Why Anthropic Are Causing a Comp Crisis & Why You’d Never Hire From Salesforce or ServiceNow

Even if you have the best product in the world, you're still going to leave money on the table if you have shitty salespeople. If a guy's been at

salespeople. If a guy's been at salesforce.com for the last 5 years, he's never opened a new logo. Service

Now. Service Now. Why would you want to hire people from Service Now? They don't

know how to do any pipeline generation.

We have two of the greatest sales leaders of the last decade joining me.

Chan Pet is the most no BS, incredible sales leader who's worked across some of the most category defining companies of the last 10 years. And joining him we have Chris Daggen who took Snowflake

from zero to over four billion in ARR.

This is a melting pot of 20 years of sales wisdom condensed into one incredible conversation. The Ford

incredible conversation. The Ford deployed engineer is a glorified professional services person. If you're

a really good engineer, you do not want to be a Ford deployed engineer. You want

to work in the core product.

Anthropic in particular is offering sums of money the likes of which we've never seen. You think they really give a [ __ ]

seen. You think they really give a [ __ ] how good their sales organization is? I

mean, they'll say they do, but do they?

Why should they?

We should have kept hiring. We We slowed down.

Why?

Because we optimized to be public and that was a mistake.

I know CRO's getting $100 million packages.

You know, I'm considering being a CRO.

You should.

You should give it serious thought.

If you're advising a CEO, what do you say?

First of all, you have to remind them raising around doesn't mean [ __ ] I think Anthropic's a four trillion company. Ready to go.

company. Ready to go.

Guys, it is so good to do this in person. We've done shows separately. We

person. We've done shows separately. We

have some very exciting news today, which is why we're together in person.

But thank you so much for joining me in person in London.

Harry, it's great to see you in person.

I don't think we've ever met in person.

So, super pumped to meet in person and be here with my buddy here, Chad Pets.

There are not many people I would fly to London just to spend an hour and a half with. So it is it is an honor to be here

with. So it is it is an honor to be here and thank you for having us.

Dude, I I am so excited for this. So I

just want to start with the news of you guys coming together. Can you just share a little bit about the news and what it means?

Yeah. I think um you know uh Chad and I have been talking about this for years and and uh and you know after I left Snowflake I you know sit on a a bunch of different boards and pretty much the

number one pain point of any startup CEO is they need help building a sales team and I started to try to work with other recruiters uh and never was I satisfied

because I was spoiled because Chad he co-built the Snowflake sales team with me and and I'm like man I I I'd love to figure out a way to get Chad involved and that's how the conversation started.

Yeah, we were somewhat precluded from working together cuz I had restrictions on who I could work with and Chris was working with separate companies. So, he

would ask me to help certain companies and I couldn't because I had conflicts with my other companies. And so, we kind of figured out a way that we could get rid of those conflicts and join up. And

I think it's I think it's the best of both worlds. We have there's some

both worlds. We have there's some overlap between things that he's good at and I'm good at, but there's a lot of things that I can do. uh and a lot of things that he can do and when you put us together it's it's pretty [ __ ]

special. I spoke to Matan about both of

special. I spoke to Matan about both of you earlier and he said the lovely thing about you guys is you're like ying and yang you know like Chris is the really bad cop and Chad's the cuddly ped

you know when you miss the quarter and you're expecting to be told off he gives you a hug and he says it's okay don't worry numbers don't matter it's okay yeah you said there about building sales teams and it's the core challenge that

early stage and kind of scale up founders face has what it takes to build a sales team changed in a world of AI as we look at drastically different companies and

different company scaling profiles in this age you're seeing a lot of you know productled growth companies and you know there there's a lot of order takers you know out there I think the thing that Chad and I pretty consistently

agree on is that if we can build outbound sales organizations salled growth engines um and then you can pile in PLG on top of it you you have best of

both worlds so I think you know our perspective Ive and and I don't want to speak you know you know for you Chad but our perspective is build great go to market people that we built at Snowflake that he's built you know a thousand

times over that will differentiate the company.

Yeah. I mean you still have to have folks that are willing to go do the heavy PG. I I think sometimes there's

heavy PG. I I think sometimes there's this notion that look we have an incredible product and sales doesn't really matter because our product is so good it's going to sell itself. You

definitely run into some of that. It's

total [ __ ] Even if you have the best product in the world, let's say that's the case, you're still going to leave money on the table if you have shitty salespeople. So to Chris's point,

shitty salespeople. So to Chris's point, you still have to have sales people that are going to go out there and find new business. And that's been our core

business. And that's been our core belief since for, you know, 30 years.

Help me out. We see people with great logos, whether it's any of the big names that we know, and often they are order takers. How do I, if I'm a founder,

takers. How do I, if I'm a founder, determine if that logoed person is an order taker or if they were actually genuinely very good? It's a question that by the way like every CEO asks me

and and you know the simple answer is give me an example of you opening up you know two to three new logos in the last you know 24 months and then ask them next level questions like who was your

champion who was the economic buyer but if you start going down that that that avenue and they start faltering it means they're lying and so you looking for those people that have that experience of opening up new logos.

Yeah. And it's pretty simple. You could

look at somebody's resume. If a guy's been at salesforce.com for the last 5 years, he's never opened a new logo.

Service Now, Service Now, right? Let's go hire people from Service Now. Why would you want to hire people from Service Now? They don't

know how to do any pipeline generation.

Why do you say that for people listening that don't understand?

Well, Salesforce has a monopoly.

And so, how much outbound are you doing if you work at Salesforce? You just

First of all, everybody's already a customer. So, how many new customers are

customer. So, how many new customers are you going after? Like, you could talk to a guy at Salesforce. He's like, "Yeah, I closed Wells Fargo." What? What? No, you

didn't. Wells Fargo has been a customer for 10 years. Like, you might be working on Wells Fargo, but you didn't close Wells Fargo. And so, if you talk to

Wells Fargo. And so, if you talk to these sales guys and they work for a company that absolutely has a monopoly, how are they doing any pipeline generation? What I'd rather find is

generation? What I'd rather find is somebody that works for a company that nobody's ever heard of and actually has an inferior product and was actually able to go to the market with an inferior product and win deals.

Totally agree with you. And get that in terms of the inferior product. I always

whenever I'm hiring investors, I like I look people who've been at a tier three brand and done really well. Well,

cuz that's freaking hard to do.

Otherwise, it's the brand.

Yeah. Yeah. We h like I mean, I won't name the name of the company that that we were just talking about, but um Chad helped me uh hire the head of sales and he was at a very mediocre company, but

succeeded there for like seven years.

And so that that's grit.

I spoke to Matam before the show and he said that he was going to hire three regional sales leads and then you spoke, Chad, to one and you were like, "This is the guy. This is the guy. a killer sales

the guy. This is the guy. a killer sales instinct. How did you detect that so

instinct. How did you detect that so fast? What was it that shone out? And

fast? What was it that shone out? And

for founders that are listening trying to discover that, what should they look for?

Yeah. I mean, first of all, everybody gets hung up on like, look, I'm in this particular space, so I want to hire people from the same space I'm in. I

never look at that stuff whether you're looking for a regional VP or a chief revenue officer. To me, it's the quality

revenue officer. To me, it's the quality of the sales organization in which you've operated. Who have you worked

you've operated. Who have you worked for? What was the training methodology?

for? What was the training methodology?

What was the DNA? It's not the company.

There's great companies with very shitty sales organizations and there's shitty companies with worldclass sales organizations. So the first thing you

organizations. So the first thing you look for is what quality of sales organization does the individual come from? Who trained them? Can I call

from? Who trained them? Can I call somebody that I know and respect that this person worked for that says this person is world class? They have grit.

They have determination. They have all the things you're looking for. So it's a it's a different way of identifying talent. I think that's a problem too is

talent. I think that's a problem too is like a a lot of like people in like the security space they want to hire people with security backgrounds and for the most part a lot of the security companies have

historically been channel only or channel driven sales organizations. So I

actually have an affinity of not hiring people out of the the security space.

There are some recent examples like the the team at Whiz certainly a very good sales organization but you know I think you know the the industry expertise does not matter as much as like you being successful selling an enterprise

technology.

Does our mindset change around building sales teams when we have more technical products and we need sales engineers and that technical aspect becomes more central to the role of selling? Yeah, I

think it does. Like at XAI, for example, um it was pretty important to us that we hire people when you're selling an API, that's not an out-of-the-box product.

So, you have to be more technically astute when selling something like that.

So, you not only find people that are at least slightly more technical or at least have sold more of a technical product, but you also change how you enable them. Like our sales guys at at

enable them. Like our sales guys at at XAI actually do all of their own demos, which as you can attri attest to, that's that's not the norm. So I think yes it it changes the profile but it also

changes how you enable them.

We spoke before on message about 20x quotas for 11 reps and I got so much inbound from that and I think quotota setting is so hard for founders today

when we're told that we need to grow faster than ever. We see 500 million are bannied around so commonly.

How do we think about setting quotas in this very new world? If you have a company and the the founder says, "Oh, I should give them $2 million, you know,

in uh quota." My question, first question is, "Do you have any evidence to show that you should be able to they should be able to hit that quota?" I'm

like, "No, but we're an AI company."

Well, who gives a [ __ ] that you're an AI company? Like, show me the data. So from

company? Like, show me the data. So from

my perspective, if you're building an a a great organization and you have a fast growing sales or you and you have north of a million and a half dollars of

productivity of them of of a rep that can, you know, on board and within six months do over a million half dollars, keep hiring faster and faster and faster. If they're doing3 4 million,

faster. If they're doing3 4 million, don't pat yourself on the back because that means you're missing opportunities.

you're missing uh opportunity in the market because they're just sitting there and they're fat and happy. Like

they're just like, "Yeah, it's easy to make my my number." So I I I think it's like look, make it hard for them to get to million and a half um and and find those those hunters and that's the kind

of organization that will will make you a very differentiated organization.

Is it still four to 5x is good or has that changed now? I mentioned Clay earlier and we mentioned Clay, but she said theirs is 8 to 10. 11 Labs said historically it's been if you get 3x

your OT, you're pretty happy. I I agree it's probably going up um because of of of just different things that are happening in terms of being able to have like a PLG lead source. I think when it comes back to quota setting, I always

remind these CEOs like what are you optimizing for? Let's talk about the

optimizing for? Let's talk about the risk. Okay, let's talk about the risk of

risk. Okay, let's talk about the risk of setting quotas too low. What happens?

You're probably going to overpay. Okay,

that that's a shitty thing to have happen. But can you live with overpaying

happen. But can you live with overpaying a sales organization for one year?

Because understand if you're overpaying and what happens? It means you're blowing through whatever forecast you set. Now again, you're spending too

set. Now again, you're spending too much, but you're pretty happy because you're blowing through the number. Let's

talk about the flip side of that. Set

quote is too high. None of your salass sales organization. None of them are

sales organization. None of them are making any money. Morale is [ __ ] What happens? The sales organization quits.

happens? The sales organization quits.

And if you lose a players, you don't replace A players with A players. As

soon as the A players go, the rest of the A players know that they shouldn't go there. So now you're going to lose

go there. So now you're going to lose your sales or and you're going to replace an A player sales or with a B player sales or. So it's about optimizing for the right type of risk.

By the way, the other thing that we do now that we didn't used to do is you put windfall clauses in there because there are certain situations like some of the companies we're talking about where you could have a rep go out there and find a

15 or $20 million deal. I clearly don't want to pay that rep three or $4 million in commission. So, one of the things

in commission. So, one of the things we've been adding is a windfall clause that says, "Listen, if we have the right as a company to look at a deal, and if you go do some massive deal, we get to talk about the comp plan and perhaps

reset what you're going to make." So,

you might still make 2 million, but you're not going to make five.

We had that. I mean, at Snowflake, I had that windfall clause. I probably invoked it five times.

Yeah. Can you imagine signing like the Pentagon for like a $30 billion contract when you're Andrew and you're like, "Yep, I'll take my 20%. Thank you so much."

much." Exactly. Exactly. Exactly. and and

Exactly. Exactly. Exactly. and and

here's my resignation as well.

Exactly. I'm retiring.

Can Can I ask you, we we see again the company's scaling faster than ever. If

you're advising a CEO, one of my biggest problems that I see now is CEOs who bluntly get a little bit high on their own supply. They've raised a lot of

own supply. They've raised a lot of money and like revenue seemingly scaling. What do you say to keep feet on

scaling. What do you say to keep feet on the ground when sales are scaling fast, but it's a continuous game?

First of all, you have to remind them raising around doesn't mean [ __ ] Okay?

The fact that you were able to get, you know, three guys to write you a big check doesn't mean you've accomplished anything and you have to constantly remind them of that because there are definitely CEOs that will raise around

and and take a victory lap. It means

nothing. And the right CEOs know that, but some CEOs don't. So, first of all, you have to remind them of that. Like,

you haven't done anything. And then

you'll get some of these CEOs that'll say, "Well, look, I'm doing this. I can

get the best CRO in the world." No, you can't. Okay? You've got good traction.

can't. Okay? You've got good traction.

Here's what those CRO are looking for.

By the way, there's four or five guys in the world that are the best in the world and they can go do anything they want to do. Let me explain to you why you're not

do. Let me explain to you why you're not ready to get that guy. And you have to sort of reset expectations. Like, look,

you've got good traction. There's good

things happening here. You're you

haven't accomplished quite as much as you think you've accomplished. The other

thing is, is your revenue sticky? Is

your AR sticky? So, all this monthly recurring [ __ ] that you see, that can be a head fake, right? Because there's

there's no moat. He and I talk about this all the time, right? Go get booked contracts. So the first thing I say is

contracts. So the first thing I say is they say, "Look, here's my ARR." I say, "Well, is it ARR? Is it annual recurring? Let's talk about how you

recurring? Let's talk about how you define ARR." Because often times they'll

define ARR." Because often times they'll take monthly recurring and they'll lump it into annual recurring. You can't do that.

And so you really have to dig into a lot of this stuff to really understand the health of the business.

We're seeing this real opacity around revenue. And it's just murky around how

revenue. And it's just murky around how most of it's calculated. Like my peak day was 10 grand. I'm going to extrapolate that out. I'm now at 3.6 million. Well, and you have you have

million. Well, and you have you have naive founders and naive sales leaders who are then saying, "Okay, yeah, let's pay the sales team on, you know, the like monthly and a rear billing and we're and there's no commitment and and

at Snowflake, I didn't pay the the the sellers until they got a book contract, an annual contract." And so like it's silly to pay a sales team on something that's just like an ondemand contract.

No way. We never you should never do that because it it's it's not durable revenue and there's risk. And so these founders are like, "Oh, look at this."

Well, dude, what happens if XYZ company or Enthropic comes out and replaces you tomorrow? Like there's no moat. There's

tomorrow? Like there's no moat. There's

no contract. There's no moat. It's easy

to move. Like these are things that are real that are really concerning that that I get concerned about in working with these founders.

Some of these companies you actually I I find myself having to explain to them the value of having booked contracts.

They're like, they're paying monthly.

I'm like, I know, but we need them to be booked. Why? That creates friction in

booked. Why? That creates friction in the sales process.

Lower margin. they get upset. It's lower

margin.

Lower margin.

Yeah.

It creates friction in the sales process because, you know, I can understand the friction, right? If they just have to

friction, right? If they just have to flip the switch and they can start doing it, but there's no moat there. So,

there's no loyalty. There's no nothing.

So, if you have a competitive, if you have a competitor and a month later the competitor comes out with a product or a feature that's better than yours, these guys will just switch off of you. The

point of having a book contract is there's lots of points, but one of the points is you have time. So, they can't just switch off you the second something goes wrong. Well, this was going to be

goes wrong. Well, this was going to be one of my questions, which is Jason Lampton from SAS, a kind of famous SAS investor, said on a show recently with me, multi-year contracts but mean less than ever because if you don't have

usage, they're essentially just deferred churn. Um,

churn. Um, I I don't know, man. I don't agree with that at all. I think that's just a is that is he a VC? Yeah. Yeah, that's

probably a typical VC thing. I think

like you have to go in and you have to then sell like in a consumption model, you have to get usage. So like we talk about Ford deployed engineers. Okay.

Well, that's an ideal situation to deploy a Ford deployed engineer or professional services person which I think you know that's the right approach. Um putting a professional

approach. Um putting a professional services person in and then get to drive consumption of the contract and the sales team needs to be incentivized to drive the consumption not just to book the deal but to drive consumption.

How do we feel about the enthusiasm around FDS? You know, I had um Matt

around FDS? You know, I had um Matt Fitzpatrick, who's the CEO of um Invisible, which is a kind of billiond dollar company that sells data like Mccor and all the others. Um and he's like, if you want to sell to enterprise,

you have to have an FD model. Is that

true? And is the enthusiasm around FD right?

I mean, it depends. I mean, he Yeah, I mean it depends. I mean, I know a lot of people that think for deployed engineers simply make up for a shitty product.

There's and there's something to that, right? I mean like look, you're

right? I mean like look, you're basically and I won't mention companies here, but there's big companies out there that just send hordes of four deployed engineers into those companies that are basically just building the

product that they don't have on site and then basically calling it all one big product. So I I I think there's a

product. So I I I think there's a balance. I think there's uh a world

balance. I think there's uh a world where they add a lot of value, but I think you can get carried away with it.

the the the forward deployed engineer is is a a glorified professional services person because like if you're a really good engineer, you do not want to be a forward deployed engineer. You want to work in the core product. And so then

you go out in the field, you develop some product in the field that may never make it back into the core product. Then

as a customer, you're left holding that bag and you have to then support that product later on. there's a lot of technical debt that that ford deployed engineers are going to leave and there's

a ton of risk. Um and and again they're not the Ford deployed engineer is not as good as the core engineer that's building the core product. That's just

fact.

Can I ask going back we said what if it's all going well. The flip side is what if it's going badly? What do you do when you have a sales team that's not hitting goals, that's not hitting target

and you need to [ __ ] motivate the troops? How do you do that? I mean, you

troops? How do you do that? I mean, you know, I just had this conversation yesterday with a company that I'm involved in and, you know, he had a segment of his business, you know, that

that missed the number and and I'm I'm like, okay, let's look at did did every rep in that organization miss? Did every

manager miss? How's the second line manager? And turns out that like the

manager? And turns out that like the problem is probably the second line manager. And so like you have to take

manager. And so like you have to take action. Um because people are apathetic

action. Um because people are apathetic if people get lazy. And I've gotten lazy. I was got I got lazy. I brought

lazy. I was got I got lazy. I brought

Chad back into Snowflake cuz I got lazy.

Um and and so it happens. Uh and so you kick you up the ass.

He [ __ ] kicked my ass, man. He

absolutely did. He called my baby ugly.

Um but dude, that's what you got to do.

You got to you got to How did you get lazy? I'm just

intrigued.

I made too much money. I made too much money. I I you know I I didn't do the

money. I I you know I I didn't do the the hard things. I wasn't doing the performance management like I used to.

Um and I just expected everyone else to do it. There there were Harry there

do it. There there were Harry there there were people in my or that were not doing one-on ones. They were not doing forecast calls. Like that's crazy.

forecast calls. Like that's crazy.

That's crazy. I was not inspecting that.

That was my fault. 100% my fault. Um and

Chad helped me light that fire again. So

brought him back in.

Thank god Chad. He needed a kick up. I

was thinking he's getting less.

I mean, but look, how many guy I Chris and I had this conversation two or three weeks in and I said, "Okay, I'm I'm I'm finding [ __ ] I'm going to go find a lot more [ __ ] I'm going to expose it."

Can I ask what what is [ __ ] Just so I understand some of the things he's talking about.

People just weren't in their businesses.

You talk about like, okay, how many one-on ones are you having? They're not

having one-on- ones. What are the leading indicators you're looking at in your business? We're not. How many new

your business? We're not. How many new meetings are reps expected to have?

Eight. What happens if they don't? We're

not monitoring it. Are you rolling out meta consistently? No, we're not. How

meta consistently? No, we're not. How

much time are you spending in the field with your team? Not very much. I mean,

it was second line managers weren't going going on sales calls. I mean, there was a whole bunch of rot that was my fault.

But but other than that, it was pretty good.

That aside, it was fine. It was But you know what? Culture was strong. The work

know what? Culture was strong. The work

from home Friday brought it.

Well, that was the other thing. Look, I

mean, Snowflake had a massive IPO and so we had a bunch of [ __ ] people there that made a bunch of money and were just hanging out investing.

This was what I was saying to Chris before you arrived was like, I have so many friends at some of the biggest companies who are making tens of millions.

Does that make it much more challenging when you're trying to build a sales team of ambition and hunger when suddenly people are cashing out 10 20 in liquid secondary market and oh by the way, they don't have a

quota. Like what the hell? What kind of

quota. Like what the hell? What kind of organization is that?

Is it totally [ __ ] not having incentivization tied to performance?

Of course, what's the point? It's

ludicrous. So, think about But if you look at like I I don't want to name names, but like big names, they've famously not had it tied to not tying it as a mistake.

Yes. H

how do you hold anybody accountable?

Like if I'm a Okay, I'm an A+. You're a

D. Okay. You don't do [ __ ] I work my ass off. I sell 50 million. You sell 10

ass off. I sell 50 million. You sell 10 million. And we make the same amount of

million. And we make the same amount of money. You feel [ __ ] great because

money. You feel [ __ ] great because you're hanging out making a bunch of money, not doing [ __ ] and you're a loser. No less.

loser. No less.

You're golfing every Friday.

I'm busting my ass, kicking your ass, and I know I'm kicking your ass, and we get paid the same.

There's a word for that. It's called

socialism.

Socialism. Yeah, I knew you'd say that.

Welcome to Europe. It's lovely to have you in London.

Yes. It does not work. It simply does not work.

It works until it doesn't. like these

these companies are, you know, hey, look, it's raining purchase orders right now at these companies, but that day will change.

One-on- ons was one of the first ways that you said, h, you know, we weren't having them. What do you advise sales

having them. What do you advise sales leaders on how to do one-on- ones correctly, how often they should do them, how to best do them every week. And and I think like it's

every week. And and I think like it's actually a good way to use AI. I mean

because now you can have your, you know, you could get into clot or whatever it is you're going to do and have, you know, tell me about their calendar, tell me about their forecast. So then you as the manager coming super prepared and

saying, "Okay, well how tell me about these sales calls, tell me about these these deals." And and you're you're way

these deals." And and you're you're way more informed. But dude, it's not like,

more informed. But dude, it's not like, "Hey, bro, how are things?" Like, that's not a good one-on-one. A one-on-one is the manager asking really hard questions about how their their their business is

going. And it's really to hold the

going. And it's really to hold the individual contributor, the frontline manager, the second line manager accountable. And that's like the that's

accountable. And that's like the that's what was not happening. When you're not doing those one-on- ones, those one-on- ones need to happen every single week.

Um consistently. Consistency matters. If

showing up like every month, they're going to be like, "Yeah, they don't really ask me tough questions.

I'm doing 15 new meetings a week, but I'm not converting. Fire. I'm firing

you.

Why?

Because I hit the quota of eight that you told me was good.

Yeah. Well, dude, there's the reason that you go on eight eight face to face meetings a week is to Oh, eight face to face.

Eight face to face.

Ah, face to face is different.

That's much harder. Now I have to constantly be on a freaking plane.

So, a good way to find out if a second line manager is failing, just look at their travel schedule. If they're if they are not if they are lowest on the totem pole on their on their travel

reports means they're not working.

So one of the things when I came back into Snowflake we pulled up TN budgets and it was like dude you run North America uh you haven't been on a plane in 5 weeks.

That's a problem.

Is there a direct correlation between success and flights?

Yes, 100%.

That's that's why I don't want to go back being an operator because I know I know how the tax that that my body will pay.

I love that. Does the requirement for medic implementation change in this world?

I don't think so. I mean, I think like I think metrics matter. Like again, like you know, someone said like I won't name names, but I'm here in Europe. I did a dinner with a very successful company

and the the head of Europe said, "I don't think uh medic matters anymore."

And I'm like, "Well, dude, like no pain, no deal. No pain, no deal. No champion,

no deal. No pain, no deal. No champion,

no deal." And and the way that you develop a champion is you look at the metrics. You show them how to use those

metrics. You show them how to use those metrics to get the deal done. So like I doesn't change and people want want to say AI makes it different. I don't

believe that at all.

Guys, I need your help. Okay. I need I I'm a hot company that you agreed to work with and we need to build my sales or but we're competing against Open AI

and Anthropic who are slinging 10 20 30 million bucks in package to great sales talent. Guys, what do I do?

talent. Guys, what do I do?

I mean, I live this this conversation I'm having quite literally every day because Anthropic in particular is offering sums of money the likes of which we've never seen. And I can't say

it's it's wrong. They have endless amounts of money and they just care about speed. And if I was in that

about speed. And if I was in that situation, I would probably do the same thing. So, how do I compete against

thing. So, how do I compete against Ananthropic? If I have a rep and I'm

Ananthropic? If I have a rep and I'm going to offer that rep $600,000 in stock and they're going to offer 1.2. We're going to offer the same

offer 1.2. We're going to offer the same cash OT, call it 400, they're going to offer 400. So, how do I compete against

offer 400. So, how do I compete against that? Number one, don't you want to go

that? Number one, don't you want to go to a place that actually cares about performance, that actually cares about having a quality sales organization?

Does that not matter to you? You can say that's anthropic. I could say no, it's

that's anthropic. I could say no, it's not. They have a group quota. Okay? So,

not. They have a group quota. Okay? So,

you can be the best guy in the world at doing what you do and you're going to get paid as the shittiest guy. What does

that actually tell you? What it should tell you is they don't actually value having quality salespeople. They just

actually value having a lot of salespeople. Is that an environment that

salespeople. Is that an environment that you want to go work in? There is some like politics aside, sales people are capitalists. They

believe in meritocracy. They want to be rewarded for their performance and their hard work. If you go to Anthropic,

hard work. If you go to Anthropic, that's gone. If that if that doesn't

that's gone. If that if that doesn't matter to you, then go to Enthropic. I'm

not quite certain then that I want you in my sales organization anyway. And so

that's how I compete against it. Talk

about the upside of the OTE. You talk

about going to a company that actually values the function in which you perform. And a company like that, as

perform. And a company like that, as well as they're doing, do you think they really give a [ __ ] how good their sales organization is? I mean, they'll say

organization is? I mean, they'll say they do, but do they? They probably

don't. Why should they?

And I think I think developing like if you're if you're If you're a go-getter, you want to learn. Like the what did Chad say earlier? Like who taught you sales?

Yeah.

Go to a place that that if you're a saleserson, go to a place that someone's going to teach you sales. Like you want to go like if I'm going and hiring someone, you're looking at I want to go hire someone from MongoDB or Whiz or one

of these companies cuz those guy those sales leaders, they develop their people. That's who I want to, you know,

people. That's who I want to, you know, be my next VP of sales.

Why do you want to hire from MongoDB or Whiz?

Because they're sales leaders. um

although tough um are incredible, you know, medic disciples who develop the crap out of their people and hold them accountable and that's what I'm looking for.

Would you say to a founder, don't worry about missing the ones that do go to open air or anthropic because the best don't want to anyway?

Yeah, I think you can make that argument. It's it's harder to make as

argument. It's it's harder to make as they offer more and more money. Um so

the the pitch that we're both making right now about come here uh especially for development is harder today than it's ever been. Uh 10 years ago, I would sell on coming to work for a John McMahon company because we're going to

train you and we're going to do this and we're going to do that. Uh that pitch is harder to land today because they're like, "Yeah, I hear all that, but I can go to Anthropic and make five times as much money."

much money." But but you know, Harry, like we talked about factory, like so Chad and I are working together on factory and and all of the a lot of this factory salespeople are some of the earliest sales people

that I hired at Snowflake and the the common theme is they want to build something. They want to build something.

something. They want to build something.

They want they're excited to go build something. They believe in the CEO.

something. They believe in the CEO.

That's a material thing. And so I think you want to you want to build something together versus just being, you know, you know, as as as Frank Slutman always used to say, passengers and and drivers.

These companies all pretty much everyone's a passenger because there is no accountability. You're not learning

no accountability. You're not learning anything from a sales, you know, perspective. Eventually that will come

perspective. Eventually that will come to bite you in in your butt in your career. we said about like competing for

career. we said about like competing for talent with some of these frontier companies. You you mentioned that having

companies. You you mentioned that having that conversation daily with CEOs.

What's the biggest challenge that you find yourself facing on a daily basis with the founders you work with? So for

example, for me as a series A in ambassador, it's the pricing that I have to pay a series A 2 million probably 300 400 million post. That's my biggest daily challenge. What's your biggest

daily challenge. What's your biggest daily challenge?

Recruiting building sales teams. The number one pain point. This is why Chad I'm Chad

pain point. This is why Chad I'm Chad and I are working together and there are enough good salespeople.

Well, there's a lot of sales people. You

finding the good ones and building great organizations is hard. It's really hard and and it's expensive. That's the other thing too. It's it like first of all

thing too. It's it like first of all we're expensive. So the first

we're expensive. So the first conversation is wait you guys want what?

That's the first challenge that we face.

So we're cap we're capitalists. We're

performance based.

Yes we are performance based but we are not cheap.

So how do you structure how you work with companies? Uh, we get an we get

with companies? Uh, we get an we get equity. I mean, there's there's cash

equity. I mean, there's there's cash that covers just the expenses of the recruiting because the guys on the recruiting team are the best recruiters in the world, bar none. But they're not cheap. So, we have to collect cash to

cheap. So, we have to collect cash to cover their expenses. The way we make our money is we get an equity grant tied to four years. And they say the same thing to everybody, like, look, we're going to get in there and you're quickly

going to realize that we are going to change the outcome of your company. You

will see after a month exactly what you're getting. By the way, if you

you're getting. By the way, if you don't, no problem. You fire us.

I got a question for you. I love both of you, but you're you're both pretty opinionated. Um, what do you do when you

opinionated. Um, what do you do when you come into an organization and the existing sales or probably isn't up to scratch in a lot of cases and then

you're the enemy. What What happens then?

I think Chad says this pretty much. I

mean, he's more blunt, you know, he is.

He's more blunt than you. Yeah, it's

more but you know and and you know he he'll tell you before you before you hire him that he's going to replace the entire sales team.

What a found to say.

So every CEO conversation is can I work with this guy? Is he a killer? You're

kind of and I'm sure and he's feeling me out too and as and I oftenimes will refer them to our interviews and say you should watch this so you understand what you're getting with me because I am not everybody's cup of tea. And a lot of

people watch that and say, "Yeah, we shouldn't work together."

We're good.

And I say, "Did they say that?"

Oh, for sure. Oh, we No, man. We You're

You're [ __ ] crazy. Like, listen,

that's why I told you to watch it. The

other ones will be like, "This is exactly what we need in the organization." Uh, so that's a good

organization." Uh, so that's a good qualifier. And then I'll go through

qualifier. And then I'll go through their sales organization and say, "Look, I've gone through the sales organization, particularly your chief revenue officer. I can't work with him

revenue officer. I can't work with him or her. So, in order for me to come in,

or her. So, in order for me to come in, you have to commit now that we're going to replace that person. If you're not prepared to replace that person, we can't work together and it's black and white.

Do you find companies are willing to let go of talent soon enough?

No.

No.

No.

How do you know? Cuz it it is a really hard thing. You don't want to be

hard thing. You don't want to be knee-jerk reaction. You miss the

knee-jerk reaction. You miss the quarter, you're out. But you also don't want to let it hang too long.

I look I mean I I had the fortunate, you know, uh experience of working for some pretty ruthless guys. In particular, uh Frank Slutman. Um, and

Frank Slutman. Um, and was he the most ruthless?

Yes, 100%. And I I clearly remember this.

How many years did he age you?

A lot. A lot.

Chris is actually 27.

Yeah. Exactly. Exactly. Exactly. Um, but

you know, I clearly remember there was a there was a there was a very senior person that I had hired. Um, and he was not working out. He was not working out

at all. And Frank, uh, I tell Frank, I

at all. And Frank, uh, I tell Frank, I said, "I think I have a problem with this person." And he goes, "You know,

this person." And he goes, "You know, Chris, um, you know, I'm old and I'm going to die soon, so you you gota you got to do it now." And I'm like, and he's like, "The problem you have, Chris,

is you have too much empathy." He's

like, "So, you know, but when you have doubt, there's no doubt." And and really, I learned that from Frank, is making those hard decisions quickly, it it actually it does so many things.

First of all, you get rid of the rot.

Uh, second of all, it makes other people better because you all of a sudden you are a performance-based culture. You're

getting rid of someone who's not performing and people look up to you.

So, I've had to make very hard decisions, multiple senior uh people that I've fired throughout my career.

Super I hate firing people. It it it makes me sick to my stomach.

Any advice to founders because I hate it too on on how to do it well from what you found with this senior person? And I had to I I said, "Listen, like, hey man, it's not working out and I feel really bad, but this is not going to work out." He goes,

and his response to me was like, "I can change." And I'm like, "I've done enough

change." And I'm like, "I've done enough research. You cannot change. It's not

research. You cannot change. It's not

going to make any difference. Uh, we are not going to change our opinion. I am

super sorry. You and I are good. We're

good people. I'm not going to go talk smack about you out in the world, but this employment engagement is over. And

here's my HR." And that's it. You have

to do say as little as possible. get out

out in and out quick. Um, but be kind.

You don't have to be an [ __ ] about it. I

it. I I totally agree. To performance

improvement plans ever work?

No, I I have seen them work, but it's like a rare occasion. It's a sign for you to leave.

Can we're seeing revenue scaling um unlike anything we've kind of ever seen before. In that world, forecasting

before. In that world, forecasting becomes more and more challenging. Any

advice on how to do sales forecasting in a world where it's just like kind of thumb in the air?

It's could be 300, could be 400.

It's super hard. Like we've always done it. Um

it. Um forecasts have always been data driven.

You know, you take a productivity model and and we can pretty much tell you with 90% certainty historically where you're going to end the year based on what you're getting per rep, how many reps you hire, what the attrition rate is,

what the ramp rate is. Uh and so you you you build those. The problem is um in this world today, first of all, doubling is not good enough. So going from 50 to

100, 5 years ago, everybody'd be super excited. Today you go from 50 to 100 in

excited. Today you go from 50 to 100 in a year and you might go out of business.

It's just it's a different world. And so

you have to have some balance between you can't throw out the old way of doing it, the data driven because I've seen companies try to do that. I've seen them raise off of numbers where they said we did 50 last year, we're going to do 300 this year. I'm like great, back it up.

this year. I'm like great, back it up.

How how are you doing 300? Show me the numbers. We just feel like we can do

numbers. We just feel like we can do 300.

What do you want them to say? Hey, each

rep carries 2 million quota. We're going

to bring in Yeah. not quota, but each each quota is

Yeah. not quota, but each each quota is a a function of of compensation uh productivity. Each rep is able to

productivity. Each rep is able to generate $2 million in new ACV. We're

going to have a hundred of them, so we can do 200. So, you still have to use that approach, but then you have outlier deals.

Is sorry, is it naive to assume reproductivity scales linearly with size? like do you not always that denigration that Snowflake was the first thing first

company we had ever seen where we couldn't hire fast enough to bring the productivity number down no matter how fast we hired it kept going up which is like that's when we knew what a lovely problem we've got something

we and I mean we said it earlier and I said it on your last podcast we should have kept hiring we we slowed down we slowed because we optimized to be public and that was a mistake in my opinion y

and by the way I I my hand was on that So, you know, I I I was sitting down with a company that um we both know very well um but I'm not going to name it cuz I'll get in trouble. And they were saying uh like,

trouble. And they were saying uh like, "Oh, we need to scale from 100 to like 300 reps in a year." And I'm like, "Wow, you're adding 200 reps in a year. It's

half a day almost. Is it possible to add 200 reps in a year at a series BC stage and not lose quality?"

Um, look, there's there's all sorts of rules you have to break to do that. For

example, you never want a new manager to have less than five productive reps. You

can't scale the organization from 100 to 300 and not have that. What I mean is, if I have a manager, he's got five reps on his team. He or she, three of those reps should be productive. Two can be new. But if you try to hold that, then

new. But if you try to hold that, then you start running out of places to put reps. So now all of a sudden you have to

reps. So now all of a sudden you have to do things like I could have a manager that has six reps. Each of those six reps has been with the company for less than 90 days. [ __ ] starts to break when you do that. So your ratios get messed

up. Your enablement could have issues.

up. Your enablement could have issues.

You start cutting territories too quickly. Hey Mr. Rep, you came on with

quickly. Hey Mr. Rep, you came on with 50 accounts. 6 months later you have 10

50 accounts. 6 months later you have 10 accounts. So can it be done? It can. But

accounts. So can it be done? It can. But

if you're going to scale that quickly, the market better me massive. And you

better have a product that everybody wants to buy. What do you think the like the most number of reps we hired in a year at?

I think one year we went from 100 to 300.

Yeah, that was pretty wild.

How many reps can you have under a manager?

Six.

Six is it?

It depend. Like at scaling when you're scaling.

Yeah, when you're scaling it's it's six, but at scale like you can like if you're not growing as fast and you're not hiring as fast and you have a bunch of productive reps that have been in the seat for six months or longer, you can

have like eight or nine. and and

especially with AI, you can use AI to like give you a bunch of data uh leading indicators on on what's happening to those reps.

Do you ever find ramp or onboarding for reps to be well done by early stage companies?

It's really hard to do. I didn't

It's hard. I I I think like this is why I think the hardest job in in technology sales is the frontline manager. the

frontline manager is the key to development of the reps because like in all honesty like your your enablement at a series B company is not that great.

It's not you're you're you're trying to do some stuff. You might have an enablement person. Um you're going to

enablement person. Um you're going to teach them on how to sell medic and and everything like that, but it happens at the frontline manager level. So

developing your frontline managers, hiring good frontline managers is really really important. There's a company out

really important. There's a company out there that I've brought into almost every one of my portfolio companies called Rev Logic and all they do is build enablement programs for early stage companies.

When is the right time to really be investing in enablement?

Early.

When you're building a sales team early.

Is that like 2 million in revenue or like 20 million in revenue?

I I don't think you can pick a revenue number, but if you're going to if you're going to have 10 or 15 reps, for example, if you have five reps, you don't need it. But if you're going to if you have 10 or 15 reps and you're going to 50, you better have it.

It's cuz you're think about it. you're

you're building you're spending a lot of money building out that sales team. You

might as well invest in developing them.

Is there anything specifically we can do to make sure reps ramp quickly?

Well, ramp is remember there's a couple things that go into ramp. Number one is the sales cycle itself. So to to define a rep is productive, right? A productive

rep if if the productivity per rep is a million dollars per year. The first

quarter they're productive is the first quarter you can expect them to do 250.

So first of all, you have to people get this definition wrong all the time. Like

the second a guy does a deal, he's productive. Incorrect. It's the first

productive. Incorrect. It's the first quarter in which they hit their full productivity number. And so if you have

productivity number. And so if you have a sales cycle that's 6 months, how do you get the ramp time less than 6 months? You can't. So the two things

months? You can't. So the two things that go into shortening ramp time are the sales cycle itself and then the enablement of the rep. So there's two things that go into it. You can do a good job of getting the enablement to

happen within 90 days, but if your sales cycle is 6 months, you're still going to have ramp time of 6 months. What are the biggest mistakes you see people make founders managing those reps in that time?

Well, I think they arbitrarily come up with numbers like like we were saying earlier, they're like, "Oh, we should do $3 million cuz we're an AI company." Um,

oh, I can we talked about another company where they they were like, "Oh, we don't need real salespeople. We can

hire uh I don't even want they call the salespeople." And it's like, "No, dude.

salespeople." And it's like, "No, dude.

like you need, you know, you can do weird things until you don't and things will end badly for you. So I like for my opinion is like invest in in a great sales organization as soon as you can.

You know, maybe I'm getting old, but I don't like the like gamification of the like scaling game. And what I mean by that is like we need to hit 15 million because then we'll raise 100 million at 500 million.

This is what I deal with every time I come into a company. Like they're like we have to get to this number. I'm like

it doesn't work like that. We have a bottoms up approach. We'll tell you what you can do. You can't say this is the number we have to get to. Get us there.

It just it doesn't work.

It sounds like the do like I moved to San Francisco and the.com boom. That

sounds a lot like the do boom.

15 and then we can raise it 500.

And they do. And that's the issue.

What about the margin? What what about Yeah. What about the margin? How about

Yeah. What about the margin? How about

you're reselling a bunch of large language models at a negative margin?

How does that go?

Do you have that conversation with founders a lot?

100%. In fact, I've I've I've threatened to walk away from companies because they said, "We're going to go raise at this number. This is the forecast we need to

number. This is the forecast we need to have to get to that valuation. So,

that's what we're going to do." And I'm like, literally, I've said to companies, if you go do that, I will leave because we are not going to hit that number. I'm

looking at the number of sales people.

I'm looking at the productivity plan.

That number is not realistic. You might

get lucky and get there. Forecasts are

not supposed to be lucky. They're

supposed to You're supposed to put a forecast out with some level of certainty that you can get to that number. You guys sit on boards with some

number. You guys sit on boards with some of the best founders and some of the most exciting companies. Are VCs vocal enough when it comes to constructive

advice, guidance with the companies they work with?

99% of them are not. They're I mean why?

Cuz they've never been operators. So

like they're just regurgitating, you know, something they heard in another board meeting that they think might be.

I I was on a board call. I was on a board call of a se a seedstage company.

Um and one of the VCs got got in and said, "When are we going to do our first million-dollar deal?" I was like, "Dude,

million-dollar deal?" I was like, "Dude, how about you shut the [ __ ] up?"

I mean, it's like, "What value is that at all?" Right? So, I was once in a

at all?" Right? So, I was once in a board meeting and they said, "I I know what we need. We need we need more sales."

sales." And I was like, "Shit, let me just um more." So, what do you say? Sales.

more." So, what do you say? Sales.

That's the best advice I've ever heard.

Yeah, thank you for having James. That's a good one.

James. That's a good one.

So, what are the best board members that you sit on boards with do on the flip side?

The best board members uh that I sit on boards with are the ones that uh know something in particular product for example and add a lot of value in a particular area on that board and offer

their input and are involved in the business enough to have a point of view.

which means not just showing up at the board meetings, actually have conversations with people inside of the company in between board meetings. And

so they combine the knowledge that they've gained with the expertise that they have and they use that to actually add value. But they also understand

add value. But they also understand their swim lanes. The board members that drive me [ __ ] nuts is like when I'm sitting in a board and I have some guy on the board that's a VC that doesn't

know [ __ ] all about sales that wants to chime in when we're talking about sales and give us his suggestions and start asking questions. I'm just looking at

asking questions. I'm just looking at the guy. Can you just shut the [ __ ] up?

the guy. Can you just shut the [ __ ] up?

I think that I think the best board member that I've ever seen um is is Mike Spiser and in building Snowflake. That

guy was so he was a founder of the company and then he was so involved in the product and he and he and he when he didn't know about sales, that's why he brought in John McMahon to be on the board of Snowflake. Like there's like he

knows where he's good at and he knows where he's not and he's super valuable.

So he literally probably the best board member I've seen. Yeah, Mike's Mike's amazing.

Mike is absolutely amazing.

And and McMahon was the same way. Like

John would come in. I I sat on four or five boards with John. John opens his mouth when we're talking about sales.

And honestly, that's that's where I learned from. So when I'm sitting in a

learned from. So when I'm sitting in a board meeting, when we're talking about what I know, I'll say what I have to say, and then I don't say [ __ ] Yeah. John John's John doesn't say a lot

Yeah. John John's John doesn't say a lot in the board meeting. He spends a lot of time with you understanding the business and telling you that you're [ __ ] up, you know, one-on-one so that you don't

go into that board meeting and and, you know, become an idiot. He's he's he's really good at that.

He's also an elegant gentleman.

Very, you know, I had him on the show and I was just like, "Oh, world class."

world class." Gosh. Um, we said the word territories

Gosh. Um, we said the word territories earlier and I had the CRO at 11 Labs on the show and he was like, you kind of have to be global now and you have to open everywhere and be everywhere. And

obviously you work with Harvey, obviously we're with Lorra. Um, we'll

leave that one out.

Um, but they're both opening everywhere.

How do you advise founders when you have to be global sales? Not like day 365, but like day one and you have to open multiple locations at once. How how do

you advise them?

I mean, this is new, right? The way we used to do it is you nail North America.

Get North America to like 100 million.

Yeah. Like you get North America to the point where it's it's operating and and you have some level of confidence and you have a good leader that can run North America that frees your CRO up, Chris, to go open other markets. You

start with AMIA, then you go to APAC, but you do them sequentially so that you're not spread too thin. I agree that has changed. I'm seeing companies open

has changed. I'm seeing companies open up everywhere simultaneously. And I

think it's really challenging because it's it also depends on the CRO, but say you have a CRO that's not accustomed to doing that, which is the case with most most of them, it can really stretch them.

I think I think like we both like to hire young upandcomers to be the first head of sales. And the problem now, like this is a new problem. The problem now

with that is that they've never run an international sales team. And so I had time like I was talking to one of the founders about this is I had time to like ramp North America, hire a North

American lead, ramp Europe, then ramp APJ. There is no time. And so like the

APJ. There is no time. And so like the the the they are founders are now paying CRO who have that experience enormous

amounts of money enormous. It's crazy.

um because they know that they have to like get market share ASAP globally now.

And so people like that are peers of mine that have experience like me are, you know, paid quite handsomely to do that.

Being blunt, is it not actually just effective capital allocation to pay a CRO who's done that, don't kill me, 15, 20 million bucks.

Well, that's a very low number.

That's a low number.

You're not even in the ballpark.

Oh, okay. You you can see CRO's today and I'll leave the companies out. I know

CRO's getting hundred million dollar packages.

You know, I'm considering being a CRO.

You should.

You should give it serious thought.

Would you endorse me on LinkedIn?

Yes. You should think about it.

That is nuts.

We got We got a a series A company. You

want You want in?

100 million bucks. I'll be anyone's.

Are you kidding me?

No.

Wow.

Yeah. It's crazy.

Is that good?

I don't know.

It's a bubble. Th this this to me is a bubble and honestly Anthropic is is inflating that bubble. Not that they're doing anything wrong. They just have so much money they can spend and so they are setting benchmarks that the rest of

the market is trying to keep up with.

Wow. It's crazy.

And more power to them, right?

It's better to be a CRO of a startup than it is a CRO of a publicly traded company.

Oh, 100%.

You'll get paid more.

Yeah.

Which is crazy.

Do you guys buy the SAS is dead?

Some SAS is dead. I I I I I don't 100% buy it. I think, you know, there's, you

buy it. I think, you know, there's, you know, look, when when uh I I went to Snowflake, the enterprise was uh you know, was still in the data center and and you know, IBM was still selling

mainframes. IBM still sells mainframes.

mainframes. IBM still sells mainframes.

Legacy dies a slow death. There will

people will still have Salesforce as their you know, their CRM or their their their source of record. Uh but it's changing.

I'm a traditional SAS founder, guys. My

sales team's getting eaten away by I think it was I think a load of is it snowflakers have gone to anthropic or one? Yeah. And I saw this LinkedIn post

one? Yeah. And I saw this LinkedIn post about it which like this is savage the amount of snowflakers are going to what do I what do you advise me if I'm a

traditional SAS company? Just kidding.

It's it's a really difficult thing. I've

been on emergency calls literally to discuss this and the problem is you can't compete financially. you what they are paying people is so far above what everybody else is paying. You can't sit

there and just counter these people.

But even development wise, honestly, you can't compete. If you're at a

can't compete. If you're at a traditional SAS company, you're not selling the same learning trajectory that you are being at the coldface with anthropic.

It depends on what you're talking about.

Learning what uh if you're talking about learning how to be a great salesperson, I don't think you're going to get that anthropic. If you're talking about

anthropic. If you're talking about learning how to sell uh the products of the future, you're right.

And so, what would you advise? Okay,

switch hats. Now I'm the sales talent.

I've got I'm not maybe not going to learn what a great sales or looks like, but I am going to learn what maybe the best product or in the world looks like at the cutting edge of technology looks like. It's pretty tough. Like if

like. It's pretty tough. Like if

Anthropic for example when they were at their 380 valuation they were offering reps call it a million2 um I'm not an investor in Anthropic but I if I

recruited for them I would make the case all day that you can 10x that stock all I think anthropic is a $45 trillion company. So if you're a sales rep and

company. So if you're a sales rep and they're offering you a million two and you could look at that and say I'm going to have $6 million in four years.

How do you tell someone good conscious not to do that?

It's hard. I I think it's hard. I think

like culturally you have to be okay being, you know, in this organization where you said it, it's a great product, unbelievable product organization, world class, the best in best in the world.

But like you're going to be sitting next to some mediocre people that are going to make a lot of money and maybe they came 6 months earlier, so they're going to make more than you and you're going to be super, you know, pissed about it.

But [ __ ] $10 million will will make you do a lot of things.

Maybe I'll don't. That's right. Yeah,

that's right.

I had someone on show the other day that said the 60 You're going to laugh at these numbers, but like the $60,000 SDR is dead. Like the low-level just kind of

is dead. Like the low-level just kind of outbound [ __ ] like lowlevel low quality. Enter to the 250k SDR, which is

quality. Enter to the 250k SDR, which is the again, we can adjust the numbers if we want to, if they're more expensive and inflated, but the the full stack AI

ramped killer SDR, I'd rather have one of them than 10 of the [ __ ] lowquality ones. Are they still just setting

ones. Are they still just setting meetings? Has the funk function changed

meetings? Has the funk function changed fundamentally? Yeah.

fundamentally? Yeah.

Well, let me ask. But are they doing more than setting meetings? Are you

talking about actually closing transactions where they transform it into an inside rep? Are you saying the SDR function of just setting meetings is still the same, but their productivity is higher because of AI?

No, I'm saying we're needing them to go more full stack. So, it is kind of end to end, but we'd rather have three end to ends versus 30 before. I think the the one

thing that's you're missing in all that is like that's the future of your sales organization. So like

organization. So like are sales always going to be smaller potentially? I I don't know. I mean

potentially? I I don't know. I mean

right now the I mean right now it's the opposite.

It's the opposite. So I mean we're we're not there's no lack of demand for good salespeople. And if I'm a CRO I want

salespeople. And if I'm a CRO I want STRs in my organization because I want they're going to be my future sellers. I

want to develop those people into my field sales organization over the next five years or two to five years.

Yeah. I don't know if you saw Benny off, but he's like, "No more developers."

Yeah.

Sales people welcome. Want sales people.

Can I ask you verticalizing sales teams has always been really freaking hard?

Does verticalizing sales teams change today? And what's your biggest advice to

today? And what's your biggest advice to founders who are now contemplating when and how to do it? I I think if you're if you're an API company, for example, it

absolutely changes because you're you're talking about customized solutions and so it makes sense to have customized solutions specific for a vertical because you can go in there and repeat that motion. I think for out of the box

that motion. I think for out of the box uh products it's it's less relevant, but we're certainly seeing I'm seeing it happen faster than it has in the past.

I think you know Snowflake did it um you know probably a little bit too late. Um,

but because it's a consumption model, you have to actually understand the use cases and then go win those use cases and get those use cases live and all this other stuff. So, I think it's super relevant to have a verticalized sales

team, but you have to invest in having specialists and like, you know, it's expensive to do do it.

We mentioned the word consumption.

Everyone talks about the future of pricing and everyone kind of agrees that we're moving away from per se. Percy's

dad, per se is dead. Yeah. Hey, you ever speak to a traditional CFO, they're like, "No, no, no, no, no. I don't want variable pricing in this way. I need to know what my cogs are. I I like the

reliability of perceived pricing. How

does pricing change in the future? And

does how we sell need to change according to that?" Yeah, I I think they're going to have to like every SAS company that that is a perceived is having the conversation right now of how do they introduce some sort of

consumption into their pricing model because there's risk that you know you know companies have less employees and even though you might be you know gaining market share in terms of number of customers you might be losing revenue

because you're going to have if you're a per seat license um and and a a lot of times like this the reason that Snowflake was a consumption model is because our underlying cost of goods was

also a consumption. So, you know, CFOs didn't like they tried to force us into uh a traditional licensing model and we said we we were said no. And so, tough

tough luck, Mr. CFO. This is the new world. This is how it is. So,

world. This is how it is. So,

it definitely changes uh how you think about the sale too because in in the traditional world, it was go book a deal and walk away, right? And and the sales guy didn't have to care. As we

experienced at Snowflake and I'm experienced at every company, you you can't have that. the rep has to be invested in uh the long-term relationship with the account because they have to ensure that the account is in fact consuming. Otherwise, they'll go

book a deal, walk away, and the account doesn't consume and the company's got a gross retention problem. So, you have to tie some of their compensation, most of it still to the booking events, but you have to size some of it to the consumption so that they are incented to

make sure that they don't overbook deals and at the same time that the customer is actually consuming what they bought.

We were downstairs before this and I showed you the video where I said work from home Friday is uh an excuse for a three-day weekend. Do you find that this

three-day weekend. Do you find that this generation of sales rep is aware of the requirements to win?

I mean I think there there was a time where you know these reps there there's this entitlement this like you know generational issue um and I think co

accentuated it um and and really started the 3-day work week. I think um I think now um you know you talk to any college grad um and they're struggling to get

jobs um and that's that's changing their mindset and so a lot of these people who have these entitlements they're going to have a bunch of young kids come up and steal their lunch because they're going to go out and want to work because

they're desperate to work. So I I do think it's going to change.

Yeah, it's a cultural issue at least in the US. I mean if I look at the US we're

the US. I mean if I look at the US we're just as a country we're soft. people

have forgotten that we actually have to work hard to achieve the things that we've achieved in the US. I won't speak to Europe because you know how I feel about Europe. So, I think it goes I

about Europe. So, I think it goes I think it's far more broad than just salespeople. I I I think it's an issue

salespeople. I I I think it's an issue and but I will say uh over the last year or two I I'm seeing it swing back. Like

some of the founders we've talked about that I've worked with um I mean personal situation, I'm working 70 hours a week.

My wife talks to me not that often because she's super pissed about the hours I'm working. I'm like you don't understand. Everybody I'm working with

understand. Everybody I'm working with is working 70 hours a week. That was not the case a couple years ago.

Tra, why are you doing it? I mean this in a nice way, dude. You don't need the money. He's a psychopath.

money. He's a psychopath.

Um I love to work and I love to win and I love to be around people that are smarter than me and I love to build incredible companies. I love it. The

incredible companies. I love it. The

thing that that's like genuine about Chad is he's relentless and sometimes that can be taxing because you you sometimes don't want the feedback that he's going to give you, but he's

generally right and and he will not let it go. He's a dog that's chasing that

it go. He's a dog that's chasing that bone and he will not let that bone punk go.

So, I'm I'm very like Chad in many ways, but I've learned that people thrive on the carrot or the stick. I'm sure he's very good with the stick, but but some people thrive on the carrot. I I'm I'm

That's why we're we're partners.

That's why we're together.

Is that That's why we're partners.

Is that it? Because I struggle with giving the carrot. Can you

do Can you give both in one person?

You can. You can. I think like look like there are Does he ever give the carrot?

No.

Come on. There's some carrot in there.

There's some There's some There is some There's some Chad Chad is really good for me because I will try to be nicer than I than I need to be. um and he'll hold me accountable to like making sure

that we you know there is more stick in my delivery. Um but I I think you know

my delivery. Um but I I think you know what I tried to do is build a sales organization that was not a bunch of [ __ ] and and so Chad respected that.

He helped me build that organization.

There are sales leaders out there that are [ __ ] They don't care that they're [ __ ] and they'll build they'll build an organization that is a bunch of [ __ ] Um that's fine, but that's not good long term to build a

long-term, you know, sales organization.

Which organization has the most [ __ ] I'm not touching.

I knew I knew you'd ask that. I I I Yeah. Yeah. I got trouble last time I

Yeah. Yeah. I got trouble last time I was on this podcast.

I called someone a dick and a liar last time. So, yeah,

time. So, yeah, that went down so well.

Yeah. Yeah, that was really good.

You mentioned like, you know how I feel about Europe. I I'm I'm not kind of

about Europe. I I'm I'm not kind of deliberately teeing you up, but like if I'm a European founder listening as there are tens of thousands, what do you advise me then?

I just think it's hard to find the types of people uh harder I should say to find the types of people particularly outside of the UK in Europe that are willing to put the effort in that I think is

required to be successful. I I just think it's challenging and I think it's very difficult to fire people in Europe as you know. I mean, you want to hire in Germany or France and Spain and decide you want to fire somebody, it's next to

impossible. And so, having things like

impossible. And so, having things like performance management and so on and so forth are challenging. Uh, I think Europeans have a different expectation in terms of work life balance. I'm not

saying it's wrong, it's just different.

Uh, and I think that can make it challenging.

One of the one of the mist I've made plenty of mistakes in Europe. One of the mistakes was putting the inside sales team and STRs in Amsterdam. Um, as soon as you put someone saying they're not

working out and they're getting a PIP, the first thing you do is they go on sick leave and then you're negotiating with lawyers. It's the worst. I mean,

with lawyers. It's the worst. I mean,

it's the worst.

So, what happens there? They go on sick leave and then and then they come back for like a day and then they go back out on sick leave and and then they're like, "Well, how much are you going to pay me?" And and

if you're in a company that is the stock is worth a lot, they're going to be really painful to get exit out of the organization. It's just it's a pain. So

organization. It's just it's a pain. So

we we had one company and they wanted to fire someone but they couldn't and so they had to have them resign. So the

game was how can I make this person resign? So every day the CEO came in

resign? So every day the CEO came in with a thousand block of page like white paper and so every day you need to check that there's a thousand pages and that we're not being ripped off and then at

the end it' be like I want to double check that one.

Did it work after two weeks?

Isn't that savage?

The best the best European performance management story I have is the guy who was my German country manager had a underperforming rep. That rep decided he

underperforming rep. That rep decided he wanted to go part-time and German law allows him to go part-time. Um, and so what he what the the the country manager

did is said, "Okay, good news to this sales rep." Um, he was trying to

sales rep." Um, he was trying to negotiate him to get him to leave. He

wouldn't leave. He wouldn't leave. He

said, "Oh, great great news. We're every

Monday morning, the day that you're in the office, you're going to drive two hours into Munich, um, and we're going to have a one-on-one 4-hour development session, and I'm going to develop you to

be the best sales rep ever. Uh, and he just grilled him for 4 hours. At the end of that 4 hours, the rep said, "I don't think I want to do this again. I you

you'll have my resignation tomorrow." He

talked to his lawyer. His lawyer said, "Well, you shouldn't do that." Uh so so then Rin came back and said, "Okay, guess what? I'll see you on Monday." Uh

guess what? I'll see you on Monday." Uh

uh Sunday night, the guy resigned because he just made it so difficult. I

think you just have to like performance manage the hell out of people and make it very difficult on them.

It's also just a mentality like nothing irritates me more when I get into these companies than when I see people whose mentality is what can I get out of the company for giving the least.

Yes.

Drives me [ __ ] insane. Uh and I will tell you when I got back into Snowflake uh I saw it everywhere and and it just it's like look we are here we are privileged to get to work for this

company. You are here to fulfill the

company. You are here to fulfill the critical role. I can tell you that's how

critical role. I can tell you that's how I view my job. Like if I don't think I'm adding as much value as I possibly can.

I will leave cuz I can't live with myself. And I think you have to try to

myself. And I think you have to try to find people that are like that. But

there's so many people that are just like, "Oh, it's a big company. Let me

take take take and give as little in return as I can to get away with it." Do

you think it's possible to have a large thousand person plus company without that lack of attachment to the brand and to the company?

I mean, I'll tell you at at SpaceX and XAI, uh, they have done an incredible job of having people that believe in the mission. Clearly, it's not 100%, but

mission. Clearly, it's not 100%, but everybody there believes in what they are doing and wants to be there, of course, to make money, but they want to be there because they believe in what they're doing. What do you think they've

they're doing. What do you think they've done specifically to give that belief, that enthusiasm for the mission?

They hire for it. I mean, it's a big part of it. I mean, they hire for it.

They they you get a very quick feel when you're interviewing there for like what this thing is all about. They talk about mission all the time and and they believe in what they're doing. They they

believe we believe that we literally are doing things to save the world. Now, you

can question that all day long, but that is the belief that we are doing things to change the world and you're going to make a lot of money because you can do you can be work at a nonprofit and do the same thing, but you're going to make a lot of money at at SpaceX most likely.

Yes.

What have you changed your mind on most in the last 12 months?

I I think we talked about it from my perspective is is the the go global as fast as you're going? Like that that to me is is crazy. Um I I would have a year ago I would have said no way. Like

you're don't do that. Um, now you kind of have no choice. It's a sprint. Um,

it's a hyper competitive market. Um, I I like, you know, I think the world of uh Matan at at factory and I think he's got the right mindset. He he wants to go and win. Um, so he's just going as, you

win. Um, so he's just going as, you know, balls to the wall and and that's what you have to do. So that's my biggest kind of I have to kind of shut up when I when my instincts are saying don't do this, don't go to Europe, don't

go to APJ right away. I kind of have to sit back and say you have to do that now.

What was your belief? I think when it comes to developing forecast and productivity plans, having some flexibility to say yes, the productivity plan says we can do this and recognizing

that we likely can do more than that and having some flexibility between this astronomical number that they think they have to get to. The datadriven number says here and and being willing to find

some middle ground because the reality is like at at factory we're seeing things happen that we've never seen before. the size of the transactions,

before. the size of the transactions, the speed in which they are closing these transactions. I've never seen it

these transactions. I've never seen it before.

Do you worry that we're at a momentary period in time where every CEO CIO is being beaten by their board for AI implementation and for the next 12 to 24

months, every company in the world is in the market for the product. Take legal

for example. No law firm is like, "Nah, we're going to sit out the AI thing."

And so everyone is in the market for it, but only for 18 to 24 months will that be the case.

I think like like we said earlier, there is a there is a bubble to this thing, but I also think it's it is ch like it is life-changing. I mean AI is changing

is life-changing. I mean AI is changing the way that you can you can interact with technology. So I I do think it's

with technology. So I I do think it's important that you you you build for speed and you go fast. Um but there there will this bubble will burst. Do

you buy that AI completely changes the sales prospecting process game? You

know, we've seen many people from, you know, 11X uh to like artisan and your qualifieds. Do you you know Jason Lamin,

qualifieds. Do you you know Jason Lamin, the VC that we discussed earlier, you he got rid of his whole sales team um for his conference uh and has all AI SDRs

and AI sales process.

I don't know, man. And I get like three uh AI generated uh recruiting emails uh a day and like it's embarrassing like these people put their names on it and

you know what nothing what has not changed is if you have the guts to pick up the co the phone call me leave a voicemail text me email me call me again that there's not nothing replacing that

because dude like all these CIOS are getting inundated inundated with AI prospecting you can get rid of them or you can leverage AI and get and then you know invest in field marketing and get

and do a lot of you know marketing events and do cold calling like this is it still matters. I mean you Chad is the case in point. He does not send emails

or LinkedIn emails. He picks up the phone and calls anyone.

Yeah. My guys are not allowed to send notes. They have to call because it's

notes. They have to call because it's the same thing. People get inundated with recruit. They have to get the phone

with recruit. They have to get the phone number and make the phone call. And so I I don't think the day of the sales rep uh is changing. I I just don't as long as you're selling something that's critical to the business and if whatever

it is you're selling, if it fails, people lose their jobs. You have to develop a relationship with a human being to do that.

Does the role of customer success change over time? Chris, you've always been

over time? Chris, you've always been very vocal about customer success basically being BS and being free professional.

I think I think it's Yeah, I I 100%.

Well, I think because you there's so much more intelligence you can get on usage of your of how the customer is interacting with the product.

So, it should be way more analytical. It

should be way more insightful.

Yeah. It's not this like kind of whatever like what customer success before was who knows what it was. Um and

now you have all these metrics that you can gather. You can actually it can

can gather. You can actually it can suggest like how you interact with the customer. It can suggest that you talk

customer. It can suggest that you talk to them about this these things. It can

show you that the customer is going to leave you. There's a bunch of

leave you. There's a bunch of intelligence that it's going to do. So I

think like customer success could be completely automated um to some extent um once the customer's in in deployment in in production. So I I think you know I think AI can definitely help.

Can I ask one final one before we do a quick fire? What are you thinking about

quick fire? What are you thinking about a lot that you don't see people speaking or talking about much? I

I think we're talking about I mean some of these compensation things we're talking about it's not sustainable. What

what sales people are currently being paid today is not sustainable. You

cannot pay sales people this amount of money and have a company that's cash flow positive and so on and so forth.

Right now, nobody cares because there's so much funding out there and they're just looking at the growth numbers.

Nobody seems to care about how much your burn is or anything like that. That has

to change. And when that changes, all of these comp models and all of this [ __ ] has to change along with it.

Does it lead to a hollowing out of that sales ecosystem with I don't 500 to a,000 people making between 10 and 50 million bucks?

Yeah, likely. And I also just I don't know what the world looks like, but how many there is a world where there is five or six super relevant technology companies and not a lot else. I hope

that's not where we land, but you could certainly see a world in which that is where we land. And in that world, there's not a need for a bunch of salespeople because there's only five or six companies.

Has working with X changed your perspective on the future of like the dominance of companies?

For sure. I mean I I mean working with X has been one of the the the SpaceX II which we're now called has been one of the great joys of my life. It's been

it's been I have learned more uh I I actually learned quite a bit going back in with Chris Snowflake the second time.

But I have learned more about um technology and where I think things are going. So I think the answer is

going. So I think the answer is what's the biggest thing you learned?

There's just different ways of running a business. Um the way in which that

business. Um the way in which that company is run I've never seen before.

um it's it's just different structurally organizationally uh everything is different. And there are times when you're like, "How can this work?" And then the next thing you know,

work?" And then the next thing you know, it's working. So it it it forces me to

it's working. So it it it forces me to recognize that although I've seen something be successful in the past, it's not the only way to be successful in terms of how you run the business.

Chris, what about you?

You know, I'm thinking about like all these questions around, you know, people are saying where the salesperson will will be dead or STRs will be dead. I I

just I don't buy it. Um but you know it's it makes me think about things a little bit differently. Like you know I talked to the the people I'm a year out of being at Snowflake and things have

changed so you know dramatically that it makes me paranoid that I'm missing out on things for sure.

Do you think data bricks goes out?

I don't know when they start selling you know stuff at negative margin. I don't

know if they can. So

I had to put it out there. Well, I mean, it's a fair question. Snowflake today is worth what 55 billion. So, is somebody going to make the argument to me that data bricks is worth two and a half times snowflake? You would

times snowflake? You would Nobody's making that argument to me.

The public markets are quite different than the private markets.

100%. Remember, private markets, you know, this takes three guys to set your market price. Public markets take

market price. Public markets take millions of people to determine your price. So, is the question, can they go

price. So, is the question, can they go out? Probably. Can they go out at 150

out? Probably. Can they go out at 150 billion, 10% above their last valuation?

I'd like to see that. So, what worries me that I think most people aren't talking about is like the contraction in in liquidity options. You know, public markets are basically dead. You can't go out with 200 300 million in AR now for

sure. Even a billion is is that even

sure. Even a billion is is that even interesting. I know it sounds awful. Uh

interesting. I know it sounds awful. Uh

two tech buyouts gone. You think you think Tom Bravo are jumping back into another Kooper or Anana plan? Ah, less

likely. And then everyone looks at an ax and a cursor and goes, "Wow, look at these big guys paying the money. They're

so specific in what they want and why they want it. It's not a deep enough universe. Where where are the exit

universe. Where where are the exit options?

I think that's why you're seeing companies do things that we've never seen before, like offer tender offers, continuing to raise financing and offer secondaries because they're effectively providing the same level of liquidity to their employees that they would get if

they went public because otherwise there is no liquidity and they have an issue.

So that that that's a new thing, right?

Like you'll actually see CRO's negotiate into their comp plans that they have the ability to sell annually up to 20% of their shares in a tender offer. I never

heard of that 5 years ago.

Is that good?

You know, I'm not sure. I think public markets are a good thing. I think I think markets are very efficient at telling us what a company should be worth.

When when Snowflake was private, it was all about topline revenue. That was what it was about. When we went public, it was about free cash flow. And so the market still rewards snowflake on generating free free cash flow. So I

think that's a thing that you have to think about cuz one thing that's hard is when people do have some liquidity, you get kind of secondass citizens where you often have like the senior folks who've taken liquidity and who've made often several

millions and tens of millions. And then

there's the newer folks who maybe haven't hit vesting cliffs yet and who haven't. And you do have these two

haven't. And you do have these two worlds.

That's tough.

Yeah. I mean, I I I had the opportunity since I was like, you know, employee 13 at Snowflake, you know, I had plenty of liquidity options along the way and I took some because there was like it made sense. Now I wish I

sense. Now I wish I You regret it.

Yeah. A little bit.

A little bit. Yeah. Yeah.

What would you advise someone who has those options today?

You know, look, it depends on where you are in financially, but look, having some taking something off the table cuz like there's risk in everything. It made

me less stressed when I took some money off the table.

So, it actually when I say I regret it, I joke. I I I don't regret it because it

I joke. I I I don't regret it because it did allow my wife to be a little bit less stressed, me to be a little bit less stressed about our financial situation. Um, so I I recommend everyone

situation. Um, so I I recommend everyone whenever you can have some liquidity, take something up. Maybe it's 5%, maybe it's 10%, but do something.

Is your wife as pissed with you as Chance is with her?

No, because I don't work as hard as Chad.

But that's about to change. Oh, that's

about to change.

That's about to change, Chris.

Yes, indeed. Life's about to become a lot more intense.

Yeah. I No. And in in full transparency, I I need a little bit of intensity, right? You know, working 20 hours a week

right? You know, working 20 hours a week isn't isn't all it's cut up to be.

Okay. Are we ready for a quick fire?

Yeah.

What's the most controversial belief you have about modern sales teams and how they should be built?

One of the challenges when when building when you go talk to a CEO about building an enterprise sales organization that that becomes controversial is the cost.

Um, when you say things like, "For every five reps I need a manager," that's expensive. Uh, when you say, "For every

expensive. Uh, when you say, "For every four managers, I need a second line manager," that's expensive. When you say things like, "It's going to take 6 months before you get anything out of this investment, and you're going to

invest in a hundred of these people, and for the first six months of buying these hundred people, you're going to get nothing for it." Uh, companies look at this, and they're like, "You want me to spend a [ __ ] ton of money?" And then you say things like, "Great, and at the end

of the year, you're going to lop off 25% for attrition. We're going to attract

for attrition. We're going to attract 25% which means the forecast is going to go down by 25%. They see these numbers and the first couple years of enterprise sales are very very expensive and that

in this day and age that is very controversial.

25% attrition a year.

Yeah, that's normal.

Are you serious?

That's inclusive of promotion. Like it's

promotion, it's voluntary and involuntary attrition.

Remove promotion. What was that 20% at least? Yeah. Because think look every

at least? Yeah. Because think look every every healthy sales organization should be attritting the bottom 10% every year.

You should be getting rid of 10% of your sales force every year.

Do you think most companies are doing that?

No. No.

How do you do that? If I'm genuinely if I'm a sales leader, do I just Okay, it's December.

No, you're doing it. No, it's quarterly.

Every quarter you're looking at the team like you should be able to get rid of two and a half% of your sales organization.

Performance management is not an annual thing. it like and I think that's like a

thing. it like and I think that's like a lesson that I learned is you do have to continuously do it. You have to hold people accountable.

Do you worry about building a culture of fear?

Look, we at Snowflake we had a great culture and early on I we were we were uh firing people for underperforming. Um

and like I said, you don't have to fire people and be an [ __ ] about it. I

think you can let them go, wish them the best. Don't be a negative reference on

best. Don't be a negative reference on them. Um, but good performers,

them. Um, but good performers, you know, actually like to see that you get rid of bottom performers because that means like they're special and and it and it's meaningful.

Like like if I'm an A player, is that going to deter me? If you tell me, hey, look, every year we get rid of the bottom 10%. I'd be like, you [ __ ]

bottom 10%. I'd be like, you [ __ ] better. If you don't, I don't want to

better. If you don't, I don't want to come work there.

Which private company has the best sales or today in your mind?

uh the best private company at scale now they were likely they were recently acquired whiz had a world-class sales organization under Dolly Ro what made it so good

Dolly I mean Dolly basically brought the entire team over that we built together at App Dynamics and Zcaler and because Dollyy's Dolly he brought all of them with him they were operationally sound he hires the right people whiz is a

worldclass sales organization when you hear that someone came from a public company and you're like uh-huh Uh-huh. They're good. They've learned

Uh-huh. They're good. They've learned

under a great leader. You said

Salesforce was like like MongoDB. MongoDB.

like MongoDB. MongoDB.

Yeah, MongoDB for sure. Yeah. I mean,

like they've been pillaged cuz because of that, but uh they developed their people. Um and that was a that was a

people. Um and that was a that was a prime target.

What sales advice do you often hear that you think is nonsense?

It goes back to the controversial question that you asked is like, you know, getting hiring for industry expertise drives me nuts. Like I you hire the athlete, not the like you know

intelligence in a specific industry. So

ex person is brilliant but they really want to be CRO not head of sales.

Thoughts?

I would need more context. Do you mean they're focused on the title?

They're focused very much on the title.

Yeah. I mean I go I just had a situation where this came up last week. um there

there is some merit to wanting the title simply because it gives you a level of credibility both in in in with customers and when it comes to recruiting. So if

you give somebody that is in fact the CRO a VP of sales title you are sending some level of signal to the rest of the market that you don't totally believe in this person may not be intended but that signal will be received when you're

trying to recruit people.

It made it harder. I was the VP of sales for the longest time at Snowflake and not the CRO and it made it harder. I

made it harder for him to convince people to come and talk to me. Um,

eventually, you know, they promoted me to CRO.

But if you give it too soon, it makes it incredibly difficult if you don't scale into it. And then how do you deal with

into it. And then how do you deal with the motion of that person? That's why I like like especially like if you're the first head of sales, I like hiring them as a VP of sales because ideally because

if the company grows really fast and they can be VP of Americas like they don't have to be the CRO and and they can stay at the company.

How scalable is your model? You take

very active roles. You often sit on boards, board observers. How scalable is it actually?

I mean I'll take this one. It it up until this point for 30 years it's been me. Um, so I have a team that handles

me. Um, so I have a team that handles the recruiting. I handle all the board

the recruiting. I handle all the board work, all the consulting work. Um, and

and we're I think I have seven companies in the portfolio. I'm I can't take on anymore. Um, the reason I was so excited

anymore. Um, the reason I was so excited to bring Chris on a is because he adds value in so many places that I don't.

The reality is operationally I think I'm pretty good. I've sat in a lot of

pretty good. I've sat in a lot of boards. I was trained by Chris. I was

boards. I was trained by Chris. I was

trained by John McMahon. I was trained by Mike Spicer to do the operational ship. But the reality is I've never sat

ship. But the reality is I've never sat in a seat. I've never been a CRO. Chris

is the only CRO in the history of technology to go from zero to four billion. And so I think the two of us

billion. And so I think the two of us combined are pretty special. The reason

I brought Chris in is I can't expand the business without Chris. We're also

making some other pretty critical hires.

We're hiring a guy by the name of Mike Hos that's going to come help scale the uh recruiting side of the business and then two other people. So to answer the question, right now it's not scalable.

Once we get these additional people in place, it is scalable. But will we ever be a company that's got 30 companies in our portfolio? Never. Have you had a

our portfolio? Never. Have you had a whiff in company selection? And what did you not see that you should have seen?

[ __ ] yeah. I've had a bunch. Um,

lace work.

Yeah, I mean, where do you want to start? Um,

start? Um, say what?

Yeah. Look, I think the two things that I've learned the most if I meet with a CEO and the and he's not a matoner in my mind a Winston type of guy. Uh, I can't work with them. I because if I go in

there and say we need to do this, this, this, and this. Oh, well, geez, duh. And

I look for how often they reach out to me. Like the killer CEOs I work with, I

me. Like the killer CEOs I work with, I swear to God, Matan is reaching out to me at 10 o'clock at night, 6 o'clock in the morning. Shri Raaswami the same way.

the morning. Shri Raaswami the same way.

So it's got to be a killer C CEO. And to

the extent that I'm able to figure it out, which is not always good product, it all comes down to product. If they

don't have world-class product, you're going to [ __ ] lose. And so, have I had some misses? Yeah, I've had a lot of misses. And and it's either one of those

misses. And and it's either one of those two reasons or both at the same time. I

mean like the lace work sales team was a world-class sales team just a crap product. I mean that's a great example.

product. I mean that's a great example.

So in 10 years time you look at each other and go that was a success. What is that body of work?

I think it's making companies like factory be like the next great sales organization. Um, I think together if we

organization. Um, I think together if we can walk away saying like we helped like we had a hand in building worldclass salespeople along with worldcl class

product like multiple times over. That's

what I want to do. That's what I find joy in. That's what like someone asked

joy in. That's what like someone asked me to be on the board of a of a publicly traded company and Frank Slutman quick quickly helped me put that to bed. It's

like why would you do that? And he's

right. He's like, "Where I find joy is helping companies build." And that's what we're doing is we're helping these companies build from sometimes nothing into these world-class organizations.

So, if we can spike the football and say we've helped a bunch of companies go public, that's what I want to help them do.

What would you be?

Completely agree. Like, if you look back 10 years from now and you say over the last 10 years, there's been 15 or 20, whatever the number is, worldclass technology companies that changed the

technology industry. And we can say for

technology industry. And we can say for half of those companies, we were instrumental in helping those companies get there. I I can't think of uh

get there. I I can't think of uh anything better than that.

That's exciting.

I couldn't agree with you more. 50% hit

rate on transformational companies is Yeah. And and and I I I believe we can

Yeah. And and and I I I believe we can do it.

Final final one. I promise. You can

choose one VC to partner with. You can choose a person and you can choose a firm cuz they might not be the same.

Yeah. I mean, look, Mike Spiser um is still and and you know, he's at Sutter Hill and he's doing his own thing. Mike

is so unique and Mike is unique to me for for a number of reasons. One, Mike

has the ability to see around corners.

Mike sees [ __ ] that nobody else sees.

Now, you could argue we've had some execution issues around his vision, which we've had, but Mike sees [ __ ] before anybody else sees it. Two, Mike

is an operator, and he's probably the only guy I've ever worked with that is both a stock picker and an operator. and

three, Mike. Mike doesn't give a [ __ ] He just wants to win. And he will tell you whatever he has to tell you, he never holds back. Um the other guy, and

I I've There's probably two others. Um I

just met him. Um Shawn Maguire um from Sequoia.

[ __ ] hell, I love Shawn.

I I spent some time with Shawn McGuire.

This guy like runs a marathon in jeans like every day. No, but like to the airport.

Did the taxi not work? Yeah. Yeah.

I spent time with him. We went on a walk. Turns out we went to the same high

walk. Turns out we went to the same high school. We have a bunch of similarities.

school. We have a bunch of similarities.

Um they're both [ __ ] nuts.

Yeah. Like I I I sp I'm like, "Oh, this is my guy." And then lastly, um John Herring at V Capital and and he's a big Elon guy. And the reason I love John is

Elon guy. And the reason I love John is John is a [ __ ] in the weeds VC like I am. Like I've never seen a guy put the

am. Like I've never seen a guy put the hours in like like he does. And I think that's true of all three of them. They

do the work. They care.

I'm gonna I I'm gonna stay silent on this one.

Oh, yeah. Chris has got an issue.

yeah. Chris has got an issue.

I'm not I'm gonna stay silent on this one. Other than Mike Spiser, uh, who I

one. Other than Mike Spiser, uh, who I owe my my career at Snowflake to, that's what I'm going to say. Silent.

Guys, listen. This has been so much fun.

I so appreciate you coming in person. It

makes it so much better and I can't thank you enough.

Thank you, Harry. Cool. Thank you.