Lenny's Podcast: Product | Career | Growth
01:11:40 · Lenny Rachitsky, Jen Abel
[01:11:40] S0: Okay. There's four more steps to go before you're done, before the money's wired. Okay, so step 11, papering prep, setting timeline for procurement. [01:11:50] S1: Yes. So you have now spoken pre-pilot about the timeline of which we're reverse engineering. Now you're going to document in an email, so that that champion that you're working with can forward that to procurement to say, "Hey, here's what we agreed to. Here's the pricing that's predicated on us getting this signed by this date." Give them something. "Here's the kicker they're going to give us if we get to this date." There's always got to be a reason to create urgency. And then what you want to do is say, "Here's our paper." Send a Word document. Do not send a PDF because they're going to always redline. Always. Send a Word document of your paper and ask the question, "Do you want to use our paper, here's a Word doc version, or do you want to lift from it? And do you want to use your paper?" It might be a lot faster to use their paper. That's why you give them the option. And that's why the timing is in there because they might say, "Well, in order for us to hit that time, we got to use our paper." [01:12:49] S0: And it's not Google Docs, it's Word doc like Microsoft Office. [01:12:52] S1: Microsoft Word, yeah. Most of these people can't access Google Docs, but yes. [01:12:56] S0: And so this says post-pilot, feels like it's gone well. You're saying the next step is, "Here's the contract," basically. Get that to procurement that early.
01:12:56 · Lenny Rachitsky, Jen Abel
[01:12:56] S0: And so this says post-pilot, feels like it's gone well. You're saying the next step is, "Here's the contract," basically. Get that to procurement that early. [01:13:07] S1: Again, your internal champion is you're working from N minus one from the executive sponsor or it's the executive sponsor themselves. You wouldn't have made it ... They're not going to put their team into a pilot if it doesn't have likes. [01:13:21] S0: And an implication here is procurement is a way that your deal might still die even if people internally love your product. [01:13:28] S1: Correct. If you get sent to ... So here's something interesting that a lot of people don't realize. People will use procurement as the excuse to not want to give you the bad feedback, "Oh, I got to go talk ... Oh, procurement. It's lost in procurement or blah, blah, blah, blah, blah." Very easy to blame procurement. Usually, procurement is a 30-day process, doing the back and forth on the legal, the papering. Procurement's job is not to kill the deal, it's just to make sure that it is aligned with how they need to buy. That's their job. Procurement is the only person that can get you paid. Do not start any work until you go through procurement. Business unit leaders can't just pay you. That needs to come from the finance team who pulls from the budget. So be very careful. Don't start any work until obviously the papers are signed. [01:14:26] S0: Start work meaning implementing, rolling out to- [01:14:26] S1: Right.
01:14:26 · Jen Abel, Lenny Rachitsky
[01:14:26] S1: Right. [01:14:28] S0: ... people, onboarding? Got it, got it, got it. Okay, amazing. Okay, so that's step 11, papering, prep, setting timeline for procurement, getting on board with, "What is it going to take to sign by this date? Here's a little gift you'll get if you do it by this date, free month or whatever." Okay. Step 12, papering review. [01:14:45] S1: Yes. The best thing you can do is they're going to send you back redlines. No question. If the redlines are extensive, go ahead and accept the things that are easy. If the redlines are extensive, see if you can get legal on a call live and just talk to them. That will accelerate your sales cycle. [01:15:06] S0: Versus a bunch of back-and-forth emails? [01:15:07] S1: Versus a bunch of back and forth. Get them on a call, be like, "Hey, we're 80% of the way there. I have a few questions based off of your redline. Can we jump on a live call and just go through them?" Focus on the things that are going to impact the business and push in on those. Let the other stuff go if it's not super important. Obviously, have a lawyer look at it from your side. You're dealing with a commercial legal team. Have a lawyer look at their redlines. [01:15:36] S0: I imagine most companies have legal counsel. [01:15:38] S1: Yes, I would hope. I would hope so. Yes. [01:15:41] S0: Okay, cool. So paper review, so that's reviewing basically. It's interesting to call the paper. Is there a more technical term for that like the- [01:15:49] S1: Contract. I say paper. [01:15:49] S0: Contract.
01:15:49 · Lenny Rachitsky, Jen Abel
[01:15:49] S0: Contract. [01:15:50] S1: That's like corporal language paper. [01:15:52] S0: So interesting. Okay, papering review. Okay. Step 13, papering procurement process. [01:15:57] S1: Yes. So this is where ... We talked about this. We merged that conversation. This is when you are getting the procurement lead and that legal lead on a live call to work through the questions or the things you cannot accept. Now remember, if they give you their paper, there's going to be a lot in there that you're going to need to- [01:16:19] S0: Redline. [01:16:19] S1: ... redline. They're expecting that. They're just giving you the kitchen sink, right? If they ask for $10 million of liability insurance, as a smaller company, you can push back and be like, "Listen, your exposure with what we're doing is not that high," or maybe it might be and you need that. But they're going to give you the kitchen sink, know that it's all negotiable, but- [01:16:39] S0: Don't be afraid. [01:16:41] S1: ... pick your battles. Pick your battles. [01:16:42] S0: Yeah. Don't be afraid the deal will fall apart if you see something in there initially. [01:16:44] S1: Yeah, no, no. At this point, the deal will not fall apart. You just need to work closely with them to make sure they understand where you're coming from. That's more what it is. [01:16:52] S0: Okay. And the final step, signature. Ta-da. Anything special other than signing?
01:16:52 · Lenny Rachitsky, Jen Abel
[01:16:52] S0: Okay. And the final step, signature. Ta-da. Anything special other than signing? [01:16:58] S1: No, this is the really exciting point, which is just figuring out who the signatory is before it goes routed for signature, so that make sure your internal client knows, you know, because sometimes it's the CFO. It's not the executive sponsor. And you just want to make sure everyone knows who that individual is, because if there's a delay, you just want to make sure they get pinged. [01:17:22] S0: Damn, we did it, Jen. We did it. We got through all the steps. We just signed a massive contract. Congratulations. Let's go. Steak dinner, champagne. I don't know what salespeople do when they close a deal. Ding a bell. There's bells often. [01:17:34] S1: You know what we do? Okay, what's the next one? That's it. Because you are in sales, you're only as good as your pipeline. [01:17:47] S0: So fun. It must be the best feeling after all this- [01:17:49] S1: It is, but then you're like, "Oh, now ..." Literally, the feels is like five minutes and you're back to work. [01:17:56] S0: Yeah. And I imagine part of this is also, "How do we expand this deal?" [01:18:00] S1: 100%. [01:18:02] S0: Is there anything there, just real quick, just how to start thinking about where this goes once the deal is signed?
01:18:02 · Lenny Rachitsky, Jen Abel
[01:18:02] S0: Is there anything there, just real quick, just how to start thinking about where this goes once the deal is signed? [01:18:07] S1: Yeah. And this is where I think the expansion comes in. You either know the products that they can expand into. You've been through this journey before and that's pretty straightforward. But if you are early in the journey and you're closing your first 10 enterprise customers, you need the founder involved once these people are in to understand, "What part of the product is custom to what these people need and do we want to build out? Do we want to charge for services?" Again, here's the other thing too, services, and I know every company is an ARR recurring revenue focus, but services is still the largest line item in budgets. [01:18:47] S0: And so you're saying it's okay to offer services- [01:18:50] S1: It's okay to offer- [01:18:51] S0: ... as a part of this? [01:18:51] S1: Yes. Yeah. Yeah. [01:18:53] S0: Yeah. This has come up a number of times, I think with Jason, also, Lemkin and you just like the increasing ... There's a rise in services being a part of software companies. [01:19:03] S1: [inaudible 01:19:03] how to buy. So they know how to buy. They're so used to it. Consultants, lawyers, you name it. There's always budget for services.