How to build outbound - Kevin Hopp, CEO and Founder of Hopp Consulting

[00:00:00] Hey, it's Andrew here. Just quickly before we start the episode, I want to tell you about one of my favorite newsletters. It's called Strategy of Security.

[00:00:08] If you want to understand the company's ideas and trends shaping cybersecurity and its sub markets, you should take a look.

[00:00:16] Cole Gromos runs the newsletter and he has spent the last 20 years in cybersecurity, including stints at PwC and Memento Cyber, the investment bank dedicated to cybersecurity.

[00:00:27] Recent articles I like include, how could platformization work in cybersecurity where he talks about there being lots of single vendor platforms, but not a multi estate platform?

[00:00:39] And also one called demystifying cybersecurity's public companies, where he explores the pure play ones and also hybrid companies which are in cyber.

[00:00:48] He lists all of them and then breaks down the numbers in all sorts of different ways. Now this is not a paid promotion.

[00:00:54] I just simply enjoy what Cole is publishing. Check it out at strategy of security dot com. Now on with this episode.

[00:01:03] Pipeline generation, filling the funnel, prospecting, call it what you want, but it is hard these days to get enough high quality opportunities into the pipeline.

[00:01:13] If you're struggling with this, just know you're not alone. But what do we do about it?

[00:01:18] My guest today is an expert on a skill, some may say it's an art that has been around for decades.

[00:01:25] Most don't do it because mentally they've convinced themselves or being told by others it just won't work.

[00:01:32] But it can work and work very well if you know what you're doing.

[00:01:37] Kevin Hupp joins me today to talk about Cole calling. Don't go away.

[00:01:41] Welcome to the Cyber Security Go To Market podcast. We tackle the big question. How can cybersecurity companies grow sales faster?

[00:01:59] I am your host, Andrew Monahan. Our guest today is Kevin Hupp, the founder at Hupp Consulting. Kevin, welcome to the podcast.

[00:02:06] Thanks, Andrew. Glad we were able to reconnect. I know we've done a podcast before together and

[00:02:11] I'm no stranger to the podcasting game, the sales development or cybersecurity. So this is going to be a great conversation.

[00:02:18] Yeah, I'm looking forward to this. When I think of someone who has spent their last few years, if not their whole life,

[00:02:25] but certainly dedicated the last few years of their career, their business and what they do towards Cole calling, I think about you.

[00:02:32] I've seen you do training online, you do a lot of consulting. I've actually also seen you, Kevin, do live Cole calls on lives.

[00:02:40] I guess LinkedIn lives or YouTube lives. And I think that takes a lot of balls to go and make live Cole calls.

[00:02:46] So I certainly value someone who does that. And I saw somewhere, and you tell me if this is wrong,

[00:02:51] I saw somewhere that says you've made over 600,000 Cole calls in the past five years. Is that about right?

[00:02:57] Yeah. I mean, the numbers have just continued to get a little bit bigger.

[00:03:02] I'm mostly a trainer and a coach, right? Like that's where my most the biggest value that

[00:03:07] I think I can provide to companies is. But because I've been so publicly, you know, being the call guy,

[00:03:13] the guy who like can actually make the calls, I get people come to me and saying like, hey, I want you.

[00:03:18] Like I need you to sit down and do it. I'm like, look, you don't walk up to Michael Jordan and say,

[00:03:23] I need you to make free throws for me, but I'll do it. It's just going to be like expensive and I don't guarantee results.

[00:03:28] And like you get what you get and people really dig it. So I still make calls to this day for clients is my point, right?

[00:03:34] When people need an ace, they don't have time for training. They don't want to put an ounce of effort

[00:03:39] into it besides like one hour onboarding with me. I'm here, you know? So I make a lot of calls.

[00:03:44] I've made hundreds of thousands of cold calls because I use technology to make that go faster.

[00:03:49] Some people think like, well, that takes five years of dialing. No, that would like no numbers and all that.

[00:03:54] Right? Yeah. I think that's an important thing is that these days, you know,

[00:03:58] where I made a whole ton of cold calls, you know, 15, 20 years ago,

[00:04:02] it's a very different game than what it is now. So we're here to learn about what it means to do

[00:04:07] cold calling today, how relevant it is today, things like that. All right. Well, let's get into

[00:04:12] the business end of this. But before we do, stay tuned for the end of this episode when Kevin's

[00:04:18] going to tell a couple stories. One about a compromising photo at a conference and the second

[00:04:22] one about his first job in retail with questionable names of stores. So look out for

[00:04:29] that at the end of the episode. But Kevin, let's talk about our situation here.

[00:04:33] So we got our company Cyber Donut. Regular listeners will know about Cyber Donut. They're

[00:04:38] an early stage company in cybersecurity. We've got a sales leader, we've got a marketing leader,

[00:04:42] we've got some sellers and we've got 20 paying customers and now we're ready to go for growth.

[00:04:47] We've got some Series A funding lined up and the sales leader and the market leader have

[00:04:52] got their heads together and said, you know, we need to choose the pipeline. Let's go and do

[00:04:57] some serious SDR, BDR type work. So let's talk about what they should be thinking about to go

[00:05:03] and build this function and get the benefits of a really strong and robust model. First question

[00:05:10] is, should they be insourcing or outsourcing this at the start? To start, I would outsource it.

[00:05:17] Why? Because the barrier to going with outsourcing, by the way, in my career,

[00:05:22] I've been a SDR manager. I've also been running an agency. I also ran an agency that did outsourced.

[00:05:28] So I've done the in-house and I've done in-house and out-house, I guess you want to call it,

[00:05:32] outsourced and in-house, right? Like I've done it both ways and I've had extensive experience

[00:05:37] in both ways. If you're getting started and if you're Cyber Donut, you have 20 customers.

[00:05:43] 20 customers in the cybersecurity space is, you know, it's a grain of sand, right?

[00:05:50] If you have a product that is really going to be applicable, that you're going to go raise

[00:05:53] a bunch of dough, someone really believes in that. We need to really nail down what markets

[00:06:00] you're going to go after and why. And 20 customers, in my opinion, would not be enough

[00:06:04] of a sample size to then say this is where we're going. So with an outsourced agency,

[00:06:09] the biggest benefit is you turn it on quickly. The second benefit is you can test things

[00:06:15] with them because you can turn them off at any time as well. This agency, they usually

[00:06:20] work in either short retainers or month to month, something like that. So really good use of your

[00:06:25] dollars would be to say here's assumption number one, let's go test it. How many meetings can we

[00:06:30] get and what happens in those meetings and what happens in those calls? And we learn from that.

[00:06:37] Right. Then once we start seeing conversion rates over the course of three to six months,

[00:06:42] we can say, all right, cool. I've got this model. I'm paying this outsourced agency all this.

[00:06:46] My next step would not even be to insource BDRs at this moment. I would say how do we create demand

[00:06:52] generation? How do I get a marketer in here to take this market message I've established that

[00:06:57] we can have that customers like and build me a funnel. And then I'm going to go get two SDRs

[00:07:03] and the SDR is going to work the marketing funnel with some outbound. But now we've got

[00:07:06] this engine that starts to churn. The water's falling on the wheel a little bit. You're like,

[00:07:09] okay, cool. I got something for him. The old model, the model I got hired into in 2016 is

[00:07:16] I raised 20 million. Let's get nine warm bodies in here and let them figure it out. You know,

[00:07:21] we got a sales problem. Just hire salespeople. It's not easy, right?

[00:07:25] It's really not. So yeah, long story short, I'd say outsource first,

[00:07:29] really nail your market message, get more data.

[00:07:33] And with an agency, a good agency, and tell me if you think I've got this wrong,

[00:07:38] they have a process to bring people on to get them trained up and how they do this.

[00:07:43] They'll have a way to onboard you so that in probably a couple of hours, you can be onboard

[00:07:49] as a company and they know how to use your messages and their frameworks. So your time to

[00:07:53] get going is so much quicker than going to try and find people. And early stage coming

[00:07:57] like this probably won't have the expertise and how to run that team. It's going to be

[00:08:02] whatever the marketing leader or the sales leader think is the best way to do it who may

[00:08:06] or may not have experience doing this, right? So I feel like I'm kind of on board with you,

[00:08:10] right? It's a fast way to do it. What about managing your outsource,

[00:08:14] your agency? How close do you manage them? How close are you there with them on the day to day?

[00:08:20] So I think part of the beauty is you don't have to be there in the day to day. That's

[00:08:23] part of why you would want to go with an outsource thing is like, hey,

[00:08:27] I'm going to pay you X amount. They usually have some sort of guarantee of productivity,

[00:08:31] if not outcomes, which is like we're going to have X amount of conversations.

[00:08:35] We're going to work X amount of contacts. We're going to share with you what's happening.

[00:08:39] What I think the big like when I ran my agency and the customers that got the most value out

[00:08:45] of the engagements were not the ones where it was just a CEO who would sit there and say,

[00:08:51] you said you'd get 12 meetings. You got 11. What are we going to do about this?

[00:08:55] We had those customers and they were the worst, right? Because what you really want to

[00:09:00] do, like the thing that a lot of people miss with an outsource agency is why didn't those

[00:09:05] conversations like all these other conversations convert? What's the real problem over here?

[00:09:10] Are we bad data? Are we targeting the wrong people? Are we saying the wrong thing?

[00:09:14] Are your reps trash? Try to get in the weeds on why things are not converting because that

[00:09:20] will inform what you really want to know. So you want meetings. Everybody wants sales

[00:09:25] meetings. But if you can figure out why you're getting those meetings and why you're not getting

[00:09:30] others, then we start to build a formulaic approach which we can then use people to

[00:09:34] multiply. But you got to figure that equation out to then add people to it and get the

[00:09:38] results you want. And everybody does the opposite. They do the opposite. They bring

[00:09:43] the people in and say, oh, I figured it out. Yeah, this is your job. Figure that out.

[00:09:47] And then they fire them in eight to 10 months when it doesn't work out the way they

[00:09:51] want it to. And it's a vicious cycle in VC bad companies.

[00:09:55] And then you were saying before, once you've got that wheel going, once you have the model

[00:10:00] starting to repeat nicely and you can see some pattern, that's when you might say,

[00:10:04] okay, let's bring a couple of folks. Maybe would you hire them from the agency or would

[00:10:08] you have to go and get your own and bring in two or three folks yourself?

[00:10:12] Well, some agencies do like the walk to run model where you can hire the reps that

[00:10:18] were working there. And I've seen some of those agencies work beautifully, honestly.

[00:10:22] I used to talk crap about that because that wasn't the model I used. But now as a

[00:10:26] consultant, I've been in conversations with people who are like, hey, we've been

[00:10:31] outsourcing this and we're going to bring in five of those SDRs to make our SDR team from

[00:10:35] one or two to seven overnight. And you don't have to train those five people

[00:10:38] that have already been trained. Now, there's always a big cost associated with that

[00:10:43] because the agency is making their revenue two ways. They're making the revenue on you

[00:10:48] paying them on a monthly retainer, but then they're also going to charge you a recruiting

[00:10:51] placement fee. There's going to be a recruiting fee there. So I guess the answer to your question

[00:10:56] is like, if step one, go get marketing. Don't expect sales to take all of... Your whole

[00:11:04] go-to-market is outbound sales and I'm going to hire these rockstar BDRs. I'll get out of

[00:11:09] nowhere and they're just going to produce because I know what the message is and I

[00:11:13] know what the market is. Get a marketer in place that understands demand generation

[00:11:18] and demand capture. Do they understand how to build what I call the watering hole?

[00:11:24] There's a few ways to hunt for zebra. If you're a lion, you can wander the Serengeti

[00:11:29] and you can be the fierce lion and hope that you're going to run into the gazelle

[00:11:32] or the zebra or you can go to the watering hole and the zebras are going to come

[00:11:36] eventually. A good marketer creates a really good watering hole and that's a place

[00:11:42] that attracts people to have the business problems that you solve.

[00:11:47] I think that's a part of the modern go-to-market stack that's becoming more and more of a

[00:11:53] must-have. If you don't have a quality marketer that can produce a high number of MQLs,

[00:11:57] and I'm not talking just about inbounds, talk about MQLs. Just tell me that Andrew

[00:12:02] downloaded an ebook or a white book or white paper or something. Tell me that Steven

[00:12:07] attended a webinar we hosted. Those sorts of things help outbound teams convert at a much,

[00:12:13] much higher rate as opposed to just ripping lists out of ZoomInfo or wherever and just call.

[00:12:19] That's probably a big change from 2016 when you go to hire into that company where you

[00:12:23] probably just left saying go make your list and start making some calls. I think these days,

[00:12:28] a lot of organizations understand that this should be part of a process.

[00:12:31] But given what you said then, should your first hires, when you're insourcing it,

[00:12:37] should they be working for sales or working for marketing, do you think?

[00:12:40] I think they should work for sales. It really depends. I've seen it go one of two ways.

[00:12:46] They'll work for marketing if the marketer is a revenue-motivated marketer. From what I've

[00:12:53] seen, remember, I'm a sales guy through and through, so I'm talking about the other side

[00:12:57] of the fence here. What I've seen from the actual clients and customers I've worked with

[00:13:01] there are marketing leaders that are brand, message, market narrative, deep industry veteran,

[00:13:09] knowledge in the space, but they're big brand marketers. Then there are marketers that are

[00:13:15] these tacticians where they're like, yo, I'm going to get you 300 MQLs and here's how I'm

[00:13:20] going to do it. We're going to have ungated content. We're going to work dark social.

[00:13:22] We're going to do these and that. They have this revenue-minded approach,

[00:13:26] revenue marketing. It's like this new title that I see more and more.

[00:13:31] If you have a revenue marketer who's leading up marketing or a heavy voice over there,

[00:13:36] the SDR BDR function should probably roll up to them because the SDR BDR function is that

[00:13:41] tip of the spear which is actually killing the zebras. You can bring the zebras in,

[00:13:46] but without someone to go do all that work, the stuff no one wants to do,

[00:13:50] talking to strangers, they should roll up there. If you don't have one of those and you have

[00:13:54] the visionary CMO who's a brand marketer or whatever, which is sometimes the co-founder,

[00:13:59] sometimes there's something else, but they're not the tactician who really cares about the

[00:14:03] Xs and Os and how many MQLs you call today, then they should roll up to sales because

[00:14:08] they're going to be supporting sales' number. Correct me if you're seeing something different,

[00:14:14] but what I'm seeing with the best SaaS companies and the best cyber companies is

[00:14:17] they're taking this revenue marketing approach. They're making that more of an

[00:14:21] integrated function with sales. The sales leader and the revenue marketer are on the

[00:14:26] same team, which is so against traditional markings over here and sales over here.

[00:14:32] They hate each other. Yes. When they come together like that,

[00:14:36] so different from 10 years ago that you can actually get some good results.

[00:14:40] It seems like if you're going to hire someone as part of your demand gen or your

[00:14:44] demand capture, you better be part of it together as opposed to fighting it after the

[00:14:49] fact there's campaigns going on that your callers or your follow-upers could actually

[00:14:54] work with. It seems like such a disjointed approach these days when you see it work well, right?

[00:14:58] Yes. It's just interesting. When I was in SDR, the marketing department was very,

[00:15:05] very touchy about what we drove these leads. They were all about the inbounds because

[00:15:11] inbound was the only metric they looked at. They were just looking at how many

[00:15:14] demo requests can we get a month? Well, there's a lot of value in these people that

[00:15:19] if you have good content, if you have authentically good content on your website

[00:15:24] and in your blog and on webinars, dude, it's the watering hole. There's zebras,

[00:15:29] there's gazelles. They're all there. Not all of them are going to self-identify right away,

[00:15:33] but part of my methodology that I teach SDR is to go have these curious business conversations

[00:15:38] with people where you can uncover all sorts of stuff. The traditional marketer over here

[00:15:43] sitting over here saying, well, they're not going to buy today and they're not going to

[00:15:46] buy soon and they're not coming inbound. Well, that's okay as a sales development

[00:15:50] professional and as a full cycle AE or whatever. I just want to have more conversations with people

[00:15:55] that could buy my stuff at some point, right? And allow us to do what we do best

[00:16:00] as salespeople which is build trust, build rapport, build that relationship so that when the

[00:16:06] time does come you are top of mind instead of just making the only metric of success

[00:16:09] for marketing how many people raise their hand to get a demo this month?

[00:16:13] So it's interesting what you said right there, Kevin. So what I've seen over the years is people

[00:16:17] who don't have the experience let's say and how to have these potentially awkward conversations

[00:16:23] early on with someone. Well, they tend to default to it will tell them this and tell

[00:16:27] them that and pitch them this and pitch them that, right? And you said something interesting

[00:16:31] there which was what I really want to have is a discussion or conversation. So talk to us

[00:16:36] about the difference between the two. Yeah, absolutely. So the methodology that I teach

[00:16:42] sales teams, I got to actually patent this. I don't have it patented but I call it conversation

[00:16:48] first prospecting which sounds a little bit redundant but at the same time a lot of the

[00:16:54] old school approach to how to do sales is to call people, tell them what you sell and say,

[00:17:00] you interested? Right? Like hey, I've got the world's greatest cup. Are you in the

[00:17:04] cup market? It's like, huh, that's a really transactional kind of weird way of going

[00:17:09] about it and that's a lot of sales training I had coming up. And I've evolved into thinking

[00:17:14] and now I've put into practice and now I've helped dozens of companies adopt this mentality

[00:17:19] and mindset around your outbound salespeople should be curious about two things really every

[00:17:25] time they talk to a person that could be a prospect, right? One is business problems.

[00:17:30] Business problems. Business problems are why people buy stuff from other businesses.

[00:17:36] You don't buy stuff because it looks cool or because it's the shiny new object. That's rare.

[00:17:43] It does happen sometimes. You see some companies that are able to create the shiny new object

[00:17:47] pitch in a way that is just incredible, right? I think of Drift. If anyone's familiar

[00:17:52] with Drift back when they really went to market in 2018 and 2019, they created a

[00:17:58] category overnight. Chatbots were this little add-on thing that were sold to websites and

[00:18:03] they're like, that bot is your main channel. And it's like the shiny object of shiny objects

[00:18:08] for marketers. It was sick. It's cool to watch from the outside. The two things that you talk

[00:18:13] about are business problems and then valuable solutions to those problems. Now you notice I

[00:18:18] didn't say APIs and software platform and integrations, which is all the crap that people

[00:18:24] always want to say. Oh, hey, what's up, Andrew? I'm with Salesforce for the number one

[00:18:29] CRM for sales and marketers. We got a thousand APIs. You got a few minutes to show it to you next

[00:18:35] week. That's like, dude, that's advertising. I think salespeople should be able to have these

[00:18:39] consultative business conversations. But that also requires something of me as the sales rep,

[00:18:43] right? I have to understand what's going on in your world and what might be going on in

[00:18:49] your world and ask you about that. And I gotta be ready for that conversation. So this

[00:18:53] conversation first approach actually requires a lot more of the salespeople. And what you find

[00:18:59] is if you can adapt that mindset with your entry level salespeople, your mid-level salespeople,

[00:19:05] they turn into better senior sales. They turn into better closers because they've been having

[00:19:10] these business conversations all the way along as opposed to, yeah, my SDR job, I just set

[00:19:15] 2000 emails a day and it was brutal and people told me to F off. But then I hit my

[00:19:19] quota and now they send them a high ticket closer. Like that doesn't really work very well,

[00:19:24] right? And the things that I was good at when I was in SDR, I promoted to AE was hitting my

[00:19:30] quota. Sure. But it wasn't grinding to hit my quota. It was doing things that hit my quota

[00:19:34] that proved that I understood the market. I understood how to sell what we were pitching

[00:19:39] and I understood how to talk to buyers. And that's a lost art.

[00:19:43] So that puts more of a pressure on the organization to properly onboard SDRs than not just say,

[00:19:50] here's our data sheet and five, I don't know whatever talking points, right? You can understand

[00:19:55] your buyer. You're going to say this is the ICP we're going after and this is their fears

[00:19:59] and frustrations. This is their hopes and dreams. This is what kills their jobs. What's

[00:20:03] in fire. You got to really understand these people surely, right?

[00:20:06] Yeah. I mean, that is a huge part of it. And I saw a post today on LinkedIn talking

[00:20:12] about this and I almost like, I was like, dang, I'm going to post that next week.

[00:20:15] Because it's the concept of business acumen. It's probably the most undertaught, under

[00:20:25] laid out things for salespeople. And the best salespeople are actually just really smart

[00:20:31] in that they pick it up along the way, right? So, I mean, in my career,

[00:20:36] I've seen two types of like a salespeople, right? One is like the bulldozer, right? Like the

[00:20:43] bullheaded. They just try harder than anyone else. But when you talk to them, when you meet

[00:20:49] them the first time, you're like, oh shit, this is the number one guy. Like he's not even

[00:20:53] smart. He's a dummy. He tries harder. He tries way harder, puts in way more effort, pushes

[00:20:59] every button every time he can, da da da. The other one that I've seen lead sales

[00:21:04] organizations. And this was like when I worked at Vonage telecommunications, like 600 salespeople,

[00:21:08] right? Not 600, but we had like 300, 400, like a lot of salespeople. The number one guy there,

[00:21:14] smart, really smart. Didn't work harder. He works smarter. He was connecting dots. He was

[00:21:19] getting deals done by creating synergies. And that comes from being curious, right? Like

[00:21:27] a few of the things that I instill in SDRs when I work with them is curiosity, right? If

[00:21:32] you don't care about the people you're calling, don't call them, right? Like I think people who

[00:21:36] make outbound calls and do well at it are two things, right? They're interesting people

[00:21:41] who are interested in the people they call. Interesting and you're calling interested people.

[00:21:46] And when you get that kind of dynamic going on in a cold conversation,

[00:21:51] that's where you get magic. Kevin, let's learn a little bit more about you.

[00:21:58] I've got a list of 35 questions here and we're going to pick them out completely randomly. I've

[00:22:02] got a next generation AI tool that uses polymorphic advanced encryption to protect the algorithm

[00:22:10] to make sure that when I spin this wheel through these 35 questions, the questions

[00:22:15] that come up are completely random. So you're ready to play the game with me?

[00:22:19] I was born ready. Let's go. All right. Let's spin the wheel.

[00:22:28] All right, Kevin. Number 32. How did you first make money as a kid?

[00:22:34] Well, I guess it didn't make a lot of money as a kid, if that's an answer. Like if we're

[00:22:40] talking defining kid, like, you know, before high school, I did not really do a lot of work.

[00:22:46] My parents didn't believe in like the chore, like allowance system. Like I would always have a

[00:22:51] little petty cash in my pocket to do stuff, but like I wasn't like working at home to do

[00:22:56] enough to get a hundred dollars to go buy something. Like it was like 10,

[00:22:59] 15 bucks in your pocket when you go to the movies. My first job ever was at Chicks

[00:23:05] Sporting Goods when I was 15 years old. So everyone might be thinking Chicks Sporting

[00:23:10] Goods. Never heard of that. Well, they sold to this company called Dicks Sporting Goods.

[00:23:15] Yeah. Imagine being 15 years old and you got to explain to your friends that you're

[00:23:19] working at Chicks and now it's going to be Dicks and Chicks and Dicks. And you know,

[00:23:24] this is a Say For Work podcast. So we're not going to, we're not going to elaborate on the

[00:23:27] joke, but that was my first job as a cashier at Chicks Sporting Goods, then turned to Dicks.

[00:23:32] And I'm sure there was no ridicule whatsoever from your friends about all that stuff.

[00:23:36] I mean, I thought it was hilarious. You know, I thought it was really,

[00:23:40] really funny. So I did that for a while in high school. My favorite job,

[00:23:45] and this is really relevant to this, the job where I made the most amount of money

[00:23:49] as a kid before I like was in college or of age. I worked at a Christmas tree lot.

[00:23:54] Christmas tree lot jobs are the best because you're walking around Christmas trees. It smells

[00:24:00] great. Everyone who goes to get their Christmas tree, it brings the whole family. Everyone's

[00:24:04] happy. They bring dogs, you know, you give them free apple cider and they're like,

[00:24:08] oh my gosh. And you throw the tree up on the thing and tie it down and they

[00:24:11] hand you a $20 bill. And it's like, it was the best job ever. I worked there for three,

[00:24:16] seasons in high school and I made like, you know what I used to call it, I used to call it Kanye

[00:24:20] money. Kanye West money. I made like $1,200 in a month. And at the time that feels rich,

[00:24:27] you know? Cause like, I think I had $200 in my bank account and then you make

[00:24:30] 1200 bucks in one month and you're like, yo. What am I going to do? Do I need a financial

[00:24:34] planner or not? Yeah, yeah. I got stacks on stacks. So that was a fun job.

[00:24:39] All right. Let's spin the wheel again. All right. Number nine. What is the most embarrassing

[00:24:50] memorable moment in your sales and marketing career?

[00:24:55] So I, this is a, this is a, this is a good one. When I was in SDR,

[00:25:00] I worked for a series a startup here in San Diego and they raised some dough and they

[00:25:06] did the thing that you did back in 2016, which is let's go hire our ton of people.

[00:25:11] They hired like 35 salespeople in six months, right? They had no SDR team.

[00:25:16] And then they went to having a team of 12, like in two, three months. And I was one of those 12,

[00:25:22] second cohort they brought in there and I excelled at it. And which is really weird.

[00:25:27] I got to tell this part of the story because it's really important that like I was a really,

[00:25:31] really good SDR and cold calling was probably only about 15 to 20% of my meetings. So my

[00:25:37] creativity and the way I treated it, like an AE pipeline was why I was successful as an SDR,

[00:25:42] which is funny because now I teach this approach that is very radically phone centric, but we didn't

[00:25:47] have dialing tech. We didn't have great list building tech. We didn't have great resources

[00:25:51] at all. I was just hustling out there. So because I was so good at being an SDR,

[00:25:56] I got to travel and I was the first part of me, first like non closer to ever travel.

[00:26:01] So I traveled with two of the AEs to a conference. Now at this conference,

[00:26:06] we had a booth and the booth had a big TV in the middle, you know, like conferences

[00:26:10] kind of do that. And part of this, you know, $12 million injection, they hired some marketing firm

[00:26:16] to make a video that's like explaining how our software helps customer journeys or whatever.

[00:26:21] Well, there's a part in the video where there's a guy and he's the main character trying to

[00:26:26] explain what this software does and all that. There's a part in the video where he's naked

[00:26:31] and he's just standing there like this and it's like, it blurs out his junk. So you can't,

[00:26:36] you can't see it. So I go to this conference and I'm like, I feel all cool about it and

[00:26:40] da da da da da. And my buddy texts me, he said, did you see what, you know, the marketing gal

[00:26:46] just posted on Twitter and LinkedIn? I'm like, no. So I opened my phone and look at it. It's

[00:26:51] me standing in front of the booth, like right here talking to somebody and the naked guy right

[00:26:56] behind me. And like, it was like zoomed in on just me and the naked guy. And it was like,

[00:27:01] ah, sick. Like this is great. Phenomenal. Thank you. I mean, when I got back into the SDR pit,

[00:27:07] someone had printed it out and like taped it inside of my little cubicle. Like me and the

[00:27:11] naked dude. Exactly what sort of conference was this that you went through? It was a,

[00:27:16] it was a professional conference. It was, I'll tell you which one. It was Gainsight's Pulse

[00:27:20] Conference. So Gainsight makes customer success software. It was in Oakland. It was,

[00:27:24] you know, and the whole point of that gimmick was to make it, you know, people walking

[00:27:28] down the hall go, oh God. Naked guy. You know, kind of a gimmicky thing. So yeah,

[00:27:34] yeah, just being associated, you know, thinking I was doing a great job and then being associated

[00:27:39] with the naked guy. That was embarrassing. No kidding. I mean, it's funny. You know,

[00:27:43] we talk about conferences a lot and you know, you have to do something to stand out and you

[00:27:48] have to go with, well, some people might get upset, but some people are going to love

[00:27:51] it. And you have to kind of understand that the more different you get and the more

[00:27:55] out there you get, you'll be polarizing. But you get the, get people stopping and going,

[00:27:59] what the heck? That's, you know, you've got at least got someone to stop and pay attention

[00:28:03] just a little bit. Yeah, that's right. That's right. All right. Let's spin the wheel. One last

[00:28:08] question. All right. What is the story behind you getting your first job as an SDR?

[00:28:19] Okay. That's a, that's a, that's a good one, I guess. I told you the first part of the

[00:28:23] story. The first part of the story is I was an early stage hire at a company that had

[00:28:28] just raised a bunch of money. I guess the, like the real story of like how I got that job was

[00:28:34] my first job out of college. I was the first hire at a tech startup, first hire, not for a

[00:28:40] sales hire. So it was like me and the CEO back to back. And we did that for about 18 months.

[00:28:45] And then my buddy told me about this thing called equity. And I'm like, what do you mean

[00:28:50] equity? He's like, well, you have a salary, right? And I'm like, yeah. And it's like,

[00:28:53] do you get benefits? He's like, no, not yet. But CEO says they're coming. And I was so

[00:28:56] young. I was on my parents' benefits didn't matter. He's like, well, at least you're like

[00:28:59] the first employee. So you're gonna get a bunch of equity. So I started the equity

[00:29:02] conversation with the CEO and then he let me go the next week. It was just like, yeah,

[00:29:08] no. So it was, it was, it was a whole roller coaster, right? I got like kicked to the curb

[00:29:12] very unexpectedly. And it was kind of a bad time of year for hiring, right? So it was like

[00:29:18] end of November and started interviewing for product management jobs. I started interviewing

[00:29:24] for customer support jobs. I got two different customer support job offers because when I was

[00:29:29] at this first startup, I was the chief everything officer, right? So I admin zendesk, I admin'd our

[00:29:36] HubSpot. I admin'd our, you know, product management software that we were using. We

[00:29:40] were using JIRA to do product management. And like, I would be in the meetings with our

[00:29:44] fractional CTO and the CEO and trying to like give feedback. And I'm talking to customers

[00:29:49] and I wrote all the copy of our website and I, I, I, right. So we did all this stuff.

[00:29:53] And the question that I was left with when I got kicked to the curb is like, how do I

[00:29:57] go find that job again? Well, those jobs are tough, right? Oh, I'm hiring jack of all trades.

[00:30:02] Like you gotta pick a lane, right? You gotta pick a lane. And I had mentors in my life that

[00:30:06] told me, Hey, like if the sales part of what you did wasn't hard, if it came easy to

[00:30:13] you and you're a talkative guy, Kevin, if you know me, you kind of know I'm a talkative guy.

[00:30:17] Why don't you try getting a sales job? I'm like, I don't know. I don't know. And then I

[00:30:22] got these customer support job offers and they're like, you know, a low base salary with like a

[00:30:27] questionable bonus maybe. And then I interviewed for an SDR job and they're like, here's your

[00:30:32] base pay. And then here's what you're supposed to do with this. And it's like way bigger. You

[00:30:36] know what I mean? Like, Oh my God, I can make X amount of dollars a year. And it's so

[00:30:39] much more. And so the money was a big motivating factor. And then yeah, it got in,

[00:30:44] got in early. But part of why I got hired at that company was my early stage experience, right?

[00:30:49] Cause they were hiring me. They hired 12 SDRs without an SDR manager. They had no manager.

[00:30:54] How on earth did they manage all? Dude, it was, cause it was like silly, right? It was

[00:30:58] a terrible decision. Terrible decision by the executives. Let's just bring a bunch of

[00:31:02] warm bodies. Let them figure it out. And the guy who ran enterprise sales would meet with us

[00:31:06] every other week and be like, what are you working on? What's going, how can I help?

[00:31:09] And we're like, well, we don't know what we're doing. You know? And it was like a whole

[00:31:12] thing. So anyways, that company, that company went under.

[00:31:19] I would imagine when you're consulting or when you're talking to CEOs, CROs,

[00:31:25] one of the things they're thinking to back in the mind is, you know, I'm hiring people who

[00:31:28] are two years out of college. How much business acumen can they truly have? How can they

[00:31:33] have a really valuable conversation if they're still trying to make their rent every month

[00:31:39] and try to figure out what they're going to do when they grow up?

[00:31:42] Well, it's not the simple answer is you don't need to know everything. You need to know

[00:31:49] what you need to know. Right? And this is where you get like some of the sales

[00:31:53] influencers on LinkedIn that have worked for one, two companies in 10 years. Right?

[00:31:58] They have this like myopic view of how to do sales development or how to do sales,

[00:32:05] because that's how they did it at their company for years and years and years.

[00:32:09] And inside of a company, I do believe that the best cultures are a little bit dogmatic.

[00:32:16] Right? That means we all walk around and believe with the same system of beliefs about

[00:32:22] our role in the market, our role in the space, what we're doing, what our competitors

[00:32:29] are doing. If you can create like a dogmatic culture around we are the best and we know why,

[00:32:35] then you get confident people who can lean forward and have challenging opinionated

[00:32:40] conversations, which is really how good sales are made. The challenger sale teaching,

[00:32:45] tailoring and taking control of the narrative in these selling conversations.

[00:32:49] But that comes from a dogmatic understanding of what you do and why it's valuable. Right?

[00:32:55] So to answer your question, like, you know, this person is 25. How are we going to

[00:32:59] develop business acumen with them? It's less of like overall business acumen and it's more of

[00:33:04] they need to know what's going on with your company. You know, what they sell and what role

[00:33:10] it plays. They don't need to know everything else. Right? So they need to understand the

[00:33:13] point of view of the company, why it exists, why it's so important, maybe how others might

[00:33:18] view it or not view things like that. Right? As opposed to being some, they can read a

[00:33:22] P&L statement from every public company in the world. A little bit different skill set.

[00:33:27] Yeah, that'd be very different skill set. So what you find, right? Like back to this idea

[00:33:31] of like some of these influencers have this myopic view. It's like it's one thing to do

[00:33:35] really well at one company for a long period of time. It's another thing to serve a lot

[00:33:40] of companies in a really valuable way. So if you get a guy like me who's, you know,

[00:33:44] never had a full-time job for more than about a year and a half, I've always jumped around.

[00:33:48] And then I went into consulting as the longest job I've ever had about six years,

[00:33:52] but I've helped 70 companies in six years. Right? My breadth has gone massive. Right?

[00:33:59] So I understand all sorts of stuff and you have to have kind of a propensity for that,

[00:34:03] I would argue. But you're not trying to get, I'm not trying to like make me in every SDR.

[00:34:08] I'm trying to build the tendencies and the approach to the conversation based on their

[00:34:15] market, their solution, what's going on in their world. And they should be curious. You

[00:34:19] know what I mean? Like the best SDRs are the ones that you don't have to tell them that

[00:34:23] they're lacking knowledge. You don't have to tell them that they have gaps in their game.

[00:34:28] Like they figure it out. Right? They're reading books. They're attending webinars. They're trying.

[00:34:34] They tend to be the ones that rise up a little bit as well, right? They just stand

[00:34:37] out a little bit. They elevate themselves. Let me ask you about something I've seen in the last

[00:34:42] probably few months actually. I don't know why, but it feels like something in my

[00:34:46] Instagram feed, my Facebook feed, and I know maybe even LinkedIn feed is just flooded with

[00:34:54] AI based SDRs. Like fill your account or 100 meetings a week kind of thing, right?

[00:35:01] And you don't have to do anything. You have to press a button and the magic happens.

[00:35:05] Obviously ridiculous. But it opens up a bigger question. What role does AI play in this world?

[00:35:17] If people have this mindset, this is all so simple. I just have to feed in two or three

[00:35:21] talking points and press the button. It's all going to happen. Maybe it is the right thing to do.

[00:35:25] So where's AI going to affect how we do outbound and prospect?

[00:35:29] It's a great question. What people don't understand about AI, and I know this is

[00:35:36] going to be verbal, but I'm going to do the video for the video feed here. I'm drawing a

[00:35:39] little graph, X and Y axis. What people don't understand about AI is that yeah, right now,

[00:35:46] the pushback is, well, I'm a relationship builder and I don't see any robot making a

[00:35:53] relationship with Bob like I can. There's no way I'm getting replaced. I believe that cohort of

[00:35:58] salespeople that think AI will not replace them is very over-emphasized. AI will replace a

[00:36:06] salespeople. Why? Because a lot of sales is asynchronous communication,

[00:36:11] and asynchronous communication can be done better, faster, and cheaper by a robot.

[00:36:16] This is the curve at which AI innovates. It's an escalating curve.

[00:36:22] It's called an exponential curve. Right now, call it we're right here, about halfway up that

[00:36:30] curve. In this span of time, call it three, four, five years. When did ChatGPT launch? The

[00:36:35] first LLM publicly available two years ago, three years ago. If this is two years, two years from

[00:36:41] now, oh my God, we're off the chart to the right. People that think that AI is not going

[00:36:50] to come for sales don't understand what AI does. AI can process information and generate

[00:36:58] dynamic outputs based on the inputs much faster, cheaper, and better than humans.

[00:37:04] My argument would be that today, this is right now, this is April 2024, we are close to parity

[00:37:12] with what AI could do with an SDR. Most sales development jobs are just sending emails and

[00:37:21] following up on warm leads. That's most SDR jobs.

[00:37:24] Is that right? Yeah. Oh yeah. Oh yeah. The amount of

[00:37:28] SDRs that pick up the phone every single day is probably only 10% of all SDRs.

[00:37:33] Wow, I'm shocked about that. Yeah. There's lots of SDRs because there's

[00:37:36] a lot of SDR leaders that their whole model is built on this, the MQL flow I was talking

[00:37:42] about. It's like, well, Sally just sends the email to Andrew after he attends the webinar,

[00:37:48] and he says, yeah, I'll take a demo. She gets paid 150 bucks and she gets

[00:37:52] one towards her 17 she needs for the month or whatever it is. That kind of stuff makes it

[00:37:57] so you have no motivation if you get the phone. I think there's another feeling in the

[00:38:02] industry that cold calling is dead or cold calling doesn't work. I was on a call with

[00:38:06] a client last week when the rep said, that's completely dead. I was like, completely dead?

[00:38:11] So if that is a feeling that you will have, the managers of the leaders think that,

[00:38:16] of course there's going to be little requirement of their people to go and make some calls.

[00:38:20] That's right. That's right. So on this curve, if we're right here, I'd say we're pretty

[00:38:25] close to like, you know, an AI bot today can go send thousands of messages that are somewhat

[00:38:32] customized and get a very similar response rate than an SDR. So when you're paying a fully

[00:38:40] loaded $90,000 a year with benefits and all that crap, because the SDRs are getting such

[00:38:47] an abysmal response rate, outbound email and outbound in general. We're talking about if you

[00:38:53] get 1% response rate, you're a rock star. Like dude, the machine can do that better and it

[00:38:59] can do it right. Right? I'd say we're at parity just about, and there are not a lot of quality

[00:39:04] go-to-market solutions around this. In fact, I'm seeing what you're seeing, which is like,

[00:39:08] the early wave of this is nauseating, right? These companies that are saying get 100 meetings

[00:39:15] a month, get this, get that. And it's like, it's mini guns. I mean, they're mini gunning

[00:39:20] your entire market with your name and ruining your reputation. So there are not a lot of good

[00:39:25] tools for this. There really are not. And I get asked to advise on companies around this and

[00:39:29] people want me to hawk their products and stuff. And, you know, I'm very, very skeptical

[00:39:34] about it still. In about a year, a year and a half, maybe less, we're going to get to the

[00:39:40] point where AI will get better than the SDRs. Why? Because machine learning, some of these

[00:39:47] AI tools that are spinning right now, they will improve over time. It just gets better.

[00:39:52] So when we reach that point, that's when you start to see like a, you know, right now we're

[00:39:55] seeing a headcount reduction of 60 to 75% across most sales orgs when it comes to outbound and

[00:40:01] top of funnel. It should go, it'll go to 80, 90%. But in that model though, Kevin,

[00:40:06] in that model, that means that any old Tom, Dick and Harry can get access to this tool that's

[00:40:11] going to go and do a great job. And then we're going to flood everyone's inboxes and

[00:40:14] LinkedIn inboxes and things like that. Does that help?

[00:40:17] Yeah. Well, there's always going to be the barrier of knowledge, right? There's always

[00:40:23] going to be that barrier of who knows how to really operate what AI systems want.

[00:40:27] This is part of what I want. I'm trying to shift my consulting into, right? Like I believe

[00:40:30] this is the future. I believe that this exponential curve is something that I want to

[00:40:35] ride too, right? And I think about how can I use AI in my business as well. We're a long

[00:40:41] ways away from, you know, long ways, meaning three years from one click of a button and,

[00:40:47] you know, all your prospecting is done for you. But there are so many tools right now

[00:40:52] that make it so easy. And the biggest problem if I'm an SDR or if you're a sales leader

[00:40:57] and you really think about what are your reps doing every day, if the answer is

[00:41:02] asynchronous communication, meaning not calling, talking on the phone, not actually live

[00:41:08] communicating to people, I would be figuring out ways to get AI to do that because there's

[00:41:12] going to be really good AI bots. And I think, you know, the best AI systems are going to be able

[00:41:18] to not just be outbound, right? Like think about how good an LLM could get if it was

[00:41:24] attached to your Gmail, attached to your CRM. So now it's seeing all the outbound emails,

[00:41:30] but it's also seeing the inbound ones. It's also reading all the chats on the website.

[00:41:35] It's also seeing all the emails sent everywhere and it's learning, it's learning,

[00:41:39] and it's learning. And this curve is going so all of a sudden it can handle inbounds way better than

[00:41:45] SDR. So the message for a leader right now at Cyber Donut thinking, okay, we need to do some

[00:41:51] of this is what? We need to augment the people that we work with. We need to recognize

[00:41:57] it might be a couple years away or what? So if we're just talking about outbound,

[00:42:02] you don't need to go hire 20 people, don't need to go hire 10 people. You need to hire one or two

[00:42:07] people that understand how to use this tech or you need to go figure out how to use this tech

[00:42:12] because you could set up an email minigun system in five minutes. I've got, reach out to me,

[00:42:16] I've got three vendors I recommend for this. You can spin up really clean outbound email at

[00:42:21] massive scale powered by AI in minutes. That's not going to be the only answer. And someone

[00:42:26] needs to monitor all those inboxes and someone needs to train the AI and somebody needs to,

[00:42:30] so you need a few people. But the modern SDR is going to know how to do all that.

[00:42:35] But the one skill that's never going away is the ability to have a cold conversation with

[00:42:39] a stranger and that's what I teach. So there's a place in all of this for cold calling,

[00:42:46] but it's not calling one by one. It's not a call center environment. It's using technology

[00:42:51] and process in a way that your reps are calling the right people at the right times.

[00:42:56] And that's kind of what I help you with.

[00:42:58] I love that. So yeah, it feels like the threshold is moving from asynchronous to synchronous

[00:43:04] and a human being's willingness to have a conversation with someone who's not another

[00:43:09] human might be a little bit away or for us to replicate it and seem like it's a human

[00:43:14] might be a little bit away still.

[00:43:16] I do not believe any of these vendors saying they could do AI cold calls. If it's so good,

[00:43:24] then do it. Do it live. Do a live demo.

[00:43:26] Pretty even close, Kevin, right? My three years, five years. I guess at some point it will come,

[00:43:30] but it seems like we're quite a bit away still from that.

[00:43:34] But how many actual buyers, do you really want that to be the brand impression

[00:43:39] when you reach that CISO, that VP of IT and they say,

[00:43:43] is this an AI bot? And then the bot replies, yes, but I'm trained on everything I need to know.

[00:43:49] So I think customer service jobs, completely gone. Right? Like when I'm coming inbound

[00:43:58] and I just need help with X, Y, and Z, if there's a really good AI, I'll talk to it.

[00:44:03] It's very rare that the AI does a good job. But yeah, I think you don't need ever a human

[00:44:08] to take customer service stuff anymore. It's an inbound set of criteria. They know what

[00:44:13] they're doing. They know what they're doing. They know what they're doing. They know what

[00:44:17] they're doing. It's an inbound set of criteria. They know the information.

[00:44:21] I feel like the bar is quite low as well on some of the customer service interactions

[00:44:24] they're competing against. Yeah. So I've heard some demos.

[00:44:27] I've heard some actual demos online of customer service bots that are AI on the phone.

[00:44:32] They're slick. They're slick, but it counts on there not being a BS filter.

[00:44:38] The nature of the relationship because it's an inbound call, not an outbound,

[00:44:42] the BS filter is down. With cold calling, that BS filters, I think it always will be.

[00:44:46] That's my theory. All right, Kevin. Listen,

[00:44:49] this has been an awesome conversation. Really, really enjoyed it. Our leadership

[00:44:54] at Cyber Donut is better informed to spend their 20 million dollars wisely

[00:44:59] and start generating some pipe. If an other company except for Cyber Donut wants to get

[00:45:04] in touch with you and talk to you, what's the best way to do that?

[00:45:07] Definitely LinkedIn. Hit up my LinkedIn or Kevin at hopconsultinggroup.com. I have a website too,

[00:45:13] hopconsultinggroup.com. But LinkedIn, I find myself there all the time. That's kind of where

[00:45:19] my market lives and I got to be present there. So reach out anytime.

[00:45:23] Awesome. All right. Thanks a lot. Cheers.

[00:45:38] It will mean a lot to me and to the continued growth of the show if you'd help get the word

[00:45:44] out.

[00:45:44] How do you do that easily? There are two ways. Firstly, just simply send a link to a friend,

[00:45:50] send a link to the show, to this episode. You can email it, text it, slack it, whatever works

[00:45:56] for you and is easy for you. The second way is to leave a super quick rating. Sometimes

[00:46:02] that can seem complicated so I've made it as easy for you as I can. You simply have to go

[00:46:06] to ratethispodcast.com slash cyber. That's ratethispodcast.com slash cyber and it explains

[00:46:15] exactly how to do it. Either of these ways will take you less than 30 seconds to do

[00:46:20] and it will mean the world to me. So thank you.