Speaker 1Hey, folks. We're back with the Science of Scaling podcast. My name is Marc Roberge. If you follow my work, you know I'm a passionate entrepreneur. I love startups, and I love helping startups generate revenue. That's what this podcast is about. With the help of the best sales leaders from the best tech companies in the last decade, we're going to unpack all the issues, all the challenges, all the opportunities with doing just that. So I'm excited for today with Ange McManaman. She's the VP of sales over at Crunchbase, where she started a couple years ago. We're going to unpack a very important arc of our economy and a few years in tech, and that was going from 2020 and 2021, arguably the biggest bull market in the history of tech. Leading to 2022 and 2023, arguably one of the biggest down cycles. And what does that mean for a sales leader? What does that mean for the pressures they're getting from their CEO, from the leadership team, from the board? How do they manage expectations? What does that mean for the culture of their team? What does that mean in terms of the pivots they need to make with their product, with their value prop, with their target customer? It is important. And was a stressful time. I am so thankful to Ange for her transparency, for her vulnerability to talk openly with me about that. So we all can relate to it. We can all take an exhale and we can all learn how to navigate these tricky times. Let's dig in with Ange. This is going to be a lot of fun. It's going to be a therapy session, everyone. I think every sales leader is in the same boat. A couple of years ago, having. this crazy hyper growth mandate, only to have that completely changed in the last year. And that's something you, like everyone else, went through, Ange, and that's what we want to unpack. Why don't you set the scene?
Speaker 2Sure. So we're probably all very familiar with the scenario, right? You're hired to grow revenue extensively, and you're hired to either prove yourself pretty quickly, as we are in the VP level and up. And two to three years ago, there was a lot of money coming in. There was a lot of. There was a lot of revenue in my area, right? So sales enablement and focusing on tools that help people do their jobs better. Crunchbase was launching a new product, enterprise software. We'd been around for a while, and our private company data has really established us into a really. the go-to place for that sort of data. And we wanted to start helping teams, not just sales teams, but teams that really prospect and want to find new leads, if you will. And so we started offering our enterprise software. And that's where it was my mandate to come in and build the team, grow the team, and then obviously make it successful. So it was, we got this shiny new thing. Let's hire a ton of people, and let's not just hit numbers, let's exceed numbers, and prove to the board that we have this legitimate second business, if you will.
Speaker 1Give us a sense of scope, whether it was revenue or the sales team size when you entered, and then what were you asked to build it to within that first year?
Speaker 2I think we were probably seven or eight people when I got there. We had those people that were starting to test the waters, if you will. And so my mandate over the next six months to a year was to hire a team of 35 plus.
Speaker 1What was the trigger or driver of that desire for growth? Was that coming from some new VC, or was that coming from the founder that wanted to raise a big round and justify? What triggered that?
Speaker 2That's a really good question. And I think it was coming off of a really probably good one or two years and trying to get another round within the next year.
Speaker 1So yeah, I think that's important context. If we were to be faced with this again, we need to know how to deal with it differently. So before we go there, just give us the quick flyover on how you handled this.
Speaker 2I think first it was really looking at the plans of, okay, what do we want? What do we want each person to produce, right? The minimal viable production from each SDR and AE. So I was in charge of the SDR team and the account executives. How are we going to build a really strong SDR team that was doing it? You know, we had a good influx of inbound, but also like what was going to be our outbound motion. So quickly building and modeling out expectations and then hiring, right? Like balls to the wall, let's hire. I had a really good recruit, internal recruiting team. We needed to hire the right people. It sounds cliche, but I really truly believe like getting those hires wrong or getting even one hire out of five wrong just really can hurt you in the long run. Hurt you with revenue. It hurts you with team morale. It hurts you with just building a cohesive unit. So that's what it looked like. It looked like a lot of interviews. It looked like a lot of debriefs back and forth and challenging. My crew internally, like, do you think this person's really going to do the job we put in front of them? Do you think they're going to have that grit? Do you think they're going to be able to honestly handle change? And I know that's a given in the startup world, but I always have to remind people like this is where we're at. We're not a public company, right? We're not going to always be headed in the direction that I tell you all the time. Like we may steer to the right. We may steer to the left. And you have to be okay with that. You have to be agile enough to be like, okay, I still see the focus. I still see the end goal, but we may be going back and forth a little bit, if that makes sense.
Speaker 1Things are going to change fast. And they have to tolerate that. How do you interview for that?
Speaker 2It's hard. I'm going to be very honest. That's a hard one because a lot of people tell you what you want to hear.
Speaker 1Sellers are great at that.
Speaker 2Yeah, I mean, that's the problem. I can try and see through some of it, but God, it's hard. So I like to talk about adversity and what they've gone through, like anything that they've gone through in the past six months, nine months that really challenged them. And how they dealt with it. That's a good indicator. Sometimes I will say really junior people have a hard time answering that question because I don't know if they see a lot as adversity or challenges. And a little bit more senior, like account executives usually can give me a pretty solid answer there. I like to ask, you know, what's their biggest career mistake so far and what would they do to change? Again, it's not completely related to being in a startup world, but it is being able to think, all right, could we have done something different? Maybe my idea wasn't that great. Maybe the way in which I got to, you know, point B wasn't great. I like that because I feel like they're a little bit more open as an individual.
Speaker 1I love it. That's great. It's a hard one. I agree. So let's go over to the modeling part. You mentioned you had to put this together. Like, I'm going to hire a bunch of SDRs. What's the quota? How do I model this? I don't have to hire a bunch of reps. What's the quota? This is a brand new business. How did you come up with those?
Speaker 2It was really hard. I mean, that's the most hard for me. I struggle with that in my career because a bit of it is a guessing game when you have such a new product. So what we did was kind of looked at the team currently. So I did have a couple of SDRs. I did have a couple of account executives and I kind of looked at their production. And that's without anything. That's without marketing, right? Like that's without a good sales process established. We kind of just took it from there. Right. And said, like, how can we grow? And if if we get higher sales trainer, if we hire enablement, will that help us X percentage? So it was a bit of a guessing game with my CRO and our head of RevOps. And we just kind of sat through a lot of spreadsheets to just say, OK, this is what we want to go towards. It was probably not super conservative and super, super modest. It was probably right in the middle, which I think that was really fair for the business. For our CEO and for us. Look, you already have the incredible pressure of hiring, getting the team and then to have that double pressure of these extraordinary. You're like, like, it's just then it becomes such a high stress cutthroat environment. And that's just not for me.
Speaker 1And took on both the crazy hiring goal and the 50 percent increase in productivity per rep. So let's talk about how did you all come to a not too conservative, but not too aggressive number on those expectations? Did that come from the top and everyone was realistic or was that more you pushing and managing up?
Speaker 2It was me and my CRO. Luckily, I have a CRO that we have a really good communication line and we're able to challenge each other in a way that's. I think, really healthy.
Speaker 1here. Yeah. When I talk to peer CROs and I say, hey, have you ever had a CEO or a board approach you at the beginning of a year with a completely unrealistic target from a revenue standpoint? I mean, everyone's like, when has that not happened? It's really nice to hear and break this down for us because we have to talk about how to manage up in that situation. And I like to do it, not surprisingly, through the data. So just having a report of like, okay, over the last four quarters, how many new salespeople did we add? And in order for me to hit this plan, how many do we have to add? I like to see like whatever, 10 or 20% improvements. Like we added two a quarter last year and now we're going to add three. If it's eight, we have a problem. And what kind of demand gen do we have to produce? Like we've historically produced 200 inbound leads a month and we've historically produced 75 qualified appointments per month. month. And if you do the math with a similar close rate, we need to 5X that in one month. So it's just like you start to put the math together and you educate up and some boards and CEOs will compromise. They're like, okay, I get it now. I get how the revenue math and I get how I can hold you accountable to increasing close rates by 10% or increased demand gen velocity by 10 or 20%. But I get why a 400% increase in one month is unrealistic. And then others will just be like, I don't care. Snowflake did it, figure it out. And then you can just like continue the education. Like come back after Q1, I'm like, sorry, I missed by 10%. I want to break it down for you. We were supposed to go from adding two reps a month to eight reps a month. And I was only able to add five. And we were supposed to go from 200 inbound leads a month to a thousand inbound leads a month. And we were only able to increase it to 600. I think once they see it framed in that perspective, it'll mitigate the risks of you being penalized for that. And help them see what responsible scale looks like. All right, let's get back to Ange.
Speaker 2I'm lucky to have a good kind of relationship where it's like, hey, can I hold off on hiring? I think I was like, let me hold off on hiring these last two or three people. Let's just see what we can do over the next 30, 60 days. And I'm glad because again, we would have had a little bit harder of a fall if we just kept going. So that's one thing I think that I'm going to do. I'm going to do what I would take again when I go through this. I think we have to be a bit methodical in how we grow.
Speaker 1So we set the stage and we reflected on a little bit on how do we handle this next time when we're thrown a huge number and maybe even in a big tailwind market. But let's keep pulling on that. So you go through this. So give us the therapy session now. When did this start? How did you know? What did y'all have to do?
Speaker 2Yeah, it's probably started at the end of last year, maybe a little bit, you know, Q4, we've started to feel it. And this is not, I don't
Speaker 1think. Like everybody.
Speaker 2Yeah, like exactly. And so that's the sad part, right? Like part of it is was out of our control, I think, just given the macroeconomic time. So we started to look at should we read forecasts for 2023? And I started to see a big disparity between my top performers and my low performers. So at that point, last year, we did get enablement and training. So we started to kind of focus on what any good sales leader would do and trying to get those, you know, C plus players to be B plus or B players and trying to get a little bit more process implemented. And it was tough. So I think just given the what was going on in the world, like just how sales slowed so much and the world changed and more anxiety and stress and all that. And so, so we reforecasted for the year, we looked at, honestly, like, I'm always a big fan of spiffs. I don't know how you feel about them, but, you know, just love them. Yeah. So like given during the month or the quarter, whatever we needed to motivate and see how we can kind of keep people, you know, rolling. Another thing, like on the flip side, you know, we were seeing quite a bit of churn. I think that's when we looked at mid-year and said, OK, well, we might have to get this team
Speaker 1smaller. You brought up something interesting, which was as you started to see this, one of the things you saw was a bigger disparity between your top performers and bottom performers. Can you unpack that?
Speaker 2So a couple of things, you know, those salespeople that are just they do what they need to do. They're hard to find their diamond in the rough, but they're there. And those people kept doing it. Those people kept doing the hustle, whereas the other people needed more help. They needed more motivation. They needed more guidance. I just saw like that disparity, right? Like I needed so much more extra attention. I needed more motivation. I needed more guidance. I needed more attention on those lower performers. And it wasn't immediately helping, right? Like doing training, doing things that we thought we could see results quickly. I wasn't getting there.
Speaker 1That's very interesting. I'm actually I'm not surprised about the lower performers. Are the top performers like working harder or differently to maintain their performance as the economy changes? Or were they hitting 250 percent of goal before because they were working equally hard and now they're still hitting, but it's more like, oh, I'm not going to be able to do it. I'm going to hit like one hundred ten percent. Like help me understand that.
Speaker 2I think they got smarter. I think they got more creative. I think my team was set up where you could upsell and expand your current customers. I think that's where you had to lean in. You had to really go back to that. This is what I grew up on. But, you know, that relationship selling of do you have a really good relationship with this client? Are they utilizing us well? Do they actually need more support? And do they have a bigger team that or, you know, maybe they need more seats? I saw a bit of that, which I think is just, I mean, smart, right? It's just it. And I think to your point, I think they were always hitting, you know, 150 percent, 150 to 200. Now they were hitting 100 to 125. They dropped two, but they were still doing it. They were still getting the job done. Hey,
Speaker 1folks, just Mark here. Actually, this is an underutilized diagnosis strategy, especially in times like this. That Andrew is speaking about where we probably had an economic issue affecting the company. It's often when you miss the number, you're like, is this the economy? Is it our product? Is there new competition? Or is it just we're executing poorly? And one of the sources of really interesting insight and accurate diagnosis is tell me about your top performing reps and how they're doing. Tell me about the people who've been on the floor for two to three years. Let's look at their numbers. Because if we're missing, but the top five reps who've been here and always hit are still hitting, you got an execution issue. You like haven't been hiring well. You're not feeding those new reps or enabling those new reps well. But if you have a handful of salespeople who've been hitting quarter after quarter after quarter for two or three years, and then all of a sudden, all of them this quarter are down by 80%, you have a macro condition. You have a new competitor. You have a product that's no longer competitive. You have a macroeconomic condition. Not only that, but you have a new competitor. A lot of boards and CEOs and CEOs look at that as an accurate diagnosis of what's going on. And you see that with Ange. She saw a drop. Yeah, they were still, the top performers were still finding a way to hit, but they had fallen from 200% to 110%. Clearly, there was something macro happening. All right, let's get back to her.
Speaker 2I mean, that's kind of sales sometimes. We can give them tools. We can give them process. We can train and show them the way. But at the end of that time, they have to do it. And they have to do it in a way where it works for them, they're able to build trust. They're able to get that commitment from somebody across the Zoom or across the way, right?
Speaker 1Beautiful. And so let's talk about SPIFs for a second, because I think that's relevant to today. I think there's a lot of leaders out there that are like, I'm just looking for any sort of quick cultural motivator here. It's tough out there. How can we drive morale? How can we drive performance? And SPIFs are great. How are you using them?
Speaker 2I love SPIFs. And I try and ask my team what they want, too. I think that's really, you know, just to be inclusive, making sure I hear them on things that maybe I'm not thinking of. We have a, you know, unlimited PTO policy, but I'm still a big fan of giving the team, like, just take the full day off. Don't worry about a thing. Even with our unlimited PTO, because it's been stressful in sales. We know that. It's been a tough year. And so having that extra time to themselves and just kind of taking a mental break, I think is big. Big fan of that. Love team goals, too. Like, hey, can we all get to a certain number, right? Like, I recently took over our customer success team. And so I want them to be a more cohesive unit. You know, there's always been this sales versus CS kind of tension in the world, not just where I am at, but, you know, in the world. It's like, how do we draw those teams closer? Trying to work together on deals that we think are valuable and they need help earlier on than just the kickoff call.
Speaker 1I love using spiffs here, just like Ange. Now, there are certain best practices around that. And I love it when other smart people not related to me come up with the same thing because it gives me more conviction for the idea. And I've used this quite a bit. And what you're hearing from Ange is the usefulness of team-based spiffs over individual spiffs. I remember I ran contests for years, every month, and they are always team-based. it's these four people against these four people against these four people with a really fun like it's like whoever comes up with the most sales together or whatever and a really fun team prize like going on a dinner cruise or going to the casino in a limo or and they're taking pictures and it's what a great cultural additive and the one month we ran an individual contest where the winning rep got seven thousand dollar bonus was the year there was the one month we had they cheated backstabbing like all this greed and so that's where you're hearing from angier is like lean into the team base with spit makes it fun it allows you without having to change the annual comp plan to drive specific behaviors that you want from the team based on the current diagnosis of what's happening out there and make sure that you are showing that on a daily basis like a dashboard goes out every single night so people can see it spiffs are an amazing way to drive short-term diagnoses and the need for skill up leveling so lean in all right let's get back to ang so
Speaker 2incentives like that where i think is kind of fun to get groups together and and really that those team base they're commission based so on their individual performance they're getting money and they do have accelerators which i think are important so i tend to lean on the team-based spiffs to help just culture morale
Speaker 1i love that so much i think that's spot on so all right now that we have painted the context let's take the opportunity while the wound is still fresh and reflect and be like how will we do it differently next time okay and that and next time can come in a couple different flavors it's it's highly likely there's a hopefully a lot of listeners that are a year or two away from getting a cool growth round having a growth vc come in and having a lot of um pressure to grow at a pace what feels like is perhaps irresponsible and unrealistic so like reflecting on what you just went through what are some things you could do to manage that and then related like hopefully in the next whatever five to eight years we have another crazy economy and we're all stuck up in the hype
Speaker 2i can't wait yeah it's easy yeah it's
Speaker 1easy to think about it now but like we all believed it and so like how will you check yourself you know i mean like are how can we avoid that next time so again while that while the wound is still fresh let's let's kind of reflect on that
Speaker 2there's certainly endorphins in that whole thing you just talked about so that's where i think it's it's really hard because you got to pull yourself out of it and do that reality check so i would say hiring so i've done this so many times that even even through the craziness of the last two years i would absolutely put the pedal to the metal on a hiring but i would be very cognizant of who i'm hiring i still would take the time to do proper interviews like proper debriefs i just wouldn't put that aside and i know sometimes we're like oh let's just do you know 30 minutes with three people that'll save time no let's not do that let's just and i know it's so time consuming so i'm not going to do that i'm not going to do that i'm not going to do that i'm not going to do that i'm not going to do that i really think hiring fast but constantly looking at the talent that was hired and making if you need to make that you know decision that's not a good fit do it quickly right hire fast and fire faster like we've all heard that hey
Speaker 1folks just mark here yeah this is what a smart sales leader sounds like it's not that you walk into a board meeting and you miss and you're fired they want to see how you're handling the mess and if you walk in and you're not transparent you're saying yeah yeah we missed but look at the pipeline for next quarter that really starts to lose credibility for me i want to see how you're diagnosing it and i want to see where your plan is it's like okay we missed because of macro conditions and a fall off on sales budgets within tech let me show you why i know this and let me show you the data that i'm using to come up with this and so my plan because we're 30 below plan in this coming quarter is to redirect pipeline efficiency outside of tech manufacturing healthcare and finance and in fact i have a mandate across the organization that 85 of new pipeline generation falls outside of tech we're also doing a sales enablement process to understand the personas in these industries and how they're different from tech to mobilize our team and i expect that to pop us up and recover in this coming quarter that's what i want to see i want to see a metrics driven diagnosis and a strategy that gets at it that we can measure and just do an amazing job of showing this to us here let's get back
Speaker 2to her i'll always push back to my executive and the board if they're pushing on me to hire so fast because i know in the long run it's not going to be worth it for revenue for culture for anything that you want to get done so again i'm kind of talking out both sides of my mouth i will hire fast but i will be very particular with how it's done and who is hired and before
Speaker 1you go on from that you mentioned push back on whoever the ceo of the board coach the first time leader on that narrative like the literally the ceo is like okay when i make up the numbers here we did 10 million last year you need to give me a plan to get to 40 and the leader's sitting there be like no way and like so is it just going back like you're crazy no or is there a narrative that you can help that leader you know root the conversation in so you know i think that's a great question and i think that's a great question and i think that's comes off smart and there's reasoning behind it there's evidence whatever how do you do that
Speaker 2here's probably the two or three things that i would have a constructive conversation about but one i would just make sure that there are things going on in the product or being added that will help with that number i can't just hire a bunch of sales people and quadruple our efficiency metrics and get to a number there has to be something good about the product exciting sellable stickiness right so you want to make sure you know you're full fully aware of the product roadmap two you want to make sure that you've thoughtfully built the model that makes sense so in that scenario you gave me that's headcount that's also probably a certain percentage of quota attainment going up and revenue coming in from certain individuals have you seen that has that been a trend over the last three six months if it is great ride that ride that trend and continue to keep pressing that up every quarter every every month to that point like any metric like that make sure you're seeing movement there that's a good conversation that's that's good planning and modeling right you don't you if you haven't seen any increase in quota attainment over the last three months and you're trying to double it in six months okay what are you doing for that have you do you have an extensive training program coming in do you have a one-on-one coaching scheduled every week like how are you going to do that and then the third thing i probably just make sure you have a really great communication line with whomever your executive is hey can we make sure you're giving me this mandate can we do a check-in every 30 45 days just to you know obviously keep me accountable but also just to see if all the other things that we planned for are on track and you could still commit to that 40 million but with the understanding that there are things that are going to have to have to happen to get you there
Speaker 1that was great and thank you so now let's talk about running the team efficiently now something that's like very in the moment for a lot of our sales leaders out there is like get more efficient get more efficient so you have all had to do that in the last year what have you done what's worked what hasn't worked what are you optimistic about trying and q4 and q1 can you
Speaker 2unpack that sure so we have a much smaller team now which i believe brings us a little bit closer to where we would have ever been with all sorts of numbers for my sdr my account executives and my customer success team just just to make them feel like they're really part of the team so i want the cs to know how the sdrs are measured what they do on a day-to-day basis i i have them come into their call dissections because ultimately they are managing those people and so trying to just again keep keep that cohesiveness with the small team you know looking at all of the numbers mark you know so what's our acv what's it's been doing you know acv's kind of been going up and down this year and i want to just really try to get it on a trend even if it's a small percentage every single month just going up into the right going up and why you know how have we sold differently you know you know have we talked differently about the product um i think it's a really good time in our sales conversations to just i've always been a huge fan of discovery i think it's the most important part of the sales process but now more than ever i think it's having those real conversations on full team size but team usage right it's okay if you don't give me your full team as software seats i'm that's okay give me give me half your team let me show you what we can do right and let's really utilize it and i'm okay with that we've done the same on our end with with sales tools and i and and i'm literally fine i'd happier than have this large contract with us and miserable so back to efficiency metrics just on you know looking at how we can become more productive so it's looking at how many of these calls are really going into the next stage how many of our discovery calls are going into the demo and why we're trying to really pinpoint the reasons and you know can we help that even in the qualification call so win rate you know win rates are obviously always top of mind and you know activity I care about, but I trust my team so much. Trust that how they utilize their time every day is in the benefit of either a prospect or a customer. All right. And so that's not too big for me right now, but I do think that I rather pinpoint more of like how their calls are going than how many they're doing. Because it's not a quantity game anymore in a way. It's a quality
Speaker 1game. Hey folks, just Mark here. This is a pothole that we should avoid from the beginning. We crushed it in the bull market. We sold the $70,000 ACV to the hot tech company. We knew they weren't going to use those seats. We knew it. We took them down. Now we're paying the price. And this is a pothole we always want to avoid. Yes, Warren Buffett and Wall Street all want to see increasing ACVs as a justification of your market power. However, be careful achieving that higher ACV in the opening contract. This is a huge pothole in SaaS is we oversell upfront because that's how reps are comped. And the buyer's like, I just want these 20 seats. And the seller's just good. And like, no, you got to buy all 60. And then 12 months later, especially in a bear market, guess what's happening? Contraction of revenue. Yeah, they only need the 20 seats. So yes, increase ACVs, but don't do it in the opening contract. Do it through expansion as the customer needs it, as you've proved ROI. And the reason for this is the comp plan. Reps get paid more historically for the first sale and less on expansion. Don't do that. It's causing a bad behavior. In fact, pay them more for expansion, even if they're not involved. Take down what the customer needs today and set them up for success and expansion, and everybody's better off. Unfortunately, Ange and a lot of other companies are feeling the pain of that today. And it's a terrible thing to have to unwind. All right, let's go back to her. I think that's an amazing place to end up, Ange, because I kind of feel like our listeners, especially our sales leaders are like ahead the entire time you're talking today, Ange, because I appreciate you being open and revisiting all these moments and kind of being vulnerable on that because almost every company has gone through it. I think it was a very important journey for all of us to learn from. And I appreciate you coming on and dropping knowledge with us today, Ange.
Speaker 2Thank you so much for having me. I had a lot of fun.
Speaker 1All right, that does it for me, folks. I'd like to thank you so much for joining me today. I'd like to thank our showrunner, Matthew Brown. Editing support comes from Pizza Shark Productions. Of course, I want to thank HubSpot for Startups and the HubSpot Podcast Network for keeping the audio on. And by the way, I'm a huge fan of feedback. And so get this, if you're listening on Spotify right now, check your phone, see that Q&A field. That's a direct line to me and our show. So let us know what you think. All right, I'll see you next week. © transcript Emily Beynon
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