Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20Sales: The Biggest Sales Lessons Scaling Brex to $400M ARR, Why Startups are Doing Outbound Wrong and How to Fix It & Why Demand Gen is the Bottleneck for all Startups and How to Solve it with Sam Blond, Former CRO @ Brex About this episode Sam Blond is the former CRO at Brex, where he led the company from near $0-$400M in ARR and a $12.5B valuation. Before Brex, Sam was VP of Sales at Zenefits, where he led the company from $0-$70M ARR in 2 years and a $4.5B valuation. Sam joined Founders Fund as a Partner in 2022 and recently left to focus more on operating. In Today's Episode with Sam Blond We Discuss: 1. Lessons From Scaling Brex to $400M ARR & Zenefits to $70M ARR: What are the secrets that very few people know, that led to the success of Brex and Zenefits? What was the single worst sales investment Brex made? What was the best? What are Sam's biggest tips to people picking the rocketship they will join? 2. Who, What and When to Hire: When is the right time to hire your first sales rep? Should the founder be the one to create the sales playbook? What is the right profile for the first sales hire? Does it matter if the new hire has domain experience? Why does Sam always advocate to hire through network and not recruiters? 3. How to Hire the Best Sales Reps: What are the questions Sam always asks in interviews with sales hires? Does Sam do case studies with candidates? What is he looking for? What are the biggest green and red flags a candidate can show in an interview process? What are the biggest mistakes founders make when hiring sales teams? 4. How to Have the Best Performing Sales Team: What are the three ways to measure the success of a rep in the first 30-60 days? Why does Sam believe most startups are doing outbound wrong? What should they change? Why does Sam believe demand gen is the bottleneck for all companies? What can be done to solve the demand gen challenge? How does outbound change in a world of AI?
Transcript 12,678 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 Where people over index is domain. If you are hiring your first AE, first big AEs, number one and two, they need to have seen an early-stage startup environment. There are three things that I look for in terms of measuring the success of a sales hire. For almost all startups, the bottleneck to growing faster is actually around demand gen, opportunity creation.
0:28 Harry Stebbings? You are listening to 20 Sales with me, Harry Stebbings. Now, 20 Sales is a monthly show where we sit down with the best sales leaders in the world to discuss how they build and scale the best sales teams. Today, joining me in the hot seat is Sam Blonde, former CRO at Brex, where he led the company from $0 to $400 million in ARR and a $12.5 billion valuation. Before Brex, Sam was VP of Sales at Zenefis, where he led the company from $0 to $70 million in ARR in just two years and a $4.5 billion valuation. Sam then most recently joined Founders Fund as a partner in 2022 and recently left to focus more on operating. But before we dive in, have you ever wondered why spending company money is so broken?
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2:36 Harry Stebbings? Brex automates and accelerates spend management with easy to use corporate cards, travel expense management and bill pay, all on one AI-powered platform. Brex makes it easy to boost efficiency and compliance enterprise-wide and free up your managers, employees and accounting team for higher impact work. Don't let Concur slow you down. Top companies from startups to enterprises are using Brex to manage spend with greater efficiency, accuracy and speed. We're talking DoorDash, Robinhood, Airtable and countless other industry leaders. Ready to join them? Switch to AI-powered spend management at brex.com. And finally, we need to talk about Clay. Clay helps the best GTM teams up-level their data enrichment and outreach workflows.
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4:20 Speaker 02 You have now arrived at your destination.
4:23 Harry Stebbings? Sam, listen, I am so excited to have you back on the show. It was a while ago since we last made this happen. Hopefully, I've improved as an interviewer. So thank you so much for joining me again today.
4:33 Speaker 00 Ari, I'm pumped to be here. Thank you for having me. Last time we did this was, I think, a month or so after I joined Brex in 2018. The world is quite different six years later as we sit here.
4:45 Harry Stebbings? I mean, six years ago, fuck me, I'm getting old, but I do have to start.
4:50 Speaker 00 Man, what does that make me?
4:52 Harry Stebbings? Dude, you're ancient. I mean, you are just, I mean, I want to start with the entry into sales before we dig into specifics. What was the entry point for you? And when did you realize that you loved sales?
5:04 Speaker 00 I attribute a couple data points of luck to being in sales and in tech sales in the first place. So I graduated from University of Missouri in 2007 and wasn't considering, like, you know, but for my brother being in the Bay Area doing tech sales. As a graduate of the University of Missouri, that's not even on your radar. And so I got a job as an SDR at a company called EchoSign. So I sort of lucked into getting into tech sales in the first place because of my brother. And then I lucked into joining a successful business like EchoSign that allowed me to progress my career. I didn't know what I was looking for at the time.
5:46 Speaker 00 And fortunately, I found Jason Limkin, who's a friend of both of ours that was leading this company, and joined as an SDR when it was effectively being run out of a garage, an actual garage in Palo Alto. The question around when did I sort of figure out that tech sales was for me, something like that? I would say that pretty quickly, I was able to start differentiating myself from peers doing the same thing.
6:13 Speaker 00 The feeling of being successful was addictive. It was pretty evident to me early on that I had found something that aligned well with my skill set that, you know, eventually evolved into a tech sales career.
6:27 Harry Stebbings? Dude, I think momentum and confidence are two of the most important things to have in a team because as you said, their success is so addictive. I always think, how do I create that momentum in teams? You've been in sales respectfully then for Christ, 17 years without aging you. So with that in mind, what do you know now that you wish you'd known when you started 17 years ago in that garage with EchoSign?
6:51 Speaker 00 I didn't at the time appreciate how hard of building a successful startup. And, you know, I took a handful of interviews when I first joined a company and, you know, EchoSign gave me an offer, maybe I had offers from other people. I probably looked at like, you know, the comp or something like that. And one of the things was how far is the commute to make my assessment on which firm to join. And, you know, the reality is the importance of picking the right company, it just really defines one's career. I attribute so much of my success to joining the right businesses. Now, like, I was able to perform within those businesses.
7:34 Speaker 00 And, you know, for context, we're talking about EchoSign, Zenefits and then Brex on the sales side. So much of my success was predicated on the success of those businesses. And I don't know that I had an appreciation for one, how hard it is and two, the importance of picking correctly.
7:52 Harry Stebbings? Okay, so on that note then, for people listening going, I want a rocket ship career. I want great trajectory. Sam, how do you pick which company to hitch your bandwagon to, so to speak?
8:04 Speaker 00 Well, I think it depends on the stage. There are companies that are 100 to 500 employees, let's say. There's a lot of signal around those companies. The trajectory with which they are hiring, the sort of like what I'll describe as heat around fundraising that exists for those businesses, the revenue growth that those companies are experiencing. And so you can join a 100 person company as the 10th sales rep. You have a lot of historical signal to go off of that you're picking a company that is a rocket ship, to use the cliche. We'll have to come up with a better word. You know, earlier stage, it's much more subjective, right?
8:44 Speaker 00 The things that I mentioned there around fundraising events, employee headcount growth, revenue growth, those are all things that are objective. The subjective side of things, and what I think I was able to get right at Zenefits and Brex, so much of the success of a really early stage company is predicated on founder or founders and their ambitions and aptitude to building a big business. And I remember, this was further in my career, but when I joined Zenefits, I think I was 29 years old. And I was fortunate to have Jason, again from EchoSign, who had moved on from Adobe. He was introducing me to a number of startups.
9:27 Speaker 00 And I started to sort of pattern match around what I believed an exceptional founder looked like. By the time that I met Parker, Parker from Zenefits, Jason had signaled, one, that Parker is incredible. They're raising a very competitive round at Zenefits. This could be the one, something like that. And I met Parker, he was, in the best way possible, just different from everyone else. And I knew it. And it didn't matter what Parker was building. What he was actually building was all-in-one HR. Doesn't sound and is not sexy. I just wanted to join this guy's company. Because he was going to build a $100 billion business.
10:11 Speaker 00 We didn't realize that outcome with Zenefits. He's going to with Rippling. So, you know, solid intuition.
10:17 Harry Stebbings? Sam, when you're doing such a rocket ship in sales, are you not just an order taker? I don't mean that disrespectfully. But like, when it's like being pulled out of your hand, it's quite fun being in sales, isn't it? But when you are fucking slogging your guts out. In enterprise sales, in long sales cycles, it's a different game. Is it not quite easy when you're at a rocket ship?
10:41 Speaker 00 I think any sales environment, there is going to be a lot of nuance that leads to huge discrepancy in performance. You know, there are of course, sales environments where selling the product is more challenging. There are sales environments where the sales cycle is significantly longer. There are sales cycles where the AEs are controlling more of their investment through outbound versus taking leads from marketing and inbound. But what happens seemingly universally, even at the best companies in the world, like Zenefits in 2014, is there are outlier performers that perform at something like 3X to the bottom performer. And so you get a team of like 10
11:26 Speaker 00 people, even when you're in an environment where the product is flying off the shelves, there is still this huge discrepancy of performance. And I love sales because it's so objective compared to other areas of the business where you have a 10X, you know, performer, and it's hard to know that, or certainly harder than it is in sales. And so that's what comes to mind. Like, of course, you want to be in an environment where the business is doing well, but it doesn't mean that the role becomes easier, or, you know, your success is more guaranteed or anything like that, because you still need to be the best. If you want to get promoted faster than anybody else, if you want to make more money
12:09 Speaker 00 than anybody else, you need to be number one. And it doesn't matter if you are at a startup that is less successful, or the hottest, fastest growing startup there is, those dynamics still exist.
12:21 Harry Stebbings? I want to discuss the team build out. This is one of the most challenging areas for founders. You mentioned there, kind of, you need to be number one. We need to get a team in place first, Sam, in this hypothetical situation where you are advising me, a terrible and inexperienced founder. Imagine that hard is not difficult. But let's start with a very challenging question, which is, how do I sequence sales hires?
12:46 Speaker 00 The way I start is hire two individual contributor account executives. Those are sales reps. Always start with two. There are a bunch of reasons why. We won't go on too much of a tangent here as to the reasoning. Once you have two successful individual contributors in seat, You probably want to take a parallel path of hiring more individual contributors and hiring your first sales leader, because once you have two successful folks in place, you're sort of qualified to bring in a great sales leader. When I joined Zenefits, there were two successful sales reps. When I joined Rex, there were two successful sales reps. The recruiting process
13:26 Speaker 00 of a sales leader is going to take time. You don't want to entirely stall the business as you are taking the four to six months possibly to find the right sales leader. And so these parallel paths of continuing to hire individual contributors and hiring your first sales leader are oftentimes what I recommend. Once you have a sales leader in place, you can then start to do some specialization, like hire an SDR. I don't like hiring SDRs prior to hiring a sales leader, because they need a lot of hands-on management.
14:00 Harry Stebbings? I want to go deeper in a chronological order, specifically. We mentioned, just so it follows cohesion, we mentioned that, you know, hire two at a time. Before that point, does the founder need to be the one to create the playbook? And do they always need to be the one to sell? I argue yes. People tell me I'm full of shit.
14:17 Speaker 00 You're not full of shit. You're absolutely correct. And good point on the sequencing here. So I jumped right into when you are ready to hire, but what are the signals that you are actually ready to hire? You should have a handful of non-friends-and-family revenue-generating customers and a process that you believe is repeatable in terms of generating more of these customers. The reason that I say handful is because it's not the same for businesses that differ from one another. If you're in a very transactional business like Rex was, Rex actually had tens of customers before bringing on their first sales rep.
14:58 Speaker 00 Now, if you're more of an upmarket enterprise-like product, your ACV is six figures, you may actually only have two or three paying non-friends and family, what I'll describe as more enterprise-like customers before you're ready to bring on a salesperson. But look, if you as the founder cannot close customers and generate revenue, people that specialize in sales will definitely not be able to. There is no one better qualified to acquire your first set of customers than you as the founder, regardless of your professional training. And so do not hire a salesperson before you have customers.
15:40 Harry Stebbings? Very, as specific as possible. I now have customers. We mentioned those enterprise customers and revenue-paying, non-friends and family. And now I'm going to go out and hire my two reps. You've said two. I'm going to make them fight till the death like Hunger Games. Kidding, obviously. That would be immoral to suggest such things. My question to you is, what's the profile? And where do I find these people? How do I hire them?
16:05 Speaker 00 Profile, the things that I would solve for. And then one specific thing that I would not. And then we'll get into sourcing. The things that I would solve for, early-stage startup experience. If you are hiring your first AE, first AEs number one and two, they need to have seen an early-stage startup environment. Do not hire from an extreme example being Salesforce. But gosh, even today, don't hire from a rep who came from Rippling and joined Rippling when they were 500 employees. The experience that they're going to have onboarding into that environment is radically different from what they will experience onboarding into your environment.
16:47 Speaker 00 And so I would qualify this as something like one of the first, ideally 10. AEs at a startup, and the earlier the better. So, early-stage startup experience is, you know, top of sort of like profile things that I would solve for. Next on the list is, they have to have a track record of success. Sales is objective. You want to hire the best possible person that you can. If they're coming out of an environment that had eight sales reps, you really hope that they are one, one or two. And we're going to talk about how to solve for that in the, the like category of sourcing. So, track record of performance, early-stage startup experience.
17:28 Speaker 00 You want somebody who has seen similar deal sizes with similar company sizes specifically. So, if you are a very transactional sale, selling into companies less than 100 employees, you do not want to hire somebody who is a field sales rep, coming from deals where, you know, they closed a deal every six months and these deals were six figures. So, you sort of want like the deal size, meaning the ACV, and the customer segment that they are selling into to be similar. The last thing that I will mention that people over-index on, where people over-index is domain. And so, if we're taking something like, let's just take EchoSign, which is electronic signature product.
18:11 Speaker 00 If Jason had solved for hiring people from either DocuSign, which was like the direct competitor, or from like a company that generates documents, like, like similar, similar category. So, they just like, you know, understood the space a little bit better, it could talk the talk. That would have been the wrong trade-off. Because it's already so hard to find an exceptional, early-stage, track record of performance, sales rep. If you are sacrificing or making a trade-off, On somebody who has seen your domain, you're sort of definitionally trading off somewhere else. That is the wrong trade off to make, and not to make this about me, but I'll now make it about me. Electronic Signature, all in one HRs.
18:56 Speaker 00 Innovates was a health insurance broker that had HR software and Brex was credit cards, fintech, bank account. These are radically different types of software. And I think that people who are effective just pick this stuff up pretty quickly. Any follow ups before we move on to sourcing?
19:13 Harry Stebbings? Yes, I do. I'm the founder. That sounds great. They need to have been early and seen the stage, one of the first few reps, and they need to have an early track of success. Sam, from that description, that sounds like someone of your caliber. You are few and far between. You're very expensive, respectfully, and it was impossible to hire you. I'm just a startup dude. You're not going to join me again, having seen what you've seen and having... Are we not living in a bit of a dream world, having this early track of success, also trying to get them to an early stage startup?
19:48 Speaker 00 I think it's the right question. And surprisingly, the in like number of these people is quite high. And by the way, there's one thing that you don't necessarily need to solve for here. And that is you should, you do not need to solve for the logo. Meaning this person doesn't have needed to be an early sales rep at a company that ultimately realized a multi-billion dollar valuation. In fact, there's logic to the inverse being true. Where if they were a sales rep at a company that had a product that was harder to sell, if your product is easier sell, they can sort of be freed. They will be more effective at selling. That said, if we think about the number of early stage startups
20:31 Speaker 00 that hired up to 10 sales reps over the last five years, that's a large number of startups and that's a large number of people. When I joined Brex, the recruiting ground for me was fertile. There were countless AEs that I could recruit from my personal network that met this criteria. And so you'd be surprised at how many folks there are. Now, there are also a lot of folks who are less good, meaning they weren't at the top of the leaderboard. But if we just multiply the number of startups that have existed over the last three years, times the top two or three sales reps, we're in the thousands. There are thousands of these people that exist.
21:10 Harry Stebbings? All right, I can buy that. So then there's thousands of these people, it's bigger than we think. Great, what a relief. I was getting worried there. So how do we source them? We get a G sheet out and what does that look like?
21:22 Speaker 00 Here's what I see most folks doing. What I see most folks doing. So Harry, you are an exceptional founder. You were number one at your class, in your class at Stanford in computer science. And you maybe were like, you know, the CTO at a great startup prior to joining. Your background is not sales. Your personal network is not sales. It's engineering. Recruiting your first set of engineers became easy for you. It was just like your Stanford classmates that you were friends with. And it was folks that you worked with at Rippling prior to starting your company. Okay, but now it's time to hire salespeople. You aren't close with salespeople. This is not your personal network.
22:04 Speaker 00 What most or many folks do is they leverage something like an external recruiter. And, you know, they have a recruiter send them candidates that they look at their resumes. And then they interview them and they spend a bunch of time on interviews with potential sales candidates. And the reality is that these people that you were talking about, Harry, how many of these people do exist? Most of them do not go through a third-party recruiter. They want to go somewhere where their reputation precedes them a little bit. And so sourcing by leveraging your personal network is just of the utmost importance.
22:47 Speaker 00 Now, there are a few flavors that this can take shape. The first is you might have been, you know, successful technical lead at a prior company. Like go, go potentially recruit from the sales team there where you may know some of the sales folks. So that's your personal network. Thinking Brex as an example. Our first couple of sales folks before I had joined that came from our CFO at the time. His name was Michael Teanbaum. He recruited them from SoFi. So you can leverage the networks of some of the folks on your team as well that are bringing in your potential early sales reps. You can leverage your investors. So Harry, you're an investor. You may know some exceptional AEs that you
23:32 Speaker 00 can help place at some of your companies, certainly refer to potential founders. But this leveraging of your personal network, I would not stray from that. And to take it one step further, at Brex, we did not use recruiters, internal or external, to source candidates for the sales organization, ever. I hired the first, let's call it five folks from my personal network after the first two sales reps came from personal networks of people that were already within the company. After I hired those five people, they had personal networks. I'll be specific. I hired a guy, Brandon Boyle, who just crushed it at Brex. He brought it. He came from Gusto. He brought in the number one rep from Gusto
24:16 Speaker 00 as soon as he joined. And so you're just constantly leveraging the networks of the existing team, of your investors, and of the successful folks that you hire. And the probability of success is just so much higher for a number of reasons.
24:32 Harry Stebbings? Is a good hire today better than a perfect hire in the future? You know, I'm sure I'm a founder now and, ah, I met Sam. Yeah, I think he's good. And I like him and the co-founder likes him. Yeah, a couple of things off, but should be fine.
24:47 Speaker 00 There are always sacrifices. I don't know that there is such thing as the perfect candidate. There are a few things that with these early hires that I would not sacrifice on. I referenced a few of them. There's another one that Jason loves to talk about, and that's would you buy from this person? So I think what you need to do as a founder, Is you need, you need to sort of decide what, what are the areas that I'm open to sacrificing? And what are the areas that I've not? And then solve for the areas that you are not open to sacrifice.
25:20 Harry Stebbings? Do you do case studies? Do you test it literally?
25:22 Speaker 00 Meaning, do you have the candidate do a case study?
25:25 Harry Stebbings? Yeah, Sam, sell me Brex or sell me your prior company.
25:28 Speaker 00 Oh, I think, I think the prior company is a really interesting one. Because I think what's hard about sell me my company, meaning sell me 20 VC, right? You're a 20 VC expert and I'm not. So like you know how to pitch this product better than anyone in the world. And they're almost like destined for failure, but they should be exceptional at pitching their existing product. And so if they can pitch you, you know, yes, I would buy your existing product from this person. And that should be an easy exercise for the rep to go through. I like that area.
25:58 Harry Stebbings? Okay, so we're there. Any advice to me on, I'm, I'm loving kind of this chronology. So we've, we've got these two, we want to make them an offer. Any advice on sales comp, Sam? I've got no idea. I'm, I'm giving these two reps. It's the first time I've hired them. What's the right way to approach sales comp for the first two?
26:16 Speaker 00 You know, I think for the, for the early ones, I, I think you probably just have a conversation around just like, what are your comp expectations? You're probably going in with an idea of what you believe is market rate for the hire that you are making. Let's just say like, you know, at maturity, you think this sales rep is going to be able to close something like a million dollars in ARR. We're a mid-market sale and we can, we can afford to pay somebody in this role. Let's call it 200K. You know, we're early stage, sorry to give them a bit more equity. We think ballpark is going to be like 160K total comp. That's like, you know, where we think it is. Harry, you're the candidate, you know, what are your comp expectations? Well, Sam, today I'm at 180. My company is a little bit bigger.
27:00 Speaker 00 I would, you know, I, I would take a little bit of a hit there. And you know, you go in at, at 160, you give them a bit more of the equity off the company. But I think it's not one size fits all. You do want to have an idea based off of how much revenue you think a sales rep can generate at maturity. AE range 100 to 250 is like the total comp for a sales rep. So wide range there based on a number of factors.
27:24 Harry Stebbings? Sold. We got them. We got these two reps. Okay, so they're joining now. You know, onboarding, it just fricking sucks every way you do it, right? I've never hired reps before in this hypothetical situation. They turn up on day one. What do I do for onboarding, Sam? Like, how do I set them up for success as best I can?
27:43 Speaker 00 Yeah, this is why the startup experience is so important. Hopefully, the rep comes in understanding a little bit of what they need to be successful in an environment where there isn't a lot of structure and there is a lot of ambiguity. You know, you as a founder can be confident, here's your computer, starting day one. I'm going to teach you as much as I know about what has been effective for selling here. But, you know, what ideas do you bring to the table for us to generate and close more revenue? Hopefully, setting them up for success by giving them access to any information that they need. And then, you know, the sort of like next iteration of this area is how do we then measure
28:25 Speaker 00 performance and success of this new hire? You know, ultimately, it's going to be around generating revenue, their ability to generate revenue. I think during, you know, 30, 60, 90, you probably do want to have agreed upon objective measurements of success. It's going to be different for every company, but you want to be transparent about here are the things that are important over the first 30 days. Here are the sort of like milestones that we would like you to achieve in your first 30 days. Many of them are going to be objective. Some of them are going to be subjective and just, you know, if you're as a founder watching them sell, is this person picking this up quickly or not? It's slightly subjective.
29:07 Speaker 00 And then, as we mature, there are three things that I look for in terms of measuring the success of a sales hire. This is true for the first hire and this is true for the 10th hire, the 100th hire. The first is performance. Super objective, sales, you know, it's, it's how much revenue is this person generating? Where do they stagger on the leaderboard? The next two require no skill and are more subjective. The first is effort. Is this person working hard, setting the bar for what hard work looks like? And then the third one is attitude. Is this person reflecting positively on their peers? Are they coming into the office motivated with a smile on their face?
29:51 Speaker 00 Positive about the environment? You know, how do they handle change? Those sorts of things. And if number one doesn't exist, meaning if the performance isn't there, you sort of default to, okay, what is the effort and the attitude like? And if either are lacking, this is either like a zero time or one time conversation with the person around performance.
30:15 Harry Stebbings? Sometimes it takes quite a lot of time to ramp, especially in an enterprise sale. The numbers won't be there early on. It's a little bit hard to tell. And if you're a founder and CEO, you've got other shit to do rather than just monitor Sarah's effort levels, which are pretty subjective, other than just kind of looking across the room. So my question to you is, how do you measure success when the sales cycles are super long? And is effort really that easy to tell?
30:40 Speaker 00 I grew up in a world where people were in the office five days a week. And yes, it was easy to tell who was working hard and who wasn't. You know, especially in sales, one, there's the like, when are they getting in and when are they leaving? And then there's also the, gosh, this person, I hear them on the phone all the time. And you could just sort of like see and hear the activity levels, especially in sales. You know, some folks today are remote and that is a new challenge. I think, Harry, though, if you make the right hires, there are metrics that you should start seeing improve almost immediately, regardless of how long the sales cycles are.
31:22 Speaker 00 Some of those metrics will be things like the number of opportunities that we are working. Harry started two weeks ago. Harry, he immediately started pounding the phones. He came up with this like really creative outbound campaign and we're like, I'm joining calls with Harry with Square. We've got a demo with Square today, the CFO that Harry broke into the account. And now I'm the founder CEO. This is an important call that I'm joining. Like high five to Harry for breaking into this account. Square's now in the pipeline. This was a real call. And so even if your, your cycle times are long, there are sort of obvious metrics that should be improving.
32:05 Speaker 00 A sort of easy one is around opportunities and pipeline that you are tracking.
32:10 Harry Stebbings? How long does it take now if you've got someone shit? Like, I think it's like a week. I think people are way too nice. I know in a week if someone's good or not.
32:18 Speaker 00 It's funny, the, the number that was coming to mind for me, it almost doesn't matter how long the cycle is with these early hires in particular. I, I think 30 days. Um, and, and here you're, you're probably closer to right with your week. You know, many folks say a quarter, many folks say 90 days. That, that seems way too long for me.
32:37 Harry Stebbings? If you hired me, I'd show up on day one with like segmented customer lists, the buyers in each. I would be ready on day one to email them, ready to go with my fucking email. I would have already done Canva marketing collateral that I'd done in prep for the day ones. You know, on day one that that's good.
32:55 Speaker 00 You only get one chance to make a first impression. It generally doesn't get better, which I think sort of piggybacks off of your comment, Harry. And if you're having performance expectation conversations really early on, I, I think that is a, a bit of a red flag.
33:13 Harry Stebbings? Sam, what's your biggest hiring mistakes? Everyone makes mistakes. My mother always tells me I was one.
33:20 Speaker 00 Your brother has very high expectations because you're crushing it. I think my biggest hiring mistakes were pretending that concerns that I had in the interview and hiring process didn't really exist. In sales in particular, you know, it is performance based, but it's also like the team dynamic is so important, like this concept of building a winning culture and having people that are positive influences on their peers. You cannot have folks that sort of sit around and complain about the product or complain
34:02 Speaker 00 about marketing or whatever the like complaint of the day is because it rubs off on their peers. And before you know it, you have just like an unhappy sales floor where one person is negatively impacting the broader team. And I have probably rehired or hired people where, you know, this concern had been flagged, where it's like, you know, they hit quota, but there is some serious baggage that comes along with this person. It's like, oh, they hit quota? We need to hire 10 people? Come on, like join. And so, you know, that's one example, but I think it's pretending things that were concerns
34:43 Speaker 00 in the interview process didn't really exist because like either they were coming from this place or being sort of blinded and then those things oftentimes come to manifest and bite me.
34:55 Harry Stebbings? We've got our sales team. They're doing okay, but wait, they're not actually doing okay. There's something that's not working. How do most founders diagnose bottlenecks in growth? And how do you advise the right way to diagnose bottlenecks in growth? Now we have the team in place.
35:12 Speaker 00 You know, I did some consulting between Zenefits and Brex, and I talk with founders as part of my prior role at Founders Fund regularly. And the conversation almost universally goes something like this. Harry, we're sitting here in late March, let's just pretend the quarter ended, and we missed our revenue target. And when I ask, why did we miss our revenue target? Almost universally, the answer is something like, we had a couple big deals that had those big deals just closed, we would have hit our plan. And unfortunately, they pushed and we missed. But like, you know, I'm sort of diagnosing our problem with,
35:54 Speaker 00 we didn't close company A and company B that were in the pipeline. And the reality is that I would say for four out of five startups, maybe more, when they are effectively diagnosing the problem or the bottleneck to growing faster ads is conversion rates. And for almost all startups, the bottleneck to growing faster is actually around demand gen, opportunity creation. And if you think about just sort of a simple version of this, if everything else remains constant and you are able to 2X the number of opportunities that you are creating, you have effectively just doubled your sales.
36:37 Speaker 00 And doing the same thing on conversion rates is much more difficult to do. Meaning, you know, 2Xing conversion rates is far more difficult than focusing on generating more demand or focusing on opportunity creation.
36:55 Harry Stebbings? Why? I'm pushing back in a respectful way.
36:58 Speaker 00 Of course.
36:58 Harry Stebbings? You can carve out a much more structured sales process, be more involved as a founder in that sales process. I think actually, if you want high quality, great leads, they're hard to come by. Like, 2Xing that, I don't know if that's easier than increasing conversion. And I'd rather increase conversion because then we're not gonna, once a lead is not converted, even harder to get them back a second time. So I'd rather increase conversion than just burn more leads.
37:25 Speaker 00 What I find is the environment that exists for most tech startups is what I would describe as a lead poor environment where you look at the calendars of the salespeople. Harry, you just hired two salespeople and you know, we're this phase of the company where it's now you and two other salespeople and I pull up the calendars of your two salespeople and they are spending an average of one hour a day customer facing. This is whether it be, you know, new demos that they are taking or existing pipeline where they're following up with a customer and they are clinging on to any possible opportunity that exists in
38:08 Speaker 00 the pipeline and they're salespeople. So they're sort of waiting for more opportunities to come in because you know, their focus is on closing the deals and we don't have anybody in marketing and I'm a founder, I've got all this other stuff going on, you know, if I'm spending one hour a day customer facing as a salesperson, I'm clinging on to the limited number of deals that I do have. That creates an environment where I am incentivized almost to Harry to tell you as the founder, you know, this deal actually has a good chance of closing even though it doesn't because I've got to tell you I have some form of pipeline. I can't tell you we're going to close nothing this month,
38:47 Speaker 00 but if I had more opportunities, if my calendar was more full of demos, we would be closing more revenue. And I just believe that demand masks a lot of other potential problems, almost all startups. The bottleneck to growing faster is demand. We are, we are constrained by the number of opportunities that we are creating. We are misdiagnosing this as a conversion rate problem and our resources and our focus are being mapped to where we are misdiagnosing the bottleneck, which is the middle of the funnel. We have more salespeople than we do people focused on opportunity creation. Our focus is on the deals that are in the middle of the funnel. With all of
39:31 Speaker 00 this resourcing and attention should be on generating new demand because we will, that is the bottleneck to growing faster.
39:38 Harry Stebbings? You've sold quite horizontal products in the past in terms of to a broad customer base of industries, not just, I don't know, the auto industry or the whatever industry you want to focus on. I think it's like packaging is one of the biggest problems. Getting it to resonate with customers, verticalized sales playbooks. I find so often people try and be everything to everyone and then it doesn't hit with anyone. That's one of the biggest problems I find.
40:02 Speaker 00 It's interesting. The thing that really differentiated Brex in the early days was the underwriting model where we used the cash balance to issue credit versus a personal guarantee from a founder based off of their personal credit, which is the way that all of the credit card companies did before Brex. We actually weren't the first to do that. Divvy, who was a competitor at Brex, they started before Brex and they used the same underwriting model. But Divvy sort of approached the market as we are going to be a corporate card for any type of business. And Brex launched as the first corporate card for startups. So we were really explicit in our branding around what we were. We were a corporate
40:47 Speaker 00 card and who we were for. We were the first corporate card for startups. And because of that, we gained really meaningful market share in this vertical of technology, the segment of startups, because of the branding association and the focus that we had. We took the innovator's dilemma approach, which was we went after a small segment of the market, very differentiated product, gained huge market share and expanded from there. And so, you know, at least in that example, it was really effective.
41:20 Harry Stebbings? So I totally agree and I remember that so well. It was like wildfire when it was bluntly so proliferated among the startup class, especially in Y C as well. It had this unique channel acquisition as well, which I think is so important. And with more specialization, you get higher conversion rates in channels because you're more targeted messaging wise. So like, I think that's really important. You mentioned about kind of generation. Raps expect things to be handed to them. Marketing and not geniuses, not in a disrespectful way, but they're not magic. Who is responsible for lead generation? And how do you think about that?
41:56 Speaker 00 Well, certainly in the early days and I would argue as companies progress as well. I, you know, if you only have two AEs, those AEs have to be responsible for generating some of their that often takes form of outbound, but they can come up with clever ways to generate demand outside of the outbound. But salespeople should absolutely be responsible for controlling their own destiny in a way, generating their own demand that often manifests through outbound. I think this is true on day one. This should be true on day 1000. I'll tell you a quick story about Rex, where I think, you know, it really illustrates the importance of this point.
42:36 Speaker 00 When we were a relatively mature startup, uh, so let's call it 50 to 100 million dollars of annualized revenue. One of the things that we noticed was that the AEs were sourcing far more of their own revenue than their SDR counterparts. Even though they were full cycle, they were also closing this revenue. So you have an SDR who is spending 100% of their time on outbound and an AE who is spending, let's call it 50% of their time on the, on outbound. And the AE is sourcing more closed revenue. It shouldn't be that way, Harry, right? But it was. And the reason behind that is because AEs had their opportunities converted at higher
43:20 Speaker 00 rates and the opportunities that they were generating generated more revenue. And it's because AEs had this intuition around what a quality opportunity looked like, which companies would spend more on their card. And so they were sourcing higher quality, higher revenue generating opportunities than their SDR counterparts were. Now, of course, we took this information, we made a bunch of changes. We sort of took away the ability of the SDRs to decide which accounts to go after. We said, these are the accounts that you should go after. These are the people you should reach out to in these accounts because we know conversion rates by persona. We also changed the model by which SDRs were compensated.
44:04 Speaker 00 They were originally compensated on opportunity creation. We moved it to revenue. Eventually, SDRs began sourcing more revenue than their AE counterparts. Now, the AE counterparts, they didn't change. They were still sourcing the same amount of revenue, but SDRs caught up. And we get none of these insights. We drive none of these changes if we don't have AEs sourcing their own revenue. Uh, such is one example of why I think it's important, but ultimately I think that, you know, it's a missed opportunity to not have AEs. Like if we think about ROI on AE time, number one is closing revenue. There's no higher ROI than an AD spending their time closing deals.
44:48 Speaker 00 Number two, sourcing additional revenue. And so if they aren't spending 100% of their time, let's call it 45 hours a week, closing deals, whatever that excess time is going towards, it is less ROI positive than sourcing their own deals. So I think they should be doing so.
45:07 Harry Stebbings? Are we entering a world where SDRs are like a bit old school, really, isn't it? A bit of cold outbound? That sounds nice. In a world of content, short form video, creating audiences, creating community, you know, really, people are sold before they even enter sales processes now. I think there's a Gartner thing that says like 88% know that they're going to buy when they enter a sales process. I'm butchering the number, but it's, it's, it's a high number. Like the old SDR, Sam, I liked your post about, you know, HR integrations. We're a great provider. Is that not gone and we're moved to a world of content now?
45:43 Speaker 00 It's the right question. I love outbound. I love sales outbound. What, what you're describing, Harry, is a form of outbound that I think is not effective. Let's approach it like this. What I see most sale, early sales reps, SDR teams, startups, what I see most folks doing is they purchase, you know, CRM, they purchase Zoom info to get. Contact information, they purchase outreach to have email sequencing. And then they write like a, you know, version of the copy that pitches their product a little bit.
46:21 Speaker 00 And then they drop the universe into seven email sequence outbound cold email. And Harry, these are going like, we're, we're, we're a 10 person startup. Nobody knows who we are. Harry, you are 22 year old SDR that just started at our 10 person startup. Nobody knows who you are. So you're sending an email to, let's use your example, the VP of HR at Rex. 22 year old SDR, 10 person startup. It's the 12th email that they have received today, trying to pitch them on a payroll or whatever product they're pitching them on, and it goes right into the trash. Most startups are doing outbound wrong.
47:05 Speaker 00 I think the way that startups should be approaching this, first is on who you are targeting and then how you target them. So who you are targeting, think about the universe in terms of concentric circles. You want to start with the sort of like closest concentric circle to your business. So Harry, we're still this 10 person startup, okay? You, Harry, in your, you're the founder. You have a personal network that is a bunch of other founders. So we're going to start going after companies that are in your personal network. We've also raised a seed round from a number of different investors. We're going to leverage the networks of our investors. We've got 10 employees.
47:50 Speaker 00 Our engineer, they, they were at three companies before they joined our company. They've got a bunch of connections that they can reach out to at other early stage startups. Let's, let's rev leverage their personal networks. Okay, now we're starting to acquire some customers. Some of these customers are really happy. How can we leverage these customers to generate additional customers? Hey, Harry, you're VP of HR at this company. Do you know anybody else who could leverage our product to realize some of the same value that you are realizing? Because, you know, the HR community is sort of tight knit.
48:30 Speaker 00 So I just think the way that we are doing outbound or who we are targeting is wrong. Think about the world in terms of concentric circles and closeness to the business. At Brex, we started with personal networks. We moved to investor networks. We moved to YC companies. We moved to former YC companies. We then put billboards up all over San Francisco and we targeted companies that were headquartered in downtown San Francisco that would walk past our billboards. These concentric circles just keep getting further and further out until you get to the point where you have such a brand that you can email the VP of HR. You are no longer a nobody company. You are rippling.
49:11 Speaker 00 And VPs of HR at 250-person tech companies, they know rippling. And the probability of getting a response to that email is just significantly higher. But you don't get there on day one. It's a process. So that's on who you are targeting. Now, the way that you target them. I think, you know, you really want to have contrarian, you know, really demand gen efforts, but specifically contrarian outbound efforts. I've talked about a champagne campaign that I did at Brex where we sent founders a bottle of champagne early on and, you know, congratulated them on a recent fundraise. That's differentiated. It received a ton of responses.
49:54 Speaker 00 You just want to come up with something that is different from what everybody else is doing that stands out. It oftentimes can come in the form of some physical delivery, a handwritten note. You just want to be different.
50:06 Harry Stebbings? You know what worries me a lot of the time that I see now? A lot of companies I'm in, they'll have this quite intense SDR AE sales function. They'll have CS functions and the ACVs are 10K. And it's like, ah, and they're like, ah, but it'll scale. It'll scale, Sam. It rarely scales. And so we're layering on this enterprise cost base for this very SMB PLG revenue base, which has really been born out of the PLG motion. And I'm just seeing a generation of companies have shit economics because of this. Do you see it too? And am I just getting jaded and old, Sam?
50:42 Speaker 00 I think the approach to acquiring customers and how much you can spend on that, it needs to be influenced by your ACVs. And to your point, Harry.
50:53 Harry Stebbings? And your LTVs. Like if you are Brex, the LTV is much longer than I would imagine a people management solution. Maybe not, but other solutions which are just generally shorter.
51:05 Speaker 00 Well, I think there's, you know, within different businesses, you have different segments of customers and you can approach acquiring one customer very differently than a significantly larger customer that generates more revenue. But what you can't do is scale that down. And so I use this, this example of we sent bottles of champagne. It was 40 bucks a bottle. You know, it's expensive, like after delivery, maybe we're upwards of 60 bucks. You can't spend that, you know, on customers that generate a hundred dollars a month in revenue for your business. And so if you think about the world or your company in terms of multiple businesses
51:46 Speaker 00 based off of the segments, you just target customers differently depending on how much revenue they're going to be able to generate. It's certainly not one size fits all.
51:54 Harry Stebbings? One thing I worry about with outbound though, Sam, is you mentioned like, oh, people get 10 emails a day and blah, blah, blah. But I think they're about to get 100 emails a day. And I think they're about to get 100 text messages a day and 50 WhatsApps. I see so many WhatsApp sales tools now as well. AI is going to massively increase the amount of outbound sent. Will we see the commoditization of outbound with the rise of AI?
52:19 Speaker 00 What I'm seeing is the tools today are making the category of outbound or the function of SDR or AE more effective. They're streamlining a lot of manual process, the same way that something like Outreach did a number of years ago. Harry, when I joined, EchoSign is an SDR. Marketo existed, but I was manually sending all of these emails one at a time. I'd like copy it, paste it, and then I'd like put in somebody's name, and then I'd hit send. But it was a very manual process, and along comes Outreach, and I'm able to send like a hundred at a time. That allowed me to be far more efficient as an SDR, but
53:04 Speaker 00 it didn't get rid of the function of SDR. In fact, like, maybe there are more SDRs in a world where Outreach exists than there were before. And I think we're continuing down this path of automated. Now, we can personalize emails. The AI is going to write me an email that knows things about Harry that I wouldn't even be able to find out if I spent a bunch of time researching it. So the AI is going to write me copy as well. I think what, at least today, AI does not accomplish that humans still do is this aspect of being creative. The AI isn't going to tell you, here is your contrarian or unconventional
53:44 Speaker 00 outbound sales campaign that is different from what everybody else is doing, and that's generally going to come from a human. And there is a process that I go through to determine these things, if it's helpful. Yeah, I'd love to hear it. Okay, for each different channel, I love to do just a whiteboard session. Outbound is one example. So let's take the outbound example, but this applies to so much more. And then I'll give specific examples of outputs that this process has produced. So with outbound, we want to be different. At a 10-person startup, Harry, you're the founder, you're going to be in this meeting, the two sales reps are going to be in this meeting, and then maybe we have like somebody in growth, that person's going to be in this meeting. So you've got
54:29 Speaker 00 Four people in this meeting. We are going to do, it's up at eight o'clock on Monday evening meeting. It's the end of the day. We're going to do a whiteboard session. This meeting can go until midnight. There's no end in sight because it's the last meeting of the day. Okay, everybody come in with your top three ideas on what you, you suggest we do. That is different from what everybody else is doing in outbound. Okay? We go around the room. Sam, who are, what are your top three ideas? Okay, Harry, what are your top three ideas? We go to each person. Everybody comes with three like contrarian or different ideas on how to do outbound. We discuss them all. We select the ones that we think are the best and we go out and we try them. And you do this with outbound. You do this with events.
55:14 Speaker 00 I remember the first time we sponsored Saster at Rex. We have late night whiteboard session. We get everybody that we think is, you know, contributing to this meeting in a room. Everybody come up with three ideas. What are the things you want to do differently? We don't just show up to Saster with a $100,000 booth and some pins to give away to people. We show up, we have TaskRabbits outside of the event in Brex t-shirts handing out Brex fist burritos to every single person that walked in the venue. So the first experience that they have at Saster is they get a Brex burrito when they walk in. Four bucks a person. Not expensive.
55:54 Speaker 00 They walk in, you know, our booth, we have a magician that is using like, you know, Brex cards to do tricks. Uh, we're giving away $25 gift cards. He's incorporating the Brex pitch into his magic tricks. Everybody is around our booth for these $25 gift cards. We had all the billboards that were around the Saster conference. We bought them at the paper mall. So on the walk from the hotel to the conference, you're seeing Brex billboards. When you check into your hotel, your key is a Brex credit card. When the hotel gives you your key, it's a break. You use your key like four times a day to go in and out of your room and you're using a Brex credit card.
56:34 Harry Stebbings? How do you do that? You do a partnership with the Four Seasons?
56:37 Speaker 00 You pay for the sponsorship. And we, you know, we actually brought this idea to Saster. And Saster was like, that's free money for us. We didn't even have this sponsorship before. Yes, we, we, we have these room blocks. We can tell the hotel, like, use these key cards. We ordered the key cards.
56:53 Harry Stebbings? That's smart. I like that. The key cards is really good.
56:56 Speaker 00 And none of this stuff, and again, you do this with every channel. And actually, I'll give you one more example, because I think, you know, Harry, you seem to like the outputs of some of this stuff. But the way you get there is late night whiteboard session. We're sponsoring Saster. Everybody come with your top three ideas of things that we can do to stand out at the conference. We're doing outbound. Everybody come with your top three ideas of things that we can do differently than everybody else for outbound. I'll give you one more. Hate advertising. Actually, there's two outputs. Everybody just pays LinkedIn and Google and Twitter, and they pay them a bunch of money to, like, surface some ads. Okay, Rex, we went offline. So everybody's doing online advertising. We put billboards all over San Francisco. We did offline, very contrarian. We had a concentrated target market geographically.
57:41 Speaker 00 My favorite one, though, that was super effective. What Rippling has done, they have a campaign right now where instead of paying LinkedIn money to surface ads on LinkedIn, when new employees onboard to their customers, they onboard through Rippling. And at the end of their onboarding, right, you know, it's W4, I9, payroll, all that stuff, benefits. At the end of the onboarding process, they do an NPS survey. How would you rate your experience with Rippling? The folks that say nine or 10, they send them an email. And it says, if you post on LinkedIn about your onboarding experience with Rippling, we will give you $25 or $50 Visa gift card, just hashtag Rippling, hashtag sponsored, something like that.
58:25 Speaker 00 And so you have thousands of posts on LinkedIn that are sort of organic, where a new hire at a company is saying, just joined company X, onboarded through Rippling, awesome onboarding experience, you know, hashtag Rippling, hashtag sponsored. In all of these posts, they get tons of engagement, because you see when somebody joins a new, a new company. Everybody likes it. It's like, you know, I joined this new company. It's an announcement. Everybody likes it. Congratulations on joining the new company. And they're paying 50 bucks. Each time somebody does one of these with hundreds of likes in some instances because
59:04 Speaker 00 they join a new company, how much more effective is that $50 than paying LinkedIn $50 to service an ad that says rippling all in one HR and IT?
59:14 Harry Stebbings? We both know brand building. That I'm moving is one of the most high engagement valuable posts you will ever do. The I'm moving, new fund, big round is the ones that get it. Everything in between is nice, but it's activity. Those are your needle movers. And so you're getting it for 50 bucks. So I totally agree with you there. I've got to ask, what was the most successful paid campaign you did? And what was the, oh my God, we just fucked up on that one?
59:44 Speaker 00 Okay, so the most successful campaign, and we'll not be Brex specific, the most successful campaign we did at Brex was the billboards. I think it's the type of thing where our mind share within our target buyer went from zero. When Brex launched in 2018, when I joined Brex, we didn't have a website. I went to the website and it said, coming soon. We had no PR. We didn't announce any of our funding rounds. We were in stealth. So it was almost impossible for our target market to know who Brex was. So, you know, market mind share of Brex was like near zero. And when we launched, we did a bunch of things,
1:00:28 Speaker 00 including announcing the fundraising that we had done historically. Of course, we launched a marketing site, but the very day that we launched and GA'd the product, we put billboards up all over San Francisco. I think the campaign cost something like $300,000 over three months. We were everywhere. That just made everything easier for us. You know, we talked about outbound thing. I can't tell you the number of responses to our outbound emails that were, I see your billboards everywhere. And they probably don't respond to the email in the first place if they don't see our billboards everywhere. So one, customer acquisition became so much
1:01:09 Speaker 00 easier because of the brand awareness from that campaign. But where it goes bigger than that, like, In fundraising became easier because of that campaign. We we sort of became famous because of this billboard campaign where we were all over San Francisco. And so for, you know, $300,000 was really effective.
1:01:29 Harry Stebbings? So we have that as the best. What was the, oh my God, I can't believe we did that.
1:01:34 Speaker 00 Ooh, okay. Rex is a corporate card, a credit card. And if you think about, you know, American Express was our biggest competitor when we first launched. We were mostly taking market share from American Express. Folks had used their business or corporate card. And American Express is really famous for airport lounges. You know, they've got these like Centurion lounges at a bunch of airports. And around the same time, Capital One was launching these like Capital One cafes. And we decided at a very early stage, we were less than 100 employees. We decided that we were going to open a restaurant and lounge.
1:02:18 Speaker 00 And so we opened in South Park in San Francisco. We opened a Brex Lounge on top of South Park Cafe, which was a restaurant. And Harry, running a restaurant is hard. It's also expensive. It is distracting. And, you know, in hindsight, that was a big mistake. We should have focused on building a credit card company, using our dollars to acquire things like customers and not, you know, remodeling a 100-year-old restaurant that was in dire need of a remodel.
1:02:59 Harry Stebbings? How much did it cost?
1:03:01 Speaker 00 There's two costs. There's the hard costs. Hundreds of thousands, if not low millions of dollars, you know, when all was said and done in terms of remodeling the restaurant, the rent, the, it just everything that goes into it. But, Harry, it's it's the opportunity cost that was so much higher. It is hard to run a restaurant. It takes resources from whoever we put in charge of running the restaurant. They have to hire people. They have to manage those people. That was the biggest mistake that we made at Rex.
1:03:32 Harry Stebbings? Yeah, that was a shit idea. I think that was a world-class shit idea.
1:03:37 Speaker 00 If you were in, if you were in some of the exec meetings where we discussed it, you might have been like, this is gonna be great, but it wasn't.
1:03:43 Harry Stebbings? No, no, because it's not, it's like, it's just in South Park. It's just in South Park. It's not like Amex lounges around the world with a network effect and a brand effect. This feels like if I was the founder, I'd do it just to have a good place to have lunch.
1:03:58 Speaker 00 You know, here's, here's maybe the glass is half full way of thinking about this is something like not 100% of your really creative or crazy ideas are going to land. And I think it's better to have tried than not tried at all, something like that. You know, so maybe even like celebrate the failures in a way.
1:04:19 Harry Stebbings? If you think about the contrarian winnings, I totally agree with you. And I would way rather fucking try and have some out there stuff that fails than doesn't. I think you just want to cap the losses, hopefully in the not millions. I want to move into a quick fire, Sam. So I'm going to pepper you with questions, 60 seconds per one. Does that sound okay?
1:04:37 Speaker 00 I love it.
1:04:38 Harry Stebbings? Okay, discounting, do we ever do it? Do we not do it? What, what's the advice?
1:04:42 Speaker 00 Yes, with qualifications, you know, early stage startup. If I can describe the environment that I prefer to be in, it's something like we are perceived as the premium product, both because of the quality of our product, but also the price point with which we sell the better product. And I have the ability to discount that product to accelerate deal cycles. So much of sales is psychology. And if you're a buyer, the feeling of getting a good deal drives behavior. You know, there's a saying here, time kills all deals, especially in the early days.
1:05:23 Speaker 00 If providing a discount does things like accelerates deal cycles, prevents people from looking at competitors and allows you to move on to another opportunity. I do like leveraging it in certain instances. I think where people make mistakes and salespeople in particular make mistakes is like just defaulting to discounting. This is something that happens very late in a deal and it happens with a very clear trade off, which is driving urgency to close.
1:05:55 Harry Stebbings? Was sales tactic has died a death? What's no more?
1:05:58 Speaker 00 There are two. We talked about one, this sprang and prang of emails, especially at an early stage, I think is something of the past. The second thing that comes to mind is people are going to start meeting their customers in person again. You know, pre 2020, a lot of customer interactions happened in person. And then 2020 hit, people went remote. And I think, you know, we have not returned to an environment where we are meeting our customers in person, we're meeting our prospects in person. And I think that today, if you're doing that, it's a real competitive advantage. But I think forward looking, this idea that we never are going to meet our customers in person, that we're
1:06:42 Speaker 00 just going to return to the norm here. We measured conversion rates at Brex. When we met a customer in person, we had 3X the likelihood of closing that deal than if we didn't. And so like the days of working from home, doing Zooms only to meet with customers, not meeting customers and developing personal relationships, those days, I think are going to be a thing of the past, if not already.
1:07:05 Harry Stebbings? Do you buy remote sales teams?
1:07:07 Speaker 00 If you are a mature business and you've gone remote, that's tough to put that back in the bottle. The genie's out. I think if you are starting a business today, I am very biased towards building in person, both the, you know, the entire company, but also the, the sales organization.
1:07:26 Harry Stebbings? I totally agree with you. I fund in person companies. Let's finish with, what would you most like to change about the world of sales moving forward?
1:07:34 Speaker 00 My experience with many salespeople today, and you know, we've talked a little bit about this remote environment that I think has had influence. But I think today's salespeople have gotten a little bit lazy. And I think they and we, because I consider myself You know, part of this community, a couple of things have happened. One, we have become overly dependent on marketing, SDR, anybody to source our own leads. We, we are, we are consumers of demand. And if we're not well fed, then you can't expect us to close revenue.
1:08:16 Speaker 00 So that's, I think, one like trend that I believe needs to change. And the second one, it, it is around effort and especially with remote companies. And I think that this is true with sales and it's likely true beyond sales. Where, you know, Harry, when I joined Brex in 2018 and we did this podcast, startups were really fucking hard. And my first day at Brex, I had a meeting that was at 8:00 AM. And I had a meeting that was our exec, our weekly exec team meeting. And it started at 8:00 PM and didn't end until midnight. And I walked home from the office after midnight and I was in meetings from 8:00 AM until midnight.
1:09:02 Speaker 00 Same thing was true at Zenefits. And look, I was an executive employee there, but all of the people at the company were working that hard. And it required it. And I think today, many salespeople in a remote environment are waiting for leads to be placed on their calendar and working something like a 30 hour work week. And it just doesn't really work, especially for early stage startups. Like if, if you want to separate and be successful, it just requires a lot of hard work and, and no entitlement around, you know, getting leads placed to warm spoon fed leads on our calendar.
1:09:44 Harry Stebbings? But that's, that's the greatest opportunity of all to me for young people. Cause I, I sound so old saying young people, but like, yeah, I've been doing this 10 years. And a lot of people coming out of university ask me, what do you advise? I always say it's so easy to be different because everyone else is so mediocre. If I actually just do those little things to you, Sam, I write that thank you email to you post the first day, highlighting the couple of things that I thought were interesting from that first day that maybe we could do better. You're like, that is good, good start, perceptive. Little things that don't take much, really don't take much, but it's so easy to be great because everyone's quite mediocre, I think.
1:10:20 Speaker 00 I think it's really insightful and smart. And there are so many of these things that just apply beyond what we're describing around here, but like the little things can go a long way.
1:10:31 Harry Stebbings? Sam, I've loved this. Thank you so much for putting up with my sometimes impassioned rants and opinions. You've been fantastic and I hope we don't have to wait another six years to do this again.
1:10:40 Speaker 00 Harry, I appreciate the invite so much. I've had a blast as I always do. And let's hang out in person. I'll be in Mudville in early June and I expect to see you and spend some time together then.
1:10:53 Harry Stebbings? What an incredible show that was with Sam. I want to say huge thanks to him for joining me today. And if you want to watch the full episode in video, you can check it out on YouTube by searching for 20VC. We always love to see you there. But before we leave you today, have you ever wondered why spending company money is so broken? Employees want to follow the process, but they're confused and frustrated. It takes forever to get anything approved. It's so tedious to get anything paid. And folks in procurement, finance, and other stakeholders are just as frustrated too. Duplicate spend, unauthorized contracts, surprise vendors, late invoices, missing receipts and documentation, it just doesn't end. Altogether, it makes a spending feel out of control, wastes time
1:11:34 Harry Stebbings? and money, and increases risk. It shouldn't be this hard. It doesn't have to be. Airbase makes it easy. Airbase is the only procure-to-pay software that beautifully combines enterprise with employee-friendly ease of use. It orchestrates upstream intake requests all the way through to the downstream processing of invoices, expense reports, credit card transactions, and reconcile that seamlessly in your ERP. Replace a complex maze of tools, forms, emails, and spreadsheets with an interconnected collaborative platform. Stop uncontrolled spend. Make it easy for employees to follow the process. Put stakeholders in the loop. Close your books faster, keep suppliers happy. All this and more is possible with Airbase. To learn more, head over to airbase.com/20vc.
1:12:19 Harry Stebbings? Airbase: procure, pay, close. And speaking about game changers with Airbase, you need to check out our next sponsor. Is expense management a painful chore? Sounds like you use Concur. It's time to switch to Brex. Brex automates and accelerates spend management with easy-to-use corporate cards, travel expense management and bill pay, all on one AI-powered platform. Brex makes it easy to boost efficiency and compliance enterprise-wide, and free up your managers, employees and accounting team for higher-impact work. Don't let Concur slow you down. Top companies from startups to enterprises are using Brex to manage spend with greater efficiency, accuracy and speed. We're talking DoorDash, Robinhood, Airtable and countless other industry leaders. Ready to join them?
1:13:04 Harry Stebbings? Switch to AI-powered spend management at brex.com. And finally, we need to talk about Clay. Clay helps the best GTM teams up-level their data enrichment and outreach workflows. It consolidates 75-plus data enrichment tools into one credit-based marketplace, letting you search multiple tools at once for contact info, company details and more. They've tripled data coverage and quality for large Silicon Valley companies versus using one or a few tools, like ZoomInfo, at a tiny fraction of the cost. Clay even lets you use AI to do unstructured research. Ask it to visit a list of websites and summarize pricing, decide if a company is B2B, if it's SOC 2-approved, or anything you can think of. Finally, based on that research,
1:13:48 Harry Stebbings? you can use Clay to auto-generate personalized email lines for each lead on your list. Everything syncs to your CRMs, like Salesforce, your email sender, like Outreach, and even your database, like Snowflake. Clay helps GTM teams across Ramp, Vicarda, Intercom, Sandoso and many others go from campaign idea to execution in seconds. They have dozens of free templates and GTM resources. Visit clay.com/harry today and get started with Clay. As always, I so appreciate all your support and stay tuned for an incredible episode this coming Monday with the one and only Sam Altman at OpenAI.
Previous 20VC: Are the Best CEOs the Best Fundraisers, Are the Best Founders Insiders or Outsiders to a Problem, Why Ownership Should Not Be a Focus in VC & The Biggest Lessons Scaling MongoDB to $26BN Market Cap with Kevin Ryan, Founder @ AlleyCorp Next 20VC: OpenAI's Sam Altman and Brad Lightcap on The Future of Foundation Models: Will They Be Commoditised | How to Solve the Problem of Compute | Open vs Closed: Which Dominates and Why | Which Companies and Verticals Will Be Steamrolled by OpenAI Page updated October 26, 2026 · transcript and summary are machine-generated
