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Dan Fougere, CRO @Datadog: Why Discounting is Dangerous and Contract Sizes are Misleading | E1229

Dan Fougere is one of the most successful sales leaders of the last decade. Most recently, Dan was Chief Revenue Officer for Datadog, growing revenues from $60 million to $1BN ARR. Before Datadog, Dan was Head of Global Sales at Medallia where he created the Mediallia sales playbook. In addition, Dan is also a minority owner of the New York Yankees. ----------------------------------------------- Timestamps: (00:00) Intro (00:56) From Engineering to Sales (07:57) Why Urgency Matters in Product Sales (15:34) Is Outbound Dead in 2024? (19:58) Giving Proper Weight to Small Accounts in PLG Strategies (23:21) Lessons on a Sales Demo (31:54) How CS Should Be Comped (34:00) Dan’s Sales Playbook Meaning (47:12) Advising Founders on Layering Sales into PLG (49:33) Making a Great Sales Culture (52:05) Knowing When Someone is a Mishire (01:01:06) Hiring Sales Reps (01:09:34) Turning Career Challenges into Personal Development (01:17:43) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Dan Fougere: 1. Lessons Scaling Sales to $1BN in ARR at Datadog: What did Datadog not do that Dan wishes they had of done? What did they not do that Dan wishes they had done? What does Dan know about scaling sales to $1BN in ARR that he wishes he had known at the beginning? What stage of the scaling process was hardest? Why? 2. How to Hire the Best Sales Team: What are the top signals of the best sales candidates? How does Dan structure the interview process for new candidates? How does Dan use tasks and take-home assignments to test candidates? What does Dan think of hiring panels? What are the biggest hiring mistakes Dan has made? What did he learn? 3. Discounting, Logos and Deal Reviews: Is discounting always wrong? How should sales leaders use it? How important is the quality of logo in the early days vs revenue in the door? What is the right way to structure deal reviews? What makes good vs great? Is outbound dead in 2024? Advice to founders on outbound? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Dan Fougere on Twitter: https://twitter.com/dfougere Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #danfougere #datadog #shoredrivecapital #sales #hiring

Dan FougereguestHarry Stebbingshost
Nov 21, 20241h 22mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Datadog CRO Dan Fougere: Discipline, Pricing Power, And Sales Culture

  1. Dan Fougere, former CRO of Datadog and Medallia, breaks down how to build rigorous, scalable sales machines on top of great products, especially in PLG-driven companies.
  2. He explains MEDDIC qualification, why tight discount control and small initial contracts can unlock massive long‑term value, and why AEs must own pipeline generation.
  3. Fougere dives into crafting effective demos, hiring and testing reps, structuring CS, and building a high-accountability, high-fun sales culture.
  4. He also shares candid personal stories about being passed over for a CRO role, financial stress, life‑changing exits, and how those experiences shaped his leadership philosophy.

IDEAS WORTH REMEMBERING

5 ideas

Qualification must ruthlessly seek the bad news, not confirm happy ears.

Using MEDDIC and the “three whys” (why do anything, why us, why now), great reps deliberately look for risk and gaps early so they don’t waste cycles on weak deals or over-forecasted pipe.

AEs cannot outsource pipeline generation; PG is everyone’s job.

Fougere compares asking SDRs to ‘do PG for you’ to asking someone to go to the gym for you; top cultures expect leaders, AEs, and SDRs all to create new opportunities with researched, value‑first outbound.

Small initial contracts can be huge if they’re real projects in expanding domains.

At Datadog, $600 ARR accounts like Capital One grew into seven‑figure enterprise deals; the key is to land in genuine, strategic projects (e.g., early cloud workloads) and then earn your way up through value.

Discounting is dangerous if decentralized; keep pricing power centralized and data‑driven.

Left alone, reps will push to max discount; Fougere insists on tight CRO/CPO control, clear discount ceilings, and resisting ‘frictionless’ approvals to protect long‑term unit economics and future upsell leverage.

Great demos start with discovery and a story, not a feature firehose.

He stresses doing discovery beforehand, mapping the product to the customer’s specific pains, and telling a narrative where the buyer clearly sees themselves, their environment, and their personal win in the solution.

WORDS WORTH SAVING

5 quotes

Asking somebody else to do pipeline generation for you is like asking them to go to the gym for you.

— Dan Fougere

Discounting should have as tight a control as possible. Left to their own devices, salespeople will peg at maximum discount 100% of the time.

— Dan Fougere

We will have a legendary sales team, making life-changing money, being best in class, and having fun.

— Dan Fougere

Very junior people can do very big deals with the right training and the right leadership.

— Dan Fougere

Old school is the new school and it’s the good school, because humans don’t change.

— Dan Fougere

MEDDIC qualification and creating urgency in enterprise dealsOutbound prospecting, pipeline generation, and the role of AEs vs SDRsPricing discipline, discounting strategy, and land‑and‑expand in PLG modelsDesigning sales demos, playbooks, and repeatable sales processesCustomer success structure, compensation, and post‑sale expansionHiring and evaluating sales talent, including tests and signals of disciplineSales leadership, culture building, and Fougere’s personal career / money journey

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