Hacking Your First $2M ARR: Sales Tactics from Kevin Bayly, VP Sales at Material Security

Andrew Monaghan:
A common career path in sales is to move from a larger company to a startup. And people have their own reasons for doing it. Some like the challenge of it, some do it for the potential upside. Some are looking to expand their experience. Today we're going to talk with someone who did just that, made that change from a big company to a very small one. He went from a company with a large sales team that just IPO'd to one where he was a seventh hire in the company and the first one who wasn't an engineer. You're going to hear how things started off as he did the change, how he worked well with the CEO and co founder, how they were scrappy, how they got almost all their first meetings in one particular way, and how they converted to opportunities around 80% of the time. You'll also hear, though, how suddenly things weren't all up and to the right, and how the leadership team completely changed the company based on some deep analysis of the business and some very candid conversations at the senior leadership level.

Andrew Monaghan:
There's going to be all that and more in this episode with Kevin Bailey, the VP of Sales at Material Security. I'm Andrew Monahan and this is a cybersecurity go to Market podcast where we tackle the question, how can cybersecurity companies grow sales faster? Well, Kevin, welcome to the podcast.

Kevin Bayly:
Thanks for having me. It's good to be here.

Andrew Monaghan:
Yeah. I'm looking forward to our conversation. I think there's some interesting things that we've got on the docket to talk about today for the audience. But to start off with, what I want to do is go back to 2019. There you are. You've got a great career. You're four years into a great career at Okta. You've risen up through the ranks a little bit.

Andrew Monaghan:
You're probably doing very nicely. Thanks very much. And yet you decided to throw all that in and go to a company and be the first person outside of engineering in the company. What the heck were you thinking?

Kevin Bayly:
That's just what everybody does, right? I always just kind of thought, you know, everybody wants to be the first AE when there's no infrastructure or anything and leave a great. A great company with a great culture. No, I, I never had like the some people do. It was never like, on my bucket list to be the first AE at a startup. For some people, that is. But for me in my situation, like, I was really grateful for what Okta provided. It was an awesome company. I got there.

Kevin Bayly:
They were like, just done a series C few hundred Employees and just kind of on a, on a tear. And I was just through there through this awesome period of time where a couple years leading up to an ipo, a couple years post ipo and what it was for me was just personal, you know, growth. Like I. There was a really, there's a really set playbook at Okta and it was working really, really well. And if you executed playbook, you were going to W2 like it was going to go really well for you. And that's kind of what I was doing and that's a great life. But just for me personally, I kind of wanted to build. It just seemed really fun and really interesting to me.

Kevin Bayly:
And I was just in a, I was in a position where it was the right time, you know, financially, it was the right time personally. And I got connected with the founders over here at Material. And I'll never forget our first kind of intro meeting was at like a coffee shop in San Francisco. And I saw, I saw the demo. It's still part of our product today. But the very first thing that they had built was this way to basically put sensitive messages behind an out of band MFA challenge. Like the stuff that sits at rest, that's susceptible to exfiltration once a, once a mailbox is compromised and you could actually protect it with, with an MFA challenge. And I was like, oh, I just sold MFA via Okta to, you know, hundreds of different people.

Kevin Bayly:
I was like, I, I can do this. This seems like the right time, the right swing to take. And it just seemed like a lot of fun. So I wanted to immerse myself in, in a startup. And I, and I really like the, I really like the founders. And it just seemed like the right opportunity to do it. So I found, figured why not?

Andrew Monaghan:
And did you go into thinking, I'm going to be the sales leader or are you thinking I just want to get going and have some fun as an an ic?

Kevin Bayly:
No, very much more the latter. I was more interested in like, like I said, like building, helping build a company. And so for me, it really had my title. I don't even think I really had a title when I first joined. It was not head of, it was not, certainly not like VP or C. Anything. Like it was just sales, sales guy. You know, it was just we don't have one of these and, and they had a few customers and it was sort of a time where they felt like, hey, maybe there's an opportunity here for us to start growing our footprint.

Kevin Bayly:
And, and you know, we've got a little bit of traction here. And can someone who's not the founder of this company sell the product? And, and that was, that was the mission. That was my goal. And at Okta, I had done both, right? Like I had, I had been an IC on the enterprise sales team, I had managed mid market teams as, as an rd. And so I had, I had both experiences. But you know, when it, when it came to material, it was, I think I was the seventh employee. I, it was just. And all of them were either founders or engineers.

Kevin Bayly:
And so I'll never forget my first day when I sat down and at company HQ and I realized that everyone sitting at the table was the entire company. You know, it was just around one table. So that's a little bit humbling. But now the mission from when I got started was just, can someone who's not the founder of this company sell the product? Right? It's like, so that's just what we started doing.

Andrew Monaghan:
And you came, as you said, from somewhere where there was a playbook, right? Just follow the playbook and the magic's going to happen. What did you take with you from Okta that said I'm going to do this material? And what did you leave behind and said, this is no way this will work in the environment I'm walking into.

Kevin Bayly:
Well, the first thing I learned really quickly was that this Rolodex that I thought I had didn't, didn't really exist. Right. I think like I was saying before, I was like, I just sold MFA to all these identity and MFA to all these people. I know them. What I didn't account for was just the brand that Okta had. Right. You know, I was, you know, their trusted advisor, so to speak, you know, guiding them through a, an evaluation process and a sales cycle. But Okta was a market leader, right? And there's a lot of weight behind that.

Kevin Bayly:
And it opened some doors for me. It's not like I didn't have any Rolodex. Like there were a lot of, you know, meetings. I got to practice my pitch and we definitely, you know, got ourselves into a few opportunities that way. But not, it didn't nearly have the same effect that I thought it would coming in. And then you realize pretty quickly, okay, like I have to fill top of funnel, like I have to build pipeline here and if it's not gonna be just through my own personal network, how do I do that? And, and we came up with some pretty creative ways for doing, for doing just that.

Andrew Monaghan:
And you've used the word we a few times. Now, as you're talking about those early days, were you partnered up with the CEO doing all this together or was he very much. Look, Kevin, you got sales, you deal with it, involve me as necessary.

Kevin Bayly:
I keep saying we because it was just such a team effort. It is like still one of our company core values to this day, which is win or lose as a team. And it's been that way since the very beginning. Like we, there are three, three co founders and they had, they had fairly clear swim lanes even from the beginning. And our CEO and co founder at the time, Ryan, he was responsible for go to market and I was directly reporting to him. And it was a really unique experience in that kind of. When I'm the loan I see on the, on the sales side of the house, it was a unique experience in the sense that, you know, Ryan was my, you know, our CEO, my boss. He was, he was my sales engineer in every deal.

Kevin Bayly:
He was my SDR leading to a lot of the pipeline. He was my executive sponsor in the deal. So like, we were just on the front lines and there was just a tremendous amount of collaboration in every single thing that we did. And I think that's like a really important point to hit on because I, I do talk to a lot of people who, who join early stage companies as, as salesperson. And a lot of times there's, you know, a founder who doesn't necessarily want to sell or isn't necessarily, you know, wired that way, but they want the product to sell. And so they'll hire someone as a salesperson and they'll say, all right, now that I have a salesperson in the building, now we can take off. And they kind of, you know, unintentionally or intentionally brush off a lot of the responsibility that comes with it. That was not the case for me.

Kevin Bayly:
And I think that's why we were so successful, especially in the early days, was that it was, it was a complete team effort in every single thing that we were doing. A lot of what my job was, was to, was to quarterback Ryan, right? Like he was going to do it. He's, he's got an, he's incredibly smart, he's got incredibly high motor and, and he was going to do a lot of this stuff on his own. But at the same time, you know, I had a back background in enterprise software sales. I kind of knew, you know, the process that needed to be followed. I had an instinct in these deals. I knew, you know, that they needed to hear from him. They need to hear certain things from Him.

Kevin Bayly:
We could both say the exact same thing, but it would just be a lot better received coming from the founder. And, and there was just a lot of, you know, strategy inside of the deal themselves that we were working on and that I was kind of coordinating from, from behind the scenes. There was a lot of pipeline generation effort and, and referrals that we were getting that was, you know, I was coordinating behind the scenes, but it was from the very earliest days, like, we were just in this thing together, you know, and, and I'm a firm believer that it, that it really has to be that way, especially early when this was all, you know, what we're talking about now is when we were in stealth. So, like, you qu. Really don't have a brand. It's not like no one's heard of you. It's like you don't even market. Like, there's no.

Kevin Bayly:
We didn't have a website. Like, there was. There was pretty much nothing there. We were in, we were in true stealth mode. And if it's that way, like, it's just about how you show up and it's about what you say, it's about how you say it, and it's, it's about the problems that you solve. And so you have these short but extremely valuable interactions that are, you know, that are your starting point. You have to, you have to open doors and you have to capitalize on it. And in order to do that, you have to put your best foot forward.

Kevin Bayly:
And a lot of times that's through the founder, but you have to give them strategic direction and share your knowledge with them. And so a lot of that is just when I say we, it's just team effort, like the entire way.

Andrew Monaghan:
I would imagine those early days, you know, you're both going in with the right intent, but still there's that kind of, how do we. How do you work this out a little bit? Right? Was there a moment when you thought, oh, this. We've now found our, we've found our rhythm. We found out how to do this together.

Kevin Bayly:
Now we. I don't know if there was one moment, but we started to get signals really early. Right? Like, we were, I'm happy to share, but we were pretty effective early on at, at generating introductory calls, you know, first meetings. And a lot of times it's like we're genuinely asking for feedback. And we kind of had this mantra. Ask, ask for feedback, get money, ask for money, get feedback. You know, and so we were, we were opening doors and we were having these conversations and we were trying to build product and we were trying to build stuff that, that, that was valuable and we were trying to understand and quantify that value so we could articulate it. And, and in doing so we had a product that was really unique.

Kevin Bayly:
And, and so we garnered a lot of interest with those early, those early conversations. And that's like there's not one moment but you start to see light bulbs go off. You know, people who just thought, I'm going to take a, you know, one on one meeting with this, this founder and just kind of like guide them along and give them my input. And then they go, oh, this is actually something that I could potentially use. And so we had a bunch of, we had a bunch of conversations like that. Like one of the, one of the first deals that, that I closed at at Material was just something I self sourced. It was one of my customers from Okta. He now actually works at Material.

Kevin Bayly:
He runs just kind of like all the, you know, it and security stuff we do internally here today. But he, you know, I'll never forget like when I reached out to him, he's like, I, you can practice your pitch on me dude, but I don't have any budget, I'm not going to buy anything. And then we walked through the, the demo with him and he was like, I like this thing, I like it. I think I want to POC it, you know, so you just kind of run into all kinds of opportunities like that. And the first few deals that we closed, like they were, they were real companies. We were really focused on like measuring our, our progress and our success against, not just selling to like portfolio cousins, you know, and like other, you know, startup companies. Like we wanted to do real deals with real companies and first two deals that we closed in the first like 30 days that I were here, that I was here, like household, household brands, like they're, you know, one was like a fortune, you know, 300 company. And, and so that's how we, that's how we measured ourselves.

Kevin Bayly:
We, we really wanted to make sure that we were adding value and it wasn't just some incestuous thing where you're selling to other startups that are in the same venture portfolio that you are.

Andrew Monaghan:
You mentioned that you had a process to get those first meetings on the docket. Let's imagine material was six years later. You're starting right now. What would you be doing to try and get the first 20, 30, 50 first meetings with real prospects, not friendlies and as you say, portfolio cousins?

Kevin Bayly:
Yeah, I think I'll Explain it. But I think the long and short of it is that when you are first starting your pipe gen focus needs to be way more geared towards people and less towards accounts. Right? Like every salesperson's instinct is to come up with like some version of, you know, an ICP and then to build a target list of accounts at a startup. Especially in stealth mode, when you don't necessarily have a brand, the target account thing becomes really, really, really challenging because there's just a lot of noise, like you're fighting with every other company under the sun, that is, that is trying to get a meeting with them as well and trying to sell them something. And especially if you're in a crowded space, like it's just really, really easy to get drowned out. And so the reason, the reason I tend to tell people to gravitate more towards the people is that your, your network becomes the most, the most important thing. It's like early stage pipeline generation is all about networking and relationships. Like people are generally very willing to see something new and to, as I was saying before, like give you their feedback, right? And if you do it in the right way, that can be extremely, extremely effective.

Kevin Bayly:
So what we did specifically was, you know, we had obviously like a cap table. We had a bunch of other, you know, just very influential security people that we knew quite well. And, and so we, we'd reach out to them and if we had a strong enough relationship with them and they were, you know, invested in the company, either financially or emotionally or both, they want to help. And if you're open about asking for help, people want to give it to you. And so what we did was we developed a, we developed a process around this. We, I would reach out to, to these folks and I would tell them like, hey, you know, it's really important for us to grow the business. You don't like cold outbound. Neither do we.

Kevin Bayly:
Would you mind helping me with some introductions to your network? And then I do a lot of the, once they agreed to do that, we just kind of went into it with both of us with, with eyes wide open that they were going to help me out and I would do a bunch of the hard work on the back end, which was quite literally like combing through all of their LinkedIn connections. We found it like really inefficient to do these one off asks of people where like, hey, it looks like you're connected to Sally on LinkedIn. Would you make an introduction to me for me? And it's, you know, it's, it's inefficient. It's kind of annoying for the person that you're asking the referral to. Cause like, odds are everyone knows like with LinkedIn connections, you probably only know like 1 out of 10 actually well enough to, to introduce, you know, the founder of a company who's your friend for, for like a one on one, you know, demo session. And so what we started to do is just come through all these connections. I'd put together like a big list. So if they had, you know, 5,000 LinkedIn connections, that turns into probably a list of you know, 250 or so like very interesting security titles.

Kevin Bayly:
And then I'd go through the list with them and we'd literally sit there and scroll through an Excel spreadsheet until they saw a name that, you know, they kind of lit up and they'd be like, oh yeah, I went to college with them or that was my first boss or I've worked with them for years. Like, and then you distill this big list of like 250 down into something that's much more manageable and they are very warm connections that are very comfortable for that person to reach out to and then you, from there it's very important how you interact. Like we would, we would ask for that referral, we would totally white glove the experience. Like it would be, you know, a message from Ryan to this person who is making a referral on our behalf, asking them like, hey, would you be willing to give this, this founder some of your feedback on their product? And there was an extremely high hit rate on folks taking that meeting. Right. And so when I say like focus on people, that's what I mean. Right. Like we didn't care as much about the, the logo or the account.

Kevin Bayly:
We cared a lot more about like warm connections and a path into the right security title at a, at a company. You know, we, and we would go from there and you kind of have to, we said shine bright. Like when we get that meeting, you're just opening a door. Like it's, it's up to you from that point how you, how you engage and how you show up to that. But we built a lot of almost all of our pipeline early days and in that way focusing on people instead of targets.

Andrew Monaghan:
Did you keep a track of the conversion rate from those intro first meetings to actual some sort of opportunity?

Kevin Bayly:
Yeah, 100%. Like it varied. It gets harder as you go. Like it's harder to scale up. Like as you, as you add AES, this is like a very you know, niche thing, it's an early stage thing that we kind of architected it together, our process. But like early days, I mean probably 80% of the intros that, that we were asking for we were getting and that starts to diminish over time because then you're, you know, then your network is, is bigger. There's, you've kind of gone through the people who are financially invested in the company. But like it was enough to build really significant pipeline and have, have a really successful, you know, first 12 months.

Kevin Bayly:
Like we, I think we did north of like $2 million in ARR. When we were just, just me and Ryan in stealth mode. Right. Like you can, you can be extremely effective by building pipeline that way.

Andrew Monaghan:
And you're talking about going through spreadsheets with investors. Was your whole ethos around we'll be dirty and how we go about doing. We don't need systems and processes. There's just two of you working this all out right now.

Kevin Bayly:
Yeah, that's kind of the main takeaway like that it's old fashioned and I don't think that that will ever change. Like people want to help people and there's no fancy AI tooling that we need to use. Like we use everything now, you know, but, but at that point, you know, like there, there's no aisdr, there's no sixth sense. There was no, you know, like none of that stuff. Like it existed but not, not inside a material and we didn't, we didn't need it. And I, and I don't think at that time it would have, it would have really gotten us that far because like I was saying, like we, we're, we're in stealth mode. We were a startup, we didn't have, we didn't have a brand, right. So there was no one that, you know, just use like six Sense as an example.

Kevin Bayly:
There was no, there was no site traffic for us, there was no way to, for us to even you know, measure that and try and convert it, you know, and anything. So it all had to be warm referrals, it all had to be network based. And if I were just to do Cold Outbound or do like a SDR or anything, right, like you're doing Cold Outbound as a stealth company that, that becomes incredibly challenging to do. Like it was just how do we, it was calorie burn, it was like how do we use our time in the most effective way possible? And the fastest path towards top of funnel was through the connections we had in our network and the people that Wanted to help us and wanted to see us be successful and all those people know who they are and I know who they are and I will be forever grateful for, for them for, for getting us, getting us off the ground.

Andrew Monaghan:
So you go in there as employee number seven, the first one on the go to market side in the first year. You said you had 2 million in ARR. In the first year. When did, when did go to market person number two join the team and what, what job did they do?

Kevin Bayly:
Yeah, we've always taken a pretty measured path towards growth. So like that was kind of our first 12 months. We did some big deals with you know, name brands like, you know, Fortune, Fortune 500 companies. I think that's when we just started to realize we were onto something. We, we had a somewhat repeatable process to where we could bring another seller on board and double our output and that's what we did. So we actually, the next time we went out, we, we hired in, in a pair of, and we hired two AES who were, who were close friends of mine from the OCTA days who were, you know, at a, at a point in time where, where they were ready to, to make that leap as well. And, and our thought process there was like, hey, we've got a shorthand, we've got a bunch of process here that, that I had adopted from the OCTA days that we had adapted to our stage and what was useful for us. And, and I could teach them that process.

Kevin Bayly:
I could teach them some of that, the shorthand that we have. And when you hire a network like it's, it's obvious but it's worth saying like, you know what you're buying, right? Like you know exactly the character of those individuals, you know that their horsepower and, and that's what we did. And, and one of them, Grant, is running enterprise for us today. He's been here for you know, five years himself. And then we just started to kind of build things out from there and scale it up. So after we hired our next two sellers we realized that like, hey, you know, it is still incredibly important for us to do this referral motion that I was just describing. But we had launched out of stealth and at that point we started to do some brand building and we, we decided hey, it's time we can add an sdr. We can start doing some like account based outbound, right? And then we added like a demand gen marketer.

Kevin Bayly:
And even then like I, I didn't really have a title. Like I, I was still like player coaching. So I was managing those functions I just described. But also I was still doing my own deals and I was, I still had a quota and I still had my own targets. And then at that point we've got, you know, three sellers, we've got an sdr, we're starting to, we're starting to really get ourselves into a sort of unmanageable amount of deals for our CEO to be the sales engineer and he really needs to be focused on the company. He really needs to be more of like the executive sponsor role, the founder role in these deals. So we had to add, you know, an se and so we added an se. And so then, you know, all the while you're also just working on the business.

Kevin Bayly:
There's a bunch of tooling and process and all sorts of things that, that need to go into supporting this. So we just kind of started like seeing success, adding more, seeing more success, adding more and trying to do so in a fairly measured way.

Andrew Monaghan:
And the momentum starts building. Right. But let's go forward a couple of years publicly looking at the profile on LinkedIn for the company, you can see the headcount was growing really nicely. And then suddenly it wasn't right. So talk us through what happened in that period where it looks like things changed up in terms of the momentum and what you're trying to do.

Kevin Bayly:
Yeah, we, so there's a, there's a lot of like external factors that go into that too. Like, like the kind of ZURP era ended. There was just, it was hard for, for all companies at that stage. But the one thing that we really, really focused on was, was our icp. And for us that was, that determined everything. And that was about like a, probably about a year and a half ago, what we, it started with a simple, a simple conversation. There were, there was a type of deal that we were winning hand over fist and there was a type of deal that we weren't. And I went to Abhishek, our CEO and I, and I said, you know, hey, if you had just kind of hired me recently as a, as a VP of sales from the outside, what I would say to you is like, we are winning these and we're losing these.

Kevin Bayly:
So I'm going to focus over here until we have the right, you know, set of feature functionality to go win the other type of deal and you know, then we'll, we'll continue to build over there. But right now I've got a target, I've got to focus on attainment and that's where we're going to Go, because that's where we win. And then we started to realize like, oh, okay, is that our icp? We never put a ton of focus into that previously. And it's really like starts with gut feel, but it has to be rigorously tested and validated with data. So after that kind of like initial realization, that's what we did. Like we dove deep into, into, you know, that hypothesis to test it. And so there's a qualitative component and there's a quantitative component to it. And we started to validate that.

Kevin Bayly:
We realized like, yes, this is the makeup of our icp. And so you kind of start to figure what that out, figure out what that is at a very high level. So the basic stuff like company size, certain elements of their tech stack industry, you know, the makeup of their security team, the maturity of their, of their security program and where they're at from a security maturity curve perspective, you know, and then talking to partners that like Andreessen Horowitz, Michael King wrote, was a partner over there. He wrote a really cool blog post about this fairly recently, which is just like the basic questions that help you start to get towards your, your icp, which is sort of like which, which current customers do you have to get the most out of your product? Which, you know, traits do your best customers have in common? What sort of like, objections do you see from past customers or lost opportunities? So you have to dive into the wins, you have to dive into the losses. And you start to come out of that with a clear picture of where you win. And then from there it becomes this huge lift. Can't be understated. It is a huge lift in terms of refocusing the entire company around that.

Kevin Bayly:
Once you have that realization and once you've tested it, then you need to launch into, into action and start to right, size the business around that to make sure that everybody's growing in the same direction.

Andrew Monaghan:
When I hear you say company wide implications, I'm guessing that not everyone in the company went, oh yeah, let's just rejig the whole thing around a slightly different icp. What were the discussions you had that surprised you or where was the hardest decisions we made around that?

Kevin Bayly:
I mean like when I say everything, it's everything, right? And yeah, it's not this thing. It's like none of this happens overnight, right? Like you, there's a lot of deep diving into, into this. There's a lot of dissenting opinion, there's a lot of. And it's good. Like from our standpoint, we have this like really, really collaborative, no ego, senior leadership team. And it, it opens the door for, for discourse. And, and we were happy to have that. Like we, we had an opinion and we, we, like I said, we tested it really rigorously, but we, we pretty quickly came to the same conclusion and got alignment.

Kevin Bayly:
But like as a few very important examples, you know, you, once you realize like this is our icp, these are the deals that we need to focus and focus on. For us, the very first realization was that our entire pipeline was inverted. Like literally like 80, 20 in the wrong direction. Right. So we had to correct for that as fast as humanly possible.

Andrew Monaghan:
Tell me more about that. What do you mean?

Kevin Bayly:
Sure. So, so like there are certain elements of a tech stack for us that are incredibly important, like within our, our ICP and we realized that like 80% of our pipeline was the wrong tech stack. Right. And, and so then we had to go, we had to go, we had to go sort that out really, really quickly. And then the second thing is like we, we realized that the makeup of our team itself was inverted as well. As well. One of, one of the things that we realized is like part of our ICP was company size and we were going to be more focused on kind of the lower end of like enterprise mid market SMB. And that's like, that was really where our, our product and our value prop resonated the best.

Kevin Bayly:
And we realized that like the makeup of our team was off. We had a team that was like very, very heavily geared towards like strategic, like large enterprise. And so we had to correct for, for that. So we had to, we had to make sure that like the, the players that we had out on the field were, were in the right position. And, and so that, that was, you know, that was not only a realization but something that we needed to make an adjustment for. And then the you know, third thing was like our sales process was, was misaligned as a result. You know, it's like the way we pitched, the way that we did qualification, the way that we ran demos, the way that we ran POVs, the way that we positioned competitively, the way that we price like all of this stuff needed to be at least tweaked and in some cases like wholesale changed. And so you have to go through every single part of this and that's just on the sales side, right? Like then, then you have to get the rest of the company aligned around this and like so from a marketing perspective, you know, PM messaging, competitive intel, like demand gen programs, are we focusing our Our demand gen efforts and our, our spend in the right, right sort of programs like field marketing strategy.

Kevin Bayly:
Are we going to the right events? Are we meeting our ICP where they are? You know, like, are we going. Because you can very easily go spin your wheels at, you know, out in the field, at these field marketing events. You could spend a ton of money on, on the wrong events. And yeah, we had to, we had to go through those kind of line by line and figure out which ones were the right ones and what adjustments needed to be made. And then, and then very importantly, like EPD needs to, needs to be completely aligned as well. So they need to understand what the ICP is. They need to understand like how you came to that conclusion. They need to understand why you are, why you are refocusing in this particular area.

Kevin Bayly:
And because they have to be on board, they have to adjust their roadmap and their product decisions in order to prioritize the things that move the needle for the ICP targets that you're going after. Right. Like, we can't be building product for, for one segment of the market when our, when our sales team's going after the other. That's like an obvious foot gun. So we had to, we had to just make sure that every single part of the business was focused on, on the same thing. And that's like steering an aircraft carrier. You know, like even when you're, even when you're a small company, like we were being smaller, I think helped it, it made it easier for us to move faster. But you know, in, in no case is this something that happens overnight.

Kevin Bayly:
I think like the most important part for us, like I said, was having this like very collaborative, no ego SLT team that represented all of these functions. So we were able to get a line from the top down quickly. And that permeated everywhere. And we talked about it openly, we talked about it in all hands, we talked about it all the time. And you just kind of like repeat these mantras. We started to get everybody on board and from there it was like, it was honestly pretty freeing in the sense that you're really clear. Like you start to understand what to say no to as opposed to like trying to boil the ocean and please everybody. You know, like customers always have feedback, they always have feature requests, they always have, you know, design ideas like we had to.

Kevin Bayly:
And it becomes very hard to prioritize those things. So when I say it's, it's freeing, it's just having this focus means it's very obvious what you say. Yes, to and what you say no to. And when you have this level of alignment, the stuff that you say yes to seems actually fairly obvious. And when you don't have a super duper clear focus, you end up getting pulled into all kinds of directions. And you know when you're, when you're early on and you've got like growth mindset that thrash, that thrash can be lethal. You know, like I, there's one of my mentors, Sierra Bockda, Adam Aarons, he's a legend. He has this story of like seals and surfboards.

Kevin Bayly:
And I don't even know if it's true, but the legend goes that I think it was in the 80s or 90s, they'd take people on tours of, of great white sharks, like right over by the Farallon Islands. In order to see a shark breach, they tow a surfboard behind the boat and the shark would breach, it would get a surfboard, it would get no calories, right? And if it did that enough times, it takes a tremendous amount of energy for them to do that. They started to see a decline in the, in the great white population and it was like actually detrimental to them. So the analogy is like seals and surfboards, like, are you chasing a seal or are you chasing a surfboard? And that matters in deals. Like you have to be in the right deals. If you're going to burn your calories as a sales team, you have to make sure that it's a well qualified opportunity. But it also is the same exact thing when you're working on the business and you're building a company is like, is that, does this matter to our icp? Is this a thing that is important to us, helping us win and moving us forward? If yes, let's do it. If no, we can't do it right.

Kevin Bayly:
So you have to, you have to have this focus. You have to go through this exercise every time with every decision that you make. But it's been, it's been awesome for us. It's been absolutely one of the most important things that we've done as a company.

Andrew Monaghan:
Going back to the changes you were making, especially on the sales and marketing team, was there something that surprised you? How more difficult than you thought it would be or you thought this is going to be a real big thing to try and figure out. But it was actually easier. Where were the surprises in the whole process?

Kevin Bayly:
I think, I don't think any of it was easier than we thought it would be. It was all hard, but it was all hard for the right reasons. I Think that one of the things that jumps out with that question specifically was that it was in the conversations with epd, right, because they already had a roadmap and we already had lots of customers that were not in what we had defined as our, our icp.

Andrew Monaghan:
Right.

Kevin Bayly:
So, meaning like they're, they're an existing customer. We have a relationship with them, they have feedback for us, they have input, they've, they've had their influence on roadmap. And you know, but if they had come to us today, we wouldn't define them necessarily as within our icp. So then that becomes like a really hard balance because we always try to do right by our customers. And then, so then, you know, then you kind of have all these, these trade offs that pop up and you, it's not like you can ignore any existing customer that you have. Like, it's not like we, we ignored anything that wasn't in our icp and we drew this like, hard line around it. It just, it just, there's a framework for decision making and you, you have to balance these trade offs. So there are a lot of different, like edge cases and one offs around what EPD was building and why and how we were going to prioritize certain things.

Kevin Bayly:
And, and that, you know, that still goes on. I don't think you ever really get out from underneath that. But like it, it's still really important to have a clear focus around like what it should be, right. And then you can make decisions off of that. But I would say that the most, the most challenge or, you know, friction, so to speak, usually happened around those types of decisions. We certainly didn't want to alienate anybody and we have tried our best not to. And, and you know, those conversations are just evergreen. They're always going on.

Andrew Monaghan:
So you're making the change and your new ways of doing things coming into place. How did you know it was starting to work? What were the metrics or the tracking that you were doing?

Kevin Bayly:
Yeah, well, obviously top of funnel. So you know, once we started to see the, you know, and I said we, we had to invert our, our, our funnel like we did, and we started to see that play out. So like when you talk about like who we're targeting, who we're going after, where our marketing effort is, is focused on, we started to see that shift happening very, very clearly. So we're first of all in the right deals. And then what you see downstream of that was the conversion rates improving across the board in the areas that, where at least we really measure From a go to market North Star perspective, which for us is like MQL to SQL, what is the conversion rate for those? SQL to POV and then POV to closed one. And I look at those things, we look at those things constantly and we started to see very clear trends of improvement in the right direction. And right now we're at a place that's extremely healthy from a conversion rate perspective in those areas that I mentioned, we're world class, right? Like we start to get predictable win rates that way. And so we, we start to know that if we do get into these opportunities that, that are, you know, clearly, you know, meet the definition of ricp, we have a right to win and we're going to win, you know, and, and then it starts to get really fun and then you start to see attainment skyrocket and you start to see, you know, the number of new logos.

Kevin Bayly:
You know, it was like 3X, you know, year over year and you know, revenue is, is up and to the right and you're exceeding targets. So like we had a lot of unpredictability in those kind of core metrics that I just defined. But they're simple, but they're really, really important. Like how are you converting at each stage and what is your win rate and do you have a predictable output for the inputs? And we started to see those things not only stabilize but start to consistently improve quarter over quarter the more that we just continue to focus on this stuff.

Andrew Monaghan:
So be honest now. Were you sitting there in those early days kind of staring at the screen going, is it moving? Is it moving in the right direction? Do we get it right?

Kevin Bayly:
I wish it was that real time. It's not quite the hard, the, the hard part is, you know, in your day to day you're, I'm at the end of the day like I'm a, I'm a deal junkie. Like it's still, yeah, you're in the deals, you're talking deal strategy, you're scrapping and clawing, you're doing everything that you can to win. You're improving processes everywhere that you can, but you sort of have this North Star, you know, and like there's the pre ICP definition and the post ICP definition and in the post ICP definition world you have a very clear map like, you know, where you need to go. We now kind of have everybody rowing in the same direction from like I said, from sales to marketing to epd. And, and so it's easier to, it's easier to get into, into the business, when you, when you, you know, like, when you zoom out where you want to be and where you're going. And, and so that's just, it's just made everything a lot like, clearer for us in terms of like knowing, knowing what direction we're headed. So when you're in these, when the, when you're in these deals, when you're doing qualification, for example, it's very simple to understand, like, is this a seal or is this a surfboard? Is this the right deal for us to be in? You know, and, and we're okay qualifying ourselves out.

Kevin Bayly:
That's not a big deal. There's, it's another Adam Aaron ism is there's two winners in every deal, right? The, the person who, who wins and the person who gets out first. So we got to make sure that we're in the right deals. And when we're in there and we're qualified, we're giving it everything that we got and it generally plays out pretty well for us.

Andrew Monaghan:
So, Kevin, we're reporting this discussion middle of December 2025. Getting towards the end of the year for many sales leaders. If someone's leading sales at a company, let's say 50 to 100 people, and they're sitting there and they have this gut feeling that I think part of the problem or part of challenges, we're just not got the right ICP or we're not being rigorous enough, what's the first thing they should do to start going down that track and investigating?

Kevin Bayly:
I would, I think the first thing is what's your gut feel? You know, if, if you were to go burn your calories on one type of deal, what is it and, and then start to really, really dive into the data. What is it telling you? You have to, you have to spend time on just as much time on the losses as you do on the wins. You have to talk to your customers. You have to do post mortems with your sales team, postmortems with your, with the customer or the prospect, sorry, who didn't choose you. Like, you gotta ask for time. You gotta understand why. You gotta look at, you know, all the data that you possibly can pull out of your CRM to help you under from gong, like call transcripts, like, you have to pour through it all and truly understand why is it that we win, why is it that we lose? What are the right deals for us and how do we get alignment at the top on like what the right deals are and what is our icp? And there's lots of different ways to go through the ICP exercise, so to speak. But it really comes down to why do we win, why do we lose? Let's do more of the activity on these deals where we went, well, listen.

Andrew Monaghan:
To what you described it earlier on. The thing that struck me was again, this idea that I've talked about before about the power of constraints. It's funny, if you say to a seller, look, you can only work five deals, of the 25 in your pipeline, which five would you pick? If you look at the deals that you're working now as a sales team, which 10 would you pick? Suddenly people get very careful about where they would spend their time, and some of these things start working out. So the power constraints, even though you would never say we're going to rip away three quarters of your pipeline, it really forces some good thinking about, I've got to make sure that all our efforts are in the right place, not on bets out there on the edges, hoping that some of these things come through. So I think constraints is, is one of the big takeaways. I go from your conversation.

Kevin Bayly:
Yeah, yeah, like I said, like, it becomes really clear what, what you say yes to and what you say no to. And, you know, just because you're super duper hungry doesn't mean you, you eat nothing but, you know, junk food, right? And candy. Like, you have to make, make sure that you are getting the right level of nutrition in these deals. So, like, salespeople want to, they want to get into opportunities, they want to chase them, right? But you have to be really disciplined about what opportunities you do spend your time on. At the end of the day, it's about time. It's about where you spend it, you know, the calories that you burn for, for a win. And so I'm, I'm really of the mind that, like, we need to qualify early and often, and we need to make sure that, you know, from, you know, from the earliest stages of a deal that we're in the right one and that we validated that and that we have a right to win. You have to have a right to win.

Kevin Bayly:
You have to be able to articulate that. You have to be able to, you know, articulate your value prop to the, to the prospect and reiterate that over and over again. And if you don't have a right to win, you're in the wrong opportunity. You have a weak value prop, and you're, you're just going to be, you know, grasping at straws the entire time and you're, you know, you're going to be the, you're going to be the great white shark that, you know, catches too many surfboards and, and doesn't make it.

Andrew Monaghan:
Well, Kevin, listen, I've enjoyed the conversation. If someone wants to get in touch, what's the best way to do it?

Kevin Bayly:
LinkedIn. Kevin at Material Security. Pretty, pretty simple. We're, if I could plug, we're hiring for enterprise AES, mid market AES, SMB, AES. So it's a, it's a good time to join us.

Andrew Monaghan:
You're hiring, it sounds like.

Kevin Bayly:
Yes, sir.

Andrew Monaghan:
It's like that's a big hiring the capital H, all those roles.

Kevin Bayly:
That's right.

Andrew Monaghan:
Well, listen, rooting for you for the end of the year and into 2026 and looking forward to hearing the future, how things go.

Kevin Bayly:
Awesome. Thank you, Andrew. Fun conversation. Appreciate you have me.