Why Everything You Know About Sales Is Wrong, with Thomas Waites

I want you to meet Thomas Waits, he's a fractional chief revenue officer, a startup sales architect, and the guy who wants to get a tattoo of a bull to celebrate closing a deal with 40,000 employees at Warner Brothers. I ended up getting a tattoo because we made a bet about setting a new milestone for largest DLF, and when I sold all 40,000 employees at Warner Brothers, I got to, or I had to, or got to, depending on how you think about it, for me, got to, as an honor, a tattoo of my choosing. So I have a bull on my right shoulder blade from that. Thomas is also someone who spent years watching salespeople lie, push, I manipulate their way to mediocre results, and he decided to do the exact opposite. All prospects come into a sales call, expecting the salesperson to be dishonest with them, expecting them to push something on them, expecting them to not act in their best interest. And so if you're aware of that, and somebody asks you a question like, "Hey, do you have this feature?" And you're like, "No, we don't have that feature." And you leave it at that, they might be disappointed about that, but they will definitely trust you. Today we're asking, "What if everything founders believed about sales that needs to be pushed, or persuasive, or even a little bit slippery, is completely wrong?" Thomas has coached founders who swore they'd never be able to sell effectively. To close deals, they never thought possible. And his method is so counter-intuitive, even experienced salespeople are a bit shocked when they see a work. "This one is going to change how you think about sales forever." Hello and welcome to Truth Lies and Work, the award-winning podcast, where behavioral science meets workplace culture, brought to you by the Huppersbot Podcast Network, the audio destination for business professionals. My name is Leanne, I'm a charter occupational psychologist. "My name is Al and I'm a business owner, and we are here to help you simplify the science of work and create amazing workplace cultures." Thomas Waits has scaled multiple startups from early revenue to acquisition, including taking one company for 1.5 million annual recurring revenue to a successful exit. He now works as a fractional CRR, helping founders and early stage teams build sales from the ground up without losing their soul in the process. So if you're a founder who builds something brilliant, no, you need to sell it, but find the whole thing kind of icky, Thomas has a message for you. The traits you think to qualify you from sales, honesty, caring too much, hating, pushiness, those are actually your biggest advantages. Let's go meet Thomas Waits after the short break. "If you've ever done sales for your business then I bet this is going to be familiar. Your pipeline looks cool, activity looks great, but you're not sure which leads matter, which ones are wasting your week and which call you should have made three days ago." It can all be very confusing now, very confusing, but luckily HubSpot's prospecting agent gives you a clear way forward. It shows you who's actually ready, gives the details of the reps you need and points them towards the conversations worth having. So reps know exactly where to focus and what they're walking into. Check out Hubsbot.com, the Agente Customer Platform for Growing Businesses. I am a fractional chief revenue officer and advisor to startups. So I primarily focus on startups ranging from seed stage, series A and series B. There's some other types of companies that I work with as well, but that's really my bread and butter. Prior to that, I've scaled several startups. Basically since my first job out of grad school, it was the first employee at a startup. I was acquired by a $9 billion company, scaled up our sales there, did it again at a prop tech company, and then two years ago now. So the last company that I was VP of sales at, scaled that from 1.5 million in ARR up to another successful acquisition. That was a global SaaS company. And then most recently was CRO last year at a company I had been an advisor at for two years. So yeah, for me, I mean, the bread and butter of what I do is scaling revenue and sales at startups. We could do an entire hour just on that journey that you just, you just caught up with there, which is incredible. But I think what we really like to talk about here is sales. Now, when we say chief revenue officer, is that a fancy corporate way of saying sales? So chief revenue officer, it's really interesting. For people who work in tech, they know what that is. And then people who do not work in tech, they have no idea. Like I remember telling my father, I was very excited about becoming CRO. I told my father and he had no idea what that was. He works, he's an executive construction company and they don't have those there. So it's very much like a tech role that you see, but not really, you don't really see it in traditional business. So typically a CRO, they tend to have a sales background, typically. And then what they do is they, it can vary, but typically they lead sales, they lead marketing, and then they also lead customer success at tech companies. I see. So we're talking about the entire is not just getting the deal sold or getting the getting the customer is actually looking after them through the entire journey. That's right. Or the way I explained it to my grandmother once who also didn't know what that role was. It's really hard sharing this wonderful news and people having no idea my family what I was doing. But I said to my grandma, I was like, I make all the money basically. That's, that's, and have all the humility. But it's basically anything that is revenue focused, that's what I'm taking care of. Brilliant. I think the 80s and 90s would have called that a rainmaker, I think, when they said, would we like that? I like that. That could be the R. Yeah. Rainmaker. Chief Rainmaker. I see that on your LinkedIn profile. I will, I will be in touch. Look, one of the things that we, when we first chatted, you seem to take a very contrarian view to sales. I come from a sales background. I was door to door sales. I was cold calling people sales. That was tough and horrible and I hated it. But I sense that your outlook on sales is very different to that. So tell me, what's your contrarian take on sales? So in terms of what I have a lot of these contrarian takes, which is interesting. And so in terms of why that's the case, I've never reported to a sales leader before. I've always been the sales leader. And so like at my first startup, like I said, it was the first employee. Everybody was engineers, except for me, although I did a master's in economics, so not that far off from engineering. Through a series of events ended up leading our sales. And so for me, and then a subsequent role was the sales leader. And so I developed the things that I do from sort of first principles, as opposed to, you know, observing my boss or other people or that sort of thing. And so because I took that approach, it turned out that I ended up with all these contrarian takes that I didn't realize or contrarian until I ended up speaking at different events or talking to other sales leaders or when I hire people to my teams, they're like, oh, we've never done this before. This is really cool. And then I would ask, well, how do you do it? And then they tell me, I was like, oh, okay. So that's like how I end up with these contrarian things. It's not that I'm intentioning to be one, let's say, it just sort of happened. There's a lot of them. I mean, I do fairly unorthodox things, like my teams, we have tattoo bets as an example. I don't know that anyone's ever done that before. I've never heard of that. Tell me more about that. Sure, sure, sure. So this happened two companies ago. So the company was called together. And we were at, we're just under 1.5 million when I when I came on to the sales. And I had a very small team at the time. And my second week there, we had this offsite and we had a celebrity murder mystery party. And I went as Dennis Rodman, I had all these fake tattoos. And then I ended up having all these leftover tattoos. So I ended up, I was my second week at the company. I ended up tattooing all my colleagues. They all wanted them. So we're all covered in these tattoos. And they were like hilariously good quality. So they sort of stayed with us for like the week. We were all just like, tat it off. And I had these tattoos up my neck and all this sort of thing. And then anyway, and then we ended up like, I think I made a joke. I was like, when we sit, when we hit 100 million in ARR, I was like, we should all, we should all get together logo tattoos. And our logo was like this, like, little hand is kind of cute. And everybody agreed. And I was like, great. And also like going from 1.5 to 100 million in ARR, you know, that was going to take some years, right? It was going to take some time. And it was just, there's kind of a goofy thing. Anyway, one of my junior employees, it was two weeks later, he messages me on the Monday. And I'm only like a month into the role at this point. He messages me on the Monday. And he says, Thomas, can we talk? And I was like, oh, it's like something to see my arms. I was like, sure. So I get on a call with them quickly. And he puts his ankle on his desk and shows me and he had gotten our together logo on his ankle. And he was so excited about this. He went and got it early. We were nowhere near 100 million in ARR at the time. And then so then it just became this thing. So then we used to make tattoo beds about all sorts of different things. Obviously, people could opt in or opt out. Nobody opted out. Like, there's no pressure. But yeah. And then for me, I end up getting a tattoo because we made I made a bet about setting a new milestone for largest DLF, and when I sold all 40,000 employees at Warner Brothers, I got to, or all, I had to, or got to, depending on how you think about it, for me, got to as an honor, a tattoo of my choosing. So I have a bowl of my right shoulder blade from that. And I told this story, I just never told an audience of people this story. I knew it was on Orthodox, obviously, but I told this story at a big attack event on, you know, I was talking about how to build sales team culture. And I told this story and people were stunned. It was all sales leaders. I was like, oh, this is even crazier than I thought it was. - Did you just say you sold 40,000 employees at Warner Brothers? Is that what you just said? - Yeah, yeah, yeah, yeah. - You got to tell us the story of that. What was that? - So the company was together and we were selling peer-to-peer and mentorship software for companies. And so we're basically only selling to very large enterprise. So our customers were like Netflix, Microsoft, Warner Brothers discovery. And so when I joined, we had all these big logos, but it was like, you know, big company would only have like 100 users on our platform. Right? And so we had these really impressive logos with these very small contracts. And then so for me, like the thing that I set out to do to scale our revenue is like, obviously, we need to increase, like, you know, increase the number of customers we have, but it's like we have a lot of room to grow these accounts. And so I came up with a strategy to go from like, you know, sort of the small per user model to what I call our all employee plan. And so then I was initially selling that to get it off the ground. And then I, you know, taught my sales team how to do it and then scaled it. And in that process, yeah, sold all 40,000 employees at Warner Brothers discovery. It was by far the largest deal. And then it also hit this milestone where we had a tattoo bet. And so then I had to get a tattoo. - We could just end now. And that's just like the great story we've had in the part that that is amazing. I'm gonna ask you a bit of it. I'm gonna ask you a question that I don't know whether you're able to answer. And it's nothing like proprietary or personal. - It's true. - I think when a lot of people think of sales people, they have this idea of someone in a cheap suit who's convinced them to do stuff they don't wanna do. Whereas you are immediately, we've been talking about 11 minutes. And I just wanna hang out with you and hear you stories. There's another contrary thing. You're not like other sales people. - I think that you're right. So there's, I mean, there's the, and I was resistant to being in sales. Like I went to a pretty top grad program for economics and I remember getting together with my peers 'cause we're pretty close. After we had graduated and we were working and that sort of thing, we all got together. And I remember somebody asked me like what sort of analysis are you doing? Was there a question? 'Cause they're all quants, right? They either went on to do their PhDs or they're working for the government or they're working for big banks, like that sort of thing. And I said to them, I love it. Yeah, I said to them. I was just like, oh no, no, no, no. I was like, I'm leading sales for a solar company in the States. And they were just like, like what? So yeah, so I was like very much like the black sheep of my program. You know, like a master's in economics is like, you know, you're doing computer modeling and math proofs, right? So like, I think inherently like come to it from a different place, but I did have that resistance because when I would tell people what I was doing, people thought I was sort of wasting my time or they think of like a, they think of sales people as being dishonest or they think of them as being pushy, self-interested, like just sort of like immoral, let's say. And I've certainly met a lot of, like I actually, to be honest, like when people say that to me and they say it to me often in different ways or in fly, I've never offended because it's like, I've met a lot of sales people and it's like, I actually do think that that's the case in a lot of different ways, right? And so I was like, I'm not even offended by the stereotype. But for me, the thing that I learned is one, if you're doing those things, like I just don't feel good. And so there was actually a period during my career where I actually left sales, or why I tried to leave sales. And so I went to a different startup and then I was in a different type of role, more operations and business development 'cause I was so burnt out from sales and part of it was because I kind of thought that this was inherent to it, you know? And I wasn't, because I was such like a baby sales leader, I wasn't setting the culture as I wanted it to be and I don't even think I realized I had the power to do that. I was sort of like going along with things, we were still successful to be clear, but I just didn't feel good, you know? And or my sales people would talk to me about like, 'cause I had so many, it was B2C, it was like door-to-door sales, tele-sales, you know, so I had like so many sales people across the US. And they would tell me the things they were doing. I was like, okay, and you know, and it was like working, but it like didn't feel good, you know? Really, really didn't feel good. And so I think that's why I got so burnt out. And then I tried to do something else and then we ended up needing a sales team at that startup and then the founders asked me if I'd start and then I got back in. But then for me it was an opportunity to create it as I wanted to. And so, you know, the thing that I learned is it's like, if I'm being dishonest with people, even if it's like white lies, like it doesn't have to be wildly dishonest, like even just anything that is like manipulative or being short-sighted or taking liberties with it. Like, 'cause it's hard. Like when a customer asks you, it's like, hey, do you have this feature? And you don't, it's hard to say, no, we don't have that, right? Because inside you're like, you have this fear. It's like, I'm going to lose the deal, right? Like it's not that sales people are like these monsters or whatever, but it's like, it makes sense. It's like you want, you have to get deals done. Otherwise, you have your jobs at risk. And so it's like, it's hard to have that conviction, I think. So one is that I didn't feel very good. And then, so I was like, I can't do it that way. And then the other thing is that, I think just practically speaking, I actually found that I'm way better when I do live by those principles. And so what ends up happening is that, I talked to my teams about this, is that all prospects come into a sales call, expecting the salesperson to be dishonest with them, expecting them to push something on them, expecting them to not act in their best interest. And so if you're aware of that, and somebody asks you a question, like, hey, do you have this feature? And you're like, no, we don't have that feature. And you leave it at that, they might be disappointed about that, but they will definitely trust you, right? And so that's what ends up happening. And so what happens is with our, like over time with different customers' prospects, that sort of thing, is that people trust me a lot, because I don't sound like the other people that they engage with, right? And so it's really interesting that way, or sometimes somebody might ask for like a discount, and I'll get on the call with my account executive or what have you. And it's like, we want the deal signed by the end of the month, because we want to reach our target, they want a discount. And so I'll say we'll give you a discount until the end of the month. But some prospects, it feels like we're sort of playing a game with them, right? And I remember one time, I just explained to somebody, because there were confuses to why I would do this. And I said to them, I was like, I'm like, we have a big target to reach. And that's why it's important to me if it gets done by the end of whatever was March. And they're like, oh, okay. And then we got off the call and my account executive and I were debriefing, and they're like, I'm so surprised you just told them that, right? They're like, I didn't know you could just tell you. I was like, well, yeah, because if I tell them anything else, it won't make sense to them. And they'll know that I'm being dishonest in some manner, right? Whereas if I tell them it's like, and that was the truth, I was like, I wanted to hit my target, right? And they wanted a discount, so it was like, great. Like, let's help each other out. And then I remember that prospect followed up, they signed the deal. And then they followed up and they said, I hope you hit your milestone. And they were, so those things, it's not only for me as a person, and how I want to live, but also, even if you wanted to be dishonest, I still think practically speaking, you're better to do that. And being really, really sincere, or for me, I try to, even though I want to get every deal done, I've really tried to suspend it. And so it's like, if it's not a good fit for somebody, it's like, I'm not gonna push them on that, right? And so I think when people say, it's like, I'm not gonna renew, or I'm not gonna buy, or whatever, for me, the reaction most sales people have is then they try to push harder. I normally am like, oh, okay, that's not, no problem. And then what ends up happening, I've actually stumbled into a sales technique that didn't realize it's called negative reverse selling, is like, when I do that with people, they tend to end up selling themselves because they don't resist, which is fascinating. And so I've actually done a lot of sessions with sales people and founders who are selling on negative reverse selling. And they watch these calls and they're just shocked because the person will say, no, no, I don't want that. I'm like, okay, that's fine. And then we get to the sale at the end of the call, which is like, never happens. And so for me, it's respecting people. It's trying to be oriented towards others, and then trying to live for my values. And then as it turns out, like it also works extremely well. So it sounds like you have. Almost done some kind of reframe, which I know is sales day to day, but a reframe of what sales is. The majority of people go, "I'm going into sales, therefore it's about me and my targets." It doesn't sound like it's like that with you. Tell me about that process. How do you think about sales? It would be incorrect for me to say that I'm always like feeling this way. It's really interesting. I remember when I first joined together, we took off like a rocket ship my first six months, like every single month from my first full month onwards, we set revenue records. I remember that December, which was my six month there, I think, we 12X the prior December. That was with no additional marketing spend, no additional hires. I actually like the most senior person pretty early on. It wasn't anything like that. I can send you the chart, you can see it on my LinkedIn, because I post it. We continued on and we were sending these records. Then I remember, because it's really hard to do that. It's hard to hit a new record every single month, especially we weren't just kind of smashing the records. We were like clearing them. Then I remember the next six months, we saw it started to plateau. I remember then I started pressuring my sales team more and we started having less fun. I was really obsessed with setting these records. I started my team's performance plateaued and I think it perpetuated for that reason. I caught myself and I was just like, I'm not having fun anymore. I'm stressing about these targets. My team doesn't seem happy because what I've learned is that however I'm feeling or thinking about things, my team mirrors that basically. They mirror my energy. Then they were feeling they were anxious, they were stressed. It's not a good way to work from. I think it's easy to fall into that trap. For me, I just have to reset. It's like, okay, it's like, why am I here? It's like, I want to help people. In that case, with that team, we're selling pure-to-peer software and mentorship software, which I'm very, very passionate about. It's like, I want to help people with that. With my team, it's like, I deeply, deeply care about the people who work for me, mentoring them and seeing their progression and seeing their growth. Once I start fixating on the targets too much, what ends up happening is then I get stressed, I get anxious and that sort of thing. For me, I really have to refocus on, it's like, why am I doing this? What are the right things to be doing? What's my purpose? How do I want to be? As soon as I'm like that, things with the team go really well. We start hitting our targets, even if we were behind. I think I've really centered on that through learning. I used to, particularly in the past, it wasn't just a clean cut. This is always how I've been. For me, it's been a process of learning. I know that if I'm focused on the wrong things, it just doesn't go well. It never goes well. If you're like me and you hate all this work of Hullic hustle nonsense on the socials and somebody's getting up at 3 a.m. to drink butter, then here is a brand new podcast that I never. If you're like me and you hate all this work of Hullic hustle nonsense that's all over the socials, you know that dude who's getting up at 3 a.m. to drink butter. Well here is a brand new podcast that I know you will love. It is called Seven Day Weekend and is of course brought to you by the Hubsbot Podcast Network, the audio destination of business professionals where all good podcasts live. I'm going to try and get through this. The Seven Day Weekend is your weekly dose of business finance and side hustle motivation. So go subscribe and get brand new episodes featuring a mixture of guests and Laura's hard earnd tips that'll teach you how to build the digital tools necessary to build your own Seven Day Weekend. No butter required. But a taste of what's to come, go and listen to a day in the life of an anti-work Hullic where Laura explains how to maximise your productivity with some fun and quirky techniques while living your best life. This is so up my street. Listen to Seven Day Weekend, wherever you get your podcasts. We're going to come back to leading sales teams shortly but this is a nice leg way into founders who have find themselves having to sell. Now I think a lot of founders are great at coming up with an idea. They're great at building the product or service and then they feel like it's all icky and they have to go out there and sell it. But what you just said there was that if you care deeply about the problem you're solving, then sales isn't even sales. What have I misunderstood? If you genuinely care about people and you care about the problem you're solving, I think you'll be selling in a much more proficient way, I think. As an example, what happens, it sort of goes back to I think trust is huge in sales. Like I was saying, you start in a trust deficit basically with everybody because everybody has preconceived notions about sales people. I think everybody, anyone that we've sold software to, they've had negative experiences with salespeople varying degrees and probably many of them. The thing is, if I'm talking to somebody, if you're selling a per user model as an example, let's say they only want 100 users. You want to sell them thousands of users. The thing is, that might not be right for the person. They might be really scared to roll out a program like that or they might not know what they're doing or if it doesn't go well for them, it's maybe their job is going to be on the line because they've done this project and it's a huge flop in front of it. There's lots of different things like that. For me, I try to sincerely understand what's going on with the prospects and the person across from me. If it's really not a good fit, then it's like I don't want to sell it to them. I have no interest in doing that. I won't feel good about it. The thing is, is because I have that approach, normally what happens is that people are much more open and vulnerable with me and then they'll share. We do want to go bigger, but I have these concerns. You're like, "Oh, okay, that's cool." I guess like, "Well, let's talk about those concerns." Then you end up getting much larger deals. It's almost paradoxical. If you do not need and you do not push for that deal and you're not attached to that outcome and clinging to it, people trust you much, much more. They want to be engaging with you and they trust that you're there to solve their problems. You're not just making recommendations that are self-serving. I've got a note down here that you tend to favor the STEM founder. First of all, what that stand for, and secondly, is there a story that you can think of like a transformation of someone who didn't want to sell and end up being brilliant? Yeah. So, STEM, I hope I'm right on this, is Science, Technology, Engineering and Mathematics, I believe. Basically, people who come to sales and revenue from more of a quantitative background, let's say. Generally speaking, not always, but generally speaking, salespeople tend not to have those sorts of traits and dispositions. Normally, it's a challenge for those founders to then go sell. Then, oftentimes as well, those founders never thought that they would be selling. They never thought that when they started their companies, it wasn't because they're like, "Oh, I'm really excited to go sell and then lead my. " That's not what they're thinking. They wanted to solve a great problem. They had a great idea. They want to go execute on that. Then, sales and revenue is sort of like, "Oh, I guess we have to go sell this because it's not going to sell itself and we need money." Sales oftentimes for most founders is a necessary evil that they also have these preconceived notions about what sales is all about. They're often reluctant to do it, but they know that they need to. They start tackling it. In terms of transformation, somebody that I saw be really proficient in sales was actually my CEO at together and he was leading sales before I joined. His name is Matt. I love Matt to death. He was wonderful to me. We were very successful together and he trusted me a lot. He did the initial sales before I arrived. Him and I talked about, I actually interviewed him to share with other founders that I'm working with so that he could share his story. Matt is fairly introverted. He's deeply, deeply analytical. He. I think he feels some discomfort when connecting with new people. His English and Sales are constantly connecting with new people. He was very, very successful. I think for some of the reasons that I'm actually discussing because it's like Matt has huge integrity. He's very honest with people. I remember the case. for when I was going through the interview process, was he wanted me to coach him on one of his sales calls, which was interesting, 'cause he wanted to see how I would potentially coach the team, and yeah, he was just very honest with people very straightforward, very trustworthy. Basically, the principles I'm talking about, like that is how he was. And he also deeply, deeply cared, 'cause he really believed in the problem we were solving, and he really wanted to help the people. It just came in the package of somebody who's a little bit more shy and interpreted, and that sort of thing. And he was very successful. He did the first million in sales for the company. Yeah, so I've seen that. That's why I love working with founders, because you can help people who don't think that they could be good at sales, don't seem like the typical sales person, and they can totally do it. And they can be very successful. The other thing that Matt possesses, and the other founders with this sort of background that I've seen be very successful, is they're highly, highly coachable and highly, highly open to learning. And so that's really important. And so when I interviewed Matt about this process that he went through, and we really dug deep into it, it was that he was just constantly iterating, and almost like you would like an engineering problem as well. But that's how he was treating it like that. And the founders who do that, and have that self-awareness, I think do really well too. But it's hard, because it's interesting. It's like, if you're doing like an engineering problem, for example, your work is, I suppose a bit of an extension of yourself, or you might think of it as an extension of yourself, but it's a little bit more impersonal than sales, where sales can sometimes be hard to be open and coachable, because it's deeply, deeply personal. Like what's more personal than how you interact with people, right? You have to look at it and you're like, "Oh, I didn't connect with that person," or it's like, "Oh, it's like I was really awkward," or that explanation didn't make sense. And so it's hard for people to look within, because it's inherently, like sales is inherently personal. And to get better at it, you really have to examine yourself and be strong in yourself and your interpersonal skills. And we stick with this engineer idea for a second, because my only experience of engineering is software engineering. If you're an engineer and you've started a company, a software engineer started a company, and there's a bug in your code, you know there's a logical reason why that is not happening, why the outcome is not happening. If you're an engineer and you're talking to someone selling them, there's not necessarily a logical reason why this person's saying no. So how are you reconciling that with people who are very technically minded? Yeah, yeah, and that's why it can be hard. And it's interesting is like, even the sales people as well, like it's like we record all of our calls, so you can go back and watch, right? Like if you lost a deal, you could go pinpoint it. But a lot of people, I don't know if it's that they lack the self-awareness or the mechanisms for pinpointing it, or they just don't want to see it. I'm not really sure what, you know, because it's hard watching your call, like even for me, even today if I did a sales call, and it went really well when I watch it, for me I have all sorts of feedback for myself, like. And so I think the challenge is, part of it's the self-awareness. So as an example, like a lot of, a lot of the sort of STEM background founders, they think about selling and selling their product as being information. They think that because they tend to make decisions in a very logical way, they tend to think that that's how you're going to sell somebody on something. It's like this will just make sense to them, right? And then the other thing is that they tend to be focused on themselves, and I don't mean that they're selfish or anything like that, but they tend to be focused on themselves because they've spent all this time and they've fought all their energy into building this thing. And so when they hop on a call, they're like, let me show you all this cool stuff, my platform does, and so that's what they're doing, and perhaps nervously as well. And so they lose sight of the prospect because they're focusing on showing their thing, and then not focused on the prospect. And so the biggest change that I help people with is going from not selling in like sort of what I call the thinking state and selling people in the emotional state. And that's where sales happens. And so I talked to them about this. It's like to connect with somebody emotionally, it's like, first you have to listen to them, right? And so I talk a lot about talk ratio with my team, and most sales people, their talk ratio is like 70-30, meaning that they're speaking 70% of the time, and the prospect's speaking 30. I invert that. Like if you look at my talk ratio, I've written some articles on my site and I've posted some screenshots of my talk, like my talk ratio is typically in like the mid-20s. And so which is like highly, highly unusual, and then with my teams, I get them to do the same. And so it's like people open up to us, we're very focused on them, and we're able to connect with them emotionally in that manner, right? And then it's like a lot of people, like a lot of sales people do this too, but the STEM founders, they sell sort of factually, where they're like, look at all these features and benefits, but they don't focus on the emotion behind them, which is the pain that it's solving for, or the excitement that they can generate from it. And people moved towards either relieving their pain or something that's exciting to them. Whereas oftentimes, like the founders, they'll share all of this factual information and the thing that they end up doing is they just overwhelm the person on the other side of the table. And then when somebody's overwhelmed, they tend to ruminate or shut down, and then they don't make buying decisions. And so normally what happens is like, if I give a founder, there's a lot more to it as well, but there's some examples. Like if I give a founder that framework, and they believe in that, then they can then go watch their calls, and then we talk about subsequently, where they're like, oh yeah, I mostly talked the whole time. They're like, it didn't really ask questions. And then we get into the mindset, it's like, well, you know, why didn't you ask questions? And they're like, oh, well, because, you know, this person came to see me about this platform. And so it's like, I should just talk about the platform, right? Like it's like, it's like perfectly logical, right? It just doesn't work as all, right? And they tend to, people with STEM backgrounds, tend not to be as feeling oriented, right? And so, you know, therefore, logically, they wouldn't think that others would make bind decisions from a place of emotion. And so it's like really with these sorts of frameworks that people can then go review what they're doing, and then transform, I think. But I think without somebody giving you those frameworks or that understanding, it's very, very hard to be like, well, I give them the information, right? And it's just like, if they're not buying, they just need more information, you know? And then the follow-up emails are like a novel. And the person's a shut down. I think a lot of founders worry about a sales situation because if someone says no to the product, they're saying no to them in English. You've seen that too. - For sure, for sure. I think that's one of the hardest things. Like I wrote an article in a coaching series for founders. I did this past year, and I wrote about mindset. And that was one of the key things, is that like once it, like, so it's like in, like, it was time, I was with sales, it's inherently very personal because it's like, you're connecting with somebody, right? So you have to look at that. And it's like, oh, I didn't connect with that person very well or whatever feedback you might have for yourself. And then it's even more personal for founders because it's like sales is personal. And then feeling rejected about you and your company is like, that's a hard pill to swallow. You know? And then the other thing too is that it's hard not to operate from a place of scarcity when you're the founder doing the sales. Because when you're a founder doing the sales, that means like you need every dollar you're trying to. Like you need every deal, right? And so it's very hard not to be attached to the outcome, right? It's very, very hard. But the thing is like when you're attached to the outcome or you need somebody to say yes, so that you feel that validation, whether it's product validation or personal validation, whatever it might be, it's very hard to follow the principles that I have for sales. Because what you'll end up doing is all the things that are out like that's when like if you deeply, deeply need to deal to happen for those reasons, that's when you might be a little bit dishonest to someone when they're like, hey, do you have this feature? And they're like, yeah, I have this feature, right? Like, or when they push back, it's hard to respect their know. Like I always respect somebody's know, right? And then that's when they tend to end up circling around and saying yes, you know, like I'm very good at turning those into yes, but it's because it's not like a trick. It's that I respect people. And if it's a no, it's like, okay, cool, like no problem. You know, but it's so hard for founders to have that mindset. So I have a lot of empathy for why that is. But if a founder is at the point where they're like, oh, shit, this has got to happen. Otherwise, I might have to shut the doors in 30 days. Is there anything they can do to try and separate the, the bells coming in 30 days, the bailiffs in 30 days and this sale? I mean, it's not, I mean, it's, it's more catastrophic than let's say what my sales people go through. But my sales people, I mean, for them, it's like, like, okay, I missed target last quarter. I missed target this court. And it's like, if I don't hit target this quarter, I'm probably not going to have a job, right? Like that, that's inherent to say, like it's always like very, like you feel that urgency and also that vulnerability in those fears, right? Like, and then in the example you're giving it's even more, the tough thing that I see is it's really like, one. a salesperson or founder gets into that spiral, it's very, very hard to get out of it. Because what ends up happening is it's like, you end up not following the principles you need to follow to be successful in sales. And then you're less successful. And then so you follow them less, right? And so it's like you cling to the deal more, you're more attached. And then, and then also too, like you need to be confident when you're selling, like all these sorts of things. And so you see this like negative spiral. So I've even seen success, like people that I know will be like, I've let salespeople go. That's like, they weren't successful on my team, but it's like, I know they'll be successful somewhere else. I know it, but I just know that they have to go reset somewhere else. You know, and I've actually seen that and interestingly, there's some people that I've let go that I still like stay in touch with. And that sort of thing. And I'm cheering for them, right? And there's been decisions that I've made where it's like, I let somebody go and say, Oh, shoot, like I know they're going to be successful somewhere else, but it's like, they've just gotten into the spiral and, and, and, and also like I failed to coach them out of it, you know? And so I think for a founder, if they're in that situation, their time, like I think it's very tough, but really like they would have to do like a mindset, reset basically. And but without that, it's, they're going to have a hard time. So I imagine that we are a mat, okay? So we've built out, we've done the first million in sales, we're a, we've got the luxury now going great. I'm going to bring in a team. How do you build the team? And how do you manage that team? Tell me a secret, Thomas. A lot of the founders that I work with are in that transition or they, or they've started it. And you don't need to get to your first million in, in their are either like you can bring people on sooner. The thing that I would do is, or the, or the common mistake that I see is that a lot of founders want to bring in somebody who's very senior. Like they want to bring in, like they want their first sales hire to be a VP of sales or, or CRO or direct, like whatever it is. And I really, really advise against that. And because one, those hires are very expensive, like very, like it'll, it'll, if you're paying market, like they'll be by far the, you know, the most, uh, most expensive hire that you have at the company. So there's that. But there is a big difference between, um, being, uh, an exceptional sales leader and an exceptional sales person. And oftentimes, um, you know, I've worked with a lot of, uh, exceptional sellers who are not great sales leaders. And, uh, and there's some sales leaders who aren't, who are, who are a profession and really great at what they do. And they're, they're not the best, uh, sellers. Um, and so there's that. The other thing too is that what needs to be done, typically, like the sales activities that need to be done is like, there needs to be like cold air reached on, uh, which is more like a junior VDR, uh, type activity, um, they need to be hustling deals like all these sorts of things. And the thing is, is like if somebody's progressed to a really senior level, even if they can do these things really well, they probably don't want to, right? And it's like, it's like, you don't want to pay somebody, let's say, let's say you brought on a director of sales, it's like, you don't want to pay a director of sales like three, four hundred K a year to be making cold calls for you. Like that's just, that's just not the thing that you want to be doing. So there's lots of different reasons, um, for it. And so normally what I advise is that they bring on the more junior roles. So this would be like a BDR SDR, like level one, uh, sales person. So they're generally just want to ask you, you're using BDR SDR. So it was not come across those, those terms, what do they mean? Sure. Uh, so BDR would be business development representative and SDR would be, uh, sales. And they get used in different ways. And so, um, but basically it's a level one sales person who is not focused on, um, closing deals or focus on generating like more discovery calls or generating more, uh, demos, basically generating more, uh, top of funnel pipeline for somebody else to go close. Um, and so I would recommend typically, I mean, there's new on obviously, but typically I would recommend bringing on those folks or like an account executive who can go close deals if you have lots of, uh, if you have lots of pipeline. And so like what you want is you want sellers who are going to go sell and then, um, the CEO or founder, whoever was doing the selling, they effectively become the sales leader in that case. And they're going to manage those people, right? And, and so then you want to like scale that up and then you bring on the sales leader, uh, later on. Like I had, I had a client of mine last year who I've been working with and, and they're working on their, on around a funding and she said to me, she's like, I really want to bring you on a CRO full time once we have this funding. And then I said to her, like, I love the company. I love what they're doing. I really like working with her, um, but I said to her, it was like, it does not make sense for you to have CRO at this point. And especially like what you'd have to pay as like, don't, like, don't, don't do that. I was like, meet me or anybody else. Like, I was like, here's what, here's what you want. You know, so just to nail down this progression. So I'm a founder. I've been doing the sales myself. Then I go, next stage is potentially I bring on these SDRs and BDRs who go generate leads that potentially I close. Yes. And then the next stage is that I don't necessarily lead the sales team. I bring someone in to lead the sales team. Is that what you recommend? Yeah. So it would be like the BDR SDRs who are going to generate more pipeline and then the founder continues to close those deals. So they're sort of like phasing themselves out. Then bring on an account executive and the account executive is then going to replace them needing to close the deals. And so it's like once you have those two roles, then the founder hopefully can step back and not actually be actively selling. Like maybe maybe if someone more seniors necessary for some calls, maybe they join those. But that's the idea is so it's not. I think a lot of founders think it's like, I'm going to sell X amount. And then once we are at X, then I can cleanly cut out of sales and it does not work. And it's like, I'm going to hand it over to this great sales leader. They'll be wonderful and you know, I'll never have to do that again. And it's just it practically doesn't work. And so that's why we'd advocate for it. And then you bring on the sales leader a little bit later. So in the case with together, when I joined Matt was leading the sales team and we had a four people on this. Yeah, we had four people on the sales team when I joined. And I would say like three or four sales people is the right time for a sales leader to join. So while we're talking tactically then, I think the dream for a founder is to bring someone on who's SDR BDR who's commissioned only because then there's no risk to the founder. But as an experienced sales leader, what's your thoughts on that? So for tech sales, you definitely have to be like some base. And it depends on what the prevailing norms are like in North America, I would say that for the more junior roles, you might pay them disproportionately more base than variable, but typically like a 50/50 split. So it's like, as an example, it's like with a BDR, it's like maybe you're going to pay them what you call on target earnings or OTE and on target earnings is base, the base salary plus the variable comp that you expect them to earn. And so like a BDR comp might be OTE. So on target earnings is 90K. And so you're going to pay them 50K in base and you're going to pay them 40K in variable. And the variable is tied to targets that they need to head. Is there any kind of formula you might use to work out what that work at what that commission is across both the exec and the SDRs and the BDRs? Yeah, good question. So I mean, I look for on target earnings, I look at a number of things. So I look at what are the comparables? So what is the prevailing norms? I tend to actually pay my BDRs and SDRs more than whatever normal is because then I get to have my pick of the litter in terms of those folks. And I know that those people, especially early on, like because I've done this a few times now, like I know that the early members of the team are going to go on to become the leaders of my team and they're going to promote the culture and the norms and all these sorts. So it's like those early people are really, really important. And I much prefer for my BDRs and SDRs to progress into the more senior roles than trying to hire people externally for those for those roles. It generally goes a lot better. So it's like, I'm going to invest in these early people heavily. And so it's like, I want them to be exceptional. And I want you. And so I tend to pay more than market for the more junior roles. So I look at market comps. And then in terms of setting the variable targets, this is really interesting is that there's a norm in tech sales where companies will recruit people and say, oh, your own target earnings is $250,000. And then the person gets to the confidence like, you know, not even God could sell, you know, and get to 250. You know, and so the targets are very unreasonable. And it's very aspirational. And so that's why a lot of sellers, when they're interviewing places, they'll say like, what percentage of your team is hitting target, right? And sometimes it'll be like 10%, right? So it's like, yeah, your on target earnings are 250K. It's like, how many people are hitting that? It's like, and if it's like 10% is like, well, like that's a huge red flag, right? And so where's for me, the way I set on target earnings is that it is the expectation. Like if you're not hitting on target earnings, like that means that like you are under performing and like something's going wrong. And so it's like, it's meant to be achievable. And then the way that I back out what is and is not achievable is like early days, like I also some deals myself. So I get an idea. It's like, okay, it's like I can sell accident a month. Like what could have. another seller reasonably sell. I look at team performance, I look at comparable norms, I look at the economics, 'cause it's like, let's say I think a BDR can only set 10 demos in a month and it's like, I look at it's like, okay, but for paying this person an axe and they set 10 demos a month, like, is it even worth that? And so there's a lot that goes into it, but for me, one of the big principles about my teams is that the on target earnings has to be attainable otherwise there's all sorts of problems with that. And it's very commonly the case that's not attainable. - If someone's listening and goes, do you know what, I need a Thomas in my life, how do they get in touch? Do you, what are you offering at the moment? - So I have my website, which is twcsales.com and so I post a lot of like long form articles on there. That focus on sales skills, mindset, I have articles for sales managers, sales leaders, and then also for founders as well. So people can go check those out. And then I also have something I started this year, which is a live calling show, which I'm very excited about. And so basically it's like, you can think of it as like live coaching, live calling, where every other week, five sales leaders can join and every other week, five founders who are either doing sales themselves or leading an early sales team can join and ask me questions and get feedback and advice. So just a fun way for me to connect with new people and then also folks can find me on LinkedIn. - That was Thomas Wates and this might be the most useful conversation for you. If you're a founder or a sales leader in the trenches doing sales right now, three takeaways a Lee. - Yes, first, honesty is your competitive advantage. Every prospect walks into a sales call expecting to be lied to. When you tell the truth, even when it's uncomfortable, you build trust faster than any sales technique ever could. - Lesson two, stop talking, start listening. We say this all the time. Thomas inverts the standard sales talk ratio. He speaks for about 25% the time unless the prospect do about 75% the time. So you need to stop pitching features. You need to ask questions. Remember, people buy on emotion, not information. - And number three, don't hire a senior sales person too soon. Your first sales hire should not be a VP or a CRO. Bring on a junior business development representative to generate a pipeline of interested prospects while you still close the deals. Then scale from there. The founder who tries to skip straight to the sales leader almost always regrets it. - You can find Thomas and his long form articles, which are on sales mindset, skills and team building at twsales.com. He's also got a brand new live call-in coaching show on the same website. Just check the show notes for the link. - This is Trude Live and Work. We will see you next week. (upbeat music)