The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:05:20 · Max Freeman
[00:05:20] S0: So not only bankers, but I think there's a lot of mispriced assets on the market where their resume will not suggest the true alpha. But let's let's start with bankers. So in building the early go to market team at Ramp, we brought on quite a few investment bankers, and now they're running pretty large pieces of the business. Here's why I have an affinity towards doing this. One, bankers are programmed to work. The concept of a nine to five is completely foreign to these folks. Two, they have intelligence and they have business acumen and a lot of horsepower that is not always found when hiring for sales talent. And I think the third for our business, you know, we're selling into the office of the CFO. And so in the earlier stages when we didn't have brand recognition, no one knew who we were as a company, being able to call a CFO cold, tell them, Hey, I just quit my job at Goldman TMTIP to join this credit card business. That packed a very compelling punch for us. I think those were the tangible benefits. Maybe the last additive component that I think is important is I didn't have time and early sales teams don't have time to teach folks this is how you use lean language in a cold call, this is how you use appropriate grammar in a cold email. We had to be executing and so bringing on folks like that helped de risk a lot of that. So we were just in pure execution mode. And now today, you know, Mike Weber, we pulled him from Citi. He runs a massive piece of the business. Sam Buck runs a massive piece of the business. He came from Goldman.
00:06:51 · Harry Stebbings, Max Freeman
[00:06:51] S1: I spoke to Sam before this show. He was fantastic with suggestions. My question to you is I I can literally feel the pain of founders listening going, really? How on earth do you afford these investment bankers? How do you afford these investment bankers? [00:07:07] S0: Yeah. So the the bet we took early on was to actually pay way above market rate for this talent. But in return, we were gonna expect way above market rate when it comes to output. And so we'll make the unit economics work. We'll pay two x what a standard SDR is gonna make. But guess what? You gotta book 40, 50, 60 meetings, which is four to six times what a standard SDR has to book. [00:07:31] S1: You book 40 to 50 meetings? What is the expectation on meeting bookings, really? [00:07:36] S0: It depends by segment. Obviously, the the further up market you go, the numbers are are lower, and we're looking for quality. But down market, we still have SDRs that are booking well above 50 meetings in a given month. [00:07:48] S1: In a given month? [00:07:49] S0: Yes. [00:07:50] S1: That's not very much, dude. 50 meetings in a given month for an SDR. [00:07:54] S0: You have to book a meeting with intent. There has to be qualification rigor. There's a lot that goes into it that takes precision. I think you're understating this. [00:08:04] S1: No. Because when we were chatting before, I said, like, Deignan... Chris Deignan is like, oh, you can't do more than seven. And you were like, oh, people do way more than that. They do, like, 10 in a day.
00:08:04 · Harry Stebbings, Max Freeman
[00:08:04] S1: No. Because when we were chatting before, I said, like, Deignan... Chris Deignan is like, oh, you can't do more than seven. And you were like, oh, people do way more than that. They do, like, 10 in a day. [00:08:13] S0: Those are those are account executives that are taking seven actual meetings, like the closers. Ah. Not the top of funnel that's, like, booking the meetings for the sellers to then take. Do you [00:08:24] S1: not expect even, like, the low ACVs to be doing way more than 12? These are small businesses, like start ups, like [00:08:30] S0: I'm talking about SDR specifically. On the AE side, yes, of course, they're taking more than 12 meetings in a given week, especially down market with the low ACVs. Our inside sales reps, our commercial reps, they're taking 10 to 12 calls in a given day. [00:08:44] S1: That's what I'm talking about. Yes. That was the disconnect. So there are people doing 10 to 12 calls a day. [00:08:49] S0: Absolutely. There are some sellers at Ramp that are on 15 plus calls in a given day. [00:08:53] S1: Okay. That's what I'm talking about. And and, sorry, they are AEs or SDRs? [00:08:57] S0: Account executives AEs. [00:08:59] S1: They're doing, like, eight to 10 a day. Great. There is another component, though, to Teams, which is we can't just have IB. They've gotta come from some tech company. And they're tech companies where it's good to hire from versus bad to hire from, and I'm not asking for explicit names, but, like, profiles for me as a founder to think through.
00:08:59 · Harry Stebbings, Max Freeman
[00:08:59] S1: They're doing, like, eight to 10 a day. Great. There is another component, though, to Teams, which is we can't just have IB. They've gotta come from some tech company. And they're tech companies where it's good to hire from versus bad to hire from, and I'm not asking for explicit names, but, like, profiles for me as a founder to think through. [00:09:17] S0: Yes. I love this. I obsess over this topic. So I am a huge fan of Moneyball, and you have to treat go to market recruiting like Billy Bean. There is so much alpha in finding what companies have grown revenue in a significant way. I'm talking north of nine figures, but have done that despite having a low NPS score. Why is there so much alpha in this? A few things. You have to create a lot of your own demand. If you're the fifth or sixth best player in your market, the inbound funnel, that's not very fruitful. You got to go make it happen. Two, you have to navigate a lot of complexity in your cycles. There's probably a lot of weak reviews on third party publications, whether that's G2, Capterra. So you gotta be dialed in to advance opportunities. And three, you're usually priced at a premium compared to other players in the market that are priced significantly below you. So if you can be the number one or two seller there, you come into a system like Ramp, that is where the magic is gonna happen. [00:10:17] S1: If you were to name a company. [00:10:21] S0: I can't give away the secret sauce. I'll I'll name one. I'll name one. [00:10:24] S1: Sixth Sense. Because they have a low NPS products, maybe not great
00:10:24 · Harry Stebbings, Max Freeman
[00:10:24] S1: Sixth Sense. Because they have a low NPS products, maybe not great [00:10:29] S0: Correct. [00:10:29] S1: But close good customers. [00:10:32] S0: Exactly. In fact, just yesterday, one of our top enterprise sellers sent me a email from a customer that said, this huge review that they sent internally, they wanna offer a case study, and we didn't even prompt them at all. And Alex had said, I've never seen this in my fifteen years of sales. I was like, oh, we get that 10 to 20 times a month at Ramp. You've just been selling shit products. [00:10:55] S1: When you're trying to determine greatness in a candidate in terms of where they've come from before, How do you unpick whether it was truly them or whether they were just an order taker? You you can have two different situations. One, they're just an order taker, which isn't very difficult. Or two, they're at Twilio, and they sign up Uber. And they sign Uber when it starts, and then it expands into what it becomes, and they get the credit for that. How do you determine true quality versus happen... Downs or order taking?
00:11:24 · Max Freeman
[00:11:24] S0: Yeah. You have to decompose their number. And so, okay, you did you did 2,000,000. That's that's great. How much of it was inbound? How much of it was outbound? How much of it was expansion? How much of it was sourced by your founder? How much of it was from existing opportunities that you inherited? And then you you really have to drill down such that you can spot and figure out if someone is bullshitting you. And then to get even more deep into testing their acumen around sales, it's, alright, talk talk to me about two deals. You have to make them reconstruct them chronologically. The best candidates give so much texture and, like, you're really trying to figure out, well, how did you advance this? Well, what was it? Were you articulating business value? Was it some workflow that you tied to a business outcome? They'll know that. And if they can't describe that, not a good sign. The inverse is also true. You wanna understand, talk to me about a deal that keeps you up at night. Why did you lose it? If they can't unpack why they've lost an opportunity, was it they were single threaded, they didn't build a champion, there was no business value, the product wasn't good enough, they didn't qualify well enough. Like, figuring that out and testing for it is actually incredibly important in an interview process.