A Product Market Fit Show | Startup Podcast for Founders
00:33:44 · Nick Fleisher
[00:33:44] S0: No, it was a test. It was a test. And Oliver picks up the phone. He's like, hey, what can I help you with? It's stuff like that where it's like building those relationships. And some of the like our fortune 500 deals take months and months to close. Like we have deals closing now. And like we've had deals closing over the last four or five months that like Oliver and I started incubating at the end of last year. And that's like people are saying tell us like how do you get how are you able to get such big deals? And part of it is just because we've been working on it for a while. Like we've been building relationships there. Like some of the fortune 500 clients we have. We've like multi-threaded with 50 stakeholders over the last nine months, the two of us. And he's flown to these places like over and over. And so like founders need to be selling, right? Most of my day is demoing and selling. But I think it's just allowed us to move a lot faster. Like when we launched and came out of stealth, we had a ridiculous, we had like 10 to $15 million of pipeline like already ready to go. Like that we had been warming and demoing. We had done hundreds of demos already. That's because Oliver was just an extension of us and he also knew the market and had all the right traits. It then sets you up for a very good sales culture going forward, right? Like we know the things that work and the things that don't. We've tested all the tactics. So like when you start to get into like the real growth curve, like you're not testing the waters and trying things out all over again. The other thing I'll say is like his role early on was very tied to product and engineering. Like he would do these demos. Liam, Jared, and I, the co-founders, we were all coding. And so us plus the early engineers we hired would just like listen to Oliver do these calls. We'd hear someone say something that was wrong or didn't look right. And we would just go start working on it. We had one little room in the office that was like had a door that was not really closeable so it wasn't silent. And so we would just hear him do these demos and we would just start working on it right away.
00:35:28 · Pablo Srugo
[00:35:28] S1: One of the maybe classic pieces of advice tied to this is one of the reasons you don't hire an AE so early is because an excellent AE wants a product that's already got that traction that they can come in and be like, yeah, I'm going to hit quota. I'm going to destroy quota. Like if you're already selling this much, I can sell that much more. How do you get somebody like Oliver to join this early on?
00:35:47 · Nick Fleisher
[00:35:47] S0: It has to be the right person that's willing to take the risk, right? Like you're as if you are a really good AE, right, who can sell five, ten plus million dollars of a enterprise product a year. You're making millions of dollars, right? So it doesn't actually make any financial sense to go to a startup pre-product. So you have to incentivize with equity and ownership, right? Like obviously a huge chunk is equity, but I think another chunk is the ability to like do more than just selling, right? Like you're going to get to work with existing accounts. You're going to help us strategize about where we go. Like it's just so different from a traditional AE role. And if you're into tech in the startup world, it's very interesting. And as a result, like, you know, not to over harp on one person, but like that first hire, like Oliver has done a lot of venture investing and helped a lot of other startups with their early sales process. He, after, you know, despite having a great comp set up here, like he personally invested in the business as well. And so that to me is also an interesting profile that we're starting to see more of. Like you see it at 11 Labs and some of these other companies where like either the early sales lead or like VP of sales is an investor as well and like very plugged into tech. It's another interesting persona and it's attractive to a subset of like really high performing AEs to that.
00:37:02 · Pablo Srugo
[00:37:02] S1: Well, it's a very different setup, right? The classic setup is you as a founder go out, generate your leads, close your first million of ARR. And then once you've got something that's kind of working, find a way to make that somewhat scalable. And the way that I see that playing out usually is you hire these maybe top of final BDRs, SDRs that are like truly junior. And even on the AE side, you hire someone with a little bit more kind of experience, but you're not going out and hiring like the top AE in your industry. It's just not the normal thinking. And so you're kind of putting these pieces in the puzzle and saying like, if I can make it work with this team, I can make it work with anyone. And that's the way you kind of scale it. You went the exact opposite, which is part of it was serendipity in the sense that you knew Oliver and Oliver was there, right place, right time. Where you're like, let's hire the absolute best AE to just lead this for us. Let's make a package that's interesting and compelling enough to him and have him kind of drive all of that. It's kind of like intrinsically not scalable because there's only like one Oliver, but you then bet on Oliver to be able to create that, I assume the scalable piece of it, you know, later on.
00:38:07 · Nick Fleisher, Pablo Srugo
[00:38:07] S0: Yeah. And I think the best in class AE or seller is getting so much more scalable. Like I struggle to believe that we're going to go hire a bunch of SDRs, especially in our market. Like I was literally with a buyer yesterday at a fortune 50 who was like, I get flooded with LinkedIn's and calls and emails. Like it doesn't work for me. Like I need someone who's going to like come here and like build the relationship and like sell me like a real person, the thing that you're selling. [00:38:29] S1: What are your ACVs, by the way? [00:38:30] S0: It depends on the client, right? For the biggest fortune 500s, it could be 500K to a million. For the 10 to 30 person legal team, it could be anywhere from call it 50 to 100K. [00:38:40] S1: Okay. You're not selling 10Ks or 20Ks. I realistically, you're selling 100Ks and half a million. [00:38:45] S0: You can't afford to fly in person for a deal less than 30K. That's kind of like our rule of thumb is like if the deal is less than 30K, like it doesn't make a ton of sense unless it is a very sexy logo. Like that has to be also another, and we debate this a lot, right? Like, hey, it's a solo GC at like the hottest company in the world. Like go and do it. Who cares? Right? Because that everyone wants to be like that company. And so that 20K deal is going to generate you like millions in pipeline.
00:38:45 · Nick Fleisher, Pablo Srugo
[00:38:45] S0: You can't afford to fly in person for a deal less than 30K. That's kind of like our rule of thumb is like if the deal is less than 30K, like it doesn't make a ton of sense unless it is a very sexy logo. Like that has to be also another, and we debate this a lot, right? Like, hey, it's a solo GC at like the hottest company in the world. Like go and do it. Who cares? Right? Because that everyone wants to be like that company. And so that 20K deal is going to generate you like millions in pipeline. [00:39:11] S1: But I say that mainly just to kind of contextualize because obviously the playbooks have to do with the ACV. So if you're closing five to 10Ks, this may or may not work for you because you can run volume, right? If you're closing 50K, 100K plus, you can't just run these volume. Like there's just not an infinite number of these people. So you got to be a little more thoughtful about how you go. [00:39:29] S0: Totally. I think the alternative would be like, you can also say, hey, we have 10 clients, 10 potential prospects that I can try to get a meeting with over a one or two day span in, call it wherever, the middle of nowhere in Florida, right? Even if those are all 20K accounts, like that's still worth my travel, right? Because cumulatively, like if I spend enough time with them, like it's worth it. And so you do kind of have to do some like backup napkin math. I think early on though, like you just want users, right? You want usage. I don't care if it's a 10K deal. I don't care if it's a million dollar deal.