The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:16:21 · Harry Stebbings
[00:16:21] S1: What ACV does it make sense to have reps on? And what I mean by that is you said there are 50 to 60 calls. Is it like 10 a year you can start to have a rep led approach? Below that, it's gotta be PLG. How do you advise founders on that?
00:16:36 · Carles Reina
[00:16:36] S0: I think it needs to be at least $1,000 a month, right? The trick is how much money do you feel that you can put in your credit card without having to explain anything? If you are comfortable putting $1,000 a month, absolutely fine, then your threshold should be $2,000 right? But if the majority of people putting $1,000 on their credit cards, even if it's for a business transaction, they still need to explain quite a lot of stuff. So then that's the moment in which they need handholding, they need convincing, they need to show ROI. That's the one that you want to tackle them because then you treat it as like a PLG motion with a land and expand. It's like, Don't worry. We'll sort everything. We'll help you. Dollars 12,000. It is a lot of money. Acknowledge that it is a lot of money for them because it is a lot of money. Then work with them on an expansion plan. But if you do it much higher, then I see a lot of founders telling me like, No, no, needs to be like investors have been telling me, I need to go proper enterprise. Proper enterprise, 6 figure deals and so on. I'm almost like, Forget about it. It's gonna take you months to get that contract done. The beautiful sight is if you sign a $12,000 contract, there is probably one layer of approval. Maximum two layers of approval for a bigger company. If you wanna sign a 6 figure deal, can this be like at least three or four layers of approval. If you wanna sign a million dollar contract out of the gate, it's gonna take you a long time. But if you actually land in a very, like, small deal, then you start expanding it, those approvals have disappeared completely.
00:17:58 · Harry Stebbings, Carles Reina
[00:17:58] S1: What are your biggest lessons on how to land and expand successfully? Because I... I'm in a lot of companies, period, but I'm in a lot of companies where they've landed and they've assumed that they've expanded and they have the cost base ready for the expansion in terms of CS and all that comes with a sales machine, but they stay at the land price. And that's a big problem because then the economics just don't work. What are your biggest lessons on how to expand successfully and manage that as a sales leader? [00:18:26] S0: So we've had that as well at ElevenLabs multiple times, right? There's a portion of the customers that we oversold, and then they kept kind of flat. Part of the big effort always is like, how do you find new use cases for them and how do you show them additional value? So you need to knock on people's doors. Even if you sign an inbound deal, that is one deal that is inbound. But you should not be thinking that that is done. It's like, then you need to transform it into an outbound opportunity as well. And then to do an outbound opportunity, like, Okay, now I have an MSA signed with an order form. Let's actually go and outbound every single other team that might be relevant across the entire organization to show them what the capabilities are. That is the only way you actually expand a deal. But not only that, it's like the most important question is, how do you retain them forever? Because if there is only one team that uses you, that team at some point might get pissed, someone might pitch them, you lose the deal.
00:18:26 · Carles Reina, Harry Stebbings
[00:18:26] S0: So we've had that as well at ElevenLabs multiple times, right? There's a portion of the customers that we oversold, and then they kept kind of flat. Part of the big effort always is like, how do you find new use cases for them and how do you show them additional value? So you need to knock on people's doors. Even if you sign an inbound deal, that is one deal that is inbound. But you should not be thinking that that is done. It's like, then you need to transform it into an outbound opportunity as well. And then to do an outbound opportunity, like, Okay, now I have an MSA signed with an order form. Let's actually go and outbound every single other team that might be relevant across the entire organization to show them what the capabilities are. That is the only way you actually expand a deal. But not only that, it's like the most important question is, how do you retain them forever? Because if there is only one team that uses you, that team at some point might get pissed, someone might pitch them, you lose the deal. [00:19:19] S1: Who's responsible for this internally? Is it CS? Is it product? Is it sales? [00:19:23] S0: Depends how you wanna organize it. Some companies call it account management, right? What do [00:19:26] S1: you do?
00:19:26 · Harry Stebbings, Carles Reina
[00:19:26] S1: you do? [00:19:27] S0: We do account execs and customer success. So for us, once a deal is signed, we transfer it to customer success. Customer success is responsible for the upselling, negotiations, all of that stuff. Now, the difference is in the enterprise segment. So very large customers, right? So name account lists, companies that have over 2,000 employees and things like that. Then for those ones, my request to the account exec is like, Your job is not finished. Even if you transfer it to a customer success manager, I still want you to go and upsell and find new opportunities in the account because you're incentivized. And if I'm an account exec, let's be very honest. Everyone loves money and making money as an account exec. So Joni and Sanders say, like, You went through hell for the past sixty days to close an enterprise contract. Fantastic. Then that contract is signed. Getting the next team on board is relatively simple because you've actually gone through the actual signing of the contract. So just outbound, open new doors, and we'll pay you even more commissions because, like, you're... You keep accruing more. Right? [00:20:28] S1: Help me understand as a founder, how do I create a comp plan for sales reps first, And then second, how do I create a comp plan for sales reps to upsell efficiently?
00:20:28 · Harry Stebbings, Carles Reina
[00:20:28] S1: Help me understand as a founder, how do I create a comp plan for sales reps first, And then second, how do I create a comp plan for sales reps to upsell efficiently? [00:20:39] S0: I think in reality, it's pretty much exactly the same in the sense that what we do at ElevenLabs is I set up this threshold, which is like we ask everyone to bring 20 times their base salary. That's your quota, right? So if I pay you 100 ks a year, your quota is $2,000,000 That's it. If you don't achieve your quota, then you're gonna be out, right? And we're ruthless on that end. So everyone actually smashes their quota to ElevenLabs. I would rather have smaller teams that, like, smash their quotas and then pay the money. [00:21:05] S1: What percent do you hit their quota? [00:21:07] S0: Today, it's more than 80% hit their quota. Wow. Right? And they unlock accelerators and all of that stuff. But the interesting piece, like, on the upsell side is we compensate both the account exec and the CSM. If the contract is absolved, if we upsell a company within the first twelve months, the account exec continues to accrue like quota retirement and also like commissions, and the CSM is compensated an NRR. Right? So I'm paying double, but I don't care. It makes perfect sense because then I have these two people busting their ass to make sure that they actually can make more money, which is fantastic for me as a company.