What unicorns know (with Pablo Dominguez, Operating Partner at Insight Partners)

Can you do less to achieve more? How did Gainsight drastically improve onboarding time? And what do unicorns really know?

That's exactly what we talked with Pablo Dominguez about.

• (00:00) - Introduction
• (04:15) - Continuous improvement
• (14:36) - Efficiency as a competitive advantage
• (16:08) - Cutting the salescycle in half
• (19:51) - Going down market via efficiency
• (26:21) - Finite resources, finite time and finite dollars
• (29:15) - Who runs the process?
• (31:43) - The importance of RevOps
• (34:43) - Strategic RevOps

Check out the book what unicorns know here

Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

Guest

Pablo Dominguez

Operating Partner, Sales and Customer Success - Insight Partners

What is The Revenue Formula?

This podcast is about scaling tech startups.

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

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

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

[00:00:00] Toni: Hey everyone, this is Toni Hohlbein. You are listening to The Revenue Formula. In today's episode, we are chatting with Pablo Dominguez and about what unicorns know.
[00:00:11] Enjoy.
[00:00:14] Access. It's like a Texas A& M kind of. No, what is it?
[00:00:20] Pablo: Oh man, now we're starting off on the wrong foot. So, this is, I went to the University of Texas. Texas A& M is our biggest rival. And that is the game, uh, I was actually at that game in 1998 when our, our running back broke the, uh, national record for rushing against our biggest rival. So it's, uh, a picture that I remember fondly.
[00:00:43] So,
[00:00:43] Toni: have a, so anyway, you know what, maybe this is a topic for another time, Pablo, but, uh,
[00:00:52] Mikkel: I was also, UM sports. Yeah,
[00:00:54] Toni: no, no, no, no, it's something else. But, uh, so I've like almost relatives that have a very deep, uh, Texas, uh, A& M, what is it, A, yeah, Texas A& M kind of, uh, history. And they really want us to come to a game, you know, and, uh, watch it.
[00:01:07] And, you know,
[00:01:08] we'll,
[00:01:08] Pablo: you'll love it. They are, um, they're crazy. Like crazy in a fun way. Like it's a very... Imagine the most loyal football fans in Europe, who you guys think are crazy, that's them, for hours.
[00:01:24] Mikkel: Oh, you have those too. Amazing. I thought it was only here. They were causing a ruckus. Jesus. I think almost that was the intro to be honest.
[00:01:33] Toni: Yeah, maybe, maybe that was the intro. But, uh, then the lead in is so difficult. It's like, so Mikkel, why do we have a, why do you have a unicorn standing
[00:01:40] Mikkel: there? So I have the.
[00:01:42] I have the book, okay, but I have the book digitally and I'm not gonna put my phone up here. So, uh, today we have a guest who wrote a book, uh, about what unicorns know. So I literally went to the shop and I got this. I don't know if you can see it. It's far away from the camera. You stole it from your child.
[00:02:00] No, I forgot to steal it from my child. That's the worst part. So I actually spent money on this. And now it's, you know, the funny story is. Will I get that receipt or what? No, no, no. I'm not going to expense that. So I'm going to gift it to my daughter and then I realized, Oh, dang, I also need to get one for my son now.
[00:02:17] So, you know, the task is just never ending. There you go. Anyway, just getting back to the show, I guess. Sorry about that. We have a guest with us today, Pablo Dominguez. Welcome, Pablo. Welcome.
[00:02:27] Pablo: Hey guys,
[00:02:28] Mikkel: So you. You are an operating partner at Insights Partners. One of the things I found is you work with a portfolio, I hope I got this right, you work with a portfolio of about 500 companies, helping them to scale, and Insights Partners has minted more than 75
[00:02:47] Pablo: That's correct. Yeah, Insight Partners is a New York based venture capital and private equity firm. We've been around for over 27 years, primarily investing in software business and business companies. Uh, I've been here five years now. Running the sales and post sales team. And, um, you know, our focus really, our companies, uh, we invest in them.
[00:03:09] Uh, we help them scale right from, from the time they come in to be part of the portfolio until there's an exit. And, uh, it's an awesome opportunity to, to meet so many founders, their teams, and learn from them and also provide best practices that our team has, uh, uh, picked up over the years.
[00:03:28] Toni: And maybe just to kind of make this clear for everyone who maybe hasn't picked this up, you as an operating partner, you're not just the one writing the check and then showing up once in a while at a board meeting. You actually get the chance to be, you know, sometimes deeply involved with those cases and actually truly help them scale, right?
[00:03:43] So this is not just a talk track. It's also some of the, uh, the, the work that Insight Partners is, is providing for the, for the portfolio business.
[00:03:51] Pablo: Yeah, absolutely. We have, um, we have the investors, right. That find that, that find the best opportunities, uh, in, in the world from a software perspective. And then we have the advisory teams that are all former operators, right. Former heads of sales, marketing, product, engineering, uh, talent. Uh, and those teams are on the ground working with, uh, the portfolio to, to help them scale.
[00:04:12] So it's, it's great.
[00:04:14] Toni: Wonderful.
[00:04:15] Mikkel: And so I guess, you know, just to position your authority have, I think what's super interesting is usually when we're talking with people, they come from a company and they have one perspective from that company. You obviously have worked with a variety of businesses and then distilled that into the book.
[00:04:30] We're going to kind of dive into today, called What Unicorns Know. And I think one of the first things, uh, one of the first things Toni and I, so we both read it by the way, And one of the things we kind of talked a bit about is we really see the power of continuous improvement, because of the compound you can get from it.
[00:04:48] Right. But it seems like kind of often people think it's boring. That's, that's not what people are, are deeply interested in. Right. Um, so I hope we can kind of change their minds today and maybe get your take on why is continuous improvement actually such an important piece that, uh, especially the unicorns you've written about here at work with.
[00:05:08] Pablo: Yeah, let me, let me back up to you brought up something important around perspectives, right? So, um, my entire career has been focused on go to market effectiveness, right? Working with sales and marketing and had the pleasure to start in consulting, uh, had two stints in public companies, right? So I got to see what, uh, ostensibly good looks like.
[00:05:28] I think people think once you're public, everything is easy, but that's not always the case, right? Challenges continue. They're just different challenges. And then I, um, Spent five years at a startup in New York, right, uh, tech led founder, got to experience what that is like, scaled from, you know, 40 million to 400 million and had a successful exit.
[00:05:45] and now at Insight, uh, you mentioned it before, you know, supporting so many companies, you get a lot of pattern recognition, right? You get to see What works, what doesn't work, and you learn from some of the best in the industry. So, I've had a pretty good purview, right, being in consulting, public and, and private.
[00:06:02] And in my journey, uh, I met a man, uh, Matt May, who's the co author of the book, right? Um, who is, uh, also a former operator, has worked with Amazon and other tech companies and started his career, um, uh, working at Toyota, right? Where, where lean sort of come from, right? And so. Lean has typically been attributed with manufacturing, right?
[00:06:22] Let me figure out how to remove waste in the manufacturing process. and then it was brought over to product development, right? And so Agile and Lean sort of came to be. And Matt and I started using Lean really, I think, for the first time in GoToMarket about 11 years ago. Right. And we've used it in a public company.
[00:06:39] We used it at the startup I was at, and now we've been leveraging, uh, those principles with our portfolio companies. So what you see in the book, right, when you talk about continuous improvement and the other elements, those are all things that we have done in the real world, right? As operators working with companies.
[00:06:56] And because it's our first time using it in go to market, we wanted to share that with the rest of the community, right? Every go to market leader, CEO should be. Leveraging these principles to scale their companies effectively. Um, and that was sort of the precipice for putting it into a book.
[00:07:13] Toni: And I think, you know, one of the first examples that are used in the book kind of to, to drive this home is this Formula One piece. I would love you to kind of just walk through this again for maybe some of the folks that haven't yet, they will obviously very soon, but haven't yet maybe read the book, uh, because this was one of those things where.
[00:07:31] I, I basically looked up from the book and was like, turning to my wife, and it's like, did you know ? And, and this, this just drives this, this continuous improvement value home. So well, so I would love you to maybe spend a couple of, a couple of sentences on that.
[00:07:45] Pablo: Yeah, absolutely. And, uh, whether, you know, if you're listening and you're like, oh, here's another sports metaphor, right? Um, let me explain why this is so awesome. Formula One, in our research, and also understanding who's leveraging principles in the world the best, is the epitome of efficiency and effectiveness, right?
[00:08:05] a Formula One... Race can range from an hour and a half to two hours in terms of length, right? And during that race, you've got to pit your car and change your tires. And so there's an element of strategy, right? Which tires do I run? How early do I pit or do I pit at all, uh, to win the race? Every second you're not on the track.
[00:08:29] Is time lost that you, you know, that your opponent is potentially on the track. And so it's amazing that the Formula One teams have spent so much time innovating, right. Continuously improving, doing a lot of experimentation. So much so, right. When we talk about constant experimentation, they are limited on how much they can experiment.
[00:08:48] They're limited on when they can experiment throughout the season, right. Otherwise they'd be too efficient. If you think about like in a company, you can't limit innovation and experimentation. So what's interesting is. And we talk about this a lot, right? The fastest time recorded, the record for changing four tires in an F1 race is 1.82 seconds. By Red Bull. And you can watch this on YouTube. And I, I watch it every week and I am, I'm shocked. I'm like, there's no way that was 1.82 seconds. That four tires came off and four tires came on, right? And you think in order to do that, the amount of practice, right? And experimentation and continuous improvement and mapping out the process where 21 people should go, because there's 21 people assigned to a pit crew, right?
[00:09:34] So there's 21 people that have to stand in the right place. And so. Where I'm going with this is hospitals are now talking to F1 crews because if you look at a hospital emergency room, we talk about this in chapter four of the book, it's kind of set up like a pit stop, right? There's a patient on a table, there's a doctor, there's nurses, there's tools around everywhere, and it's grossly inefficient.
[00:09:58] So they've reached out to F1 crews to say, hey, you guys have somehow figured out How to change four tires with all these people around the car. How do we become more efficient? Cause we're trying to save someone's life, right? You're just changing tires to win a race. so that's fascinating to us that hospitals saving patients are not looking to the best hospital, but they're looking to see who's the best in the world at process improvement and how can we leverage that.
[00:10:21] Right. And so that's why we talk a lot about F1 just because of the absolute efficiency that they've sort of brought to, um, their practice.
[00:10:31] Toni: I think, I think the one thing that I was fishing for here was this crazy improvement from, what is it, the seventies or something when, you know, some of the F one racing started and that was, let's just call that the benchmark or the, the, the baseline. Improve down to this 1.2. Was it 1.2 seconds?
[00:10:47] Pablo: Yeah, 1.82 seconds. Before, it used to take 57 seconds. Although, it's not apples to apples, right? Because back then, um, you also refilled the car with, uh, petrol, right? Fuel. Today, there is no, there, there is no fuel. But still, you know, filling in the fuel was not what took the longest time. If you watch the videos from the 50s, the 60s, the 70s, It took like 30 seconds to take the tires off, right?
[00:11:14] Just to take tires off. And the fact that now you can do it in under two seconds and the average, I think, is around three and a half. So it's marginally more than two seconds, but that improvement from like 50 seconds down to three seconds on average is fascinating, right? In terms of how you design the car, the aerodynamics, where the tires go, where people sit, what tools you're using.
[00:11:35] Absolutely awesome.
[00:11:37] Toni: And so the, the reason why I think it's, it's so eye-opening for also, you know, people running businesses and, you know, operating those revenue engines. It's really, you know, sometimes when you say continuous improvement is like, ah, by, you know, by how much possibly could I improve this conversion rate or about how much possibly could I, you know, shrink down that, you know, sales cycle or.
[00:11:56] time to first value or whatever, whatever you choose, everyone's like, well, it can maybe chip away, a percent or two, right? and in this, in this formula one case, what is it? 95% you chipped away or, you know, improved 20 fold. I mean, that's just, that's just completely insane when you think about it.
[00:12:14] and opening this up to, hey, listen, this F1 example is not entirely different from, you know, you running your, your revenue engine in that case. And then showing that parallel, I think this was extremely powerful to, to choose to open up. I don't think you open up the book with this, but it was one of the first things that clearly stuck out for me, where I was like, okay, now, now I definitely need to finish the rest.
[00:12:35] Pablo: Yeah, no, it's great. It's a, it's great to call that out because. What I learned from Matt when he worked at Toyota, and we talk about this in the book, right? The people at Toyota in the manufacturing line, the innovation on continuous improvement, guess where it came from? It didn't come from the CEO, it didn't come from line managers, it didn't come from the executives.
[00:12:53] It came from the people doing the work, right? Every year, I think, Toyota has over a million ideas from the workers that say, All right, you told me that this is my job, right? There's a standard operating procedure, do this, job is not only to do your job, but to go, wait, is this the best way to do it?
[00:13:11] Is there a more efficient way? And you raise your hand and say, hey, I found a better way to do it, right? And so, In business, it's sort of the same thing. When I worked at the startup, um, let me tie this to the sales process, right? Our sales process at the startup I was at, I think from the time the customer said, like, Hey, I'm ready to buy, right?
[00:13:30] Like I want to, and we did the contracting and there was a lot of back and forth. It took over 65 days to sign up, like why? And the team went through a lean process, right? We mapped out the process. Existing, found a lot of waste, too many touch points between finance and legal and sales and operations.
[00:13:49] And in their recommendation, that got whittled down, right? We're talking about, uh, F1 coming down from, you know, a minute to mere seconds. In our sales process, that went down from, you know, over 65 days to a week. Right. Which is amazing. If you think about it, like time to revenue just went down significantly.
[00:14:07] And what I loved about it is the woman that we had on our team driving it, this woman, Jane, she came back to me and goes, why can't it be a day? Like,
[00:14:16] Toni: Yeah.
[00:14:17] Pablo: it have to be a week? Right. So that, that mindset of continually improving, right. And experimenting, I was like, I don't know, can it be a day? And like, once you get it to a day, like, why couldn't it just be hours?
[00:14:27] Right. Um, obviously some contracts will take longer, but that's the kind of thinking you need in the culture from people to really continually optimize stuff.
[00:14:36] Mikkel: I think also what some people miss in some cases, this becomes such a massive competitive advantage. Usually you want to see a competitive advantage being that you have some proprietary technology or access to something that others cannot access, but a process. That's really, really lean and efficient, that can definitely be a competitive advantage.
[00:14:55] Toni: Yeah, well, and the reason why it is that is because, you know, your, your cash cycle just becomes so much shorter and you can reinvest in growth and so forth. And, you know, all the efficiency is coming from that, right? You can basically, you know, out compete, out innovate and out spend your competitor in that sense by following some of those, quote unquote, boring, you know, ways to improve the efficiency of your organization.
[00:15:16] Pablo: no, absolutely. Like if I stick to that example, we had eight people doing contracts, right. On our team, on Jane's team. And she came back and said, Hey, from reducing it from 65 days to a week, I only need three. Right. So great. Those other five people I can use for something else that maybe I had to ask for budget, we didn't have budget for, right.
[00:15:35] People always say it's the small that beat the big, right. David versus Goliath. It's actually the fast that beat the slow, right. And by having your competitive advantages, speed, right. Speed is what wins in business. If you can. Pivot more quickly, right? We've got AI transforming the entire world. Who's going to quickly adapt that?
[00:15:54] Who's going to like test it and experiment and figure out how to gain their competitive advantage, right? So I think the people in the processes that you have internally, obviously your product is a competitive advantage, but being able to move quickly and pivot, huge advantage.
[00:16:08] Mikkel: So I think, uh, what would be really cool is let's talk about one of the unicorns that, you know, succeeded in building some of these advantages. Uh, and one of the things we kind of, uh, saw in the book was, uh, Nick Mehta's, uh, Gainsight. Uh, and they had this objective, I think, of reducing the sales cycle by cutting it in half, basically.
[00:16:27] And I think cutting the time to value. So onboarding new customers in half as well. And I think that. let's just pause there for a second because achieving that is a major efficiency driver for any business.
[00:16:38] Toni: No, but I mean, I mean, also, you know, think about the CEO that walks into the executive meeting and states that, Hey, we're going to, we're going to cut both of these things in half.
[00:16:49] Everyone is just going to be rolling their eyes and it's like, Oh, crazy CEO has some, some, some idea again. Uh, you know, let's, let's move past that woman real quick. So this is, this is an insane improvement, uh, that, that has been targeted and, and maybe I'm taking this away, but it has also been achieved actually.
[00:17:05] Right. So, uh, we'd love to, we'd love to get the inside story on that.
[00:17:09] Pablo: Yeah. And let me, I'll, I'll, I'll make one correction because half is incredible. It was actually 66%, right? If we want to be specific, it was 66%. So, so Nick, for those listening, right, is the CEO of Gainsight, customer success platform. He's also the, let's call him the grandfather of the customer success movement, right?
[00:17:29] He's besides selling a solution for customer success. He's the biggest advocate for sort of post sales, right. And the investment and making sure all that. So. Um, they were an inside portfolio company and I can talk to this because one, it's in the book. It's also, they posted something online on their website about the engagement.
[00:17:45] So if you're interested in learning more, um, you know, feel free to go to their website. So we had done a lot of work with Nick and the team on, um, you know, enhancing their go to market model. This is before Vista took over. One of the things they wanted to do was decrease time to value for, their earlier sort of like SMB mid market product, right?
[00:18:05] and as I talked about before, we did a lean process engagement with them, right? So, leaders, uh, across the organization, post sales team, sales team, marketing, All involved, right? Like when you do this, a lot of companies fail because they only bring in the team that's impacted, right? Let me just bring in the customer success team.
[00:18:23] And the fact is there's more people touching the customer in every sales process and post sales process, right? So you may not know that there's a pain point because you didn't bring in the marketing person or you didn't bring in a BDR or product, right? Or finance or legal. So Nick had the whole cross functional team come in.
[00:18:42] And basically map out the process, come up with recommendations. And after piloting one of the recommendations, they found that they could reduce the time to value by 66%. And after they ran the test, right, you run an experiment. Does it work or not? Rolled it out and actually ended up deploying. Um, that was the precipice also for deploying, uh, their, their sort of SMB product, right?
[00:19:04] So, you can see. Not only in the work that Matt and I have done with Porco's, right, but like Nick was able to achieve a very significant improvement. by really focusing on what was most important to the customer, and really removing a lot of the waste, uh, that we all create, right, with systems, with process, etc.
[00:19:22] By the way, without spending a dollar, right, I want to be very clear, when you do lean, you can't buy systems... You can't add people to it. This is literally the removal of waste in the system alone. Generated a 66% improvement. Then once you do that, of course, you can say well, hey Maybe this tool gets me another five points of improvement or whatever But what I love about Lean, it's you're not investing dollars per se when you're optimizing the process or euros
[00:19:51] Toni: You said something real cool there, uh, in between, and I wanted to make sure if I caught this, uh, correctly. So, uh, some of that, you know, time to value improvement was actually also, uh, or the purpose of that was also to almost unlock a different segment in the market, uh, which obviously, You know, has completely different unit economics to a different ACV.
[00:20:10] Therefore you have to deploy almost a different team, you have less money in order to get, get the stuff done. Um, and by, by decreasing that time to value so drastically. Uh, that actually unlocked then a new part of the market for them. Did I, did I understand that correctly?
[00:20:26] Pablo: Yeah, absolutely. I mean, they've, Gainsight at the time is historically focused more on the enterprise, right? And there was an intent to how do we go down market more effectively? And that's what they were really trying to solve for, right? Is how do we decrease time to value overall? But in doing that, they realized, okay, smaller customers want quicker ramp up times.
[00:20:46] Um, they want quicker implementation times. And that was sort of what helped propel. Some of the thinking that the team had already done, right? And so that, that's what's great about, what Matt and I have put in the book, uh, for the, for the audience listening, right? There's, this is not an academic book, right?
[00:21:01] Like we've taken the practices for that. We did it against other companies. There's templates in there that you can use with your teams. If you wanted to run a similar sprint. And it's, it's pretty practical and easy to leverage actually.
[00:21:14] Mikkel: I think in particular now, the, the kind of environment all the SaaS businesses and scale ops are faced with, you know, a lot of things have kind of changed in the, in the, in the sense that you can't do the same kind of investments anymore is more about efficiency and, you know, profitable growth or whatever you will call it.
[00:21:32] and I think that's where just going back to the analogy of, Hey, we, we actually just need three people in legal to handle this process already there. That efficiency gain plus, uh, freed up resources. I think that's, that's some of the merits of the continuous improvements that, um, you've covered also in the book,
[00:21:49] Pablo: Yeah. And let me add one point on there. Cause people sometimes misinterpret efficiency and effectiveness, right? Efficiency is about doing things right. Let's take a, your favorite football team in, in, uh, in Europe, you can lose every game in the season. That's very efficient, negatively efficient, but you efficiently lost every single game, right?
[00:22:12] You did things right, although it's wrong. Effectiveness is about doing the right things. Right? So there's, there's an element where you want to be effective and efficient, not just efficient, because you can be efficient, but not be focused on the right things. Right? And so we talk a lot about in the strategy chapter, uh, the first chapter of the book around, especially in today's time, our companies laser focused on doing the right things, right?
[00:22:39] And in order to do the right things, you've got to choose what not to do, right? Because resources are limited. Time is limited, right? Money is limited. And so you can't be doing all the things that potentially you were doing last year in order to, you know, stay afloat or to win. And so that distinction, I think, between effectiveness and efficiency is just something people really need to focus on.
[00:23:02] Mikkel: But, but actually, I wonder how, how does that happen at a business, right? I think it's really hard when you're coming from a point of time where, where you're used to, let's say, running a lot of motions, running a lot of investments and doing a lot of stuff and then saying, okay, all of a sudden, you know, we can't just have our team work harder.
[00:23:18] It doesn't, you know, that rarely works out. And we still have all these things that we want and need to do. Like, those companies you've worked with, those unicorns, how have they gone about that differently, uh, from your perspective, like from your chair?
[00:23:34] Pablo: Yeah, let me give you an example, because it's hard, right? Porter said it best, the essence of strategy is choosing what not to do, right? When Jobs came back, uh, Jobs, Steve Jobs, to Apple, um, after he was ousted, and we, and we reference this a lot, right? William Isaacson talks a lot about this in his book.
[00:23:53] When Jobs came back, Apple was trying to do everything. Right? Printers, servers, laptops, etc. And he narrowed it down to basically, we're going to do one product on a 2x2 matrix. What are we going to focus on in each of these things? And people were shocked, like, well, what do you mean? We're not going to, like, build these things?
[00:24:10] Like, I have a whole team building stuff, right? And so, it's a difficult decision to say... We're not going to go into France, Germany, and Benelux. We're only going to pick one of them, right? Or we were planning three product rollouts. We're only going to do two. There's this misconception that I have to do more with less, right? And with, with the lean lens on it, what we like to say is you have to do less to achieve more, right? If I've got targets to hit for the year, how could I possibly spread my team, my team thinner, right? If I've got the competition attacking me. I'm trying to hit top line targets and bottom line targets from the board.
[00:24:51] The only way to do that is to be laser focused. So when we work with portfolio companies, and if you're listing and you're not a portfolio company, you really gotta sit down and like, lay out, alright, what's the, you know, we call it the waterfall, right? I'm here this year, whatever, 10 million ARR, I'm trying to get to 20 million.
[00:25:07] How am I gonna get there and what trade offs do I make to basically maximize my bets, right? And maybe rolling out five products, I can't do it because I don't have the R& D team. Right. Because we cut R and D spend, or maybe I need to hire a bunch of R and D people to do five products, and that's going to take away from our core.
[00:25:25] Um, and so there's a, there's a balance between, because your, your listener might be saying, well, wait, what happened to startups and scale ups, constant experimentation, and we've got to test everything like. Well, you should test different things, but not a hundred things, right? You can't test every market, every product, enterprise, mid market, SMB.
[00:25:45] Especially in a time like this, you've got to be more laser focused on what can you do to survive and grow? and leadership has to make those tough decisions, which is hard, right? You asked the question, like, how do you do it? It's hard to tell someone we're not going to do X, Y, Z, and that might impact their role, their team.
[00:26:01] And they might have to focus on something else.
[00:26:04] Mikkel: I can give you a great formula one analogy for that one. You need to slow down to speed up. So when you hit the corner, you know, Oh, wow.
[00:26:12] Toni: Thanks Mikkel. I know. Why was that not in the book? Um, I think, um, I think it's, uh, it's a really cool concept.
[00:26:21] I, I still think, listeners might almost, um, okay, well, some of the growth pressure is coming from the board.
[00:26:28] Right. And, and then, uh, then having the balls and the guts to stand up and be like, uh, it's, it's a very counterintuitive point for, for many operators and also for many board members. To say, actually, we're only going to do these one or two things that maybe get us there. Uh, what we have actually seen working with some of our portfolio, so, so to speak, um, that there's sometimes a tendency to, you know, layer more and more and more things on top in order to kind of then get to that, you know, 20 million number, if you will.
[00:26:59] Uh, but really these additional layers detracting from the really important pieces that need to be built out. Right. But it's, it's so, it's so difficult to, Um, uh, first of all, no, any of that stuff, you know, when you're starting out, obviously hindsight is always 20, 20, uh, but at the same time also having the, uh, the guts to stand up to the board and say, you know what, we actually not going to get to 20.
[00:27:21] We only going to get, you know, quote unquote to 18 maybe. Um, and, uh, and all the other things that we could be doing in order to close the gap, you know what, uh, they're just not worth it. Um, and I think that's a, that's a really difficult conversation to have.
[00:27:33] Pablo: it is. And I, and I, and I've been in those discussions, right. Because ultimately the board will choose like, Hey, it's 20, not 18 period.
[00:27:41] Toni: Yeah.
[00:27:42] Pablo: Your job in the company is to say, okay, what's the best path to 20 and is sprinkling 30 initiatives versus 10 effective for our team who's going to be spread out in different directions.
[00:27:54] Right. And so. If you've got to get to a number and that's what the board's holding you to, you can still like look at your priorities and your initiatives and go, okay, what's the bare minimum we can do to stay aligned, to stay focused, to not burn out teams that strategically allows us to get there, right?
[00:28:09] While still innovating, right? Because you can't abandon those things that are longterm bets. But again, with finite resources, finite time and finite dollars, you have to make choices and that's hard, right? That's what strategy is about is making choices to get you to win. No different than an F1, right? Like, seriously, right? Um, it starts to rain. Do I pit stop now and change tires? Is the rain gonna last? Is it not gonna last? Right? those are big, those are big choices to make that could cost you the race, right? The average time, between first place and second place at the end of the year in terms of throughout the year is only about 20 seconds. Right? So it's a huge difference if you decide to stop, uh, to your point, Mikkel, like slow down or not, right? So, but those are trade offs that teams make. No, stay on the track. No, come in for new tires and maybe it costs you the game, right? Obviously in business, it can't cost you your business, which is why it's even more important to make strategic decisions with the input from your team.
[00:29:13] Yeah,
[00:29:15] Mikkel: I think what I, what I also reflected a bit over is if, if you've looked at this kind of process you've outlined in the book and you kind of covered it also with, with Gainsight, right? You obviously came in as, as a partner in this scenario, but how do you see companies potentially running this process themselves?
[00:29:30] Who is, who is best positioned in the organization to carry this forward and what, what needs to kind of be in place in order for, for a company to basically follow? I think you're calling it the, the unicorn model.
[00:29:42] Pablo: it's a good question where we've seen success even, even if we're involved, right? Like, If there isn't a point of contact that's been appointed by the CEO Um, and there isn't buy in from the CEO. This is never going to work, right? Because it has to be a cross functional engagement. Otherwise you're not really solving for all the issues.
[00:30:01] And so having. Someone, um, as an executive sponsor, right? Whether it's marketing, sales, the COO, if you have a COO, uh, it could be IT, it could be product, cause we do this also with IT teams, right? Not just, uh, go to market teams. Um, you need an executive sponsor, but you also need someone who is going to project manage the initiative and say, these are the people we're going to bring in.
[00:30:25] when we test the experiment, who's holding them accountable, right? We're going to meet weekly, we're going to meet bi weekly, we're going to get reports. Is this working or not? When we do it, we have the benefit of we help project manage it, right? if you read the chapter and go, okay, thank you for the templates.
[00:30:40] Thank you for the framework. Well, who does this? Okay. You have to appoint somebody in your company to be what we would be, right? Who's going to, uh, bring the different teams together. Who are the, who are the teams going to listen to, right? Because. If it's a sales issue, is marketing going to listen? If it's a salesperson, like who can be independent, and collaborate effectively cross functionally because you don't want someone who's going to say, well, my function is the most important.
[00:31:03] and everybody, it's everybody else's fault that the sales process is broken or post sales, right? There's no blaming here. It's, we're just going to fix this and like eliminate some stuff.
[00:31:13] Toni: I have an idea. Could it be revenue operations to step in and help with some of those cross departmental things? I
[00:31:18] Pablo: That is, yeah. So by the way, yes. Absolutely. When, I don't know if your listeners have RevOps or not. If you have a RevOps function, nine times out of 10, when we do that, that is the point of contact because they're connected to all the different functions. If you don't, you should get a RevOps person at some point, right?
[00:31:36] But yes, absolutely. The RevOps leader or someone on that team is a perfect. Project management and leader to drive this.
[00:31:43] Mikkel: So, I mean, there's two routes we can go now. Because now we're talking about revenue operations. So that's, I think, very close to, by the way, our listeners. So I kind of almost want to get, uh, you know, take a little bit of a left turn, uh, if that's okay with you. And, uh, again, back to the portfolio of companies you've worked with and interfaced with, right?
[00:32:04] How, how do you see the importance and the impact of revenue operations in those organizations specifically?
[00:32:11] Pablo: Yeah. So I have had the benefit of running RevOps at public companies, uh, supporting 8, 000 reps, right. Having a very large organization. I've also built it from nothing at a startup, right. Where there wasn't really RevOps. and I've also been in sales and the teams that we've hired. Had insight to support portfolio companies all have done some stint in RevOps, right?
[00:32:35] Because that's where a lot of the glue, happens in support of the revenue, the revenue teams, right? So since we have 500 or more portfolio companies. I can tell you definitively, right? Statistically, the companies that invest early in revenue operations and get a strong leader perform significantly better than those that do not, right?
[00:32:58] because you're really hiring one that chief of staff for the head of revenue, right? That is there to, um, Implement strategy, work on strategy, everything from strategy to tactical items, right? Should we be using a CRM? You know, how do we implement the CRM? But, um, but is also the conduit to work with, you know, product, with marketing, with the post sales teams, um, is providing a lot of the analysis that's going to the board, right?
[00:33:26] And so, honestly, those resources are super critical. And it's one of the recommendations we always make when we're working with leaders. One, do they have a good number two, right? Which is a RevOps person. And if they don't, they should immediately look to hire someone. And typically hiring more senior early on gets you way more lift than Well, I don't have the budget.
[00:33:51] I just want somebody to do CRM, right? That's always, I think, a miss on their part because they're not thinking long term, right? You get a good director in or senior director or a VP that's actually scaled an early stage company to mid stage to late stage, and you're off and running, right? Because they know what systems are needed, what process is needed, how to integrate the different functional teams.
[00:34:15] so we're huge proponents of getting RevOps right early on.
[00:34:19] Toni: There you go.
[00:34:20] Pablo: And by the way, to go back to Gainsight, sorry to cut you off, Gainsight, phenomenal RevOps person when we did this project that actually drove, helped drive that 66% improvement, right? Caitlin, when she was running RevOps, phenomenal team, phenomenal leader, could it have happened without her? I don't think at the pace they moved, like she was the glue that helped connect a lot of the pieces.
[00:34:43] Mikkel: I think it's just super interesting because you, you know, so we talk a lot with revenue operations professionals. And what happens so often is they hope to land in a very strategic position and they end up just, you know, doing Salesforce validation rules, which is not really what impacts revenue or drives the needle for the business.
[00:35:02] And I think you said something very important that it's like the right hand man or woman for revenue. And you need to go for a strong leader in that position early. What is it that person does? Like, what will that person do differently than just hiring a, you know, a system administrator instead?
[00:35:20] Pablo: Yeah, let me, let me clear up, uh, something you said I want people to understand is like, you don't walk into a strategic role, right? You create a strategic role and you earn it, right? I think you've got to build the trust of, uh, because I have this, I have this discussion a lot with leaders is like, well, I've been relegated to just do CRM or analysis, right?
[00:35:43] I'm like, okay, I don't, I don't know if you were relegated or.
[00:35:49] You didn't show the value you can bring, right? Because there's two kinds of ops people. There's the ones that do get relegated, and I think it's their fault. And there's, then there's the ones that truly show up as a trusted advisor and that chief of staff to the head of revenue, help them think through, um, again, okay, you know, back to my example around strategy, are we going to go into France, Germany, or Benelux?
[00:36:11] Like, hey, I ran the analysis. Here's what the markets are doing. Here's where our competitors are. Um, based on that, my recommendation would be let's just do France and Benelux today because Germany is going to be more difficult. Yes, it's a larger economy, but here's the rationale, right? That's what a good RevOps leader would do, right?
[00:36:29] A bad RevOps leader would be like, well, here's the systems we need for the countries and, you know, we have to be in German language and French. Like, that's not thinking strategic, right? Like, you have to show up as. But not just to the head of revenue, right? To marketing, to product, because they want to say, wow, that person's awesome.
[00:36:49] If you think about it, the best RevOps leaders, when you, the head of revenue, aren't there, sub in for the head of revenue, right? And they don't, other people don't go, oh, I can't believe, you know, Margaret or Johnny is here. I'm not going to listen to them. They go, crap. The head of revenue's gone. We got to listen to this person because this person is going to hold us accountable and is way more tactical, right?
[00:37:12] So, it's up to you, head of RevOps, whoever you are listening, right? To build that trust, build that, uh, advisory capability so you're viewed more than just a tactical person.
[00:37:25] Toni: And I think really that's. So, I mean, for, for RevOps folks listening, I think that's great advice. Um, and then for kind of the CRO, VP sales, VP revenue folks listening, it's also about the, uh, you know, and, and I don't think you can always pull the strategic, uh, value out of a person, right. To your point, you need to, you know, that, that needs to be a push from that person, but I do believe that there can be a difference in when you want to establish your revenue operations function, uh, don't go for the, uh, system admin.
[00:37:57] jobs back, so to speak, maybe shoot a little bit higher, you'll, you'll pay quite a lot more potentially. Uh, but you get a lot of additional other benefits that, that will actually benefit you in terms of, you know, increasing revenue, uh, probably saving costs somewhere. And most definitely also, uh, the ability to, you know, foresee risks and obstacles and, and bring this to the awareness of, of the leadership.
[00:38:21] Pablo: Absolutely. Like, I think you said it there, like, could you hire the Salesforce admin? Sure. And you probably need a Salesforce admin. Right. But where do you get more lift, right? A leader that understands strategy can help you do compensation planning, set quotas, think about territory design, understand systems so it can work with IT, uh, you know, understands top of funnel so it can work with marketing.
[00:38:44] Uh, can think about contract lifecycle management, right? Like, are we being efficient? Uh, are we targeting the right customers? Are we deploying salespeople effectively? Right. Uh, we've got budgeting season coming up, right? We're about to hit Q4. Can that person help work with finance and the team to figure out, do I need to hire five people, 10 people?
[00:39:02] Like that's invaluable, right? And allows me as the head of revenue to focus my time on the customers while I have somebody helping me develop the strategy and running the business,
[00:39:13] Toni: Yeah. And I think. I think what's really powerful is to, while Head of RevOps was a very much a trending topic in the last, you know, year and a half or something like this, the promise that came with it was always around efficiencies, right? And some things we, we talk about this here on the show a lot and, and we fear and worry and sometimes, sometimes also see it that the folks that were hired into those positions aren't really actually able to deliver those efficiencies, right?
[00:39:41] And I think, I think a way to also achieve this is to use some of the frameworks here laid out in the book, right? It doesn't need to be exactly to the T, but those are, those are ways of how some of those folks listening can actually deliver these efficiencies that in the end we're hired for, right?
[00:39:58] And I think sometimes the job spec veered a little bit into the system admin role, I absolutely kind of see this a lot, but at the end of the day. You need to almost ask yourself, okay, you know, when, when the next time of budgeting season is coming up, will people think like, okay, Do we need to improve Salesforce just a little bit more this year? And will that actually deliver a lift? Or do we need to do something else instead, right? And you want to definitely be in the latter part of that conversation. and, and getting to this point, number one, obviously you need to be able to talk the strategic talk that is, I think sometimes really difficult for folks to figure out, but at the end of the day, then also use those, uh, use those frameworks out later in the book to actually deploy some of those lifts either on the cost side or the revenue side or wherever it is, but that's, that's how you get to, to deliver value for, for the organization.
[00:40:46] Pablo: Yeah, no, absolutely. Um, and the book has, again, the book can be used if you're a CEO, if a Head of Revenue, right? But for RevOps specifically, Like chapter four, which talks about process, right? RevOps is at the center of reps hate process, right? It's too cumbersome to close a deal. The handoff process to post sales or implementation is a pain in the butt.
[00:41:08] The renewal process is difficult, right? If you take the elements from the chapter on process improvement. You can run your own Kaizen sprints to make it, to make improvements, right? The, we talk a lot about constant experimentation, right? So if you want to be innovative, a lot of times people don't want to take risks.
[00:41:26] Cause what if I test something and it doesn't work? Well, the beautiful thing about experimentation is test it with one of the groups, instead of testing it globally, test it with the team in the UK. First, if it works, awesome. Test it with the team in EMEA. Awesome. And now go with your entire global team.
[00:41:41] Now you look like a hero, right? You've done an awesome job. The chapter on also driving accelerated value, right? And really understanding, we love this chapter, Matt and I, because it brings marketing and sales together, which we all know are always, you know, there's always some sort of nice tension there, but especially in today's environment where the buyer has changed and the decision maker has changed and the budget owner has changed, right?
[00:42:04] I, as the decision maker and budget owner have kind of lost my ability to do that because now the CFO and the CEO have said. Everything rolls up to us. We'll make the ultimate decision. So, have companies really mapped out the, um, customer journey to understand what is the, what does the customer really value.
[00:42:23] As you go and pitch your solution, right? have you redone your personas in terms of, okay, now I got to sell to the CFO. Do I understand what the CFO cares about? Everybody says, well, it's all about margin and dollars and cost to the CFO. Is that true for every CFO? Not always, right? And so I think there's a lot of really good frameworks that people can leverage.
[00:42:43] Uh, that will help them in their day to day role to improve the commercial organizations.
[00:42:49] Toni: And I also think for just ideation almost, right? If you have a larger organization. there, there's so many ways to say, okay, we're seeing a conversion rate or an ACV or a sales cycle. Some of those quality controls be higher in one region versus the other, right? And then what should you be doing about it?
[00:43:08] Well, you should investigate and understand why it is better somewhere, and then it should try and replicate that DNA somewhere else. And, and also the other way around, something is not going according to plan. You know, number one, you obviously need to. You know, find it, you need to detect that something is going off.
[00:43:23] You need to inspect of, you know, why it's going off and they need to be able to act on this. Right. And, and I think those could be super easy ways for folks to unlock, um, those efficiency gains. And this can be both impacting cost and, or revenue. While, while, while CROs, and in many cases, the CRO is the, the, the leader of, of the revenue operations function, while CROs tend to not care too much about cost and CAC and these things, the best do obviously, but many don't, and at least not the day to day.
[00:43:51] Saving costs really means you can redeploy that somewhere else in order to unlock more revenue actually. Right. it all ties back to, acquiring customers at the end of the day. And there's so many different ways and angles in, in any organization really that, you know, over time you can unlock and the.
[00:44:07] The crazy thing about this is, and this is goes back almost to the formula one example, um, they compound over time, right? So you have one improvement and you will kind of keep, you know, this will be a gift keep, uh, that keeps giving, but then also if you are able to sequence different improvements together, you have another compound, coming out of that as well, right?
[00:44:27] So there's lots of different, very big levers that folks should be starting to pull in order to get what from this, uh, one minute. Uh, you know, it's higher change to what, three seconds or something. There's, there are ways to do that.
[00:44:39] Pablo: Yeah, the compounding is, I love you, I love you brought that up, right, back to the example when I was at a startup and Jane reduced that time from 65 to a week, right, and said, I don't need eight people, I only need three. In today's environment where people have had to make reductions, right? Budgets are flat or non existent. Going back to strategy and like, okay, I have to make trade offs cause I'm not going to get people. Well, if I just freed up five people, maybe I could do one of those things that I couldn't do before. Right? You're able to be more innovative if you can optimize and be more effective and efficient. Um, and I love when you were talking about, you know, we talk about the five whys a lot, which is one of the lean principles.
[00:45:20] Um, five whys mean when you see an issue or you see something good, you always ask why five times to get to the root cause. So to your point, conversion rates are higher in, uh, you know, Uh, the UK versus France. Well, why? Uh, well, because we trained the team there. Okay, well, why? Well, because there was a leader that actually believed in training, and the team in France didn't.
[00:45:41] Okay, well, why? And so you ultimately get to like, okay, well, what's the root cause of why it's better or worse, right? I think people need to do that. But I would also caution on survivorship bias. Sometimes people think, well, hey, these reps are performing very well. Let's try and mimic what they're doing.
[00:45:56] Without really understanding, well, why are they good? Is it because they're actually good or is it because we gave them very good territories or they had a windfall sale that we can't replicate, right? So you've always got to dig deeper into the data, which I think RevOps does very well, right? Cause sometimes senior leaders see numbers and it's let's go do that.
[00:46:15] Cause that number, that conversion rate looks better. That win rate looks better, really understand the data, understand what's causing it so you can make more, uh, informed decisions to build the business forward.
[00:46:27] Mikkel: Wow, I think this was a wonderful left turn we ended up taking, by the way. You're
[00:46:33] Toni: so awesome, Mikkel, it's fantastic.
[00:46:35] Mikkel: I think I have one last request for you, Pablo. This is for anyone who is potentially watching on YouTube. Can you just take a step to the left or right, whichever you prefer,
[00:46:44] just one. So that's, that's the book.
[00:46:47] You can see it in the back. That's the book. And actually, I'm just gonna go rogue here. So the first one to write a review. and send us a screenshot. I'm going to send a copy of the book. That's it. We're going to do that. Yeah, we'll, we'll do exactly that. Pablo, thanks so much for, uh, for joining us. It's been wonderful to have you, uh, really enjoyed it.
[00:47:06] Thanks. Thanks,
[00:47:07] Pablo: thanks for having me, guys. It was a, uh, it was a pleasure. This is awesome. And, um, for those watching that are related to our hosts here, University of Texas over the Aggies.
[00:47:17] Toni: Wonderful. Pablo, have a wonderful day. Thanks so much.
[00:47:21] Pablo: Thanks so much.