A Product Market Fit Show | Startup Podcast for Founders
00:44:49 · Pablo Srugo, Rahul Shivkumar
[00:44:49] S0: You're doing God's work, man. You're a true philanthropist. Oh man. Okay. So that's the BDR piece. I think we went pretty deep on that. The second piece is kind of like just what's working. So this is all to get the demo, right? Like, okay, fine. You got the demo, great. You have high show up rates because you're targeting, like you said, the right people, whatever. So they're showing up with some decent intent. What's the goal on this demo? And what do you find is really working? And maybe tell me the other thing we talked about is quotas, right? How do you comp the BDRs? How do you comp the AEs? Maybe all of that, which is all tied together. [00:45:18] S1: Yeah, I think we comp our BDRs, you know, we do like a base and then we do like OTE. The OTE is tied to qualified leads that they bring in where the qualification is, and I highly recommend this, make the qualification extremely tight and precise. So at the end of every quarter, you are not going back and being like, is this qualified? Is this not qualified? The first BDRs that we had, I think a lot of it was debate. Should this be qualified? Should this not? I think now we have a very tight definition and that just helps us across the board. [00:45:46] S0: So it's a deterministic qualification. It's not even like you or the AE decides. It's just like is or isn't.
00:45:46 · Pablo Srugo, Rahul Shivkumar
[00:45:46] S0: So it's a deterministic qualification. It's not even like you or the AE decides. It's just like is or isn't. [00:45:50] S1: Correct. Exactly. I mean, the AE has to get the customer to answer a couple of things, right? Like, hey, how many providers are you? Like, what are your growth plans? And if it doesn't hit a certain bar, it doesn't count as qualified. [00:46:00] S0: Got you.
00:46:00 · Pablo Srugo, Rahul Shivkumar
[00:46:00] S0: Got you. [00:46:00] S1: So there are signals that maybe aren't there online that you have to get on the call, but those have to be answered before it can be qualified. And I would highly recommend having a very tight definition because it lets you really know if you're going out for the right people or not. The other thing on the BDR site is we are obviously comping for qualified lead, not for a closed one, right? But I would track that. Often you will see things like, hey, a lot of cold calls, a lot of qualified leads, a lot of conference activity, a lot of qualified leads, a lot of pipeline. But at the end of the day, what matters is closed one revenue. So you might see a conference where, oh, we generated a million dollars in pipeline. And then 12 months later, that converted to a total zero, which actually tells me that maybe the ICP we targeted at that particular conference wasn't right or the messaging that we said wasn't right. Like, it gives you like a basis on kind of like diagnosing where in the funnel things are actually breaking. But you should track if your BDRs are actually bringing in revenue, not just pipeline. I think a lot of early advice I got was like, oh, pipeline, pipeline, pipeline. Pipeline's great. It's like obviously like a leading indicator of... [00:47:03] S0: Yeah, yeah. But it's one like, the only thing you can't make up is real money in your pocket. [00:47:06] S1: Correct. All pipeline is not equal.
00:47:06 · Rahul Shivkumar, Pablo Srugo
[00:47:06] S1: Correct. All pipeline is not equal. [00:47:08] S0: No, for sure not. Which actually raises the question, like, I know it doesn't seem fair, but like, why not comp the closed one? I mean, if you're spreading the leads across many different AEs, you take out the risk that you're just sending to a shitty AE that doesn't close, why not just comp the closed one? [00:47:20] S1: Yeah. So we have SPFs for that. So if it's a closed, there's an example. I don't know if we're doing it currently, but it was like 2x to qualified leads if it's a closed one, right? So you are incentivized to bring better logos. What we have found is when you comp it by closed one, like there is variability on the AE side. And I think you want your BDRs to almost immediately know if what their behaviors are. [00:47:44] S0: Yeah, if they want a win or not. Yeah, that makes sense. Quick feedback. Yeah. [00:47:46] S1: Right, correct. The feedback loop is too long because our sales cycles end up being, you know, two months or so. [00:47:51] S0: And what's the quota for an AE? [00:47:53] S1: AEs are comp by, we do 50-50. So like 50% base, 50% is commissions. The commissions are tight to kind of like revenue, right? We have accelerators and we're like, hey, if you overperform in a certain quarter, you get like a bump on that. It's like pretty standard. Yeah. [00:48:08] S0: But what's the quota? Like how much do they expect to close a year?
00:48:08 · Pablo Srugo, Rahul Shivkumar
[00:48:08] S0: But what's the quota? Like how much do they expect to close a year? [00:48:11] S1: Depending on like the seniority of an AE, I think like our like pure mid-market, I think they're expected to close about 1.2 million in ARR for the entire year. [00:48:20] S0: What's the number one thing that you're doing that you find is different or special or unique or just really working well when it comes to demo to close and onboarding? Like just that whole, you know, demo to getting true kind of, you know, retained ARR.
00:48:20 · Pablo Srugo, Rahul Shivkumar
[00:48:20] S0: What's the number one thing that you're doing that you find is different or special or unique or just really working well when it comes to demo to close and onboarding? Like just that whole, you know, demo to getting true kind of, you know, retained ARR. [00:48:33] S1: Some people may not like this, but we actually try our best to do a ton of discovery before we even show a demo. And we found that to be extremely valuable. This used to annoy me a lot when I was on the other side, when I would demo products. When I'd hop on, they'd ask me 50 questions and I'd be like, I just want to see the product. What are you doing? And that's how we were running when Varun and I were selling and we had no sellers. First call, demo, show everything, right? But as we've become more multi-product, as we've started catering to more specialties that have their own unique edge cases and things like that, the approach of going in and just showing things actually backfires very quickly. Our ICP comes in and they're like, look, these five things matter a lot to me. But if your demo script is showing 18 things and you only touch the five at maybe the end of like the demo session, you've wasted their attention on the 13 things that don't matter and it ends up backfiring a lot. So we actually changed our process to do discovery, then demo after. Like never show the product until a few questions are answered. And then kind of what we saw there was like when we did show the demo, it was far more effective. Right? Like, oh, I get it. Okay, you've actually tailored a demo to me. Yeah.