Chris Degnan: Why You Should Hire a Head of Sales Sooner Than You Think | E1080

1. 0:00 – 15:00

   You must go on…

   1. CDChris Degnan0:00

      You must go on eight sales calls a week, and you must be a student of what you sell. I send emails on LinkedIn, so prospecting should never die. Cold calling should never die. You... The marketing team needs to generate pipeline. They need to generate leads, meetings. No one's really your friend. You have a job to do, and you have an obligation to shareholders.

   2. HSHarry Stebbings0:20

      This is 20 Sales with me, Harry Stebbings. Now, 20 Sales is the monthly show where we sit down with the best sales leaders in the world to reveal their tips, tactics, and strategies when it comes to scaling the best sales teams. And today, we're joined by a true unicorn. We are often told people are destined for certain stages of company building and growth. Well, our guest today is the exception. He joined Snowflake as the first sales hire and employee number 13. Since, he's scaled the company from no customers at all to annual product revenues of over a billion dollars. He's the CRO at Snowflake. I'm thrilled to welcome Chris Degnan, one of the greats, and this episode is beyond. So get out the notebooks and get ready. But before we dive into the show today, static financial models with manually updated numbers, they just won't cut it anymore. Meet Liveflow. Liveflow is the leader in financial analysis according to G2. Liveflow helps finance teams at Y Combinator, OpenPhone, Landing.ai, and thousands more forward-thinking companies to turn their spreadsheets into a real-time FP&A platform. You might be wondering, how does it work? You're likely using Google Sheets or Excel for your financing modeling, right? And when it comes the time to update that model, are you stuck exporting your P&L and balance sheet from your accounting software over and over again? It's just inefficient. Enter Liveflow. It seamlessly integrates with over 50 financial reports from your accounting system, enabling you to say goodbye to manually updating your budget versus actuals report, automatically consolidate multiple entities, forecast cash in real time, and empower department heads to manage their budgets effectively. And here's the kicker. We're deep into the 2024 budgeting season, your board or C-suite is probably expecting fresh financial models at every turn, so let Liveflow shoulder that burden for you. Tap into their library of 100+ expertly crafted templates, such as 13-week cashflow forecast, which you can access and customize for free. Don't wait. Head over to liveflow.io/20sales and elevate your financial game today. The first 10 people who sign up via the link will get 20% off for three months. And speaking of incredible products like Liveflow there that change how we work, Outreach is the only AI-powered sales execution platform that unlocks seller productivity to help sales teams efficiently create and close more pipeline. From prospecting to deal management to forecasting, their platform leverages automation and artificial intelligence to help revenue leaders increase efficiency and effectiveness of all go-to-market activities and personnel across the revenue cycle. And Outreach is the only company to offer sales engagement, revenue intelligence, and revenue operations functionalities in one unified platform. But don't just take my word for it. There are 6,000 companies, including Zoom, Siemens, Okta, DocuSign, and many more who depend on Outreach to power their revenue organizations. To learn more, check them out at outreach.io. And then speaking of incredible products, I have to discuss ZoomInfo. I had Henry Schuck, the founder and CEO, on 20VC recently. And ZoomInfo helps companies supercharge their revenue potential. Landing your next customer, it's really fricking hard, but it doesn't have to be. You can be more efficient. So get more efficient, close more deals with ZoomInfo's all-in-one tech stack and the world's best B2B data. Their quality data delivers the insights you need to identify the right prospects at the right time. Don't just take my word for it, check them out and see why 30,000 customers and growing, including the likes of Snowflake, PayPal, Dropbox, and thousands of startup and growth companies love and use them. Head over to zoominfo.com/20vc to see for yourself and sign up for a free trial of the ZoomInfo platform. You have now arrived at your destination. Chris, I am so excited for this. I've heard so many good things from Pat and Danny 20VC for many years. So thank you so much for doing this today.

   3. CDChris Degnan4:18

      Harry, thanks for having me. Great to talk to you.

   4. HSHarry Stebbings4:20

      Not at all, but I would love to start. I think sales is this kind of thing that you fall in love with, and I want to start with your entry into sales. So how did you make your way into the world of sales? And when did you first realize that you loved it?

   5. CDChris Degnan4:31

      Yeah. I, I moved out to California in, in the late '90s, and there's a mutual fund company called Franklin Templeton. So Franklin has a, a thing called the Management Trainee Program, and you basically rotate through departments for four-month increments. And so my first rotation w- was in HR. So I, I got into this management trainee program. My, my first rotation was HR, and I absolutely hated HR, and I was like, "This is not a career for me." (laughs) Um, and then my next rotation was in sales. And it was like, click, "I love this." Now, I, I didn't necessarily love the mutual fund sales side of things. You know, a lot of the, the, the salespeople that I supported, so I was an inside salesperson effectively supporting a, a field rep. Those field reps had giant territories, and they were on the road five days a week, and they all typically were divorced o- once or twice. So I, I figured that wasn't a, a good career move. But I slowly made my way into technology. But I think it's at Franklin where I realized I loved sales.

   6. HSHarry Stebbings5:27

      Can I ask, what was it specifically that you loved about sales?

   7. CDChris Degnan5:30

      You know, I'm a competitive human, and I think c- getting on, on with someone and teaching them why or explaining to them why whatever I was representing could improve their job, could make them better at their job or whatever it is, that's when I started to realize I really enjoyed it. I enjoyed more the business-to-business sale. I found it... yeah, there's a lot of competitors out there, and it gets me up out of the... out of bed every day. Even to this day, competition is what drives me. So I think that's really probably what I love the mo- the most about it.

   8. HSHarry Stebbings5:59

      And you know what, for me it is, it's the close. It's the high that you get when you close a big enterprise deal, when you sign that big contract, and this was hard with venture. It's like 10 years for IPO, 15 years. Sales is like, you can get them more often, and I love that.

   9. CDChris Degnan6:14

      The- the immediate gratification is- is definitely (laughs) something that, uh, that I enjoy. But it's always, like, it never ends 'cause once you have a good quarter, it's onto the next quarter and you're a loser all over again, so.

   10. HSHarry Stebbings6:24

       It sets the bar higher as well. The better you do, it's like, "Great. Well, you can do better than your best then." Um.

   11. CDChris Degnan6:30

       That's correct, yep.

   12. HSHarry Stebbings6:30

       I'm sure Frang doesn't push hard at all though, so you're fine.

   13. CDChris Degnan6:33

       (laughs)

   14. HSHarry Stebbings6:33

       Speaking of Frank, how did you come to Snowflake then? I'm sure we'll probably jump a few steps, but we love sales. How did Snowflake come into the fray?

   15. CDChris Degnan6:41

       I was actually hired, at the time they didn't have a website, they didn't actually have a CEO at the time. So, there's a- a venture capitalist by the name of Mike Speiser from Sutter Hill. Mike's an incredible recruiter, incredible venture leader, and I got introduced to Mike. I- I had been selling at EMC and, uh, through my storage connections, got introduced to- to Mike 'cause he ha- he had started a company called PureStorage. He's like, "Hey, I'm building this company called Snowflake." And I was interviewing with a lot of other companies. Some of them went public, like AppDynamics got bought by Cisco, and what got me excited about Snowflake was the- the concept of the cloud. People were gonna move analytic workloads to the cloud. The data warehousing market was a huge market at the time. It was a 10 to 12 billion dollar market. And I liked the founders. They were just good humans. And as opposed to me going to work for another sales dude, I was gonna go work for some cool founders and- and that's re- I came on as the director of sales, not even the VP of sales. So, I started in 2010. Uh, Mike Speiser was our theoretical, uh, CEO at the time. He showed up one day a week. So I- it was me and a bunch of engineers that was, uh, the beginning of Snowflake.

   16. HSHarry Stebbings7:48

       I think Mike is one of the hidden gems of this business, I have to say. He's also so under the radar.

   17. CDChris Degnan7:53

       He- he is totally under the radar. He is brilliant, and when he's on, I don't think there's anyone better, and a lot- I think a lot of venture people look up to him, for sure.

   18. HSHarry Stebbings8:02

       I definitely do. You can go back to that first day at Snowflake and you can give yourself a piece of advice. Knowing all that you do now, what would you go back and tell a slightly younger Chris?

   19. CDChris Degnan8:12

       Yeah, 10 years younger Chris. You know, I showed up and I- and I had a, you know, WTF moment. I was like, "What am I doing here?" Me and a bunch of engineers. There was some insinuation that Netflix was a customer. They were not. There was zero customers when I showed up, and I think I had a panic moment of like, "Man, did I make the right decision?" But I think that panic, anxiety, whatever you wanna call it, is what made me figure out what to do. So, what I would say to myself is, "Just do what you did, but don't worry, it's gonna work out." 'Cause I think there was a lot of sleepless nights that I had. I had a good paying job before, and- and Mike Speiser convinced me to take a huge pay cut cash-wise. He's like, "You gotta bet on the equity," which now, it was a great bet, but back then, it didn't feel that way, and so that was a big, big deal.

   20. HSHarry Stebbings8:57

       Your wife is like, "You put the house on the line." (laughs)

   21. CDChris Degnan9:00

       We put a lot on the line. To her credit, she let me do this, so I- I give her a lot of credit for letting me do that.

   22. HSHarry Stebbings9:04

       Uh, and so, I'm so excited for this 'cause I also think you are one of the rarest people in business who's actually seen it full stack. Like, people are often boxed into like, oh, you're this stage, you're that stage person. You are full life cycle, my friend.

   23. CDChris Degnan9:16

       (laughs)

   24. HSHarry Stebbings9:16

       And so my question to you is, we often hear about sales playbook. You came in when there were no customers. What is a sales playbook and how do you define it?

   25. CDChris Degnan9:25

       I still say this. So, I just did a new hire training this week where I- I presented to a bunch of new hires, and I say the same exact thing today that I said when I started at Snowflake is, but I was- I was the original BDR, I was the original sales rep at Snowflake, is, "You must go on eight sales calls a week and you must be a student of what you sell." So for me, I- I wasn't 100% certain on what I was selling, so I interviewed the founders and stuff like that to better understand the value proposition. So again, a student of what you sell and go on eight sales calls a week, and if you do that and you have a good product, you'll be successful, and if you have a crap product, you will be.

   26. HSHarry Stebbings10:04

       Let's just break that down for me. Why eight sales calls?

   27. CDChris Degnan10:08

       You- you gotta leave time for prospecting. You gotta be able to prospect, and- and that's the other thing is if you don't figure out how to plan for the next week, it's all about time management. I think for me, going to college or university is all about time management. If you're not gonna be a, you know, an engineer, you're not gonna be a- a doctor or something like that, you're- you're- you're gonna be a stupid sales guy like me, it's all about figuring out how to manage your time. And I think for me it was, okay, I could do, go on eight face-to-face sales calls a week and still have time to follow up on all that stuff, on- on all the emails that I need to do to- to follow up on the eight sales calls, go on two to three net new business meetings a week, and prospect. So, if you think about just time management, that's really what's in the realm of possibility. I- I worked at a place at EMC where my sales manager, who was super intense, required 15 meetings a week, and that was not possible. It- it- it- it was not possible. Eight is good. Eight is good.

   28. HSHarry Stebbings11:02

       But prospecting actually suggests that you have an ICP, you have a defined customer profile, you know who is your customer. Talk to me. You came when there was zero. You didn't have that. How did we approach that and what would you advise?

   29. CDChris Degnan11:16

       So, I started off, I had a- a basic premise of- of our value prop, and- and our basic premise was we separate storage from compute and we natively ingest semi-structured data and we're a SQL engine. That was kind of the- the premise. And so, I would just send out an email and say, "I'm not looking to sell anything at this point." Mike Speiser was like, "For two years, you're not selling a thing. Like, I don't want you to sell anything. I just want you to get customer feedback."... for two years, I really focused on just getting customers to try the product or tell us if they would buy it and that kind of stuff, which was hard because you're trying to get people just to try a product for free that doesn't really exist. There's no website. And so what I did was I would go out and I'd talk to, like, GE, and I'd say, "Hey, this is what we've built." And GE would go to me and say, "Hey, when are you gonna run on the private cloud?" And I'd go to Benoit and Thierry, our founders, and say, "When are we gonna run on the private cloud?" And they, they say never. (laughs) So I was like, "Okay. That's, (laughs) that's a good, good idea of I'm not gonna go to someone who's gonna require me to r-run the private cloud." And luckily, in 2013, Amazon had, had launched Amazon Redshift, which we compete against, and they had signed up a thousand customers in nine months. And so what I realized is they actually... They created the market. They just... Redshift was not a good product at the time. And so, I basically figured out that customers had pain associated with Redshift. And so then I started really just focusing on digital native customers, customers that were already in the cloud, as opposed to me convincing someone to move to the cloud. Amazon, and then now Microsoft and GCP, they're convincing people to go to the cloud. That's not my job. My job is to say, "We have the best data warehouse in the cloud." That was really how I figured it out. And it took me a bunch of iterations and a bunch of nos from the founders until I figured out our, our ICP.

   30. HSHarry Stebbings12:56

       I always say if you have to educate the customer, it's too hard. They've gotta know they need it and they've gotta be in market. Like, yeah, we're ready to think about it or be open to it. If you need to teach them, no. Do you agree or am I wrong, and do we lose category creation then?
2. 15:00 – 30:00

   W- what do you…

   1. CDChris Degnan15:00

      two." I was the director of sales. So whether I was the VP of sales, the, the chief revenue officer, that came later. It, it was more like, "Help us build a product that lasts," and then I think he figured he'd hire someone w- with more experience than, than me.

   2. HSHarry Stebbings15:13

      W- what do you advise founders today in terms of hiring that first salesperson? Should it be a head of sales? Should it be junior sales reps who just go out, dogfood product? How do you advise them?

   3. CDChris Degnan15:23

      If you can find the right person who has something to prove, that's important. And I, and I felt, look, this was an opportunity that I did not wanna fail at. So I think I, I approached it very much like, I don't want them to take the ball away from me, therefore I'm gonna hit every metric I need, and that's what I, that I focused on, is hitting every metric. And I think the founders, if you can get someone who's been a sales leader who will go back and roll up their sleeves and go on eight sales calls and do prospecting, wonderful. Sometimes, if you asked me to do that now, 10 years in, if you asked me to do that again, I probably wouldn't do that 'cause I don't need to, right? But I, I was a little bit desperate, and so I think if you can find that right sales leader who has that energy to go out and do all the basics of sales, then I think it's great. But I think it's, it depends on the person. I think hiring a, a VP of sales, I think it's a mistake for a founder to hire a chief revenue officer right away because the getting rid of a, a chief revenue officer is gonna be more painful versus, hey, you have a VP of sales, and you can hire over them, and you can make that VP of sales a head of North America or head of the East or West or whatever it is, uh, wherever they are.

   4. HSHarry Stebbings16:32

      You mentioned there about hitting metrics, hitting metrics. Kyle said I had to ask this one. How did you hold yourself accountable?

   5. CDChris Degnan16:38

      So a- again, so, so I, I wa- I spent eight years at EMC and then I went to a small startup where I was running the West for this company called Avenxa. This is where we really came up with real metrics of eight, eight sales calls a week, and I figured when I, when I showed up, I was holding my sales team at Avenxa to that metric. That worked, by the way, and that was reasonable versus the 15 that my, my sales manager at EMC had me do. So I said, "Okay, eight sales calls a week, that's what I'm gonna do." And so how I held myself accountable was I'd go on eight sales calls a week, and then at the end of every week, I'd send an email to the entire company on the eight sales calls I had. So it was to the founders, to the engineers, to the board of directors. Some of the engineers still have those emails because they love to hear what people are saying about our product. And so the feedback that I got was part of us building the product, and they loved that feedback. So I was their feedback loop, if you will, in the field.

   6. HSHarry Stebbings17:36

      Oh, dude, you are good. Pinpointing yourself for promotion early with that one, aren't you? All the board are going, "This guy, this guy is good. Hey, you should-"

   7. CDChris Degnan17:44

      (laughs)

   8. HSHarry Stebbings17:44

      "... you should promote him." Do you think sales reps should do that today? Do you encourage yours to do that?

   9. CDChris Degnan17:49

      Yeah, so I just hired a new head of Europe. So I was running Europe for a quarter th- this year, and I even have ... What I have now is every major account in Europe, I have each sales rep send me a weekly update on how is it going in that account. So I still read ... I was just reading one of those this morning on one of our larger accounts. I love that because now I get a feel for what's happening in the business, I get a feel for the good and the bad. And- and they give me, like, what's green and what's red, and I look at the red right away. I go to the red and say, "What's the problem?" So you should absolutely do that. If you're kind of not doing that, then you're basically keeping stuff to yourself. In fact, I think one of the, one of the problems that I didn't realize, but a lot of heads of sales don't effectively communicate in larger companies with product. Sales and product have to be really close, and that- that's a huge thing.

   10. HSHarry Stebbings18:41

       This is, like, too good, so I have to just dive in here. So when we actually think about these kind of reports, being we have 300,000 salespeople that listen to every show (laughs) , which is worrying given I've never been a sales rep, but (laughs) my question is, how do we structure these sales emails? For them listening thinking, "Okay, I want to do it. How do I do it?"

   11. CDChris Degnan19:00

       Again, if you think about it, I'm going on eight sales calls a week. I'm trying to go on two to three net new business meetings a week. So I- I structure on, okay, if I'm going on two to three net new business meetings, like, I went to ABC Company, I met with the chief data officer or director of IT or whoever it is, here's who I met with and here's the conversation I had and the next steps. And I try to get next steps in every one of them. And then when I go back to ABC Company and I meet them again, I'm trying to set up a pilot and convincing them to try our product a- at the time. And then they're giving me objections on why they can't give us data. You don't encrypt data, or you're in the cloud, or whatever the objection is. And I'm putting those objections in the email to the company so that the founders, the engineers hear that. And a lot of features ... Like, I remember we went, early days, I brought Thierry or ... There was this technical feature called windowing that we needed that we didn't have. And the guy is like, "Well, you need windowing. I need windowing." I have no idea what windowing is, to be honest with you, but I'm like, "Okay, we need windowing, Thierry." And that night, the brilliance of Thierry goes home and builds the basic concept of what is Snowflake's windowing functionality today. That's the beauty of the relationship between sales and product, is I bring them to water and they have to drink it and they can figure out if they're gonna drink it or not.

   12. HSHarry Stebbings20:18

       Dude, you're- you're a bad sales rep.

   13. CDChris Degnan20:20

       (laughs)

   14. HSHarry Stebbings20:20

       If you were a good sales rep, you would have gone, "Windowing? We already got it, baby. Oh, it's coming out next week. It's coming out next week." Uh, and so we send that to everyone. You said there are kind of sales leaders interacting with product. How should they do that? What's the best way that you see sales leaders interact with product most efficiently?

   15. CDChris Degnan20:37

       Well, I think you put product in the room with the customer to give them direct feedback, as opposed to me w- writing it down and just saying, "We need this windowing functionality." That would have been one thing, but for Thierry to hear from the- the mouth of the customer, "This is why I need it," 'cause ultimately he was a founder that he didn't care about being the CEO of the company, he didn't care about making billions of dollars. All he cared about is creating a product that people used. He- he came from a background of- of database. He knew that he needed to eventually have that, so he went and built it. So I think it's not for me to decide. I don't decide the product roadmap. The- the- the early engineers used to jokingly refer to me as the shadow CTO. There's not one piece of code I've ever written at Snowflake, there's no- no technical decisions that I've ever made. All I've done is brought the product team to the customer, and the product team makes the decision. That's kind of the job that I view I have.

   16. HSHarry Stebbings21:35

       Do you think it's important to have a common enemy? I do. So, like, I create enemies in my teams. Is it important in sales teams?

   17. CDChris Degnan21:43

       Oh, I- I mean, I was just listening to, uh, Tom Brady is, and he was just saying, "Look, I looked at the- the other team as my enemy. I didn't have friends on that team," is what he said. Now, I think after the game there were guys that he went to college with and stuff like ... But in that moment, he's like, "They're my enemy." So 100%. In fact, 10 years into this job, that is what gets me up out of bed. I love having a- an enemy. By the way, I have multiple enemies, I don't want to call them all out on this call, and that motivates the heck out of me, for sure.

   18. HSHarry Stebbings22:10

       Can I ask you? L- I think this is really important, but we mentioned earlier the metrics element. How do you think about, as a leader, say, sales forecasting? I know it's a bit of a pivot, but it's just one that I get so many sales leaders ask me about. How do you think about effective forecasting? What have been some of your biggest lessons?

   19. CDChris Degnan22:26

       So early on with Snowflake, the challenge is that we- we were competing with Amazon, Microsoft, and Google, and so the cloud native solution was always the default solution. So early on, I actually wouldn't let the sales team put an opportunity in Salesforce to forecast it unless the customer had tried the product. And so now the forecasting is- is about the compelling events, like is there a compelling event? The- the biggest hole that you can poke in a forecast is: what is the compelling reason or compelling event that the customer is gonna do something? Especially in a- in a weird economy, people are not gonna do anyone any favors. Like, salespeople are like, "Oh, I have a good relationship with this customer." No, you don't. They're- they're gonna care about themselves and their job and their family, not you, Mr. Sales Rep, Mrs. Sales Rep. What is the compelling event? Do you have a ROI, some reason that the customer is gonna buy? Otherwise, that- that's the easiest thing to poke a hole in. And by the way, there are a lot of sales leaders that don't ask that question. Why? Why are you going to do this deal? Why? That's really the- the number one thing that I, that I look at from a forecast perspective.

   20. HSHarry Stebbings23:32

       How often do you get a satisfactory answer to that?

   21. CDChris Degnan23:34

       Rarely.

   22. HSHarry Stebbings23:35

       Mm-hmm.

   23. CDChris Degnan23:35

       Rarely. 'Cause people don't ask hard questions. So I was in New York last week going on- on a sales call on a mi- net new prospect, and I'm in there in the building and I'm like, the guy's ... This customer is, like, just talking in circles. And I'm like, "Hey, dude, do you want to do something or not?" That basically summed it up. He was like, "Well, I don't know that I'm the guy." Okay, great, I figured that out really quickly. He wasn't the right guy. Who is the right guy? And so you kinda have to be very direct. Don't waste my time, I'm not gonna waste yours. There are a lot of people that will take meetings but do nothing. You shouldn't waste your time. You should ask the hard questions.

   24. HSHarry Stebbings24:09

       How do you create urgency in deal cycles? Even if they, say, do want it and they do have a compelling reason, how do you create urgency? 'Cause they can just take a while.

   25. CDChris Degnan24:18

       Well, if you can find a compelling event and you basically create a, a backwards timeline of saying, "Hey, you wanna get this migration done? You wanna get this project done, whatever it is, by this date? Here's what has to happen. In order for us to get it there, here are the following things that have to happen. We have to go through contracts." Our- our average time for a contract to get signed is, is three months. Uh, we have some customers who are small customers, so it'll take 60 days, but we have customers that will take... Like, in a large enterprise, their procurement departments, they crush innovation by just their process. Large organizations have crazy slow processes-

   26. HSHarry Stebbings24:54

       And we've talked three months.

   27. CDChris Degnan24:54

       Oh, yes. Even longer. We've been in procurement for six months. It- it's crazy. It's great. So like, large enterprises-

   28. HSHarry Stebbings25:00

       With, with implementation on top of that, you're like, nine to 12 months at least.

   29. CDChris Degnan25:05

       Correct. Yes.

   30. HSHarry Stebbings25:07

       And so if you educate customers as well, from day one to completion, you're like, two to three years.
3. 30:00 – 45:00

   I'm so pleased you…

   1. CDChris Degnan30:00

      So now what I try to do is focus on finding sales leaders that work directly for me, that have the same sense of urgency. So I have a guy who runs our, our largest customers working for me. He runs those transactions. I don't run those transactions anymore and he tells me what he needs from me, and I trust that he's doing that job. Building that trust, giving the keys to your, your baby, if you will, is, is sometimes hard. But man, like, when you find those great leaders, you feel super lucky. And, and that's, that's how you create scale and that's what I've done with my organization today.

   2. HSHarry Stebbings30:34

      I'm so pleased you said there about finding those great leaders. Y- you've now brought in many great leaders underneath you. When you think about your biggest hiring lessons for sales teams, what are the biggest lessons you have from hiring the best sales teams?

   3. CDChris Degnan30:48

      So, you have to find people that kind of believe in the foundation that you believe in. Be a student of what you sell. If I have a sales leader who wants to sit in their office and manage a spreadsheet, that's not for me. I'm a lead-from-the-front type sales leader. I want my sales leaders to, to be the same. And finding that out is, is hard. And so, you can get faked out by people, too. They can tell you that they're doing those things, and then what happens is, when you go into the field and you go meet with the people that work for them, all of a sudden you realize they're not doing that, you're doing that. And so, all of a sudden, that becomes a problem. That has happened to me multiple times is I've been faked out by sales leaders who, who say they're doing that, but they're not. I wouldn't say, Harry, it's a, an easy thing to figure out. It's something that I still struggle with to this day. But, uh, you spend time and effort and you'll figure it out.

   4. HSHarry Stebbings31:33

      What's the biggest mistake you think founders make when assembling sales teams?

   5. CDChris Degnan31:37

      Well, I tell this to founders all the time. They actually... It's on the marketing side, is where they make the mistake. Founders love product marketers. They understand the product and they're gonna build this marketing literature and stuff like that. That's a waste of time. The marketing team needs to generate pipeline. They need to generate leads, meetings, whatever it is that y- the metric that you wanna come up with. And founders, th- they're like, "I don't want some pipeline generation machine. I want a great marketing page of telling the sales team why the product is so good." Let the sales team and you, founder, figure that out together. Don't rely on the product marketer to do that, 'cause they're not in the field. The sales team's in the field. You're in the field. To me, the, the number one thing that I s- I say to sales leaders, "Dude, go hire a qu- world-class pipeline generation marketer. That is what you need, because then you'll learn from the sales calls. Then you'll... That'll help you develop the product." So I think that's the number one issue that I see in, in startups.

   6. HSHarry Stebbings32:36

      And we've heard about accountability. You said, like, pipeline generation master. Dude, I can fill your pipe, but I can do it with not great leads. And so I find, like, actually accountability then really hard on pipeline generation, because I can gamify all of the metrics if I wanted to. How do you think about creating that? Like, what is success framework for pipeline generation, given that so much can be gamed?

   7. CDChris Degnan32:57

      When we hired our, our CMO almost seven years ago, Denise, I was arguing with the previous marketing team over what a, you know, an MQL was, what an SQL was, and all this other stuff, and it was driving me crazy. And she said, "Great news. We're never gonna talk about MQLs or SQLs anymore. We're just gonna talk about qualified meetings. That's, that's all you sh- should hold me accountable to." And that's what she did. So, she would sit down with... We had an SDR organization that, that was i- initially under me and that I tr- three years ago transferred that to her. But we talked about just generating good quality meetings that converted to pipeline. That's all that we, we talked about. And to this day, that's all we talk about, is qualified meetings. And so, that's the thing that I would say is, yeah, if you fill my funnel full of... Th- this is where the, the, the friction with sales and marketing becomes is, you start talking about what the definition is of an, an MQL, and you have this definition. And you're sitting down with the CEO and the CEO saying, "Oh, that's... Yeah, look at all this pipeline. The sales team's not following up on it." And the sales team's like, "Yeah, that's..." So, so I think it's, it's having integrity in the pipeline is important.

   8. HSHarry Stebbings34:02

      You mentioned pipeline generation there. Dude, is old school outbound dead? Can we get on those phones or get on those emails and dial for dollars?

   9. CDChris Degnan34:11

      So, this week, I met with some of our, our, our SDR leaders. Um, they were in town and they were doing, uh, a quarterly review and some training. I say to them, "I was Snowflake's original SDR, because I built my own lists. I, I scraped websites. I prospected." By the way, I still use that to this day. I still do my own recruiting. When I, when I hire people, I pick up the phone and I call people. I send emails on LinkedIn. So, prospecting should never die. Cold calling should never die. You gotta find, find champions. The way you find champions is you're gonna say, "Hey, I heard you have this issue." Anyone who, who says that's dead is crazy.

   10. HSHarry Stebbings34:48

       You know what I find funny is that people don't understand is that the more powerful you become, the more outbound is effective, and the more you should do it, not the less.

   11. CDChris Degnan34:56

       Yeah, 100%. If you're waiting for marketing to hand you the golden leads, if you get two leads from marketing a quarter, you're welcome. Go pick up the phone and cold call into your prospects. Go to, go to conferences. Show up. Go to partners. Ask them how they can introduce... But that's the hard work. And if you can actually do that and the hustle, you're gonna be successful.

   12. HSHarry Stebbings35:16

       You said there about, earlier, about reviewing kind of where you're at with calls and the green and the red. Can you predict churn in potential customers, do you think? And actually, is it much harder today where suddenly budgets are turned off in macro uncertainty?

   13. CDChris Degnan35:31

       So, with Snowflake, being a, a consumption model, you can see the dial turn real time. I look at revenue on a daily basis. And if a customer goes up really fast or down really fast, it sets off alarm bells. Because I don't want them to overspend, because all of a sudden they'll be really mad at me. And I don't want... And if they're underspending...... then I go right to the sales team and say, "Why? What's happening?" And so I get real time feedback on churn. When a customer is gonna churn, we know. Now, they might be going out of business, or maybe we lose a workload, but not the entirety of it. There are stuff like that that happens too. But we see that in real time, and that's the beauty of a consumption... Good or bad, that's the beauty of a- a consumption model.

   14. HSHarry Stebbings36:10

       You know, a lot of founders are concerned. What do you hear when you speak to CFOs? Is spending still going?

   15. CDChris Degnan36:16

       Look, people have to do business. You're either gonna keep moving or you're gonna die. I call BS on that. And I think if you don't have a good value prop, yeah. If you have a n- if you have a nice-to-have, like a sales tool, that's gonna be hard. A nice-to-have forecasting tool. Like I got someone who tried to introduce me to some sales forecasting tool and I'm like, "You're barking up the wrong tree here." I- I don't have that pain and I'm not doing that. The reality is, is that's- that's not a huge pain for me. I'm not gonna go buy a nice-to-have, something that would be additive. But find a pain and CFOs are spending it right now, and I see that real time.

   16. HSHarry Stebbings36:51

       I- I have to say, I spoke to, you know, many about you as a leader beforehand, and- and I spoke to many underneath you actually, and they said he's the best in the business for developing talent. My question to you is, what do you think you do to develop sales talent so well?

   17. CDChris Degnan37:04

       You know, I- I am humble enough to know that, like, I'm lucky to be selling the product that I'm selling. I take feedback and I act on that feedback. I feel like I learn a ton from my own sales leaders. Like people who work for me, they teach me something every single day. I was on a sales call at a customer recently with one of our long time s- or actually our very first sales rep, this guy Tom, and I was on a sales call with him and I learned from him. And so I think the thing that- that y- you learn about is if you're open to feedback and then you can give those other people feedback onto how they're doing and what you're seeing others do, then jeez, it's- it's awesome. And I think what I try to do is get others to talk to 'em. So like we just promoted a guy to be the head of- of the UK, and one of the guys who runs, you know, a huge business for me in North America, Mark Fleming, he spent time with Jimmy helping him out of the goodness of his heart. And Mark is a wonderful sales leader, and he's given Jimmy time and helping Jimmy develop. So I- I think it's about, it- it's like a family. It's like you're having a family raise people versus just like being a single parent. And I think because I do it one way doesn't mean it's the best way. And I think that's kind of the way that you kinda I- I view it is if I can get others to help me raise the family, I think that's the way I look at it.

   18. HSHarry Stebbings38:17

       People often say you should feel safe in your team, you should feel safe in your team. Do you think sales reps should feel safe or should they feel the pressure?

   19. CDChris Degnan38:24

       I think they absolutely need pressure. I, look, I never feel safe. I- I'll- I'll be honest with you, I never feel safe. To this day, I don't feel safe. And- and I think when I see people like who are laid back, don't have the sense of urgency that I have, it drives me crazy. The answer is no. Going back to the- the- the comment I made earlier about the new hire training that I- I- I went in and I said, "If you do not go on eight sales calls a week, if you do not become a student of what you sell, you will fail." You might be a really nice person, but if you don't do those two things, you're gonna fail. And I say that to everybody.

   20. HSHarry Stebbings38:54

       How fast do you know if someone's gonna fail? Is it very obvious or does it take more time?

   21. CDChris Degnan38:59

       Well, if you go out on a sales call and the person doesn't know what the hell they're talking about and they've been on the job for six months, y- yeah, you're gonna be in a world of hurt and you should just cut bait. To quote Frank, he- he has this saying, "When there's doubt, there's no doubt." And I think y- y- in your gut, you see it. And I think a lot of times because you're a human, you, because you have empathy, you wanna help people along, because... And you want them to succeed. But at some point they hit ceilings and you either have to s- you know, say, "Hey, you're- you're not scaling, you're not doing this." And in your gut you see it. And that's the hardest part is how fast can you make that decision? I think you see it pretty quickly. It's just do you have the- the guts to go and make that tough decision quickly 'cause it's not... It's gut-wrenching.

   22. HSHarry Stebbings39:40

       How do you do it with enterprise where it takes a long time for deals to close and those sales cycles are much longer? With the PLG motion, you're like, "You know what? Chris hasn't signed anything in two months. Clearly not working." When do you expect people to close their first enterprise deals?

   23. CDChris Degnan39:53

       So we say, y- you talk about productivity of- of sellers. So we have different productivity numbers per division that they're in. So corporate s- seller, so who's more of a junior seller, they're gonna become productive within three to six months, meaning they're gonna, they should be closing deals because their sales cycle is 60 days. So if they can go and prospect, find a customer, they- they have a 60-day sales cycle, boom, and a smaller contract value, y- you'll do that. In- in a mid-size enterprise, it's six to nine months. And in the large enterprise, it's 12 months. That's what we see. But there are basic things, like I- I'll give you an example. I think you did some homework prior to us talking. You spoke to Kyle Rourke. So Kyle Rourke was one of my first li... He actually was the first guy I recruited to Snowflake. He ran the West for me. And at the time, I- I had all direct reports of sellers and then when Kyl- I had Kyle run the West, Kyle takes over basically for me and comes to me and says, "Hey, guess what? I'm gonna hire two people on that in L.A." I'm like, "Really?" I'm like, "We can't get arrested in L.A." He's like, "We're doing it." And sure enough he was right. He had three people down there and two of the people became super productive and were selling. And that one person, he couldn't get out of his own way. And so I think that's when you realize is like he was waiting for the leads to come to him versus the leads going and making things happen.

   24. HSHarry Stebbings41:07

       Would you always hire in twos? Because then you know for sure whether you've got a head or not a head and you actually have reliability there.

   25. CDChris Degnan41:14

       100%. Like that's a, that's a good lesson is like a single person should not be the litmus test, because you don't know if they're doing the things that you do. As the sales leader, you should be BL leading from the front sales leader. You should understand how to sell the product. You should understand what works. But then if you hire in twos and you put people in the field and you see one person's successful, one person's not, it's not because of the territory, guaranteed. It's because one person's doing something different. So find out what that person that's succeeding is doing and then either make that person do that same thing or cut bait.

   26. HSHarry Stebbings41:46

       I- I really like you, Chris, but you're- you're also quite direct. I can imagine in a deal review with me, I would also be a little bit on edge. My question to you is, and I- I did get this from Kyle, how do you give feedback that's empathetic where we know you're a good guy, but it's also direct and maybe not always that nice and easy to hear?

   27. CDChris Degnan42:04

       I mean, Kyle and I have had tough conversations before, and he's a good friend of mine. Look, you don't have to be an asshole. You don't have to be mean to people. Frank always says this to me. He says, "Do you think the board of directors are my friend?" And the answer is no. He- he- he answered it for me and he said no. He said they'd fire me in a heartbeat if they didn't think I was doing a good job. I saw that firsthand when they, when- when the board of directors fired Bob Muglia. Bob thought they were his friends.... and they weren't, right? And I saw that happen and I think you- you kind of have to know that in the corporate world, no one's really your friend. You have a job to do and you have an obligation to shareholders. And if you operate that way and you understand that's the premise that you're operating on, that's- that's h- how I operate, so.

   28. HSHarry Stebbings42:48

       Do you find that sad?

   29. CDChris Degnan42:49

       It's awful. When you build a startup, you're building it from scratch. You know these people's families, you've traveled the world with them, you become friends with them. But then at some point, there becomes a point where it doesn't work anymore, and I think that's the awful part of the corporate world.

   30. HSHarry Stebbings43:07

       But this is what I just can't get my head around with you, Chris, which is, like, you are this unicorn. Again, I- I've interviewed, you know, 200 of the best operators in the world across product growth, sales, everything. Everyone agrees in people having stages of company. You transcend that and are kind of stage agnostic. Do you think people should be bound to specific stages or can they be plastic to many?
4. 45:00 – 57:34

   When you hit a…

   1. CDChris Degnan45:00

      with product? Like, there's a bunch of questions you should ask yourself.

   2. HSHarry Stebbings45:03

      When you hit a quarter, do you say to your team, "Well done." and do you celebrate hitting quarters? Or do you just go, "On to the next, treadmill, treadmill"?

   3. CDChris Degnan45:10

      (laughs) I'm- I'm, "On to the next." I'm like, "Okay, that was a good quarter." 'Cause sometimes you're gonna have bad quarters and you have to diagnose and be honest with yourself on what happens. Why did we have a bad quarter? And there's things like COVID, there's things like inflation and you have to- you have to decipher between is inflation ha- having an impact or is it your sales team?

   4. HSHarry Stebbings45:30

      If you don't celebrate the good times, you are gonna have people leave. So how do you think about celebrating the good times?

   5. CDChris Degnan45:36

      Every quarter I do a- a quarterly review with the entire sales team. I celebrate the top performers. We have SPIFs, we have President's Club, you know, where we bring the top performers every year. So the answer is yeah, I do celebrate that, 100%, and I celebrate them and I say, "Great job."

   6. HSHarry Stebbings45:53

      On the, like, downside, you have a quarter which doesn't go to plan, how do you prevent morale getting shot in the head there?

   7. CDChris Degnan45:59

      I think you're honest. You're saying like, "Here's what we're seeing in the market." Was it sales? Was it product? And as we looked at it, we saw, dude, as- as you said earlier, CFOs were- were cutting back and the behavior was- was changing. So you- you have to be measured in- in how you look at these things, not emotional, and you have to really look at the metrics and understand what's happening.

   8. HSHarry Stebbings46:18

      Final one before we do a quick fire. I had Henry Shuk on the show from ZoomInfo.

   9. CDChris Degnan46:22

      ZoomInfo, yeah.

   10. HSHarry Stebbings46:23

       Yeah, and he said to me that, "Actually, we have to change our whole org structure in this new macro climate because all of our customers, they used to just renew and upsell. Now they're going flat, they're not buying more and they're going, 'And we want data.' We wanna see our ROI, we wanna see usage, we wanna see the dollars we're spending are being spent efficiently." Are you seeing that same transition and are you seeing a restructuring of a more CS heavy ROI presentation style needed?

   11. CDChris Degnan46:53

       Well, well, when you say CS, that's- that's a naughty word. Um, so I- I don't believe in customer success, um-

   12. HSHarry Stebbings46:59

       Dr- drop the mic, Chris. Why not?

   13. CDChris Degnan47:01

       Yeah. Yeah.

   14. HSHarry Stebbings47:02

       Say it.

   15. CDChris Degnan47:02

       Because what does customer success do in most companies? They're basically either renewal people or they're guiding the customer around to how to use the product. But if you ask the tough question in, of customer success, could they sell the product? No. Are they, you know, technical enough to be a sales engineer? No. You know, what are they doing? To me, I'd rather take that money that you're spending on customer success and invest it in either, you know, professional services people that are paid for that you can use as free resources but they're technical, sales engineers or sales reps so you're getting something, as opposed to this weird thing that you can't really quantify. We have a- a business value engineering group, which they actually are more of an enablement group for the sales team to help. Actually, what we do is build business value plans for the customer. "Hey, you were doing X before, you're doing Y with Snowflake. Here's the benefit." But it's an enablement, it's the sales team should be, you're teaching the sales team how to fish. It's not like they're gonna do this for every single sales rep across the company. The- the sales rep should end up doing that for themselves.

   16. HSHarry Stebbings48:07

       What would you advise founders then who are going, "What? I've been trained for years on customer success. Should I get rid?"

   17. CDChris Degnan48:13

       Yes. Get rid of them. Build a- build a professional service organization, hire more SEs who can do it. Customer success, look, people think that's blasphemy, I get it. I don't believe in it. I inherited our customer success when Frank came in, he gave it to me. I got rid of it. It was an expense that I didn't see the value in. Yeah.

   18. HSHarry Stebbings48:29

       How do you- how do you think about though losing renewals? Customer success can be quite good for account monitoring and then managing upsell. No?

   19. CDChris Degnan48:36

       No, because the sales rep can do that. You e- they give the sales rep a renewal quota, that, I mean, it's a basic thing, basic. So-

   20. HSHarry Stebbings48:43

       It's a lot- it's a lot to- a lot to ask though. No?

   21. CDChris Degnan48:45

       No, because if you- if you're, "Hey, guess what? You have a renewal quota."... and you have a, a growth quota. That's easy. Here, go sell. And if, if you're too, too busy to do the renewal, great, I'll just take away, you know, half your accounts.

   22. HSHarry Stebbings48:57

       I've got to ask this, are there any other conventional things in SaaS and sales that you're like, "Nah, I wouldn't do that"?

   23. CDChris Degnan49:04

       Well, on, on the go-to-market side, it really is about, I think, professional services is incredibly helpful. But we don't, we don't-

   24. HSHarry Stebbings49:11

       Why do you think professional services is incredibly helpful? Because we're also trained that it's not, and it's just consulting. You don't want to be a consultant. You'll, you'll worsen your multiple.

   25. CDChris Degnan49:19

       So our, our professional services organization is a single digit profit margin business. It is not something Wa- Wall Street cares about in terms of our services revenue. It's an enablement function. It remains profitable, but at a, at a low margin. So we're not losing money on this organization. And they're getting customers to use the product and consume the product. Also, what, what's coming out of that organization is the training for our customers and our partners. So all of the content at Snowflake for training and enablement comes from our professional services organization. That content is then distributed out to our partners and customers to make them successful. So I'm a huge fan of our, our services org, for sure.

   26. HSHarry Stebbings49:59

       I mean, jeez, that was a mic drop moment for the end, wasn't it, Chris? Save a good nugget of wisdom there. Final, final one, and then I promise to do quick fire. I heard from Kyle that I had to ask this. Before the IPO, you had to resegment the whole sales team, and everyone had a new role and a new GO. Shit, that's a lot to do late stage in the company. How did you do that, Chris?

   27. CDChris Degnan50:20

       You rip the Band-Aid off and just do it. And by the way, that's something that's just constant at Snowflake, is change. If, if you're not changing, you're dying. And I think I'm always evaluating how we can become more efficient. So even at our scale, I am constantly saying, "What do we need to change for next year?" It's always a lot more than I thought. So do it now, and it's painful, and people don't like change, and but m- man, you gotta do the right thing for the business. And so that's h- how we've always operated.

   28. HSHarry Stebbings50:47

       Well, Chris, I've enjoyed this discussion. I could talk to you all day. I want to move into a quick fire round. So I say a short statement and you give me your immediate thoughts. Does that sound okay?

   29. CDChris Degnan50:55

       Sure.

   30. HSHarry Stebbings50:55

       Tell me about a deal that you closed where you had to do something creative to get it over the line.

Episode duration: 57:34