Dan Reich is the Founder & CEO @ Troops.ai, the startup that is the ultimate slackbot for sales teams. To date, Dan has raised over $17m in VC funding with Troops from many friends of the show including Felicis Ventures, Founder Collective, First Round, Nextview, Susa Ventures, and even Slack. As for Dan, he is also the Co-Founder and President of TULA, a private equity backed health and beauty business that has developed the world’s first line of probiotic skincare products. Before that, Dan was a Co-Founder of Spinback (acquired by Buddy Media in May 2011, then acquired by Salesforce in June 2012).
In Today’s Episode We Discuss:
- How Dan made his way into the world of SaaS with the founding of Spinback. How that led to his founding of the ultimate slackbot for sales teams in Troops?
- What does Dan really mean when he says “account based collaboration”? What is this a transition from? In terms of tracking and analysis, how does this change when making the move from tracking individual performance to team performance around an account? What can one do to actively implement this? What is key to a successful transition to this style of selling?
- What does Dan mean when he says, “sales teams are not working together the way we think they are?” What can sales leaders do to actively ensure their sales team is acting in unison? Where do many sales leaders go wrong here? How does Dan think about post mortems when an account is lost or won? How does Dan prevent dips in morale when sharing the loss of a sale?
- With scaling orgs, silos are often created, why does Dan think many silos come into existence? At what stage does Dan really see them become a problem and cracks in the org begin to show? What can leaders do to instantly reduce the effect of silos? How does Dan think about controlling the noise to action ratio with the firehose of data at our disposal today?
Dan’s 60 Second SaaStr:
- What does Dan know now that he wishes he had known at the beginning?
- What is the right time to train your sales team?
- The right way to structure sales comp plans?
You can also take your SaaStr to go:
Listen on iTunes.
Listen on Google Play Music.
Listen on Spotify.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Harry Stebbings: Hello and welcome back to the official SaaStr Podcast with me, Harry Stebbings @HStebbings1996 with two ‘B’s on Instagram and I’d love to welcome you behind the scenes there. But as you all know, I’m a bit of a SaaS nerd and there’s nothing I love more than a new take on methodology on an existing process or way we work in SaaS. And I was chatting to this guest the other day and he mentioned the term “account-based collaboration”. And being the SaaS nerd I am, I wanted to jump on it and make an awesome episode out of it and how to utilize this method in your organization, and so I’m thrilled to welcome back Dan Reich. Dan is the founder and CEO of Troops.ai. The startup that is the ultimate in Slackbot for sales teams. To day, Dan has raised over seventeen million dollars in VC funding with Troops.
Harry Stebbings: For many friends of the show, including Felicis Ventures, Founder Collective, First Round, NextView, Susa Ventures, and even Slack. As for Dan, he’s also the co-founder and president of TULA, a private equity-backed health and beauty business. This developed the world’s first line of probiotic skincare products. Before that, Dan was the co-founder of Spinback, which was acquired by Buddy Media in 2011 and then acquired by Salesforce in June 2012. Huge thanks, though I do have to say to David Beisel at NextView for the original intro to Dan today. I really do so appreciate that. But that’s enough of me, so now I’m delighted to hand over to Dan Reich, founder and CEO at Troops.ai.
Harry Stebbings: Dan, it is absolutely fantastic to have you back on the show for what I know will be a very special round to you so thank you so much for joining my dulcet British tones again.
Dan Reich: Thanks, Harry, great to be back.
Harry Stebbings: I would though, love to kick off — and for those who maybe didn’t hear our first episode, Dan: how did you make your foray enter what I know to be the wonderful world of SaaS? And what was the founding moment for you with Troops?
Dan Reich: I’ve spent my whole life doing startups. The last software company I started, we basically helped online brands and retailers measure how much money they were making from social networking sites like Facebook. We ended up merging my company with another business called Buddy Media and then ended up selling that to Salesforce. After that experience, and my previous experiences, and that of my co-founders, we all came to appreciate the value and importance of, what we know to be CRM — customer relationship management. We also came to realize just how painful it was to use those types of tools to run your business.
Dan Reich: Effectively, we felt that everyone looked and felt like data monkey, but instead they should have been driving revenue and customer relationships, so we felt that needed to change and so we took a step back and thought about the problem more holistically and asked the question, “What if you could engage with this data and information much like you would engage with a buddy over text messaging?” What if you could literally chat with your CRM, and do so in a more appropriate medium of messaging? So that was really the question in genesis behind Troops.
Harry Stebbings: I do want to start there today, and we’ve been lucky enough to spend some time together and chat a little more between last show and this show. And when we chatted before, you said to me about the rise of team operating systems. And a really interesting one for me being account-based collaboration. I do want to start on some nomenclature, Dan, really. What do you mean when you say ‘account-based collaboration’ in team operating systems?
Dan Reich: Yeah, sure. So if you think about the past few decades of certain innovation of technology, it’s generally been oriented around the individual for productivity and applications. And if we fast forward to today — I don’t know what your Chrome browser looks like, but now we’ve got forty different tabs, forty different priming solutions for forty different things all stitched together with E-mail, which honestly feels a lot like a to-do list that other people control for me and it’s kind of gotten out of hand. And now if you look at a company like Slack, which is the fastest growing business application in the enterprise literally ever, this is where people prefer to spend time, and get work done, and collaborate.
Dan Reich: And the reason it’s more real-time, it’s frictionless, it’s more delightful? And what’s happening now is — in fact, we did research earlier this year — of the companies using these mediums, about 70% of those companies are now creating channels specifically dedicated to managing prospects, customers, accounts, opportunities, and this is really now the place where account-based collaboration is happening. A place where people are coordinating not just with themselves and marketing organizations, but literally across the whole organization. Product, engineering, executives. In order to drive growth, and revenue, and customer experiences for their partners and this is really changing how people institutionalize processes at organizations.
Harry Stebbings: That’s super funny, actually, I couldn’t agree with you more in terms of the integration of accounts. Actually, at the fund here, we create separate channels for each portfolio company, which one-clip labelers and accounting on industry, so to speak. So that’s super interesting to hear. I do have to ask, though, making the move from personal productivity to account-based collaboration; two elements really strike me in terms of defining what success looks like: how does this change when considering quite a big shift, really, from moving from personal productivity to this account-based collaboration method?
Dan Reich: And yeah, you know, it’s a great question. If you think email is the best, last one of communication then this whole conversation’s a moot point. But really, what we’re seeing happening now is that more collaboration and teamwork, up front, in a process for customer acquisition or account management just drives better results. So for us at Troops, we have customers that use us to really work on lead management, pipeline management, forecast management and by bringing it in to this new medium with your whole organization we actually see an increase in our lives. So increase in forecast accuracy, increase in lead work rate, increase in data compliance and updates back at the sales floor’s serum, et cetera, et cetera. So the whole business metrics just increase by making it more real-time, frictionless, and collaborative.
Harry Stebbings: And you mentioned metrics there, and whenever I hear metrics, I immediately think the kind of tracking and the MRI thing. And it’s relatively easy to in the world of productivity with the plethora of tools and options we have as a single stake holder. How does this change, though? When recognizing now with account-based collaboration there are multiple stake holders and how should we then think about monitoring the performance, so to speak of account-based collaboration?
Dan Reich: Yeah, so when you think about performance, or measurement, or as a manager, you’re really thinking about — well, really as a CEO, you’re always- in my mind, you’re thinking about sort of three things as a founder CEO. So you’re thinking about cash, culture, vision as the kind of key metrics for driving health of an organization. So when we think about cash, right, cash has to do with the health of the company. But how do you know the health of the company? So ideally, you buy some thing to manage all of this information in an organization.
Dan Reich: We know that category to the serum, we know sales floors to be the leader, but as you also know with an organization, it’s like garbaging garbage out of if you don’t have the right information at your fingertips, then you don’t have accurate reporting, and you don’t have the right KPIs, you don’t have the right information to do things like hiring and do things like decision-making. You can’t have share holder meetings, can’t have investor meetings, and so what quickly happens is in order to drive those right KPIs, you first need to know what’s real.
Dan Reich: So you end up having heavy, managerial, boring meetings where you’re just trying to wrap your head around, like, literally what’s happening with the company. So step one is just a line of invisibility to those KPIs. I’d say that the second thing is you need a great culture to drive the right outcomes and so what is a great culture? Well, you want want happy, productive, motivated employees. And so, if you’re, in this example, a sales person, how many salespeople do you know are happy acting like a data monkey, updating fields, forms, buttons, and boxes?
Dan Reich: And so, if you can create happier customers with better tools so they’re more productive and they feel like work isn’t just work, you’ll also see better outcomes which will drive those KPIs. And then lastly, alignment — huge thing — I know your company’s talked about alignment and culture all the time. But to create alignment, we think you need an incredible transparency, visibility, and collaboration. By putting this work into a medium like Slack and organizing around accounts and prospects, what you’re really doing is democratizing information in a much more meaningful way and by doing that, you’re gonna also drive better alignment against that vision so you can drive better outcomes for the company and your customers.
Harry Stebbings: So many seeming advantages that I do have to ask, though, not everything is always blue sky and roses. In terms of the challenges that one faces, really, in integrating an effective system like this, what are the challenges that one must face?
Dan Reich: I think with every new technology, people inevitably ask the question: “I could already do X, Y, and Z, right.” Of course somebody else will create examples. And before the car came along, people weren’t thinking they need a car, they were easily able to get from point A to point B. It was only until there was this new mode of getting from point A to point B i.e., the car, that people totally rethink how they should do their lives. And in this case, with transportation.
Dan Reich: I think the same thing is true with anything with any new technology so at work, as we think about shifting from the historically ‘E-mail only’ for external communications and internal communications, now to this more real-time, asynchronous, frictionless collaboration hub. That’s, in many cases, a paradigm shift because it’s not only just chat that it’s facilitating, it’s actually facilitating workflow and business processes.
Dan Reich: When we have conversations with customers all the time, we can see their wheels begin to spin when they recognize, “Wait a minute, this isn’t just another place to have conversations, it’s a place to actually stand up mission-critical processes in a way that’s more delightful and easier for employees and if they can do that, again, they’ll drive better outcomes across the whole company.
Harry Stebbings: I do have to ask one final question before we drill down into the sales team and their workings: you mentioned ‘heavy managerial meetings’ etc. And I speak to a lot early stage founders who have been thinking about direct reports and building up their direct reports. When did you start seeing the direct reports being built out and why do you think leaders need to really put a lid on it and ensure they don’t have too many?
Dan Reich: When we think about direct reports or hiring in general, it’s typically when we, as a hiring manager, or in the early days as founders, end up spending way too much time on any one given thing. So in this example, when we were spending way too much time selling, to the point where somebody could, on their own, own relationships so that’s when we began to think about direct reports, account executives, et cetera.
Harry Stebbings: Totally get it. For you, though, how many is too many?
Dan Reich: I think the magic number of direct reports is probably something around eight, give or take. I think anymore and you’re not really effectively working with any one of them and at any less and you’ve got extra capacity.
Harry Stebbings: Yeah, I totally agree with you and I mean, eight’s probably absolutely the cap, so to speak. If we do, though, drill down a little bit from those direct reports in the leadership into the sales team and their workings within SaaS orgs. In our last chat, you said to me, “The sales teams are not working together the way we think they are.” Now, I’ve been kind of kicking myself for not asking a followup to this since I heard it.
Harry Stebbings: So with that in mind, how do you think SaaS leaders think that their sales teams are working and what’s the reality?
Dan Reich: I think most sales or SaaS leaders think they know what’s going on with their customers and their sales teams more so than they really do. I was having a conversation earlier this week with one of our customers and he told me that he was accidentally left off of one E-mail and it created this sort of whirlwind, haphazard mess with managing the account. And in reality, that happens very, very frequently. The right people are not brought into the right deals at the right time. I remember even years ago there was another deal I was working on and the conversation already evolved to a negotiation stage and that team never even looped in the CEO, which could have been a make-or-break catalyst for how that deal evolved.
Dan Reich: And so the point is there’s such a huge opportunity to do more collaboration earlier and upfront with various folks on the team. The other piece is there’s also a huge opportunity to get more folks involved in sales that are not on the sales team: key product stake holders, key engineering stake holders, key folks from operations for the legal team earlier and often because in doing that, again, you’re gonna get more points of view, more perspective and more operational support to help effectively close deals quicker. And today, it doesn’t happen as easily because of the mediums by which this is being facilitated.
Harry Stebbings: Can I ask a strange question and kind of a feeling about that two-sided marketplace there in terms of the customers and then the additional team members who could be brought in that maybe aren’t traditionally into the sales process? One is: do the customers find it strange speaking to maybe product leaders or maybe technical experts in their domain when they’re traditionally speaking to salespeople? And then also: how do you excite the team who aren’t used to speaking to customers to now be more customer-facing?
Dan Reich: I heard a story two weeks ago, one of the fastest growing SaaS companies, their head of sales shared a story with me, and what he told me was they went into a big meeting with a Fortune 100 company and it was the salesperson and the head of product. And early in the meeting, the salesperson was speaking, but by the end of the meeting, all eyes were on the head of product. And the reason is that technical person that has the technical depth and understanding and is really solution-oriented; that is the person that’s truly creating the most value, that can speak to problem, solution, and how that offering can help out that partner.
Dan Reich: So I think actually in today’s world, customers expect and prefer to speak with people that are much more technically savvy because those are the people that are really doing the work at the end of the day. And so I think this is also a shift. It’s also why you see a lot of SaaS companies have these self serve experiences with easy onboarding, credit cards, you don’t need to speak to a salesperson because the expectation today — unlike 5-10 years ago — is you shouldn’t have to have those big, heavy, enterprise sales conversations with big implementation, integration. Instead, you want beautiful, elegant products that just work and so therefore, you just want to also speak to somebody that has seen the best use cases for those products, can help stand up for those use cases for the customer.
Harry Stebbings: No, I do totally get you there and the rise of self serve. But if we get back to ensuring synchronicity amongst the team, I do want to ask specifically maybe within the sales function: what can SaaS leaders do to actively ensure that their sales teams be from inbound, to outbound, to SDRs, working together in unison? What can they do?
Dan Reich: The first thing they can do is: unify the team in a public and social medium. Like, Slack, I’m thinking about one of our partners, for example, is HubSpot, and they had a problem which was they were generating so many leads. They’re arguably one of the best inbound marketers in the world. In fact, so good, their conference is literally called Inbound. So here they were, generating all these leads and they were getting pumped into this CRM and those leads were just not being worked. And the reason they weren’t being worked was because it was in a clunky system that wasn’t very visible, or transparent, and hard to use.
Dan Reich: And so what they did was they unified the team and Slack. They brought all of the leads into Slack and as a result saw about 100% increase in lead work rate simply by putting the work where people were already spending their time. So I think that’s step one, just unifying the team publicly in this medium, where people are spending their time. I would say the second thing to ensure teams are working together is sharing wins and learnings often.
Dan Reich: So for example: any time deals are closed and won, or, really, any time deals are lost. It’s important that the why behind those wins or losses are shared broadly with the organization, not just with the sales team but, again, with the product team, the engineering team so that you can have this continuous learning culture to improve and double down on the things that are working and fix the things that are not. And then, kind of related I would say, the third thing is: just ensuring that the right KPIs are seen by the whole organization. So whatever those leading indicators are for your team, whether it’s number of sales activities or number of user signups, you want to make sure the whole team is seeing that in real-time frequently to really act as the heartbeat of the organization.
Harry Stebbings: Now this is a very unfair question, but I’m too intrigued not to ask it from a leadership perspective here. You mentioned maybe sharing why you maybe didn’t win a deal. Culture and morale is always front and center for you as the leader. How do you think about although the benefits of sharing the learnings of why maybe you didn’t win a deal, how do you think about maybe the damage to morale for the team at not winning a deal? Is that a thought for you and how do you think about the balance between morale versus optimizing learning?
Dan Reich: It’s definitely a thought, but I think the risk of not sharing the losses and not having the brutally hard conversations is far, far greater a risk. For example, if you think about companies like Sears, right? Once upon a time, there were a bunch of executives that totally didn’t believe or acknowledge this thing, called the internet, that was coming along and so they didn’t want to have the hard conversations. And by not having the hard conversations and identifying and speaking honestly about problems, you can never fix those problems. And if you can’t fix those problems, you end up in a case of Sears nearly going out of business.
Dan Reich: So for Troops, we have a value of radical transparency. We need to be able to look at the problems head on and be able to have those conversations as a team so that we can fix them and that’s it. We just continuously try to identify the problems — what’s working, what’s not? And if it’s not working, just work to fix them. And so by standing it up and making that information available in real-time across the whole organization, holds us all accountable to what’s happening in those painful truths when we lose deals so we can fix them.
Harry Stebbings: I am sorry. I am probably drooling unnecessarily here, but I am too interested. When one is thinking about those meetings, when sharing those learnings, it could be win or loss now. Do you think about incorporating that into current all hands meetings structures that you have or do you think about adding in new team-meeting ways specifically discuss that core win or loss?
Dan Reich: In a way we do it at Troops is we have that information flowing in real-time to the team as it happens so that in the event there’s a case that we can help fix or save a deal we want to or in the event there’s something we learnt to win — something we learned about a win — that we can’t tell us of our customers would benefit from a serum later we want to react quickly. At the same time, we do, every Monday, an all team hands-on meeting and we’ll share the aggregate wins and losses from the previous week just to add a bookend or bookend beginning for that week just so we could surmise what’s happening.
Harry Stebbings: Totally. No, that makes sense and I’m sorry for drooling there so much, but I was intrigued by the structure. But before we move into the quick fire round, Dan, the final element stature is we spoke about the case of synchronicity amongst teams. The most common problem that founders face is is the element of silos. Usually they’re considered the enemy, obviously, in scaling orgs and I’ve heard you say before that under the umbrella of account-based collaboration even more so. So on that, and starting with the element of maybe causation or warning, how does one often see silos being created within more orgs? And one of those leading indicators that should really mark the red flags for leaders that something silo-like is coming?
Dan Reich: Yeah, the thing with silos is they’re silos; you can’t see what’s happening easily in that part of the organization. The good news is: these are stoppable issues. I think silos can be easily broken largely due to those mediums and the tools that we’re using. So, red flags, unfortunately, I think often are sometimes a little bit too late when they’re issues. Maybe an extreme example would be, quite literally, the product of engineering team worked on a product that the sales team cannot sell or customers will not find valuable. So why might that happen?
Dan Reich: Well, it could be because the product of engineering team live in a vacuum and they’re not listening to real-time customer feedback or they’re not engaged with what’s really happening on the frontline as an extreme example. So we think that by organizing teams in a collaborative medium will break these silos down — Slack being a great example. And if you do that for counts, and customers, and prospects, you’ll win.
Dan Reich: So we call it account-based collaboration but where you think about it is it’s really a systematic approach to building and leveraging a strategic deal support team, like a product team or engineering team, in that medium so you could win more deals, shorten sales cycles, and increase deal sizes. Unlike traditional selling where sellers operate in a silo, feedback is the weighed, and inconsistent, and team selling is haphazard. Again, by bringing it into this collaborative medium, you’re really addressing those issues and breaking down those silos.
Harry Stebbings: No, I absolutely agree in terms of breaking down those silos. One thing that I maybe struggle with and I should probably not say this live: is the element of focus and concentration when we have access to such real-time information and data from the team. How do you think about retaining focus and concentration within teams with this sudden influx of data come in and is there any advice that you would have?
Dan Reich: Absolutely. I think in today’s world, noise is a real thing no matter what topic. Whether it’s tools that use at work, or how you work, or even in your own personal life with social media. So noise generally is, I would say, across the border. The good news is: at work, there’s generally somebody that is responsible for standing up for these processes and determining the right noise-to-signal ratio. So I think the short answer is is it all depends.
Dan Reich: So if there is a mission critical update like the world is ending for one of our best customers, I probably want to know that in real-time as soon as possible. But maybe if there’s another set of KPIs like pipeline or forecast for the week, I probably don’t need to see that every single day in real-time, I could see that once a week. At the same time, what I do want access to is a historical view and lens into everything that’s happening on some of my customer conversations.
Dan Reich: So, again, that’s why this concept for us, account-based collaboration, is so important. If I want to know what’s happening with IBM deal or the Coca-Cola deal, I shouldn’t have to chase down individuals to see what’s happening. What I should be able to do is go to one, central location and in seconds, get access to the full history, and conversation, and narrative of what’s happening and why. And in doing that, I’m just going to be smarter and be able to drive better outcomes for the organization.
Harry Stebbings: Yeah, no, I couldn’t agree with you more there in terms of visibility and what maybe you should and shouldn’t need to see quite so much in real-time. I do want to move into my favorite element, though, Dan, being the quick fire round. So I say a short statement and as you know, you have sixty seconds before I bang the hammer, so to speak. Are you ready to roll?
Dan Reich: Yeah, let’s do it.
Harry Stebbings: So what’s the biggest challenge for most SaaS founders?
Dan Reich: Prioritization. I think in your early stage, especially as a founder, there’s a million and one things that you need to do and you can’t do all of them. And you especially can’t do all of them well. So I think prioritization is key and I think good prioritization requires good information and support from your team. So ruthlessly prioritizing, I think, is probably the most important.
Harry Stebbings: The biggest question I get, really, from SaaS founders is: how much of the SaaS start up investing sales and marketing?
Dan Reich: I think it depends on the business. Again, take Slack as an example. They hit some pretty impressive revenue targets with absolutely no sales team in the early days of the business. They’re shifting back down so I think it depends on the product, whereas some other organizations out of the gate require highly consultative sales and conversation with the prospective buyer so it depends.
Harry Stebbings: When is the right time for SaaS startups to train their salespeople?
Dan Reich: Oh, early and often. I think your organization is only as good as the people you have and so, you need to constantly and immediately be investing in their success personally and professionally because the better they are and happier they are, the better your organization will be. So, early and often.
Harry Stebbings: I’m throwing one in here, but I’m too intrigued not to ask it. Who should be responsible for upsells? Should it be customer success or should it be AEs?
Dan Reich: You know, we’ve seen it both ways. I remember hearing a story where we had an account executive that had two hundred accounts and we went to them and said, “You no longer have two hundred accounts, you have one.” And the thinking there was instead of doing drive-by sales and flipping them over to account executives or account managers for upsells, we wanted one person to own bigger deals end to end. And so I think that upsells depend on the size of the organization.
Harry Stebbings: No, I think that’s a great answer. And then I do want to finish with: what do you know now, Dan, that you wish you’d known at the beginning of your time with Troops?
Dan Reich: I think that this is obvious but, I’m continually reminded by this but, having the right people with the right attitude is the most important thing for the organization. At the end of the day, the company is only made up of those people and the people are only as good as the support they have and the cultural alignment that they have. So, nothing new but continues to be emphasized each and every day.
Harry Stebbings: Dan, I can’t thank you enough for coming back on. As I said, I so enjoyed it the first time and I was so intrigued by it and the rise of account-based collaboration. So, thank you so much for joining me again today.
Dan Reich: Thanks, Harry. I appreciate it.
Harry Stebbings: Absolutely loved that discussion with Dan on unifying teams and if you’d like to see more from him, you can find him on Twitter @DanReich. Likewise, it’d be great to welcome you behind the scenes here at SaaStr. You can do so on Instagram @HStebbings1996 with two ‘B’s. It really would be great to see you there.
Harry Stebbings: As always, I so appreciate all your support and I can’t wait to bring you another fantastic episode next week.