Creating an entirely new category in the B2B tech market is its own ball game. Business leaders don’t have the advantage of building on the knowledge people already have about a product, and they’re not coming in with an alternative to something already in existence.
So how do founders and entrepreneurs succeed in a down market and create something out of thin air?
In Episode 3 of the CRO Confidential Series, Sam Blond, partner at Founders Fund, sits down with the SVP of Sales at Gong, Jameson Yung, and CEO of SaaStr, Jason Lemkin, to share their decades of knowledge for those dreamers hoping to find rapid growth and success in today’s world.
Gong is one of those companies that created its own category and was most recently valued at $7.5b. Jameson leads most of Gong’s customer life cycle and shares what worked and what didn’t for this fast-growing company.
If You Create A New Category, Make Sure It’s Awesome
This goes without saying, but we’re saying it anyway.
Before Gong, in the EchoSign and Zenefits days, a tech stack existed within sales, including things like CRM and tools for prospecting. When Gong came along, they weren’t an alternative to CRM. They weren’t replacing something people previously used.
Instead, Yung shares that Gong came onto the scene with a compelling story early on that, based on opinion, the current world was broken, and they had the solutions to fix it. And then, they handed companies a compelling and easy-to-use product that quickly became a staple in the tech stack of tech companies.
Identity is essential when making something awesome and convincing other people of your awesomeness.
For Zenefits, Blond says they really embraced the identity of being the fastest-growing tech company ever and raising a bunch of money. The problem with this was people didn’t really know what the company did even though they’d heard of the brand.
The right thing to do is associate your company with what you do. If Zenefits had been known as the best health insurance broker or tech-enabled, it would have been much more valuable to people and the company.
Set The Bar Low
Reach for the sky with your products, but don’t make your customers reach for the sky to get them. Because they won’t.
How do you set the bar low for customers?
- By understanding what your real competitive set looks like
- And how it’s affecting revenue
That was key for Gong. If you know what you’re up against, what kinds of problems your customers are facing, and what your competitors are offering, you can leverage it to your advantage. Gong had a very short setup time, so the time to value is so fast.
They set the bar low by removing barriers. Instead of saying, “Hey, give us a bunch of money,” we said, “Hey, turn this on. We’ll assess your business, and if it makes sense, then we’ll continue, and if not, no sweat.” The barrier to entry was so low that it didn’t make sense to refuse it.
That’s the position you want to be in. That’s the secret sauce.
Being so easy to deploy that you don’t need all the budget expansion expenses. Gong is a budget expander. With this approach, you can sneak in there and then prove your value later when it’s apparent.
Blond mirrors this position with his time at Zenefits, another company that created a category. Zenefits was so successful for two reasons.
- Making it really easy to buy — Zenefits monetized through health insurance commissions and was perceived as a free product.
- Removing barriers to trying a product — You could make Zenefits your broker and try this incredible software, and if the day came when you decided you didn’t want it, you could sign back over to your prior broker. No questions asked. No costs.
Removing barriers to using your product is essential when creating a new category in a non-well-established place.
How Gong Overtook Its Competitor
Let’s look at a tiny case study between Gong and Chorus. Both competitors offer fantastic tools. In the beginning, each core product was pretty similar — both could transcribe a call, do analysis, send an email, and record zoom. Now, they’re demonstrably different.
So how did Gong beat Chorus?
A few things helped.
- Implementing a better sales team early on.
- Treating sales like a science rather than an art.
When Yung joined Gong, he immediately raised quotas and compensation and hired a sales team one or two levels above what they initially thought they’d put in place. You can’t really put junior sales reps on the phone with CROs and expect massive success, but he also wanted scrappy people, so he hired people somewhere between the 20-years-in-a-suit and the year-or-two-on-the-job person.
This measure meant outselling Chorus from the start.
A different marketing engine gave Gong more credibility and made them look bigger than they were, which is always a plus. Yung says, “The whole concept of sales is not all art. There’s a science to it, and that’s what our content was, and it still has a big impact.” The brand carried more weight because of the content they were putting out.
Take Advantage Of Your Raving Fans
Chorus took advantage of what Gong missed out on early on by using champions as leverage.
Brands like Gong have raving fans — people who just can’t get enough of the product and the benefits it provides.
Despite Gong being one of the most successful businesses of this tech generation, nothing is perfect. Yung shares the most significant lessons learned throughout this process in the hopes of saving someone out there from repeating the same cycles.
Mistake number 1: Trying to move away from an existing sales motion.
At the start, Gong used pilots so users could try out the product before investing. Then they moved away from it. Fortunately, they recognized it was a mistake to move away from the ease of pilot motion and have since gone back.
The lesson learned here: Solving for time to close was the wrong thing to solve for.
Mistake number 2: Not recognizing how powerful our brand champions could be.
“From the very beginning, when you put Gong into the hands of users, they went crazy for it,” Yung shares. They didn’t recognize how powerful that was early on, and as Lemkin shares, they all didn’t have any contrast to this experience because Lemkin, Blond, and Yung had only ever worked for apps that people loved.
Chorus did a good job of getting advisors early on and plugging them into decent size organizations that blocked Gong out pretty well. Yung says, “Looking back, that was something we should have done and would have given us more traction faster.”
Looking To The Future
It’s a tough time in tech right now. Quota attainment is dipping, teams are missing company revenue targets, and morale is turning negative in some places. But people new to the industry might not realize that SaaS has always been hard. We’ve been in boom times. Q1 of 2021 was insane and unlike anything we’ve seen in our careers, but it hasn’t been the norm.
So how do you stick it out during the tough times?
- Competitive intelligence. You have got to be good at it to know how you’re performing compared with your peer set. Otherwise, you won’t have an accurate perspective on how you’re doing.
- Don’t make massive radical changes. Try not to do anything hard to undo, like changing quotas or comp plans. Avoid drastic measures because things are always changing, and you never know what the future holds.
- Control the controllables. Stabilize the team by validating their experience, and then focus on what you can control. You may not be able to control that a CFO isn’t going to sign right now because the budget is locked up, but you can control the inputs that get you there.
- Find the wins. Everyone wants to feel like they’re winning. Find these wins and push them across the organization.
Cooler heads will prevail in this ever-changing environment. The next generation of leaders will likely be born out of these more challenging times. Share this with your teams because we’ll go through these cycles indefinitely, as history does, and those who perform during those cycles when times are rougher will ultimately have the best outcomes during their careers.