The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:29:03 · Harry Stebbings, Max Freeman
[00:29:03] S1: So which is Paul, so we're a 100% OTE. When does that change, and how do we then instigate a different discussion around correcting that plan? [00:29:11] S0: Data. Like, typically, this would take... It depends on what segments you're going after, but if you have cycle times that are less than six months, you should have enough data in the system to figure out, okay, this person has been in seat for two months, they've ramped for the first ninety days, we're seeing stage progression here, we have reason to believe that pipeline is going to be X, let's make a quota that is both ambitious and somewhat reasonable based on the data that we have. And you should never hire one seller or one SDR at a time, because the problem is how are you going to benchmark their performance? How do you know if they're good? You're to benchmark them against yourself as the founder? I don't think that's reasonable. Also as a founder, if you're going to be spending time onboarding a seller, that's laborious, that's expensive, do it in pairs. And there's competition, there's collaboration, they're not lonely. I strongly advise against one at a time. [00:30:01] S1: Do we always shed one, or do we sometimes keep them both? [00:30:04] S0: How do you mean? Like, if someone isn't performing well? [00:30:07] S1: By nature of having two, one will always perform worse than the first. How often do you keep them both versus get rid of one?
00:30:07 · Harry Stebbings, Max Freeman
[00:30:07] S1: By nature of having two, one will always perform worse than the first. How often do you keep them both versus get rid of one? [00:30:14] S0: It depends. If someone is just complete outlier destroying the other seller, yeah, you you probably need to shed that person. If it's a 10 to 20% delta, you have to you have to go deeper and unpack unpack it. Like, what why why is this person winning more? Like, what structural advantage might they have? Is it pipeline that I gave them? Is it pipeline that came from our cap table? Is it something else? Do they know the product better? Are they more motivated? Do they give a shit and the other person doesn't? Like, this is this is on the founder to go ascertain. [00:30:46] S1: So for the 100% OTs, sorry, going back to that, that's for SDRs. Does that change when we're doing comp design for AEs? [00:30:53] S0: No. It's for... It's unilateral across Unilateral. Early go to market teams. [00:30:57] S1: Yeah. Wow. What are the big mistakes you think founders make when they're doing comp design? Because, again, like, we have challenging nuances. Like, when you have new products, you wanna incentivize them more. You wanna encourage bonuses for selling more of those. But I don't wanna then have a load of people sell all of that and none of the core. How do you think about that?
00:30:57 · Harry Stebbings, Max Freeman
[00:30:57] S1: Yeah. Wow. What are the big mistakes you think founders make when they're doing comp design? Because, again, like, we have challenging nuances. Like, when you have new products, you wanna incentivize them more. You wanna encourage bonuses for selling more of those. But I don't wanna then have a load of people sell all of that and none of the core. How do you think about that? [00:31:17] S0: I have so many thoughts on this. Depends on stage. First, if you're an early stage founder, you're probably still trying to take one product to market and you want to focus on that. You really need to understand your ICP. Said another way, it's so much more valuable to have 20 customers that are raving and thrilled about one single product offering than you in a half assed way serving six customers on multiple products that aren't as thrilled. You need to get the tailwind going of case studies, references, and positive momentum across your business. Later stage though, like where Ramp is today, incentive design is incredibly important. And I think it's existential to over incentivize new products to get off the ground. And so thinking through 2x to 3x quota retirement for new products, you got to get the again, you have to get the momentum going such that you earn your way into more multiproduct customers, more case studies, more momentum.
00:31:17 · Max Freeman, Harry Stebbings
[00:31:17] S0: I have so many thoughts on this. Depends on stage. First, if you're an early stage founder, you're probably still trying to take one product to market and you want to focus on that. You really need to understand your ICP. Said another way, it's so much more valuable to have 20 customers that are raving and thrilled about one single product offering than you in a half assed way serving six customers on multiple products that aren't as thrilled. You need to get the tailwind going of case studies, references, and positive momentum across your business. Later stage though, like where Ramp is today, incentive design is incredibly important. And I think it's existential to over incentivize new products to get off the ground. And so thinking through 2x to 3x quota retirement for new products, you got to get the again, you have to get the momentum going such that you earn your way into more multiproduct customers, more case studies, more momentum. [00:32:19] S1: When you get a higher wrong, Max, what do you not see that you should see? So, like, for me, sometimes, I'm I'm quite overtly aggressive. It's very innate, and I'm intense. And I'm gonna fucking kill competition, and I'm gonna salivate over it. And I'm happy to talk about that. The quiet killers, I don't find as easy sometimes to uncover. That would be the talent that I miss, and I try and correct for that. When you make a mistake on hiring, what do you miss that you should see?
00:32:19 · Harry Stebbings, Max Freeman
[00:32:19] S1: When you get a higher wrong, Max, what do you not see that you should see? So, like, for me, sometimes, I'm I'm quite overtly aggressive. It's very innate, and I'm intense. And I'm gonna fucking kill competition, and I'm gonna salivate over it. And I'm happy to talk about that. The quiet killers, I don't find as easy sometimes to uncover. That would be the talent that I miss, and I try and correct for that. When you make a mistake on hiring, what do you miss that you should see? [00:32:48] S0: People in sales, especially leadership, naturally tend to interview well. They are sellers by trade. They know how to say the right things. They know how to respond extremely quickly in the interview process to show that they are urgent and can follow-up ruthlessly. I think the the only mistakes that we've made are over indexing on pedigree and coming from, the big name brands and not truly understanding two things. One, do they have the agency and do they possess the figure it out x factor where they do not need to be dependent and reliant on so many different internal resources? And then two, which is related, are they gonna go all in? Are they going to have a deep obsession with working at Rant? Like, it has to become their identity. And if both of those things aren't ascertained crisply in the interview process, it could come out, and it's it's sometimes the wrong hire.
00:32:48 · Max Freeman, Harry Stebbings
[00:32:48] S0: People in sales, especially leadership, naturally tend to interview well. They are sellers by trade. They know how to say the right things. They know how to respond extremely quickly in the interview process to show that they are urgent and can follow-up ruthlessly. I think the the only mistakes that we've made are over indexing on pedigree and coming from, the big name brands and not truly understanding two things. One, do they have the agency and do they possess the figure it out x factor where they do not need to be dependent and reliant on so many different internal resources? And then two, which is related, are they gonna go all in? Are they going to have a deep obsession with working at Rant? Like, it has to become their identity. And if both of those things aren't ascertained crisply in the interview process, it could come out, and it's it's sometimes the wrong hire. [00:33:43] S1: Chad Pete said on the show, legendary sales leader, said that young people just don't wanna work and that there is a different appreciation for why they wanna work from home. They want work life balance. They want mission. They get burnt out. They want kombucha. Is he right?