Founder-led sales | Pete Kazanjy (Founding Sales, Atrium)

[00:00] The thing that I just like to encourage founders and product managers, what have you, is just don't be afraid of sales. There's a lot of people out there who would love to tell you a story that it's magical or like, oh, you got to be a born seller or things like that. And it's really not, right? Those people are just talking their book, if you will. And so just getting good at those behaviors is going to benefit you in a myriad of ways. [00:25] Welcome to Lenny's podcast. [00:30] better at the craft of building and growing products. Today my guest is Pete Kazanji. Pete is the author of my single favorite book on sales, [00:38] called Founding Sales. [00:39] which I point every B2B founder to. He also runs a huge community of salespeople called Modern Sales Pros. He's also the CEO and founder of Atrium, which is a SaaS product that helps you make your sales team more efficient through analytics and data. In our conversation, we focus on three things. One, why founders should be doing sales themselves for a long time before hiring your first salesperson and also when it's time to hire that first salesperson. We get into how to hire [01:09] mistakes people make. And finally, we cover a bunch of tactical tips for getting better at sales. Pete didn't come from my sales background, and he learned everything by just doing it, learning, researching, and repeating. I know that you'll learn a ton from this conversation. With that, I bring you Pete Kazanji. [01:26] This episode is brought to you by Vanta, helping you streamline your security compliance to accelerate growth. If your business stores any data in the cloud, then you've likely been asked or you're going to be asked about your SOC [redacted address] to prove your company is taking proper security measures to protect customer data and builds trust with customers and partners, especially those with serious security requirements.

[01:56] SOC 2 can either open the door for bigger and better deals, or it can put your business on hold. If you don't have a SOC 2, there's a good chance you won't even get a seat at the table. But getting a SOC 2 report can be a huge burden, especially for startups. It's time-consuming, tedious, and expensive. Enter Vanta. Over 3,000 fast-growing companies use Vanta to automate up to 90% of the work involved with SOC 2. Vanta can get you ready for security audits in weeks instead of months. [02:26] than a third of the time that it usually takes. For a limited time, Lenny's podcast listeners get $1,000 off Vanta. Just go to vanta.com slash Lenny. That's V-A-N-T-A.com slash Lenny to learn more and to claim your discount. Get started today. Hey, Ashley, head of marketing at Flatfile. How many B2B SaaS companies would you estimate need to import CSV files from their customers? [02:56] happens when they do. Well, based on our data, about a third of people will consider switching to another company after just one bad experience during onboarding. So if your CSV importer doesn't work right, which is super common considering customer files are chock full of unexpected data and formatting, they'll leave.

[03:26] Getting people to your aha moment more quickly and reliably is so incredibly important. Totally. It's incredible to see how our customers like Square, Spotify, and Zora are able to grow their businesses on top of Flatfile. This because flawless data onboarding acts like a catalyst to get them and their customers where they need to go faster. If you'd like to learn more or get started, check out Flatfile at flatfile.com slash Lenny. [03:55] Pete, welcome to the podcast. Hey Lenny, super awesome to see you. Even more awesome on my part, ever since I launched [04:06] This podcast, I've always wanted to have you on it. We're finally here. [04:10] We've been online buddies for a few years now, ever since I discovered your book, Founding Sales, which we're going to talk about. And it's just been a lot of fun knowing you. So thank you again for being here. [04:20] The quick story was Lenny had shipped his different genres of marketplaces and how to like start the liquidity and growth and whatever. And I was obsessed with it. And then somehow I ran into you at Brianne Kimmel's SaaS school. And I was like, after I gave a presentation on founder led selling and there was like a scrum of people around me. And I was talking about like amazing writers and amazing content online. And I referenced the series and then you raised your hand. You're like, that was me. And I was like, what? You're amazing. [04:50] No. [04:50] And now, happily ever after. Look at us now. And then you encouraged me to make a book out of that post, which I have not yet done. Maybe one day.

[04:59] eventually. So we're going to be talking a lot about sales and a lot of the stuff that you cover in your book. Before we get into it, could you just take a minute to share a little bit about your background and some of the wonderful things you've done to kind of give folks a sense of your experience in the sales world? I think probably the most important thing to characterize for folks is that I don't actually have a background in sales like originally, which is where most sales leaders and sellers come from, you know, they graduate from school or BDR, become an AE manager or BDR manager, and then go on a sales leadership. My background is actually [05:29] in product marketing and product management. I started my tech career at VMware back in the day. [05:34] tons of amazing, fun VMware diaspora. And then I started a software company called Talentbin. It was a recruiting software company in, geez louise, 2009. And just we quickly realized that, man, this software, this B2B software stuff doesn't sell itself. You're respective of maybe what people say on the internet, at least back then. And so I had to be our first seller, our first sales manager, our first sales leader. And that's where I learned how to do sales. [06:04] this isn't rocket surgery. Anyone can learn this. If I can learn this, other people can learn this, even though there's not documentation on it. And so the software company was eventually acquired by Monster Worldwide in 2014. And then I wrote a book on sales for founders and other kind of first-time sellers. It's called Founding Sales. Mainly, it was the book that I wish I had. [06:26] Right? So rather than having to learn by a narrative from the rest of the first round

[06:34] And then subsequent to that, I started what became the nation's largest sales operations leadership community. It's called Modern Sales Pros. It's 30,000 sales operations, sales leaders, et cetera. And then started a new software company called Atrium that makes data-driven sales management software. Yeah. [06:50] And then here I am. So I think a little bit about sales. Turns out modern sales, right? Not that old sales, modern sales. Oh, I'm curious to hear what that is. But before I ask you that question, I just want to mention the book, your book, Founding Sales, is like the book I... [07:07] give every founder that is trying to figure out sales. And every time I give it to them or point them to even your site that has offer free, they're always just like, holy shit, this is exactly what I needed. So we're going to be covering a lot of that stuff in our little chat. Rad. Can you actually just briefly talk about what is modern sales versus what you called traditional sales or old school sales? Oh, I just think that there's a little bit of a mindset change. It's a little bit related to some of the reasons why founders and other folks maybe have this perception of sales being like, [07:37] Because people, their only experience with sales is like Glenn Gary, Glenn Ross, or movies with sleazy used card salesmen and stuff like that. Whereas the way to think about what sellers are is they're kind of like the microeconomic agents in the market that bring supply to demand rather than waiting for demand to find supply. They have supply in their back pocket, and they run around trying to find people who ought to have the demand. Maybe they have the demand right now.

[08:07] have the demand. So like A, that process is very important from a technology deployment standpoint, and also B, it's like very measurable, especially in a modern environment where like, you know, with modern CRMs and also kind of like all the digital activity that we do, email, calendar, phone, Zoom, et cetera, like all this information is now being recorded such that you can then like measure, manage, and improve behavior. So very similar to how like back in the day, you do product analytics by like licking your finger and sinking in the wind, and then like, [08:37] Then mix panels showed up, then amplitude showed up, then, you know, so on and so forth. And the same is kind of the case in sales as well. And so like modern sales... [08:46] is a more thoughtful, operational, rigorous, analytical kind of bent. It's been around for a while. It's kind of like one of those things like the future is here is just like wasn't widely distributed. But now it's like being much more distributed and much more embraced. Kind of like the pre-moneyball moment in sports and baseball to kind of the post-moneyball moment, we're now kind of like just flipping over there. [09:15] So that's kind of the delta. Awesome. I definitely want to talk about ways to get better at sales and like things you've learned about just how to improve at sales. But to set a little bit foundation for that conversation, I want to talk about founder led sales. You touched on this topic. Your book is basically named after this concept of founder led sales. Can you talk about what that is, why it's so important and maybe why founders often get this wrong? [09:37] The way I think about founding sales, the book founding sales, I like to think of it as the sequel to Eric Reese's The Lean Startup or Steve Blank's Four Steps to the Epiphany or Startup Owner's Manual or whatever. If you think about the stages, and this is all B2B, right? If you think about the stages that a product goes through, it's one, you got to know what problem you're solving.

[10:06] and validate that, and it's got to be real. It can't be like, "Oh, I thought I had this problem." Got to be validated. And that's like customer development, that's customer research, right? And that's more of like a product management function. And then there's... [10:19] you know, building the minimum feature set in order to prove that like maybe technology can fit to this this problem and like solve it. Like and that's how like we create to create value as technologists is like piecing together, you know, technology and code or like bits and atoms and what have you in order to solve a problem that people have. But then the next step is like, OK, cool. Now I got to get someone to pay for this and I got to do that in a reliable fashion and I got to do it in a scalable fashion. And so like there's kind of like a little bit of a loop there, right? [10:49] done, throw it over the wall, have fun, kids." It's a loop where the minimum viable version of your product is probably going to suck. And then in order to get to the minimum valuable, you've got to be interfacing with a lot of customers, and that's a sales behavior. Get in front of people and be like, "Hey, I think you probably have this problem if you look like these other folks right here." And the point is that, if you're not going to be a [11:12] you can't outsource that behavior, right? The founder's got to do that stuff. And a lot of people kind of ask me that question. It's like, well, I suck at sales or like, I'm afraid to talk to people or, you know, like interfacing with non-friendly parties is like, makes me uncomfortable. And the way to kind of think about it is like, it's, I forget who the person was who said, startups versus incumbents is a race between like, can innovation get to distribution before

[11:42] As a founder, it's going to be way easier for you to get good or like minimally viable good at selling by having like interactions with. [11:50] like non-friendly parties and like, you know, having commercial conversations and asking for money in exchange for their, in exchange for the value delivery, it's going to be easier for you to do that than it is for some third party to become as expert at the subject matter that you're tackling that you are. Because as a founder early on, like use Atrium as an example, we make data driven sales management software, which it exists to help sales managers and teams use metrics and data to improve the performance of their reps. I mean, the way I kind of think about it is kind [12:20] kind of data doggy, amplitudey, but like for your sales reps. I'm probably the expert in sales like analytics in the world, right? And so like back in 2016 and 2017 when we were doing this, if I had like, [12:36] put aside the fact that I already know how to do minimum viable selling. If I try to get somebody else expert at that in order for them to go out and do that in the market, that would have been not good. And then this is why Steve Blank always talks about startups can't get to scale without firing their first VP of sales. It's oftentimes because they skip that step. And so the founder is like, hey, man, I'm going to pour a little bit of sales on this, hire some sales leader or

[13:06] couple dozen customers. It's just not tenable. You lose that feedback loop. You lose the learnings of whether or not your message fits the market, all that sort of stuff. You're playing a game of telephone with that, with a third-party seller versus you. And you just want to keep that in one brain to start, then package it. And then when you have a repeatable while loop, like a selling while loop, then package it and hand it to someone else. So that's kind of like my diatribe on why [13:36] summarize the reasons that you should be doing this and it sounds like there's so many. One is, [13:40] figure out what you should actually be building. That's a reason founders should be selling. Two is learn how to position and pitch and sell. Three is figure out what you could teach your salesperson when you hire them. Is that kind of the summary of why you should be selling as a founder for a while? [13:55] Yeah. I mean, like one, it's going to help you with your product development because you're not going to have that abstracted for sure. Two, it's going to help like you're going to be the person who's going to figure out how to talk about it in an effective way. And then three, it's going to make it such that you can package that up such that other human because like that's the way that B2B startup scale is like it's not like WhatsApp or or like, you know, Twitter or like Airbnb or whatever, where you have like this kind of like scalability by a marketing.

[14:25] The organization's scale primarily is by adding more salespeople who then have customer-facing meetings with prospects. And then you cap out with the number of hours that are in the week. There's only 40 or 50 hours in the week, especially as a seller, because you interface with other people during business hours. And so the way that you scale up is by just adding more salespeople. [14:47] Right. And so that's why packaging that up is really important because then you're going to shove it into the brains of, you know, two more salespeople. And then once they're successful, you're going to go to four. And then once they're successful, you're going to go to eight. And then once they're successful, you're going to go to 16. [14:59] You talk about this while loop concept, which I love. What are signs that it's time to hire your first salesperson? It's kind of like begs the question, when do I do this? Yeah, I'm not a software engineer, but like I like to use technical metaphors with technical audiences because I think it's like helpful. And so it's kind of like... [15:18] When it runs on your local, [15:20] Now it's time to see if it reproduces over here. So if it reliably runs on your local and it doesn't error out, so then what would the definition of not erroring out look like? [15:50] turn first meetings into eventual customers, right? And do that in a reliable fashion. It's not like I engaged 10 arm's length parties and I got two customers closed. It's like, hey, that's great. That's a good start. Do that 5X that, 10X that, right? So take 50 at-bats, take 100 at-bats. And now that you know that you reliably for every cohort of 10 first meetings,

[16:20] cohort of 10 that you engage, are you closing one? Are you closing 1.5? Are you closing two? Are you closing 2.5? If you're in there, but if you're at like, yeah, for every 30 I interact with, I close one. Well, it seems like that's probably like pretty inefficient unless you're selling $500,000 deals or something like that. So it's at the point where you have the, like, it feels like it's statistically significant. It feels like it's repeatable [16:50] safe bet to try to abstract that out to somebody else. Because the only way we're going to get to success is like, we're not going to have Lenny go and like sell from morning, noon to night, right? What we're going to do is we're going to take the information out of Lenny's brain and we're going to put it into slides and we're going to put it into scripts and we're going to put it into email templates and all that sort of stuff. And then we're going to shove that into the brain of two more reps and see if we, now we can get it to like run in the cloud, right? In the, [17:20] And then to start out, it may fail the same way. All right, cool. It runs on my local. Uh-oh, it breaks over here. Okay, why? And then that's the next stage is now you're figuring out how to get those other folks to sell as successfully as you have. And that becomes the next job. [17:38] And this is a actually this is the presentation I gave at Breanne's SAS school was there's if you Google it, it's just called like founder led selling. It's like available online. It's essentially there's like a bunch of stages in the B2B maturity journey. And like you have to go through them in order to get to the next one. If you jump stages, like you're kind of hosed. And so in this case, like if you know that you can reliably sell this yourself, that's great.

[18:08] as well as you, not 10, because you're never going to get too successful if you're trying to onboard 10 concurrently. And then if you get those two successful, now you've earned the right to go to four, eight, et cetera. [18:21] I love this heuristic that you shared that you want to get to about 15 to 25 percent of contacts closing to a customer. Yeah, I see you shaking your thumb. I think that's really useful. So it's like a third, a bit less than a third, and doing like 50 to 100 attempts is roughly possible. [18:37] Yeah, and importantly, what you don't want to do is, and I think probably a lot of the product managers like to listen to Lenny's podcast here might appreciate this, is like, you want to bring on like cohorts of users and kind of like see what's going on, then learn and then bring on new cohorts of users, right? [19:07] discovery questions are evoking the right response or not the right response. See how your slides land, see how your demo lands, all that sort of stuff. If it's working well and you're getting to the next stage, yeah, this is great. I would love to introduce you to my boss. Ah, that's a good sign. It's like, yeah, I'm just not getting it. All right, cool. Back to the drawing board, right? Versus doing like 100 all at once and then like, all right, now did it work? Right? We want to like break it up and then constantly just be iterating, iterating, iterating. And like, again, I think [19:37] way to kind of think of a sales motion. So sales motion is like a fancy pants way of describing just like all the things that you do in order to take a prospect and like,

[19:46] you know, bring them through the sales process, then eventually close them. And one helpful way to think about it is kind of like software. [19:54] And what you want to be doing is constantly updating it. Like, "Oh, that was a really interesting question that the prospect asked right there. I didn't have a good answer for it. And moreover, I didn't have a slide for it." You know what I should do? I should make a slide that handles that objection. [20:08] So I can show it to them visually, and also it'll help give me guardrails and a talk track, and that'll be nice. So I'm going to do that, and then I'm going to update the source code. And now my sales motion has been updated. [20:23] Right. And then the next loop through, ideally, the next time that person says, like, oh, I don't know, Lenny. It doesn't really sound like, you know, X, Y, Z. You're like, oh, you know, a lot of people say that. But here, if you if you look over here, you can see this. Oh, yeah, that's a really good point. Wonderful. So as the next step, let's go ahead and talk to your boss. Right. And so like now your sales motion has been updated and the collateral has been updated. And now we're like we're being more effective sellers. And you're just going to do that. [20:49] dozens and dozens and dozens and dozens and dozens of time before you have a repeatable sales motion. [20:55] What's interesting is with this heuristic, two-thirds of the time, it's not going to work out. No. And so a lot of times, they're going to be like, "I don't get this. Leave me alone." Is there other leading indicators that tell you you're improving, knowing that only a third or maybe a fifth of the time it'll work out? Is it talking to the boss more often? [21:12] What else do you look for? Yeah, exactly. Totally. So what are the leading indicators of success? Because if you're only looking at lagging indicators, so again, it's probably like a funnel on a new feature, right? So the opportunity is like an at-bat or a potential transaction. And so usually what you do is you model out the stages in your opportunity. And so generally, there will be kind of different stages depending on the sales motion.

[21:42] on customer data. It takes like five minutes to turn on an Atrium account. So, you know, it's really, really helpful for folks. They just sign in, they OAuth with Salesforce. Great. So a really important part, like stage in our sales motion is, did we, we call it data light, right? Has data been lit up? And so that's a stage, right? We have a discovery stage. We have a data light stage. We have like a, what we call a preview stage. Like, are we previewing it with the staff? Then we, you know, get to a commercial discussion. And so you can measure how you're getting to those [22:12] of like somebody lands on whatever page that Lenny was in charge of at Airbnb and did they click on the right thing and do they get to the next thing and they get to the next thing, get to the next thing. And so in sales, it's kind of the same thing. And so the more sophisticated version of this is looking at stage conversions, what have you. The less sophisticated version of it, which early on I think is an appropriate way of doing it, is like, "Hey man, are we getting second dates?" [22:36] So just metaphorize it to Hinge or Coffee Meets Bagel or whatever the more recent one is. It's like, all right, are we getting the second dates? Are we getting the third dates? Because if we're not getting the second dates, probably something's amiss there. And so what we want to do is we want to say... [22:53] Great. Of all of our 10 first meetings, how many get to second meetings? [22:58] It would be great, the lagging indicator is two wins out of 10 or what have you, but I'm going to come into these conversations and I want out of my 10 first meetings, I want seven of them to get to the second meeting. [23:09] And then I want, of those seven, maybe I want like, you know, I want 4.5 of them.

[23:16] to get to the third meeting. And then ultimately, I want two or three to win. And that's the way to kind of think about that. Those are the leading indicators. And so as those conversions get better, like, man, I'm not getting any second dates. Oh, okay, cool. You need a haircut. [23:30] Or you need the shower. And the same applies to your sales motion as well. Your message is not landing. You're targeting the wrong people. What's going on here? You need to think about it. [23:42] You need a better pickup line. There you go. Right? Now you're not even getting first dates, man. You're just like, man, like, yeah, go all the way up to-- like, you need a better hinge profile picture. [23:51] Right. You're just like not getting any matches. As a founder, do you have to get good at sales? You know, a lot of founders are like, oh, my God, we're going to do PLG. We're going to be self-serve freemium. We don't need sales. I'm just going to let people figure it out. Like, is that is a requirement of a B2B business to get good at sales as a founder? [24:10] I would say you don't have to get good at it. You just have to get non-zero at it. There's this really great article on Lenny's newsletter on adding a sales organization to a self-serve product that Lenny had me write and then he edited the heck out of it. It's really a fantastic asset.

[24:40] sales piece to it. And I would encourage people to read that article. I forget what it's called. You added a really cool name. Oh, the transition layering on sales to product. Yeah. See, you have a, you're good at naming things, right? I was inspired by David Sachs as the, uh, the cadence, which I love for how to operate. There you go. Yeah. That's a, that is a great, that is a great article. So it's not that you have to be great. You just have to recognize that it's important. And so like a good example of this would be probably like the most famous [25:10] get sales religion as quickly as they should have would be Dropbox. And Dropbox has phenomenal early sales leadership. So one of our investors here at Atrium is a gentleman named Mike Marge. He's a partner at Kraft Ventures. He was an early sales manager and leader there. Kyle Parrish was the head of sales at Figma. Mercer Fuhrer is over at Figma as well. There's all these just absolutely fantastic Dropbox folks. But the problem was is that the organization from a product standpoint never put [25:40] as many calories behind product development that would support the ability to sell to across an entire organization. And so the way that I try to succinctly describe that is never mistake your lead gen for your business. And I think the good news is that a lot of people took a lot of lumps there and folks have learned that. Maybe Slack [26:00] almost missed that, but then they brought in a bunch of Salesforce folks and other folks. Actually, Mike Mark was also an early sales manager at Slack as well, and really got religion around that.

[26:15] People paying 19 bucks a month or 29 bucks a month or what have you is really great, but getting to a 50,000 or 100,000 or a $250,000 contract, that's where big ARR numbers start racking up. And organizations want to talk to a human in order to navigate that. So PLG is great for landing. [26:37] Right. And like permeating an organization, there's a bunch of great like craft invest in this like crazy. So like scratchpad is a great example of like very bottoms up. I mean, atrium is pretty bottoms up as as well. It's like it's like what is the Robin? What is the the Silicon Valley joke middle out or whatever? Because we land with like sales managers and SDR managers. But it's still like what you're doing is you're like you're solving the problem that the user has. But the problem is, is like the user doesn't necessarily have like large budgetary authority. [27:07] up, but then you got to talk to the person who's got the purse strings. And so that's going to require sales. That's okay. And just to punctuate that, basically 100% of B2B companies end up building a sales team, right? I would say that's the case. I mean, it's more of a question of when versus if. So even the really famous ones like Atlassian, right? And Atlassian, they had a sales [27:37] out a lot. But instead, what they did was they just priced the product breathtakingly low. And I think developer tools can oftentimes do this, where because developers are pretty technical, they can adopt products. They don't need hand-holding in order to adopt a product that is complicated enough to be valuable. Datadog's a good example, or New Relic, or AppD. But even those guys, very early on, had meaningful sales organizations. And one of the reasons why Datadog

[28:07] DataDog ended up winning that market, but their sales organization is no joke. [28:11] So even developer tools, you might think, "Okay, cool. Well, developers can just swipe their credit cards." Yeah, they can, but then you're going to be [28:20] eventually capped there. I mean, look at Snowflake. Snowflake has like, I don't know, 500 salespeople. Like, [28:26] You're going to need a sales work. Let's shift a bit to talking about just how to get better at sales, at the scale of sales. And I think it's interesting because you don't have a sales background, and so you've had to learn how to do this, and you did a lot of research and building your business. You've had to get really good at sales. So maybe a first question, what's the number one tip that you have for getting better at sales? [28:50] The first chapter of founding sales talks about what I call sales mindset changes, because I think the big thing is it's just so weird. [28:59] It's just such a weird shift in behavior. Because if you think about it as a product manager, as an engineer, how many people do you interact with day to day? [29:08] 6. [29:09] 10 maybe not too many right and it's always the same people [29:13] Right. And so it's like super comfortable, whereas in sales or anything customer facing, what ends up happening is like you're meeting multiple new humans every day. [29:22] If you're doing it right. And that's just is like such a mindset shift. Like you're not going to be able to remember everybody. You're going to have to write it all down. You're going to have to use the CRM for that. You're kind of like in the starting blocks, like, you know, on the track, like you're in the starting box and like you have 90 seconds or like a couple minutes to like form rapport to make to make somebody feel like they should trust you and they want to be honest with you. Right.

[29:52] It's kind of like Paul Graham's maker versus manager schedule. Salespeople have manager schedules. [29:58] interestingly enough where what you're doing is you're constantly context switching and [30:02] An ideal salesperson's calendar or a founder who's doing sales is two, three, four, maybe five customer-facing meetings a day with different humans. And then moreover, then you're having incremental interactions with those folks later on, later that week or the next week or what have you. So then you have to keep continuity of these multiple parallel conversations. So it's a totally different set of skills. And so it feels super weird to start out. [30:32] is it's just a skill and so you just start doing you start doing you start doing it um [30:37] And you just kind of become used to it. You become calloused, right? It's like, I'm incorrigible now. Like you put me in an elevator, I can talk to anyone, right? And one of the things that, so like one, just recognizing it's going to be a pretty big mindset change. And then the second thing you can do is then once you know that there's going to be a mindset change, you can focus in on making those behaviors be better. [31:07] in the world who maybe are like a little shields up, [31:09] Right. Like they're probably used to interacting with people who are like not going to be super nice to them. Like maybe it's bartenders or a flight attendant or like barista or or fill in the blank. Right. Right. [31:19] Think about how quickly you can become friends with them.

[31:22] Like how you can break that down because that's going to be a really good skill for you to have when you're interacting with a prospect. And then what that's going to allow you to do is then ask them candid questions about their current situation that either A, they may know about or B, you ask provocative questions that make them think about the world in a way that you want them to and realize that they have pain they didn't want or that they didn't know that they had. [31:52] where he said, "Think about the things [31:56] that you do in your day to day [31:58] that are like a pianist [32:01] like a piano player playing scales, like da-da-da-da-da-da-da-da. What is the version of that for selling? And that's like rapid rapport building, asking good questions, asking follow-up questions, being willing to ask uncomfortable questions. [32:16] Right. All those sort of things. And like asking for money. [32:21] and then shutting up, [32:22] and waiting for them to answer. All these are very uncomfortable things, but the more you do them, the better. You'll just get good at them. [32:52] to your product. You can get your first integration into production in a matter of days and save countless weeks building custom integrations, letting you get back to building your core product. Merge's integrations speed up the product development process for companies like Ramp, Drada, and many other fast-growing and established companies, allowing them to test their features at scale without having to worry about a never-ending integrations roadmap. Save your engineers countless hours and expedite your sales cycle by making integration offerings your competitive

[33:22] with Merge. Visit merge.dev/lenny to get started and integrate up to five customers for free. [33:30] One of the things in your book that most shifted my mindset on sales was this kind of shift from you're trying to convince someone to buy this thing to buy. [33:39] You're trying to help them and maybe this will make their life easier. Can you talk a bit about that? [33:44] I think this is kind of like the, remember the modern, the, like the modern sales versus like old school sales thing. Like the old school sales thing is like, all right, I'm going to sell something to a mark. [33:55] Or the best example is, "Man, that guy's a great sales guy. He can sell ice to an Eskimo." It's like, "Man, if you're selling ice to an Eskimo, you're an asshole." What is wrong with you? They don't need ice. I mean, unless they're visiting Southern California. And so as a seller, what you should be doing, the way that I like to frame it to people is that you're a consultant that has a particular [34:19] for a given solution. [34:22] your solution, right? But we're not trying to like use Atrium as an example, right? Like Atrium's minimum ICP is probably like SDRs plus AEs in an organization should probably be like at [redacted address] up to like 300. [34:35] Right. So if someone shows up and they're like, man, I got to get really good at sales. I need to buy your software, Pete. And I'm like, OK, cool. Like how many how many salespeople do you have? [34:44] Like, oh, I like one. I'm like, man, I'm not going to sell you Atrium. Like, you're just going to be unhappy. It's going to be dumb. Like, it's going to be a waste of our customer success resources. You're going to churn all those sort of things, right?

[34:56] But if instead what you're doing is you're saying, hey, I'm going to go out in the market and I'm going to find the people that match that. [35:03] that have a high proclivity that our technology solves. And then I'm going to talk with them about how they're solving that problem right now. And ideally, through a series of questions, I'm going to reveal that to them that they're doing it. [35:15] Probably not great. Right. And then once I've revealed to them the fact through kind of this directed questioning, what's known as discovery, that they're not solving the problem. Like they have this high magnitude problem that it is costing them lots of money, that it is a pain in their ass. And that and then I reveal to them that there is a better way of approaching it. And magically, magically enough, I happen to be a representative of that of that solution. Well, now, like that's an ideal transaction and everybody everybody wins. [35:45] And you can kind of see why I was saying that, you know, sales is like kind of the grease that makes the economy work like that. And also importantly, brings new technology to the market in a way that that makes everything like that makes everything better. [36:01] If someone's listening to this and they're like, "I want to get better at sales, what's one thing I could do differently?" [36:06] tomorrow, this week, to improve my [36:09] ability to sell my product, what would that be? [36:12] there's like the non-complicated version of those complicated version. I think the non-complicated version would be just like walking down the street, make eye contact with everybody. And then every person that you like, every person you stop next to at like Starbucks or the, or like, you know, the crosswalk or whatever, just like strike, strike a conversation with them, like figure out a mechanism by which you can start a conversation with them. Like look, like compliment their, their shirt or their shoes or remark on something. Don't use the weather because that's lazy, but like figure that out because like, so like that's the, the first version is probably the more sophisticated version is like, you know,

[36:42] Just be very, very tight on your ICP. Just get very, very, very crisp around who has your problem and why. And so being more crisp around that and then having that understood is a great way of making sure that you're not wasting time on people who don't have your problem and that you're doing more of those loops with people who are right in the white hot center. So one is kind of like a behavioral thing and one is a more thoughtful thing. That's great. Can you actually explain ICP briefly? Because a lot of people may not know that [37:11] Yeah, thank you. So ICP stands for ideal customer profile. And actually, it's important to kind of think about there's two things in a B2B sales motion. There's like the account, the characteristics of the account, which is like the company that's going to buy. And then there's the characteristics of the human and the personas that you're going to be interacting with. [37:41] have at least a couple of product managers, because if there's like a single product manager, it might be like too much. Like they might be at the point where they don't need a full blown, like a full blown enterprise analytics suite. And that's probably it. Right. And then on the, then on the human side, who are the people who participate in that conversation? Well, the product managers are going to be the ones who are going to be the users. But engineering is probably involved in order to make sure that amplitude can talk to the cloud data warehouse and so on and so forth. And then moreover, the person who owns the [38:11] Budget might be the VP of product not the product manager or it might be the VP of engineering or the CTO right? So there's three different folks that we talked about there. It's like different humans and so I ideal customer profile is understanding what those kind of like are

[38:26] parameters look like for looking at an organization or to say, man, that's an awesome op. Let's go get in front of them versus I don't know if that's a very good opportunity. Like maybe that's let's pass on. And then the personas are. [38:40] Great, that's an awesome op right there. [38:43] all right, I know that I'm going to have my first conversation with Lenny, but with an intention that I'm eventually going to get to the VP of product at Airbnb. And that's Susie over here. And then, you know, once we get validation from her, then, um, then we're probably like, I know that the VPE over here is Frank and like, so like knowing who the personas are. So that's what ICP and personas are. Awesome. There's a template that you've created that helps you kind of lay out your ICP. And so we'll try to link to it in the show notes. [39:13] Nice. Sounds good. So we've talked about founder-led sales and how founders should be starting sales. We've talked about just how to get better at sales as a founder, as anyone. I want to talk now about hiring salespeople. Sure. And great mug, by the way. Coffee is for closers. I love it. Right. Can people buy that online or is that just a one-off? [39:35] This is like a modern sales pros. Perfect. Modern sales pros mugs. We have a bunch of Yetis that we give away for Atrium as well. But yeah, we're big under sales jokes here. Because we stole this from New Relic, being very user-centric in your swag. So I got my sales nerd jacket on here. I've got my Let's Get It hat here. I've got my Coffees for Closers mug. These are all inside sales jokes that maybe your audience won't necessarily get, or maybe they will.

[40:05] very much gets them. They're like, "Oh man, your hat's so funny. Can you send me on?" I'm like, "No problem. You should buy our software." Love it. Hiring salespeople, we've talked a bit about a lot of these things like maybe when it's time to hire a salesperson, when you're closing a fourth or fifth of your opportunities, when this while loop is kicking in. In terms of the who to find for this first sales role, and you mentioned that VP of sales are often let go. It's a very high rate of not working out. Is that true? [40:34] Yeah, I mean, the way to, again, this is kind of mapped out in the founder-led selling presentation and then also in founding sales, the book. I mean, generally what you want to do is you probably don't want to start with like a VP of sales to start, like a sales leader. And there's a couple of reasons why there. Like, right. [40:52] Even if you figured it out yourself. [40:55] required, right? You have to get to that minimum sufficiency of 10, 20, 30 customers yourself first, right? But then the reason why I advocate for folks that hire a couple of sellers, a couple of AEs to start is because, again, you have that software in your brain. Unfortunately, there is no GitHub for sales motions. So it's in your brain, it's in your documents, et cetera. And so now you're [41:25] like early stage kind of pioneer sellers to take that sales version. The downside of hiring, like seeking to hire a VP of sales or like a head of sales or what have you, who actually is a head of sales, like is coming out of an organization where maybe he or she is a manager of managers or like manages like, you know, 10, like eight reps or something like that is that person hasn't been selling for,

[41:48] a hot second. Right. And I think actually Jason Lemkin had a pretty funny tweet about this the other day where he was like, [41:54] you know hiring the VP of sales who's like been there and done that before like why exactly does she want to do it again right like oh you scaled up uh you know Datadog or like Figma or whatever you should come to my like crappy little startup it's like yeah I'm professionally rich and and so instead the the great folks to look at are like the deputies right or like those early stage sellers so the example I always use here um my last software company was in recruiting so if you [42:24] So, you know, my buddy Troy, um, [42:27] Runs this recruiting software company called guide, right? They make this like really cool guided. Hey, hiring process for candidates, whatever, but they sell to recruiting organizations. So the kind of early, the early stage sellers that he would be interested in would probably be like early people at like lever or greenhouse, right? Who sell to the same persona, probably around the same like average selling price. [42:57] like two years ago. So like Greenhouses has a phenomenal sales organization. Their sales leadership is absolutely fantastic. The gentleman who's the CRO over there is a good friend of mine, Sean Murray. But like, [43:09] Early stage selling takes early stage sellers where people have been there because you're not going to have all the collateral slides and scripts and whatever aren't going to be all buttoned up and with a bow around them. And so looking for those early stage kind of like grimier, grittier sellers is a more effective way of going about that. So those are the folks that you want to look for once you've gotten to that statistical significance of your own selling capacity.

[43:39] My question is, if you're like, say, a Series A founder, what's like a profile of a person you look for? You said it's like a deputy at a successful sales org. [43:48] I'll give you a couple examples. So like, I don't know, say you're doing some sort of like design [43:52] Cool. [43:54] Right. Like I would go look at the Figma sales organization and I would look at some of the earlier sellers who were there maybe two years ago or three years ago or what have you. Right. Maybe you could consider getting a sales manager there who's like not super far from selling. [44:12] A great example, there's this woman, Marissa Fuhrer, who works at Figma. She's absolutely fantastic. She works on the enterprise team there. She was at Dropbox previously as a seller for a long time. She would be a great profile for someone who's not too far from having sold and is willing to roll up her sleeves. But ideally what you're doing is that would probably be the person who you'd want to hire [44:38] After you've hired those couple of sellers and gotten them to success because the other thing too is like Marissa She's probably gonna look at your organization be like cool prove to me that your product fits the market Because like I don't want us to really take a bet on you and then you would say well in addition to having a 25% win rate with me I have these two sellers right here and they both have 20% win rates and you can see that they're both closing $50,000 of bookings a month [45:03] All I need you to do is scale it up. In which case that early stage head of sales is like, all right, let's do it. She's about to get a bunch of LinkedIn requests. She's great. This is one of the things that we really love at Atrium is we have really great customers. We're creating a new category of software. And so it's kind of one of those things where more advanced, more modern sales managers and leaders really get it. It's kind of how it always is in category creation.

[45:33] really get it and really get it, they turn out to be awesome. That's one of the things that just makes startups fantastic. What's a sign that maybe it's not working out when you hire your either first salesperson, or maybe first five? What are signs? Because you said it often does not work out. What are early signals like, "We should rethink this?" Presuming that you have, and this is another reason why it's really important to do it yourself to start, but presuming that you've done [46:02] that you've been able to close business on a reliable basis, again, with like arm's length [46:07] prospects. It can't be Lenny's mother-in-law buying my software. Which can't be real, actually. [46:15] Yeah, but like, I mean, God bless, but like she's not ICP for Atrium, right? So like you can't, this is like kind of the danger of like, you know, doing revenue trades in your accelerator or like whatever, like it's not real, right? So if you have done that and you've sold like 20 or 30, you know, deals, you know, it can be done. We have an existence proof of this. So if someone else can't do it the way that you do it, and this is why hiring like two folks to start is effective. [46:42] Right. Like you don't want to hire just one. You may be three, but like four. It's like, oh, that's a lot to manage, at least to start. And and so if you have done that and the person's like their win rates are poor, right, or that their activity levels are poor, things like that. Those are usually indicators that it's like not going to that it's not going to work out, that they're not getting those second dates. They're not getting those third dates. But importantly, they have to have the materials in question.

[47:12] people through and did you give this to them? Did you take all the discovery questions that were in your brain and write them down into a Google doc or a Notion page or what have you? Do you have a demo script for them? If those things are not present, then probably no one's going to be successful. Or at least they're going to have to re-derive all that stuff that you already did. But if you have all those precursors and it's not sticking for someone, that's probably a good leading indicator that they're not going to work out. How much time do you give these folks before you make a decision? [47:42] This is why it's so, so, so important to look at leading indicators. And this is something that we just think about all the time here at Atrium from an instrumentation and data-driven sales management is... [47:52] If someone's not having customer-facing meetings, if they're low activity, you're never going to win anything. If you have a 50% win rate on two opportunities in a month, that's probably still not going to be super helpful unless you have a very, very, very high deal size. And so looking at those leading indicators, are they having first meetings? [48:13] Are they having second meetings? What does their email volume look like? Are they progressing things through? Are they getting things to proposal? And then eventually are things closing? And so that's why bird dogging, I do a bunch of masterclasses for Atrium on data-driven sales management, and one of them is on ramping. It's called ramping for success. I forget the name of the masterclass, but looking at those leading indicators, like [48:36] opportunity inflow is a person putting time like putting meetings on their calendar are they progressing them are they being active in the meantime those are all really good leading indicators and so i mean if somebody's like not getting first meetings on the calendar like you know within a month it's like okay cool this isn't working out right now if they're not getting to second or third meetings but they are getting those first things well now you know you've got a different problem

[49:00] right? Which is like, they're getting those first dates, but they're not getting a second date, and they're not getting a second date the same way that you were. Okay, maybe that's a coaching issue. Or maybe it's just like a behavioral problem that you're not going to be able to surmount. But the point is, is it's like having instrumentation on the most leading indicator possible gives you eyes onto whether or not things are working or not. And you can make judgments because the worst possible situation is like, nine months in, you're like, man, it's not working. [49:30] you would have known like two months in, like this wasn't working. I like they gave us kind of a bottom end of the range, like in a month you should be able to know. A lot of times, what would be like the max by which... [49:39] Like if things are going OK by like six months, you're probably-- it's probably going to be good. Or what is that time frame? [49:46] Oh, like where you know you're successful? Yeah, like it sounds like maybe from a month to some future month. [49:52] this is a period where you can get a sense of this person is going to work out. What's like that range in your mind? [49:57] It's almost like you're kind of continuously monitoring. So in the first month, maybe you spend that time onboarding the rep, teaching them, going through mock discovery conversations, mock demos, et cetera, having them ride along with you. In the second month, we would expect them to have 10 first meetings or maybe 20 first meetings, and we would expect 50% of those to get to the second meeting. So we'd measure those things. In the third month, we would expect [50:22] some subset of the month of those first meetings and second meetings that happened in the second month to get to a proposal. [50:29] to get to a commercial conversation. And then maybe we would expect some of the deals in that month to close.

[50:35] right to close when or or maybe the next one and so it's like it's essentially [50:40] Like, [50:40] you're looking at the leading indicators in the appropriate timeframe such that, [50:46] Like if someone is in month three and they're getting a bunch of their deals to proposal, you can't declare victory yet because like the money is not in the bank. However, things are looking good. So if you get to month four. [50:57] And then, and lots of things are getting into proposal, but nothing's closing in month four, nothing closing in month five. You should still like, you still can't say olly olly oxen free. You should still be very concerned. Right. But if you, if like the leading indicator is at the right level for the right, [51:12] period, right, interval in ramp, then you can... [51:15] Like you can feel confident, but not declare victory yet. [51:20] Got it. Something that this reminded me of is we were chatting ahead of this call and you mentioned that work from home is really bad for salespeople in your experience. Can you talk about that? [51:50] and then they need to be audited, right? Like instrumented. And so like the faster the loops are, [51:57] on that, the better off you're going to be. And so if the loops are once a day of listening to their calls or maybe even a longer interval, then the correction loops are just going to be way too slow. Versus if you're sitting next to somebody, if you're sitting amongst three or four people and listening to all their calls concurrently, and then they get off of a call, and it's like, "Hey, that was really good.

[52:22] You know, correction here, correction here, correction here, correction here, here. [52:27] run it back to me. Now the loops, right? The speed with which you're able to like update their software and making, make sure that the sales motion is running appropriately on them is quite high. And like in early stage startups, that's the only thing that matters is like how it's a race against time to make sure that you get to success. You can raise your next round of financing or get to profitability or what have you. And so like having distance, right? Having asynchronous [52:57] all of that, it really is problematic. Once that sales motion is baked and can be distributed, okay, that's potentially a different situation, but very early on, having someone sitting, being able to sit side by side with your sellers is really [53:14] pretty, it's hard to beat. So it's the solution. Is it [53:19] If you're starting now a B2B company, your advice is don't be remote, work in an office. My point of view on that is, especially at an early stage, you start... [53:30] from a founder standpoint, like being, you know, uh, shoulder to shoulder with your, with your co-founders certainly, but even with like, you know, a founder who's has a couple of sellers that they're working with being side by side with them in order to like help them learn faster, teach them more, have accountability and then have like, you know, um, like training loops is really what you need to, what you need to do. Because the alternative is like, there's,

[54:00] It's kind of like learning loss, if you will. There's a bunch of 24-year-olds who have never learned the skills that are needed at the same way, at the same clip that they would have sitting amongst 10 others with an SDR manager sitting in the middle of them or an AE manager sitting in the middle of them. Any last pieces of wisdom before we get to our very exciting lightning round? [54:24] I think probably the biggest thing is the thing that I just like to encourage founders and product managers or what have you is just don't be afraid of sales. There's a lot of people out there who would love to tell you a story that it's magical or like, oh, you got to be a born seller or things like that. And it's really not, right? Those people are just talking their book, if you will. And so just getting good at those behaviors is going to benefit you in a myriad of ways. [54:54] as a product manager within an enterprise organization or even a consumer organization, selling behaviors and good communication and persuasion and always thinking about what's in it for them, et cetera. Those are really good skills for internal selling, for external selling, for you want to interface with [55:12] customers, et cetera. It's like, you know, all these skills are very important and impactful for, for a myriad of personas. [55:19] Amazing. Well, with that, we've reached the very exciting lightning round. I've got five questions for you. We're going to go through it pretty fast. Are you ready? [55:27] I am. Question one. What are what are two or three books that you recommend most to other people?

[55:33] The books that I recommend the most there would be The Goal by Eli Goldratt. There are two books that inspired Atrium. One is The Goal, which essentially is a novelization of the Toyota lean manufacturing system. So it's like a process engineering book written as a novel. It's like really fantastic. And sales organizations are just revenue factories. So it's a really like if you want to think about like systems thinking and kind of like, you know, processes, but in a way that's like not a textbook, it's absolutely fantastic. [56:03] takes care of itself. Bill Walsh is a really famous football coach for the Stanford Cardinal and the San Francisco 49ers. And he just kind of like broke down how you can't worry about the score in the football game. You can only worry about the things that are in front of you you can control. And that if you do a high quantity of high quality actions, like whatever your position is as a quarterback or a linebacker or running back or whatever, then the score will take care of itself. And that's very applicable to sales as well. Like if you focus on those leading [56:33] that you're doing in a high quantity of high quality way, then the score will take care of itself. So those are two great books I like to recommend to folks. Favorite other podcast? Oh boy. I don't listen to too many. I listen to Lenny's and I listen to the All In podcast, just so I can get my fill of doom and gloom. And knowledge with this one. Favorite recent movie or TV show that you've really enjoyed? I've got a five-year-old, so we're all Disney

[57:03] repeat recently has been in Kanto. So yeah, there you go. Love that one. Favorite interview question that you like to ask folks? [57:12] So I'm going to change this up on you. It's less about interview questions. One of the things I'm a really big fan of is job simulation, especially in sales. And so I'm a big fan of doing screens. So we actually have a written screen that we do with folks, which is a Google doc that has like a dozen or so biographical questions that we allow people to answer. And you'd be shocked like the way that how well it screens people, like, you know, 50% of people won't do it. And this is not these are not complicated questions, right? It's like, Lenny, tell me about something [57:42] built that you're proud of, right? Like it's a dozen of those questions. And so like one, you can filter out people who are not serious. You can filter out people who, you know, have low levels of give a shit. You also can see whether or not people can communicate in a compelling fashion, right? With a beginning and a middle and an end. You can also see their attention to detail, whether or not like they, it's like ridden with typos or they like forget to answer some of them or what have you. So it's not an interview question thing, but like that's a huge hiring [58:12] fill out when they're trying to apply to work at Atrium, is that right? Yeah, or it's just something that I mean, for all my portfolio companies as well, people just use it. It's a Google Sheet, right? Sorry, not a Google Sheet, a Google Doc, right? And you just clone it, give it to them, "All right, you have edit rights. Let me know when it's done," and you'd be shocked. [58:30] People are like, I forgot to do it. Okay, great. You told me everything I need. Amazing. Final question. Do you have a favorite story of you or a salesperson closing an awesome deal, something that seemed impossible, something that you're proud of? There's a gentleman in our sales organization named Sean who's an early seller here. He's now a sales manager. He's absolutely fantastic.

[59:00] is you're generally speaking not going to close the deal on the first time through the pipe. As we discussed earlier, if you have a 30% win rate, that's pretty great. If you have a 20% win rate, that's pretty solid. But that still means that four out of five are not going to close. But the next time around, [59:16] they might, right? So like win rate on the second time through the pipeline. And so Sean, you know, one of our biggest customers is a company called Grin. They're absolutely fantastic. They make influencer management software for brands, very cool stuff. And, you know, I think Sean probably ran like three or four ops with them before they were able to get a toehold in the account a couple years ago. They were much smaller. And so now, you know, I think they have like 100 SDRs, like 80 AEs [59:46] is, [59:47] You know, it's not going to be the first it's not necessarily going to be the first time through the pipe and maybe not the second time. But you just have to keep like pushing that boulder up the hill. And eventually when you do, good things happen. [59:58] What a great lesson to leave us with. Very empowering. Pete, this was everything I hoped it would be. Two final questions. Where can folks find you online if they want to learn more, learn more about Atrium, the book, and then how can folks be useful to you? [1:00:28] the whole book is available online as like hypertext. I mean, you can buy a physical copy as well. But the reason why my wife put it into a Squarespace site was because we wanted people to be able to search it and come back to it and use it as a reference and so on and so forth. And then in terms of like folks, how folks can be helpful to me, if you work for an organization that has between 10 and 300 salespeople and you're looking to make them more, like manage them better

[1:00:58] Efficient, right? That's a big watch word these days is efficient sales organization through better management. Atrium is fantastic for that. If you just Google like atriumhq.com is the domain, but you can also just Google Atrium sales and we'll be the top result as well. [1:01:13] Amazing. Pete, thank you for being here. [1:01:15] Yeah, it was awesome. Thanks, Lenny.