The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:22:23 · Harry Stebbings, Max Freeman
[00:22:23] S1: What's a good response rate when you're sending outbound in a tool like this? [00:22:28] S0: Response rates over time since the acceleration of AI have actually regressed pretty meaningfully. But, response rate isn't the right metric to index on. It's meeting response rate. It's like you could get a 5% response rate, but if they're saying please never email me again or opt out or fuck off, that's not directionally helpful. It's [00:22:50] S1: And so it's it's how many convert to a meeting? [00:22:52] S0: Yeah. And that should be just a hair under 1%, I think, is really, really strong standard. So for every 100 emails you're sending, those convert to one. That's that's great. [00:23:02] S1: How quickly do you verticalize your sales team? Because all of this can become better, more efficient, more accurate with verticalization. Hey. We've got clients including British Airways, Delta, and Ryanair. Oh, wow. Okay. We're we're targeting the travel industry and specifically airlines. Do you see what I mean? When is the right time, and how do you think about that?
00:23:02 · Harry Stebbings, Max Freeman
[00:23:02] S1: How quickly do you verticalize your sales team? Because all of this can become better, more efficient, more accurate with verticalization. Hey. We've got clients including British Airways, Delta, and Ryanair. Oh, wow. Okay. We're we're targeting the travel industry and specifically airlines. Do you see what I mean? When is the right time, and how do you think about that? [00:23:24] S0: Yeah. I think the right time to verticalize your business is when you need to pull the lever to inflect conversion. I think companies actually verticalize far too early, especially if you have a huge addressable market. You're in land grab market share mode. And so I think verticalizing the business may actually be counterproductive to doing that. But as you own more and more of the market, I think this is arbitrary, but I'd say, you know, three to 5%, guess what? The total amount of opportunities you can go after starts to become contained. And so the lever that you need to pull is you need to be able to convert leads to close one at a higher clip. And so I think that is the moment when you start to verticalize, you know, looking at companies that I think have done this moderately well, the Oracles, the Workdays, the SAPs of the world. That's exactly what they've done. One of the
00:23:24 · Max Freeman, Harry Stebbings
[00:23:24] S0: Yeah. I think the right time to verticalize your business is when you need to pull the lever to inflect conversion. I think companies actually verticalize far too early, especially if you have a huge addressable market. You're in land grab market share mode. And so I think verticalizing the business may actually be counterproductive to doing that. But as you own more and more of the market, I think this is arbitrary, but I'd say, you know, three to 5%, guess what? The total amount of opportunities you can go after starts to become contained. And so the lever that you need to pull is you need to be able to convert leads to close one at a higher clip. And so I think that is the moment when you start to verticalize, you know, looking at companies that I think have done this moderately well, the Oracles, the Workdays, the SAPs of the world. That's exactly what they've done. One of the [00:24:16] S1: reasons I like verticalization of sales teams is what it does to sales cycles. Often, the messaging is better. It's more accurate. The value prop's kinda clearer, and I just see a compression in the sales cycle when I see that verticalization. What are the biggest lessons you have on how to compress sales cycles? [00:24:35] S0: The best way to compress sales cycles is qualifying with more rigor. So upstream, you need to understand, does this person have the influence to actually infectuate change? And are they reasonably committed to doing this within a twelve month period? If you could check those boxes, yes, swing swing at
00:24:35 · Max Freeman, Harry Stebbings
[00:24:35] S0: The best way to compress sales cycles is qualifying with more rigor. So upstream, you need to understand, does this person have the influence to actually infectuate change? And are they reasonably committed to doing this within a twelve month period? If you could check those boxes, yes, swing swing at [00:24:52] S1: it. How do you determine that actually? Because a lot of people like to have ego and say they're very important. And a lot of people would like to please you and say, yes, they'll do it fast. How do you actually determine it?
00:24:52 · Harry Stebbings, Max Freeman
[00:24:52] S1: it. How do you determine that actually? Because a lot of people like to have ego and say they're very important. And a lot of people would like to please you and say, yes, they'll do it fast. How do you actually determine it? [00:25:02] S0: Yeah. You you... You've gotta test them. The way to test them is if they're not in the c suite or they don't have a VP title, you have to know who their boss is in the org chart. And so if you've had an unbelievable call and you've earned the right to pull in another stakeholder, you have to ask for it. And there's a subtle way to do this where it's seemingly a gift to get. Hey, Harry. Today was awesome. I have a lot of conviction that we can solve this problem for your business. We're gonna knock this demo out of the park. I'm gonna bring on a bunch of my technical resources. In an effort to bring them onto the call, my ask would be that you bring Susan, your VP of procurement, into this next conversation. You'll know right then and there. Is this person gonna... Is Harry gonna bring Susan into the call? Okay. Great. You may have a champion. You may have someone that can infectuate change. If not, oh, why aren't you? Are you just window shopping? Do you not have a relationship with your boss? Can you not actually do this? So it's it's it's a really good way to test that out.
00:25:02 · Max Freeman, Harry Stebbings
[00:25:02] S0: Yeah. You you... You've gotta test them. The way to test them is if they're not in the c suite or they don't have a VP title, you have to know who their boss is in the org chart. And so if you've had an unbelievable call and you've earned the right to pull in another stakeholder, you have to ask for it. And there's a subtle way to do this where it's seemingly a gift to get. Hey, Harry. Today was awesome. I have a lot of conviction that we can solve this problem for your business. We're gonna knock this demo out of the park. I'm gonna bring on a bunch of my technical resources. In an effort to bring them onto the call, my ask would be that you bring Susan, your VP of procurement, into this next conversation. You'll know right then and there. Is this person gonna... Is Harry gonna bring Susan into the call? Okay. Great. You may have a champion. You may have someone that can infectuate change. If not, oh, why aren't you? Are you just window shopping? Do you not have a relationship with your boss? Can you not actually do this? So it's it's it's a really good way to test that out. [00:25:55] S1: So I I love that, and Susan would love to come. One thing that's really... It's important for us right now is just cost controls. And so, Max, can you help me out here? You... You're saying that you're charging, you know, $4 per card or $4 per seat or $4 per unit of whatever we're selling. I'm gonna need it at two. Are you gonna be able to meet me there, Max? I guess to buy