Carlos Delatorre, CRO @Harness: Why Every Sales Rep Should Do Pipeline Generation | E1251

Carlos Delatorre 0:00 I think for an early-stage company, the CEO really has to develop the plays, figure out the message, at least that initial message. I don't believe salespeople sell. Buyers buy. All salespeople can do is create an environment that is conducive to that purchase decision.

Harry Stebbings 0:20 Ready to go? Carlos, I've wanted to do this one for a while. I'd heard so many things about you from prior guests, so thank you so much for joining me today.

Carlos Delatorre 0:38 It's a pleasure, Harry, thank you for having me. I have arrived. (laughs)

Harry Stebbings 0:41 (laughs) It is great to do it in person as well, it makes it so much more special. I love to start with context, though. When did you first realize that you had this love of sales first?

Carlos Delatorre 0:52 Probably as a teenager. Um, I had a cousin, uh, my cousin Tais was dating a guy who was a manager of a clothing store and (clears throat) I think I was 14 or 15 at the time. And I had worked, you know, for several years mowing lawns and raking leaves and doing odd jobs, uh, paid by the hour. (clears throat) And, uh, he decided to give me a shot at the store. He would let me come in on the weekends and sell men's suits and, uh, the commission rate was 10%. And the suits were $800 to $1,000 and over the course of a weekend, I could usually sell one suit, maybe two, maybe three. Uh, and so to make a hundred bucks in the air conditioning in the mall was pretty amazing, and I thought, "Hmm, there's something to this."

Harry Stebbings 1:40 Do you think people are born salespeople or do you think it can be learned?

Carlos Delatorre 1:45 I think it absolutely can be learned. And I think when people say that someone is born a sales, uh, a salesperson, usually what they're referring to is charisma and a big personality and, um, I don't know that those things are necessarily what makes a great salesperson. They don't hurt, but they're not the core of it. Um, so sure, uh, having more empathy, having, uh, (clears throat) uh, you know, being genuinely curious, I think those things help, uh, you know, are innate, uh, innate attributes that make people better salespeople. But I think most of it is learned.

Harry Stebbings 2:21 EQ, empathy, that pain tolerance, all feels a little bit like a game of art. And then we see the world today and it feels a lot more scientific.

Carlos Delatorre 2:31 Mm-hmm.

Harry Stebbings 2:32 How do you think about sales being art or science?

Carlos Delatorre 2:35 Yeah, I think art is what we call something when we don't understand it yet. Um, (clears throat) you know, people could say, "Oh, you know, Picasso, that's, that's art. How does he do it?" And then you have, you know, students studying for years and then they break it down, "Well, it's the colors and the shapes," or whatever it is that's the basis of, uh, of Picasso's art. And so I think like anything, um, there, there are people who are savants, who are gifted, and there are people who can, uh, connect dots that others don't see. But then, um, others can, can follow, can learn, and can, can replicate those things. So I think it's more science than art, candidly.

Harry Stebbings 3:17 It all starts with bru- bluntly bringing reps on.

Carlos Delatorre 3:19 Mm-hmm.

Harry Stebbings 3:19 And I spoke to Manny and I spoke to, um, um, Dev at Mongo before, and they both said that you're amazing when it comes to hiring sales talent. So I wanted to start there. What are the single biggest lessons for you when it comes to effectively recruiting sales reps?

Carlos Delatorre 3:37 I think it's important to think about the job that needs to be done. Arrive at a conclusion, a well-formed opinion around whether a candidate is capable of doing that job. And I think a (clears throat) , a trap and a mistake that people make is, um, over-rotating on what they have done in the past and assuming that (clears throat) success in the past predicts success in the future. Um, certainly a track record of failures is, uh, is something to, to be thoughtful about and to avoid. But success in the past, (clears throat) you have to be able to, um, break down what needs to happen in the future and identify what skills or what attributes are required in order to accomplish this, uh, outcome in the future. (clears throat) And then figure out a- almost like take a battery of what this person brings and how much of what they need in the future do they already bring? Investigate or interrogate what they've accomplished in the past, what their life journey is like, and form an opinion around their innate attributes so that, um, you can start to, to, to have an opinion around the likelihood of their success in the job that you're trying

Carlos Delatorre 4:58 to, to fill.

Harry Stebbings 4:59 Okay. Uh, you're gonna advise me today. I'm one of your angel investments and you're the OG. So-

Carlos Delatorre 5:05 Mm-hmm.

Harry Stebbings 5:05 ... do I bring on board a sales leader who's got incredible experience, incredible network, and builds out the sales team themselves? Or do I bring on young hungry reps and AEs to go hunt and really...... go off on their own and be aggressive?

Carlos Delatorre 5:20 Are you a brand new, uh, company?

Harry Stebbings 5:22 We're a brand-new company.

Carlos Delatorre 5:23 (clears throat)

Harry Stebbings 5:23 First two or three years.

Carlos Delatorre 5:24 Don't hire a leader yet. Um, (clears throat) hire individual contributor. Um, at first, just hire SDRs and you be the rep, so that you get... I think, I think for an early stage company, the CEO really has to develop the plays, figure out the message, at least that initial message. (clears throat) And once you have conviction around who do we sell to, what are the personas, what's the message, then I think you can build an organization around that. Until that exists, I would advise the founder (clears throat) to hire some individual contributors around them, co-locate, sit in the same room so you can hear each other, and, uh, and duke it out, and refine the message, and refine the plays. And then once, once you've got some conviction that it's repeatable, then go and, uh, go and hire a team around it.

Harry Stebbings 6:15 Should I hire those young ones before I actually have messaging and a playbook refined?

Carlos Delatorre 6:20 Sure.

Harry Stebbings 6:21 You should?

Carlos Delatorre 6:21 Yeah. And they're going to be super junior, because they're going to be happy to be at a tech company because it's probably the first tech company they've ever worked at, and you're going to have to do a lot of the heavy lifting. You're going to have to train them. You're going to have to, you know, you may have to, you know, remind them that they should wear a shirt to a meeting, and you know, all kinds of things. But that's a beautiful part of the journey that I think, um, I think only a founder can really do well.

Harry Stebbings 6:46 Okay, so we have that. T- when we're looking for these reps, would we rather they have experience in the domain that we're in, whatever that domain is, or selling the size contracts that we're selling? Which one's a more preferable past history?

Carlos Delatorre 7:01 I'll answer the question, but then I'll answer the question that I, I, I would have preferred you asked.

Harry Stebbings 7:06 (laughs)

Carlos Delatorre 7:06 So I would prefer, um, experience with the type of deal (clears throat) over domain, with the... unless the domain is so specific that it's going to take a lifetime. You know, if I'm selling some like, you know, molecular modeling technology, and you have to be a, a biologist to understand it. But outside of that, (clears throat) better to teach the domain and to hire as many of the sales skills, um, as, as you can.

Harry Stebbings 7:36 What question would you rather I asked?

Carlos Delatorre 7:38 When you're hiring, um, the, the thing you can't change is the innate attributes, the DNA of the person. And so that's where you should spend the most amount of time. Get to understand who that person is, um, in, in, in the areas that they can't change. Then (clears throat) you should have hopefully a pretty good idea of what are the skills that they will need to be successful. Then (clears throat) once you, once you figure out, "Okay, this is the type of human being that I need," now (clears throat) how many of the skills that they'll need to be successful do they already possess? And then the skills that they don't possess, how difficult is it going to be? How long is it going to be- take for them to acquire them? And that is the formula. You can't change the DNA. And then if they don't have any of the skills, it's going to take a very long time for them to have the ramp. So first the DNA, then the skills, and there's always going to be a gap. So you sh- you need to have, um, sort of negotiables and non-negotiables in terms of the, uh...

Harry Stebbings 8:46 I love this-

Carlos Delatorre 8:47 Okay.

Harry Stebbings 8:47 ... as granular as possible, but I'm also asking because I don't know the answer.

Carlos Delatorre 8:50 (laughs)

Harry Stebbings 8:50 Um, so you would advise me, make a list of the skills that you need, test which skills they have, see which skills they don't have. How do you test what skills they have?

Carlos Delatorre 9:03 So it depends on the skill. So, you know, in enterprise, uh, in enterprise software selling technology, some of the, the skills that you would look for is (clears throat) or that I look for, um, I would look for experience, skills and experience. I would look for experience at a challenger company. (clears throat) It's so much harder to operate at a company where you don't have a big logo that, um, sort of-

Harry Stebbings 9:30 Carries it.

Carlos Delatorre 9:30 ... sells for you, that carries for you. So that would be one that I would definitely look for. Has, has this person been successful in that kind of environment? Have they had to do their own pipeline generation or have they always relied on (clears throat) SDRs or marketing or partners or what have you? So I would look for a, a history of self-sourcing, uh, pipeline generation. Have they sold a product that is of comparable complexity? Have they sold (clears throat) into accounts of comparable size? Have they sold a solution of comparable, um, (clears throat) price? Which means it would have multiple stakeholders, which means it would require a business case, which means p- more politics would be involved from the customer's perspective. Um, (clears throat) have they sold a solution that involves a comparable number of personas of stakeholders? Have they sold a solution in the same general domain? Meaning, am I selling into IT and they've only ever sold business apps or vice versa? Some of those for me are non-negotiable. Some of those are negotiable, but if we have a lot of gaps, then it just means my ramp time is going to be long.

Harry Stebbings 10:45 Which would you say are more often non-negotiable for you? I know it's situation dependent, but more often than not non-negotiable.

Carlos Delatorre 10:53 Um, I've spent almost my entire career at, uh, challenger companies. And so (clears throat) if you are going to disrupt a marketplace, um, the risk associated with hiring someone (clears throat) that hasn't been at a challenger company is really, really high. So that one is a near non-negotiable. Pipeline generation, hiring AEs that have not...... built their own pipeline, that one is non-negotiable because (clears throat) if they say they will, if they say they want to, um, they just don't know how hard it is or they don't remember, maybe they did it as SDRs a long, long time ago. So that, that's a really big risk. That's a, that's kind of a non-negotiable. Maybe they've only sold into mid-market accounts and they've only sold deals in the $50 to $150K range, we're gonna put them in enterprise selling $500K deals with many more stakeholders. But again, we think they're really smart, we think their drive is really high, and so we ... that's more negotiable. So, (clears throat) those are, those are some of the things that I negotiate on.

Harry Stebbings 12:03 When we're testing out these kind of skills and the non-negotiables and negotiables, we're gonna get into pipeline generation, I have to later, but are we doing case studies? Are we doing take-home assignments? Are we doing anything physically active to determine these skills?

Carlos Delatorre 12:18 We're reaching a conclusion, uh, or we're developing an opinion on where they are (clears throat) in terms of maturity on the skill through interviews and back channels. I'm a big advocate for, at the end of the process, we call it a challenge, we have an event where (clears throat) they have a, a couple of days to go, uh, think about some questions, prepare a presentation, and come back and present it. But that's more of a validation around the decision at the end. It wouldn't be fair, I think, to a candidate to do that early on because it does take work. And so, (clears throat) once as a hiring team we develop conviction around a candidate, we'll do the challenge just to, like, make sure we didn't miss anything.

Harry Stebbings 13:05 When you think about questions around a hire from that approval board or the people involved in the process, what are the most common reasons why there is conflict in a hiring decision for sales reps?

Carlos Delatorre 13:18 I think it's human nature that (clears throat) we tend to, uh, index around our own strengths. When we see pieces of ourselves in someone else, uh, I think it's very tempting to become enamored with that and then to miss other gaps. And so if you've got (clears throat) in a hiring, you know, in a hiring, uh, chain of command, you've got, uh, people that are quite different. One person that's super, uh, charismatic, has super high EQ, another person that's super process-oriented. The process-oriented person might miss that this person is a little awkward, or the high EQ person might miss that this person is, is kind of, like, not, not very tight on process. And so that, that would be one area where you have disagreements.

Harry Stebbings 14:05 Do you agree with Jason Lemkin who says that you should always hire two reps at the same time and subtly enforce this element of competition?

Carlos Delatorre 14:13 Yes, but for a different reason. So I do think that having multiple reps co-located is far, far better. You know, at MongoDB, you mentioned that you talked to Dave, at MongoDB, we hired a lot of people and, uh, (clears throat) our attrition was higher than we wanted it to be. And so we did a lot of analysis on attrition and what we found is that lone rangers, and we meant that meaning when we have a single employee in a ... and if we have a single rep in a city and no one else at MongoDB, uh, lives in that city, their attrition rate was, like, four times higher. It's (clears throat) so hard to ramp when you're all by yourself, when that little tiny, that quick question that would've taken 10 seconds to lean over and ask the person next to you, when that now requires you to schedule a time with someone and a- forget it. So, (clears throat) the likelihood of failure is so much higher. So sure, the competitive aspect is part of it, but I think the bigger part of it is just helping each other. So I'm a big advocate of hubs, and so I think at minimum you want two sales, if it's a company, if it's a, if it's a, a product where you have a sales engineer, two salespeople and a sales engineer, that's, like, the minimum profile (clears throat)

Carlos Delatorre 15:27 for a hub.

Harry Stebbings 15:28 Got you. Okay, so two people and a sales engineer, that's a minimum profile for a hub. I want to get to the pipeline generation. You said it there, Manny was like, "Pipeline generation Tuesdays are famed with Carlos." And it was so central to how you acted with Mongo and how you execute so well. And so first, I just want to start by asking, we have SDRs, we have demand gen, why do we need to have this, uh, extreme focus on pipeline generation for reps?

Carlos Delatorre 15:57 There's a few reasons. Reason number one, more pipeline. Great. It's like cowbell, the more the better. Um, reason number two (clears throat) , think about when, um, when a salesperson gets stuck in a deal. Why are they stuck? They're stuck because maybe they're too low and they can't get high, or they're in one division and they can't over to the other division. How do you get unstuck? You PG into the person that you need to be in to, be at. You PG into the, uh, more senior person. You PG into the other, uh, (clears throat) division. And so the ability to generate pipeline will drive, um, will, will lead to a higher win rate on existing business. What else? Well, (clears throat) if you have an organization where pipeline generation is outsourced, let's say, to another role, it's a natural tendency (clears throat) for salespeople to get, um, more and more finicky around what-... inbounds or what leads are worth their time, are worth working. And so the next thing you know, if you, if you take that to its logical conclusion, it's ... And I've seen this. I, I won't mention th- the company, but I've seen a company where the AEs said, "Hey, the definition of an, of a lead worthy of me working is the customer's ready to see a demo and they have, they have agreed with the S- with the SDR that if the demo goes well, they want a quote and they're ready to buy after that." So that's like 80% of the sales cycle is done, and the sales re- ... And so now in that kind of a scenario, you need such a huge investment in marketing and such a huge investment in SDRs just to meet that bar of the expectations of the sales reps. Whereas if sales reps are doing the work to generate their own meetings and their own pipeline, man, when they get pipeline from their SDRs or from marketing or from partners, they'll treat it like gold because they know how much work and how hard it is to get that. And so your conversion rate on your other, your non-AE, uh, sources is a lot higher.

Harry Stebbings 18:12 I, I love that. I, I, I do have to ask also ... Well, I do have to say also, I think it means you don't have the loss of accountability, which is like, it's so easy to be like, "If I didn't hit my number, yeah, but demand gen gave me shit leads."

Carlos Delatorre 18:23 That's right.

Harry Stebbings 18:24 It's like, "Well, they're your leads, so-"

Carlos Delatorre 18:25 That's right.

Harry Stebbings 18:26 "... it's your fault."

Carlos Delatorre 18:27 That's right. So I think the, the way to orient it is, um, the AEs are responsible for generating the pipeline that will support them being successful, them hitting quota. Then anything they get from the other sources is a gift, is a cherry on top, is extra.

Harry Stebbings 18:44 Does that not take all weight off SDRs and demand gen? How do you prevent them from going, "Poof, we're just the cherry on top, so it doesn't really matter"?

Carlos Delatorre 18:53 Well, that's the environment under which the AEs operate. Of course, the SDRs have expectations, you know, on them. And so you need to have, you need to have a system where there's accountability at every level and there's expectations and there's performance management.

Harry Stebbings 19:08 My

Harry Stebbings 19:09 question to you is ... You know, we had Chris Dagnano on the show from Snowflake.

Carlos Delatorre 19:12 Love Chris.

Harry Stebbings 19:12 Yeah, love Chris. Great dude. And he's like, "You can really only take, I think it was like six to eight meetings a week as a rep if you really want to come prepared and really smash it."

Carlos Delatorre 19:21 Yeah.

Harry Stebbings 19:22 Your time is gonna be so conflicted or changed differently by suddenly having pipeline generation as a core part of it and an expectation. How do you advise reps on time allocation now pipeline generation is a core part of that expectation?

Carlos Delatorre 19:38 Yeah. First, you have to agree that pipeline generation is good. You can also say that roughly excellence in pipeline generation equals excellence in sales. Someone who's got a massive pipeline that misses some things in the sales cycles, they're probably still going to do very well. Someone that executes beautifully but doesn't have enough pipeline, they're going to miss their number. And so that's the first thing. Let's agree that pipeline generation by the AE is worthwhile. If so, uh, if they agree with that, and I feel very strongly that that's the case, then roughly a third of your time, so maybe 20% of your time, one day a week is dedicated to just outbound, you know, cold calling. And then there's another probably 10 to 15% of your time that is devoted to prep for the cold calling and follow-up from the cold calling. So, that's kind of how you get to the 30 ... how I get to the 35%.

Harry Stebbings 20:38 Okay. When you're hiring these reps and they haven't had pipeline generation as such a big part of their role before, how do you teach them to be good at pipeline generation? (laughs)

Carlos Delatorre 20:48 Yeah. So remember, um, I'm not hiring folks that haven't had to, that haven't had to do it and been successful doing it. That's a-

Harry Stebbings 20:56 Is that a complete non-negotiable for you?

Carlos Delatorre 20:58 It is, yeah.

Harry Stebbings 20:59 Okay.

Carlos Delatorre 20:59 It is. It is. It is because the likelihood, the likelihood that they ... If they've been successful not having done pipeline generation, when they get in that dark, lonely room ... And what I mean by the dark, lonely room is making the phone calls and saying, "Oh, that is the 19th phone call where no one has picked up, and I've left the same fucking voicemail 19 times now." Like, if they haven't done that and they haven't been in that lonely place, the likelihood that they are willing to make that 20th call is low. Even if they thought they were willing upfront, when they actually get into it, you have to have been through that journey and seen the other side. The other side meaning the joy of landing that big meeting, the joy, the, the fulfillment of creating an opportunity and closing a deal and knowing that deal exists because I PG'd it. That company solved this problem, generated this value because I invested in them. There's a pride that comes with that, that if you haven't had it, you're probably gonna, you're, you're probably n- You're probably going to give up on the journey towards PG excellence.

Harry Stebbings 22:17 Everyone says to me on the show the change in sales is that outbound in 2025 is dead.

Carlos Delatorre 22:24 That's crazy. (laughs) That's crazy talk. (laughs)

Harry Stebbings 22:27 You strongly disagree?

Carlos Delatorre 22:28 Yeah, yeah, yeah. I strongly disagree.

Harry Stebbings 22:30 Do you think cold calling still works?

Carlos Delatorre 22:31 Absolutely, absolutely. But I'm really glad that other companies don't, and I hope, um, a lot of those companies are our competitors.

Harry Stebbings 22:39 Does AI change the effectiveness of outbound? When you think about supply, I can now send infinite emails, beautifully personalized with effective AI agents, tooling data. Does that change outbound?

Carlos Delatorre 22:53 Yeah, I don't know that you can yet, but you will. I, I, I will grant you that you will. But really, the most effective means of, uh...... of pipeline generation is outbound cold calling, the human voice-based interaction over the phone. The emailing is you do it. That softens the feel. That creates some familiarity, so that when they pick up the phone they're like, "Ah, Harry, why does that sound familiar?" And, and maybe they don't even know why it sounds familiar. But it sounds familiar because they've received a bunch of emails, and those emails had your name on it, and they were, um, they, they, they landed with some sort of a positive aura around them. So maybe the... I'll give you an anecdote. There was a sales rep, um, who I love, named David Boyle, and he was calling on, uh, Dun & Bradstreet. And Dave is an epic, uh, PG-er. And so, uh, we were at a company, Oblix, and the, the, you know, the pinnacle person to talk to at Oblix is the chief security officer, chief information security. We've got a meeting with the CISO at, at, uh, at Dun & Bradstreet, and we're in the lobby to see... So had like a little, a little, uh, a lobby just for the CISO's office. This is, you know, a few years ago. And, uh, as we're waiting for the CISO, um, Dave is in the hall doing, doing PG, leaving voicemails, pacing up and down the hall. He's looking every, every once in a while to see if, uh, if his, uh, assistant has called us in. We go in, we meet the guy, and before we even start the meeting he says, "You know, it must be nice to be able to just call a CISO like that and have him bring you in. You're welcome. So tell me about your product." So we go through the meeting, we tell him about the product, and I, on the way out I was like, "Dave, really? Just one call?" It's like, "That guy's got no idea." And he opens up his book and he shows me he had sent him 11 emails, 8 phone calls. He had become, uh, friendly with his executive admin. He com- he convinced the admin to write a Post-It note and put it on his screen, says, "Dave from Oblix wants to meet with you because of XYZ." The guy was on another call, read that, nodded, and that's how we got the meeting. He had no idea about the 18 other touches that had preceded that. And so that's what happens. You have to break through the noise. People are getting lots and lots... And so that's where email's good, and social media, and all the other things. But most meetings are set, like two-thirds are set as a, as a cold call.

Harry Stebbings 25:31 I think you're always underestimating the familiarity of naming. And what I mean by that is you post 10 times a month on LinkedIn. Me responding to five of them, "Go Carlos, so awesome to see." After five you're like, "Ah, the name rings a bell. The name rings a bell."

Carlos Delatorre 25:48 Totally.

Harry Stebbings 25:48 We have it with fans of the show where I'm like, "I don't know what they do or who they are, but the name rings a bell."

Carlos Delatorre 25:53 So true.

Harry Stebbings 25:54 And that really works. How m- Are we talking about unicorn reps though here? 'Cause like he sounds fantastic, love him, but how many are actually good at PG? Half?

Carlos Delatorre 26:05 Of the world of sales reps?

Harry Stebbings 26:07 Yeah.

Carlos Delatorre 26:07 Oh, no. Um, less than 10%. It's elite. It, it is highly, highly correlated with elite salespeople that have the ability and the tenacity, the willingness. It's hard work.

Harry Stebbings 26:20 Is it... Do you have people then in your teams who are not good at PG?

Carlos Delatorre 26:23 No. (laughs)

Harry Stebbings 26:27 (laughs) Okay, so then we don't. How do we form structure around it? Can you take me to pipeline generation Tuesdays? Like what is that? How do you structure it?

Carlos Delatorre 26:36 Before I get into the weekly cadence, let's say for the quarter I'm an enterprise salesperson. I might, um, uh, I might select from my territory 20 top targets for the quarter. And I'll sit down with my manager the first or second day of the quarter and I'll validate, "Hey, are these good?" "Yeah. Uh, you missed this one's not very good." "Great." Okay, now I've got 20 accounts that I'm gonna go after over the next three months. On a given week, I'm gonna focus on one or two accounts, maybe three if they're on the smaller side. So let's say an average of two. I declare those on Thursday. Those are my focus accounts for next week. Thursday night I declare them, which is just I click a couple of things in Salesforce. Now, over the course of Friday and over the weekend as a salesperson, I do some research. What's the research? I, um, look at what the execs are saying on social media. I read the 10-K. Now, you can use AI to make a lot of this stuff so much better. I research the company. Um, I look at what, um... I, I look at their job postings. I look at what... You might even go in looking blind and see what their engineers are saying, see what people are griping about. I try to get a sense for what's really going on inside the company, and then I develop a hypothesis about something that I think they care about that we can impact. Maybe I develop two or three hypotheses. This is for the account. Then I go in and I say, "Okay, let me come up with..." Let's say it's two account. "Let me identify 25 human beings in that account that based on their title, based on their LinkedIn profile, I think are relevant to what I sell. And let me capture those 25 names, their email address, their LinkedIn. I'm gonna check to see if I can find them on social media, and um, and then I'm gonna go into some database and find their phone numbers." So I've got their mobile numbers. Then for... And I do that for two accounts, so I've got 50 names. For my 10 most important people on those 50 names, I'm gonna also now investigate the person. Have they been on a podcast? Have they written a book? Have they written a blog? What do they care about? And I'm gonna develop a hypothesis or to a conversation starter for the top 10 of those people. Okay, that constitutes-... account PG prep. So I've got two accounts. I've got, let's say, two or three hypotheses per account. I've got 50 names with all the requisite information, email, phone number, and I've got hypotheses per contact for my top 10 contacts. I can get some help in my prep. Where do I get help? Uh, marketing on Fridays at noon, uh, is gonna send out a PG passport, news of the week, everything that happened this week, (clears throat) curated for use or reuse in the PG setting. So we had this new release. Well, let me boil that release down into two or three sentences that can be read or can be included in a, in a, in a PG email. There was a new case study. Here's the case study, but here's like a, again, two or three sentences. (clears throat) So marketing sends out this PG passport on, on Fridays at noon. Then the manager knows what the focus accounts were because they were declared on Thursday. Takes that PG passport, takes their experience, and forwards the PG passport back to their team with some advice. "Hey, Harry, I see you're going after this account. This would really resonate with them." "Hey, Jill, my neighbor, uh, works at HR in this account. She... I asked her, she said she'd be willing to take a call from you to validate your contacts and make sure those are the right people." Okay, so now the manager's involved in PG prep.

Harry Stebbings 30:22 Is that... Sorry. Is that scalable? The manager is having to look through, what, 10 different like target people's accounts? There's, there's too many people for them to be going, "Oh, Jill's my neighbor. Oh, I know that this piece of the report is perfect for them." Is that possible to ask them to do that across them all?

Carlos Delatorre 30:37 Yeah, it takes, takes an hour or two. You know, remember, the manager is in the role because they know, they know what they're doing. They've got some experience. And so it's not to say that the manager's gonna have a really great insight for every single focus account. But they'll... As they scan the 10 accounts, there'll be two, three, four accounts where they have an idea. "Oh, Barclays, I read an article two years ago." (imitates lips trilling) "Let me find it." Or, "I heard something on Bloomberg Radio. Let me go find it for you." (clears throat) Um, and so then... So that's the PG prep. So the rep's got, um, the rep's got help from marketing, help from their manager. You know, you might even have a team of, uh, data analysts that help with the PG prep. I'll talk about that in a moment. Um, then (clears throat) Monday morning, there's a, a conversation, a one-on-one conversation between the manager and the AE to review, review their PG prep. And this is where the manager really digs in to make it better. Obviously, it's an accountability event to make sure that the prep was done. But more importantly, it's about making the prep even better. "Hey, I don't think you're aiming sufficiently high. You don't have the CIO in here. You don't have any senior people..." Or, "They're too high. (clears throat) You know, the, the... Jamie Dimon is not gonna respond to an email about, uh, you know, cloud cost management." So, uh, (clears throat) so adjust the PG prep. Monday afternoons is a great time to do training, especially training that's related to PG skills. "Hey, let's role play how to talk to this persona," or, "Let's role play how to describe this product's value prop," or, "Let's role play whatever." And so we'll meet up together on a Monday afternoon, do some role plays with feedback and the opportunity to do role play again, et cetera. And so then Tuesday morning, when we (palm smacking) , you know, when, when a- when the butts hit the chairs, people are ready. People are ready. We do have a quick, you know, quick round robin just to get everyone excited and ready for the day. But remember, they've, they've prepped, they've trained yesterday. (clears throat) And, and so Tuesday is like a really important day. We'll bring, you know, cater meals into the office. There's a real camaraderie. We laugh when somebody gets hung up on. We applaud when somebody, you know, scores a meeting. We hear each other. This is where the lone ranger becomes terrible. Like, they're all by themselves, that all they hear is themselves. You've got a room full of people. "Hey, Don, uh, that was really great. Can you say that again? Let me write it down because I'm gonna use that." "Hey, Jimmy, I would have said this a little bit differently." So they, they help each other. And then at the end of the day, (clears throat) "Hey, let's all go get a beer at the, you know, at the pub next door. Let's celebrate the day. Let's laugh together." Let's really develop pride, because we know that most salespeople on the planet are not doing what we do.

Harry Stebbings 33:27 So just so I know how we structure the week, it kind of starts on a Thursday with the planning. That progresses through to action day on Tuesday. Tuesday is when we do action. We are actually hitting the accounts, hitting the targets. And then for the rest of the week, we're harvesting?

Carlos Delatorre 33:42 Yeah, there's a couple, couple other things. So yeah, the Thursday we declare. Um, Friday and over the weekend, we prepare. Monday morning, we review the preparation. Monday afternoon, we train. Tuesday, we do PG all day. And then obviously, throughout the week, there's follow-up, there's harvesting, and then (clears throat) I'm, uh... I, I love to do a, a wrap-up on Friday. So I typically run that myself, and it's the whole sales team, and we celebrate the PG success of the week. And we tell stories of success. We tell stories about, uh, successful meetings. We also tell s- stories about opportunities that have been created from previous weeks' PG, and it really builds, I think, an enthusiasm, a belief, and it real... And it reinforces this thing we do that's so important, so powerful, but also so hard. And so that's kind of the, the circle of life, if you will.

Harry Stebbings 34:37 How has the way that you do pipeline generation week stre- structuring changed over time?

Carlos Delatorre 34:44 In the early days, you know, the first time I was ever exposed, uh, to it was at, at Parametric Technology early in my career, and we called them power hours. And, uh, (clears throat) "Hey, you know, whatever, Thursday at 9:00 AM, everybody be in the office." And, uh, and so Thursday at 9:00 AM, you...... pull up Act, this is before Salesforce, and you just start making cold calls and, uh, it wasn't very structured. And (clears throat) the problem with doing just an hour is you can easily go for an hour and never talk to anyone. And so, (clears throat) you know, it's, it's... You need that positive reinforcement of a conversation, even if it's a conversation that doesn't land a meeting, 'cause you learn from that. You think, "Ah, if I had handled it differently, I could have gotten the meeting." But if you do, if you do a bunch of cold calling and noth- zero comes from it, um, it's really hard to bring your A game for the next power hour.

Harry Stebbings 35:37 How do you think about effective goal setting around pipeline generation? 'Cause every number can be gamified. How do you think about effective goal setting around PG?

Carlos Delatorre 35:46 I think there's a risk of over obsessing on the number of meetings booked. Obviously, that's the easiest thing to track, and so typically if someone, if someone is doing good PG, they should be able to, on average, (clears throat) get, uh, two meetings in a, in a given week. Sometimes people will get more, sometimes people will get less, and they might get one or they might get zero and still they did a good job. (clears throat) It was just, you know, an unlucky week or a particularly tough account. And sometimes, you know, people hit a hot streak and they'll get four or five, but 2 to, 2 to 2.5, that's kind of the sweet spot of, like, really good PG with the process that I just told you about. (clears throat) But the thing to really obsess about is a little bit further down the, you know, down the line, is there, is there qualified

Carlos Delatorre 36:40 pipeline coming out of it?

Harry Stebbings 36:42 I just, I don't understand how this is a good business. Let me pause.

Carlos Delatorre 36:46 (laughs) Okay.

Harry Stebbings 36:47 What? Okay, so you have eight meetings a month, if you think two meetings a week is good.

Carlos Delatorre 36:51 Yeah.

Harry Stebbings 36:51 Let's say 25% of those convert into paying customers and the customers are a hundred grand a year, okay? Let's just say. That's 1.2 million a year, correct? Okay. And the rep is on fully baked everything in 200, 250? Okay? Well then they're at like four or five to one. That's pretty good. But that's if everyone is fully ramped, everyone is effective like that, and that's a good, good one.

Carlos Delatorre 37:19 Yeah, but what you just, (clears throat) the numbers that you just, um, that you just shared doesn't take into account you had a paying customer and you did some expansions in your paying customer. You had a partner bring you a lead that was like 70% sold. So, that is purely just the rep going cold into a, you know, into a completely green territory. There's gonna be some good stuff. Um, you know, some, some, some low hanging fruit.

Harry Stebbings 37:46 And so you're like, right, I get it, it's like three to one on your economics, Harry, but when you add in partner, demand gen, SDR luck, you can be at five to one.

Carlos Delatorre 37:57 Yeah. Or maybe it's four to one on yours and you can be at six.

Harry Stebbings 37:59 What is okay in terms of those numbers? A lot of founders are like, "Is it okay to be at three to one?"

Carlos Delatorre 38:05 Depends where you are in the journey. Early on when product market fit isn't, isn't really good, yeah, it might be three to one. I think, you know, the rule of thumb once you're scaling, y- you know, you want to be at five to one or better, for sure.

Harry Stebbings 38:19 What level of contract size warrants outbound in this way?

Carlos Delatorre 38:23 Certainly down to 50K, maybe below 50K probably, you know, starts to break down. (clears throat) 'Cause down to 50K, um, you know, your reps are gonna be earlier in career and so their, their OTE is not as high. Um, and then, you know, when you're up into the enterprise level, then, you know, your, your, your average deal is probably more in the 2 to the 3, 400K range. It certainly works there.

Harry Stebbings 38:49 Everyone today feels like they're suffering with just not enough pipe. People aren't buying the way they used to. Everything's gone back to the CIO in terms of buying powers. What do you say to sales leaders today who go, "Carlos, there just isn't the pipe"?

Carlos Delatorre 39:05 We are not lacking for pipeline. The thing we're lacking for is, uh, you know, is, is, is ramped salespeople that can go, that can go pursue it.

Harry Stebbings 39:15 How long do you give someone to ramp?

Carlos Delatorre 39:17 I think what you're asking is when do you sort of declare, uh, you know, failure and part ways. I think ideally what you have is you have a series of milestones over the course of someone's journey (clears throat) that start in the first few weeks. They go to training, they prepare for training, um, they go to training. How did they do on their entrance exam? How did they do in their role play? How did they do in the, you know, uh, final exam? Were they able to get meetings coming out of their first, uh, you know, boot camp? Were some of those early meetings converting? Are they able to get to an economic buyer in their third month? So there's all sorts of milestones along the way (clears throat) and so if you sort of decompose a salesperson's ramp to productivity, then what you can do is you can identify at any moment, hopefully very, very early if they're going off course, and you can figure out why. A lot of companies, you know, they, they'll, they'll start to worry about someone that hasn't sold at, you know, nine, 10, 11, 12 months, and so then they'll make a decision to part ways at 18 months. That's so expensive, not just (clears throat) in

Carlos Delatorre 40:30 terms of the-

Harry Stebbings 40:31 Well, how, how would you do it differently? Are you able to let go of someone after six months if enterprise sales cycles are generally a year?

Carlos Delatorre 40:38 Just like I said, because you've got milestones along the way and so if they're not, if they're not achieving the leading indicators to success, then we figure out why and we try to fix it. And if it's fixable, great, they're back on track. And if it's not fixable, then, you know, that means they're in the wrong role or at the wrong company. And so yeah, we can...I, I've, you know, it's, it's not a happy day, but we've parted ways with people at boot camp. It was, it was clear in their first month that, you know, we'd made a mistake and, you know, we, we apologized for that 'cause we hired them. But, um, why wait nine months and (clears throat) waste their time and, and waste our time in opportunity cost? So, yeah.

Harry Stebbings 41:16 I totally get you. Ramp time is determined often by quality of training.

Carlos Delatorre 41:21 Yes.

Harry Stebbings 41:22 And when we think about skill development, what have been your biggest lessons on how to train reps effectively, especially in this ramp time?

Carlos Delatorre 41:30 The mental model that we used is we started with this hypothetical fully ramped salesperson. Uh, this individual who has every single skill, every single, uh, knowledge (clears throat) needed to be successful, you know, in the full gamut of, of selling our solution. Then we said, "Okay, let's break down all those skills and knowledges into, uh, competencies that we think can be learned in three hours or less." Then (clears throat) let's group them by what is the ideal modality to learn it? Is it something that they can learn on their own? Is it something that they can learn (clears throat) on a Zoom call? Is it something that they really need to be in a classroom to learn? Great. Now, let's look at the ideal sequence. What's the right sequence (clears throat) so that we can get them to land a good, healthy new logo as early as possible? And then what we did (clears throat) or what we're doing is we've created a learning journey that really spans about almost nine months, and it has three week-long trainings, a, a, a boot camp, an intermediate, and an advanced. And then coming out of boot camp, there's a one (clears throat) , there's a, there's a roughly half a day, there's a three-hour remote session that they attend with the same cohort that they went to boot camp with that goes deep on one competency. And so what we end up with is people coming out of boot camp able to do pipeline generation. They're able to have a conversation, start con- start meetings. They're able to do discovery, do a good first meeting. By the time (clears throat) they get through intermediate, they can land a, uh, they can land a new logo with our core product, and that's really the key. Once somebody can land a new logo with the core product, the likelihood that they're gonna be successful is very high, even though they don't have some of the advanced knowledge or the advanced skill. So that's kind of what we're, what we're doing.

Harry Stebbings 43:30 What is the average time it takes for someone to land a core logo?

Carlos Delatorre 43:34 You mean just the sales cycle?

Harry Stebbings 43:35 Yeah.

Carlos Delatorre 43:36 Uh, the sales cycles are not that long. It's a- about four months.

Harry Stebbings 43:39 Four months?

Carlos Delatorre 43:40 About 120 days.

Harry Stebbings 43:41 How fast do we let someone get on a customer call? 'Cause obviously customers and pipeline is very precious. First week, young rep you don't want to just throw on there who doesn't know their shit.

Carlos Delatorre 43:51 Yeah.

Harry Stebbings 43:51 When do you let them?

Carlos Delatorre 43:53 Soon. Early. (clears throat) We have a messaging framework that we've built, and a lot of times salespeople get it even before they start. So they're able to read, um, (clears throat) understand our value prop. It's got sample questions in there, proof points, et cetera. And so they can be on their f- on the phone in the first couple of days on board, even before they go to boot camp. They typically go to boot camp maybe week three, four, uh, three, four, or five. But they're on the phone even before, and then certainly at boot camp, they're doing pipeline generation, and they will typically have set their first meeting for sure before the end of boot

Carlos Delatorre 44:26 camp.

Harry Stebbings 44:26 With respect, boot camp sounds quite a resource-heavy, institutional-grade training program, as you say, Enablement 3.0-

Carlos Delatorre 44:35 Yeah.

Harry Stebbings 44:35 ... grade. If you're an early stage founder, how do you think about this rep training and being as effective as possible there?

Carlos Delatorre 44:41 Yeah, you wouldn't, (clears throat) you wouldn't be able to afford, uh, from, you know, from a financial perspective, but also just in terms of bandwidth, you wouldn't be able to afford to build that. And frankly, you wouldn't know what to build-

Harry Stebbings 44:54 Yeah.

Carlos Delatorre 44:55 ... with an early stage. (clears throat) That's why I go back to what I said before is for a founder at a, you know, let's say a Series A company, I would get some really smart, hardworking, uh, you know, enthusiastic individual contributors and go build it. And you won't, uh, and you'll be able to build your enablement after you've closed, you know, 10 or 20 customers and you're like, "Okay, (clears throat) now I've closed, let's say, 20 customers, which means I've probably failed to close another 60 customers, so I've got 80 sales cycles of experience. Now I can identify the things to do, the things not to do, and I can build V1 of my training based on that, and maybe that's just two or three days."

Harry Stebbings 45:38 Okay. So I, I do actually just want to go back to kind of the pipe generation 'cause all the skills really come back to that in a lot of ways. When we then review the output of that, we have deal reviews. Um, how do you approach deal reviews and what makes a good versus a bad one? When do you do them in the week as well?

Carlos Delatorre 45:56 I'm a big fan of, uh, the MEDDPICC methodology. I, I know you had Mark Gruelberger on here. I think he talked about it. Uh, (clears throat) so that I think is the, that's the soundest framework that I'm familiar with for, uh, for deal qualification. I think Dan might have talked about it as well. Um, (clears throat) when to do it. You do it when you need it. What do I mean by that? It's great to do it early in a sales cycle when it's messy and there's, you know, so many different strings to pull on and trying to come up with a strategy. It's also great to do it late in the sales cycle where, "Man, we're forecasting this deal. We better not miss something. Let's make sure we didn't miss something." So, (clears throat) I wouldn't say there's a key moment to do it, but the real, the beauty of operationalizing a qualification framework like, like MEDDPICC, the real beauty of it is that any given sales rep who, um...... let's say is going through a deal review. They're learning the concepts in the context of this one deal, but then now they know that concept and they will apply it to other deals. And so, (clears throat) you know that MEDDPICC is working when you see salespeople talking to each other without a manager involved, and they're using MEDDPICC terminology. Or you see a, a sales rep grab an SC, "Hey, can I run this deal by you?" And just, like, try to poke holes in it, and the conversation is in that MEDDPICC framework. When you, when qualification just becomes part of the culture and it happens all by itself all the time, (clears throat) that's, that's kind of where you want to be. And then the manager is just sort of spot checking or, or, you know,

Carlos Delatorre 47:35 double clicking.

Harry Stebbings 47:35 When you have pipeline generation day and it's just, just a bit off, whatever it is. The- the just, the team morale is low. Pipeline is not hitting, conversions are not coming.

Carlos Delatorre 47:47 Yeah.

Harry Stebbings 47:47 What are your biggest lessons as a sales leader on how to really maintain morale when it's just harder?

Carlos Delatorre 47:53 I've definitely seen that happen, and definitely, you know, a team can get in a funk. I think the best thing to do, um, is just to stop. Let's all get in a room and let's talk about it, let's talk about how we're feeling. Typically what'll happen, (clears throat) you know, as a manager, you know, one of your responsibilities, I think, of a great manager is to, is to maintain intimacy with the team. Intimacy with how they're feeling, intimacy with where their skills are at. And so hopefully the manager can get ahead of that and, and, and see it before it happens and, and interact and course c- uh, inter- interrupt and course correct. But let's say, you know, it gets to a point where the team is in a funk and you can just kind of smell it. You can smell it in the air, "Hey, let's stop. Let's, let's get in a room and let's all talk about it, and let's talk about how we're feeling, and r- let's reach a conclusion." (clears throat) Maybe the conclusion is they're not bought in. They don't believe that this even works. Let's talk about, let's talk about that. Let's, maybe they're right, and maybe, maybe this whole thing is crazy. I don't think so but, (clears throat) so let's, let's talk about why PG is important. Or maybe they believe it's important but they just don't believe that they can do it. Okay, maybe it's a training issue. Maybe, (clears throat) you know, so getting to the bottom of what is the driver for, for their feeling the way they're feeling,

Carlos Delatorre 49:11 and fixing that.

Harry Stebbings 49:12 How do you feel about verticalized sales playbooks?

Carlos Delatorre 49:15 About what, sorry?

Harry Stebbings 49:15 Verticalized sales playbooks. So if we take Navan as an example, somewhere where you're at, you could have, uh, a playbook for financial services companies, for media companies, for healthcare companies, and then reps who are specifically allocated to those verticals-

Carlos Delatorre 49:31 Yeah.

Harry Stebbings 49:32 ... and then can have incredibly granular detailed use cases, insights about those industries. How do you feel about very verticalized playbooks?

Carlos Delatorre 49:39 I have a different opinion about the playbook versus verticalized teams. (clears throat) Now, let me caveat this. Um, if you have a solution where it's just radically different in one... Like ERP, (clears throat) how you implement ERP at a company that, m- you know, at a paint company versus a software company is, is completely, is completely different. (clears throat) So much so that it would be unreasonable to ask a sales rep to be able to do both. Centralizing knowledge around what's going on in an industry so that salespeople, um, can be more relevant more quickly with accounts in that industry, (clears throat) I think is absolutely a, a thing to do. And, um, even if you have a horizontal solution, (clears throat) like, you know, like a technology solution, IT infrastructure, the, um, the challenges, the things that, uh, uh, customers in a particular vertical cares about are very, very different. So empowering salespeople with that is, is really, uh, is really valuable. Verticalizing the sales force when you have a, a horizontal solution I think (clears throat) cuts, um, it, it cuts against meritocracy. Because there's typically going to be some verticals that are better than others. (clears throat) Like maybe, oh, financial services is just like the cat's meow, what a great, you know, it's such a great fit. And so, hey, the team in New York, are they amazing or do they have all the banks? (clears throat) And so mixing up the territories, uh, I think, um, is, is, is really good for, you know, for, for meritocracy and for having a fair distribution of opportunity. And so, uh, like I said, the, the exception would be if the solution is just so different that you have to do it, then do it. But if you can avoid it, I'd rather have salespeople that have a mix of, (clears throat) you know, the really great ICP and then the ICP that, or the customers that are a little bit harder to, a little bit harder to sell

Carlos Delatorre 51:44 to.

Harry Stebbings 51:44 The big problem I think I'm seeing with every SaaS company today is just churn rates. Everyone realize that they bought too many seats, and they're not actually using them. The 50 seats they bought, they're only using 12 of them, and the churn rates are just incredibly high. Do you share the concern of many that actually the SaaS business that we've had was so overpaid on a seat basis that we're r- really moving into a tough period?

Carlos Delatorre 52:08 You mean that we've oversold customers?

Harry Stebbings 52:10 Yeah.

Carlos Delatorre 52:11 I do think that a lot of that has worked through the system already. Companies that I'm, you know, a little closer to, I think most of that seems to be the, the, the trough, let's say, is, you know, is behind us. (clears throat) But I, I do think that, um, the future is whether it's a consumption business or even if it's traditional SaaS, having sales reps truly involved in driving customer outcomes and gen- and creating customer value, I think is really healthy for the long-term viability of a company. And I think the days of, you know, the big sales rep with the fancy suit that comes in and does the big deal and then walks off to another, uh, to another d- you know, to another account, I don't think that's healthy, and, um, and, and I think those

Carlos Delatorre 53:02 days are long gone.

Harry Stebbings 53:03 What do you feel about discounting? You know, often we want to get deals done in a quarter. Discounting is often used as this panacea of, "Oh, we'll give you an extra 15% off, Carlos."

Carlos Delatorre 53:12 Yeah.

Harry Stebbings 53:12 How do you feel?

Carlos Delatorre 53:13 (clears throat) I think that using discount a-... to close a deal, um, that was not otherwise gonna close rarely works. (clears throat) Because if it's a considered purchase, there is either a champion that is willing to advocate for this purchase and advocate with the economic buyer for this, this purchase versus all the other things on the economic buyer's plate. Like, either that champion exists or doesn't. And whether (clears throat) that, you know, that, that costs 250K or 200K is not gonna make the difference. It's binary. Now, once you get a decision to buy, there could be budget constraints and maybe, "Well, because it's 250, we can't do it until next fiscal year and we, you know, we make it 180K," and they can do it now, or we let them ramp in. So I, I, I'm not, like, against discounting, but to use it as a lever to manufacture a deal I don't think really works, not in, you know, considered purchases.

Harry Stebbings 54:18 (clicks tongue) Okay.

Carlos Delatorre 54:18 Maybe with a commodity (clears throat) where I'm gonna need it anyway. I could buy it now. I could buy it later. Sure, you could discount your way into that, but-

Harry Stebbings 54:27 Okay. So we don't use discounting then, and the deal slips. Okay? Deal slips into next quarter, and you're my boss, and you're the sales leader. And I say, "Carl, I'm sorry, the deal just slipped. It slipped." What do you say to me?

Carlos Delatorre 54:39 Having a deal slip is a painful thing. And (clears throat) to have pain and not, uh, extract the learning is, is, is really is, is to squander an opportunity. Pain is a great teacher. Uh, our failures are a great teacher. And so if we revel in that pain and really analyze, we have to figure out, "Okay, why, why did the deal slip?" And the answer has to be something we failed to do or something we did that we shouldn't have done, and therefore what must we learn or what should we learn and what's, what must we do differently, uh, in the future? That's the key thing. Of course deals are gonna slip. We're gonna lose deals. You know, shit happens. Um, let's figure out why it happened, what we learn, and, and, and let's get better

Carlos Delatorre 55:29 as a result.

Harry Stebbings 55:30 When we think about a lot of sales leader ambitions, a lot of sales leaders want to move into the role of CEO. You did move into the role of CEO. I'm really interested in manias this one. With the perspective you have-

Carlos Delatorre 55:41 (clears throat)

Harry Stebbings 55:42 ... of moving into the role of CEO, what do you know now that you would advise other go-to-market leaders about becoming a CEO?

Carlos Delatorre 55:50 I would say make sure you know what you're walking into. What I mean by that is if a company is looking for a new CEO, um, that means that there's a problem or a set of problems that need to be solved. (clears throat) Do whatever diligence you need to do to gain a high conviction that you understand what those problems are, and then honestly map your abilities and your experience against those problems. So is you're, if you're a go-to-market leader and you assess, uh, and you reach the conclusion that the problems are largely in go-to-market, could be a great fit. Um, if the problems are outside of go-to-market, then look in the mirror and really, you know, a- ask yourself, "Am I the best person, or am I able to solve these problems?" That was the, (clears throat) that was the challenge, frankly, that, um, that I encountered in my CEO, uh, journey. I thought I was walking into a ser- to a situation where the primary, uh, you know, the problems were mostly go-to-market. And sure, there were opportunities for improvement (clears throat) in the go-to-market realm. But, you know, the, the, the company needed, uh, to mature and, uh, and to refine its product to really land on, on the proper product market fit. And the reality is that, you know, I didn't have, I didn't have a toolkit. I didn't have skills to guide the company. So I wasn't particularly effective at guiding the company through that period of refining product market fit. And, you know, it took me a while to figure that out. Unfortunately, it was a painful experience. I brought (clears throat) people I care about. Keith Butler came over to be the head of sales. And, and through that journey, we did make pro- uh, we did make go-to-market better. But we found that there was a more fundamental, you know, problem around the product, and I wasn't the right, I wasn't the right person to solve that problem,

Carlos Delatorre 57:41 so ...

Harry Stebbings 57:42 Uh, can I ask you, when you think about ... And s- sorry, I'm just peppering you with questions here that I've been thinking about it-

Carlos Delatorre 57:47 It is a podcast, after all.

Harry Stebbings 57:48 Y- yeah, yeah, but it's throughout the show-

Carlos Delatorre 57:49 (laughs)

Harry Stebbings 57:49 ... I've been thinking this. It's just, like, when you reflect on your biggest hiring mistakes, what are the ones where you look back now and go, "Ah, that's one I've made time and time again"?

Carlos Delatorre 57:59 Well, hopefully you don't make the same mistake over and over. But one that I have made, um, that was particularly painful, um, was to hire someone based on, uh, relationships. And (clears throat) it was early in my career, and I was at a startup, and this person was very successful at, um, at EMC. And the, the numbers that they had posted and the relationships that they had were so senior, I thought, "This guy is just gonna light it up." And (clears throat) I brought him on, and I spent the first three months going on these fancy lunches at steakhouses in New Jersey with these very senior folks who had m- who were completely irrelevant to the product that we sold and, you know.... fancy lunch, and the conclusion of the fancy lunch is, "Oh yeah, I'll ask so and so," who's the person you need to get to, and see if they're interested. And the vast majority were not, and so nothing came of it. (clears throat) And what I realized is that this individual lacked the, the skills to go build pipeline. He just didn't know how to do it. He was a relationship seller, a competent guy, a hardworking guy, but the skills to actually go and call a stranger and deliver a value prop and have that resonate and, and, you know, s- secure a meeting and then come in and do a great meeting, all of those skills, just he didn't have them. And so that was painful because he was expensive and I had advocated for him, and we had to go like outside of the standard hiring, uh, you know, uh, uh, parameters to get him. So that, that was one that was, that was painful.

Harry Stebbings 59:43 How will the role of a sales rep change in the next five years?

Carlos Delatorre 59:47 I think AI will automate a lot of the research, a lot of the prep work. Um, (clears throat) I think AI, uh, will also-

Harry Stebbings 59:57 What does that mean then, we do double the accounts because we have so much more time available?

Carlos Delatorre 1:00:02 Yeah. I think they, they're more productive, yeah. I think we'll see salespeople, I think we'll, we'll see sales productivity, uh, trend upwards. (clears throat) I think we'll also see attrition rates come down because we'll be able to use AI to supplement, uh, onboarding. I think we'll probably see better and better AI tools to, to help companies and candidates match so that the, you know, the, the, the fit is better. So yeah, I think we'll see, we'll see higher productivity across the board.

Harry Stebbings 1:00:34 What does everyone think they know about sales that they most often get wrong?

Carlos Delatorre 1:00:39 Probably (clears throat) they overindex on the value of relationship building and charisma and being the big personality, and, uh, you know, that, that doesn't hurt but it's not, it's not really that impactful.

Harry Stebbings 1:00:55 You've mentioned before the lone wolf and the dangers of it. How do you feel about in-person versus remote working? Especially given the rise that we've seen in the last few years of remote companies.

Carlos Delatorre 1:01:07 I think, you know, obviously during COVID, um, you know, remote working was, was the only, uh, was the only way to operate. Um, I think the trend is go- is moving back in the other direction, and I'm, I'm glad to see that.

Harry Stebbings 1:01:19 Are sales teams in person much more productive?

Carlos Delatorre 1:01:22 100%. No question about it. Absolutely. They learn faster, they, their morale is higher. If I'm having a bad day but the person next to me is having a great day, that gives me hope, that gets me through the trough. Um, (clears throat) and, and so yeah, they're absolutely more productive. Also, managers are there to solve problems, managers are there to course correct. You know, maybe somebody's doing it wrong and they don't know they're doing it wrong, but the manager can, can see it and help them. So yeah, it's, they're much, much more, uh, productive

Carlos Delatorre 1:01:53 in person.

Harry Stebbings 1:01:53 I will never forget Dave Kellogg telling me, "You never want your farmer against someone else's hunter." How do you structure account management between CS and reps to ensure that your farmer is never being fought by someone else's hunter?

Carlos Delatorre 1:02:09 So I think when you say farmer, what you're referring to is when you have an account manager that is owning one or multiple paying customers whose job it is to maintain and maybe grow those customers, but is not out there hunting for new business. And by the way, what's baked into your question is acknowledgement of the power of PG. That hunter is able to PG, and that's why that hunter is the more effective sales rep. So first of all, your farmers, I don't like the term, I prefer account manager. Your account managers should also be excellent at pipeline generation because they're trying to get into other divisions, et cetera. But, um, (clears throat) I think if your, if your account manager is driving real value with the account, then that account becomes, you know, very difficult for a hunter to crack. So I'd say you want your farmer hunting inside of the account, but you also want your account manager to care deeply about customer value. And with that customer value comes trust, and if there's a, uh, if there's a question about a new technology, they'll probably bring it to the account manager and give the account manager the opportunity to, uh, either (clears throat) fix something in our current, uh, in our, in our current offering or, or, or change a, you know ...

Harry Stebbings 1:03:36 It's interesting 'cause you're basically saying that reps need to shift earlier to embrace PG, and actually CS need to shift earlier and embrace PG also, because if you think about like the spectrum, you can't have a rep who's now embracing PG and then him equally embracing CS. You can't have both embracements. Do you see what I mean?

Carlos Delatorre 1:03:56 No, say it again.

Harry Stebbings 1:03:57 Well, so if you have a rep in the middle whose core goal is hunting and you're like great, you need to embrace PG now much more actively. On this side of it, which is the kind of post-hunt, you can't say to them, "As well as PG, you also need to really embrace CS."

Carlos Delatorre 1:04:12 Well-

Harry Stebbings 1:04:12 Because a lot of sales leaders today are like, "No, no, we really like reps to be engaged post-sale, to hand off effectively, and really keep that relationship going."

Carlos Delatorre 1:04:22 Yeah.

Harry Stebbings 1:04:22 You can't do that if you're embracing PG.

Carlos Delatorre 1:04:24 It's hard. It's hard, but, um, I think you, I think you can. I think you can. I think, (clears throat) a salesperson is probably, um, in a mature territory, is probably gonna spend a third of their time, uh, uh, a third of their time generating pipeline generation, maybe 20 to 30% of their time (clears throat) taking care of their customers, and then what's in the middle is, is prosecuting deals. And of course, you've got a, you know, maybe you've got a sales rep with 25 greenfield accounts and two paying customers. They're gonna be...... you know, more on the PG and hunting side, or you have an account manager with just two paying customers. And for them, pipeline generation is going to be easier, 'cause they're, they're doing PG into an account that they know super well and they've got plenty of contacts. And so for, maybe for that person, PG is only 20% of the time. So there's, you know, you, you, you want to move the dials across, but I think to, to be really effective, you want a salesperson, uh, generating pipeline, pursuing pi- you know, prosecuting that pipeline, and taking care of customers. And how, the weighting of each of those things is gonna, you know, be determined by the type of territory they

Carlos Delatorre 1:05:37 have.

Harry Stebbings 1:05:37 Okay, I'm gonna do a quick fire-round with you.

Carlos Delatorre 1:05:40 Okay.

Harry Stebbings 1:05:40 Are you ready?

Carlos Delatorre 1:05:40 All right.

Harry Stebbings 1:05:41 What sales tactic has died a death? We've à la poubelle outbound, that is still alive and well. What has died a death?

Carlos Delatorre 1:05:48 Closing. "I'm a closer, I know how to just convince..." This idea that you can coerce a customer or do some psychological gymnastics to get someone to sign a piece of paper when they weren't actually intending to. First of all, if you do, that's a, that deal's probably gonna churn later, or they're gonna find a way to rescind the order. But, um, I don't believe salespeople sell. Buyers buy. All salespeople can do is create an environment that is conducive to that purchase decision. How do you create that environment? Well, by doing good discovery, by finding challenges, by educating on how your solution meets those challenges. And once you do that, they want to buy. But the art of closing, that's baloney.

Harry Stebbings 1:06:36 If sellers don't sell, buyers buy, love that. Is brand not more important than ever?

Carlos Delatorre 1:06:41 Brand.

Harry Stebbings 1:06:42 Mm-hmm.

Carlos Delatorre 1:06:42 Sure. Uh, I don't know. I think it's probably always been important. Yeah, I think brand is su- is, is highly important. That's why when you are a challenger, you need a higher caliber of salesperson, because you don't have the brand. As your brand gets bigger and bigger, either great salespeople become more productive, or, um, you know, you're able to get more junior or less talented salespeople.

Harry Stebbings 1:07:06 What's the most creative thing you've done to get a deal over the line?

Carlos Delatorre 1:07:09 I think the, the story I have to tell you goes way back to the beginning of my, uh, to the beginning of my career, when I was selling, uh, medical equipment before I got even into software. Is that okay if I go back that far?

Harry Stebbings 1:07:22 Yeah, go for it. I love this.

Carlos Delatorre 1:07:23 Okay. So, I was selling this, uh, blood analyzer called a Coulter Counter, and, um, I, uh, I PG'd into an account, into a doctor's office, and the office manager told me they had just bought my competitor's product, a Becton Dickinson. And I said, "But you gotta talk to me. Mine is better," all the reasons, I'm rattling off all the reasons. She's like, "No, the deal is done." And I'm like, "Is it installed yet?" "No, it, you know, it arrives next Tuesday." "You gotta talk to me." "No, I can't." And then I thought, "Shit, I just upgraded, uh, I just, uh, upgraded an account that had one of those Becton Dickinsons. I still, I haven't sent it back to corporate, it's still in my closet. I'll tell you what, office manager. You tell the doctor she's gotta see me, and if she sees me and she still thinks the Becton Dickinson is the better machine, I'll bring one with me and she can have it for free, and she can cancel the order for the other machine." "Well, yeah, but you gotta be here before the, before the in-service on, on Monday." "Great, I'll drive." I had to drive all night, snowstorm into Jackson, California, and I demoed this doctor on, uh, on Friday, and I, I brought the, I brought the competitor's machine with me and I was able to close the deal.

Harry Stebbings 1:08:34 And so you did it live, and she saw the difference between the two machines?

Carlos Delatorre 1:08:37 Yeah, yeah.

Harry Stebbings 1:08:38 Loved that.

Carlos Delatorre 1:08:39 Yeah.

Harry Stebbings 1:08:40 That's amazing. Yeah, that's a, that's a creative one.

Carlos Delatorre 1:08:42 (laughs)

Harry Stebbings 1:08:42 What one piece of advice would you give to a sales leader starting a new role today?

Carlos Delatorre 1:08:46 You're gonna have pressure to build the team quickly. Uh, better to be late than to, than to hire mediocre people.

Harry Stebbings 1:08:54 What would you most like to change about the world of sales?

Carlos Delatorre 1:08:57 Maybe the reputation that salespeople are, are slimy or greedy or anything like that, because I think it, it prevents capable pe- it prevents some capable people from pursuing a job that could be the best job that they've ever had.

Harry Stebbings 1:09:13 Final one for you. When you look at sales strategies over the last few years, what company sales strategy have you been most impressed by?

Carlos Delatorre 1:09:21 You know, I think, uh, I was at, I was at, uh, Navan. We were a travel solution, and, uh, and COVID hit and nobody was buying travel. The company made-

Harry Stebbings 1:09:31 Were you there when that happened?

Carlos Delatorre 1:09:32 Absolutely. I joined in, uh, January of '20, and the world locked down in March.

Harry Stebbings 1:09:37 What do you do? I mean, your numbers must have just gone to zero.

Carlos Delatorre 1:09:40 Yeah. Uh, close to it, close to it. We had about a 90%, uh, drop in revenues. Uh-

Harry Stebbings 1:09:45 I'm almost amazed that 10% remained in a travel ban.

Carlos Delatorre 1:09:49 Yeah. There were just some large enterprise accounts that were still traveling a little bit. Uh, you know, we had companies that, that were in the, uh, what did they call it, the, that, that category necessary-

Harry Stebbings 1:10:00 Government?

Carlos Delatorre 1:10:00 Essential workers. We had companies that had essential workers, government, some manufacturing. Anyway, um, we made two key pivots during that period that saved the company. Uh, you know, Ariel, the founder, um, you know, came back from a vacation and he said, "By God, we've got to build an expense management solution and we've got to do it fast, and, and, you know, burn the ships." And what he meant by that was he pivoted like the whole engineering organization from one day to the next. And, you know, candidly, the executive team thought, "Man, this is a, a, you know, this is a bit dramatic. You're betting the whole company." 'Cause remember, at the beginning of, of COVID, we thought it was gonna be two weeks, and maybe it's gonna be four weeks, and maybe it's gonna be six weeks. So nobody thought it was gonna take as long as it, you know, as long as it did. So the idea of putting 90% of the engineers to go build a brand new product when we had this like pretty hot company was really scary. And, and he was single-minded about doing it, and that was the right decision. And then the other thing we did was go up market. Because, you know, the, the large enterprises believed that there was gonna be a day after. They might not know when the day after was, was gonna be, and so we were able to basically pivot the company way up market and go to people and say, "Listen, you know, were you happy with your travel program before COVID?" "No." "What better time to overhaul it than now when no one's traveling and you can have a, a great program when the world resumes?" And so by going up market and by building a second product, uh, that company didn't die, and it would have. So I'd say that, that, that was a pretty good strategy.

Harry Stebbings 1:11:37 Carlos, I've loved doing this. I wanted to do it for a long time. As I said, I heard so many good things for a long time. So thank you so much for joining me today.

Carlos Delatorre 1:11:43 Thank you for having me, Harry. I love what you're doing. You're, you bring a curiosity and a passion to, to highlight the journey that, that founders and executives are on. So thank you for having me on.