Speaker 1Hi, folks. Welcome to the Science of Scaling podcast. I'm your host, Mark Roberge. In this podcast, we discuss the science of scaling by tapping the top executives on the go-to-market side in the most successful companies. Today, we're joined by Matt Plank, the CRO of Rippling, a household name that you've probably all heard of. Matt's been there six years, almost since the beginning when they only had five engineers. He met the co-founder, Parker, at their last play, Zenefits, and they're going for it again. Today, we're specifically going to unpack the funnel and revenue math, a key piece to scientific scale that so many boards, so many executive teams, so many CROs miss. This was crucial to Matt's ability to scale them through the last six years, and he's going to unpack it. For us on this episode, let's get right into it. Congrats. I mean, what an amazing run over there, Rippling. And can you just take a step back and tell us about the beginning? How big were they when you started? How did you get introduced to them? Can you walk us through that?
Speaker 2Yeah, I've known Parker for, I guess, about a decade now, but I worked with Parker actually early on at Zenefits. So I was the 25th employee at Zenefits, second account executive, went on a run there for about four years. And followed Parker over to Rippling. And when I joined Rippling, they were actually five employees in the basement of Parker's house over in the mission here in San Francisco. So it was Parker, myself, a small group of engineers, and as early as it gets in terms of the early days. That's amazing.
Speaker 1So was the go-to-market strategy the same? It was a similar sector value prop, similar buyer. And you all at Zenefits, I mean, you all grew like crazy. Was it just a cut and paste? You know, one of the things
Speaker 2that we were extremely committed to figuring out at Rippling from a go-to-market channel was email. You know, when we started at Zenefits, email was not nearly as widely used as a channel as it became. And I think, you know, at Zenefits, you know, Marketo and Pardot and all these things were not, you know, outreach, sales loft, like none of those things existed. I think Yesware was the first one we ever ended up using in the sales org. But marketing automation was, you know, the first one we ever ended up using in the sales org. And I think, you know, marketing automation was, you kind of knew at that time. And so we found a way to write, I think, you know, highly effective emails, but also like getting them delivered was not really a problem. I mean, it was easier to tweak the system. And then what happened was over the past 10 years, emails become just significantly harder. But of course, like any good growth channel, like everybody ends up using it. And then it becomes, I think marketing, you're constantly looking for new creative ways to do stuff because anything that you do that works, like everybody does it and then it doesn't work anymore. And so we were really effective at email. We built a massive, like what we would call an inbound sales org, meaning that, you know, it was, we were sending emails, but the demos were just getting put on a rep's calendar. So the reps felt like it was inbound. So when we started at Rippling, it was way harder, you know, and the first question was how do we get our emails delivered to people? And some of that is you write emails that they, that are good, right? So they don't think that this is immediately spam and I hate this email. It's not relevant to me. Why'd you send it? So you got to make sure you're targeting the right people and your message, but then there are a lot of technical ways that you need to deliver email. You can't just fire a million leads into, you know, Marketo and send away like your, your domain and everything will get flagged super quickly. And so it was a tough go. I don't think it was tougher than we thought it would be, but we were deeply committed to solving that problem. Like in the early days of Rippling. Hey
Speaker 1folks, just Mark here. I stopped the tape with Matt. Yeah. You see this a lot with different demand gen channels. Let's take this in a very abstract, way. A new marketing method gets invented. People are figuring it out. Word gets around. It has this beautiful moment where it's just performing and then everybody does it and it gets saturated. Whether we're talking about cold calling when the phones were invented, direct mail, whenever like the catalogs came out decades ago, email marketing, when that came out, content marketing, paid ads, whatever. They've all had that cycle. And that's something that Matt's pointing out here is very similar product, very similar value proposition, very similar buyer. And yet it's a different time. Generally speaking, the demand gen tactics that they used at Zenefits couldn't be replicated at Rippling. And they had to evolve that. Let's hear from Matt how they did it.
Speaker 2And I would say for the first 12 months, you know, so 2017 through like the end of 2018, we were constantly iterating on how do we get email marketing to work. I mean, we went through so many iterations of how do you get it to work? Like one of the ways that you get email marketing to work that you wouldn't, wasn't natural to me. I had never done this before was buying high quality leads. And so we ended up buying leads and building the database. And if you buy crappy leads, then you're going to get a bunch of poor deliverability. And then like all of that stuff around email can actually really impact you long-term. And so we were just banging away at the problem for months. We approached it from an engineering problem and like a systems problem and just a lot of creativity until I feel like we finally found something that worked. It has honestly scaled all the way until really today. I don't get the connection between marketing and engineering. Like, can you unpack that? Really at Rippling all the way through to our products, the way we think about our product, the way that we think about marketing, you know, the SDR function, you know, we look at everything that humans do and we think to ourselves, like, how could we automate this? Right. What is a scalable way that we could automate this? Because obviously anything humans do is limited. One of the things that we do really well is we look for people who are like changing jobs, right? You know, if you're changing job from one company to a new company, you're highly likely to be more open to looking at a new system. And so there are ways to do that manually. And then there are ways to do that that are engineering focused. Like how do you go get the job changes from LinkedIn and all these different sources that do that? No, it's a cool design.
Speaker 1It's, um, I think it's better than most on the B2B. There's never a design that doesn't have its disadvantages. And I would guess that in that case, it's like, okay, the growth engineering team is a major contributor to demand gen, which ultimately is probably owned by the CMO, but the growth engineering team reports the CTO. So how does that like work where it's like the CMO might have a tough month or a tough quarter and they're like, well, the growth engineering team didn't do their job and they don't report to me. So it's not my
Speaker 2problem. Yeah. Yeah. It's a good question. And you're right that the, you know, I'll even throw you one more layer to that, which is, you know, the SDR function rolls up to me. And so the SDR function actually owns like the output of what we, what we call, you know, S1s and S2s. So scheduled demos and accepted demos. Uh, and so the SDR function owns the number from a quota perspective, the marketing org definitely owns the S2 number from like, this is the metric that we deliver on. So we share that metric, uh, it's separate reporting structure. Then you have growth engineering, uh, who obviously is, you know, if growth engineering doesn't do something or falls off for a week or a month or whatever, like for sure the S2 plan is not going to get hit, right? Like there's a critical component of the team.
Speaker 1And Matt, you got to back up for a second and define us too. I know it's, it's not a rippling only, but it's like not as well known. So just back us up there.
Speaker 2So for us, the way I think about it is you've got a lead, right? You know, marketing's job is to serve leads at the end of the day, an MQL marketing qualified lead to an SDR. Right. And then the SDR needs to turn the marketing qualified lead for us, but we would define into an S1, which is a S a stage one opportunity, which is a schedule demo. And then from there, a stage two, an S2 is an accepted opportunity from the sales rep, right? So marketing gives the SDRs leads SDRs, then turn those leads into schedule demos at some conversion metric. That's very important to us. And then from there, the like S1 to S2 is the acceptance rate of the AE, right? And AE might do, you know, uh, whatever 30 demos a month that are on their calendar scheduled. And they might only accept like 75, 80% of them that they actually pull into their pipeline downstream. And at the end of the day, like S2s are what matters, right? Like leads matter, S1s matter, but really like accepted into the pipeline sales qualified opportunity. Like that's the metric that everybody, you know, measures against in terms of pipeline building. And we know how much revenue, how much pipeline we need to give to an account executive and all that kind of stuff.
Speaker 1Yeah, this is great stuff, Matt. And as I've been speaking to you, you're way ahead of the game, I think, relative to your peers on the rep, what I'd call the revenue math, especially on the demand gen side. So let's take some time to unpack what you're talking about here and let's start when, when it's the right time to start. Like, cause I can't imagine you walked in, there's five engineers. You're the first kind of like business hire, first sales hire. You weren't like maniacally measuring MQL to S1 to S2. Like when, when do you move to that?
Speaker 2I think one of the most impressive charts or graphs, if you will, at Rippling is, you know, there's this graph that imagine there's two lines on a bar graph that are essentially like, how many S2s per rep do we do per month? Right. And so if you're an SMB or mid-market enterprise, like that's a, but it's essentially like how many, you know, sales accepted demos do you do for a month? And for the longest time, really six years running, like the way that we, capacity build every year, some very core centric part of the capacity model is like, how many demos do we need to give a rep? And so let's just take a mid-market rep, for example, right. Who has like, obviously a certain OTE, a certain quota. And over time, when we were a smaller company, mid-market reps would be doing literally like 35 S2s a month, like 35 accepted demos a month, which is insane to think about where we've come. And so each of the last years, over the past five years, that number has gone down, down, down, down. And the amount of revenue that a mid-market rep closes has gone up, up, up, up. And that obviously happens from increasing your win rate and increasing your ACV. Those are really the two metrics that if you increase those, then you don't want to raise someone's quota to infinity. At some point, quotas are high enough for the unit economics to make sense. And what you actually want is more reps. If you're doing 35 demos a month per rep, you're leaving meat on the bone. You can't be efficient in that world. But when you're early and you're a startup and you've got funding, but it's different, you are trying to give as many demos as you can to a rep and have them close as much as they possibly can. And even if, like, for example, if you have 35 demos going to one rep, right? And let's say that they close 15 deals. If you were to create a second rep, so you take those same 35 demos, you create a second rep. So now you're doing 17 and 18 demos each. Like you're going to close more than 15 demos as a total, right? Like the conversion's going to go up. Like they're obviously working, you know, they're able to like work, you know, follow through on a lead, work it harder, follow up more, all that kind of stuff. But it might not make sense for your business because like you might not be able to afford two people, right? It depends on like what's the revenue that they're producing.
Speaker 1All right. This is step number two that Matt's outlining, and that is to get sales capacity to equal demand gen capacity. It's two sides of the formula. I have a salesperson. This is what I think they can produce with their 40 hours of work each week. But there's a second half of the formula, which is there's a demand that I'm going to feed them. And he's walking us through that. Like right now that demand represents 35 opportunities a month. And that rep is turning that into 10 deals. Obviously, if we add a second rep, those two reps will probably get more than 10 deals from those 35 opportunities. But is it going to be large enough to still make the math work? The demand gen side has to equal the sales capacity side. And we can't increase the sales capacity side unless there's sufficient demand gen capacity. All right. Let's unpack that even more and get back to Matt.
Speaker 2And so when you're early, you tend to stuff like too many opportunities on a single person. At some point you realize like more reps make sense here. There are certainly other companies who are like, you know, add a bunch of reps in a spreadsheet, put a quote on top of them. There's my revenue plan. And yet they have no idea how they're going to get the demos or how they're going to increase the demos. They think they're going to get the demos. They're going to get the demos. They think that hiring reps equals getting more demos. You know, that's not true in my experience. Oh, it's brilliant.
Speaker 1I mean, like kudos to you for being a thought leader there. So there's so much to unpack there. How do I know even what's good? Yeah. How do I know what my MQL to S1 ratio should be and how many should be given and what's acceptable?
Speaker 2Yeah. So, you know, this is actually really, really interesting because rippling in the past six to eight months has spun up go-to-market teams in new countries. So we launched a go-to-market team in Canada, you know, selling the companies headquartered in Canada, the UK, Australia, Germany, and France are next. And so when we first started, even in a new market with five years of like all of this data, we're kind of like, how many leads do we need? Like how many demos do they need? Because you don't even know, you don't know the ACV, you don't know what the win rates are going to be. And so it's literally felt like I was going all the way back to the roots of rippling. And I'll tell you like the number one, most important place you have to start is like, what does it cost to hire a rep? And like what, therefore, what does their quota need to be? And like my rule of thumb is you want to get a 5X quota on someone's OTE, right? So if somebody's making, you know, $100,000 a year, you want a $500,000 quota. If they're making $200,000 a year as an OT, you want a million dollar quota. Now that's hard. And there's a lot of companies who don't sniff a 5X quota. And so I'm like, well, I don't know. I don't know. I don't know. I don't on OTE from a quota wallet perspective. And so I think in newer markets and certainly rippling did not start at 5X, right? When we were first on, it's probably 3X, right? And you work your way from 3X, three and a half, four, four and a half, five. And so in these new markets, and particularly I think in a world today where efficiency is so much more important, we aim for 4X. And so when we launched in Canada and the UK and Australia, we're like, look, we know what we need to pay to get a high quality rep in these markets. Like that is what it is, right? That's not a, if you got, for us, we're like pay top dollar, hire the best people. And so therefore it's set. If you want to say, look, 4X is the benchmark we need. Then you at least land on a quota where, you know, like, Hey, the business works at this number. It'd be nice if it was 5X, but 4X like we're good.
Speaker 1Yeah. This is a good guidance from Matt. I might push it one more level. Okay. What he's saying is when he said cost to acquire a rep, he's actually talking about how much you have to pay the rep. Okay. So if you've paid them like $150,000 a year, and he wants their quota to be 5X. Okay. So if I pay my rep $150,000 a year, he wants it to be $750,000 a year in quota, and that's going to work out to be a good business. I think that's really good. I want to push you all to think about it at a deeper level. Because for example, what if you have one rep that's cold calling themselves and creating their own demand versus another rep that has this huge amount of money and they're like, well, I don't know what to do with this. I don't know what to do with this. I don't what to do with this. I don't team feeding them and a huge SDR team feeding them with appointments. Obviously, the unit economics will be much better for the rep that's fulfilling their own demand. So it's a little more complicated than that. And what you have to do is take it a deeper level than what Matt's talking about and just add up all that cost. What is the quarterly spend on marketing? What is the quarterly spend on SDRs? What is the quarterly spend on our account executives? And that's the cost for a sale. And then you can do the same math to figure out what is the revenue and lifetime value from the sale. And now we can attach that back to payback periods of 12 months or less, or LTV to CAC ratios of three to one. You can Google those concepts. These are common unit economics. But the bottom line is, is you need to have some sort of projection on your sales and marketing spend and some sort of projection on your sales and marketing output. And make sure that the assumptions going into that math makes sense and spit out strong unit economics. That's kind of what Matt's saying. Okay, let's get back to him.
Speaker 2And then you work back from there, the funnel metrics. Okay, so if this is the quota that I need, you could start with making up ACVs and win rates. But to be honest, you don't know what those are going to be. You have no idea what those are going to be. And so I think another metric you can start with is what is the right amount of opportunity to give somebody where they have enough time to work the opportunity. So you take. Like at the end of the day, a funnel is very simply like how many opportunities, what's the win rate, what's the ACV, there's your quota, right? And so you take the bottom of the funnel, which is quota, and you take the top of the funnel, which is like the S2s they can work. And then you kind of massage win rates and ACV to figure out like, how do you create a funnel that works, that's repeatable and so forth.
Speaker 1I love how simple you made that. And I want to actually push you one step further to actual numbers. Because I want to like, pretend like you're advising someone that's starting a business like Ripple, that you would have to give them a funnel shape of life. You don't have to give us the numbers, but just like, hey, Matt, I'm going to try to do what you did like in the last six years. Like, what should I do? Like, what are the numbers? Yeah.
Speaker 2So I'll take an example. Let's say that you're hiring like an SMB rep at $150,000 OT. Your quota really needs to be at least $600,000 a year, like for you to get 4X on the quota, right? So if your quota is $600,000 a year, that's $50,000 a month. Right. Monthly quotas for as long as you possibly can, forever if you can.
Speaker 1Yes. Yes. Stay on monthly quotas as long as you can. Okay. Now that doesn't really work if you're selling million dollar deals. But if you're selling deals in the tens of thousands, yes, stay on monthly quotas. And here's why. Every single company closes most of their business in the last 10 or 20% of their. Fiscal period. So if you make your fiscal period a quarter, you're going to have a slow first 8 to 10 weeks of the quarter and a huge two weeks leading up to the end of the quarter. And you're going to do that four times a year. If you make your quotas monthly, you're going to have a slow two and a half to three weeks of every month and have a remarkable last week of the month. And you're going to do that 12 times a year. You want to do that 12 times a year. You want to lower. Lower the volatility by taking on more periods. So stick with monthly quotas as much as you can. Even if your finance team and your board and your executive team is marching to quarters, try to get the sales team to march to months. All right. Let's get back to Matt.
Speaker 2So $50,000 is a monthly quota. If you get a $50,000, then all day long, that's great, right? And so from there, let's say, okay, I have a $50,000 monthly quota that I need to get to. It totally depends on your market. Obviously, like ACVs, whatever. But let's just say, for example, that you're going to give a rep 30 S2s a month, right? So I give my rep 30 S2s a month. let's take a step back. Let's say that our win rate or our ACV is $5,000, right? So you have a $50,000 a month quota. You have a $5,000 average deal, right? Super transactional SMB. So if you're going to do 30 demos a month, you need to win like 33% of them to get you 10 wins for an average deal size of 5K is going to get you to that 50K number. So like there's your funnel, right? 150K rep equals a 50K quota per month. I need to get them 30 demos at a 30% win rate and a 5K ACV and my funnel math works. Now you might look at that and say, how am I going to give them 30 demos a month, right? Like that's crazy amount of demos that I can give them. And that goes back to, if you can't get them 30 demos a month, then you better find a way to get win rates higher or ACV higher. And what a lot of people will do is they're like, I'm going to hire an SMB rep. I'm going to give them 10 demos a month. And then they're going to go get me 20 demos, right? On top of needing to like win 30% of the deals and have the ACV and all that kind of stuff. And so you can really, I mean, every new segment we launch at Rippling, we honestly start the same way. We have probably 15 different, you know, go-to-market teams from direct SMB, you know, channel account and all this different stuff. And they all start from the same equation of what's the OT we have to pay, what's the quota we need to get to.
Speaker 1I'm sorry, we're out in audio podcast world right now, because we need a blackboard. If you're in this spot that Rippling was in six years ago, rewind, about two minutes and start writing this stuff down. And that's a wonderful starting point for you to figure out how your go-to-market machines work. Okay. So thank you, Matt, for doing that. And now take us a year or two later. All right. So you got this dialed in right now. Now you're running this beautiful machine. You have the sales capacity math on one side, which is your quotas and your cost of reps, et cetera. You have the demand gen math on the other side with your S1s, your S2s. S2s, your conversions, your ACBs. Now you're, I don't know, you're two, three years later, you got dozens of salespeople. How does this play out? Like, how do you decide if you should go lower on the opportunities? How fast do you build the team? How fast do you build an imagined funnel? How does it all play out?
Speaker 2Yeah, it's a good question. So let's first actually kind of go further up the funnel to kind of answer that question. So you started with this quote, you need to get to an ACV that you have and win rates to get you to like 30 S2s, right? 30 sales accepted opportunities that I'm working.
Speaker 1So there you go. That's it. He's done it. That's the demand gen formula. And yet so many boards, executive teams, ops teams, CROs, the extent of their planning is I need to do 5 million in revenue this year. My reps do $500,000 each. I need 10 reps. Now there's the other side that Matt just walked us through beautifully. And that is the demand gen math. They both have to work. It's easier to add the reps. It's harder to predictably get the demand gen to work. And you have to be confident in that before you add the reps to achieve the growth. Thank you, Matt, for walking us through that. All right, let's get back to them.
Speaker 2The reality is how are you going to get 30 opportunities, right? And in the earliest days, the answer is, could be, and was for us for a long time, like email marketing. I'm going to email people to get 30 opportunities. And, you know, in the earliest days of a company, you're not constrained by your TAM, right? If you sell into like rippling, you know, companies under a thousand employees, you know, under 2000 employees, but let's call it under a thousand. And in the early days, let's call it under like a hundred, because that's really what it was. And so there are just a, you know, in what feels like an infinite amount of under a hundred employee companies that you could sell to, right? So you're not TAM constrained. So in order for you to get 30 demos, like what is the constraint, right? And the constraint is how many, you know, accounts or contacts, let's call it, are you going to email and what's your conversion rate, right? If you have a 1% conversion rate, so you email a hundred people and you get one demo, then you need to email 3000 people to get 30 demos, right? And like emailing 3000 people, it's like, that's too many people, right? And so on one hand, I mean, it's not too many people. And what people do is they're like, oh, great. I send 3000 emails. I get a 1% conversion. I get my 30 demos. Let me just go drop in 3000 emails into Marketo or Pardot or Outreach, whatever. You do that for two weeks. And then they're like, wait a minute, my domain shut down. I can't, can't send emails anymore. Right? And so in the early days, the constraint is actually, uh, like, like how many emails can you send? And, and, you know, you, you, what's your conversion rate? And so getting that conversion rate from 1% to 2% to 3%, 4%, 5%, whatever, that's like the most important thing that you can do. That's the way that we measure the SDR work today, because when you're early and you're sending emails and you can send essentially infinity emails and get all the demos that you need at some point, you know, rippling is six years in the journey, uh, you know, 13,000 customers. Like at some point you become TAM constrained. You can't send infinity emails anymore. Like you, you have a TAM, you, you've got a number of demos you need to set and you do the math and you're kind of like, uh-oh, like my, my yield, I need to get on an account is much higher. Right. And so then you think about, okay, well, how do I get a higher yield from my activity? And like, it's not just clickety click sending emails through, you know, some automated API, right? Like you're never going to get a good enough yield to make your business work long-term by doing that. And so we could go, you know, that that's really the, how you, how you, uh, you know, why and how you, how you, how you, how you, how you, how you, how you, how you, how you, how you, how you, how you, like an outbound function, right? Cause the outbound, you know, SDR outbound, or some people might do this in sales. I'm a firm believer in separation of duties. Uh, I believe very strongly that SDRs, uh, doing SDR stuff all day long are just going to like massively outperform a sales and account executive who's, who's trying to do that as well. Um, and so you build SDR and SDR org so that they could do all of the other things, which are of course, email and phone calls and LinkedIn and all of the other creativity that you've seen pop up in the past five years. I think there's a lot of people doing really cool stuff in the, in the SDR space or just general kind of outbound account-based marketing, all that good stuff. Um, and that you just kind of have to shift your whole entire world to like, you are constrained by Tam and you can't just email everybody in the world, you know, every other month, like there are real constraints there.
Speaker 1That's a key moment is like, you, you've done something that few startups do when you actually crack the nut on one dimension, Jim, you figured out, you know, and you grew at some point. To what you're saying here, you saturate and you have to add a new one in, and in your case, it was email. And then you added in SDR is kind of cool going.
Speaker 2We did. We actually, unfortunately, we like missed the SDR step for way too long. I mean, yeah, they
Speaker 1waited too long, but at least they caught it. That's a really important learning from a planning standpoint. Once you start getting to rippling stage, you break out of that zero to one moment, you're getting five, 10, 15, 20, 30 million in revenue. And you're like, I'm going to do this. I'm going to do this. And then you're like, I'm going to do this. Planning has to start in August of the prior year. And you need to know what your current demand gen channels can deliver. They will saturate. You will hit a TAM total addressable market saturation on that demand gen channel. And if you wake up in Q2 of that year and realizing it, you're cooked on that year. You can't just be like, oh, cool. Let's start cold calling now. And that's going to be productive next month. It's not even going to be productive next quarter or in this year. You need to have started testing these alternative demand gen channels. In this case, cold calling, or selling through partners, or selling ABM. Hopefully like a year before you need them. So that when you come into the annual planning process, and you need to grow by 20 million, and you realize that your demand gen channels are going to deliver, you have the math on your little cold calling experiment, and can expand it out to get the other five. You need to test those alternative demand gen channels before you need them. All right, let's get back to Matt. So tactically speaking, do you take the inbound, the email marketing leads that you had forever, do you send them directly to the account executive, or do you send them to an SDR that only deals with those? And then do you have a separate set of SDRs? That does the account-based selling and the cold calling? How is that architected?
Speaker 2Yeah, really, really good question. So yeah, that's right. So there's basically three different kind of SDR semi-functions, or sub-segments, if you will. The first one is inbound. So they're dealing with form fills. Form fills are, of course, organic, review sites, paid advertising. Anyone that clicks on a form fill falls into this bucket, and there's a big team of SDRs that just do inbound. But for example, we used to not even call those, people. We would send them an email. We'd send them like a three or four touch automated email sequence, and we would book a ton of demos doing that. But what do you know, when we started calling them, it was like we booked a lot more demos, right? And so there's the inbound team that we send. We call them, I think, within five, 10 minutes is the SLA. We schedule a lot of demos that way. Then we have our, what we call kind of mechanized outreach. And so that team is essentially like, you know, higher volume kind of email distribution, where we also, follow up with like engaged people, but it's not pure outbound, it's like, it's a little bit of a hybrid. And then our third bucket is like pure outbound. And those are account-based SDRs. They're given a set of accounts. They kind of run their outbound playbook against those accounts. And then any lead that comes in through any funnel, like if it's a named account, it goes to that team. So we've got pure inbound, pure outbound, and then we have a hybrid. But really all of our demos today, 100% of our demos today, or 99.9% are from the SDR org. Our account executives in SMB and mid-market do not do any prospecting. We fill the calendar up with those folks and their job is purely closing. In our upmarket team and our kind of enterprise team, there are some folks who are just doing inbound as well. And then there's some folks who are now starting to sprinkle in outbound and they're partnered with SDRs to kind of go after a named set of accounts. But that evolution is shifting pretty dramatically, you know, through the next 18 months as we think about today, Rippling is still a round robin based inbound company. We don't even have territories, you know, no geos, no industries. We round robin across, you know, 200 plus reps. So that's kind of wild. We probably should have done that a while ago as
Speaker 1well. This is complicated. I'm feeling for Matt. I can sense that he's living through this right now. And let me pull a couple of things out of here. First off, he's transitioning from round robin to something more territory oriented, extraordinarily common as you get into like the mid tens of millions. And so what's happening there is your brand has grown. And the difference between a cold outbound and a warm inbound is starting to feel similar. They know who you are. And so you're better off just putting people into territories and whether there's inbound stuff coming in or there's cool calls that are happening, they're going to go and hit their quota. And that's really common in the mid market. And it's even more common in the end. And so I feel like Matt is hitting that transition period right now where he's moving from what's needed, what was needed as a multi-channel scaling organization to a, what feels more like a single organization that's in territories. And those salespeople are making their territory number through a variety of demand gen methods. The other thing I kind of predict is they're probably going to have to get their account exactly right. And they're going to have to get their accounts exactly right. The other thing I kind of predict is they're probably going to have to get their accounts exactly right. And they're probably going to have to get their accounts exactly right. It is to do some demand gen themselves, to have some accountability that's not fully reliant on SDRs or email. And it's not running things through outreach or like 50 calls a day. It's more strategic. It might be calling on the closed lost opportunities. It might be doing some high personalization outreach, but I feel like that's commonly needed at this date to get to the next level. All right, let's finish things up with Matt.
Speaker 2So at some point we'll, we'll try to, you know, um, create never like zip codes. I don't think you need to go like zip code territories these days. I think it's a, it's a different world post COVID. Um, but some alignment, you know, today you've, you could have, um, a rep in California taking a demo from someone who lives in New York. Like that doesn't make a ton of sense. And so just trying to slot in almost like time zones or regions is probably, uh, you get some yield increase by just like aligning leads to reps and like, you know, a time zone. This is amazing, Matt.
Speaker 1Thank you so much for laying out the demand gen vision from like five engineers in a room all the way up to this crazy math. It's so few people do, but it's so critical to getting the predictable scale on the going market side that we're all looking for. So much appreciate you coming on and dropping some knowledge for us today, Matt.
Speaker 2Yeah, you bet Mark. I had a great time and I appreciate you having me on and all the good questions. I appreciate the chat. Today's episode is written and produced
Speaker 1by Matthew Brown. Our show is edited by Pizza Shark Productions. Big thanks to HubSpot for Startups and to the HubSpot Podcast Network for keeping the audio on. Hey, also we're a new show. So if you like what you hear, or if you hate what you hear, leave us a rating and review over on your favorite podcast player. I love the feedback. Also check out Stage Two Capital. We're the first podcast podcast player. We're the first podcast VC firm running back by over 500 CROs, CMOs, CCOs. So if you're an entrepreneur looking to scale your business, check out StageTwo.Capital. All right, that's it for today. I'm Mark Roberge. See you next week.
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