20Sales: Why Every Sales Rep Should Do Pipeline Generation & How to Teach Them | Verticalised Sales Playbooks: When and How | How the Best Sales Reps and Leaders Structure Their Time with Carlos Delatorre, CRO @ Harness

I think for an early stage company, the CEO really has to develop the plays, figure out the message, at least that initial message. The AES are responsible for generating the pipeline that will support them being successful, them hitting quota. Then anything they get from the other sources is a gift, is a cherry on top, is extra. I don't believe salespeople sell. Buyers buy. All salespeople can do is create an environment that is conducive to that purchase decision. This is 20 sales with me, Harry Stabings. Now 20 sales is the show that dives into the world of sales, interviewing the best sales leaders to uncover their tips, tactics and strategies to scaling sales teams. Today I'm so excited to be joined by one of the OGs of the go-to-market world, Carlos Delatore. Carlos is the CRO to Harness, where he oversees global sales and go-to-market. Before Harness, Carlos was the CRO at MongoDB and Nevan, formerly tripashans. He's also an investor, with a portfolio including the lights of modern treasury and starburst. But before we dive in today, Absumo started with one simple idea. The tools you need to grow your business shouldn't put you out of business. That's why they work directly with developers to get exclusive discounts of 80% to 90% off software, saving entrepreneurs over half a billion dollars since 2010. Some of the biggest names in tech like Mailchimp, Zapier and Dropbox got their start on Absumo, and with a rotating selection of hundreds of tools, you'll find all the software you need to make your life easier in 2025, plus with a 60 day money back guarantee. You can try any tool risk-free. Not the year off with savings, get 10% off your first order, with the CRO 20 lowercase VC and a free tool exclusively for 20 VC listeners. That's CRO 20 lowercase VC for 10% off, plus a free tool at Absumo.com. Carlos, I've wanted to do this one for a while. I've heard so many things about you from prior guests, so thank you so much for joining me today. It's a pleasure, Harry. Thank you for having me. I have arrived. It's great to do it in person as well. It makes it so much more special. I love to start with contacts, though. When did you first realize that you had this love of sales? Probably as a teenager, my cousin, Tais, was dating a guy who was a manager of a clothing store, and I think I was 14 or 15 at the time, and I had worked, you know, for several years, mowing lawns and raking leaves and doing odd jobs paid by the hour. He decided to give me a shot at the store. He would let me come in on the weekends and sell men's suits. The commission rate was 10%, and the suits were $800 to $1000, and over the course of a weekend, I could usually sell one suit, maybe two, maybe three, and so to make a hundred bucks in the air conditioning in the mall was pretty amazing. And I thought, hmm, there's something to this. Do you think people are born salespeople or do you think it can be learned? I think it absolutely can be learned. I think when people say that someone is born a salesperson, usually what they're referring to is charisma and a big personality, and I don't know that those things are necessarily what makes a great salesperson, they don't hurt, but they're not the core of it. So sure, having more empathy, being genuinely curious, I think those things help our innate attributes that make people better salespeople, but I think most of it is learned. EQ, empathy, that pain tolerance, all feels a little bit like a game of art. And then we see the world today and it feels a lot more scientific. How do you think about sales being art or science? I think art is what we call something when we don't understand it yet. People could say, oh, Picasso, that's art, how does he do it? And then you have students studying for years, and then they break it down. Well, it's the colors and the shapes or whatever it is that's the basis of Picasso's art. And so I think like anything, there are people who are savants, who are gifted, and there are people who can connect dots that others don't see. But then others can follow, can learn, and can replicate those things. So I think it's more science than art, candidly. It all starts with bluntly bringing reps on, and I spoke to money and I spoke to dev of Mongo before. And they both said that you're amazing when it comes to hiring sales talent. So I wanted to start there. What are the single biggest lessons for you when it comes to effectively recruiting sales reps? I think it's important to think about the job that needs to be done, arrive at a conclusion, a well-formed opinion around whether a candidate is capable of doing that job. A trap and a mistake that people make is over rotating on what they have done in the past and assuming that success in the past predicts success in the future. Certainly, a track record of failures is something to be thoughtful about and to avoid. But success in the past, you have to be able to break down what needs to happen in the future and identify what skills or what attributes are required in order to accomplish this outcome in the future and then figure out almost like take a battery of what this person brings and how much of what they need in the future do they already bring and investigate or interrogate what they've accomplished in the past, what their life journey is like and form an opinion around their innate attributes so that you can start to have an opinion around the likelihood of their success in the job that you're trying to fill. Okay. You're going to advise me today. I'm one of your angel ambassadors and you're the OG. So, do I bring on board a sales leader who's got incredible experience, incredible network and builds out the sales team themselves or do I bring on young hungry reps and A's to go hunt and really go off on their own and be aggressive? Are you a brand new company or brand new company? That's two or three years. Don't hire a leader yet, hire individual contributor, if first just hire SDRs and you be the rep so that you get, I think for an early stage company the CEO really has to develop the plays, figure out the message, at least that initial message and once you have conviction around who do we sell to, what are the personas, what's the message, then I think you can build an organization around that until that exists I would advise the founder to hire some individual contributors around them, co-locate, sit in the same room so you can hear each other and duke it out and refine the message and refine the plays. Once you've got some conviction that it's repeatable, go and hire a team around it. Should I hire those young ones before I actually have messaging and a play but refined? Sure. You should. Yeah. And they're going to be super junior because they're going to be happy to be at a tech company because it's probably the first tech company they've ever worked at and you're going to have to do a lot of the heavy lifting, you're going to have to train them, you're going to have to remind them that they should wear a shirt to a meeting but that's a beautiful part of the journey that I think only a founder can really do well. So we have that. When we're looking for these wraps, would we rather they have experience in the domain that we're in or selling the size contracts that we're selling? Which one's a more preferable past history? I'll answer the question but then I'll answer the question that I would have preferred you asked. So I would prefer experience with the type of deal over domain unless the domain is so specific that it's going to take a lifetime, you know, if I'm selling some like, you know, molecular modeling technology and you have to be a biologist to understand it. But outside of that, better to teach the domain and to hire as many of the sales skills as you can. What question would you draw the highest? Yeah. I think when you're hiring, the thing you can't change is the innate attributes, the DNA of the person. That's where you should spend the most amount of time. Get to understand who that person is in the areas that they can't change. Then you should have, hopefully, a pretty good idea of what are the skills that they will need to be successful. Once you figure out, okay, this is the type of human being that I need. Now, how many of the skills that they'll need to be successful do they already possess? And then the skills that they don't possess, how difficult is it going to be? How long is it going to be take for them to acquire them? And that is the formula. You can't change the DNA. If they don't have any of the skills, it's going to take a very long time for them to have the ramp. So first the DNA, then the skills, and there's always going to be a gap. So you need to have negotiables and non-negotiables. I love this as granular as possible. You advise me, make a list of the skills that you need, test which skills they have. How do you test what skills they have? I would look for experience at a challenger company. It's so much harder to operate at a company where you don't have a big logo that sells for you, that carries for you. Has this person been successful in that kind of environment? Have they had to do their own pipeline generation? Or have they always relied on STO? are marketing or partners or what have you. So I would look for a history of self-sourcing pipeline generation. Have they sold a product that is of comparable complexity? Have they sold into accounts of comparable size? Have they sold a solution of comparable price, which means it would have multiple stakeholders, which means it would require a business case, which means more politics would be involved from the customer's perspective. Have they sold a solution that involves a comparable number of personas of stakeholders? Have they sold a solution in the same general domain, meaning am I selling into IT and they've only ever sold business apps or vice versa? Some of those for me are non-negotiable, some of those are negotiable, but if we have a lot of gaps, then it just means my ramp time is going to be longer. Which would you say are more often non-negotiable for you? I know it's a situation independent, but more often than not non-negotiable. Yeah, I've spent almost my entire career at Challenger companies. If you're going to disrupt a marketplace, the risk associated with hiring someone that hasn't been at a Challenger company is really, really high. So that one is a near non-negotiable. Pipeline generation, hiring AE's that have not built their own pipeline, that one is non-negotiable, because if they say they will, if they say they want to, they just don't know how hard it is, or they don't remember, maybe they did it as SDRs a long, long time ago. That's a really big risk. That's a kind of a non-negotiable. Maybe they've only sold into mid-market accounts, and they've only sold deals in the 50 to 150K range. We're going to put them in enterprise selling 500K deals with many more stakeholders, but again, we think they're really smart. We think their drive is really high, and so that's more negotiable. So those are some of the things that I'd negotiate on. When we're testing out these skills and the non-negotiables and negotiables, we're going to get into pipeline generation. I have to do later. Are we doing case studies? Are we doing take-home assignments? Are we doing anything physically active to determine these skills? We're reaching a conclusion, or we're developing an opinion on where they are, in terms of maturity on the skill, through interviews and back channels, but then I'm a big advocate for, at the end of the process, we call it a challenge. We have an event where they have a couple of days to go think about some questions, prepare a presentation, and come back and present it, but that's more of a validation around the decision at the end. It wouldn't be fair to a candidate to do that early on because it does take work, and so once as a hiring team, we develop conviction around a candidate, we'll do the challenge just to like make sure we didn't miss anything. When you think about questions around a higher from that approval board or the people involved in the process, what are the most common reasons why there is conflict in a hiring decision for sales reps? I think it's human nature that we tend to index around our own strengths. When we see pieces of ourselves in someone else, I think it's very tempting to become enamored with that and then to miss other gaps. If you've got in a hiring chain of command, you've got people that are quite different. One person that's super charismatic has super high EQ, another person that's super process oriented. The process oriented person might miss that this person is a little awkward, or the high EQ person might miss that this person is not very tight on process. That would be one area where you have disagreements. Do you agree with Jason Lamkin, who says that you should always hire two reps at the same time and subtly enforce this element of competition? Yes, but for a different reason. I do think that having multiple reps co-located is far, far better. At MongoDB, you mentioned that you talked to Dave at MongoDB, we hired a lot of people and our attrition was higher than we wanted it to be, and so we did a lot of analysis on attrition. What we found is that loan rangers, and we meant that, meaning when we have a single employee, and if we have a single rep in a city, and no one else at MongoDB lives in that city, their attrition rate was like four times higher. It's so hard to ramp when you're all by yourself, when that little tiny, that quick question that would have taken 10 seconds to lean over and ask the person next to you, when that now requires you to schedule time with someone, and forget it. So, the likelihood of failure is so much higher. So, sure, the competitive aspect is part of it, but I think the bigger part of it is just helping each other. So, I'm a big advocate of hubs, and so I think at minimum you want two sales, if it's a company, if it's a product where you have a sales engineer, two sales people and a sales engineer, that's like the minimum profile for a hub. Okay, so two people in a sales engineer, that's minimum profile for a hub. I want to get to the pipeline generation. You said it there. Mani was like, pipeline generation Tuesdays are famed with Carlos, and it was so central to how you acted with Mongo and how you execute so well. And so first, I just want to start by asking, we have SDOs, we have DemonGen, why do we need to have this extreme focus on pipeline generation for reps? Great question. There's a few reasons. Reason number one, more pipeline, more of the better. Reason number two, think about when a sales person gets stuck in a deal. Why are they stuck? They're stuck because maybe they're too low and they can't get high, or they're in one division and they can't get over to the other division. How do you get unstuck? PG into the person that you need to be at, you PG into the more senior person, UPG into the other division. And so the ability to generate pipeline will lead to a higher win rate on existing business. What else? Well, if you have an organization where pipeline generation is outsourced, let's say, to another role. It's a natural tendency for sales people to get more and more finicky around what in bounds or what leads are worth their time or worth working. And so the next thing you know, if you take that to its logical conclusion, and I've seen this, I won't mention the company, but I've seen a company where the AES said, hey, the definition of a lead worthy of me working is the customer's ready to see a demo. They have agreed with the SDR that if the demo goes well, they want to quote and they're ready to buy after that. So that's like 80% of the sales cycle is done. And the sales are, and so now in that kind of a scenario, you need such a huge investment in marketing and such a huge investment in SDRs just to meet that bar of the expectations of the sales reps. Whereas if sales reps are doing the work to generate their own meetings and their own pipeline, man, when they get pipeline from their SDRs or from marketing or from partners, they'll treat it like gold because they know how much work and how hard it is to get that. And so your conversion rate on your other your non AE sources is a lot higher. I do have to ask also what I do have to say also, I think it means you don't have the loss of accountability, which is like it's so easy to be like, if I didn't hit my number, yeah, but Demonjen gave me shit leads. That's right. That's right. That's right. So I think the way to orient it is the AES are responsible for generating the pipeline that will support them being successful, them hitting quota, then anything they get from the other sources is a gift, is a cherry on top is extra. Does that not take all way to off SDRs and Demonjen? How do you prevent them from going, poof, which is the cherry on top? So it doesn't really matter. That's the environment under which the AES operate. Of course, the SDRs have expectations, you know, on them. And so you need to have a system where there's accountability at every level and there's expectations and there's performance management. My question to you is again, we had Chris Dagnalline on the show from Snowflake. Love Chris. Yeah, I love Chris. Great dude. And he's like, you can really only take, I think it was like six to eight meetings a week as a wrap. If you really want to come prepared and really smash it, your time is going to be so conflicted or change differently by suddenly having pipeline generation as a core part of it in an expectation. How do you advise wraps on time allocation? Now pipeline generation is a core part of that expectation. Yeah. First, you have to agree, pipeline generation is good. You can also say that roughly excellence in pipeline generation equals excellence in sales. Someone who's got a massive pipeline that misses some things in the sales cycles, you're probably still going to do very well. Someone that executes beautifully but doesn't have enough pipeline, they're going to miss their number. And so that's the first thing. Let's agree pipeline generation by the AES worthwhile. If they agree with that, and I feel very strongly that's the case, then roughly a third of your time, 20% of your time, one day a week is dedicated to just outbound cold calling. And then there's another probably 10 to 15% of your time that is devoted to prep for the cold calling and follow up. from the cold calling. So that's kind of how you get to the 30, how I get to the 35%. When you're hiring these reps and they haven't had pipeline generation as such a big part of their role before, how do you teach them to be good at pipeline generation? Yeah. So remember, I'm not hiring folks that haven't had, that haven't had to do it and been successful doing it. Is that a complete non-negotiable? It is. Yeah. It is because the likelihood, if they've been successful, not having done pipeline generation, when they get in that dark, lonely room, and what I mean by the dark, lonely room is making the phone calls and saying, "Wow, that is the 19th phone call where no one has picked up." And I've left the same fucking voicemail 19 times now. If they haven't done that and they haven't been in that lonely place, the likelihood that they are willing to make that 20th call is low. Even if they were willing up front, when they actually get into it, you have to have been through that journey and seen the other side, the other side, meaning the joy of landing that big meeting, the joy, the fulfillment of creating an opportunity and closing a deal and knowing that deal exists because I PGed it. That company solved this problem, generated this value because I invested in them. There's a pride that comes with that, that if you haven't had it, you're probably going to give up on the journey towards PG excellence. Everyone says to me on the show, the change in sales is that outbound in 2025 is dead. That's crazy talk. You strongly disagree. Yeah, yeah, yeah. I strongly disagree. You think co-cooling still works. Absolutely. Absolutely. But I'm really glad that other companies don't and I hope a lot of those companies are competitors. Does AI change the effectiveness of outbound? When you think about supply, I can now send infinite emails beautifully personalized with effective AI agents tooling data. Does that change outbound? Yeah, I don't know that you can yet, but you will. But really, the most effective means of pipeline generation is outbound cold calling. The human voice based interaction over the phone. The emailing is you do it. That softens the feel. That creates some familiarity so that when they pick up the phone, they're like, "Oh, Harry, why is that sound familiar?" Maybe they don't even know why it sounds familiar, but it sounds familiar because they've received a bunch of emails and those emails had your name on it. They landed with some sort of a positive aura around them. I'll give you an anecdote. There was a sales rep who I love named David Boyle and he was calling on Dunn and Bradstreet and Dave is an epic PGR. We were at a company Oblix and the pinnacle person to talk to at Oblix is the chief security officer, chief information security. We've got a meeting with the CISO at Dunn and Bradstreet and we're in the lobby. The CISO had a little lobby just for the CISO's office. This is a few years ago. As we're waiting for the CISO, Dave is in the hall doing PG, leaving voicemails, pacing up and down the hall. He's looking every once in a while to see if his assistant has called us in. We go in, we meet the guy and before we even start the meeting, he says, "It must be nice to be able to just call a CISO like that and have him bring you in. You're welcome. So tell me about your product." So we go through the meeting. We tell him about the product and on the way out, I was like, "Dave, really just one call?" It's like that guy's got no idea. He opens up his book and he shows me. He had sent him 11 emails, eight phone calls. He had become friendly with his executive admin. He convinced the admin to write a post at note and put it on his screen. He says, "Dave from Oblix wants to meet with you because of XYZ. The guy was on another call, read that, nodded, and that's how we got the meeting." He had no idea about the 18 other touches that had preceded that. And so that's what happens. We have to break through the noise. People are getting lots and lots of, and so that's where email's good and social media and all the other things. But most meetings are set. Like, two thirds are set as a cold call. I think you're always underestimating the familiarity of naming. And what I mean by that is you post 10 times a month on LinkedIn. Me responding to five of them, go call or so awesome to see. After five, you're like, "Oh, the name rings a bell." The name rings a bell. We have it with fans of the show where I'm like, "I don't know what they do or who they are." But the name rings a bell, so true. And that really works. How, we're talking about Unicorn reps right here. Because like, he sounds fantastic. Love him. But how many are actually good at PG, half of the world of sales reps? Yeah. Oh no, less than 10%. It's elite. It is highly, highly correlated with elite salespeople that have the ability and the tenacity, the willingness, it's hard work. Do you have people then in your team who are not good at PG? No. Okay. So then we don't. How do we form structure on it? Can you take me to pipeline generation Tuesdays? What is that? How do you structure it? Sure. Better to start on Thursday. There's kind of a wheel. Sure. You guide the way. Alright. Alright. So before I get into the weekly cadence, let's say for the quarter, I'm an enterprise salesperson. I might select from my territory 20 top targets for the quarter. And I'll sit down with my manager the first or second day of the quarter and I'll validate, "Hey, are these good?" Yeah. You missed this one. It's not very good. Great. Okay. Now I've got 20 accounts that I'm going to go after over the next three months. On a given week, I'm going to focus on one or two accounts. Maybe three if they're on the smaller side. So let's say an average of two. I declare those on Thursday. Those are my focus accounts for next week. Thursday night, I declare them, which is just I click a couple of things in Salesforce. Now over the course of Friday and over the weekend, as a salesperson, I do some research. What's the research? I look at what the execs are saying on social media. I read the 10K. Now you can use AI to make a lot of this stuff so much better. I research the company. I look at their job postings. I look at what you might even go in, look and blind and see what their engineers are saying, see what people are griping about. I try to get a sense for what's really going on inside the company. And then I develop a hypothesis about something that I think they care about that we can impact. Maybe I develop two or three hypotheses. This is for the account. Then I go in and I say, okay, let me come up with let's say it's to account. Let me identify 25 human beings in that account that based on their title, based on their LinkedIn profile, I think are relevant to what I sell. And let me capture those 25 names, their email address, their LinkedIn. I'm going to check to see if I can find them on social media. And then I'm going to go into some database and find their phone numbers. So I've got their mobile numbers. And I do that for two accounts. So I've got 50 names for my 10 most important people on those 50 names. I'm going to also now investigate the person. Have they been on a podcast? Have they written a book? Have they written a blog? What do they care about? And I'm going to develop a hypothesis to a conversation starter for the top 10 of those people. Okay, that constitutes PG prep. So I've got two accounts. I've got let's say two or three hypotheses per account. I've got 50 names with all the requisite information, email phone number, and I've got hypotheses per contact for my top 10 contacts. I can get some help in my prep. Where do I get help? Marketing on Fridays at noon is going to send out a PG passport. News of the week. Everything that happened this week curated for use or reuse in the PG setting. So we had this new release. Well, let me boil that release down into two or three sentences that can be red or can be included in a in a PG email. There was a new case study. Here's the case study. But here's like a again, two or three sentences. So marketing sends out this PG passport on Fridays at noon. Then the manager knows what the focus accounts were because they were declared on Thursday. Takes that PG passport takes their experience and forwards the PG passport back to their team with some advice. Hey, Harry, I see you're going after this account. This would really resonate with them. Hey, Jill, my neighbor works at HR in this account. She I asked her. She said she'd be willing to take a call from you to validate your contacts and make sure those are the right people. Okay, so now the manager's involved in PG prep. It's that's right. It's not scalable. The manager is having to look through what 10 different target people's accounts that there's too many people for them to be going, Oh, Jill's my neighbor. Oh, I know that this piece of the report is perfect for them. Is that possible to ask them to do that across the mall? Yeah, it takes takes an hour or two. You know, remember, the manager is in the role because they know they know what they're doing. They've got some experience. And so it's not to say that the manager's going to have a really great insight for every single focus account, but they'll as they scan the 10 accounts, they'll be two, three, four accounts where they have an idea. Oh, Barclays, I read an article two years ago. Let me find it or I heard something on Bloomberg radio. Let me go find it for you. So that's the PG prep. So the reps got the reps got help from marketing, help from their manager. You know, you might even have a team of data analysts that help with the PG prep. I'll talk about that in a moment. Then Monday morning, there's a conversation, a one-on-one conversation between the manager and the AE to review their PG prep. And this is where the manager really digs in to make it better. Obviously, it's an accountability event to make sure that the prep was done, but more importantly, it's about making the prep even better. Hey, I don't think you're aiming sufficiently high. You don't have the CIO in here. You don't have any senior people. Or they're too high. Jamie Diamond is not going to respond to an email about cloud cost management. Adjust the PG prep. Monday afternoons is a great time to do training, especially training that's related to PG skills. Hey, let's roleplay how to talk to this persona, or let's roleplay how to describe this product's value prop, or let's roleplay whatever. And so we'll meet up together on a Monday afternoon, do some roleplays with feedback and the opportunity to do roleplay again, etc. And so then Tuesday morning, when the butts hit the chairs, people are ready. People are ready. We do have a quick round robin just to get everyone excited and ready for the day. But remember, they've prepped. They've trained yesterday. And so Tuesday is like a really important day. We'll bring cater meals into the office. There's a real camaraderie. We laugh when somebody gets hung up on. We applaud when somebody scores a meeting. We hear each other. This is where the loan ranger becomes terrible. They're all by themselves. All they hear is themselves. You've got a room full of people. Hey, Don, that was really great. Can you say that again? Let me write it down because I'm going to use that. Hey, Jimmy, I would have said this a little bit differently. So they help each other. And then at the end of the day, hey, let's all go get a beer at the pub next door. Let's celebrate the day. Let's laugh together. Let's really develop pride because we know that most salespeople on the planet are not doing what we do. So just so I know how we structure the week, it kind of starts on the Thursday with the planning. That progresses through to action day on Tuesday. Tuesday is when we do action. We are actually hitting the accounts, hitting the targets. And then for the rest of the week, we're harvesting. A couple other things. So yeah, the Thursday, we declare Friday and over the weekend, we prepare Monday morning. We review the preparation Monday afternoon. We train Tuesday. We do PG all day. And then obviously throughout the week, there's follow up. There's harvesting. And then I love to do a wrap up on Friday. So I typically run that myself and it's the whole sales team. And we celebrate the PG success of the week. We tell stories of success. We tell stories about successful meetings. We also tell some stories about opportunities that have been created from previous weeks, PG. And it really builds, I think, an enthusiasm, a belief and it really, and it reinforces this thing we do that's so important, so powerful, but also so hard. And so that's kind of the circle of life, if you will. How has the way that you do pipeline generation week structuring changed over time? In the early days, you know, the first time I have is ever exposed to it, was it a parametric technology early in my career and we called them power hours. Whatever. Thursday at 9 a.m. everybody be in the office. And so Thursday at 9 a.m. you pull up act is before Salesforce. And you just start making cold calls and it wasn't very structured. And the problem with doing just an hour is you can easily go for an hour and never talk to anyone. And so you need that positive reinforcement of a conversation. Even if it's a conversation that doesn't land a meeting because you learn from that, you think, oh, if I had handled it differently, I could have gotten the meeting. But if you do, if you do a bunch of cold calling and not zero comes from it, it's really hard to bring your A game for the next power hour. How do you think about effective goal setting around pipeline generation? Because every number can be gamified. How do you think about effective goal setting around PG? Well, I think there's a risk of over obsessing on the number of meetings booked. Obviously that's the easiest thing to track. And so typically if someone, if someone is doing good PG, they should be able to on average get two meetings in a given week. Sometimes people will get more, sometimes people will get less. And they might get one or they might get zero. And still they did a good job. It was just an unlucky week or a particularly tough account. And sometimes people hit a hot streak and they'll get four or five, but two to two point five. That's kind of the sweet spot of like really good PG with the process that I just told you about. But the thing to really obsess about is a little bit further down the line. Is there a qualified pipeline coming out of it? I didn't understand how this is a good business. Let me pause. What? Because you have eight meetings a month. If you think two meetings a week is good. Let's say 25% of those convert into paying customers. And the customers are a hundred grand a year. Let's just say that's 1.2 million a year, correct? And the rap is on fully baked every the in 200 to 50. Well, then they're like four or five to one. That's pretty good. But that's if everyone is fully brammed. Everyone is effective like that. And that's a good, good one. The numbers that you just that you just shared doesn't take into account. You had a paying customer and you did some expansions in your paying customer. You had a partner bring you a lead that was like 70% sold. So that is purely just the rap going cold into a, you know, into a completely green territory. There's going to be some good stuff, some low-hanging fruit. And so you're like, right, I get it. It's like three to one on your economics Harry. But when you add in partner, demand, gen, SDR, luck, you can be at five to one. Yeah. Or maybe it's four to one on yours and you can be at six to one. What is okay in terms of those numbers? A lot of founders are like, is it okay to be at three to one? Depends where you are in the journey early on when product market fit isn't, isn't really good. Yeah, it might be three to one. You know, the rule of thumb, once you're scaling, you know, you want to be at five to one or better. For short, level of contract size warrants outbound in this way. Oh, that's a good question. Certainly down to 50k. Maybe below 50k, probably, you know, starts to break down because down to 50k, you know, your reps are going to be earlier in career. And so their, their OTE is not as high. And then, you know, when you're up into the enterprise level, then, you know, your, your average deal is probably more than the two to three, four hundred K range. It certainly works there. Everyone today feels like they're suffering with just not enough pipe. People aren't buying the way they used to. Everything's gone back to the CIO in terms of buying powers. What do you say to sales leaders today who go, Carlos, they just isn't the pipe. We are not lacking for pipeline. The thing we're lacking for is ramp sales people that can go, that can go pursue it. I think how long do you give someone to ramp? I think what you're asking is when do you sort of declare, you know, failure in part ways? I think ideally what you have is a series of milestones over the course of someone's journey that start in the first few weeks. They go to training. They prepare for training. They go to training. How did they do in the entrance exam? How did they do in their roleplay? How did they do in the final exam? Were they able to get meetings coming out of their first boot camp? Were some of those early meetings converting? Are they able to get to an economic buyer in their third month? So there's all sorts of milestones along the way. If you decompose a sales person's ramp to productivity, then what you can do is you can identify at any moment, hopefully very, very early, if they're going off course, and you can figure out why a lot of companies, they'll start to worry about someone that hasn't sold at 9, 10, 11, 12 months, and so then they'll make a decision to part ways at 18 months. That's so expensive. Not just in terms of how would you do it differently? Are you able to let go of someone off to six months? If enterprise sales like was generally a year, you've got milestones along the way. If they're not achieving the leading indicators to success, then we figure out why and we try to fix it. If it's fixable, great, they're back on track. If it's not fixable, then that means they're in the wrong role or at the wrong company. We've parted ways with people at boot camp. It was clear in their first month that we'd made a mistake. We apologize for that because we hired them, but why wait nine months and waste their time and waste our time and opportunity costs? I totally get you. Ram time is determined often by quality of training. When we think about skill development, what have been your biggest lessons on how to train reps effectively, especially in this Ram time? The mental model that we used is we started with this hypothetical fully ramped salesperson. This individual who has every single skill, every single knowledge needed to be successful in the full gamut of selling our solution. Then we said, okay, let's break down all those skills and knowledge into competencies that we think can be learned in three hours or less. Then let's group them by what is the ideal modality to learn it? Is it something that they can learn on their own? Is it something that they can learn on a Zoom call? Is it something that they can something that they really need to be in a classroom to learn. Great. Now, let's look at the ideal sequence. What's the right sequence so that we can get them to land a good healthy new logo as early as possible. And then what we did is we've created a learning journey that really spans about almost nine months. And it has three week long trainings, a boot camp, an intermediate, and an advanced. And then coming out of boot camp, there's a roughly half a day. There's a three hour remote session that they attend with the same cohort that they went to boot camp with that goes deep on one competency. And so what we end up with is people coming out of boot camp able to do pipeline generation. They're able to have a conversation, start, start meetings. They're able to do discovery, do a good first meeting. By the time they get through intermediate, they can land a new logo with our core product. And that's really the key. Once somebody can land a new logo with the core product, the likelihood that they're going to be successful is very high, even though they don't have some of the advanced knowledge or the advanced skill. So that's kind of what we're doing. What is the average time it takes for someone to land a core logo? You mean just the sales cycle? The sales cycles are not that long. It's about four months, about 120 days. How fast do we let someone get on a customer cool? Because obviously, customers and pipelines are very precious. First week, young, we're happy. You don't want to just throw on that who doesn't know that shit. You know, when do you let them soon early? We have a messaging framework that we've built. And a lot of time sales people get it even before they start. So they're able to read, understand our value prop. It's got sample questions in there, proof points, et cetera. And so they can be on their on the phone in the first couple of days on board, even before they go to boot camp. They typically go to boot camp, maybe week three, four, but they're on the phone, even before. And then certainly at boot camp, they're doing pipeline generation. And they will typically have set their first meeting for sure before the end of boot camp. With respect, boot camp sounds quite a resource heavy institutional grade training program. As you say, enablement 3.0. Great. If you're an early stage founder, how do you think about the brand training and being as effective as possible? Yeah, you wouldn't you wouldn't be able to afford from a financial perspective, but also just in terms of bandwidth. You wouldn't be able to afford to build that. And frankly, you wouldn't know what to build with an early stage. That's why I go back to what I said before is for a founder, let's say a series A company, I would get some really smart, hardworking, enthusiastic individual contributors and go build it. And you'll be able to build your enablement after you've closed, you know, 10 or 20 customers. And you're like, OK, now I've closed, let's say 20 customers, which means I've probably failed to close another 60 customers. So I've got 80 sales cycles of experience. Now I can identify the things to do, the things not to do. And I can build V one of my training based on that. And maybe that's just two or three days. I do actually just want to go back to kind of the pipe generation because all the skills really come back to that in a lot of ways. When we then review the output of that, we have daily reviews. How do you approach daily reviews? So what makes a good versus the bad one? When do you do them in the week as well? I'm a big fan of the med pick methodology. I know you had Mark Goldberg around here. I think he talked about it. That's the soundest framework that I'm familiar with for deal qualification. I think Dan might have talked about it as well. When to do it, you do it when you need it. What do I mean by that? When it's great to do it early in a sales cycle when it's messy. And there's, you know, so many different strings to pull on and trying to come up with the strategy. It's also great to do it late in the sales cycle where, man, we're forecasting this deal. We better not miss something. Let's make sure we didn't miss something. So I wouldn't say there's a key moment to do it. But the real, the beauty of operationalizing a qualification framework like like med pick, the real beauty of it is that any given sales rep who, let's say, is going through a deal review, they are learning the concepts in the context of this one deal. But then now they know that concept and they will apply it to other deals. And so you know that med pick is working when you see salespeople talking to each other without a manager involved and they're using med pick terminology where you see a sales rep grab an SC. Hey, can I run this deal by you and just like try to poke holes in it? And the conversation is in that med pick framework when you, when qualification just becomes part of the culture and it happens all by itself all the time, that's kind of where you want to be. And then the manager is just spot checking or when you have pipe fund generation day. And it's just spitt off. Whatever it is, the team morale is low. Pipeline is not hitting conversions and not coming. Yeah. What are your biggest lessons as a sales leader on how to really maintain morale when it's just harder? Yeah. I've definitely seen that happen. It definitely, you know, a team can get in a funk. I think the best thing to do is just to stop. Let's all get in a room and let's talk about it. Let's talk about how we're feeling. Typically what'll happen, you know, as a manager, you know, one of your responsibilities, I think, of a great manager is to maintain intimacy with the team, intimacy with how they're feeling, intimacy with where their skills are at. And so hopefully the manager can get ahead of that and see it before it happens and interact and course interrupt and course correct. But let's say, you know, it gets to a point where the team is in a funk and you can just kind of smell it. You can smell it in the air. Hey, let's stop. Let's get in a room and let's all talk about it and let's talk about how we're feeling and let's reach a conclusion. Maybe the conclusion is they're not bought in. They don't believe that this even works. Let's talk about that. Let's talk about why PG is important or maybe they believe it's important, but they just don't believe that they can do it. Okay. Maybe it's a training issue. So getting to the bottom of what is the driver for for their feeling, the way they're feeling and fixing that. How do you feel about verdict clause sales playbooks about what's our verdict clause sales playbook? So if we take Navan as an example, somewhere where you're at, you could have a playbook for financial services companies, for media companies, for healthcare companies, and then wraps who are specifically allocated to those verticals. Yeah. And then can have incredibly granular detailed use cases, insights about those industries. How do you feel about very verdict playbooks? Yeah. So I have a different opinion about the playbook versus verticalized teams. Now, let me caveat this. If you have a solution where it's just radically different in one like ERP, how you implement ERP at a company that at a paint company versus a software company is completely different. So much so that it would be unreasonable to ask a sales rep to be able to do both. So centralizing knowledge around what's going on in an industry so that sales people can be more relevant more quickly with accounts in that industry, I think is absolutely a thing to do. Even if you have a horizontal solution, you know, like a technology solution, IT infrastructure, the challenges, the things that customers in a particular vertical cares about are very, very different. So empowering sales people with that is really valuable. Verticalizing the sales force when you have a horizontal solution, it cuts against meritocracy because there's typically going to be some verticals that are better than others. Like maybe, oh, financial services is just like the cats, meow, what a great, you know, it's such a great fit. And so, hey, the team in New York, are they amazing? Or do they have all the banks? Mixing up the territories, I think, is really good for, you know, for meritocracy and for having a fair distribution of opportunity. And so like I said, the exception would be if the solution is just so different that you have to do it, then do it. But if you can avoid it, I'd rather have sales people that have a mix of the really great ICP and then the ICP or the customers that are a little bit harder, a little bit harder to sell to. The big problem, I think I'm seeing with every SaaS company stays just churn rates. Everyone realized that they bought too many seats. And they're not actually using them. The 50 seats they bought, they're only using 12 of them. And the churn rates are just incredibly high. Do you share the concern of many that actually the SaaS business that we've had was so overpaid on a seat basis that we're really moving into a tough period? You mean that we've oversold customers? Yeah. I do think that a lot of that has worked through the system already. Companies that I'm a little closer to, I think most of that seems to be the trough, let's say, is behind us. I do think that the future, whether it's a consumption business or even if it's traditional SaaS, having sales reps truly involved in driving customer outcomes and creating customer value, I think it's really healthy for the long term viability of a company. The days of the big sales rep with the fancy suit that comes in and does the big deal and then walks off to another account, I don't think that's healthy and I think those days are long gone. What do you feel about discounting? Often we want to get deals done in a quarter. Discounting is often used as this panacea or I will give you a natural 15% off Carlos. How do you feel? I think that using discount to close a deal that was not otherwise gonna close rarely works. If it's a considered purchase, there is either a champion that is willing to advocate for this purchase and advocate with the economic buyer for this purchase versus all the other things on the economic buyers plate. Like either that champion exists or doesn't, and whether that costs 250K or 200K is not gonna make the difference, it's binary. Now, once you get a decision to buy, there could be budget constraints and maybe well, because it's 250, we can't do it until next fiscal year, and we, you know, we make it 180K and they can do it now or we let them ramp in. I'm not like against discounting, but to use it as a lever to manufacture a deal, I don't think really works, not in, you know, considered purchases. Okay, maybe with a commodity where I'm gonna need it anyway, I could buy it now, I could buy it later. Sure, you could discount your way into that, but so we don't use discounting then and the deal slips. Okay, deal slips into that quarter and you own my boss and you own the sales data. And I say, "Cos, I'm sorry, the deal just slipped, it slipped, what do you say to me?" Well, having a deal slip is a painful and to have pain and not extract the learning is really, is to squander an opportunity. Pain is a great teacher. If we revel in that pain and really analyze, we have to figure out, okay, why did the deal slip? And the answer has to be something we failed to do or something we did that we shouldn't have done, what must we learn or what should we learn and what must we do differently in the future? That's the key thing, of course deals are gonna slip, we're gonna lose deals, shit happens, let's figure out why it happened, what we learn and let's get better as a result. When we think about a lot of sales leader ambitions, a lot of sales leaders wanna move into the role of CEO, you did move into the role of CEO. I'm really interested in Manias this one, with the perspective you have of moving into the role of CEO, what do you know now that you would advise other go-to-market leaders about becoming a CEO? It's a good question. I would say, make sure you know what you're walking into. What I mean by that is, if a company is looking for a new CEO, that means that there's a problem or a set of problems that need to be solved. Do whatever diligence you need to do to gain a high conviction that you understand what those problems are, and then honestly, map your abilities and your experience against those problems. So if you're a go-to-market leader and you assess and you reach the conclusion that the problems are largely in go-to-market, could be a great fit. If the problems are outside of go-to-market, then look in the mirror and really ask yourself, am I, the best person, or am I able to solve these problems? That was the challenge, frankly, that I encountered in my CEO journey. I thought I was walking into a situation where the primary, you know, the problems were mostly go-to-market, and sure there were opportunities for improvement in the go-to-market realm, but the company needed to mature and to refine its product, to really land on the proper product market fit. And the reality is that, you know, I didn't have, I didn't have a toolkit, I didn't have skills to guide the company. So I wasn't particularly effective at guiding the company through that period of refining product market fit, and you know, it took me a while to figure that out. Unfortunately, it was a painful experience I brought. People I care about, Keith Butler came over to be the head of sales, and through that journey, we did make go-to-market better, but we found that there was a more fundamental, you know, problem around the product, and I wasn't the right person to solve that problem, so. - Can I ask you, when you think about, and sorry, I'm just peppering your questions here, that I've been thinking about for a while. - It is a podcast, I feel. - Yeah, yeah, but it's throughout the show, I've been thinking this, it's just like, when you reflect on your biggest hiring mistakes, what are the ones where you look back now and go, ah, that's what I've made time and time again? - One that I have made that was particularly painful was to hire someone based on relationships. It was early in my career, and I was at a startup, and this person was very successful at EMC. The numbers that they had posted, and the relationships that they had were so senior, I thought this guy is just gonna light it up. I brought him on, and I spent the first three months going on these fancy lunches at Steakhouse's in New Jersey with these very senior folks who were completely irrelevant to the product that we sold, and fancy lunch, and the conclusion of the fancy lunch is, oh yeah, I'll ask so and so, who's the person you need to get to, and see if they're interested, and the vast majority were not, and so nothing came of it, and what I realized is that this individual lacked the skills to go build pipeline. He just didn't know how to do it. He was a relationship seller, a competent guy, a hardworking guy, but the skills to actually go and call a stranger, and deliver a value prop, and have that resonate, and secure a meeting, and then come in and do a great meeting. All of those skills just, he didn't have them, so that was painful because he was expensive, and I had advocated for him, and we had to go outside of the standard hiring parameters to get him, that was one that was painful. How will the role of a sales rep change in the next five years? I think AI will automate a lot of the research, a lot of the prep work. What does that mean then? We do double the accounts because we have so much more time available. Yeah, I think they're more productive. Yeah, I think we'll see sales people, I think we'll see sales productivity trend upwards. I think we'll also see attrition rates come down because we'll be able to use AI to supplement onboarding. I think we'll probably see better and better AI tools to help companies and candidates match so that the fit is better. So yeah, I think we'll see higher productivity across the board. What does everyone think they know about sales that they most often get wrong? Probably they over index on the value of relationship building and charisma and being the big personality, and that doesn't hurt, but it's not really that impactful. You've mentioned before the lone wolf and the dangers of it, how do you feel about in person versus remote working, especially given the rise that we've seen in the last years of remote companies? I think the trend is moving back in the other direction and I'm glad to see that. Sales teams in passing much more productive. 100%, no question about it, absolutely. They learn faster, their morale is higher. If I'm having a bad day, but the person next to me is having a great day that gives me hope, that gets me through the trough, and so yeah, they're absolutely more productive. Also, managers are there to solve problems, managers are there to course correct, you know, maybe somebody's doing it wrong and they don't know they're doing it wrong, but the manager can see it and help them. So yeah, it's much more productive in person. I will never forget Dave Kellogg telling me, you never want your farmer against someone else's hunter. How do you structure account management between CS and reps to ensure that your farmer is never being fought by someone else's hunter? That's a great question. So I think when you say farmer, what you're referring to is when you have an account manager that is owning one or multiple paying customers whose job it is to maintain and maybe grow those customers, but it's not out there hunting for new business. And by the way, what's baked into your question is acknowledgement of the power of PG. That hunter is able to PG and that's why that hunter is the more effective sales rep. So first of all, your farmers, I don't like the term, I prefer account manager, your account managers should also be excellent at pipeline generation because they're trying to get into other divisions, et cetera. But I think if your account manager is driving real value with the account, then that account becomes very difficult for a hunter to crack. So I'd say you want your farmer hunting inside of the account, but you also want your account manager to care deeply about customer value. And with that customer value comes trust. And if there's a question about a new technology, they'll probably bring it to the account manager and give the account manager the opportunity to either fix something in our current offering or a change as interesting because you're basically saying that wraps need to shift earlier to embrace PG and actually, CS need to shift early and embrace PG also because if you think about the spectrum, you can't have a wrap who's now embracing PG and then him equally embracing CS. You can't have both embracements, do you see what I mean? - No, say it again. - Well, so if you have a wrap in the middle whose core goal is hunting and you're like great, you need to embrace PG now much more actively. on this side of it, which is the kind of post hunt, you can't say to them, as well as PG, you also need to really embrace CS. Well, because a lot of sales leaders today are like, "No, no, we really like reps to be engaged, post-sale to hand off effectively and really keep that relationship going." You can't do that if you're embracing PG. It's hard, it's hard, but I think you can. I think you can. I think a salesperson is probably in a mature territory is probably going to spend a third of their time, a third of their time generating pipeline generation. Maybe 20 to 30% of their time taking care of their customers. And then what's in the middle is prosecuting deals. And of course, maybe you've got a sales rep with 25 green field accounts and two paying customers. They're going to be more on the PG and hunting side or you have an account manager with just two paying customers. And for them, pipeline generation is going to be easier 'cause they're doing PG into an account that they know super well and they've got plenty of contacts. And so for maybe for that person, PG is only 20% of the time. So there's, you want to move the dials across, but I think to be really effective, you want a salesperson generating pipeline, prosecuting that pipeline and taking care of customers. And how the weighting of each of those things is going to be determined by the type of territory they have. - I'm going to do a quick fly round with you. Are you ready? - All right. - What sales tactic has died of death? We've alapubelled outbound, that is still alive and well. What has died of death? - Closing. - I'm a closer, I know how to just convince this idea that you can coerce a customer or do some psychological gymnastics to get someone to sign a piece of paper when they weren't actually intending to. First of all, if you do that deal's probably going to chair later or they're going to find a way to rescind the order, but I don't believe salespeople sell. Buyers buy. How do you create that environment? Well, by doing good discovery, by finding challenges, by educating on how your solution meets those challenges. And once you do that, they want to buy. But the art of closing, that's blown up. - If Salas doesn't sell buys buy, I love that. It's brown, not more important than ever. - Brand. - Sure. I think it's probably always been important. Yeah, I think brand is highly important. That's why when you are a challenger, you need a higher caliber of salesperson because you don't have the brand. As your brand gets bigger and bigger, either great salespeople become more productive or you're able to get more junior or less talented salespeople. - What's the most creative thing you've done to get a deal of with the line? - The story I have to tell you goes way back to the beginning of my career when I was selling medical equipment before I got even into software. I was selling this blood analyzer called a culture counter. I PGed into an account, into a doctor's office, and the office manager told me they had just bought my competitor's product, a Beckton Dickinson. And I said, but you gotta talk to me. Mine is better, all the reasons I'm rattling off all the reason. She's like, no, the deal is done. And I'm like, is it installed yet? No, it arrives next Tuesday. You gotta talk to me. No, I can't. And then I thought, shit, I just upgraded an account that had one of those Beckton Dickinson's. I haven't sent it back to corporate. It's still in my closet. I'll tell you what office manager. You tell the doctor, she's gotta see me. And if she sees me and she still thinks the Beckton Dickinson is the better machine, I'll bring one with me and she can have it for free and she can cancel the order for the other machine. Well, yeah, but you gotta be here before the in service on Monday. Great, I'll drive. I had to drive all night, snow storm into Jackson, California. And I demoed this doctor on Friday and I brought the competitors machine with me and I was able to close the deal. And so you did it live and she saw the difference between the two machines. Yeah, yeah, loved that. Yeah, that's a creative one. What one piece of advice would you give to a sales leader study a new role today? You're gonna have pressure to build the team quickly, better to be late than to hire mediocre people. What would you most like to change about the world of sales? Maybe the reputation, sales people are slimy or greedy or anything like that because I think it prevents some capable people from pursuing a job that could be the best job that they've ever had. Final one for you. When you look at sales strategies over the last few years, what company sales strategy have you been most impressed by? I was at Navon, we were a travel solution and COVID hit and nobody was buying travel. The company made that when that happened. Absolutely, I joined in January of '20 and the world locked down in March. What do you do? Your numbers must have just gone to zero. Yeah, close to it, close to it. We had about a 90% drop in revenues. Almost amazed that 10% remained in a travel ban. Yeah, there were just some large enterprise accounts that were still traveling a little bit. We had companies that were in the, what did they call it? That category necessary. Essential workers. We had companies that had essential workers, government, some manufacturing. Anyway, we made two key pivots during that period that saved the company, REL, the founder came back from a vacation and he said, by God, we've got to build an expense management solution and we've got to do it fast and burn the ships and what he meant by that was he pivoted like the whole engineering organization from one day to the next and candidly, the executive team thought, man, this is a bit dramatic. You're betting the whole company. Because remember, at the beginning of COVID, we thought it was going to be two weeks and maybe it's going to be four weeks and maybe it's going to be six weeks. So nobody thought it was going to take as long as it did. So the idea of putting 90% of the engineers to go build a brand new product when we had this pretty hot company was really scary and he was single-minded about doing it and that was the right decision. And then the other thing we did was go up market because the large enterprises believed that there was going to be a day after. They might not know when the day after was was going to be and so we were able to basically pivot the company way up market and go to people and say, listen, were you happy with your travel program before COVID? No, what better time to overhaul it than now when no one's traveling and you can have a great program when the world resumes and so by going up market and by building a second product, that company didn't die and it would have. I'd say that was a pretty good strategy. Carlos, I've loved doing this. I wanted to do it for a long time as I said, I had so many good things for a long time. So thank you so much for joining me today. Thank you for having me, Harry. I love what you're doing. You bring a curiosity and a passion to highlight the journey that founders and executives are on. So thank you for having me, I'm honored. That was so special, Stu, in person. I want to thank Carlos for giving up the time and if you want to watch the episode in full from the studio, you can find it on YouTube by searching for 20VC, that's 20VC. But before we leave you today, I'm soon started with one simple idea. That's why they work directly with developers to get exclusive discounts of 80 to 90%. 80 to 90% off software, saving entrepreneurs over half a billion dollars since 2010. Some of the biggest names in tech, like MailChimp, Zapier and Dropbox, got their start on AppSumo and with a rotating selection of hundreds of tools, you'll find all the software you need to make your life easier in 2025. Plus with a 60-day money-back guarantee, you can try any tool risk-free. Start the year off with savings, get 10% off your first order with the code 20, lowercaseVC, and a free tool exclusively for 20VC listeners. That's code 20, lowercaseVC, for 10% off, plus a free tool at appSumo.com. As always, I so appreciate all your support and stay tuned for an incredible episode with Lyme CEO Wayne coming out on Monday.