not occasionally sinking a deal or nearly 00:28:02.383 --> 00:28:04.783 sinking a deal, you don't actually know where the boundaries are. 00:28:04.783 --> 00:28:05.623 Like you're not going to learn. 00:28:05.623 --> 00:28:06.223 What's critical. 00:28:06.223 --> 00:28:08.473 And like what actually are deal breakers and what are 00:28:08.473 --> 00:28:09.453 things they're just asking for? 00:28:09.473 --> 00:28:10.753 Because they might as well. 00:28:11.353 --> 00:28:14.293 Michele Hansen: I mean, this is the equivalent of, you know, being in a 00:28:14.323 --> 00:28:18.343 sort of traditional marketplace and you are, you know, this, I mean, this is 00:28:18.343 --> 00:28:20.083 effectively like bargaining at this point. 00:28:20.413 --> 00:28:21.233 And then you just walk. 00:28:21.844 --> 00:28:22.234 Ben Orenstein: Yeah. 00:28:22.301 --> 00:28:27.621 And it's just like, as, as someone new to sales, you will tend to, this advice is 00:28:27.621 --> 00:28:30.021 like targeted towards people that kind of becoming, like getting into this, like, 00:28:30.021 --> 00:28:33.291 you know, probably engineers who are sort of forced reluctantly into sales. 00:28:33.711 --> 00:28:36.591 And I will say that you are, you're used to a world where if someone asks you to 00:28:36.591 --> 00:28:37.671 do a thing, you should probably do this. 00:28:38.276 --> 00:28:41.426 And sales is just like, everything is negotiable. 00:28:41.696 --> 00:28:44.906 Your default mental like map is probably kind of wrong. 00:28:45.146 --> 00:28:47.626 And so I would encourage you to correct in a slightly different direction. 00:28:47.626 --> 00:28:50.056 So here's some more of the things I've said no to where the deals still got 00:28:50.056 --> 00:28:53.476 done discounts, active user pricing, like only charged me for like the 00:28:53.476 --> 00:28:57.819 number of users I'm using, filling out a custom security audit, doing background 00:28:57.819 --> 00:29:03.909 checks on our employees, a free pilot uh, product changes, a custom demo, 00:29:04.749 --> 00:29:08.639 scheduling a call at all, like talking to something, or selling through a reseller. 00:29:09.139 --> 00:29:09.799 Michele Hansen: Interesting. 00:29:10.302 --> 00:29:13.542 I'm curious, what are things that you have said no to that were a deal? 00:29:14.602 --> 00:29:16.252 Ben Orenstein: Procurement generally wants to get the deal done. 00:29:16.582 --> 00:29:17.662 So sometimes it's price. 00:29:17.722 --> 00:29:20.302 Sometimes you ask for a thing and you say no, and they say, 00:29:20.322 --> 00:29:21.492 we can't, do it at this price. 00:29:21.762 --> 00:29:25.845 So occasionally price becomes the deal breaker, but it's actually, while 00:29:25.845 --> 00:29:29.585 procurement wants to get the deal done, legal doesn't care as much, legal 00:29:29.615 --> 00:29:33.932 has a weird place in the thing where it's like because legal is protecting 00:29:33.932 --> 00:29:38.222 the legal interests of the company, they have a bit more social capital. 00:29:38.702 --> 00:29:42.452 Um, Are more able to sink a deal and are less concerned with 00:29:42.452 --> 00:29:43.862 pissing off the VP of engineering. 00:29:44.365 --> 00:29:49.272 And so if legal says, you have to have this claim, this line in here 00:29:49.272 --> 00:29:51.814 that says you're like absolving us of liability in this situation. 00:29:52.319 --> 00:29:53.969 Uh, That can be a deal breaker. 00:29:53.999 --> 00:29:57.719 Like if you don't, agree to the legal red lines, and this also is a negotiation, 00:29:57.719 --> 00:30:00.029 like there's some things it's, the same thing where some are going to 00:30:00.029 --> 00:30:01.049 be deal breakers and some are not. 00:30:01.549 --> 00:30:04.639 But I would say you're more likely to bump into stuff where they'll just go. 00:30:04.729 --> 00:30:05.149 Yes. 00:30:05.149 --> 00:30:05.379 All right. 00:30:05.379 --> 00:30:07.579 This is required for us because we don't sign any contracts 00:30:07.579 --> 00:30:08.629 that don't have this clause. 00:30:09.132 --> 00:30:12.122 Um, you're, You're going to bump it with them in the negotiation of the contract. 00:30:13.516 --> 00:30:13.726 Michele Hansen: Yeah. 00:30:13.906 --> 00:30:18.111 And speaking of negotiation, I'm reminded of something that I often think of, 00:30:18.141 --> 00:30:22.721 which is that you end up in cases, especially in, I guess, organizations 00:30:22.721 --> 00:30:27.628 with not tons of process, but there's, there's still procurement and legal 00:30:27.628 --> 00:30:32.778 and everything involved where people just want to have an edit on something. 00:30:32.778 --> 00:30:34.488 Like they feel like they're supposed to negotiate. 00:30:34.488 --> 00:30:36.318 They feel like they're supposed to bargain in some way. 00:30:36.798 --> 00:30:39.678 Um, It reminds me of, you know uh, a designer, friend of mine. 00:30:39.678 --> 00:30:42.408 And There's a word of that she talked about how, when she would send designs 00:30:42.408 --> 00:30:46.518 to a client, she would intentionally put something, you know, in a button 00:30:46.518 --> 00:30:49.578 in like bright orange, just so the client had something to correct. 00:30:50.074 --> 00:30:53.044 And I feel like very often you mentioned invoicing. 00:30:54.049 --> 00:30:57.349 I feel like invoicing terms is that one, like if I get a contract back 00:30:57.349 --> 00:31:02.148 that only has one edit, chances are it's changing invoicing terms from 00:31:02.148 --> 00:31:06.798 30 days to 45 days, or like, there's just like these like small things that 00:31:06.798 --> 00:31:09.818 people will always want to talk about. 00:31:09.848 --> 00:31:13.478 But then as we kind of mentioned before, like the role of leverage 00:31:13.478 --> 00:31:17.558 in this and how you can play these, these things off of one another as 00:31:18.161 --> 00:31:22.514 Ben Orenstein: So that thing of including some sort of request or item that 00:31:22.514 --> 00:31:26.024 you know is going to get rejected is something you can do in contracts as well. 00:31:26.528 --> 00:31:31.118 So whenever possible, if you can, I recommend starting with your own 00:31:31.118 --> 00:31:33.338 agreement, like that's one question that will come up as like who's paper, 00:31:33.398 --> 00:31:35.678 are we gonna use, like, are you gonna start from your agreement and we'll read 00:31:35.678 --> 00:31:38.798 liner or the other way around, you don't have a legal team, most likely, so I 00:31:38.798 --> 00:31:41.918 recommend asking to start with yours and have it sent over to their legal team. 00:31:42.428 --> 00:31:45.248 You can use Y Combinator, SaaS agreement, it's quite good. 00:31:45.693 --> 00:31:46.083 Michele Hansen: So good. 00:31:46.113 --> 00:31:49.533 We, we use that for years before we actually got our, got our own. 00:31:50.281 --> 00:31:50.521 Ben Orenstein: Yep. 00:31:50.701 --> 00:31:52.861 So yeah, I would start from that and then just edit it for your needs. 00:31:52.861 --> 00:31:58.662 But then I would add a bunch of really, really friendly clauses to you, so like 00:31:58.662 --> 00:32:02.112 you agree to that we can do a case study and we can mention your name publicly 00:32:02.412 --> 00:32:05.382 and we can put your logo on the website and you'll do an interview with us. 00:32:06.147 --> 00:32:10.647 Uh, You agree that every year your price is going to go up automatically by 10%, 00:32:10.887 --> 00:32:12.957 that your payment terms are 15 days. 00:32:13.197 --> 00:32:16.827 You can start with this stuff that no one is going to accept knowing 00:32:16.827 --> 00:32:20.067 they're going to redline it and you give them that thing that like, oh, 00:32:20.067 --> 00:32:21.027 they've done their due diligence. 00:32:21.027 --> 00:32:21.967 They reviewed the contract. 00:32:22.017 --> 00:32:24.997 You can put these things in there that are like long shots. 00:32:25.497 --> 00:32:26.817 That you're expecting them to reject. 00:32:26.847 --> 00:32:29.787 And it gives them that sense of like, okay, I I've done good lawyerly things. 00:32:29.787 --> 00:32:33.297 I've protected the company's interests by spotting these things and removing them. 00:32:33.807 --> 00:32:36.187 And then some of them will get through, sometimes I put clauses in 00:32:36.187 --> 00:32:37.897 there that are like at their level. 00:32:38.107 --> 00:32:38.827 They, they agree to it. 00:32:38.827 --> 00:32:39.847 I'm like, oh, wow, nice. 00:32:39.877 --> 00:32:40.117 Okay. 00:32:40.147 --> 00:32:41.167 That's that's great for us. 00:32:42.490 --> 00:32:46.826 Michele Hansen: So I agree on that, that logo and you know, mentioned in 00:32:46.826 --> 00:32:51.476 case study is a, is a really common one that is sort of a awesome if 00:32:51.476 --> 00:32:56.306 it gets through, but, oh, well, if not, you mentioned invoicing terms. 00:32:56.813 --> 00:32:58.353 You know, there was like three of them there. 00:32:58.353 --> 00:33:01.958 And I'm curious, are there any more in there that you would suggest people 00:33:01.988 --> 00:33:06.924 adding on to either their contract or probably a good point to note if you're 00:33:06.924 --> 00:33:11.806 not doing contracts with people at the very least having a terms of service 00:33:11.806 --> 00:33:14.386 that they are checking off, that they agree to, but more often, like an 00:33:14.386 --> 00:33:16.476 actual contract, especially for bigger. 00:33:17.366 --> 00:33:17.786 I have one. 00:33:18.236 --> 00:33:21.196 Um, And using you using that Y Combinator agreement. 00:33:21.196 --> 00:33:23.456 So like, what are those other things that you throw in? 00:33:24.207 --> 00:33:26.457 Ben Orenstein: Um, I think I've touched on the main ones. 00:33:26.457 --> 00:33:30.087 I usually start, I think another big one is the limitation of liability. 00:33:30.387 --> 00:33:33.687 This is like, I think that gets fought over quite a bit, and legal departments 00:33:33.687 --> 00:33:37.307 are very much on the lookout for is, who is liable when, and for what. 00:33:38.057 --> 00:33:40.787 And who is going, like give each other protection and defend each 00:33:40.787 --> 00:33:41.957 other from, various things. 00:33:42.347 --> 00:33:46.957 And so the Y Combinator agreement has, I believe a very startup friendly take on 00:33:46.957 --> 00:33:52.717 this, which will almost, almost always get edited down or rejected by the other side. 00:33:53.217 --> 00:33:56.706 And, so I think that's a good one to leave in there as just like a red 00:33:56.706 --> 00:33:59.526 herring almost, or just, you know, give, the legal team something to do. 00:34:00.036 --> 00:34:02.496 Um, But yeah, the other one's like mostly around publicity and 00:34:02.496 --> 00:34:03.756 marketing and mentioning their name. 00:34:03.847 --> 00:34:07.597 And then like an escalator clause, like, Hey, this price like this agreement auto 00:34:07.597 --> 00:34:10.987 renews, unless you give us 90 days notice. 00:34:11.047 --> 00:34:14.257 And when it does the price automatically increases by this amount is 00:34:14.257 --> 00:34:15.157 another good one to throw in there. 00:34:15.657 --> 00:34:18.387 Michele Hansen: Have you played those clauses against each other. 00:34:18.387 --> 00:34:23.900 For example, someone is asking for, let's say, they're asking for a discount or 00:34:23.930 --> 00:34:26.600 they are asking for, let's say better. 00:34:26.660 --> 00:34:29.240 You know, they, they don't want to do 30 day payments. 00:34:29.240 --> 00:34:32.570 They want to do 60 day payment terms and then you play that 00:34:32.570 --> 00:34:33.950 off of, okay, we'll do that. 00:34:33.980 --> 00:34:35.300 If we can use your logo on it. 00:34:35.902 --> 00:34:36.322 Ben Orenstein: oh, sure. 00:34:36.382 --> 00:34:37.042 Yeah, yeah, totally. 00:34:37.545 --> 00:34:37.755 Yeah. 00:34:37.755 --> 00:34:38.235 You can try. 00:34:38.235 --> 00:34:40.065 I, that does not worked that well for me though, honestly. 00:34:40.157 --> 00:34:41.267 A lot of the times. 00:34:41.767 --> 00:34:45.007 You're dealing with legal when you're negotiating the contract, but like 00:34:45.037 --> 00:34:49.791 determining who can use the company's logo is like a marketing thing or like 00:34:49.791 --> 00:34:54.264 a PR or comms thing, and so sometimes they're like, yeah, we can't offer this, 00:34:54.264 --> 00:34:57.204 you'll have to negotiate this separately with our PR department or something. 00:34:57.707 --> 00:35:00.827 And so I haven't had a ton of success being like, we'll give you this, if 00:35:00.827 --> 00:35:03.967 you give us this sort of thing, I think there's just like the slight. 00:35:04.742 --> 00:35:07.982 Human tendency of being like, well, they asked for 10 things. 00:35:07.982 --> 00:35:09.752 If we said no to all 10 were kind of jerks. 00:35:09.752 --> 00:35:11.582 So like what's a couple that we can let slide. 00:35:12.082 --> 00:35:13.072 Michele Hansen: Yeah, I think so. 00:35:13.072 --> 00:35:17.019 So that, that element of like social capital and like who has the 00:35:17.019 --> 00:35:22.616 capital in the company and legal, it might be stronger than the 00:35:22.616 --> 00:35:23.996 communications team, for example. 00:35:24.594 --> 00:35:24.954 Ben Orenstein: True. 00:35:24.984 --> 00:35:25.374 Yeah. 00:35:25.463 --> 00:35:27.983 And again, it also comes down to like, how badly does the company 00:35:27.983 --> 00:35:28.673 want to get the deal done? 00:35:28.723 --> 00:35:30.883 And How badly do you want that thing? 00:35:31.383 --> 00:35:33.963 Are you going to walk, if they won't let you use their logo? 00:35:34.466 --> 00:35:37.316 Because if you're going to walk, if, if they won't and they really 00:35:37.316 --> 00:35:40.996 want the software, I bet you can get the logo, but if they kind of 00:35:40.996 --> 00:35:43.660 want the software and you're not going to walk, it's a lot harder. 00:35:44.205 --> 00:35:46.425 Michele Hansen: So the thing I'm curious about your experience with it, 00:35:46.425 --> 00:35:49.051 that I've experienced is insurance. 00:35:49.791 --> 00:35:55.371 This often feels like something in contracts that feels pretty set in stone, 00:35:55.371 --> 00:35:57.951 that it says, you know, it's pretty common for there to be like, you know, five 00:35:57.951 --> 00:35:59.421 different kinds of insurance required. 00:35:59.461 --> 00:36:01.821 It says you need to have, you know, general liability. 00:36:01.821 --> 00:36:05.031 You might need to have umbrella, you know, umbrella liability, excess coverage. 00:36:05.031 --> 00:36:09.939 You might need to have employers comp, you know, workers' comp like automotive 00:36:09.969 --> 00:36:15.542 like or um, I mean, especially, you know, in software having cyber uh, errors and 00:36:15.542 --> 00:36:20.921 omissions and, you know, a cyber policy on that and something that I have felt, 00:36:21.231 --> 00:36:24.444 I guess I used to feel afraid about in the past was upping your insurance 00:36:24.444 --> 00:36:28.464 coverage can be really expensive and like, and it looks very like, this 00:36:28.464 --> 00:36:30.324 is what it is in the contract, right. 00:36:30.324 --> 00:36:32.124 When you get, or those edits back from them. 00:36:32.627 --> 00:36:36.109 But you can just reply and say like our policy is, you know, 1 00:36:36.109 --> 00:36:37.414 million, 2 million, 3 million. 00:36:38.434 --> 00:36:39.574 We don't carry this insurance. 00:36:39.574 --> 00:36:42.244 We don't carry automotive insurance because we don't have any corporate 00:36:42.244 --> 00:36:47.947 vehicles , and more often than not, I have found that to be acceptable, like, or I 00:36:47.947 --> 00:36:52.957 say something to the effect of, you know, if X limit on this is a hard requirement. 00:36:52.998 --> 00:36:57.038 We are happy to discuss that with our insurance company, and add the 00:36:57.038 --> 00:36:58.508 cost of that additional insurance. 00:36:58.568 --> 00:36:59.618 onto this contract. 00:36:59.963 --> 00:37:00.143 Ben Orenstein: Yeah. 00:37:00.745 --> 00:37:02.245 Michele Hansen: And then pretty much then they're like, oh no, no, 00:37:02.996 --> 00:37:03.236 Ben Orenstein: Yeah. 00:37:03.506 --> 00:37:03.746 Yeah. 00:37:03.846 --> 00:37:06.776 I've also experienced them sort of folding on insurance requirements. 00:37:06.996 --> 00:37:09.356 It's kind of like a wishlist more than hard. 00:37:09.456 --> 00:37:11.466 Do they really care if it's 5 million versus 4 million? 00:37:11.496 --> 00:37:12.696 And I probably not, not really. 00:37:13.146 --> 00:37:16.866 Although I will say it's a very easy requirement to hit. 00:37:17.296 --> 00:37:20.416 We use founder shield and we just like tell them what we want and they 00:37:20.416 --> 00:37:23.680 send us like a group, like I got a collective policy kind of thing. 00:37:24.350 --> 00:37:26.540 It was not very much work and it was not actually very expensive 00:37:26.540 --> 00:37:27.980 for the limits that we needed. 00:37:28.400 --> 00:37:32.803 And so this was kind of like a one day ish task to like get a bunch 00:37:32.803 --> 00:37:36.313 of insurance that let us say yes, we have this on, on contracts. 00:37:36.783 --> 00:37:37.183 Michele Hansen: Uh, agreed. 00:37:37.203 --> 00:37:39.333 We actually use founder's summit ourselves as well. 00:37:40.613 --> 00:37:41.453 Ben Orenstein: that founder shield. 00:37:41.663 --> 00:37:41.903 Yep. 00:37:42.323 --> 00:37:42.833 Yeah, they're good. 00:37:43.138 --> 00:37:44.428 Michele Hansen: all the things named founder. 00:37:44.477 --> 00:37:45.977 So what else is on this list? 00:37:46.482 --> 00:37:48.152 Ben Orenstein: I mean a million things I'm going to give. 00:37:48.654 --> 00:37:51.114 I'm going to give some, some terrible legal advice here. 00:37:51.614 --> 00:37:52.994 Michele Hansen: this is, not legal advice. 00:37:53.274 --> 00:37:54.324 Ben Orenstein: this is not legal advice. 00:37:54.324 --> 00:37:54.564 This 00:37:54.794 --> 00:37:55.664 Michele Hansen: Consult your lawyer. 00:37:56.154 --> 00:37:56.844 Ben Orenstein: This is advice. 00:37:56.844 --> 00:37:59.544 that I think is probably pretty good, 99% of the time. 00:37:59.544 --> 00:38:01.794 And then 1% of the time will be catastrophic for you. 00:38:02.244 --> 00:38:07.245 And so just, just heads up, which is a contract that you signed with another 00:38:07.245 --> 00:38:09.615 company is enforceable in court. 00:38:10.890 --> 00:38:16.220 You have to imagine, like, will we get sued if if this thing is going to 00:38:16.220 --> 00:38:20.610 be enforced by a judge in a courtroom with lawyers involved that are 00:38:20.610 --> 00:38:22.340 making thousands of dollars per hour. 00:38:22.838 --> 00:38:27.510 And so sometimes you look over a list of things in a contract and you go, is 00:38:27.510 --> 00:38:31.950 it likely that if we slipped on this thing or like had a million dollars 00:38:31.950 --> 00:38:36.420 less coverage on this thing that we are going to get dragged into, and sued for 00:38:36.420 --> 00:38:38.460 breach of contract and you should ask. 00:38:38.700 --> 00:38:41.550 And the answer is probably not most of the time. 00:38:42.060 --> 00:38:46.130 Um, So I think this is my like cavalier startup attitude, which is like, if 00:38:46.130 --> 00:38:50.144 you're trying to get a business off the ground and like, I wouldn't worry it, 00:38:50.144 --> 00:38:52.504 like, the reason you die is because you. 00:38:53.252 --> 00:38:58.262 Uh, Miss a term in their terms of service and did not technically comply with it. 00:38:58.592 --> 00:39:02.132 And then they found out and took you to court and sued you and 00:39:02.132 --> 00:39:03.152 broke your company that way. 00:39:03.655 --> 00:39:07.165 I think the number of startups that have died that way, probably very, very small. 00:39:07.615 --> 00:39:10.602 And so 99% of the time I wouldn't worry about it quite as much. 00:39:10.602 --> 00:39:14.117 Like, every single beautiful line in the contract. 00:39:14.457 --> 00:39:15.747 This is not how we do it now. 00:39:15.777 --> 00:39:16.857 Now we're like a legit company. 00:39:16.857 --> 00:39:17.877 We have a legit lawyer. 00:39:18.207 --> 00:39:19.317 We like do all the right things. 00:39:19.317 --> 00:39:21.507 We push back where we need to, we follow all these. 00:39:22.112 --> 00:39:24.982 But if you're like a brand, if you're a two person company trying 00:39:24.982 --> 00:39:28.612 to sell this tool to an enterprise and they're like, you, you need to 00:39:28.612 --> 00:39:30.112 do this really weird esoteric thing. 00:39:30.112 --> 00:39:35.255 You need to conduct a uh, training every so often on making sure that 00:39:35.255 --> 00:39:40.435 your supply chain is not using forced human labor and you go sure. 00:39:40.465 --> 00:39:41.815 Yeah, we'll do that. 00:39:41.815 --> 00:39:43.988 And then, like you have a two minute conversation with your co-founder 00:39:43.994 --> 00:39:47.204 on a calendar invite and say yes, checked, compliance, done. 00:39:47.290 --> 00:39:48.010 That might be okay. 00:39:48.510 --> 00:39:51.660 Michele Hansen: I think it's also too important to note that like, if there 00:39:51.660 --> 00:39:57.510 is a conflict about something in the contract, like everybody wants to avoid 00:39:57.840 --> 00:40:03.000 court because as you said, it's extremely expensive to the point where like a lot of 00:40:03.120 --> 00:40:07.502 big enterprise contracts like that, they said, it has to go into arbitration, like. 00:40:08.510 --> 00:40:12.180 You start with negotiating, which is talking about the problem and 00:40:12.180 --> 00:40:13.920 finding a solution to it there. 00:40:14.190 --> 00:40:17.550 And then if you can't do it, then you go into arbitration, which is, you 00:40:17.550 --> 00:40:19.705 know, you have or mediation rather. 00:40:19.775 --> 00:40:24.035 And then only after you have failed negotiation, you have failed mediation, 00:40:24.485 --> 00:40:26.645 then do you go into the legal system? 00:40:26.885 --> 00:40:27.185 Right? 00:40:27.185 --> 00:40:31.535 And so like, if there was some massive problem, like it is unlikely. 00:40:32.236 --> 00:40:34.516 That, you know, sort of knock on wood, right? 00:40:34.546 --> 00:40:38.596 That it ends up in court and hopefully you have built a relationship 00:40:38.596 --> 00:40:41.956 with them and they trust that you are a well-intentioned person who 00:40:41.956 --> 00:40:43.426 may be just screwed something up. 00:40:43.456 --> 00:40:48.540 And there is some other way to solve this rather than a courtroom. 00:40:49.038 --> 00:40:50.172 Ben Orenstein: Yeah, exactly. 00:40:50.200 --> 00:40:53.260 And that this advice is like coming from someone that has not been sued. 00:40:53.710 --> 00:40:54.100 So 00:40:54.395 --> 00:40:55.025 Michele Hansen: Yes, I guess I 00:40:55.270 --> 00:40:57.490 Ben Orenstein: I imagine some, some number of years I will look back 00:40:57.490 --> 00:40:58.780 on this conversation and go, wow, 00:40:59.355 --> 00:41:01.545 Michele Hansen: We did get a cease and desist list at once. 00:41:01.545 --> 00:41:01.815 That was. 00:41:01.815 --> 00:41:05.805 probably the closest we ever for a side project yet a mobile app 00:41:05.850 --> 00:41:09.600 Ben Orenstein: So, anyway, I guess my, I guess my, you probably won't get sued 00:41:09.630 --> 00:41:12.930 is my uh, my high-level advice and do with that information of what you will, 00:41:13.430 --> 00:41:13.670 Michele Hansen: cool. 00:41:13.670 --> 00:41:14.240 What's next? 00:41:14.752 --> 00:41:16.012 Ben Orenstein: um, Let's talk about pricing. 00:41:16.032 --> 00:41:18.354 I learned a weird thing when I started doing these deals, which 00:41:18.354 --> 00:41:21.264 is that a hundred thousand dollars a year is not a lot of money. 00:41:21.764 --> 00:41:22.784 Michele Hansen: Can you break that down? 00:41:23.329 --> 00:41:23.719 Ben Orenstein: Yes. 00:41:24.529 --> 00:41:28.519 So as a person, a hundred thousand dollars a year is a lot of money. 00:41:29.016 --> 00:41:32.916 Like you're uh, an individual, you have a job, you make a 00:41:32.916 --> 00:41:33.936 hundred thousand dollars a year. 00:41:33.966 --> 00:41:34.746 You make a lot of money. 00:41:34.926 --> 00:41:35.616 You're doing great. 00:41:36.119 --> 00:41:37.889 If I was like, Hey, you need to pay me an extra a hundred 00:41:37.889 --> 00:41:38.669 thousand dollars this year. 00:41:38.669 --> 00:41:39.299 You say what? 00:41:39.419 --> 00:41:39.899 Absolutely. 00:41:39.899 --> 00:41:43.349 There's no way I can pay you a hundred extra $200,000 this year, a hundred grand 00:41:43.349 --> 00:41:45.719 a year as a person is a lot of money. 00:41:46.219 --> 00:41:49.529 A hundred thousand dollars a year to a company of a decent 00:41:49.529 --> 00:41:51.149 size, not a lot of money. 00:41:51.663 --> 00:41:55.263 So like, it is very reasonable to give an invoice to a company that 00:41:55.263 --> 00:41:58.263 says I would like you to pay me a hundred thousand dollars a year and 00:41:58.263 --> 00:42:02.193 have them not even blink because it is less than their lunch budget. 00:42:02.636 --> 00:42:10.063 You Have to really shift your mentality around money and dollars and value when 00:42:10.063 --> 00:42:13.513 you start dealing with organizations that are bigger than 20 people, let's say. 00:42:14.013 --> 00:42:16.233 Michele Hansen: You mentioned a lot of this advice in the beginning is 00:42:16.233 --> 00:42:19.473 stuff that will break somebody's brain, especially if they come into 00:42:19.473 --> 00:42:24.723 this with an engineering mindset where everything makes sense and is logical. 00:42:25.173 --> 00:42:32.616 And this is absolutely not logical on the surface, but then it actually is. 00:42:32.616 --> 00:42:35.856 When you think about all of the work that you not only put into serving 00:42:35.856 --> 00:42:41.151 these customers, but also this all of this gymnastics that goes into 00:42:41.151 --> 00:42:45.441 actually delivering the product to them and all of these other pieces of. 00:42:47.238 --> 00:42:48.978 Ben Orenstein: I would almost phrase it differently, actually, which is 00:42:48.978 --> 00:42:54.132 that a hundred thousand dollars a year is just, is something that if a 00:42:54.132 --> 00:42:57.896 company has a hundred engineers paying a hundred grand a year is something 00:42:57.896 --> 00:43:01.586 that they would do to solve a problem with like medium below annoyance. 00:43:01.846 --> 00:43:05.326 They are like a hundred percent company is solving. 00:43:06.033 --> 00:43:11.433 It is throwing much, much, much more money than that at thing like not huge 00:43:11.463 --> 00:43:14.253 problems, not even the most critical problems of the business or the most 00:43:14.253 --> 00:43:15.693 important expenses in the business. 00:43:15.993 --> 00:43:19.293 I think it's, it's kind of like useful to think about salaries. 00:43:19.293 --> 00:43:21.987 For example, just to kind of give you a data point. 00:43:22.480 --> 00:43:25.300 If there's a hundred engineers in the company, that company is 00:43:25.300 --> 00:43:27.460 paying $20 million a year in. 00:43:28.465 --> 00:43:31.578 Probably more like $20 million a year. 00:43:31.978 --> 00:43:36.552 You could be 0.005 of that and charge a hundred grand a year. 00:43:37.032 --> 00:43:40.182 And it's like, it's just, it's just not a big deal. 00:43:40.182 --> 00:43:42.102 Like They're the numbers they're looking at, and the numbers are used 00:43:42.102 --> 00:43:45.012 to dealing with, especially because now they have a procurement department, a 00:43:45.012 --> 00:43:48.522 hundred grand a year standard standard software cost, a hundred grand a year. 00:43:48.552 --> 00:43:49.032 Absolutely. 00:43:49.122 --> 00:43:49.662 All day long. 00:43:50.165 --> 00:43:53.305 Michele Hansen: And, you know, the thing to think about with that is that they 00:43:53.305 --> 00:43:58.602 have that $20 million investment in their engineers, and you know, speaking of 00:43:58.602 --> 00:44:04.397 like to Tuple, for example, to spend a hundred thousand dollars to a much higher 00:44:04.397 --> 00:44:08.297 return on that $20 million investment. 00:44:08.377 --> 00:44:13.597 It might be a very small percent of that total cost, but even if they get 00:44:13.597 --> 00:44:20.817 a 1% or a 5% efficiency improvement, or they save those developers X number 00:44:20.817 --> 00:44:23.757 of hours per week, which is more of the category that Geocodio falls in, 00:44:23.757 --> 00:44:26.477 like that is incredibly valuable. 00:44:27.080 --> 00:44:27.950 Ben Orenstein: Yeah, totally. 00:44:28.010 --> 00:44:29.360 And I wish they would think about that. 00:44:29.860 --> 00:44:34.695 Exactly like you placed it, like you said, it like a hundred grand a year is 00:44:34.725 --> 00:44:36.945 half a percent on a $20 million payroll. 00:44:37.442 --> 00:44:42.602 And so it would be great if I could just say tubal makes you 0.6% of a 00:44:42.602 --> 00:44:45.872 percent uh, more efficient and therefore you should clearly pay me a hundred 00:44:45.872 --> 00:44:48.302 grand a year and they would go, yes, that makes perfect logical sense. 00:44:48.302 --> 00:44:48.812 I agree. 00:44:49.202 --> 00:44:50.102 It doesn't quite work that way. 00:44:50.102 --> 00:44:51.992 It'd be nice if that argument like resonated better. 00:44:52.049 --> 00:44:55.619 But in the, in the bigger scheme that, that does work out. 00:44:55.619 --> 00:44:56.279 Yes, exactly. 00:44:56.279 --> 00:44:58.742 If you, if you're making them more efficient the ROI can be, 00:44:58.862 --> 00:45:00.648 can be there for big numbers. 00:45:01.148 --> 00:45:02.078 Michele Hansen: Yeah, absolutely. 00:45:02.138 --> 00:45:02.828 What's next on the. 00:45:03.677 --> 00:45:06.573 Ben Orenstein: Um, Do annual pricing with quarterly truths. 00:45:07.073 --> 00:45:12.683 So charge a big amount per year and every quarter, like so, well, first of all, have 00:45:12.683 --> 00:45:16.973 pricing that gets, goes up as the company gets more value as they use your product. 00:45:17.543 --> 00:45:19.853 Uh, expansion revenue is the best kind of revenue. 00:45:20.153 --> 00:45:22.943 So if your pricing model does not allow your most successful 00:45:22.943 --> 00:45:25.373 customers to continually be paying you more money, you're pricing. 00:45:26.293 --> 00:45:29.843 And so what we do is we do, we'll say, like, they'll say we want, we want to 00:45:29.843 --> 00:45:31.223 buy a hundred seats and we'll go great. 00:45:31.583 --> 00:45:35.243 Here's the cost for a hundred seats, by the way, if you use more, no problem. 00:45:35.243 --> 00:45:37.223 We don't need to do a whole negotiation. 00:45:37.223 --> 00:45:38.423 We're going to put this on the order form. 00:45:38.693 --> 00:45:39.833 We're going to put this in the agreements. 00:45:40.478 --> 00:45:43.448 Once a quarter, if you go over it, we'll charge you a prorated amount for 00:45:43.448 --> 00:45:46.328 the additional seats that you started using so that we don't need to do like 00:45:46.328 --> 00:45:49.638 a whole, we're not just gonna like float those seats for an entire year 00:45:49.638 --> 00:45:50.908 and then catch up a year from now. 00:45:50.909 --> 00:45:53.519 And we don't need to do a whole new agreement negotiation. 00:45:53.519 --> 00:45:56.374 We're just going to send you an invoice for those, prorated amounts. 00:45:56.864 --> 00:45:57.614 Michele Hansen: Interesting. 00:45:57.614 --> 00:46:01.844 I think it's always interesting for you to, like, we don't do per seat pricing. 00:46:02.350 --> 00:46:05.980 Um, But we do do like volume-based pricing for example, which is sort 00:46:05.980 --> 00:46:10.563 of a, like, I feel like per seat pricing is the most, most typical form 00:46:10.593 --> 00:46:14.403 of expansion revenue and, you know, they're getting more value out of it. 00:46:14.403 --> 00:46:16.353 So you, they pay you more. 00:46:16.353 --> 00:46:19.143 There's also, you know, volume based, which is where we are. 00:46:19.563 --> 00:46:21.513 And I'm trying to think of if there's any other sort of way of 00:46:21.513 --> 00:46:24.592 having like expansion built in. 00:46:24.963 --> 00:46:26.943 Ben Orenstein: So the high-level term for this is value metric. 00:46:27.591 --> 00:46:32.361 Um, And I think your pricing needs a value metric of some kinds, which I think the 00:46:32.361 --> 00:46:35.211 the way to figure it out, it's just like if the customer started getting 10 times 00:46:35.211 --> 00:46:39.491 as much value from the software, what would they be doing more of or using more 00:46:39.491 --> 00:46:41.351 of, or seeing more of that you can charge. 00:46:41.954 --> 00:46:44.174 So, is it, is it compute time? 00:46:44.687 --> 00:46:46.337 Is it requests? 00:46:46.457 --> 00:46:48.227 Is it users? 00:46:48.527 --> 00:46:51.257 Is it, you know, tasks they can have in the system? 00:46:51.754 --> 00:46:55.274 Um, figuring out the answer to that question is pretty critical. 00:46:55.764 --> 00:47:00.074 For Tuples growth, a lot of the times our expansion growth in a 00:47:00.074 --> 00:47:04.134 given month will be like two or three times what our new MRR is. 00:47:04.464 --> 00:47:07.764 So the business is growing like three or four times faster because 00:47:07.764 --> 00:47:09.054 we have a good expansion, right. 00:47:09.431 --> 00:47:09.881 Michele Hansen: Wow. 00:47:10.217 --> 00:47:10.367 Ben Orenstein: Yeah. 00:47:10.867 --> 00:47:14.227 Michele Hansen: I think the thing I love about that too, is that you are. 00:47:14.931 --> 00:47:17.811 Your incentives are aligned with your customer, right? 00:47:17.811 --> 00:47:22.041 Because the more value they are getting out of it, the more you are charging them. 00:47:22.071 --> 00:47:26.792 And, you know, there are some products like gyms are the classic example of 00:47:26.792 --> 00:47:32.012 this, that they expand their revenue by their customers, not using their product. 00:47:32.012 --> 00:47:38.777 And It creates this conflict of incentives between the company and the customers um, 00:47:38.897 --> 00:47:42.707 but something like expansion, revenue, you know, charging for more seats that 00:47:42.707 --> 00:47:48.587 aligns you with your customers and encourages you to keep serving them well 00:47:48.587 --> 00:47:50.237 and have a good relationship with them. 00:47:50.269 --> 00:47:53.611 And also for them to keep using it because they're getting more and more valuable. 00:47:55.381 --> 00:47:57.271 Ben Orenstein: It also has to make intuitive sense to the customer. 00:47:57.271 --> 00:48:00.951 Like I use bare metrics and their pricing has always kind of irked me a 00:48:00.951 --> 00:48:03.951 little bit where bare metrics charges you, bare metrics has an analytics 00:48:03.951 --> 00:48:07.231 tool for like diving into your financial data like your subscription 00:48:07.471 --> 00:48:10.441 metrics, like churn and average customer value and things like that. 00:48:10.938 --> 00:48:14.118 And bare metrics, charges you a base amount and then increases as 00:48:14.118 --> 00:48:17.652 you make more money as your MRR goes up, as your revenue goes up. 00:48:18.132 --> 00:48:20.502 And that has always felt weird to me because it was like bare metrics 00:48:20.502 --> 00:48:21.702 doesn't make my revenue go up. 00:48:22.002 --> 00:48:24.402 It tells me stuff about my revenue, but it doesn't actually 00:48:24.702 --> 00:48:25.992 increase the thing I care about. 00:48:26.022 --> 00:48:29.370 So like, it has to, it has to kind of work, whereas if your 00:48:29.370 --> 00:48:32.190 team is using Tupelo, and you add three more engineers to it, it's 00:48:32.190 --> 00:48:33.330 because you like it, you like it. 00:48:33.330 --> 00:48:34.440 And you want them to use it too. 00:48:34.470 --> 00:48:35.100 And then they like it. 00:48:35.100 --> 00:48:37.850 So it sort of makes sense, it tracks you're like, yeah, 00:48:38.210 --> 00:48:39.020 we're using the tool more. 00:48:39.020 --> 00:48:40.460 We're getting more value from it, we should pay more. 00:48:40.970 --> 00:48:43.752 Whereas just being like, oh, you're making more money than last year. 00:48:43.752 --> 00:48:44.862 We're going to charge you more money now. 00:48:44.862 --> 00:48:48.012 I was like, well, but you didn't, you're not, that's not your value. 00:48:48.222 --> 00:48:49.962 That's just like a value that you decided on. 00:48:50.462 --> 00:48:52.352 Michele Hansen: I think it's bare metrics, I, and they are 00:48:52.352 --> 00:48:53.852 redoing their pricing right now. 00:48:53.852 --> 00:48:58.151 I've seen a couple of friends post a rather long email they got from bare 00:48:58.171 --> 00:49:00.331 metrics on their pricing changes. 00:49:00.361 --> 00:49:05.891 That does not say what the pricing changes are, but I'm curious. 00:49:06.000 --> 00:49:09.320 I bet they have a sense that their pricing was not aligned. 00:49:09.872 --> 00:49:11.822 Ben Orenstein: I think they're struggling with some pricing stuff right now. 00:49:11.852 --> 00:49:13.701 And I think that email was a big swing and a miss. 00:49:14.653 --> 00:49:15.043 Michele Hansen: Yeah. 00:49:15.545 --> 00:49:15.935 Okay. 00:49:15.935 --> 00:49:18.245 So we've got about five minutes left. 00:49:18.275 --> 00:49:22.146 We usually think that, you know, people listen to software social while they're 00:49:22.146 --> 00:49:26.736 out, say running 5k, and they are probably approaching 10 K at this point. 00:49:26.736 --> 00:49:30.696 So I apologize to your legs, dear listener, or to your dog 00:49:30.726 --> 00:49:34.294 who is tired of walking around the block uh, so many times. 00:49:34.325 --> 00:49:39.395 So can you give us a, just like a quick point by point of those 00:49:39.395 --> 00:49:42.065 remaining items that were on the 00:49:42.080 --> 00:49:43.160 Ben Orenstein: right, I'm going to do them all lightning 00:49:43.565 --> 00:49:43.865 Michele Hansen: yes. 00:49:43.865 --> 00:49:45.275 Lightning lightning rounds. 00:49:45.680 --> 00:49:45.920 Ben Orenstein: All right. 00:49:45.920 --> 00:49:46.560 Here's the rest. 00:49:46.580 --> 00:49:49.570 Here's the rest of the things, don't agree to a custom contract that 00:49:49.570 --> 00:49:51.220 does not have a big price tag on it. 00:49:51.250 --> 00:49:53.970 Make sure you negotiate that upfront before you dive into the terms 00:49:53.970 --> 00:49:55.620 and figure out what you agree on. 00:49:56.130 --> 00:49:57.600 Put your price on your website. 00:49:57.810 --> 00:50:00.630 It's good to have an anchor there, starts at 20,000 a year. 00:50:00.630 --> 00:50:04.353 So you don't people wasting your, charge more for single sign on, even though 00:50:04.353 --> 00:50:06.903 it annoys people, put that in your enterprise to your charge a lot for it. 00:50:07.403 --> 00:50:11.090 Um, put an expiration date on your quotes, so that procurement feels 00:50:11.090 --> 00:50:12.050 a bit of pressure to get them done. 00:50:12.798 --> 00:50:15.545 Um, offer quarterly payments instead of discounts. 00:50:15.575 --> 00:50:18.155 If people ask for a big discount, say, oh, we can't do that, 00:50:18.155 --> 00:50:19.355 but you can pay in pieces. 00:50:19.355 --> 00:50:20.015 If that helps. 00:50:20.825 --> 00:50:23.735 If you do offer a discount, ask for something in return, try that, do that 00:50:23.735 --> 00:50:26.645 negotiation that we talked about, like, Hey, can we feature you in or whatever? 00:50:27.148 --> 00:50:31.638 Um, Keep in mind a hundred engineering org pays $20 million a year in software or in. 00:50:32.645 --> 00:50:35.781 Um, It can be useful when you're dealing with procurement to say, you don't know 00:50:35.781 --> 00:50:37.761 what you're doing and ask for advice. 00:50:37.826 --> 00:50:41.222 I had a procurement person from Shopify basically walk me through how they 00:50:41.222 --> 00:50:44.012 buy stuff and he was very helpful and it helped us get that deal done. 00:50:44.572 --> 00:50:49.786 Ask the deal get done faster often there's shortcuts or price points 00:50:49.786 --> 00:50:50.866 that get the deal done easily. 00:50:50.866 --> 00:50:56.051 For example some places require a C-level sign-off for price points above 00:50:56.081 --> 00:50:57.521 X, make sure you know what that is. 00:50:57.521 --> 00:50:59.171 Ask about it and try to come in under that. 00:50:59.204 --> 00:51:01.142 If you don't get a hard, no, you don't know where the limits are. 00:51:01.649 --> 00:51:04.439 Uh, It's often useful to tell somebody you're a tiny startup when you get our 00:51:04.439 --> 00:51:07.769 security or an it request saying like, Hey, can you fill out this a hundred 00:51:07.769 --> 00:51:09.299 page security audit, say, no, sorry. 00:51:09.299 --> 00:51:11.039 We're just three people, blah, blah, blah. 00:51:11.309 --> 00:51:13.529 Don't get a SOC two upfront. 00:51:13.559 --> 00:51:14.099 Not worth it. 00:51:14.099 --> 00:51:15.359 You can get tons of deals done. 00:51:15.419 --> 00:51:18.895 Even with giant companies without it, we have um, create a reusable 00:51:18.895 --> 00:51:21.415 security document rather than filling up a spoke questionnaires. 00:51:21.919 --> 00:51:25.112 Um, You can often agree to implement things later in a contract. 00:51:25.142 --> 00:51:26.732 So they say, we need X. 00:51:26.732 --> 00:51:27.752 You say, we can do this. 00:51:27.752 --> 00:51:29.972 We can agree to get X done within the next 12 months. 00:51:29.972 --> 00:51:32.188 And they say, okay legal cares less about getting the deal done. 00:51:32.188 --> 00:51:33.778 Use the white commenters SAS agreement. 00:51:33.778 --> 00:51:34.798 You probably won't get sued. 00:51:35.068 --> 00:51:39.043 I'm always included an escalator clause that increases the price and auto renews. 00:51:39.066 --> 00:51:41.762 When you eventually try to hire a sales person to realize that most of them are 00:51:41.762 --> 00:51:45.512 charming, hardworking, and not that smart look around for a smart one instead. 00:51:47.514 --> 00:51:49.554 Michele Hansen: There's so much good advice in there. 00:51:49.644 --> 00:51:56.203 Um, So what are the things I wish we could dive in on a what a tremendous gifts to 00:51:56.203 --> 00:52:01.513 spell all of that out, I feel a little bit obligated to give you some advice 00:52:01.513 --> 00:52:08.203 at this point and say, Ben, when are we getting the sales for founders review 00:52:08.203 --> 00:52:12.193 newsletter, where you start writing the rough draft of your sales for founders. 00:52:12.943 --> 00:52:14.803 Ben Orenstein: Hmm, that's a good question. 00:52:14.803 --> 00:52:17.743 So actually it was inspired of the day because Nathan Barry shared that 00:52:17.743 --> 00:52:22.783 he has a paid email sequence, like a paid email course that he sells. 00:52:23.283 --> 00:52:25.893 And I think that's an awesome format where like, he can sort of like when 00:52:25.893 --> 00:52:28.713 he feels like, if he adds another email to the sequence and you're basically 00:52:28.713 --> 00:52:31.053 buying it, like for like a hundred bucks, you get like what, however many 00:52:31.053 --> 00:52:32.223 emails are currently in the sequence. 00:52:32.223 --> 00:52:33.303 And then at any additional ones. 00:52:34.338 --> 00:52:36.858 And I was thinking, this might be a good topic for this, where it's like, anytime 00:52:36.858 --> 00:52:39.738 I'm feeling inspired, I'll pull one of these points off, flesh it out into 00:52:39.738 --> 00:52:43.558 an email, add it to the sequence of my people who are in this position of needing 00:52:43.558 --> 00:52:45.088 this information, get access to it. 00:52:45.588 --> 00:52:46.608 Michele Hansen: That sounds awesome. 00:52:46.637 --> 00:52:48.928 Hope to see that out there sometime soon. 00:52:49.431 --> 00:52:52.041 Ben Orenstein: Well, thanks Until then you can follow me on Twitter. 00:52:53.061 --> 00:52:54.351 and I'll eventually talk about it there. 00:52:54.351 --> 00:52:54.801 If I do it. 00:52:55.279 --> 00:52:56.029 Michele Hansen: um, Awesome. 00:52:56.029 --> 00:52:56.419 Well, thank you. 00:52:56.419 --> 00:52:58.759 so much for stopping by Ben. 00:52:58.883 --> 00:53:03.874 Such a pleasure to talk to you, and I hope that we will get more writing 00:53:03.874 --> 00:53:05.734 from you on sales for founders. 00:53:06.669 --> 00:53:06.999 Ben Orenstein: thank you. 00:53:06.999 --> 00:53:07.719 Appreciate that. 00:53:08.079 --> 00:53:08.799 Happy to come by. 00:53:09.299 --> 00:53:11.039 Michele Hansen: And that will wrap up this week's episode 00:53:11.069 --> 00:53:13.499 of software, social, Colleen. 00:53:13.549 --> 00:53:15.653 We'll be back with me next week. 00:53:15.923 --> 00:53:20.213 Make sure to check out this week, sponsor a cloud forecast to manage 00:53:20.213 --> 00:53:23.843 your AWS bill@cloudforecast.io.