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1. The Current Climate: Why So Challenging?
- Raul sets the stage with a candid reflection: "Why is everything so difficult, and what can we do about it?"
- Acknowledging 2023 and 2024 as tough years for many, Toni emphasizes the importance of moving beyond the "big whine" to identify actionable solutions.
2. AI Hype: Magic Button or Misguided Expectations?
- The promise and pitfalls of AI: While AI dominates VC funding and customer expectations, the hype often outpaces its practical applications.
- Toni critiques the trend of superficial AI strategies, warning that adding "AI" to a pitch isn’t a long-term recipe for success.
- Raul highlights the need for genuine value and strong ROI cases as the hype inevitably cools.
3. Sales Efficiency & Market Dynamics
- Pipeline struggles persist across industries, even as buyer behavior begins to stabilize.
- Toni observes a shift in buyer expectations: customers increasingly seek “magic” solutions and demand more from software providers.
- Raul sees a silver lining: rising expectations push companies to deliver better products, more personalized solutions, and stronger customer outcomes.
4. Decision-Making in Organizations: CEOs and CFOs Take the Lead
- Toni notes a tightening of decision-making power, with CEOs and CFOs often being the sole gatekeepers for major purchases.
- This shift makes it more critical than ever to craft messaging that resonates with top executives while addressing the needs of operational teams.
Creators & Guests
What is Revenue Brothers?
What happens when a VC and a CEO come together?
– They nerd out about all things revenue. And they don’t always agree.
Raul Porojan of Project A Ventures and Toni Hohlbein of Growblocks are the Super Revenue Brothers. In every episode they dissect and debate current issues in B2B SaaS, and offer solutions on how to solve them
No matter if you’re an early-stage startup or a scaling unicorn – you’ll always learn something new.
Introduction
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Raul: [00:00:00] People are still buying CRMs. People are still [00:00:03] buying. ~Uh, ~HR tools, people are still buying heat [00:00:06] pumps and people are still buying solar panels ~and, and, ~and [00:00:09] all the wonderful stuff that's been coming out and climate tech [00:00:12] and carbon reduction software
Raul: So there's hope [00:00:15] things are difficult. ~Um, ~but I do think that if you know what [00:00:18] you're doing ~uh, ~if you have a clear ROI and you sell to the right [00:00:21] people, ~your, ~your sales process is up to par. I do [00:00:24] think that's working
Toni: Raul, [00:00:27] man! ~I haven't talked to you in a while.~
Toni: How has it been?
Raul: [00:00:30] is really difficult, which is going to lead to our [00:00:33] topic today. ~Um, ~I've been working on a couple of projects, just finished a [00:00:36] big one, which was quite exciting and, ~uh, ~I'm actually quite [00:00:39] open to doing new things right now. ~uh, there's a lot of things kicking off this year.~
Toni: Tell me a [00:00:42] little bit more. What's not going so great in your life right now? ~I mean, what's up there?~
Raul: [00:00:45] Actually, I'm quite happy in my life. I would say this year has been, ~uh, ~quite [00:00:48] tumultuous. ~Um, ~a couple of things that, ~uh, ~I wanted to start, but didn't [00:00:51] materialize, but such as the life in the world we live in.[00:00:54]
Toni: Yeah.
Current Market Trends
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Raul: then, ~um, ~just all the traveling, ~uh, ~[00:00:57] starting some companies that didn't work out, ~uh, ~starting [00:01:00] some big projects, which have now finished that worked out.[00:01:03]
Raul: And now just open to new things. ~Um, ~and quite open [00:01:06] either for maybe something fixed or, ~uh, ~also some [00:01:09] more advisory, ~uh, ~this seems to be quite the sweet spot and [00:01:12] I'm working with a couple of companies there and that's working out really, really well right
Toni: ~Yeah. That is So that's awesome. But then let's maybe pivot into ~[00:01:15] What is it we wanted to talk about today?
Raul: [00:01:18] Exactly what I started out with, which is why is everything. [00:01:21] So difficult this year [00:01:24] nowadays, and what the hell can we do about that? And, [00:01:27] and we thought that that was going to be a quite nice topic to go into a [00:01:30] couple of areas we're seeing. There is not exactly one thing we're going to talk [00:01:33] about, but there's just this general [00:01:36] idea this year that things are difficult every [00:01:39] single day.
The AI Hype
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Raul: There's a Jason Lemkin post about we're all [00:01:42] fucked. And then Jocko is adding on top of that, [00:01:45] that AI is going to screw us all over. So is that [00:01:48] the thing? What else is happening? Why is everything so difficult? [00:01:51] Tony,
Toni: I mean, ~like, ~I was forced to kind of, ~you know, ~kill the [00:01:54] company and all of that stuff. I mean, it's like, I could, I could [00:01:57] keep on whining for a long time. I think though, [00:02:00] what's really, what's kind of happening in those boardrooms [00:02:03] is, ~I think ~people are starting to be like, stop, stop the [00:02:06] fucking whine.
Toni: Stop the big whine. Kind of fits. [00:02:09] Yes, we understand 23 was difficult. 24 was a little [00:02:12] bit better, but still difficult. 25, we expect ~to turn off, ~to [00:02:15] move on from this. So that's why I think it's great to [00:02:18] talk about why everything is so difficult right now, [00:02:21] which might actually help us or help our listeners to kind of figure out what is [00:02:24] difficult ~in their go to marine, ~in their lives, and then actually ~kind of ~try and fix that.[00:02:27]
Raul: and I think that's the point here. We're also going to talk [00:02:30] about how to fix it.
Sales Efficiency and Market Dynamics
---
Toni: So one of the things that ~kind of ~I noticed [00:02:33] recently is that, ~um, I mean, ~[00:02:36] everyone is struggling with their pipeline growth. I mean, everyone is [00:02:39] kind of saying this all the time, right? I think this is a, this struggle [00:02:42] will continue into infinity.~ Even actually, ~even if everything is great, people will still [00:02:45] complain about pipeline.
Toni: ~Um, ~what I've been seeing more and [00:02:48] more, ~uh, ~both at Growblocks and a couple of companies I'm [00:02:51] talking to is, ~You know, ~while [00:02:54] everything is starting to get a little bit better, ~like, you know, ~people [00:02:57] aren't as stingy anymore. They're starting to buy software [00:03:00] again. ~I feel that, um, ~the CFO is not vetoing every single deal, [00:03:03] but one thing that has happened is that [00:03:06] the expectation of bias [00:03:09] has changed a little bit.
Toni: ~Um, ~and you know, some of that [00:03:12] might come from this whole gen AI thing, so I don't want to, I don't want to shy [00:03:15] away from this, but it's. I feel more and more [00:03:18] folks are now expecting magic, you know, [00:03:21] previously it was, oh, wow, you can help [00:03:24] support my workflow. And that's really cool. And, ~you know, ~you need to click here [00:03:27] and you need to click there and then you save 20%, [00:03:30] but I think more and more folks are [00:03:33] like, Hey, you know, why is this so difficult?
Toni: Can't just ~some, ~some [00:03:36] fricking AI ~just ~do that for me? ~Uh, ~and why isn't there a button that [00:03:39] just does that ~in this, ~in this thing here? ~And I think, ~I think this [00:03:42] is the buying behavior ~that, ~that might be dragging some of [00:03:45] us down right now ~that, you know, ~where we don't have this, right. ~But we don't, ~we don't have the [00:03:48] talk track of like, Hey, this is how AI fits into this thing [00:03:51] and here, this is what you can do.
Toni: And this is how it's going to get much [00:03:54] simpler. ~Um, and I, and ~I don't mean this just ~as a, ~as a marketing tactic or something like [00:03:57] this. I really mean this as the [00:04:00] expectations of some of our buyers since they exchanged, they're kind of [00:04:03] expecting more, they're expecting more than just software. [00:04:06] And if we can't deliver that, then, you know, that, ~that will just, ~will [00:04:09] drag you down.
Raul: Hmm. [00:04:12] I agree with that and I actually like it. So even [00:04:15] though it's making things for some people a bit more difficult, [00:04:18] I'm a always quite stingy about [00:04:21] actual. Good products and [00:04:24] actual good people succeeding. And I think [00:04:27] that the cream is rising to the top in some areas, [00:04:30] a bit more than before in others, not [00:04:33] for example, in AI, ~uh, ~basically whatever you're building, [00:04:36] people are going to throw money at you.
Raul: ~Um, ~I don't think that's going to keep going [00:04:39] forever, but, ~uh, ~that such is the nature of hype topics. [00:04:42] But I do like that there is kind of a [00:04:45] pushback on, ~uh, ~or kind of a turn back to more [00:04:48] personalization, to more. ~Um, ~you [00:04:51] might call it solution selling, although that is a little bit different, but to [00:04:54] understanding the customer a bit more, which in my eyes was [00:04:57] always a good idea anyways, but some would have [00:05:00] seen me as a contrarian for the last couple of years [00:05:03] because I was never a big fan of, ~uh, ~just mass producing [00:05:06] everything and just the steamrolling through your journey of [00:05:09] a sauce or whatever company you're, you're building.
Raul: ~Um, ~and [00:05:12] now because expectations have risen, you kind of [00:05:15] have to up your game a little bit, which does mean a bit more [00:05:18] personalization typically, which does mean a bit of a better [00:05:21] approach to customer success, onboarding, retention, ~um, ~[00:05:24] making sure customers are actually happy with your product. And I [00:05:27] think those are all good things.
Raul: I do think that it's going to weed [00:05:30] out some people or some companies who might [00:05:33] not have gone with the times, but ~I don't, ~I don't think that that's a problem. [00:05:36] You just have to step up your game.
Toni: ~But, ~but, so what [00:05:39] do you mean specifically, right? Because there's, ~um, um, ~there are a couple of people trying [00:05:42] to use AI to do crazy automations, right? ~And, ~[00:05:45] and that you think ~is, ~is not the right way to put into your approach, which ~I, you know, ~I [00:05:48] probably cannot agree with that, right? ~Is, ~is that what you're saying?
Toni: Kind of, [00:05:51] Hey, you know, ~the, uh, ~this approach is probably one of the reasons why it's dragging [00:05:54] you down. [00:05:57] Yeah.
Raul: I'm, ~uh, ~I have no [00:06:00] negativity for AI. I'm just saying that anyone that puts [00:06:03] AI in their slide deck is probably going to have money from [00:06:06] BCs and then from the customers thrown after them. Which that I [00:06:09] don't like, but, ~uh, ~I do understand the nature of hype, right?
Raul: ~Um, ~[00:06:12] I don't think ~that ~there's a lot of legitimate use cases for AI. And I've [00:06:15] also seen a couple this year that I thought were really [00:06:18] promising. And so I think this is where [00:06:21] I like that the markets. Is [00:06:24] asking you for a bit more. However, in the [00:06:27] AI topic, the, I don't know, the kind of [00:06:30] the criteria seems to be quite loose right now.
Raul: I don't think that's [00:06:33] going to keep, ~uh, ~let's say staying like this
Raul: forever. So maybe in [00:06:36] 2025, just putting AI in your [00:06:39] domain name is not going to make people Google [00:06:42] you and buy you as much as before. And you're still going to have to [00:06:45] actively do something that's going to deliver value [00:06:48] ROI and be presentable to a CFO.
Toni: Yeah. No, [00:06:51] I agree with that. And it's a little bit like with every hype cycle, right? We [00:06:54] had, you know, blockchain and web three and suddenly [00:06:57] every, you know, buy your milk on the blockchain or whatever. I mean, [00:07:00] it's like, there was like all kinds of applications trying to be [00:07:03] squeezed ~onto this, ~onto this technology.
Toni: ~Um, ~we're seeing kind of the same thing [00:07:06] happening right now ~with, ~with AI, where all kinds of different applications are being kind [00:07:09] of thrown at, or the other way around, AI being thrown at [00:07:12] all of those different problems. ~Um, ~I think what we will see [00:07:15] is, ~um, ~there will be actual genuine and, [00:07:18] you know, cases where it makes sense to use that [00:07:21] new technology.
Toni: Like in crypto, it may, ~uh, ~you can argue [00:07:24] whether it makes sense to create Bitcoin, but ~that's, ~that's an application where it totally [00:07:27] makes sense, actually. And in AI, I think you will see [00:07:30] similar cases of all it. And I think those will then actually [00:07:33] survive. And I think those will probably become, ~um, ~you know, pretty big companies [00:07:36] actually.
Toni: ~Um, ~but vice versa, you know, because we are in like complainer [00:07:39] modes and you know, what's, what's, what's making everything so difficult right [00:07:42] now. And I think, I think having [00:07:45] some, you know, I wouldn't even say it's better to have [00:07:48] no AI strategy than to have [00:07:51] like a shitty AI strategy where people could have immediately seen like, [00:07:54] Oh, you're just bolting this off.
Toni: Like you're a [00:07:57] CRM and you say, ~like, um, I don't know, ~it can do something automatically. And now [00:08:00] you're an AI company, people's, I think people are starting to see [00:08:03] through this, not just customers, but also investors, right? ~Kind of there's, ~there's [00:08:06] a difference now AI first versus not, ~um, ~what does [00:08:09] that mean?
Toni: I don't know, maybe different podcast episode another time, [00:08:12] but I think just bolting it on for the [00:08:15] sake of having those two letters, I think that's [00:08:18] dangerous. And ~I think, um, ~I think that might do more harm than it might do good.[00:08:21]
Raul: And the [00:08:24] takeaway for me, how do you deal with that? If you're a [00:08:27] company that does anything with AI or is AI first, or [00:08:30] is trying to position themselves that way, [00:08:33] gut feeling and even more so than a gut [00:08:36] feeling is that I probably wouldn't assume that [00:08:39] 2025 and 2026 are going to go as [00:08:42] smoothly and people are going to just throw money your way with [00:08:45] such little.
Raul: I would say [00:08:48] substance to what you're actually delivering yet. ~Um, given it another, given another spin, like ~[00:08:51] if you had built a SAS tool like that, that would [00:08:54] not have been AI first or MIAI [00:08:57] featuring. ~Um, ~and you were at that kind of product market fit and at that kind of [00:09:00] product evolution stage, nobody would buy your tool in [00:09:03] 2023, 2024.
Raul: But now just because it is AI, maybe people do. [00:09:06] However, Don't get high on your own supply. Don't [00:09:09] mistake these market signals for what they [00:09:12] actually are, which is hype, and that is going to die down very quick, and it's [00:09:15] going to boil down to the essence again, which is a strong [00:09:18] assumption that it's still going to be more difficult next year, ~and ~[00:09:21] Even if the hype is still there, you're probably going to benefit very [00:09:24] strongly from trying to build something that people would actually use for [00:09:27] a good ROI case in B2B.
Toni: Do you [00:09:30] think 2025 is going to be, ~uh, ~more difficult than [00:09:33] 24?
Raul: ~Uh, I, like overall, ~probably not. ~Um, and, and, and ~that seems to be [00:09:36] also the prevalent, ~prevalent, uh, ~voices right now that some things are going to ease [00:09:39] up a little bit, but I do think that what we discuss right now, [00:09:42] and then there's other factors which we're going to go into, but what we just [00:09:45] discussed right now, I think that's a trend that's.
Raul: [00:09:48] Continuous going, which is that your use case needs to be [00:09:51] stronger. Your understanding of ROI needs to be stronger, [00:09:54] your decision makers and the way that you structure [00:09:57] them and the buying units understanding needs to be [00:10:00] stronger to build use cases that people [00:10:03] will actually want.
Toni: I also think kind of because it [00:10:06] talked about some of the decision makers in the process. [00:10:09]
The Role of CEOs and CFOs in Buying Decisions
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Toni: I feel like at least this in last [00:10:12] year and it differs between different sizes of organizations, [00:10:15] but really the only people buying stuff is [00:10:18] CEO and CFO. Like not, not even the CEO or CMO really have [00:10:21] decision power.
Toni: ~Um, ~and if they come to the CFO to buy [00:10:24] something kind of here, she says no, but the CFO [00:10:27] himself or herself, they're shopping [00:10:30] and obviously the CEO can also make some of those [00:10:33] decisions, right? I feel like one of the reasons that, [00:10:36] that has been dragging everyone down is, ~um, ~fewer and [00:10:39] fewer people in an organization of your, you know, your target [00:10:42] size are actually able to make a specific decision.
Toni: ~Um, and. ~[00:10:45] And rising to the top [00:10:48] to, ~you know, ~get in CEO interested in wanting to buy your [00:10:51] tool, really difficult, really difficult to execute for [00:10:54] people, ~um, you know, ~creating some topic or some problem that [00:10:57] speaks to the CEO, but actually then also connects all the way down to ~them. ~[00:11:00] The fundamental ~actually ~application problem that it's [00:11:03] solving further down in the go to market, for example, it's [00:11:06] really difficult to pull this off fine.
Toni: So if you haven't [00:11:09] been able to achieve that as a reverse. [00:11:12] You'll be stuck with, ~um, ~folks that act like the [00:11:15] decision makers because they know how to act like they are [00:11:18] because they have been, but they're not anymore. And [00:11:21] you're going to be, ~you know, ~spinning your wheels, right? And I think ~this is, ~[00:11:24] this is something that we probably need to kind of be aware [00:11:27] of for 25.
Toni: ~Um, ~it's really, You know [00:11:30] option a ~uh, ~we will still have people doing tight [00:11:33] budget management and only very few people really [00:11:36] have the decision power and you need to figure out how to correct that ~not ~[00:11:39] or ~Um, ~you know, maybe some of these things are loosening up [00:11:42] and other folks in the organization can buy things again, [00:11:45] right?
Toni: So it's like I think both of those paths are open ~and ~and I [00:11:48] think ~you ~You probably want to prepare to figure out [00:11:51] how could you present the case to the CFO that might be [00:11:54] interesting for him or her, but you know, maybe it's obviously kind [00:11:57] of wherever you're solving that problem in your part of the [00:12:00] organization
Raul: this year, [00:12:03] especially seen, but also at the end of [00:12:06] 2023, more and more with the people I work with, that [00:12:09] there's kind of ~a, an a downward, ~a downshift in market to [00:12:12] more enterprise like sales requirement ~for, for, uh, for, for, ~for the [00:12:15] sales motion you're doing, ~uh, ~meaning.
Raul: Where in [00:12:18] maybe 2018, 2020, ~um, ~you would have reached the same [00:12:21] customer with just a single touch point or a buying [00:12:24] unit of one, ~um, ~and a shorter sales cycles, the [00:12:27] same kind of customer size and deal [00:12:30] sizes, ~uh, ~requires more. Understanding of buying unit [00:12:33] requires typically going more up ~to the, ~to the chain, which is what [00:12:36] you're talking about.
Raul: And, ~um, ~I've actually seen this. I don't know [00:12:39] if it was McKinsey or BCG or something. I saw a report earlier this [00:12:42] year, which is where they asked CEOs, what do you spend your [00:12:45] time on or executives? And, ~um, ~they ranked us over time. [00:12:48] And one of the things that was increasing the most was [00:12:51] dealing with buying.
Raul: ~And, uh, in general, uh, ~being a buyer and informing [00:12:54] yourself about the market. So you're absolutely right that [00:12:57] people are spending more time on that. Typically in an executive suite. [00:13:00] However, the question here is, is ~if ~the [00:13:03] market ~is ~relaxing a little bit more ~and, and, ~and if ~kind of the, ~the angst and anxiety is [00:13:06] gone, do you think that will reverse or is that kind of a [00:13:09] learning now that all CEOs will for the next [00:13:12] and foreseeable future just remain.
Raul: [00:13:15] Buyers first and foremost.
Toni: So I hate to [00:13:18] kind of bring this AI thing kind of into this again, but I think it plays a [00:13:21] role here. So I think what is really happening is. ~It's, ~it's really [00:13:24] difficult to get CEOs and CFO excited about some [00:13:27] random SaaS software. And I don't want to, you know, ~the, the, ~the SaaS [00:13:30] tool I built, it's also just some random SaaS software really.
Toni: Right. [00:13:33] I don't want to offend anyone, but it's really difficult [00:13:36] to get these guys excited. What gets these guys excited right [00:13:39] now is AI stuff. And I think this is one of the [00:13:42] reasons why, ~um, ~they are spending more and more time [00:13:45] buying, you know, things. I would assume that probably [00:13:48] buying some kind of AI solutions.
Toni: Because they have those [00:13:51] board conversations and they have kind of all of those [00:13:54] dreams about cutting costs and making this super profitable and [00:13:57] using the newest technology. And there's a lot of [00:14:00] fear of, um, kind of missing the boat, [00:14:03] right? So, and I want to elevate this maybe to more of [00:14:06] a public company.
Toni: So let's say you have two pharma [00:14:09] companies competing against one another. ~Um, and both of, you know, ~one of them spends a [00:14:12] hundred million dollars, which is nothing for them on AI. And [00:14:15] the other one doesn't because they don't really see it yet, [00:14:18] right? ~The ~the outcome here is ~let's just say ~the company that invests in AI [00:14:21] loses all 100 million dollars I mean who cares all of these [00:14:24] companies are the same thing Maybe one takes a little ding on the stock [00:14:27] market and then kind of goes back up But that's not the problem ~That's not the scary scenario ~[00:14:30] The scary scenario is that the company with 100 million dollar investment in AI [00:14:33] suddenly gets extremely more profitable [00:14:36] Everything kind of gets smoother faster cost less and [00:14:39] then ~the ~the company that didn't invest at all in AI is kind of left [00:14:42] Behind in the dust, right?
Toni: You That's my, you know, [00:14:45] going with this and kind of saying, okay, we need to place an investment because [00:14:48] not doing it. And then because of that [00:14:51] failing, that's like way more expensive than, [00:14:54] you know, having some experiments running that then didn't go anywhere. [00:14:57] I think this is kind of a prevalent [00:15:00] way of thinking also for smaller companies, [00:15:03] especially in competitive setups.
Toni: And I think that's the [00:15:06] reason why this is such a C level thing right [00:15:09] now. ~And, um, ~and that's why they're kind of driving this stuff forward. And that's why they're kind of, [00:15:12] you know, jumping on those calls and listening ~and, and, and, ~and [00:15:15] buying software actually, ~if, um, ~if you're doing something that [00:15:18] isn't really kind of too, you know, ~to, ~to their liking, [00:15:21] but ~isn't, ~isn't something that's really important to them, that they still won't [00:15:24] pay any attention to this.
Toni: Now, what do I think is going to [00:15:27] happen in the future? I think CEOs and CFOs [00:15:30] will get bored with buying stuff. And this AI thing will [00:15:33] lose a little bit of it. Of its newness, of its [00:15:36] excitement, ~of, um, ~of maybe some, ~you know, ~disappointments will come up [00:15:39] and they're like, Oh, I didn't really save that much money.
Toni: And I think then [00:15:42] some of those decisions, ~uh, ~would kind of go further down in the organization. [00:15:45] And will that mean everything is going [00:15:48] to be back to normal? I don't know. ~I don't know, folks. Um, ~I really don't know, but [00:15:51] I also believe companies have to [00:15:54] buy stuff. Like that's how it works. You cannot not [00:15:57] buy things.
Toni: And it can't be that the CEO is the [00:16:00] only one buying stuff, right? I think ~there will, ~there will have to come some [00:16:03] kind of a relaxation, how that's going to specifically [00:16:06] pan out. And when it's obviously completely
Raul: ~with that And I most of all ~I agree with the [00:16:09] fact that we don't know exactly how that will look like ~like Uh, ~I wouldn't [00:16:12] have known in 2020 or 2021 even being close to the [00:16:15] action that the cfo is going to become that [00:16:18] important in 2022 2023 ~Um, ~[00:16:21] and we don't know exactly how that's going to look like maybe there's going to be new [00:16:24] ways of buying Especially AI, for example, or [00:16:27] the buying of AI will slow down.
Raul: But I think the question here is, [00:16:30] okay, things are difficult. AI is kind of throwing a wrench [00:16:33] in the makings of anyone who's not having anything to [00:16:36] do with that. What do we do about that? And I do think it [00:16:39] comes back to, ~um, ~understanding where buyers are [00:16:42] at right now. And what is the way that you can [00:16:45] position yourself?
Raul: Because, ~um, ~even if you're not, [00:16:48] Anything AI related, ~uh, ~people are still buying. And I think this is the [00:16:51] silver bullet and ~the silver nugget, uh, ~the golden nugget that you just named, ~um, ~companies [00:16:54] have to buy and see levels, understand that.
Toni: Yeah. [00:16:57] And I also ~think, right. It's, um, um, I think, I ~think during all of those [00:17:00] models, ~it's really, uh, ~it's really just another technology. Let's just be honest about this. It's [00:17:03] just another technology. ~Um, ~and. 20 [00:17:06] years ago, SQL was the great new [00:17:09] technology, right? ~Uh, ~SQL, ~um, ~and everyone built around this. And [00:17:12] then Salesforce is really just a big SQL database.
Toni: Like that's [00:17:15] like, you know, I think you could say [00:17:18] Salesforce is just an SQL wrapper. Like you say about [00:17:21] some of the new technology, you know, companies, Oh, this is an open [00:17:24] AI wrapper. I said, you know, it's just a technology that's being [00:17:27] introduced, ~right? ~I think, ~uh, ~using this, there will be some companies that [00:17:30] doing this, First AI first, and there will be some kind of [00:17:33] different approach.
Toni: I'm not quite sure what this means, but [00:17:36] eventually we'll get to this point where it's just sprinkled into everything a [00:17:39] little bit. ~Um, ~and I also think that there are plenty [00:17:42] of use cases right now where gen [00:17:45] AI is trying to, ~you know, ~create ~some, ~some magical [00:17:48] solution, but it's not going to work. And then the actual [00:17:51] solution to this thing is going to be a straightforward [00:17:54] science.
Toni: ~Uh, ~you know, tool based on SQL and a couple [00:17:57] of other things that is maybe much better, much more efficient in [00:18:00] solving that specific problem, right? And I think ~that, ~that [00:18:03] pendulum, you know, that will come back. And I think this can [00:18:06] also be, ~this can be also ~the story you can tell on those phone calls with [00:18:09] those customers.
Toni: Like, yes, AI is a cool thing, ~um, ~but it's [00:18:12] maybe not particularly good at solving this specific problem here [00:18:15] that you have. ~Um, ~so therefore don't get, ~you know, uh, you know, ~[00:18:18] blinded by all this nice glitzy AI [00:18:21] stuff. You need to kind of focus on what's the best solution to [00:18:24] the problem. And ~you know, ~if there's an AI solution to that, ~we will, ~we will basically kind [00:18:27] of have this, but there is none yet.
Toni: Right. ~And, ~and I think ~this is, ~this [00:18:30] is probably a better way to try and avoid the topic of talk around it.[00:18:33]
Raul: I like that the last thing I would really [00:18:36] stress that as well. Like [00:18:39] forget the, the, the two letters right now and [00:18:42] like the, the Voldemort, let's not talk about AI [00:18:45] Mort right now, but, um, [00:18:48] people are still buying CRMs. People are still [00:18:51] buying. ~Uh, ~HR tools, people are still buying heat pumps [00:18:54] and people are still buying solar panels ~and, and, ~and all [00:18:57] the wonderful stuff that's been coming out and climate tech [00:19:00] and carbon reduction software and ~whatever, ~whatever else is [00:19:03] happening.
Raul: And most of that is not AI empowered right now, [00:19:06] or at least not first, ~uh, ~right now. So there's [00:19:09] hope things are difficult. ~Um, ~but I do think that if you know [00:19:12] what you're doing and, ~uh, ~if you have a clear ROI and you [00:19:15] sell to the right people, ~your, ~your sales process is up to par. [00:19:18] I do think that's working, but let's jump into that next [00:19:21] point because I do think that this is one of the things that's also difficult this [00:19:24] year is that just sales processes are [00:19:27] different, especially sales efficiency is down [00:19:30] across most sectors.
Raul: Not everything is down, but [00:19:33] that is something that again, the doomsday sayers and ~the, ~the LinkedIn [00:19:36] bubble is screaming out so loud. ~Um, ~what do you think about that? What's [00:19:39] happening with sales efficiency? Is it picking up again? Are we [00:19:42] over the hump or ~what's, ~what's going on?
Toni: So, ~I mean, ~if [00:19:45] you look at some of the public stock, ~um, ~[00:19:48] Indications, you basically would say, no, we're not over [00:19:51] the hump yet. ~Um, ~sales efficiency has been just getting worse and worse and [00:19:54] worse. ~I, ~I think it's really cool for people to talk about this [00:19:57] profitable, efficient growth, but I also [00:20:00] think really, [00:20:03] really, we're playbook [00:20:06] just on a lower budget, you know, that's kind of what's going on right [00:20:09] now.
Toni: ~Um, and, ~and I can't blame anyone because, you know, ~while, ~while this PEG, [00:20:12] probably efficient, both is like a really cool, ~you know, ~story to tell. [00:20:15] It's really intangible what that actually means. Kind of, ~you know, what, what, what, ~how's that really [00:20:18] actually different? It doesn't mean no SDRs. What if my [00:20:21] SDRs are my most efficient channel?
Toni: Why would I cut them? That doesn't make [00:20:24] any sense. Right? So it's, ~um, uh, ~we, we're still just playing the old [00:20:27] playbook, which, you know, There's usually not [00:20:30] a big step function. Now we're doing things differently. [00:20:33] And ~when you look at, ~when you look at the numbers, it's still just difficult to acquire [00:20:36] those customers, right?
Toni: So I think sales efficiency has been [00:20:39] going in the wrong direction, you know, [00:20:42] continuously, but ~I wonder, ~I wonder if ~the solution to, you know, ~the [00:20:45] solution to this is going to be, ~we need to be more efficient, ~we need to be more efficient, we [00:20:48] need to be more efficient, or if the solution is, Hey, we're kind [00:20:51] of doing all the right things.
Toni: ~Um, ~we quote unquote [00:20:54] just need the market to turn, ~um, you know, get, ~get some more deals and, ~and then ~see [00:20:57] that ~we're, ~we're efficient again, right? Because kind of that efficiency [00:21:00] metric, ~uh, ~you can really, ~you know, uh, you can ~tune this from both sides, [00:21:03] right? ~Um, and, um, and ~I would say after one or two years [00:21:06] of everyone screaming efficiency from, ~you know, ~the [00:21:09] boardroom, ~you know, ~down to the SDR floor, [00:21:12] I think people have been thinking about this a lot.
Toni: Have they thought about this, ~you know, ~[00:21:15] enough yet? Are there still topics on the table? Yes, for [00:21:18] sure. ~Right. Um, but, um, I think, ~I think everyone has tried and everyone is [00:21:21] failing. ~I think still. And it's, it's, ~I wonder if it's an operational thing or it's a ~marketing ~market thing, [00:21:24] right. ~But what's your, ~what's your opinion on this Raul?
Strategies for Improving Sales Efficiency
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Raul: I [00:21:27] actually disagree with the everyone has tried part. ~Um, ~I [00:21:30] think people have tried to the best of their abilities, but [00:21:33] There's kind of, [00:21:36] so we had this discussion off the records [00:21:39] about two months ago or so. I am [00:21:42] hugely disappointed with still the lack of [00:21:45] understanding of the physics of revenue out there and go to [00:21:48] market and all that, even though there are wonderful [00:21:51] resources out right now.
Raul: And there is revenue architecture. ~Uh, ~[00:21:54] everyone should read that book. That's the book I was supposed to write. And now I have [00:21:57] Jocko did a really good job at that. ~Um, and, uh, so. ~You're saying [00:22:00] people have tried, but if I look at most companies I've seen, [00:22:03] they still don't even have a basic [00:22:06] understanding of the revenue formula.
Raul: So they're still not even able [00:22:09] to break down the revenue formula to, well, you know, I have my [00:22:12] ATA, right? Like, is the numbers accurate? Are they [00:22:15] transparent? ~Uh, ~can we analyze the numbers? Can we then act on [00:22:18] them and understand what worked and what didn't and do so [00:22:21] in a way that actually drives efficiency, ~uh, ~which there are [00:22:24] still ~liver ~levers ~and, and, ~and ways to work that can improve the way that [00:22:27] you do sales.
Raul: Yeah. Or marketing for the, for that matter, [00:22:30] daily and weekly. Now are the Salem returns [00:22:33] there as maybe that would have been in 2021? May, maybe [00:22:36] not, maybe not, but they're still [00:22:39] there. And there's still a lot of them that people don't even have a [00:22:42] lever on, on working with right now. And I think that's what kind of [00:22:45] disappoints me is, ~uh, ~I don't think that this is the most [00:22:48] important topic right now anymore, even though I think it's quite up [00:22:51] there.
Raul: And I do think that people who thought they gave it a good [00:22:54] try and they didn't achieve much with it, didn't actually understand how [00:22:57] to do it. ~And~
Toni: ~you, do you honestly, so I mean, ~I'm a big fan of the revenue formula, a [00:23:00] big fan of the whole bowtie thing, revenue architecture, all of that [00:23:03] stuff. ~I know that's great. Um, but ~it really is, ~you know, quote unquote ~only, it simply is just a [00:23:06] methodology. ~It's, ~it's a really great methodology ~kind of ~to peel apart [00:23:09] your go to market and see where something might be wrong, but it's [00:23:12] really just that.
Toni: ~Um, ~There are many other ways to look at, ~you know, your, ~your go to [00:23:15] market as well. ~I kind of, this is just one lens to look at this thing. Um, ~I don't think everyone is completely educated in, ~you know, ~being a [00:23:18] revenue architect and that's up to Jacco, the team ~to, ~to fix that. [00:23:21] But do you really believe that, ~um, ~Lack of having [00:23:24] that methodology ~in ~imprinted in your brain is leading to [00:23:27] people being inefficient because you can also look at [00:23:30] it from a different angle and say like, well, There's so many other ways to [00:23:33] try and become efficient.
Toni: Um, and that they probably have tried [00:23:36] that, right? That probably not everyone is an [00:23:39] idiot. Not everyone is an idiot out there trying to become [00:23:42] more efficient. They probably tried in some way that probably haven't [00:23:45] tried the revenue architecture way of doing it, right? [00:23:48] Which maybe is the gold standard, but I'm [00:23:51] honestly wondering, ~um, does it, ~does it require to kind of follow this [00:23:54] methodology in order to kind of reach efficiency status, ~right?~
Toni: ~Which is kind of what you, what you kind of said.~
Raul: ~it's okay. ~So as [00:23:57] some people might know, I'm, I'm trying to lose weight, right? [00:24:00] And I actually have been quite successful the last two years, not as successful as I [00:24:03] would like to be, but that's beside the point. ~Um, ~I [00:24:06] need to have a way of measuring that. ~Right? ~[00:24:09] Maybe body fat, maybe weight, maybe whatever, circumference of this, [00:24:12] whatever you want to measure.
Raul: But I need to have a way of measuring [00:24:15] that. Otherwise, ~like, ~maybe I can look in the mirror, that's also a [00:24:18] way of measuring it. needs to be [00:24:21] some way of me, for me to understand, okay, what am [00:24:24] I doing and is it working? And there needs to be some frame [00:24:27] for me to understand, like, hey, is this good food? Is this [00:24:30] bad food?
Raul: Is this a good workout? And is this a bad workout? So [00:24:33] there, there's kind of a methodology in my head, even though I'm not thinking about it, [00:24:36] because it's quite obvious and everyone thinks that they know what they should be [00:24:39] doing. And to me, the revenue formula is the [00:24:42] same. Like if you don't have a reference point for what [00:24:45] sales efficiency actually is and how you're actually looking [00:24:48] at it and how you're acting on it, [00:24:51] then maybe you'll find your own reference framework, even though it would [00:24:54] probably be looking mostly the same, but you need [00:24:57] that.
Raul: And what I'm trying to get at is in the execution [00:25:00] of things operationally, without that, you don't [00:25:03] have much grounds. You don't, you don't know what's working and what's not [00:25:06] working. So. [00:25:09] You don't have to follow the exact formula. I don't really care what people do at the [00:25:12] end of the day, but have a frame, have a, have a, have an idea of [00:25:15] what you're actually doing there.
Raul: And when I talk to people and they tell me, Oh [00:25:18] yeah, we've tried everything. Sales efficiency, we've improved by [00:25:21] 10%. Okay. What have you done? What [00:25:24] was the impact? How have you tried it? What was the sales [00:25:27] efficiency before, right? So I have this famous [00:25:30] example, which actually is not one example, but it's an amalgamation of many [00:25:33] examples.
Raul: I worked with a company before [00:25:36] a large project. Let's call it a sales efficiency [00:25:39] project, even though it was a bit more. And ~when I, ~when I started the [00:25:42] project, ~the C ~it was like a six months thing. ~So ~the CEO was very [00:25:45] excited and they told me that, Hey roll, this is so [00:25:48] great that you're going to help me.
Raul: ~Uh, ~I love that our conversion [00:25:51] rates are going to go up so much in our sales cycles are going to improve so [00:25:54] much. And I laughed and I actually told him in that call, I [00:25:57] said, well, no, that's probably not going to happen after a month or two [00:26:00] years. So your conversion rates will go down tremendously. ~Uh, ~and your [00:26:03] sales cycles will probably be longer as well.
Raul: And he was shocked. And he was like, Hey, why [00:26:06] is that? I was like, well, because what you have in your funnel right [00:26:09] now and what you're seeing is just not accurate. So first we need to [00:26:12] get to even represent reality at all and have a frame for what we're [00:26:15] even measuring. And mind you, that's a company that's been over 10 [00:26:18] years old at that point in time.
Raul: ~And what I'm trying to get here is that, okay. ~People are saying they've [00:26:21] tried to increase, improve sales efficiency. I would [00:26:24] say a good portion of them don't even know what their sales efficiency is. [00:26:27] Maybe they know the cock. Maybe if they're, [00:26:30] I don't know if they can attribute it, but maybe they do in a more [00:26:33] sophisticated company.
Raul: They do for sure, but [00:26:36] very rarely can they say what worked and what didn't [00:26:39] and what annoys me is not that everyone doesn't [00:26:42] use the framework that I referred to, but that it is so easy. And as [00:26:45] you're saying, people are not idiots. So that's why it baffles me that people are [00:26:48] not. Trying to adopt kind of a very [00:26:51] simple way, which is I'm trying to lose weight.
Raul: I [00:26:54] look at the scale and I look at whatever I look in the mirror [00:26:57] done. I understand now have I lost weight? And the same [00:27:00] analogy is, well, there's ways to do that for a CRO, for [00:27:03] a founder that they're just not using, even though they're intelligent [00:27:06] people. ~So yes, you can fumble your way around cock and cock payback period.~
Raul: And yes, you can fumble your way around the board talks and [00:27:09] try to explain what you've done and what you've, what you, what you [00:27:12] try to do. But. There's just very simple things that are [00:27:15] easy and that are kind of the physics out there. So, no, you don't [00:27:18] have to use them, but it would be very beneficial [00:27:21] and it would make things a lot easier for people out there.
Toni: ~I think kind of, I, ~I [00:27:24] love ~the, the, ~the weight loss analogy because ~to, ~to a degree it really is also, ~um. , ~[00:27:27] you know, consistency ~is, is, ~is kind of the key here, right? ~Um, go. ~Just [00:27:30] showing up at the gym ~is, ~is the leading indicator ~for, you know, being, for, ~for you to ~kind of ~[00:27:33] having weight loss. You don't even need to kind of go on the, you will, you [00:27:36] will go on the treadmill anyway if you actually made it to the gym.
Toni: Right? [00:27:39] And ~I think, um. ~I think the same is true for, for go to market [00:27:42] leaders, right? Kind of, they talk about efficiency, maybe on a quality level [00:27:45] because then need to report to the board, but do they, do they [00:27:48] show up every week? Do they show up every other day to kind of think [00:27:51] about, okay, this is probably not as efficient as it [00:27:54] could be, you know, we need to change something here.
Toni: ~Right. And, ~and if there's [00:27:57] anything I think that, that people should be taking away is, and it [00:28:00] doesn't need to be this Remy architecture thing, which I think is also [00:28:03] very, I think it's overwhelming. [00:28:06] Like ~this, ~this book alone is, ~I, ~you know what, I haven't read the book [00:28:09] and I'm probably not going to, it's just too long.
Toni: It's just too [00:28:12] much. ~And, and the, um, ~I think what people should just be taking away from this year is [00:28:15] like choose a, choose an efficiency [00:28:18] metric that you think is the right one. ~Um, ~it can be payback, [00:28:21] it can be a sales velocity, it can be, you [00:28:24] know, maybe you think GRR is just the [00:28:27] efficiency metric. It can be so many things and then just figure [00:28:30] out what is contributing to this.
Toni: ~Um, And, ~and ~this can be, ~this can be a [00:28:33] metric tree of, okay, you know, in CAD [00:28:36] payback that breaks down into cost and MR and what goes into [00:28:39] MR and you know, all of these things. ~Uh, ~but it can also just [00:28:42] be, ~um, you know, ~simpler than that. It's like, okay, ~uh, ~we know [00:28:45] that if our SDRs spoke 12 instead of 10 [00:28:48] meetings, ~that would, ~that would drive efficiency like massive.[00:28:51]
Toni: It can be simple like that, right? Even ~the, ~the revenue [00:28:54] architecture and the revenue follow up, they're not actually encompassing some of those [00:28:57] very simple metrics that you can just choose to be [00:29:00] a thing and then kind of push for that. ~Right. ~So, ~um, ~[00:29:03] it's a little bit ~like, um, ~like you mentioned, there's like pick one of [00:29:06] them and then just.
Toni: Do nothing else for the [00:29:09] next six months and try and kind of improve this thing, right? And don't bring it [00:29:12] up every month or every quarter, bring it up every other day, [00:29:15] bring it up every, you know, a weekly meeting and so forth. [00:29:18] And then focus on this. And I think we're getting like very [00:29:21] deep into the, ~um, ~the people that actually become more efficient and why [00:29:24] not kind of, ~uh, uh, ~wormhole here.
Toni: But I think it's super interesting [00:29:27] though. And I think if, if, if [00:29:30] there's one, what is it called? Like a new year's [00:29:33] Kind of a resolution. [00:29:36] It's like, you know, scratch the gym stuff. ~Um, ~you [00:29:39] know, focus on, on sales efficiency.
Raul: [00:29:42] Yeah, that's your, that's your New Year's thing. [00:29:45] And I remember one thing that ~you, ~you actually introduced in the podcast a [00:29:48] couple, maybe five to ten episodes ago. ~Um, ~When you do [00:29:51] that, things are actually not more difficult. They're [00:29:54] simpler and they allow you to do something, which is [00:29:57] actually start compounding effects on top of each other right now, [00:30:00] seemingly small things.
Raul: And you talked about that. ~If you, ~if you [00:30:03] improve the funnel by 10 percent in seven stages [00:30:06] or in seven. pieces of the funnel, you suddenly have [00:30:09] doubled your funnel, which is maybe not feasible immediately, but just the [00:30:12] power of incremental improvement. And we're talking 10%. [00:30:15] So a conversion rate improvement at one spot from [00:30:18] 10 to 11 percent or 20 to 22%.
Raul: That's a 10 [00:30:21] percent improvement. You do that seven times and you keep that [00:30:24] steady. You've suddenly doubled the outcome of your funnel. And ~the, you called that, I think ~[00:30:27] the compounding effect ~of, ~of improvements ~or something like that. Uh, and, and, and I think, ~If [00:30:30] there's a kind of a North Star to what you should be aspiring to, the year is [00:30:33] difficult.
Raul: Start focusing on the small things, understand [00:30:36] them, and try to improve by 10 20 percent and [00:30:39] do that a bunch of times over a year. ~Man, ~the year is like [00:30:42] 12 months long. Take 6 7 periods of those, [00:30:45] 2 months each. Improve one thing by 10%, [00:30:48] at the end of the year you'll have 10%. ~Um, ~given the same input, ~right now, ~put more leads in there, more [00:30:51] salespeople.
Raul: It's all of a sudden you've tripled or quadrupled [00:30:54] and it can be so simple. And it actually is for the companies who look at it that [00:30:57] way.
Toni: Raul. ~Um, ~
Conclusion
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Toni: I think kind of, we were actually planning [00:31:00] to make this a, like, Oh, everything's a difficult episode and not [00:31:03] really offers them specific solution. I think [00:31:06] we ended up offering. Get real around AI [00:31:09] don't miss the boat, but also don't fake it. ~Um, ~and then the other thing [00:31:12] is really Hey, yes, everyone has been talking about [00:31:15] efficiency sales efficiency specifically But [00:31:18] have they really tried was it was it just one of those [00:31:21] newest resolutions last year that that Basically got [00:31:24] traction until january and then the gym was empty [00:31:27] again ~Um, ~you know and basically kind of potentially change that potentially [00:31:30] change that pick one of those numbers and really just focus on this [00:31:33] And nail it there ~Um ~Guys, if you like [00:31:36] this here, hit follow, hit subscribe, kind of wherever you are, [00:31:39] maybe send it to a friend or colleague of yours.
Toni: ~And, um, otherwise, ~thank you so much for [00:31:42] listening. Thanks for all for having this chat.