The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:21:07 · Carles Reina, Harry Stebbings
[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. [00:21:43] S1: Totally get that. Again, I just want to pick on some things you said You said that 80% is phenomenal given the ambitiousness of 20x. If you're advising me as a founder, is that 20x a good rule of thumb, or do you think that's specific to the margin profile of ElevenLabs?
00:21:43 · Harry Stebbings, Carles Reina
[00:21:43] S1: Totally get that. Again, I just want to pick on some things you said You said that 80% is phenomenal given the ambitiousness of 20x. If you're advising me as a founder, is that 20x a good rule of thumb, or do you think that's specific to the margin profile of ElevenLabs? [00:21:57] S0: I think like the reality is like every business will be slightly different depending on the industry you're selling, right? So what I always tell everyone is like, let's start with 20x, And then you can adjust. What I told everyone in the company, like, the first account execs that I hired was like, Guys, I have absolutely no clue if 20x is gonna be the right number or not. The standard in SaaS is that you have somewhere around six to seven, maybe eight, maybe 10, right? That is the standard. I know this is what you are expecting. This is not how we're gonna be building a company at ElevenLabs. If you're thinking about doing the same that you've been doing at Notion or all of these places like Salesforce and so on, then you're in the wrong place. So we'll experiment. If we get it wrong, absolutely fine. We'll compensate you correctly, and then essentially we will change the entire composition structure. But if we get it right, which I think it is the right number, this is what we're gonna keep. And we've kept this in day one. We've been running with this for the past two and [00:22:47] S1: a half years. Of the 20% that don't, what do they get wrong? When you look at that cohort, what do you learn when you're looking at the next hires?
00:22:57 · Carles Reina
[00:22:57] S0: So there is two buckets within this 20%, right? One is like people that truly don't fit in the company, And what they get wrong is fundamentally like they're not product experts. Like they haven't actually dived deeper enough in the product that actually can understand it. They have the aggressivity to actually go into the market outbound and so on, right? Those guys, unfortunately, we terminate the contracts. We give them a compensation, so we usually pay anywhere between two to three months of base salary so that we tell them, Hey guys, it didn't work out. We do believe that you are very strong. It didn't work out at ElevenLabs because of the way we do things, but you're going go somewhere else. And we're going help you get somewhere else. That's why we're you this two or three months compensation severance package. And you can do super well. So it's us. It is not you. It is us fundamentally, right? The other percentage of people that don't get into that 80% is people that are building long term pipelines. So I have a guy, for instance, and there's been plenty of them over the past two years, but this guy that we hired from AWS, mega smart guy. Super good. And you look at the core numbers and you're thinking, Shit, I should be fighting this guy. He's not hitting the quota. He's less than 50% quota, right? And then any other person would have looked at the numbers and be like, This is not a fit. I cannot keep this person. Talk to any investors and would tell you, like, Fire this person. Like, It's just not a fit. You dive into the numbers and you realize, like, Oh, it's because he went to the proper enterprise cycle and he's building the most amazing commerce you can have in the entire UK region. Wait a second. Why would I fire this person when he actually needs a lot more ramp, fundamentally because he's tackling the difficult, challenging industries? We kept that person, and this person absolutely smashed it this year. 200 plus percent quota. So you need to actually differentiate, like, what is it actually someone that doesn't fit in the company for a variety of reasons, and who is actually building a proper pipeline over the long term, and they need a little bit more help.
00:24:55 · Harry Stebbings
[00:24:55] S1: Well, this is... I I completely disagree with the notion that because someone's selling to large enterprise, you can't tell whether they're good or not for a much longer period of time. I think like you did that, you look under the hood, you look at the relationships, you look at the conversations, you look at the interactions, you look where they're at, you get a good enough feel of how close
00:25:11 · Carles Reina, Harry Stebbings
[00:25:11] S0: it is. Yeah. And what what I do is, like, with the team, and we do, like, we we have quite a lot of people in the go to market side. Like, globally, we have up our line, 90 people or something like that. But what I do is, like, I have sessions every single month with my account execs and my CSMs where we go deep into the pipeline. It's like, it's pipeline review sessions, and I drill them on absolutely every single detail. And we do it in front of everyone, right? So if someone hasn't been building the proper pipeline, and I do see the numbers and I do see it, I will tell it in front of them, like, You have not done a good job. Like, You're actually slacking. You're doing this, this, this. Or I will tell them, You're actually lucky. Like, in the past month, you hit your numbers because of pure luck. Next month, you're not going to hit them, so you're not in a good spot right now. And if they improve, which the majority of them do, the following month, I'm like, I know I gave you a lot of crap last month. You've done fantastically well now. But you need to have that honesty with your team because otherwise, like, what are we doing here? If we're trying to build a generational company, you cannot, like, do things, like, the traditional way. You need to do it in a completely different way. [00:26:10] S1: You said there about those meetings with execs and CSMs. Can you actually just take me to them? You do them monthly. Correct? [00:26:16] S0: Within monthly. [00:26:17] S1: Do them monthly. Do you do them separately with CSMs and execs altogether?
00:26:17 · Harry Stebbings, Carles Reina
[00:26:17] S1: Do them monthly. Do you do them separately with CSMs and execs altogether? [00:26:21] S0: CSMs have their own meeting, and then account execs have a different one. And then in the account execs, I split it by region. [00:26:27] S1: And they're in person or remote? [00:26:29] S0: All remote. This is an interesting thing. I know how some people are about being in her office and all of that stuff. And when I see my sales team in the office multiple days, I start getting worried. Because if you're a salesperson, you need to be on the road. I travel 75% of my time. Like in the past three weeks, I was in San Francisco, I was in Mexico City, in Tokyo, in Seoul, in Singapore, in London, and I'm heading to Dubai, right? That is like the standard thing. Like, salespeople need to be on the road talking to their customers, whether that is in The UK, that is across Europe, or that is like in Cancun. I do not care. If you are constantly in the office doing virtual meetings only with your customers, you're doing it wrong. [00:27:08] S1: How do you build a sales culture remotely? [00:27:11] S0: By being ruthless. You need to be on top of it. It's like it requires extra time, and it requires people to be forced to actually, like, be on the road. It's like we will have multiple touch points, but I don't hire people that are junior. I hire people that are actually, autonomous, very energetic, very passionate, will accept like a million no's, fundamentally, because building sales is tough. Building sales remotely is even tougher, and you just need to be on top of it.