Mark Roberge, SaaStr fan-favorite and Co-Founder and Managing Director of Stage 2 Capital brought together some of the top CROs in SaaS during the SaaStr Annual to share some of their greatest learnings and pivotal moments leading some of the Cloud 100 SaaS companies.
- How do you define and refine an ICP?
- Can you start and stop a PLG motion?
- What should you look for in an Enterprise rep vs. a Mid-Market rep?
- How do you diagnose and solve churn?
- How should you handle presenting challenges to your C-suite team when you’ve just joined the company?
Solving High Volume, Low Conversion at Lattice
Dini Mehta joined Lattice at $3M in revenue when it had just 10 people in seat for Go-To-Market and 7 salespeople. She was hired because they saw a bit of softening in new business growth, and she came to help diagnose what was going on and help scale the business.
She saw three problems immediately after joining the company:
- Their closed-won ratio didn’t connect to all of the activity happening on the ground and behind the scenes. Sales reps were hosting 4-6 calls daily but most of these calls were early demos or top-of-funnel discovery calls
- Sales was closing really small deals on one end while talking to really large companies with hundreds of thousands of people on the other. From a GTM execution standpoint, they weren’t focused.
- Lattice had a product-led growth flow on the website while the sales team was still trying to sell the PLG companies
The good news is Lattice had a lot of activity and initiatives at play. The bad news is it wasn’t driving the results they wanted. So, Dini came in, looked at the data around churn and usage, talked to customers, defined and narrowed Lattice’s core ICP, and made a few changes:
- They put a minimum in place not to sell to anyone under $4k. The sales team was a little afraid of not hitting their numbers anymore, but Dini knew the people below $4k weren’t getting the full value out of Lattice’s product suite and would churn anyway
- They put the full PLG motion on pause. People could come in and experience the product via the website now, but it was ultimately sold through the sales team
- They defined their ICP, figuring out the types of organizations that see value in Lattice and qualified out the ones who didn’t.
Lattice had limited resources and a small team, which meant they needed to focus in. As a startup, it’s tempting to try and do everything. In the early days, you have to. But, at some point, you have to focus in if you want to drive operational excellence. Suddenly, people’s calendars went from six calls to two calls a day, but because they added more time to focus on qualified accounts, activity and conversion increased.
Key Takeaways Creating Sales Acceleration at Lattice
There are a few takeaways from Dini’s time at Lattice.
- If right now you’re weighing your options between Product-led growth or traditional sales – to some degree our panelists recommend running a PLG motion for some time to see what the data and results show. Especially if your product can be easy to sign up for and more importantly, deploy, with just the users themselves. However, if your product is more nuanced like Lattice’s, it’s probably worth copying their model of allowing free trials via their website but ultimately having a sales team expand on the value of the full product suite.
- Define your ICP as early as you can and segment your sales team accordingly. While it may seem smart when you have five or fewer salespeople to sell anything and everything between $3k and $100k, that won’t scale. Attune sellers for one or the other.
- Many founders try to sell a product to everyone in their total addressable market right out of the gate. But you don’t want to boil in the ocean immediately. It’s better to find the best ICP to get to $5M-$10M and scale from there.
- How do you define your ICP? Instead of analyzing Close Rate and CAC, instead, identify existing customers who are power users. They’re the raving fans, giving feedback and helping build better versions of the product every month.
Taking Calendly from $10M to $100s of Millions
When Kate joined Calendly, they had just completed their Series B, took $300M in venture, and were around $100M in ARR. They were thinking about the next great growth horizon and had data that showed teams were interested in using the product. Calendly is scheduling automation and has roots in PLG. In the beginning, it was solopreneurs and small SMBs coming through the funnel. But, they quickly identified a pattern of key use cases emerging: Sales, customer success, and recruiting were the personas doing the most scheduling within organizations, and as these departments asked Calendly for deeper and richer solutions integrated into their workflows, making it easier for large teams at large organizations to stay in their existing tech stacks and use Calendly.
From an R&D perspective, they invested in what they called vertical solutions to support those new use cases. Soon the composition of the funnel began to change. They started seeing IT administrators, business leaders, and rev ops leaders showing up in the funnel rather than individual entrepreneurs. In response to that change, they created a small but mighty group of inbound sellers who could normally take a high-intent lead and convert it. But to take an inbound lead from a large company and turn it into a larger deal required a different skill set. So, Calendly decided to invest in going Enterprise.
But going Enterprise is so much more than just hiring Enterprise salespeople. Although that’s part of it, there’s an entire journey and organizational change that needs to happen across your organization to be ready to drive and win Enterprise deals and accounts.
Kate has a simple framework for going upmarket: Product, People, and Process.
- From a product standpoint, you might think you have product market fit. But selling to large companies means having the right security and administrative features and requirements. There are a lot more requirements and regulations needed to support a large organization than a small or mid-sized organization.
- From a people standpoint, do you have the right profiles? At Calendly, they had to hire a completely different profile in sales, customer success, and marketing— the composition of the team and the tools that the team will need will change as you create an enterprise-focused motion.
- From a process standpoint, you have to be ready to invest in Enterprise sales and build infrastructure to make sure sales can be successful. So, you have to build rev ops, add some enablement resources, deals desk, and legal – in addition to everything else. In the early days of exploring Enterprise, getting an Enterprise company to commit to investing in you is half the battle. It requires infrastructure to support your sellers in getting through those tasks.
Scaling Enterprise vs. Mid-Market Sales: Key Takeaways from Calendly
It’s a common blueprint to start with SMB and mid-market accounts as your ideal customers. Keep in mind it’s a long journey to start to go up-market towards the Enterprise, and you may not want to start ignoring your paying customer base in order to bring in larger Enterprise companies. It can take upwards of a year to even start building out an Enterprise sales and product team.
When you finally go Enterprise, part of the challenge is having to re-find your product market fit with a completely new audience segment. And as Calendly quickly realized, inbound leads won’t drive Enterprise, so you have to build the right teams and infrastructure to support the shift to go outbound and hunt these Enterprise whales.
As Calendly expanded to serve both markets, what did Kate look for as a differentiator when hiring an Enterprise vs a Mid-Market Sales rep?
First, you need the right ICP. When people think of Enterprise, they might immediately go to the 20,000-person company. For Calendly, Enterprise was Mid-Market and the lower Enterprise segment. So, they looked for reps who have done deals in the $30k-$50k range and had experience in value selling. Often, you’ll inherit an organization of scrappy people selling features and functions because of their PLG roots. Selling to Enterprise is selling to a buyer who wants to talk about business value. You need to be able to make a case for the value that your solutions create for their organization. The value you communicate needs to make sense for the end user but also resonate with the C-suite and stakeholders making the buying decisions. It’s a completely different skill set selling into the Enterprise and understanding their business case and potential usage for the product vs. selling into a more mid-market account that may not have as complicated of a buying process since you’re typically dealing with the direct end user.
Joining Box as CRO When They Had a Churn Issue
Mark joined Box four years ago at $600M in revenue and 4-5 years past IPO. As a subscription business, you should always be growing, but the rate of growth wasn’t where they wanted it to be. Generally, when a company brings in a new VP of Sales or CRO, they think they have a sales problem. Often, they do. But, after doing the research and discovery, Mark found that Box had a churn problem that was higher than average. As a team, they worked to understand why and eventually found that they actually had a product problem.
As the new guy on the block, Mark had to approach this with care because to make that big of a shift as a company, he needed to not ruffle feathers right away. So, he took notes on everything he heard about that was going on in the market and then validated that with first-party experience. He met with Box customers in all segments and verticals and validated what the sales team said. Then, after validating and building a good relationship with the executive team and board after a year, he shared his findings.
So, they made some changes to the product, made acquisitions, changed pricing, packaging, messaging, and positioning alongside improvements in the sales organization. The result?
Growth returned, and they saw dramatic improvements in churn. If you have a leaky bucket and are a high-growth company, you might be able to outrun it. If you have Rule of 40 dynamics and you’re not growing at 40% on new ARR, you can’t afford to have a leaky bucket.
Even though Mark had left Salesforce six years ago, one thing he’s seen is when people leave a place like Salesforce and move on to their next role, it can be a challenge to get everyone on board with what your visions for the company are right away. You have to develop relationships with everyone before sharing challenges outside of the domain you were hired for. As noted, Mark had waited a year before rallying Box behind addressing its churn issue. A year.
What Should Founders Look for When Hiring Out of a Big Company?
If you’re considering hiring someone from a big company like Salesforce, Mark warns that founders often wonder if the person will have enough work ethic to make it work at a smaller company. He advises to look past the logo and look for traits. If your potential candidate came from a larger org, what traits and what did they manage that are similar to what you want for them to own at your company? Be clear on expectations and go deeper in the interview process on what resources the big company person had to see if you’re willing /ready to also invest in those resources to make them successful.