Andrew Monaghan:
Our guest joined his new company as the head of North America Sales and found a sales team running hour long discovery calls that sometimes were even killing their deals. Prospects would too often take all the information they would get, disappear and either do nothing or buy from someone else. So he cut those calls in half and he's on the path to compressing 12 to 18 month sales cycles down to three to six months. And he built a system where discounting is no longer the way to close. How do you do that? That's what we dig into today with John Chiappetta, the now CRO at Xona. I'm Andrew Monaghan and this is a cyber security go to market podcast where we tackle the question, how can cybersecurity companies grow sales faster? Well, John, welcome to the podcast.

John:
Thanks for having me.

Andrew Monaghan:
Looking forward to our discussion. So, over the years, probably three or four times we've talked to people who run sales or even a couple of CEOs in the OT space. So I'm always intrigued about a world that many cyber pure play enterprise salespeople into cyber kind of know about, but probably aren't that comfortable with. So anytime we get to learn from a slightly different perspective is always good.

John:
Right on. I'm excited to be here.

Andrew Monaghan:
So let's look at something first of all. So you joined a company called Iona Systems or Iona, a couple of years ago. Now you came in as the head of North America and then the start of this year, you're promoted up to be the CRO. I'm kind of curious though, when you came in, always interesting, you come into a new organization, you're trying to learn how things work and whether they work and whether they don't work. What was a couple of things that you noticed that you came in and thought, you know, I, I think there's something there we could probably do a little bit better.

John:
Yeah, it's a good question. And you know, when you go into any organization, you're trying to get the lay of the land, but you're also trying to figure out what you can and can't do from a company perspective. I had the benefit of coming over from a competitor in the space, which, you know, I joined that company as employee number four or five type of thing and so built that from the ground up. Had a very good idea of what works and what doesn't work in this space. And so as soon as I came on board, what I wanted to dive into is do we have the right team? And there's one simple question that I Ask at this stage of a company to figure out are they the right individual for this job at this point in time. And then it's to figure out, okay, what, what's working, what's not working. To do that, it's diving into all the data we have and for argument's sake, did not have to figure out where the gaps are, where the bottlenecks are. And then ultimately how do we do the one thing that we need to do which is grow the business.

Andrew Monaghan:
Now you tease me there with the question that you ask about whether the people the right fit or the team that you have. What's the question?

John:
So at this stage of a company where the primary goal is growth, right, we are going through the awkward teenage years of a company's journey where we're not a startup anymore, we're more in the scale up territory when it comes to sales individuals. I asked them one question and I want to, to hear a very simple answer and it's why sales? When I talk to my reps, I say, why sales? And there's one answer that I want to hear because it's going to be a lot of work, it's going to be a grind and you need to have your head in the right spot. You need to be doing this for the right reasons. And you know, like I'll throw that question to you. Why do you, what do you, what answer do you think I'm looking for in that scenario?

Andrew Monaghan:
That's a good one. I mean I, I could go different directions. One is people like to be competitive and it's very clear in sales whether you're winning or losing by where you're on the leaderboard or where you are against quota. I think that's one thing that some people say. One is that they all have different answers depending on who you are. Another one is I like to see people, companies transform and I want to help them transform. There's a kind of altruistic element of it. Another one is I'm driven by making a ton of money as another one.

Andrew Monaghan:
So I don't know, where are you going?

John:
The first one. Those are all great. And you know, there, I should say there's layers here, but the one that I want to see boil to the top. Again, you got to factor in the stage of company, what it takes in the background. You're going to be asked to do things outside of your job description, but you have to be motivated and if you don't have a clear motivator, you're in trouble. I want everybody on My team to be driven by money at this point because that's the only thing that we can align on. When I ask that question and I start to talk to individuals and they're driven by, you know, I want to build relationships and that sort of thing. That's fantastic.

John:
There's nothing wrong with that. There's a very specific, you know, role for that. But it's not what we need. When we need aggressive growth, that's when you bring in account managers and you, you know, drive business after the fact. But when we need to, you know, pound the phones, when we need to get in front of people, drive business forward. I want aggressive salespeople that know what they're driven by and they want to make a lot of money.

Andrew Monaghan:
So I'll give you the. I don't know if it's two sides of the same coin. I personally hate this phrase. It's usually said by people outside of sales. Sales is just coin operated, like somehow it's just, I don't know, let's show your money, I'll get money kind of thing. What's your impression of that phrase?

John:
It has to be true to a certain extent, but there's nuances to it. It's not as simplistic as that. So it has to be true in the sense of I have BDRs that sit there, make calls all day long, get told that F off, you know, 100 calls, maybe zero people answer and the three people that do tell them to F off. Right. If you're not driven by, you know, something beyond that, if you don't have a clear North, North Star, you're going to get, you know, disgruntled, you're not going to want to do the job. You need to have something that, that motivates you. I look for ex athletes, for example, because they know how to put reps in, they know how to, to look to. Okay, I want win that game at the end of the week or win that championship at the end of the season.

John:
They're motivated by something different than the day to day. Because in sales it's very easy to get discouraged. All of us, we're going to have bad days, bad weeks, bad months, bad quarters. And it's about how do you mentally reset and push through that. And you need that motivator. So in one sense, absolutely, you know, salespeople should be coin operated. That's the definition of their job. Right.

John:
It's high risk but high reward. Now the nuances to that, these individuals, well, speaking as a salesperson and I'm sure you can relate to it. You have to believe in what you sell right there. You're never going to be successful if you don't believe in what you sell. And that comes down to the company has to be solid 10 out of 10, the product has to be solid 10 out of 10, and then what you ultimately deliver to the customer, these are customers that you're going to work with for a long period of time. You have to make sure that it checks every box they need it to check. And they're coming to you afterwards saying, you know what, thank you. Thank you for reaching out.

John:
Thank you for the engagement. This has been fantastic. That's ultimately what you want to get to. But, you know, if we're talking percentages, out of all the calls you have, maybe that's 2 to 5% are going to end up like that. The rest are difficult. And there's a lot of personality types that can't handle it, to be honest. So relating that back to the start is that when you're in a smaller organization, if you have one person on the team that might not be in it for the right reasons, you know, they're going to be demotivated pretty quickly. They're not going to be firing on all cylinders.

John:
And at a company that's scaling up, that could be 25% of your productivity out the window if you don't get that right. So the personnel on the team and the motivators, and it's also my job to keep them motivated, but the motivators are huge.

Andrew Monaghan:
Yeah. Your athlete analogy, I think, is, obviously, it's not new. It's been around for a while, but I think there's a lot to that. I always kind of lean into the idea of, is it because you want to win, or is it because you're scared to lose? And very different motivators for people like that.

John:
Yes. I mean, and I'm trying to think, to me personally, I don't know. Yes, I want to win. I don't know if I'm scared to lose. I think I hate losing because to me personally, it means I wasn't good enough at something. And that could have been, you know, I didn't pitch effectively. I didn't pull out the business value to that specific person well enough to then articulate what we do as it relates to them. I didn't prepare before the call.

John:
There's something that, you know, was a gap on my side that I could have done better at. Now there's going to be a few Situations that no matter what, it's completely out of your control, their budget got pulled or, you know, they're going to continue with the vendor that they already had and regardless, they just want to price shop a little bit. But I would say for the most part, for me personally, I just, I hate losing because it means I wasn't good enough in that specific situation.

Andrew Monaghan:
Well, one of the things you told me before we hit record here was as you came into the company, you looked at the things that the sales team was doing. You actually cut discovery calls from roughly 60 minutes down to 30 and made one of the goals, or the whole goal, getting the prospect to say, okay, how do you do that? Which then teed up, obviously, the next call, the demo, whatever might be after that. What specifically were the reps doing in that 60 minutes that you felt like it needed to change and why?

John:
Yeah, and I wouldn't. When I walk through this, I don't want it to sound like they were completely in the wrong and that'll never work and blah, blah, blah. But companies go through phases. When you first start an organization, you're in that startup mode. All you want to do is get people to go hands on with your baby, try it out, give me feedback. And your only goal isn't necessarily, yes, it's to sell, but it's, let's get, you know, deployments out, just do POVs, go hands on, get the feedback. At some point that has to switch and you need to structure it a little bit differently where the POV then becomes a tool to validate everything else in the conversation versus an end goal. And I think, you know, at that point in the company, the POV was still the end goal.

John:
And so, especially for technical individuals, what the, you know, natural thing is to do is, this is so great. I want to get on a call and I want to tell you all the information as much as I possibly can. I want to show you a demo, I want to give you everything because, you know, I have your attention and you agreed to an hour. The reality is, A, it's too much information. They're not, they're never going to remember it. In fact, they're only going to remember the stuff that they disagree with. But, but then B, if you give them too much information, anybody too much information too soon, they're going to take that away, go great, they're going to talk to everybody else, they don't have a reason to talk to you again, and then they're going to go with the last, you know, one or Two solutions that they spoke with. And so when I looked at, you know, all right, we're doing an hour conversation, we have reps as well as SES on there.

John:
What was clear to me is that that conversation is a brain dump of our features. That's never going to work. Right. What we need to do is get on and figure out, are we even a good solution for that? The answer might be no. The answer might be, hey, you're looking for something completely different to what we do. We'd love to help you, but guess what, maybe I can point you in a different direction because we're not a fit. What that comes down to is how effectively can we ask questions to pull out the right information around what are they trying to solve from a business perspective? Not everybody's in that category. Some are more in the, hey, I just want to look for some, you know, information and have an educational conversation.

John:
That's fine. But again, we shouldn't waste resources with an hour and SEs and all this other stuff on there. But I think the gist of it, if I have to boil it down, is we need to do our job effective effectively by pulling out what is the business requirement? Why are they going down this road? You know, what is, what is the true pain that they're feeling right now or the pain that they would feel if they don't get a solution like this in place and then, you know, give them just enough information to, you know, what you said, get them. All I want them to say on that first discovery call is, that's interesting. How do you do that? We get to that point, we put a period in it. It doesn't matter if there's 10 minutes left or whatever. And we say, you know what, great question. How about we do this, we'll book a follow up, I'll get one of my technical experts on here.

John:
We can go, you know, deep into in terms of how we actually do that as a platform. And then you start to stage it and you get more and more buy in at every single level.

Andrew Monaghan:
So it kind of moved towards a shortened discussion. It sounds like if you were to say that 30 minutes, how much of that 30 minutes is you trying to learn about them and how much of that 30 minutes is them learning about you?

John:
I mean, there's the perfect scenario and then there's how it actually works in practice.

Andrew Monaghan:
There's reality.

John:
Exactly. And the reality is it's no different than when you or I go onto a car lot. Right. We don't want to give away Too many, too much information, because we know it's just going to be used against us. Absolutely. There's prospects that show up to calls that feel like that. And, you know, it's like getting blood from a stone. It's.

John:
Sometimes it's never going to happen. And then it's our job to start to feel around and, you know, go with, what do we think is, if we, if we're going to take a single shot here, what's our silver bullet, and go down that road and see if we can open them up. But in a perfect world, you know, we want to have a conversation. It's, you know, the notion of a pitch is an interesting one for me because I don't believe really in a pitch in the true sense of it. If anything, the pitch comes at the very end where you pitch. Okay, how. Why did we have this conversation? How does this align when you have all the information and what does this look like rolling out? What do you say? Let's work together at the start. It's around, you know, let me understand your problem, set how you see it.

John:
Walk me through your role at your organization. Why are you going down this road? And then from there, it's more of a conversation in terms of, okay, that's great. Let me tell you the path that we're on as a company. You let me know if that aligns, and then we can talk about your specific use cases. So I wouldn't say it's 50 50, but in those first discovery calls, it might be. It might be 15 minutes of, you know, tell me about yourself. What are you looking for? You know, why are you going down this road to begin with? And then maybe I would say it's about 10 minutes of, okay, let me very succinctly tell you who we are as a company. Why did we go down this road? And there's important nuance behind that.

John:
And then, you know, how are we different and how do we solve your problem? And then I would say the. The last five minutes is more so, you know, a little bit of back and forth. They go, okay, that's interesting. Tell me more about this specific thing and that specific thing. And then again, ultimately, it's get to that point where, okay, how do you do that? Perfect. Let me tell you.

Andrew Monaghan:
Yeah. Essentially, you hit two of the things I always think about with these calls. One is, well, the questions that the prospects are asking. And I think some people get this a little bit wrong. They think what they want to know is, what do you guys do actually, what they're really asking is what can these guys do for me? And if you want to answer, how

John:
do you make my life better?

Andrew Monaghan:
Yeah. To answer the. For me. But you kind of need to do some understanding about what they're all about. Right. And the second thing that they're always looking for is how is this different to what we're doing right now. What I've heard about the market, that hot company I heard about last week, you know, how you're always getting compared in some way and if you don't, if you can't answer that clearly, then you're leaving a lot of confusion in the mind of the prospect.

John:
And you know what it would, you said it perfectly. And what it reminds me of is the stupid saying. And I say stupid because I don't believe in it in the true sense. But the, the old sell me this pen. But the, you know, moral of that story is I don't know if you need a pen. If you need a pen, you're going to buy a pen. If you don't need a pen, you're not going to buy a pen. The moral of that story is absolutely true.

John:
I don't know if we're aligned. I don't know if you need my solution. I don't know if my solution can help you. Let's have a discussion. You know, why did you show up to this call in the first place? What drove the curiosity? And they're going to give me something from there. Okay, interesting. You know, tell me a little bit more about that. How are you doing it today? You know, what are the problems with that? If you have to fix one thing, what is it? Right.

John:
There's going to be drivers because everybody is busy. Nobody has time these days. Right. Whether it's their, their job, their personal life, and we have to be respectful of that. But they just took 30 minutes out of their day to have a conversation with you or I. Why? There's something there that they're looking for. They're not just looking to fill a 30 minute slot in their calendar. They can walk upstairs and grab a coffee and see their dog or whatever.

John:
Right. So it's important to pull that out and then have a conversation with them as it relates to their business needs.

Andrew Monaghan:
With salespeople, I found it's really hard to get them to change behavior. Right. Because often what happens is you ask them in a very stressful environment as they're on a sales call and they've been doing it a certain way for five, 10 years and they're trying to listen. They're trying to read the room, they're trying to remember things, all these things going around, and then you suddenly say, well, no, do this completely differently. So I'm wondering what you learned about how to make. How to help that change happen.

John:
Yeah, and I. I've been there, too. I've been in that position where, you know, salespeople inherently have a confidence to them, and rightfully so. I want my salespeople to have a confidence to them because they need to deliver a confident message. But the flip side of that is we don't always see our own gaps. Right. We don't. You know, we can be blinded by our confidence at times.

John:
I would say there's two different things that come to mind when you ask me that question, and it's a very good question. The first goal is to figure out who's going to be on board, because at the end of the day, the company needs to move forward. If we keep going down the same old path that's not working to the level that we want it to work, it's not going to change. Nothing is going to change. We're going to get the same results. So we need change. I was in, as I mentioned, in the position of coming over from a competitor where we fleshed out the motions, and now, so I. I knew what worked.

John:
It's one thing for me to come into an organization and say, hey, look at me, I know best. It's another thing to show it, right? And, you know, my goal was I'm going to help the team by training them. I'm going to help the team by walking them through examples. I'm going to formalize things. We formalized what I call the sales handbook, which is probably too many pages in terms of a PowerPoint, but it's everything that they possibly need to know when they get stuck and go, what should I do now? Process templates, you name it. But then I would say the critical thing is I get on calls, I run accounts, I show them that it can work. And then you're going to have people that either see that and buy in, or you're going to have people that resist and want to do it their own way. And at the end of the day, it's about building the team culture and what kind of culture you want.

John:
You got to figure out who's on board and unfortunately, who's not going to be on board and make decisions accordingly.

Andrew Monaghan:
Was there a certain exercise you ran or a certain bit that you did with them that it's just like the light bulbs came on and everyone just kind of got it. And it was a lot easier at that point.

John:
It was. And I mean, there's a couple things, right, because. And you touched on it. Nobody likes somebody coming in and telling them how to do their job for the sake of doing it. And both internally within the team as well as on sales calls. Actually, what I absolutely want to avoid is conflict and confrontation in the sense of, you know, I know better than you, especially in IT and OT sales. Right. I'm dealing with, and my team's dealing with very senior IT individuals who have been in that role for a long period of time.

John:
The last thing you want to do is get on that call and say, you know, the decision you made a year or two ago is wrong, and let me tell you why. Right. And so you need to lead people to that conclusion. And the way that I decided to do it when I joined the team was get on accounts, run accounts, close them at a rate that the company hadn't seen historically. The company was seeing, you know, 12 to 18 months in terms of sales cycles. What I saw in my last organization is we could get larger deals in three to six months. And, you know, that's not going to happen overnight. And.

John:
But that was my goal in terms of how do we switch everything to that. And I would say within, you know, one quarter of starting, I was able to do that. And very quickly, people who've been here for many years longer than I have saw that and went, that's the right way to do it. You know, we're going to do it that way from now on. And they started to buy in because they, they saw the results. And so I, I'm a big proponent. And everybody says it, everybody should say it is, you know, lead by example. But it's one thing to say it and then it's another thing to do it, but do it in a way where you're not throwing that in the face of your sales team to say, I'm better.

John:
You're doing it to say, hey, there's another way. Let me help you effectively make more money. Which is, again, what I want my team to care about. And then ultimately everything should be aligned.

Andrew Monaghan:
So show don't tell is a key part of it, right?

John:
Yeah.

Andrew Monaghan:
And you guys have.

John:
I was just going to say. And don't say that. You know, the old I told, I told you so afterwards. You know, we're a team, we're going to win together, we're going to lose together, and then that's what it comes down to.

Andrew Monaghan:
Yeah, I think if done well, very powerful. Right. If done wrongly, it can really alienate people and they'll tell you 55 reasons why that won't work with me and my territory and my kinds and things like that. Yeah. Interestingly, as you make that change, I'm wondering if there was what the role of call recordings were in the process. Were you able to kind of dissect them on a, on a weekly call or something like that to show really what was happening. So the call.

John:
Yeah, so we use gong. It's, you know, a relatively expensive tool, but it's a very handy tool. But the way I'm still torn on how to use that on a day to day basis, to be completely honest, because depending on how you approach, you know, hey, I just listened to your call and here's a bunch of ways, you know, you could be better. There's calls that I can be better for sure. And you know, in hindsight I absolutely know that. I think where it's very, very valuable is the transcription aspect of it because, you know, a salespeople aren't notoriously fantastic note takers. We want them to be, you know, getting information into the CRM is difficult and GONG captures all of that, which is very handy. And so that's my primary use case of it with new reps.

John:
Absolutely. It's, it's valuable. I don't want to over talk on that too much because it can very easily erode the confidence of a salesperson versus build them up. And so, you know, what I focus on is when I'm bringing on new reps to the team, I spend a ton of time to do mock calls myself. I invite them to the calls that I run and then I use, you know, GONG and call recordings. I would say sparingly, I would say as a last ditch ever effort versus a. Let me point out all the things you did wrong because I don't think there's value in getting better. But I think there's a detriment if they think they have somebody over their shoulder critiquing them 100% of the time.

Andrew Monaghan:
Yeah, I have to deal with this a lot in what I do. And I probably listened to over a thousand first meetings in the last few years with all my clients. And you're right, if they feel like you're just pounding on them, then that's not going to work. If you do it from a standpoint of, look, it's all about getting better, I'm just going to give you and what I started doing a while back was say, okay, I'm not trying to point out the 10 things you do better, but here's the two or three, max, that might have made a difference. Let's look at a point in the call where it would have mattered, things like that. And therefore, it's much more palatable for them.

John:
Yeah. And I would say probably two things boil to the top with me in terms of how I practically use that. I would say one being I try to look at the aggregate. So I don't want to single anybody out. I think there's, you know, there's certainly places where you want to single things out. We have a weekly pipeline call with all the reps on there. You know, what's the next step? What's the next meeting? Where are we at? How. How well do you know this deal? I think that's great because then we can get some banter back and forth across the reps.

John:
But when I look at the call recording specifically, it's more. So what I. What am I seeing across the board, more of the systemic issues, and then how do I address that with everybody together? All right, we're talking about pricing way too early, or all of a sudden. One of the problems that I saw here early on was that, you know, why. Why are we talking about discounts on the first call? It's, you know, or. And then we start negotiating against ourselves about how big the discount should be. But don't use discount. The discount's not needed.

John:
The discounts a lever when you want to pull something into the quarter or make sure we get it over line if we have some very strong competition at the end. But that's not the primary, you know, buying motion here. And so I try to address it at a global level, I would say, where it becomes that that type of thing becomes very valuable, is late in the deal cycle where, you know, it may or may not close in the next few weeks. And all of a sudden they went quiet and is that, you know, something that they do, or all of a sudden, are they talking to somebody else? Are they cheating on me? Whatever it is, it's okay. Now, let's go back through all the notes and all the calls. Did they say something that you were too close to the deal to pick up on? Right. Was there, you know, some kind of an objection or them, you know, slowly distancing, but still being polite and taking the calls that an individual rep might not have picked up on? I think that kind of debrief and strategy part of it is very, very important when it comes to the calls versus the. All right, I listened to all your discovery calls this week.

John:
Here's, you know, the 10 things that I didn't like.

Andrew Monaghan:
Yeah, yeah, yeah. If you have someone who's operationally minded on the team, one of the things that you want to look at, if you don't think already, is using Claude projects. And you, you basically say, here's, here's John's last 10 first meetings that they ran against our way of kind of thinking about how to shoot what good looks like. You know, give me some ideas about how John could do better. Right. And it's much more in an aggregate.

John:
Yeah, I love that. And actually I was very surprised, so I'm all over that kind of stuff. We use HubSpot. HubSpot has this little thing in there called their assistant and it's basically their own. Oh, I don't know if it's their own AI model, but it's an AI model built within HubSpot. And I'm usually fairly skeptical about the ones that are kind of baked into the platforms. Right. They can only be so good.

John:
It's not their main business driver, but theirs is surprisingly good. You know, not to give them too much of a plug here, but for instance, we lost one deal and to test it, I went into that and I said, okay, you know, look at this deal. Look at all the past calls, the past emails, you know, what signs did we miss early on? And then I separately went in and did my analysis myself. It was almost one to one with what I came up with in terms of, you know, some of the things that they mentioned in the earlier calls that we weren't aligned with. But, you know, our reps look past them areas that we could have been more engaged throughout the pov, for example, you know, missed touch points, that sort of thing. It. It called it all out, which I was very surprised with. And so now I'm encouraging everybody on my team to, you know, leverage that across the board.

John:
Um, maybe it's a past deal that we lost in the past, but now they're reengaging with, okay, what do they care about, why did we lose it back then, blah, blah, blah, and have it do a bit of a brain dump. And that way all of a sudden you have more information going in.

Andrew Monaghan:
It'll be good to do that before the end of the quarter. Right. I've got eight deals lined up. Tell me, why am I going to lose these eight deals? Each one what, what is not strong.

John:
Yeah, well. Or when.

Andrew Monaghan:
Well, no, like I want to be paranoid. Right. Tell me how I'm going to get surprised in the last day of the quarter. Right. Tell me now a month ahead of time that I can then go start filling the gaps. Yeah, some really good stuff there.

John:
And it has access to all the information. And so I was surprised with how much information it could handle and spit out something that's actually very valuable on a day to day.

Andrew Monaghan:
Yeah, yeah. Some of these things are really powerful. I always have that. I don't know what the right ratio is, but I feel like, well, maybe 2 to 3 to 1. I'm really pleasantly surprised how strong they are. And then the one is, that wasn't nearly as good as I thought it would be, but it's really quite impressive how fast this whole space is moving.

John:
And it's almost, I agree actually. And so we're looking at a number of things across the board. I'm more on the efficiency side, so how can I get greater efficiencies out of my teams? What are the little redundant things that can slip very frequently that something like an AI can handle? And so one of the initiatives I'm working on internally and I personally implemented in the past in my last organization is okay for all my reps. How can we go back, you know, seven days ago, what emails did I send seven days ago that I should be following up with, but I didn't resp because I didn't receive a reply from them. And then I want the AI to go in, read that thread, draft a response and save that response as a draft in my folders. So that way the first, first thing in the morning my reps can go in there, click on drafts, just maybe there's 10 items in there, maybe there's 20. Edit, you know, send, delete, what have you. And then all of a sudden it turns a task that would be maybe two hours into or a task that wouldn't happen at all into five minutes of proofreading and sending.

Andrew Monaghan:
That's awesome. I, I, I, I use a tool, a couple of tools that, the workflow type tools. You give me an idea for an agent I can build right there. Because I, I'm like that, you know, I'm, I'm the ADHD sales guy who remembers the absolute most important things. But a lot of other things just slip through the cracks. But yeah, like every day or every couple of days, here's five emails you sent that me reply to here's a response is a good go, right?

John:
Bingo. And I think that's probably a very important piece at a company at this stage, right. We're growing, we have to be careful with every dollar that we spend. We want to be efficient. You know, we're valuation minded, so efficiency certainly matters. And then how do we 10x the productivity of our reps? And it's, well, spend your time on what matters, which is, you know, to your point, the 10 deals you're going to win versus what's not winnable versus well, you still have to build your pipeline for Q3, Q4. That's not as sexy right now. How do you let, you know, AI handle a lot of that stuff, but keep it personal because nobody likes a generic, you know, marketing response.

John:
Everybody can read an email and instantly see if it's a generic marketing or sales email. And everybody hates it, including myself when I get those. Right. So that's going to be key.

Andrew Monaghan:
So you mentioned before, but the example you gave anyway was talk about price too early or discount too early in the process. Is OT quite a price and discount orientated marketplace or is that just something that people get their head around the wrong way?

John:
Sometimes it's a, it's tough to answer one way or the other. So there's, I guess, nuances in the OT space that we don't see everywhere else. So for example, and I should say for the folks who might not be as familiar with with ot, everybody knows what it is at this point. I think OT are the systems that drive the business. OT might equal it in some cases. We might be talking about a workstation or a server or a switch, but oftentimes it's on a separate network that drive the business forward. If you think of hospitals, it's the MRI machines, it's the X ray machines that run the business. It's in manufacturing, it's robotic arms or on the plant floor, right? It's the ovens.

John:
If those go down, the dollar stop, the business stops. It's operational technology. And in the OT world, they don't have, you know, two year, three year refresh cycles. Like when you replace your computer or it ships you a new computer. They procure this stuff sometimes for, you know, 10, 15, 20, 30 years, depending on what it is. And so that's what they're used to. And it's not so much that, you know, nobody has unlimited budgets, right? That's, that's a reality across every department that you sell into. But the way that they deploy their capital is different because they, a lot of it's capex, right? This notion of SaaS and Opex wasn't a thing seven years ago and all of a sudden it is.

John:
And so we have to be creative in a few different, I guess, senses of the word. We have to make sure a, we have a way to, for them to cap, exit if they want to go that route. And so how do we start talking about 10 year contracts type of thing? But we need to bring it back. I would say the biggest driver is bring it back to the value to them. And easier said than done in a lot of cases. And with us we're all around secure remote access to operational technology. Now I'll get the question all the time. How many breaches do you stop? And it's kind of like, you know, if you break up the doors and windows to your house, how many break ins did you stop? There's no way to tell.

John:
Right. But the flip side of that is, you know, how do you quantify it? Well, right now you have X amount of machines on your factory floor. How many times do you need to ship somebody over from Germany to Kansas in order to maintain that? You're paying for the travel, you're paying for them coming on site, you're paying for, you know, their food, you're paying for the actual, you know, wage that they have, hourly wage. Right. There's a cost to that, that, that one's the easiest to quantify. How many times you do it. A month, a year, blah, blah, blah. Roll that up.

John:
You know, there's efficiency metrics, right? In order to get somebody to access remotely today, what does it take? Well, I have to submit a ticket to it. Then all of a sudden, you know, that takes two weeks for it to sort out and then it grants them and they have to walk them through and blah blah, blah. The whole time there's something that's down. Okay, well what's the lost revenue from that? If it's a, you know, energy utility grid, that could be millions of dollars for every hour that it's down, right? That's unacceptable. And so there's things that you can quantify it to, but bringing it back to the pricing conversation, the key is you have to find those levers and they're going to be different depending on who you talk to. Some want an efficiency play, some want a resilience play. I got to make sure this doesn't go down. Some certainly want security more when you talk to the IT folks because that's what they're tasked with, whereas the OT folks are tasked with keeping things operational.

John:
And then we have to have a very transparent pricing ladder that matches the value that they expect.

Andrew Monaghan:
How easy is it for the rep to diagnose on that first call, which is the main driver for that company?

John:
How easy depends on the rep, you know, but it's, I would say we have two camps, right? And I alluded to it, alluded to it just there. We deal with OT folks and we deal with, let's say IT slash cyber folks. If we go back, you know, five, six years and prior, those were completely separate teams, right? Okay. Ot, you go run your thing. I'm going to split that off into a separate network. Kind of a, you know, don't know, don't look, don't see, don't tell type of scenario. And then it handles everything on the corporate side, even though it has spent millions of dollars in terms of IT security, they go, that stuff's vulnerable. It's end of life.

John:
I don't understand it. Put it over there, Covid. Happened a bunch of other things happened. All of a sudden remote access is a thing. And then we saw breaches, we saw ransomware. Everything goes through the roof now. You know, there's the term IT ot convergence. That's big in the space.

John:
All that means is all of a sudden it's ass is on the line if something gets into that network. And so they're responsible for the security of that network now. And the CISO is, and you know, the CTO has oversight, but they still don't understand how those networks work. And they're different from it. You can't, you know, just restart things or upgrade certain things. They can't go down. They have to be have 100% uptime, whereas OT is tasked with keeping it operational. So they're tasked with two fundamentally different things, right? One's tasked with this has to stay live.

John:
I need this vendor in right now or else that goes down. The other one's tasked with, no, you don't need that vendor in. Because if he brings something in or she brings something in that in fact infects my network, I get fired. So they're in two different directions. And to your question, when we get on that initial call, we need to figure out a what camp are they in? Are they on the OT side of the business or are they on the IT side of the business? Because right there we can bucket them. What's their driver? Their driver is ease of access and operations or it's security. And if I can make these people less of a pain and have less of an ask for me in terms of getting their vendors in, that's a nice bonus. From there then it's figuring out okay, within those camps, what is the real driver? Is it compliance? Is it efficiency? Is it, you know, there's too much administrative overhead for my IT manager to add all these vendors and I have no visibility into who's on my network.

John:
And we can start to walk through it, but you know, simple. No, but we can certainly bucket it to make it easier on ourselves.

Andrew Monaghan:
When you talk to OT folks, do they know the metrics? Do they know that if this production line is done for one minute is going to cost us this much? Is that the level that they're at?

John:
Oh yeah. And, and they know that they get fired if that goes down. Right. Because if it's losing that amount of revenue and they're only like their, their job is to keep it operational. It just so happens they have a vendor who's in a different country that they have to figure out how do they get them here to keep that operational. And what I would say is five years ago they didn't care whatsoever about security. Wasn't a thing. I would say now they understand security is a good thing but again because they're not tasked with that, that's not their, you know, what's first and foremost in their mind versus is not tasked with making sure it's operational.

John:
It is tasked with making sure it's safe.

Andrew Monaghan:
Yeah, it's very different. I think I often hear people talk about, well just ask them for the metrics and on the cyber side people don't know the metrics honestly because a little bit they're fuzzy. Right. It's not like that. If we don't do this, it's going to cost us this much. It's not the reality they're in, right?

John:
It is and it's and a lot of things unless you know a breach of has happened on the cyber side is preventative. It's, you know, you put on, I live probably a little bit more north than you, but you put on snow tires or maybe the better analogy is, you know, you put on, you put camera systems in front of your house. How many break ins or with the snow tire example crashes did you prevent? And it's like, I don't know, maybe some. Right. But it's, you don't have that hard metric to point to to say this is exactly how, how many. Whereas on the operational side, you know how much volume goes down that manufacturing line, you know, if that stops, you're losing X amount of revenue. You Know, probably per minute or per hour and it's unacceptable.

Andrew Monaghan:
Do you have a filter that says if these guys are talking about their H vac systems? Well, you might assign a different priority to the people talking about the manufacturing

John:
line, but you know what? Not really. Because you think so. The big one a little while ago was Target there, they got breached because of the H vac. Right. And so I would say generally speaking, as an organization, we work within critical infrastructure and anything you can loop under that category. But what's probably more accurate is we work with business critical systems and to every single business know you encounter, it doesn't matter if it's a mom and pop shop or, you know, Ford, they're going to have systems that are absolutely critical to the day to day operations. And that's the stuff that A, you want operational 100% of the time, but B, you should also protect with your life because the consequences of if that goes down and there's, you know, adjacent systems beyond that where you might have secured the point of sale system from the IT side to a ridiculous extent, but all of a sudden in Target, if you have, you know, wide open access to the H vac system, then somebody can get in there. And then because you support the H vac system, your internal staff from the IT side of the house, there's a point where you can cross the network.

John:
And so there it's all interconnected these days and it's going to get worse and worse.

Andrew Monaghan:
Yeah, I imagine that Target case study is a big one because it fits your model. Right? It fits what Zona does. Precisely.

John:
Bang on. But I would say the trade off is, and I'm guilty for this too in my personal life for sure, but everybody is of the notion it's not going to happen to us. Right. And I'm sure you can think of examples. You know, maybe it's a home security system or you know, something where you go, yeah, can't argue with that. That's probably nice to have, but I don't have one. Right. And it's, it's all from the notion of it's not going to happen to us.

John:
And the reality of, you know, our environments now in terms of cyber security, doesn't matter who you are, it's, you're just a point on the Internet. And if there's a way in, there's a way in. And you know, you might not be Ford, where downtime is, you know, tens of millions, but whatever that is, I guarantee you it's proportionally critical to your

Andrew Monaghan:
business Yeah, I remember in those days I was at a company that benefited from that. They went from being reasonably tight by their cyber spend to I think in the month afterwards, they spent certainly tens of millions on just buying things and getting expertise and things like that. It was like a bit of an eye opener, I think, for maybe the board, not the team. I think the target team were actually pretty good.

John:
They just weren't given the resources until something happens. And then all of a sudden it's, oh yeah, now it's time to spend. And in our space. When I first started at my last organization, I came on board, I think I mentioned employee four or five type of thing. And I had to figure out this pre revenue. I had to figure out A, what did we build? B, who wants to buy this? And then C, how do we get in contact with those people and articulate it in a way that they understand? And that's a journey in itself. When I first joined that company, I was, you know, I read the, the data sheet and I was just getting on calls saying words. Hopefully, you know, the person on the other side understanded those words because I certainly didn't.

John:
But then, you know, once you flush that out and you listen to them and you get the odd, oh, do you actually do this? And it's, oh, yeah, we do. Is that interesting? Why in this space specifically so water and wastewater, I'd make cold calls and say, you know, how are you securing this today? And the answer was, we just put it directly on the Internet. Obviously that's problematic. You don't want your critical info. And I would pull up the website, they're like, here's the website you can go. And it was just username and password. A lot of them were the default ones. So if you knew anything about or just Google the software, you can get into it and control cities water system, which, you know, seems crazy, but that particular firm that I called had a contract with the city and it was their job to maintain that remotely.

John:
Now that transition to all right, everybody now, you know, heard of a VPN. VPN's encrypted. That's the better way to do it. They switched to using a vpn. They said, no, I'm good, I have a vpn. Cyber insurance came in with regulations and said, you have to put multi factor and all remote access. So they checked that box and they said, okay, I'm good. At that time, you know, the word zero trust was at conferences.

John:
It was a buzzword nobody understood. But then they very quickly. And so it was A lot of educational conversations. But they then very quickly became aware that a VPN's a big, long ethernet cord, and so that you have split off your OT network from your it, even though you spent millions of dollars here, but now you're allowing Joe Blow to connect in from Starbucks or his house, and those two networks become one. So that transitioned the market into, okay, that's not acceptable. And then, you know, finally, we're now at a place where our buyers understand the risk, understand the needs, have defined their requirements, and the conversation is a much better conversation to have because it's, you know, to my point before, less confrontational. They understand where they need to go.

Andrew Monaghan:
Sounds like a whole lot of maturation. Also, education was important for that segment to kind of learn and grow up a little bit.

John:
And unfortunately, it was through, you know, all the headlines that you see. Right? And it's. It's not because they woke up one day and said, hey, how can we be better? It's because of the flood of headlines, you know, geopolitical tensions that we're all aware of right now that. That drive certain behavior. And then, luckily, regulation started to come in for key industries aligned with best practices. And, you know, from us as a sales team, just relating it back to that, it's important for us to not only stay ahead of that, but be aligned with that and be able to speak that language. Because when we get on those discovery calls to what we discussed earlier, we need to understand, okay, what regulations are you following? Okay, interesting. Well, that points out, you know, this, this, and this.

John:
How are you achieving that today? Oh, you're not. Okay, well, let's walk through, you know, how we can do that effectively overnight for you. And the conversations do get much more, you know, open, aligned. It's easier to convey the value, and it's a much better engagement.

Andrew Monaghan:
Well, on that positive note, John, let's wrap this up. Love the conversation today and wish you and Zona every success for the rest of the year.

John:
I appreciate that. Thanks for having me.