The secret to fixing sales development for Cybr Donut: programmatic consistency - Dave Breshears, Revenue Mechanic, President at OneView

[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. If you want to understand the company's ideas and trends shaping cybersecurity and its submarkets, you should take a look.

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[00:01:01] Now on with this episode, most cybersecurity sales teams I talk with right now say they need more high quality pipeline in order to hit their numbers this year. But if you ask 20 cybersecurity sales leaders about their views and how to get it, you'll get 30 different answers.

[00:01:18] This whole area is in transition right now. And there are many opinions on what's alive or dead, working or not working. Often our opinions are based on what we see in our own sales teams, good or bad.

[00:01:31] And we don't have the perspective of what's working or not working across many teams, which is exactly why I'm excited to introduce you to Dave Bershears who calls himself the revenue mechanic. Well, let's get straight into the business side of this, Dave.

[00:01:55] So on your LinkedIn profile, you list yourself as the revenue mechanic at your own company, Silicon Hills Revenue Lab. Why did you call yourself the revenue mechanic and what does it mean? No, that's funny. So for a long time, I was just an enterprise seller.

[00:02:14] And the last gig that I had was at a company called Outreach, the sales engagement platform company. I think a lot of folks are probably familiar with. It's been about three, three and a half years there.

[00:02:24] And when I left, one of the things that I was really passionate about was continuing to help outreach customers get more value out of the platform. It was one of those pieces of technology that was a little ahead of its time. It could do a lot of things.

[00:02:38] It was started in one particular corner of the market, but there were a lot of other things that could happen. And so when I left, I went and founded the professional services practice at a company called Sapper Consulting.

[00:02:47] And for a couple of years got to get into a lot of different companies, text acts to understand what they were trying to accomplish and what tools they were using to do it. And what I realized about my job was that I wasn't really a consultant.

[00:03:01] I wasn't just telling them what to do and giving them playbooks and kind of writing out a list of stuff. What I was actually trying to do is get into the systems and figure out why weren't they working? What pieces weren't connected to other pieces?

[00:03:13] Where was their misalignment or definitional ambiguity or slippage between the systems? And how was that keeping the organization from being able to achieve its goals? And so what I realized was I was more of a mechanic than a consultant,

[00:03:26] because at the end of the day, it was very easy to give people a list of directives and tell them what ought to happen. But the amount of things that have to go right and the number of systems that you have to get to talk

[00:03:37] and coordinate with one another is large. And so being a mechanic and helping them fix their revenue engine was really the thing that I enjoyed the most, but it also became the most limited. Yeah, I love the whole idea behind that.

[00:03:50] Right? It's the mechanic is the person who goes in and fixes things. And often, you know, things are running less than perfect. It's great to you up actually for this discussion. So, you know, for those who are longtime listeners, this won't be new for new listeners.

[00:04:05] What we're going to talk about is our company Cyber Donut. Cyber Donut, even with that amazing name is a mythical company. But it's a combination of the companies I've worked at and all those I've worked with in my consulting and my training with cybersecurity companies.

[00:04:21] And we've said that Cyber Donut is a series A company. They've taken about 20 million in funding right now. And this moment in time, they get 75 employees, 40 real paying customers, not friends or friends and people, you know, did a roundabout trip, some POS and things like that.

[00:04:39] The invested headcount and also some tools, but Cyber Donut is struggling right now to consistently generate pipeline. We have about five SDRs, we got 15 AEs, so the investments happened already. It feels like we've got all the tools and we've done some integrations,

[00:04:59] but there's no set way to use them all. You know, too often the SDRs and AEs are doing their own thing with sequences. It's roll your own and see what works. They can do their own trials around messaging.

[00:05:12] This works for me in this part of the country and this ICP and everyone's good off on doing their thing. And we get pocket of successes here and there. But when we try to replicate it across the team, it just doesn't work that well.

[00:05:25] And the general conclusion is that most of our outbound is falling on deaf ears and it's expensive grind without much in the way of results. And, you know, that's not good, but we've taken all this money. Good business says we have to grow.

[00:05:39] The board says we have to grow. And the leadership team was expecting us to deliver, but we're not. We got this guy called Bob McDonald. Bob is the SDP of global sales at Cyber Donut. And he is the one feeling the pressure.

[00:05:55] He gets up every morning, looks at the pipeline inside Salesforce and gets that knot in his stomach saying, oh, crap, you know, things have not changed since yesterday when I wish they would have done. So this is a tee up there. We're looking at here, Dave.

[00:06:10] First question for you. So, you know, Bob sitting there, what is the first thing that Bob needs to do to start trying to figure out how on earth do we fix this? Yeah, Bob needs to have a come to Jesus moment.

[00:06:24] You know, I've had the luxury of getting to see a lot of different companies deploy sales technology and that means not just tools like Outreach, but, you know, Outreach and Zoom Info and a marketing automation platform like Marketo and tools like Six Sins and Bombora and Tech Target

[00:06:41] to get better at identifying targets that are ripe for conversation. Lots of different tools are being deployed right now, but they're being done in a haphazard way. But one of the things that of all of those different ways that you can deploy

[00:06:53] technology and all of the different ways that you can go to market with an SDR organization, there's one common denominator across all of the companies that are doing it well in a scalable fashion. It'll take you from five SDRs and 15 sellers at Series A to 25

[00:07:10] and, you know, 150 whenever you get into that Series C, Series D level. And that is this, the companies that are doing sales development will have programmatic consistency, meaning they are not just letting sellers willy-nilly decide how they go to market, what the structure of their sequences

[00:07:26] should be, which prospects within an account they're going to target, which accounts they're going to prioritize, how many prospects at each account, what they're going to do in those sequences. When is it time to make a phone call?

[00:07:36] These are all decisions that happen way above the pay grade of an individual SDR. And when you're going to market, you need to get data at a significant enough quantity that you can actually get statistically significant results.

[00:07:48] One of the really interesting things, things that Outreach did when it was developing its platform was develop the ability to do A-B testing of the templates within a sequence, the email template. So I can have a template A that fires off for 50% of my traffic and another

[00:08:04] node of the test that's a B version that fires off to the other 50%. Well, when they put this, when they developed this capability, they used machine learning to test when those actual tests had reached a level of statistical significance, which is important.

[00:08:19] So they brought in a bunch of really advanced Outreach customers, people who had been successfully deploying this in the field and doing their own A-B testing. And what the data science team at Outreach found out was for customers that were doing A-B testing on their own,

[00:08:32] and this is very large customers, sophisticated organizations, lots of SDRs, controlled testing environments, sellers using shared sequences, all the things that you would hope to have in a controlled experiment, those folks were calling the losing node better than 50% of

[00:08:46] the time on their tests, meaning they were picking the loser. When we ran those tests against a machine learning validated engine that would tell us when we achieved statistical significance, I can't say that phrase over and over again, they found that they were just wrong, right?

[00:09:01] And so one of the many problems of having humans do this work is that we're fallible and that whenever we try to do A-B testing, especially SDRs doing very limited data sets and very limited controls on who they're engaging and what messaging they're using,

[00:09:17] they're more likely to get it wrong than not. So the idea of being able to put together a program to test that program to see if it works to get valid data, understand if we're doing the right things with particular prospects

[00:09:29] in our market, that's not something that you can do in a one-off individual way. Those things require programmatic consistency. Now, the challenge for cyber donut though is they don't have a whole ton of people kicking around looking for jobs wondering who's going to be

[00:09:46] my person that drives the programmatic consistency. Who is the person that needs to take that on? Yeah. And in early stage company, it's a joint effort, I think. It's the getting the account executives and the SDRs along with your

[00:10:00] product marketing team and marketing team in general to agree on a few basic principles that are going to keep the team aligned. The first one is your target selection. The hardest part about being a Series A company is having the discipline

[00:10:12] to actually figure out if you've got product market fit because it's very easy to go nail a few customers of type A and a few customers of type B and a few customers of type C and a few customers of type D.

[00:10:24] And very soon, you're servicing for different market segments. And that's an incredibly difficult thing for most companies to do. It's everything from being able to continue to develop the product for any one of those market segments needs to filling out the different

[00:10:37] feature deficits that you may have against a competitor in one of those segments to being able to do simple things like support from a customer's success and service perspective, those very different use cases or types of customers.

[00:10:49] So I think at the outset when you're trying to get your feed underneath you, getting alignment on a very narrow definition of what your ICP is. Right? And here we're not talking about your total addressable market or even your serviceable addressable market.

[00:11:03] We're talking about the serviceable obtainable market. That and obtainable in this case is important. You could theoretically do business with a lot of different kinds of companies but you only have a limited number of sales resources. You got five SDRs.

[00:11:17] Those five SDRs if they're doing targeted outbound engagement and they're doing account based selling, they're engaging somewhere between three and five prospects per account and we're talking about a company with more than let's say 250 employees. They're going to be approaching multiple entry points for that conversation.

[00:11:34] They're going to be using sequences of varying degrees of work effort required. So some are going to be low touch, some are going to be high touch. But the point is they're going to be able to engage about 250 accounts per quarter for each SDR.

[00:11:49] So now you start to get a number in mind that lets you know that serviceable obtainable market is going to be a much smaller number of accounts than the marketing typically thinks of. Marketing thinks in the thousands.

[00:12:00] Our finance team and our board is thinking in terms of the tens of thousands. We sellers are thinking in terms of the dozens, right? And so in order to be affected, the first thing that you have to do is narrow the definition

[00:12:13] of the segment of the market that you want to go after so that you're looking at customers that look very much like your best customers. Who are the prospective customers who you are the best at servicing? They're the easiest to get in.

[00:12:24] They have the lowest threshold for security requirements. They're not going to wrap you around the axle with new product demands. These are the customers that are low friction entry point and an A level. But all of your resources there,

[00:12:37] the second thing that has to happen is clearly define the buyer personas within the organization that you want to go after. And not just in terms of like that we sort of think of the med pick buyer roles. You've got economic buyers, decision makers, champions, influencers, informants.

[00:12:53] Instead, we want to think about what makes a good entry point for a sales conversation. If you're talking to a very large organization, the C-suite does not start conversations with SDRs about technology that they don't know anything about. That ain't a conversation for the C-suite.

[00:13:07] Yet I talk to a lot of companies that are targeting exactly those types of customers and say we want to talk to the CEO. I mean, you know, you might think you do, but you don't. And that's a terrible target for an SDR.

[00:13:18] So the second thing you've got to do in addition to getting a very narrow account list is find the buyer personas and the buying groups within the organization to make the best starting point for a sales conversation and build your messaging and your engagement around the problems that

[00:13:31] those folks are dealing with. So persona based differentiation, if I can't give you a problem that this buyer persona in their role deals with that's different from this buyer persona in their role in a different part of the org, that's one buyer persona.

[00:13:48] If I don't have a differentiated reason for you to want to talk to me, right? So we want to minimize the variation. But your question was who's in charge of this? I think it's a group project that sets the parameters. What accounts are we going to go after?

[00:13:59] What's the very narrow segment and what buyer personas within that? And how do we attach that to the problems that those buyer personas feel? Once you have those parameters, you can then set a basic set of sequence blueprints that say, hey, if we're going after

[00:14:14] somebody who is above the line, a champion, decision maker in an organization of this size or sequences outbound ought to have this basic structure. One of the things that we have sort of learned over time is the basic parameters of a sequence.

[00:14:29] So for a high touch outbound, you can look across back Holland and Sam Nelson and lots of different people who have sequence blueprints. But the high touch versions all basically come out to about the same thing. It's going to be approximately one month of engagement.

[00:14:44] It's going to be somewhere between 15 and 20 touches. It's going to be a combination of emails, phone calls and LinkedIn engagement. The majority of the manual touches are going to be phone calls. Right? There's a lot of things that we've now started to create as best practices.

[00:14:58] So if you have those three ingredients, a very narrow set of targets that you're going after a clearly defined set of buyer personas with the problems they deal with in relation to your product very clearly defined with messaging differentiated to that.

[00:15:12] And then thirdly, a set of sequence blueprints that say every time I go after a persona at this level, this is the structure of engagement that I'm going to use. You've already started to build some of the basic building blocks that are going to contain it.

[00:15:25] So even though you may not have a sequence committee that's doing writing that's incredible or a lot of different things, if you give your sellers some basic tools, you can set some constraints on what they have.

[00:15:37] Now as you get into B and C and D rounds of funding, you'll start to pull in those folks who can do more standardized sequences. You'll get in more of that leadership that's able to do some targeted marketing, you know, to a very narrow subset of targets.

[00:15:52] But for right now, just create some basic ground rules that keep everyone from doing absolutely anything they want. They're going to need some creativity because you're not going to have the resources to service everything, narrow the constraints on their creativity.

[00:16:06] So I like the idea of the cross-functional team, right? This is modern revenue, not 10, 15 years ago when everyone was gufft in their own thing. However, you know, when things are this bad and it gets tense inside the organization, you know,

[00:16:20] things aren't always as hunky-dory as let's all sit right on a table and figure this out. I actually worked somewhere not that long ago where end up nicknaming the CMO as the CFP, the chief finger pointer.

[00:16:35] Have you worked with a team where you go in and you realize, oh my God, these they're all blaming each other. No one's taking responsibility. You know, how do you deal with that? Almost all of them. When do you not?

[00:16:44] Like that's first of all, that is the state of organizational dysfunction. Like I think that's the norm. It's funny because all people will hire me in and say, hey, Dave, we want you to help us fix our sequences, right? Which is where this conversation it's a pipeline problem.

[00:16:58] They've got a huge pipeline problem, but they've identified it and it's not just sequences. We need to help her write greatest emails that are better. I could not find a less impactful or interesting thing to do than write emails for sequences.

[00:17:10] There is literally no amount of wasted effort that is greater than the amount of effort that we put into rewriting the copy on emails and sequences. Like you can do almost anything else that will have a bigger impact than that.

[00:17:25] Worse than that is like worrying over things like subject lines. If you find yourself worrying over subject lines, just go bang your head against the wall for a few minutes. Come back and forget that you ever heard the word subject line

[00:17:35] because it will make no difference in your effectiveness. Right? So that's that's number one. They call me and they know what they want to fix and it's absolutely not what they want to fix. What they do need to fix almost every time is a misalignment.

[00:17:47] And I'll tell you where that misalignment tends to happen and how I go about sort of fixing it. Usually it's a matter of perception. I describe the big Tam, the little Sam, the littler song. One of the biggest places that marketing and sales are misaligned

[00:18:01] is around something called the MQL, the marketing qualified lead. And it's because marketing views these things as these high volume opportunities, I'm going to give sales a whole lot of these MQLs and then they're from that going to parse out who's interested.

[00:18:15] The challenge is that unless an MQL is an actual hand razor, what it actually is, it's just a signal of interest. It's on par with getting a signal from Six Sents or getting a signal from Bombora or Tech Target or Zoom Info Insights

[00:18:29] or any of the other systems that purportedly give us intense signals from our buyers. That's what an MQL is. It's just a signal. So the challenge is the marketing team views this as having given a lot of great fuel to the sales team to go do something with.

[00:18:43] From the sales perspective, I have to refine that MQL. You've handed me low grade crude and I now have to go through a process of refining. And what that really means from a sales perspective is for any MQL you give me, I'm going to have to go engage

[00:18:57] multiple buyers at that account. It's not going to be the one person. You gave me an account level signal of interest and I'm going to have to engage multiple of them. So for every MQL you gave me, you really gave me five MQLs.

[00:19:08] And for every MQL that you gave me that you think I'm just going to pick up the phone and book a meeting, I'm going to make 20 touches and I'm going to make those 20 touches over a month to five different groups.

[00:19:18] Right? So now you've handed me not just one MQL times five, but one MQL times five over a duration that includes multiple touches over a period of time. That's a debt that every time you hand me one MQL, there's a massive workload on the sales side.

[00:19:34] This is where that tension tends to happen because no one's talking about prospecting capacity. No people are pointing fingers at the quality your MQL suck. Maybe or maybe you're asking the MQL to do too many things. You're right. That MQL is not a hand razor.

[00:19:48] They didn't come in on a contact request form. They didn't ask for sales to reach out and in that sense, they do suck. But that's only if you expect them to be handraisers. If you view them as a signal of account level and the tent

[00:20:00] and you hand them to sales in an amount that doesn't exceed their prospecting capacity, the MQLs might be fantastic signals. But that's the disconnect. It's that one side is thinking in a volume that's great and one side is thinking in a volume that's small

[00:20:14] and this side doesn't understand the requirement of this side to convert that MQL into a meeting. And so I begin almost all of my conversations by getting everyone on the same page about what exactly are conversion workflows look like. And invariably, there are two very different pictures.

[00:20:31] And by the end of that conversation, folks start to get an understanding of that 250 number of when I say you can only hand one SDR 250 accounts per quarter. Now the MQL conversation becomes very different because 80 MQLs a month suddenly becomes 20 MQLs a week.

[00:20:49] Right. Which now we're talking about a very different volume than marketing coming in and saying here are 500 booth scans or badge scans from last week's conference. Fantastic. I'll be able to knock those out at a rate of five per day for the next 100 days.

[00:21:05] Does that sound like a good follow up strategy? No, right. So when we have these misaligned expectations about what each side is trying to do to convert something, we we're going to have tension. We have to redefine those two things.

[00:21:19] When is an MQL ready for sales and what is sales going to have to do to convert it? It feels like in 2024, we might have been a lot better at this than we are, though. Right. This I mean, this this has been around for a while.

[00:21:31] Why are there higher level issues like alignment issues, not just that the marketing to sales or rep or SDR a little bit company alignment issues is a lot deeper than this. You know, I think there are those issues, but I think some of them come down

[00:21:46] to just not really knowing what SDRs do. I think that there was a lot of belief like I understand when I was at Outreach, I probably sold to or worked with maybe 200 companies, including some of the biggest in the world that were on the platform at the time.

[00:22:00] I was the first strategic account manager and afterwards I probably worked with another hundred hundred and fifty companies, including some of the biggest in the world across a variety of technologies. Right. So I've seen a lot of different things,

[00:22:11] but what it ultimately comes down to is a lot of companies that do SDRing well have been doing it well from the very beginning by making their SDRs do very targeted outbound. Like even though we're doing it at scale, we're using persona based sequences

[00:22:25] and we're making phone calls as the primary way that we're converting those conversations into meetings, right? We're not trying to book meetings with email and we never have. That's important because I think a lot of people looked at platforms like

[00:22:39] Outreach and Salesloft and Apollo and they said, ah, these are high velocity sales tools. They are designed to engage a very large, no, they never were. You're thinking of marketing automation. You're thinking of things like MailChimp.

[00:22:53] If you want to send a high volume of email to a fairly unsuspecting list of folks, go buy yourself an email automation platform that is not anything that SDRs were ever doing. Now I know they were. I know that you can point to companies that did that.

[00:23:09] Those companies were wrong and bad and they did it the wrong way. I've spent five years now walking around telling people, cut it out. Quit trying to fix Outreach's deliverability problem by turning it into a high velocity mailer, not its job.

[00:23:23] So I think a lot of these companies have this assumption that I could hand you a thousand MQLs. You could put them into an email automation platform. You could blast them five or ten times. Then a meeting would get booked somehow, not how it happens.

[00:23:36] Even at Outreach, seventy five percent of the meetings that get booked using sequences happen on phone call touches in multi-touch sequences. Seventy five percent. The remaining twenty five percent. A surprising number happened on the email steps that follow a phone call touch.

[00:23:51] That touch where I go, hey, just bumping this back up. Then once you have to hunt for it, I'll try you again later. Those little five minutes after a phone call automated emails got a surprising

[00:24:01] number of replies because it's easier for me to just go hit the reply on that that actually call you back or return your voicemail. Right? So even when email works, email is working because it's in conjunction with a prior phone call touch.

[00:24:14] The majority of companies are trying to automate their way out of a pipeline problem that can only be solved with manual voices on telephones. That's that's it. So seventy five percent. I'm shocked at that number. Honestly, I've encouraged that it's so high.

[00:24:30] It makes sense to me intuitively, I guess. But I think maybe the reason I'm a little bit shocked is that one of the things I've come to hear quite a bit and maybe realize a little bit as well

[00:24:43] is that it seems more and more the SDR function is viewed as an email messaging type function, just more personalized and more targeted than anything else. And people are abandoning the phone like this somehow got to plague right now and I don't understand it.

[00:25:01] And the irony is this, nobody's calling while getting rooms. So I have the great pleasure of getting to work largely with an executive client help, right? And so I get into a lot of the the rooms with folks are more senior.

[00:25:12] When I asked those folks, how many phone calls did you get this week from an SDR prospecting you almost no hands go up if they do it's one or two. If I say how many voicemails did you get zero zero is the number, folks. Nobody leaves voicemails.

[00:25:27] When I say how many of those numbers attempted to call you more than two times zero, here's the truth of the phone. If you don't leave a voicemail, no one knows who the hell you are. You're a random string of numbers at best.

[00:25:39] It might say spam risk or spam likely or something even worse. It isn't likely going to have your phone number, your name or have your phone number, one of your name is not going to have your company name.

[00:25:48] So the first thing you're fighting over is you're making these random dials to what is always going to be a registered like it's going to show up either on my phone or it's going to show up on my work phone as a digit

[00:25:58] string of digits and you're not saying anything. That's moronic. You leave a voicemail every time you make a dial or you didn't make the dial. It didn't happen. Nobody is memorizing your random string of digits and going, ah, this SDR is trying to reach me again. Didn't register.

[00:26:14] The reason why people pick up phone calls and the reason why sequences work is because we win attention over time. If every time a phone call touch happens in a sequence, you don't leave an email. It's as if that never even happened, which means your conversion rate overall

[00:26:28] is going to plummet. Right? So that's the first challenge that they have. The second is even when people make phone calls, they're doing stupid stuff like making call blitzes where they'll put like a shit ton of phone numbers into a dialer and just start dialing.

[00:26:41] No, make one dial and they won't have any connections. The connector will be less than 1 percent. Not leaving any voicemails just right there. And they go, oh, well, phones don't work except phone calls work because they're in a sequence.

[00:26:51] The place that you the distribution of replies in a sequence is a bell curve. You get very few replies at the very beginning of a sequence. And the ones you do get are negative. There are people responding, no, thank you.

[00:27:01] You get very few positive replies in the first few touches. Why? Because we're earning attention over time. That's what a sequence is. It's because we can't just reach out and be like, Andrew, you're in the market for this today and get you. Like that's not how it happens.

[00:27:13] I earn your attention over time. Build interest. I generate curiosity. And then in a good bell curve fashion, I start to get a rise in responses after about the fifth, sixth, seventh touch. It peaks at some point and then declines to a point of diminishing returns

[00:27:27] on the back end of the sequence. If I don't make the first, second, third, fourth, fifth, sixth, seventh phone call, I'm leaving all of that conversion on the table. Guess how many phone calls we typically make? One point four. That's the average. Is that right?

[00:27:42] One point four. Yeah. One point four. And that's I mean, the data is everywhere, but it's fewer than two. I'll put it at that. Very few reps are making more than two phone calls per prospect.

[00:27:51] We know it takes somewhere between five and seven to get your peak conversion in a multi-touch, multi-channel 17 touch 20 day standard high touch sequence. So with the reason why the Thunder works is you're not using it and you're not using it right.

[00:28:04] I feel like if we're poisoning people about the phone, we're saying it doesn't work or it's stupid or whatever like that. And yet we're still self fulfilling prophecy. Exactly. We're asking people to pick up the phone and they're

[00:28:16] doing it half ass. I would write if someone told me I want you to do something, but it sucks and it's probably not going to work. But please go ahead and do it. I'll put as much effort into perfecting that phone call

[00:28:26] as the person just told me to basically right. And it's worse than that. Like I can go in and you can say, hey, help me fix my sequences. And I'll say, OK, well, you got several problems. Reps shouldn't be writing their own. They should be using shared within.

[00:28:37] So I can do a lot of things. But at the end of the day, I'm ultimately going to be saying the sequences that I recommend use emails to get a phone call answer. The purpose of an email is not to get a reply.

[00:28:48] If I get a reply on an email, it's most likely going to be no. And if I get it, if I get an objection, I'm not going to be able over to come in an asynchronous channel.

[00:28:56] So my sequences require you to use the phone and required you to do it this way. They'll all say fantastic, love it. And then I say, OK, great, your sellers currently make about 20 phone calls a week. I need them make an 80 a day.

[00:29:10] And that breaks down to 20 phone calls an hour for four hours of dial time for an SDR two hours in the morning, two hours in the afternoon. You can have the middle of the day to do a lot of other stuff. And they say still sounds great.

[00:29:21] And I say fantastic, what are you going to do to help your reps build the dialing capacity to go from 20 dials a week to 80 dials a day? And they look at me like I'm speaking French, right? You have to build a culture of dialing.

[00:29:34] You've got to build the skills. You've got to go hire a Jason Bay type company to come out and help you learn how to use the phone. You've got to listen to 30 minutes to President's Club.

[00:29:42] You've got to do all of the things where there are people that are teaching the skills, but it is not an innate talent. Most SDR managers don't have it. They never had to learn it. If they did learn it, they didn't have to teach it.

[00:29:54] Right? So we need to invest heavily in developing phone competence, especially for a generation of folks who are as I'm being told innately objection to they don't they don't like using the phone. I don't know if that's true or not.

[00:30:07] I have feeling this is much like everybody said nobody answers their office phone. That was a myth. Everybody answered their office phone. We didn't all just quit. We forwarded them to our mobile number. Like when I mean, right? Did you get an office? I had an office phone.

[00:30:21] I did forward my office phone. I didn't just get to be like, oh, I'm not in the office anymore. You guys can't catch me. Like that's not how life works. So I think we build up these myths about the thing.

[00:30:32] And then instead of just skilling people up to be able to do the job, we put them in a spot where they can't succeed and then go, look, it doesn't work. And that this is the bonkers part. Pick up a phone, teach your people how to use it.

[00:30:44] They'll be great. All the companies, by the way, they do this. If you want to know why Snowflake and everyone else is crushing you right now, you're getting crushed right now because there are still companies that do

[00:30:53] this, that teach their reps how to get on the phone, give them really good phone numbers, give them the tools that they need and then have them run sequences that do this. They're eating everyone's lunch.

[00:31:03] I know because I get to see it and it's the results are spectacular if you do it. Dave, let's learn a bit more. But you personally, I have a list of 35 questions here.

[00:31:17] And what we do is you spin this wheel, which you're going to hear in a second to pick three of the 35 questions now, just so you know, this is completely random. I use an advanced next gen AI engine to make sure that the questions

[00:31:33] that picks out of 35 are our surprise each time. And I'm even moving towards new large language models to make sure that we're completely as random as we can get. So I'm going to go ahead and we spin the wheel here and we're going to see

[00:31:46] what questions it comes up with. You ready to go? Let's do it. Oh, look at that. Number 17, how did you first make money as a kid? Oh, man. Let's see. How did I first make money as a kid?

[00:32:02] I think my very first paying job that was not like mowing lawns for neighbors and stuff was umpiring youth baseball. And I think it kind of foreshadowed my later career and telling people what to do. I really enjoyed it at the time, but that was my first official.

[00:32:18] My actual first job, though, I didn't work in like restaurants or anything outside an aunt who was a court reporter, a court stenographer. And one of the things you have to do as a stenographer is proofread all

[00:32:28] of the things that you type out of machine language into English. And I got a job as a proofreader when I was in high school. And it was amazing because it paid like 15 bucks an hour back in 1985 dollars, which was a you know, a mint basically.

[00:32:42] So that was I think that was my first official gig. You scarred by having to read some of the things that came out on the court transcripts. There was some crazy stuff that yeah, I can't repeat any of them,

[00:32:54] obviously, but there were some very unusual things that for a 15 year old kid was probably not safe for work, but I certainly enjoyed it. Yeah, I bet you did. All right, let's spin the wheel again.

[00:33:11] Number three, what's the most embarrassing or memorable story from your career in sales? Let's see, most embarrassing or memorable. I think, you know, I don't have a lot of super embarrassing ones. I know we all do little things, but you get over that stuff pretty quick.

[00:33:30] I think some of my most memorable sales things have been these surprising moments where people that I tried to sell something two years ago and didn't wind up actually making a sale. But you know, there's one guy in particular, I mean with a guy named Paul

[00:33:45] Stonic this afternoon, and he and I met in 2010 in my very first sales gig when I was selling at a company called Envoto, selling e-commerce video. And he was at Avon and tried to sell him at Avon then at Dress Barn, then at Home Depot.

[00:34:02] And I think there was something else in between. So over the course of several years, he moved jobs. I kept pursuing him and we probably hadn't talked in five years. And now he's heading up the Savannah College of Art and Designs

[00:34:13] SCAD Pro program and he reached out two weeks ago and said, Hey, what are you doing? Man, I need somebody to come help my team learn about sales. So I think the thing that I think is the most memorable about my job

[00:34:26] are those folks that you had an impact on, didn't even sell to them. Just had a good relationship as part of the process and they stick with you over long periods of time. And I just think that's the coolest. Yeah, relationships and trust matters, right?

[00:34:39] How you treat people, how you engage. People remember they're really good and also they're really bad. Yeah. And it's, you know, and there was it was truly just a friendship over the course of selling. It wasn't like we went out and played rounds of golf or did

[00:34:52] anything else. It was truly just a professional attempt to help a company solve a problem. But when you do those things the right way, it really matters. And you stick with folks. And I think that was, you know, when I got into sales,

[00:35:04] I was very uncertain about it. The reputation of sellers is not exactly stellar. And so I don't know what I imagined it would be, but I definitely didn't think it was going to be this long term consultative problem solving, you know, really engaged job

[00:35:19] that you could get so much out of after such a long time. Yeah, no kidding. All right. Last question. Let's spin the wheel one last time. All right. 25. What is the story behind you getting your first job in sales? Oh, that's a good one.

[00:35:38] So I was when I got my first job in sales, I was almost or I guess that was 40 years old and was about to turn 41. I had been a graduate researcher and an assistant professor at the University

[00:35:51] of Texas in Austin and Houston Tillett's University and was kind of headed down the track to finish a PhD in communication studies and become a professor. And then my wife got pregnant and that was sort of a surprise.

[00:36:03] And if you don't know anything about academics, when you're a young academic and I was nearly 40, but still young for an academic, as I was looking to get a job, you're trying to find ten year track jobs and there were maybe 10 to 15

[00:36:16] open in the entire country and each one had a couple of hundred people who are applying, most of whom have been doing it for a long time, which means you're going to spend your early years as a professor just traveling around

[00:36:26] the country, taking adjunct jobs, going wherever they are. And you might show up at a place and have them on the first day of class to say, hey, the class didn't make your unemployed. So, you know, knowing my wife was pregnant, realizing this is my future,

[00:36:37] kind of realized I had to do something else. And so I bumbled around with a couple of things. And then a buddy of mine named Yuri Costin, who is a lifelong sales recruiter has been doing it for a very long time anyway, said you are built for sales.

[00:36:48] I had been a debate coach. I don't know if you know anything about academic debate, but it's basically professional objection handling. You teach people how to present value propositions and you defend them against people who want to tear them down, right?

[00:37:00] Like it's a it's a lot of the same stuff. But most importantly, it has a W at the end of the fight, right? You get to win and you get to lose. It's a highly competitive thing.

[00:37:09] And when Yuri pushed me into sales, I wasn't really sure what to think of it. Like I said, the reputation of sellers is not exactly something that I was, you know, embracing, but I realized a ton of that was just a bad stereotype.

[00:37:20] And when I got into it, I loved it. Immediately felt that same competitive energy that I got from doing competitive debate coaching, competitive debate and now got to do with big paycheck on the back end of it. And I thought that was pretty cool.

[00:37:32] So that was 10 years ago. No, shit, that was 15 years ago. And I've loved it ever since. And how did you start off? Did you just go in and get it all wrong? Or did you find that you were quite a natural and you just

[00:37:44] need to tweak things along the way? You know, it's super funny. My first job was an SDR job because, you know, I'm a PhD dropout, 40 year old, like not exactly. I'd not had a boss.

[00:37:54] I'd been a director and had done a bunch of things that I had putted of bosses, but I listened to them. So I was a terrible first hire and a guy named Justin Crandall, who's just a fantastic sales VP came from Bizarre Voice,

[00:38:07] took a chance on me, hired me as an SDR. And I was kind of in the ideal situation to be an SDR. We were selling e-commerce video in 2010. E-commerce was still relatively new. And so on the first day they handed me this big, thick catalog called

[00:38:22] the Internet Retailer 500. And it was the top 500 companies selling online, you know, Amazon at the very top and, you know, Dover, Saddlery and stuff at the very bottom. And there were, they weren't about 150. Sorry, Dover, Saddler, you are always big and important.

[00:38:38] But the point was it was this contained, you know, universe of accounts. I couldn't just go sell to anybody. This is before the days when brands were really selling direct. They were largely going through retailers. So there were 500 targets.

[00:38:50] And I was told, you get the eastern third of the United States. Go get them tiger. And so in a lot of ways I was thrown to the wolves, but I was given such a narrow set of targets, you couldn't just go burn an account

[00:39:01] and go get a new one. Those were your accounts. You got that many and that's how many you could sell to. So it forced me to be creative. It forced me to be targeted. It forced me to do sustained pursuits like there weren't sequences back then.

[00:39:12] But I only had a limited number of VPs of e-commerce I could be talking to. So I talked to them for very long extended periods of time. And those were the secret ingredients of what it took to be a good SDR. We just didn't know it.

[00:39:24] You had to have a narrow set of targets. You had to have a message that you were tailoring to those particular folks. You had to remain sustained in your engagement for a long period of time. And so those natural things that sort of became the success criteria

[00:39:37] for a good SDR were baked into the job. So it was kind of, I would have been crazy to fail at something that was sort of that easy. And so I did that for like three months, broke all of the SDR records and setting meetings.

[00:39:50] And they said, you want to try selling? And I was sure. So it became an enterprise seller shortly after that and never look back. 15 years later, you're still in the business. That's awesome. Yeah, right. Now, you know, I stopped selling about five years ago,

[00:40:01] but I still totally miss it and still have to do it on occasion. I saw a post on LinkedIn. I think it was last year. I think the actual post was from a CISO in the cybersecurity world.

[00:40:15] And he was complaining about, do people really think cold calls work or whatever? And of course, all his buddies piled on and say, oh, my God, I can't believe all these sales rep making cold calls. And they remember this one SDR for Rapid Seven chimed in.

[00:40:29] All he said was one line. He said, I booked 168 meetings last year and 164 came from a call. Yep. That's it. There's a guy, right? So Rapid Seven is probably going to figure it out, right? They know how to teach people.

[00:40:41] They know how to create the culture and they know how to do them well. And they're winning by it, sounds like. And honestly, cybersecurity is better than any other industry doing this. The earliest success stories coming out of outreach were not exclusively,

[00:40:54] but in large part, they were cybersecurity companies that figured this thing out. And the selling environment for cybersecurity has only gotten more competitive. But the companies that continue to do targeted outbound on the phone, multi-touch, multi-channel shared sequences, programmatic consistency, continue to eat everyone else's lunch.

[00:41:13] And what's funny is outreach is the one who sent a lot of those early SDR and ops managers out into the universe and they populate a lot of those cybersecurity companies. So their DNA is this. So if you are a cybersecurity company and you're not doing this stuff,

[00:41:29] I promise you there is a competitor who is absolutely torching you on pipeline, guaranteed because they're they're out there and they're doing it well. I sold to a bunch of. So let's say you come by the cyber donut, right? They've done the cross functional team.

[00:41:43] They started narrowing down their ICP. They've got the right sort of framework for messaging and they're relying on their teams to do it. But one of the things they've realized, let's say, is they're just not

[00:41:54] confident in their SDR function and I don't know, the people and the house being made up and maybe it was a bit haphazard and it was usually liked. Right. Yeah. They probably don't even have a leader. Right. They're just hired by this, like Bob. So I'll manage them.

[00:42:08] Right. They got they got another successful SDR who got promoted. Right. Right. Right. What wouldn't make you a good people leader? So if they want to do a reset and create the high functioning SDR team,

[00:42:21] Bob sitting there and going, OK, I'm going to do it right this time. How will he do it right? What what will he do to say, yep, this is going to work unbelievably well in three months or six months time?

[00:42:31] First thing first mistake that I think Bob is sitting on as a CRO of an early stage company is you've got a bad ratio of closers to SDRs. Right now, you have one SDR supporting three closers. That means that their job is essentially trying to keep the pipeline

[00:42:52] three full pipelines filled. Now your AEs are going to be able to do a certain amount of that. But my guess is there hasn't really been an effort to figure out what the AEs prospecting capacity is.

[00:43:03] Most AEs prospecting capacity at best, you're going to get an hour to two and two is a stretch of them doing the kind of work required to get meetings to book. Right. Just because you're an AE doing outbound doesn't mean you get

[00:43:17] a shorter sequence or fewer touches or you don't have to make the same number of phone calls or you don't have to go multi touch, multi channel or you don't have to multi thread your engagements. The rules of outbound are still the same.

[00:43:28] You have to have a sustained engagement. Mostly get them through manual touches on the phone. Knowing that if an SDR is expected to fill three full pipelines or most of them and an AE is only going to be able at best to be able to fill,

[00:43:42] let's say they're doing a quarter of what the SDR are, let's give them 25 percent. That means an SDR has to fill 75 percent of three separate pipelines. That's a tall order. The chances are if the SDR was doing that good, right?

[00:43:57] You would need either a whole lot more AEs or what would be more likely is I would hire the SDRs first to create a one-to-one relationship between the SDR and the AE to go test my territories and have them focus on a single pipe

[00:44:11] to figure out what we can do. I'd have at least three of those in place so I could see if those dyads are actually functioning dyads or if it just happens to be we got two superstars together, so try to control for some variance.

[00:44:22] But I'd start by reducing that number. It is easy to hire account executives if you are handing them full pipelines. It is hard to make account executives at Series A companies when you are striving to product market fit, be both successful at closing business,

[00:44:37] which is going to be super hard because you don't have a bunch of referenceable customers, you don't have a lot of proof of time in market, you still don't have your SOC2 Type 2 certification fully nailed down. All those things that Series A companies are struggling with means

[00:44:50] the job of being an AE is harder. It's harder for me to get ink on paper than when you've got a hundred referenceable clients and you are SOC2 Type 2 compliant, you've got all of your process nailed down on the back end.

[00:45:02] Until then, you're asking your AEs to do a super hard job with a super thin pipeline. I think that's a recipe for disaster. So I'd start by reversing it. Second thing you do when you create more of those SDRs in the beginning

[00:45:14] than AEs is you've got a pipeline to your account executives. This is the place that you should be thinking about pulling out those AEs. So every time you hire an SDR, it's not like you're putting a sunk cost on that part of the business.

[00:45:26] This is your investment in your future pipeline of AE talent. But I think that's one of the most immediate ways that an early stage company can think about what they're doing with an SDR team.

[00:45:37] If you hire one SDR, you're hoping that you hire a superstar who can figure it all out. If you hire three to five, now you've got a team and you can start to understand variance between the different folks, what motivates them, how the commission is different between them,

[00:45:51] what they're doing to support their account executives. So I think that would be the first change that I would make. The second change is probably figuring out what metrics you want to look at from an SDR productivity perspective.

[00:46:05] And I think a lot of people are really fixated on kind of the counting metrics around, are they doing a lot of the right activities, email wise, phone call wise? I think you have to look at phone calls.

[00:46:15] But when I look at activities, what I'm really looking for, are they doing the right things? I could make a thousand phone calls to a thousand different prospects and they will be exponentially less effective as making a thousand phone calls to 10 prospects, right? Or to 100 prospects.

[00:46:32] The more touches I'm making, the more likely the conversion is going to happen. And so I would want to make sure that we're not just counting activities, but there were counting activities in a way that correlate to success.

[00:46:43] And that means not just the number of phone calls you're making, but tracking the outcomes of those phone calls, the number of phone calls you're making per prospect and especially tracking whether or not those are turning into meetings that are booking.

[00:46:55] I think we spend way too long talking about activity metrics and vanity metrics that simply don't impact the bottom line. It feels like this team might need a strong leader as well, right? They have a lot of responsibility on their shoulders. And usually they're very junior.

[00:47:12] It feels like they might need someone who's a bit more senior, who's the father figure, the uncle who's been around the block a few times to really pull this together into something that they believe they can do and really make a difference.

[00:47:24] It's also so I think that's a great point. And I think there are a couple of things. One is I think it helps to have a senior leader on your SDR team, if only because you're trying to get a seat at an executive table.

[00:47:36] And if the SDR is always the redheaded stepchild of the revenue organization, if every time there is a conflict over qualifying criteria between the SDR manager and the AEVP, who's going to win that fight? Right. You're stacking the deck against the SDR organization.

[00:47:52] If you don't give them equal voice and equal stake. Now, the flip side of that is by the time you find someone who has that sort of executive level presence in an SDR background, you know, folks like Lars Nielsen do not grow on trees.

[00:48:04] And finding those folks to head up your organization can be very difficult. Once you get them, the challenge can be that they don't then know how to turn around and grow their manager base up because they're so executive. They like having this boardroom and executive suite conversations.

[00:48:19] They're not so good at the tactical. I think what companies need to invest in is the kind of SDR leader who knows how to train managers. Managers are the weak link in almost every SDR program for a couple of reasons. One is, who are we promoting?

[00:48:33] Well, we're promoting former SDRs. Well, who are former SDRs? They're people who had an entry level into our organization and likely spent somewhere between 12 and 24 months in that entry level role. They've not had any prior people leading experience. They've not had any people management experience.

[00:48:49] They are then elevated into a role where they've only had weak leaders to learn from because the people in the seat before them weren't any good. So we treat managers like that somehow in innate talent, like we do a lot of the roles and sales and it's not.

[00:49:03] It requires training. I would invest a ton of money and time not just in finding that SDR leader, but in developing a training program that makes those SDR managers good people leaders, good people managers. And that's not an innate set of skills that requires training

[00:49:21] and dedication to the program. So, Dave, I hate to say this, but we're running out of time here. I know I looked at that. This flew by. Flew by. I feel like Bob McDonald is going to be on better footing now than he was

[00:49:34] when it was 53 minutes ago, which is great. Right. And we've given some pretty actionable, specific things for for Bob to go look at. And of course, you know, we're hoping that other people out there

[00:49:45] in the same sort of boat as Bob stretch their head going, what do I do? Because it seems to be so much in flux right now. But, you know, I've bound how it works, how it doesn't work. And a lot of emotion and passion and viewpoints

[00:49:56] and seem to override logic and also facts. So I'm glad that you're able to bring some of that to us this morning. And I'll leave you with this. The craziest thing is this at the time when people are piling on

[00:50:10] sales development and SDRs, this is specialized sales function and talking about how ineffective it is. We are just now developing the technology to really make target selection effective. We're just now getting the six senses and the bomb or isn't the tech targets and the MQL data

[00:50:28] is becoming more reliable. And we now have things like gradient works that let us do dynamic distribution of accounts so that we can constantly keep reps on the highest value, highest problem. Now that we're finally getting the back end plumbing to a point

[00:50:41] where it actually can support a functional outbound role, we're talking about killing the outbound role and that's bonkers. If you do everything that I talked about and you plug in that great target selection data, you should be bumping your conversion rates from two and three percent

[00:50:56] for somebody in a high touch sequence to 10 and 15 and 20 percent. Think about what kind of return that becomes on SDR investment of time. If you're appointed the right segment of the market and the unit economics makes sense, companies that do sales development

[00:51:11] correctly over the next three years are going to absolutely crush those that try to remove the humans from the top of the funnel. It marked my words. It will be devastating. I love that. Love it. I'll put your LinkedIn and the show notes for the episode.

[00:51:27] Is that the best way for people to get hold of you? It absolutely is. I have recently announced that I am joining OneView, a new company headed up by a guy named Remington Rawlings used to do a lot of revenue operation stuff at Snowflake and some other places.

[00:51:41] And I will be heading up the professional service side of the practice. So come check out OneView. I will be heading up OneView Labs and you can always buy me on LinkedIn. Fantastic. Thanks for joining us today. Andrew, I appreciate it, man. Thank you for having me.

[00:52:06] It would mean a lot to me and to the continued growth of the show. You could help get the word out. So how do you do that easily? There are two ways. Firstly, just simply send a link to a friend.

[00:52:17] Send a link to the show, to this episode. You can email it, text it, slack it, whatever works for you and is easy for you. The second way is to leave a super quick rating. And sometimes that can seem complicated.

[00:52:30] So I've made it as easy for you as I can. You simply have to go to ratethispodcast.com slash cyber. That's ratethispodcast.com slash cyber and explains exactly how to do it. Either of these ways will take you less than 30 seconds to do.

[00:52:47] And it will mean the world to me. So thank you.