The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:45:23 · Carles Reina, Harry Stebbings
[00:45:23] S0: It's a lot of money. [00:45:24] S1: Compared. If we think about... You set me a k, I'm on a 100 k and I get twenty twenty x. I'm on 2,000,000. So if I get 3,000,000, then I get 10%. Yeah? And I get 300 k. Yeah? As a bonus. [00:45:38] S0: It's fantastic. [00:45:39] S1: Is that good for industry? [00:45:41] S0: That's fantastic. Like, think about it, like, salespeople used to be the highest paid in any organization. Now it's changed with the researchers and AI, which 100% they deserve it. But up until like the AI revolution that happened three years ago, salespeople were like the highest paid, always.: [00:45:58] S1: No, I'm aware of that. But I'm just like, God, I thought if you hit like 100 of your quota, getting 15 to 20% would be good. [00:46:05] S0: No, like it does too much. Otherwise, your numbers would never add up, right? [00:46:09] S1: When do you advise founders on when to have a customer success team? You said that you waited way too long, way too long. Yeah. When is the right time? [00:46:15] S0: I think like once you hit like a good like $34,000,000, then I think it's time to actually bring your fair customer success. $3.04, an hour? Yeah. Okay, got you. So, it makes sense to have on a CSM function, an average of $4,000,000 in book value. I think that makes sense. We're super bad on that, so I think like our average book value per CSM is about like 8 point something million, right? So it means that we're massively understaffed, so we're trying to fix it for next year. But ideally, four is a good number.
00:46:15 · Carles Reina, Harry Stebbings
[00:46:15] S0: I think like once you hit like a good like $34,000,000, then I think it's time to actually bring your fair customer success. $3.04, an hour? Yeah. Okay, got you. So, it makes sense to have on a CSM function, an average of $4,000,000 in book value. I think that makes sense. We're super bad on that, so I think like our average book value per CSM is about like 8 point something million, right? So it means that we're massively understaffed, so we're trying to fix it for next year. But ideally, four is a good number. [00:46:44] S1: On the flip side for sales teams, do you think that you need to wait until you have a sales playbook before you hire a fantastic sales leader like you? Or do you do what Matti did and bring you in with zero revenue? [00:46:56] S0: Bring with zero revenue. Bring someone that is like scrappy, that like wants to iterate, will tell you like if things work or things don't work. Like, think you need that as soon as possible. Because I think like there was this like moment in which like, Matty called me one day, like, You know what? Going forward, I report to you for sales. You report to me for everything. And was like and that was his way of saying, You are supposed to be doing sales. Founder led sales are good, but you hit a rock, right? Like you hit a ceiling and just like at some point you need to do the transition. So better do the transition now than actually wait another six months because we know what we're selling, we know how we're selling it, you've been doing it all of these months, and you get a lot more deals than me.
00:46:56 · Carles Reina, Harry Stebbings
[00:46:56] S0: Bring with zero revenue. Bring someone that is like scrappy, that like wants to iterate, will tell you like if things work or things don't work. Like, think you need that as soon as possible. Because I think like there was this like moment in which like, Matty called me one day, like, You know what? Going forward, I report to you for sales. You report to me for everything. And was like and that was his way of saying, You are supposed to be doing sales. Founder led sales are good, but you hit a rock, right? Like you hit a ceiling and just like at some point you need to do the transition. So better do the transition now than actually wait another six months because we know what we're selling, we know how we're selling it, you've been doing it all of these months, and you get a lot more deals than me. [00:47:38] S1: How common is that though? That you know what messaging works, you know what channel works, you have a playbook?
00:47:38 · Harry Stebbings, Carles Reina
[00:47:38] S1: How common is that though? That you know what messaging works, you know what channel works, you have a playbook? [00:47:44] S0: I think it just depends on the sales leader that you bring in the organization and how quickly and how willing to experiment they are, right? And I think that has a ton of value if you bring someone sooner, that has the right mentality. Of course, if you bring someone that has very like, I have my playbook and this is how we're gonna be doing it, I always hate it because playbooks don't work, unfortunately, right? And I think that is the key, is if you have someone very early that you can iterate and build trust extremely quickly, then essentially founder led sales stop making any sense fundamentally because you could be spending a lot more time doing other things. Unless you're a founder that is like really on the sales side. Fantastic. Then just keep going, right? Otherwise, you could be spending your time like building the product or doing other things that are much more important. [00:48:27] S1: So you come in, and then what's the biggest advice post that in terms of do we just hire like five reps at once and just go hell for leather? How do we think about the right way to sequence hiring in the really early sales days?
00:48:39 · Carles Reina
[00:48:39] S0: In the early days, like hire one or two. Like don't overhire because then if you overhire, fundamentally you're gonna be building the wrong culture. People are gonna be asking you a lot of questions. You will have five different people iterating their own playbooks and thinking about their own stuff. What you wanna do is you wanna give them some guidelines. This is what works, this is what is not working. You can still iterate a lot of what works and what doesn't work, and you can make a ton of mistakes, but I don't want five different people going wild and trying to figure out, because then essentially no one is going to be closing anything, right? So better to have, like, you bring the safe leader, someone that is able to actually get their hands dirty and understand what's happening in the business and pitch and go deep, and then you bring two more people. Then wait until they're onboarded. Wait a couple of months. You don't have to wait too long. Two, three months. Let's make sure they're fully onboarded. Let's make sure that they're starting to sell contracts. And internally, at the company, The ElevenLabs, we used to have like this target that's like, when you join The ElevenLabs, you need to have signed your first contract within the first two weeks. Woah. And like... And that was a target. That was a target. We got people that had even, like, signed, like, within, like... It was, like, seventy two hours they signed the first enterprise contract. Right? Tiny contract, but I don't care. It doesn't really matter.
00:49:50 · Harry Stebbings, Carles Reina
[00:49:50] S1: Do you put them on calls straight away? You don't want to burn leads. [00:49:55] S0: The early days, we used to do it, and then they would join my meetings, and essentially I would tell them, okay, this is like how we do it on the product side. This is like the overview. My expectation is like you're gonna be spending the next like twenty four hours drilling the entire product and understanding it, and I will ask you to pitch me tomorrow, right? And then I will bring into my calls, and then they will see me pitch, they will see me talk to customers. The following day, they would essentially just give me the pitch. If I liked it, then essentially we would just join calls the same day or the following day together. And then they would pitch. I would be taking a backseat. They're like, I'm there to support you if they have any questions. And then within a week, they were already fully up and running. And then, of course, it was a lot more risky, but hey, we had nothing to lose back there, right? We had to move quickly because the market was crowded. [00:50:39] S1: Advise me, how can I train my reps most effectively? Is this like listen to all my Gong calls, go spend time with product, go spend time with customer support? What should I do to train reps most effectively?