Matt Plank, Rippling's CRO: How to Build an Enterprise Sales Machine | E1241

1. 0:00 – 3:08

   Intro

   1. MPMatt Plank0:00

      Founders definitely should not create the playbook, but I think founders wait too long to hire a go-to-market. And I think they do that because they feel like they can't hire a good salesperson, potentially without a bunch of traction. The big mistake that people make, as they transition to the next phase, is people don't increase price into a point where they find friction.

   2. HSHarry Stebbings0:20

      Ready to go? (upbeat music) Matt, I'm excited for this, dude. I've heard so many good things, both from Ashley and from Parker. So thank you so much for joining me today, man.

   3. MPMatt Plank0:39

      Yeah, absolutely. Thanks for having me. I, uh, likewise have- have, uh, heard a lot of great things and watched a lot of great episodes on the podcast, so excited to join you.

   4. HSHarry Stebbings0:47

      Yeah. Bribery goes a long way, dude. Uh, listen, I think there's a moment when people fall in love with sales. Can you take me to, when did you fall in love with sales and realize that this was the career for you?

   5. MPMatt Plank0:57

      You know, candidly, I've been, uh, I think in love with sales since I was, you know, selling wrapping paper in fifth grade in elementary school. And I think for me, uh, it's always come from probably some part of competition, you know, wanting to, uh, to sell stuff and- and kind of be number one on whatever leaderboard it was. And believe it or not, that's- they get you primed for that in elementary school when you're selling wrapping paper or discount codes to your local stores or whatever. But then all the way through college, I was selling hot tubs and appliances at Sears and Cutco knives and really anything you could- you could think of that was a commission job. Uh, I was doing it from a pretty young age.

   6. HSHarry Stebbings1:33

      Do you think that people are born salespeople or do you think it's something that can be learned?

   7. MPMatt Plank1:38

      I think there's a lot of people that are born that could be salespeople. Um, you know, just given the- the kind of the attitude that you have. And I think there's certainly some people who are born who probably don't, you know, would like run in the opposite direction from any sales job. But, uh, I think it comes from, you know, wanting to be, uh, you know, wanting to be competitive and being okay when you lose, because in sales, like yes, of course you win, but you lose the majority of the time really. And so I think there's a- there's a lot of dynamics, uh, that I think are, uh, that you have to kind of have the ing- the right ingredients. But I think from there you can certainly, you know, teach a lot of the skills that, you know, that- that make a good salesperson good.

   8. HSHarry Stebbings2:17

      Do you think it's okay to be good with losing? Like, I fucking hate losing. I would- I would kill my kids if they ever said that they were okay to lose. It should hurt every time, in every way, and you should remember it so you never feel it again.

   9. MPMatt Plank2:28

      Yeah. Well, I think, look, like loving winning and- and having like a deep hatred when you lose are- are kind of one and the same, in my opinion. And so as long as, you know, losing stings and motivates you and all of that, but I mean if you think about in sales, I mean, even the best sales reps I know, depending on whatever segment you're in, you know, their win rates are anywhere from 15%, 20%, maybe 30%, 40% at the absolute highest end. And so regardless, like every month, every quarter, you're- you're losing the majority of the opportunities that you're in. So you gotta be able to know how to, you know, lose an opportunity and come back and bounce back and, you know, focus on the wins and all that. So yeah, you gotta be- you gotta be okay with accepting a lot of rejection if you're in

2. 3:08 – 5:40

   Why Are Win Rates So Low in Sales?

   1. MPMatt Plank3:08

      sales.

   2. HSHarry Stebbings3:08

      Why are win rates so low, Matt? I'm an amateur. This show is brilliantly successful because I know very little, uh, (laughs) and I ask dumb questions. Why are win rates 15% to 20% and you're just losing to competitors? I-

   3. MPMatt Plank3:21

      You know, the- the number one reason why, uh, you lose a deal, in most cases, at least at Rippling, is indecision. Uh, people that are basically end up staying with whatever solution they had today. Um, at least in our case, you know, we are ripping and replacing something pretty much every time, you know, we bring on a new customer. And so the overwhelming majority, and if you look at the pie chart of closed loss reasons, it's like, you know, almost half of them are- are basically like unresponsive, right? Or maybe a third of them are unresponsive. Like literally you do a few calls and it's going well and they just completely ghost you. Uh, some other big chunk of them are people who get back to you and they're like, "Hey, we decided to hold off for now." You know, whatever. Something in the company changed, priorities, budget, someone left. And so there's a lot... Like if... I think win rates are different if you think about like a decisioned deal, right? Like a deal where they decided to go with you or a competitor, then I think you'd look at win rates that are- that are much higher in those cases.

   4. HSHarry Stebbings4:14

      Can I ask, indecision, is that not just a sign that you haven't articulated the solution articulately enough?

   5. MPMatt Plank4:21

      For sure. I think someone not deciding, uh, in many cases mean that you didn't, you know, you didn't prove enough value in- in the solution you're selling or whatever it may be. But there are also just a lot of good reasons why, um, you know, someone's not ready for whatever reason, or really like dynamics change in the company. A lot of time, uh, the person that you're evaluating with might leave the company or something, they might hire someone new who now owns that decision. And so there's plenty of good reasons. And I actually think the way that you deal with that is- is really, really critical. And like the best reps, um, you know, they, over their time and their tenure, they- they- they grow and they like, they build a pool of those types of people. And as long as you have really good engagements with both the people that you win and also the people that you lose, um, they start to come back around. Like once you've been in a role for even a year, 18 months, like you just get this- this circle back loop of all these people that you've spoken with in the past 18 months. They... And a lot of times when they come in the second time, they're immediately ready, the deal cycle moves way faster, it's a lot easier. And so sometimes I think people, they get a no from somebody and they just like abandon. Sometimes in the worst cases, like they won't even respond. So you know, "Hey, thank you so much for your time. Thank you for evaluating," all that good stuff. But I'm like over the top like kill them with kindness when they say no, uh, and that really just builds you this like big circle back, kind of loop back pipeline that will help you, you know, in years down the

3. 5:40 – 6:44

   Is It Easier to Sell Replacement Products or Net New Solutions?

   1. MPMatt Plank5:40

      road.

   2. HSHarry Stebbings5:40

      Matt, is it easier to sell a product where you are replacing an existing line in a, you know, financial model or in an expenses page or budget? Or is it h- easier when you are a net new line item?

   3. MPMatt Plank5:54

      I think it's way easier when you're replacing something, um, i- in my opinion. Um, when you're trying to create...... a category or, uh, you know, create budget for a thing that doesn't exist. There's just a whole bunch of different things that you have to go through. Um, I have always, for the most part, sold the product where you're ... I mean, I think early on, I guess, in, in the early days back with Sanblon when we were at a EchoSign, um, you were selling an eSignature solution that was, like, net new. And it was hard 'cause p- you'd go down on an evaluation and someone at the very end would be like, "Nah, we're just gonna keep doing this on paper." And you'd be like, "How is that even, you know, a consideration? It's so crazy." I think today, at Rippling, we're replacing another system every time, and I find that to be a lot easier to know that, like, there's a deal to be had here or they're gonna pick somebody, and you really just need to beat the competition, um, you know, to win the deal. I think, I think that's much easier.

4. 6:44 – 8:40

   Is Outbound Sales Dead?

   1. MPMatt Plank6:44

   2. HSHarry Stebbings6:44

      You said about, like, often it's, like, indecision and just kind of ghosting. Um, when we think about that, that often comes from outbound, and the fact that outbound has got you to those few calls. Everyone says today outbound's dead, 2024, no. Outbound, (French) , uh, to the traction in Europe. Do you agree or not?

   3. MPMatt Plank7:05

      I th- people that say outbound is dead are, are either one of two things. Like, they're either engagement baiting, you know, looking for a reaction on LinkedIn or whatever, uh, that they know that there's a whole army of people out there where that's their profession, and they're trying to kind of create, you know, whatever, some conversation around it. Or, they're generally not good or haven't grown something of large scale. I mean, to, to even claim that outbound is dead, it's just absurd. It's like what else (laughs) , how else would you build a business? If you think you can rely on, you know, marketing form fills or marketing programmatic email or whatever, um, it just means that you've never scaled something. In fact, I'll tell you that in the early days of Rippling, um, one of the great mistakes is that I didn't push outbound harder. Like, the marketing team at Rippling was absolutely one of a kind. They generated thousands of inbound demos every month, um, and we got to a kind of crisis point, uh, throughout our journey where we looked at the plan for next year and we looked at what the growth ne- uh, the growth rate needed to be, and marketing was kind of like, "Hey, we can't grow (laughs) form fills by that percentage." Like, there's no way. And we had to, like, very, very quickly, uh, build an outbound order from scratch overnight, and it was super stressful, and I wish we would've done it much earlier. But there's just, there's no way to grow and scale a big company without doing outbound. So it's harder and it's different, but to say that it's dead, I think, is insane. I mean, we book 50% of our outbound demos, we book over the phone. So we schedule, like, a thousand outbound demos a month in our SDR org, and literally half of them are booked over the phone. And so anyone who says it's dead, I think, just doesn't know how to do it effectively.

5. 8:40 – 15:45

   How To Build an Effective Outbound Function

   1. MPMatt Plank8:40

   2. HSHarry Stebbings8:40

      I'm, I'm fascinated. Before we drill down into the mechanics, you said that they don't know how to do it effectively. Again, teach me.

   3. MPMatt Plank8:47

      (laughs) Yeah.

   4. HSHarry Stebbings8:47

      You did it too late and you regret it. What are your biggest lessons in how to build an outbound function effectively?

   5. MPMatt Plank8:54

      Uh, I'd say w- I mean, one is a cheat code for us, which is that I hired Ashley Kelly, uh, who in my opinion is the best in the business, hands down, it's not close. Uh, she saved my ass from, from waiting too long to do it. And, and I don't think anybody could've built it in the way that we did, um, without, you know, her experience and our kind of previous relationship working together. But there's really two things that are important. I think the first is you have to have, like, a very deep partnership with marketing where you don't care about, like, credit. So for example, when marketing shows up and they generate 100% of the pipeline, and it's all inbound, demand gen, you know, form fills, hand raisers, and they're flowing to your inbound team, when you start to spin up outbound, you're trying to create, like, a, a new, like, incremental, you know, pipeline, right? Like, if you obviously hire 100 SDRs and you end up with the same demos you had when you had inbound, like, that's obviously a bad equation, right? Way more costs and, like, no more pipeline. Um, and so marketing, you have to, like, have such a partnership with them where a lot of the stuff that marketing does, it drives outbound success, right? And so when you schedule outbound demos, like, you've gotta also give marketing credit where credit's due. And I think a b- a lot of companies, they break that, and a lot of times they'll have marketing in, in, in, you know, different orgs and sales, which is true at Rippling as well. Marketing does not roll into me, but we just have this, like, incredible cross-functional partnership. And so what marketing's goal in outbound is they are telling us essentially, like, who should we reach out to and when? And they're doing that by capturing all this, like, intent over the internet, right? Who's on our website, who's on our review sites, uh, who just recently changed a job on LinkedIn. And so they're curating, like, con- you know, um, kind of intent across all of our, you know, accounts, right, that we would wanna go after. Mm-hmm. And they'll chain it up for us, "Hey, this person you should reach out to right now." And then they, of course, help with, like, the messaging, right? Like, here's the most effective sequences, like, they help us with the cold call scripts. And so the SDR org has an opinion on all of those things, uh, and we're responsible for, like, ruthless, like, execution of, like, a very daily driven, you know, KPI business. But marketing is absolutely critical in, like, making it work, and, and if you don't have a really strong partnership-

   6. HSHarry Stebbings11:01

      Okay, how, how do you do that effectively? Yeah, you need marketing and sales to be, like, super tight, so then marketing get part of your coms when you get new customers. Are marketing financially incentivized? Li- how do you literally do that?

   7. MPMatt Plank11:14

      Um, I think it comes from ... I mean, f- first it comes from, like, the, the culture, uh, of the, of the org, and generally from, like, the CEO, right? Like, if I show up to a meeting with Parker and I'm like, "Hey, we're gonna massively whiff revenue this month but, like, it's all marketing's fault, you know, like, they didn't generate the demos they said they were," um, like that sh- (laughs) like, I, I l- I giggle at, like, the idea of that, right? Like, that would absolutely never fly, right? Like, that conversation wouldn't be able to happen, and so you can't, you can't, like, blame marketing when you miss the plan because it's like, so what? Like, we have a plan, what are you gonna do about it? And y- and you can't take all the credit for yourself when you build an outbound org and all of a sudden the pipeline splits and you've got 50/50 or whatever, you have to acknowledge and give marketing credit. And, and while they're not incentivized from, like, a comp perspective, it, it's, like, deeply built into the culture that, like, our marketing team has a pipeline plan that they sign up for. They don't have, like, a, you know, how many-... you know, webinars did you do and how many content downloads did you get. Like, those things are important, but, like, their goals are, are how much pipeline do you generate? Like, that's all we talk about in our forecast meetings. Like, that's, that's what they're geared around. And so I think culturally, you have to have it be that way from the top down.

   8. HSHarry Stebbings12:25

      So we have, like, a top pipeline number, and that is revenue. Like, who sets that? How is it distilled down to the org?

   9. MPMatt Plank12:33

      Uh, so, uh, you know the way that we think about a plan, I, there's, there's two different ways that I think, um, y- you think about a plan. And for us historically, um, we start with usually something that Parker is like, "Hey, like, if we wanna continue to be in the top, you know, one percent of SaaS companies out there, like, this is the number that we need to go get next year. This is the growth rate that we need. Like, this i- th- this is what we need to hit to continue to be, like, you know, an outlier in the market." And you look at that number, and you're generally like, "Wow, that's, you know, that's definitely not an easy number to go hit." Otherwise, like, of course, why would it be an outlier? But then you go through, like, a ruthless, like, like, detailed planning process. For us at Rippling, we have 50 different sub-segments, right? So you have, you know, SMB and mid-market and enterprise and channel sales and product sales and all the different products. And so if you think about, there's, like, 50, you know, uh, capacity plans in a spreadsheet, and it's like, "How many demos are we gonna generate? How many reps are we gonna hire? Like, what are their quota?" And you go through that in great detail through all of the different teams, and you basically ladder up... And you kind of ignore the number. Like, you're not focused on the number that someone asked you to get to. You start from a place of, "If I just make reasonable assumptions about growth and all these different things, like, what does that get me to?" And then generally, there's, like, the plan that you believe is attainable, and then there's, like, the plan that you wanna get to, and there's a gap there. And then you go through this exercise of, like, how are we gonna plug that gap? Like, what are the 10 or 15 different, you know, levers that we could pull this year, uh, to be able to close that gap? And for us, being-

   10. HSHarry Stebbings14:08

       But, so, so I, so I understand. So you set the pipeline number of, let's say, ah, fuck, I don't know, 20 million in ARR, okay? We wanna add 20 million in ARR. I could add 21 million enterprise contracts, or I could add, you know, 200 hundred thousand contracts. Uh, do you just leave it to your team to determine where it comes from? How do you think about that breakup, that segment breakup?

   11. MPMatt Plank14:32

       I mean, d- it really depends on, like, the stage, right? So when you're early on, y- you actually start from a place of, like, like, "Who are we getting demos from," right? Like, "We're getting demos today." You know, like, "What do they look like?" And, and, you know, and you're kinda, in many ways, like, that is your segmentation. You kind of build around that. I mean, we had one sales team when we started, right? And then we branched off from there. As you start to go up market a little bit, uh, a bunch of things happen and you branch off. And so I, you know, I always tell people, like, by the time you get to be maybe, I don't know, 200 million or something, like, your job as the CRO completely changes to essentially, like, head of sales operations. Like, you have a great sales operations team, but at some point, it transitions completely from, like, "Can you close the deals," and, you know, "Are you the best salesperson" or whatever, to, like, operational planning. And so you, you take the demos that exist. "What did we do last year in all these different segments?" And you kind of figure out like, "Where do I think we can do a little bit better?" And you just kind of start to slot in all of the humans against those different segments. So Parker doesn't care. He's not like, "Hey, we need this much revenue from all these different segments." He's like, "We need this revenue. Like, you go figure out how to do it." And then we build, like, a tops-down plan from there, um, based off of, "How many demos are we gonna get in what segment," and, you know, "How many people do we wanna staff against those?" And

6. 15:45 – 22:05

   Close Rates Across SMB, Mid-Market & Enterprise Segments

   1. MPMatt Plank15:45

      so on and so forth.

   2. HSHarry Stebbings15:45

      Okay, so when we think about the different segments, we've got like SMB, mid-market, and enterprise. When we think about, like, demos booked, w- what does the different close rates look like across the different segments?

   3. MPMatt Plank15:58

      I mean, we, we sell to companies as small as, you know, three, four employee founders running payroll for the first time, right? And so on the very low end of that market, you know, we win 50, 60% of a- the opportunities. And honestly, the majority of the ones we don't win, they're just like, you know, funding fell through or whatever. Like, they don't need to run payroll anymore for some reason. Um, and on the high end of the market, we're selling to companies that are up to about 5,000 employees. Um, and so, uh, you know, like, uh, it, it really has, like, a wide range of, of kind of, um, the different segmentations. Now, for us, we have segments that are based off of employee size, like any traditional company, but then we also have a bunch of products that, like, our core kind of, uh, new logo reps sell. But then we have too many products. We've got like 30 different products at Rippling. And so as we started to spin off different product suites, like we launched a finance suite to compete with your Brex's and your Ramps of the world. We launched a global payroll suite to compete with your Deals and Remotes at FI Global. And so at some point, we had to carve off like a, a separate, what we call, product account executive team. So you have, like, a core rep that bring, you know, sells the majority of the HR stuff. Then you've got, like, a different, uh, finance suite rep. You've got a global suite rep. And so that's how you end up with like 50 segments when you're kind of... when you end up with a product suite that's, you know, 30 plus products.

   4. HSHarry Stebbings17:16

      I get you totally. So we have like a 50, 60% on SMB. What is mid-market and enterprise like?

   5. MPMatt Plank17:21

      Oh, sorry, yeah. So, um, mid-market is probably around, you know, like 20-ish percent. And then I think enterprise is maybe closer to like 15%. And I think the way you think, the way I think about this is, it really depends on what you measure, right? And so for us, like if you schedule a demo, and somebody, like, takes the call and basically says, like, "Yes, I would like a follow-up email." Like, you know, we don't go through, like, "Do you have a budget," and, you know, "What's your timeline?" I mean, we- we do that in a sense, in the evaluation, but we're not incredibly strict about, like, who do we bring into the pipeline. And so when we, you know, convert a demo, we call it stage two, an S2, we measure win rate, like, from S2, you know, all the way to the, uh, one deal. But that's gonna be, like, a penalizing kind of win rate. If you've converted something to stage three, that means, like, they've engaged in, like, scheduling a second call, right? Like, they actually have some commitment to, like, do a proper valuation. And if you measure win rates from like stage three to win, then like, you actually have a much higher win rate. And I think companies do this in very different ways.

   6. HSHarry Stebbings18:22

      Dude, what's ACV size? What average contract value size is enough to justify outbound? 'Cause if you're three to four people and you're doing, like, I don't know what the ACV is on the three to four people, but they're not gonna be huge.

   7. MPMatt Plank18:34

      Yeah.

   8. HSHarry Stebbings18:35

      You can't afford an expansive model.

   9. MPMatt Plank18:37

      Yeah, yeah, so-

   10. HSHarry Stebbings18:37

       What is enough?

   11. MPMatt Plank18:38

       Um, so it's a good point. So, uh, when we don't do outbound for those type of companies, like, that team is 100% an inbound team. Um, we do outbound in our mid-market segment, which is essentially 50, to call it 250 employees. And then we do, you know, enterprise air quotes, uh, from, like, 250 to 1,000. And then we have a team that works from 1,000 to 5,000 person companies. Now, one of the benefits of Rippling is when you buy Rippling, you're buying a seat for, like, every single person in the company. So, like, a lot of products, if you're buying, you know, Confluence or something, right, you get a seat for everybody, but it's, like, $10 PEPM. Right? If you're selling Salesforce, it might be $100 PEPM, but, like, you're only getting, you know, five seats in a 50-person company, right? We are fortunate that you, everybody at Rippling, you know, you're getting a seat for everybody. And our average PEPM is, like, $60, $70 PEPM across the customer base. So for our mid-market segment, selling to companies 50 to 250 employees, the average deal size is, like, 45K. And so at 45K-

   12. HSHarry Stebbings19:34

       Mm-hmm.

   13. MPMatt Plank19:34

       ... you could easily build outbound, right? And then going up from there, um, it, it just gets easier.

   14. HSHarry Stebbings19:39

       You can easily build outbound. What do the sales cycles look like?

   15. MPMatt Plank19:42

       Uh, in our mid-market segment, um, where we have a $45,000 average deal size, it's probably, um, the average sale cycle is probably, like, 50 days. Like, you'll get deals that come in in, you know, a month at the right time of year. And then you'll get deals that take, you know, three, four, five months on the longest end. But on average, it's probably 50, 60 days in our mid-market segment. There's not a lot of companies closing $45,000 deals in 60 days. Like, that's a very uncommon kind of, you know, funnel.

   16. HSHarry Stebbings20:11

       45K outbound is justified. At 45K, is customer success justified?

   17. MPMatt Plank20:17

       I- in terms of customer success, like, at Rippling, um, you know, we have, we... In the very early days, we had, uh, customer success, which I think of as, like, their, you know, charter is make customer successful, renew them. But, like, it's not to, like... You know, it's generally not to, like, sell new products. Um, and so, uh, you know, early on at Rippling, again, we had three products when the company first launched, and now we have over 30. And so at Rippling, early on, we had customer success, and when somebody signed up for Rippling and then they came back six months later to add a product, like, we would bring it back to the original sales rep. And, like, over time, that was just, like, clearly a terrible model, and so we converted our sales-

   18. HSHarry Stebbings20:58

       Wh- why was that clearly a terrible model?

   19. MPMatt Plank21:00

       Because-

   20. HSHarry Stebbings21:00

       Because that does the purity of the customer success and sales relationship.

   21. MPMatt Plank21:04

       Because our sales reps are, are very, like, high velocity. They're doing a lot of calls, and they're, and they're focused on, you know, if a new logo deal is $45,000, like, an add-on contract for someone who signed up six months ago might be $5,000 or something. And so w- we... You know, when their ca- their calendar's stacked up with deals that are 40, 50, 60K, and then all of a sudden you throw this meeting on their calendar for a $5,000 deal, they're just not gonna be able to give it the attention that it needs. And so we, uh, we split the team, and we ma- or we, we changed the function. We said, "Look, we need, like, account management. We need people who, you know, have had sales, carried a quota, want to be held accountable to quota," and all that kind of stuff. And so at Rippling, we have new logo sales reps that, like, you know, pass a deal over the fence, and then they have account managers who own the commercial relationship renewals. They still own, like, success. Like, unsuccessful companies will not buy anything new from you, obviously. (laughs) And so they, they do have to make it successful, but they are much more, much closer to, like, a sales team than a support team,

7. 22:05 – 24:30

   Is Customer Success Overrated in Enterprise Sales?

   1. MPMatt Plank22:05

      uh, for us.

   2. HSHarry Stebbings22:06

      I had Chad Peetz on the show. Like, the, a very famous CRO who works with Saddle Hill, um, has been in some of the most awesome enterprise companies. And he was like... No, actually it wasn't him, it was Deignan. It was Chris Deignan at Snowflake. And he was like, "CS is bullshit." You have, like, professional services, you pay for it, it's a stellar service, or customer support. But customer success is BS. Do you agree?

   3. MPMatt Plank22:31

      (laughs) It's a good question. I, you know, I would say that, uh, for multi-product companies, yes. Because the reality is, you can't have both. You can't have, like, a customer success manager and an account manager. Now, at Rippling, we do have account managers that own the commercial relationship and kind of, you know, expanding their usage within our product suite. But then we do have what we call technical account managers, whose, like, sole focus is, like, adoption of the product, success, retention, whatever. And then we have, like, a phenomenal support team, uh, who can respond urgently, jump on chat, jump on calls, whatever, right? But I do believe that you have to pick one or the other. And at Rippling, like, I, you know, for me, account management and, like, a, a sales DNA at the core is just, you can get those people to have, like, empathy for the customer and, like, understand and care about making them successful. But I don't think you can take a CSM and make them, you know, like, a quota-carrying rep.

   4. HSHarry Stebbings23:26

      For the account managers, how are they incentivized? And is that aligned to the upsell that they, you want them to drive?

   5. MPMatt Plank23:34

      Yeah. Um, you, you also have to do both. So when we first launched account managers, um, they only had a new revenue quota. So their 100% of their focus and comp plan was tied to selling new products. Um, but then, you know... And, and so they, they, you know, they, they were, they cared about retention, but, like, they didn't own a retention number. And, you know, when you're high velocity, a little bit more down market, there was just a belief that, like, you know, they would care and do the right things, but, like, you didn't need to incentivize them. And then we did that for, like, you know, nine, 12 months, and we quickly realized, "Okay, this doesn't make sense." And this year, actually, uh, we changed the comp plan. So I think, like, 70% of it is tied to selling new business, and 30% roughly is tied, um, to retention, specifically, like, dollar retention. And it completely changed everything in our, you know, like, have just, like, ou- completely outlier, like, off the charts low churn metrics. And so...They gotta own new revenue and churn. Absolutely has to happen. Can't do it

8. 24:30 – 27:42

   How Matt Approaches Discounting in a Competitive Landscape?

   1. MPMatt Plank24:30

      any other way.

   2. HSHarry Stebbings24:30

      When we think about getting deals over the line, a lot of people discount today. It's, it's an incredibly competitive landscape. Respectfully, you have many competitors across many different segments. How do you think about discounting?

   3. MPMatt Plank24:44

      (clicks tongue) Um, uh, so first of all, discounting is a completely, like, made up thing. Like, at the end of the day, what... the only thing that matters is, like, net price, (laughs) right? And so discounting is simply a factor of, like, where do you set your, your list price? Like, list price doesn't matter, right? Like, net price. So what... if you set your... if you discount 50% off or you discount 25% off, like, it's all relative to whatever your list price is, which for most people is, like, a fake price. Like, nobody cares about list price. They care about net price. And so I'm a big believer in-

   4. HSHarry Stebbings25:15

      Oh, sorry, what, what, what... for those that don't know, which is including me on this one, what do you mean by list price (laughs) and net price?

   5. MPMatt Plank25:20

      So, so let's say that, um, you know, your list price, meaning when you show up and you send... I mean, look, starting all the way with, like, some companies have a price on their website, right? If you're very SMB and downmarket, and you have a bunch of, like, self-serve signups and trials and all that, you basically need to have, like, a price on your website where someone can see it and sign up, whatever. Um, that's not our business. Like, for us, we are generally, you know, getting somebody on a call, understanding, like, you know, what their pain points are, what products are they interested in because we have 30. And so for us, you know, we have a list price, meaning there's a book price, uh, for every SKU that we have. So let's say it's $10 PEPM for a random SKU. But, like, the actual price point that we're trying to target might be, you know, $8 or $7 or $6. Like, it depends on the size of the company. If you come in and you're 50 employees and you wanna sign up in one week, like, I've got a little bit more room to make that happen. If you're, you know, if you're 50 employees and you wanna evaluate for three months, then, like, you know, then, then it might be a different price point. It might depend on the different, you know, amount of products that you buy.

   6. HSHarry Stebbings26:22

      Do you worry about different customers talking about different prices? "Hey, I got Rippling for 20 PEPM." "Oh, you got it for 30?"

   7. MPMatt Plank26:29

      Yeah.

   8. HSHarry Stebbings26:29

      "Wow, they overcharged you."

   9. MPMatt Plank26:31

      Yeah, well, I think a couple things. So one is, we have, like, an extremely consistent and firm, like, discount policy. So it's not like a rep can just, you know, make up whatever they wanna do. And so we'll tell a customer when they come in, like, "Hey, here's what pricing looks like on a one-year deal versus a three-year deal," or, like, depending on your timeline or depending on the amount of products that you buy, right? And so for us, you could come in and buy three products in a week, or you could come in and buy 10 products and take six months. And so there's a bunch of different, like... there's probably five different levels of, uh, "How big are you? What are you buying? What's the timeline look like?" You know, all these different things. Uh, but I'm confident that... and this happens. Like, people definitely talk in the market and, you know, we've got 20,000 plus customers. And so for sure, people are talking and comparing invoices and whatever. But if somebody were to come back to us, which has happened before, and been like, "Hey," like, uh, "Well, this is bullshit." Like, that someone's quoted Rippling, and I got a different price than you. And when I walk them through, like, "Hey, look, here's..." Like, you might think these things are the same, but they're a little bit different. When you... as long as you can, like, walk through the policy and stand behind it, um, which in this case, it ended up working fine, then I think you're good. But you can't have, like, wild wild west where people just make up whatever price they want, or else that... it can get out of control pretty quickly.

9. 27:42 – 30:50

   Are Logos or Early Wins More Important for Startups?

   1. MPMatt Plank27:42

   2. HSHarry Stebbings27:42

      I think early on, people are often told that logos are so important. Get the... you know, you go to the startup pages and it's like, "Retool a customer. Stripe a customer." Like, uh, you name your companies that look sexy are customers.

   3. MPMatt Plank27:54

      Yeah.

   4. HSHarry Stebbings27:54

      And that's so important. To what extent do you think logos are super important in driving sales, versus just get early wins on the board?

   5. MPMatt Plank28:03

      So I think it's interesting. Um, I think there's, like, an evolution in a, in a few different phases. I think the first one is when you're a, you know, zero to one company, whatever, you're a million bucks, two million bucks, like early, early stage, like, nothing matters. The only thing that matters is winning customers. It doesn't matter what they pay. It doesn't matter what their logo is. Like, you need customers (laughs) to, to validate that, like, you can charge something for your product and that they'll buy it. If you look at what we charged at Rippling in the early days versus now, like, it's, it's not even on the same chart. And so you need customers. And I think founders make a mistake. They're trying to, like, maximize the revenue of one specific deal, which is crazy. It's like, never, ever walk away from any deal, any price that's not free. Like, you sign them up, right? I think the big mistake that people make a- as they transition to the next phase, where they're at maybe 5, 10, they're going to 20 million, is people don't, uh, increase price into a point where they find friction, right? And so you, you need... like, friction around price is good. And so to your question earlier, like, the... I get this all the time. I'll talk to, you know, an early stage founder who's often a technical founder, who's a referral from one of our, you know, VCs or something, and they're like, "Hey, we have win rates that are like 60, 70%. We have an incredible go-to-market fit." Like, "It's so great." My first thing I always tell them is, I'm like, "That's not good. You don't want win rates that are 60, 70%. You're either not in enough deals," right? Like, you're just way too narrow, or, "Your price is way too low." (laughs) Like, if you win 70% of deals, then, like, that's not good. It's a bad... Or at least you could go much bigger, right? And so I think people don't raise price up until they get to a point where you're about to lose deals because, like, people think they're overpriced, and there's, like, friction.

   6. HSHarry Stebbings29:40

      How, how do you know when that point is, Matt? Is it when people go, "Ugh, I'm not doing it," and then you walk them back? When is that moment of realization that you've gone as high as you can go?

   7. MPMatt Plank29:51

      Yeah. Uh, um, first of all, like, I think the main thing here is, like, you, you've gotta... you should continue to inch it up over time until you... until that friction of, like, "Hey, this is, like... this is more expensive than I thought it would be. This is, like, outside of our budget. This is, you know, f- 100% more than our competitor, 2X the price of a competitor," or whatever. Until you get people that are, like, you know, walking away, then you, you... then, like, you haven't found the right amount of friction. Right when you get to that point-And, and again, you gotta go up gradually because you never, ever, ever, ever wanna, like, go back, right? You don't wanna, like, raise them and then be like, "Oh, never mind. We're gonna, like, lower our prices." Like, that's bad. Um, and we don't do this, by the way, on existing customers. Like, as we inch price up over time, like, our existing customers that bought early on, like, we lock them in pretty much forever. Um, but y- y- and you have to find that friction. A- and I think it's, it's, you'll squeak out a lot more revenue by finding, if you raise your prices 20% and, like, you, you know, you keep winning, maybe win rates go down a tiny bit, like, that's okay over time.

10. 30:50 – 36:43

    Approaching Multi-Year Contracts

    1. MPMatt Plank30:50

    2. HSHarry Stebbings30:50

       How do you think about, like, multi-year contracts? Often today, it's like, hey, as, as much as possible, lot people into multi-year contracts. It does mean that you're stuck on price. It means there's more rigidity in their minds. Maybe they won't upsell as much 'cause they've got a contract with you. It's kind of a pain, like, multi-year, to kind of change that multi-year. How do you think about that and advise founders?

    3. MPMatt Plank31:09

       Multi-years is, is, is really important. And we, we have multi-year deals, and we incentivize our sales team to sell multi-year deals. So if you sell a one-year deal versus a three-year deal, like, we'll give you, like, a kicker in the comp plan to sell a multi-year deal. Um-

    4. HSHarry Stebbings31:22

       Can I ask, Matt, Matt-

    5. MPMatt Plank31:24

       Yeah.

    6. HSHarry Stebbings31:24

       ... what difference is the kicker? I just have so many people who will ask me, like, "What is the difference?" (laughs)

    7. MPMatt Plank31:29

       Yeah, um, it's gotta be relative to your... I mean, there's so much goes into, like, the way I think about it is, like, you know, what is your, you know, commission rate on a, on a new logo? And, like, that could range anywhere from 10% to 30%, depending on, like, are you outbound or are you inbound, like, you know, what, what deal size, whatever. And so you wanna make sure that the kicker you're paying on a deal isn't much more than, like, you know, let's call it, like, 10 to 15% of the deal, right? So may- if your, if your commission rate is 20%, then maybe you're giving them an extra, like, two to 3% kicker for a multi-year deal. But you can't make it that your commission rate's 20% and then you sell a multi-year deal and you get paid 40%, right? Like, that math doesn't work. (laughs) And so it's, it's generally, I, I'd say maybe 10, 15, 20% of the original contract, like the year one contract, like, or, or thinking of the commission rate, like, that's the right way to think about it.

    8. HSHarry Stebbings32:20

       So discounting in price is a way to instill urgency in deals. "Hey, let me get Matt. You know what? It's the end of the quarter. I need to hit my number. I'll give you a 10% discount if you, you know, sign with us today." Any other big lessons on how to instill a sense of urgency in deals and sales cycles?

    9. MPMatt Plank32:36

       The first big mistake that people make around, you know, discounting is they're, like, they offer a time-based discounts before they even understand if somebody can possibly move that fast, which is, like, a terrible experience, um, both for, like, you, because you have no leverage once you've, like, thrown it out there, and then for the, for the customer, it just, like, it feels awkward, it doesn't make sense. So the first thing you have to do is understand from somebody up front, like, in the first call, what is your ideal timeline? And, and the way we talk about that is like, "Look, you're obviously evaluating Rippling. You, you've described these pain points up front. Like, just assuming that you wave a magic wand and Rippling literally solves every single one of those pain points that you have, what is your, like, ideal timeline of when you'd like to be up and running in the new system? Just like, if you could have everything, every box checked, you know, your perfect scenario, what does that look like?" (clears throat) And then when they tell you that, and, like, look, a lot of buyers are honest about that. Some buyers don't. Some buyers know that when they're up front, they're like, "I don't wanna tell the salesperson that I wanna move quickly," right? Like, then I lose some leverage in the negotiation. And so they'll, they'll be like, "Ah, this is, you know, like, next year or, you know, Q1 or whatever." Um, but you gotta find out from people what are they looking to do? And, like, build some trust up front. And then before you get to pricing, you have to, like, you know, kind of make a little bit of pokes out there like, "Hey, if we can get, you know, some competitive pricing that's kind of based on, on a timeline, this timeline we talked about, does that seem like something that you'd be interested in?" And, like, get some buy-in from them, because people do not sign contracts on the last day of the month because they're worried that their discount's gonna go away. Like, that's absolute bullshit. Like, if you ever bought software and it's the 31st of the month and someone's like, "You have this quarter-end discount," like, you know, it's extremely unlikely that if you come back on the 3rd or the 4th, they're gonna be like, you know, "No, I won't give you that price." Like, certainly there might be different price. You might have to go through a whole cycle, whatever. But the reason that the majority of people, like, sign that contract on the 31st, the end of the quarter, whatever, is because you built a relationship throughout the entire evaluation of some, like, trust. Like, they feel... You know what I mean? Like, they feel like they- they've agreed to do some things and they wanna, like, meet their part. But without that, then time-based discounts don't work for anybody, and they're actually anti- you know, they're like, they, they really are, are counterproductive.

    10. HSHarry Stebbings34:56

        How do you do deal reviews and how has that changed over time?

    11. MPMatt Plank34:59

        Um, I'll, I'll pick, like, our, you know, let's, let's call it our middle, you know, mid-market team who's kind of, like, in the middle. (clears throat) But I think the main thing that you're looking for in a deal review (clears throat) is, uh, like, reps get... You know, like, salespeople by, by almost, like, definition are, like, optimistic, right? And so, um, oftentimes they, like, they get happy ears and they hear things that, that they want to be true that might be true, but they don't sometimes ask, like, the second, third layer question to figure out if it is true. And so for me, deal reviews are all about, like, that. They're all about asking your rep, you know, who are we talking to? Who does that person report to? Uh, were they there when they bought this system? Like, you know, a bunch of questions around who are they talking to? How do these decisions get made? What do they think the timeline is? Like, you're trying to basically poke a hole in this per- if you're just sitting there and your rep is like, "Hey, here's the next step and here's who I'm talking to," and, you know, it's all good, and you're like, "Okay, great. Sounds good. Like, let's go to the next one," which is what a lot of pipeline reviews look like, that's, like, zero helpful. Like, you, you gotta create a relationship with your rep where you can poke holes in them and they're trying to, like, you know, prove to you why this is a solid deal, and there's no friction there. They're like, "Hey, this is what my manager shows up to do."

    12. HSHarry Stebbings36:15

        Uh, how often do we do deal reviews first?

    13. MPMatt Plank36:17

        Um, I mean, we have pipeline reviews every week at Rippling. It's like I-

    14. HSHarry Stebbings36:20

        Okay, so you do pipeline reviews every week.

    15. MPMatt Plank36:22

        Yeah.

    16. HSHarry Stebbings36:22

        Who's invited? Everyone from sales?

    17. MPMatt Plank36:25

        Uh, it- it's, uh, no. G- I mean, generally, we're doing pipeline reviews with like, you know, managers, uh, and rep in like a one-on-one setting usually. Um, there are times where we do a pipeline review that might be with like a manager and their team. But you can't sit around a 40-person segment and do deal reviews, right? Like, it won't be, it won't be, uh,

11. 36:43 – 40:06

    An Acceptable vs. Unacceptable Reason for a Deal to Slip

    1. MPMatt Plank36:43

       time-effective.

    2. HSHarry Stebbings36:43

       So we do it manager and rep, say, so to speak? Okay, perfect. Um, when we think about like an acceptable versus a non-acceptable reason for a deal to slip, what is an acceptable versus a non-acceptable, if you're sitting down with me, a rep?

    3. MPMatt Plank36:59

       The first thing I think about is like, like, "What is the, what is the, the historical tendency of, like, this rep?" Because deals do push in sales all the time. As Parker would say, "Did it push or did it poof?" Uh, you know, when I show up at the end of the month and I'm like, "Hey, like, you know, had a rough month, like, but we had some really good deals push." He's like, "Ah, you know, I don't believe ... Like, every time you say that, they poof and they don't push. They never come back," and blah, blah, blah. Which is generally not true, but he has this deep skepticism of that. Um, and so, but you gotta look at a rep. Like, does this rep normally close deals in this timeline and this deal did push? Then, like, that's very different than someone who's a perennial, like, my deals always push. Um, and I think the thing you gotta, you, you gotta help reps understand is like, uh, deals that push ... Like, a lot of the times, reps will think that a deal that pushed because of this person, um, left the company or a new person joined or a budget, you know, dried up or whatever, they convince themselves, they're like, "Hey, this is delayed." You know? Like, "This is just delayed." Like, this new person joined and like they, they wanna make sure that they get a demo. And it's like, there's no such thing as like delaying a deal for like those types of reasons. Like, you're starting over from scratch. You might not know it, but you're starting over from scratch. And so time kills all deals. And so you really wanna try to like get them in, not to like hit your quota so that you don't go on a PIP or whatever. Like, you wanna get them in because over time, like, if we push as a company 25 deals in a month, like for sure we're not closing those 25 deals in the next month, right? Like some percentage of them just do poof and evaporate. Um, so, you know, there are good reasons. But like, I'll tell you the worst reason is like, uh, the legal team didn't get the review done. Nothing, nothing is more frustrating (laughs) than somebody being like, "The legal, their legal team, right, they didn't get the red lines done on time."

    4. HSHarry Stebbings38:42

       Why is that so frustrating? 'Cause that seems like it's out of the hands of the rep. They don't control the legal team. That seems like a very bizarre negative externality.

    5. MPMatt Plank38:51

       (laughs) Well, I think, uh, it depends on ... So when, when you, when ... First of all, for me, when a deal pushes, what that fundamentally means is that like you forecasted it to come in, right? Like, you said it was gonna come in and it didn't come in. If telling us and rolling a deal up that, "Hey, this deal's definitely coming in. Like, they just need to get red lines signed." And a lot of times when you probe back in there, it's like, "Look, um, when did you send them the red lines?" You know? They're like, "Yeah. They told me yes, you know, two days ago, and I got them the red lines the next day." And it's like, "Well hold on." Like, "There's your problem." Right? Like, at the end of an evaluation, you should be asking somebody like, "Hey, what does the contract processing look like within your company? Like, who's involved in that process? Who signs off on contracts?" Like, "Do, do ... you know, does your legal team do a review for contracts of this size?" Whatever. And you wanna like parallel track those things so that they're, they're ... someone's reviewing the terms of service. Like y- you know, a lot of times you'll get the like vendor of choice designation before someone gives you the like, "Yes. Send me the contract. I'm ready to sign." So you have to parallel track those like legal things, budget review. You can't just like get a yes and then start all those processes over. And that's the number one reason why people push a deal, a committed deal, because if legal review is like they just didn't run this in like, you know, uh, they didn't run these parallel tracks.

12. 40:06 – 43:07

    Lessons on Maintaining Morale During Volatile Times

    1. MPMatt Plank40:06

    2. HSHarry Stebbings40:06

       I love that. Push or poof. I've never heard that before. I've done many fantastic shows. I've never heard that, uh, analogy before. There's a lot of deals today, Matt, sadly, which are poof, which are gone silent, gone dead. Budgets have gone. What's been your biggest lesson as a sales leader on how to maintain morale in volatile times?

    3. MPMatt Plank40:26

       There's kind of like two, two part question. I think the first thing is, I really believe very deeply in, in like a core thing that I had to learn over time, and, and one of the things, and going back to the beginning of our conversation, when you're like a deeply competitive person and you do like expect to win and you like really, really hate losing, I, I can definitely tell you of examples in the past where I like reacted poorly to someone that said no, right? Or someone that ... where it was just like it made no sense to me and like my initial reaction was just like the wrong reaction, right? And it's very easy for even the best salespeople, because they're generally like the most competitive, can get like pissed off and react poorly in a deal. And I had to learn over time that like you have to literally like kill them with kindness. Like, you, you have to make them ... When someone tells you no, it's like, "Hey, like, thank you so much for your time, you know, evaluating Rippling. I know how busy you are. I'm sure doing all these evaluations was like a total time suck for you. Thank you so much for, you know, t- taking the time. I would greatly appreciate, like, any feedback you could give me. I'm always looking to learn. You know, by the way, like if anything ever changes, like I hope that you're successful with XYZ vendor, but if anything ever changes, like please just know that like I'm here for you." Blah, blah, blah, blah, blah. If you leave every single interaction with that type of, of like mindset, I promise you, you'll get stuff that bounces back that you like never, like expected to bounce back. They'll come back and in, in two months they'll be like, "Hey. This competitor, like, lied to us. The implementation's terrible. There's a bunch of shit that they don't do that they said they did." But you have to leave it like that. And so I think on one hand, you gotta like make sure that you, you're not sour when you, when you miss, and y- you're like morale is like if you're moping your head around and you're all frustrated and upset, like that doesn't do you any good. It's a waste of time. And I think as a sales leader, you gotta like own the miss. Like, you can't ... If you point fingers at people and that's the MO that you have as a leader, like it sounds very cliché but it's like you gotta walk up there and be like, "We ... Like, we l- the sales org lost. I didn't set the team up successfully. Like, I screwed this up." Like, you gotta own it with the CEO. You gotta own it with the people down below you. Um, and I think weak or like insecure, you know, sales leaders will try to deflect blame to some other leader or the team or you try ... And it's like-Parker told me once a long time ago, (clears throat) I think something that really stuck with me. He's like, "You don't get any credit for knowing how to do something yourself." Like, zero credit that you know how to do X, Y, and Z. (clears throat) Like, your job as a sales leader is to get everybody else to do that. (laughs) And so, like, you can't stand there and be, like, "My team didn't execute," and be feeling like, "Dude, I told them exactly what to do, and, like, they didn't execute." You know what I mean? Like, "It's not me. I gotta get a new team or something." It's like, your job is to make them execute. It's not to know what to do. You're the head of sales. Obviously, you should know what to do. That's table

13. 43:07 – 47:28

    What’s the Weakest Part of Matt’s Go-to-Market Team & Why?

    1. MPMatt Plank43:07

       stakes.

    2. HSHarry Stebbings43:07

       Matt, when you evaluate your go-to-market team today, okay, we're sitting here, we've got a fire beside us, a whiskey and a cigar, we're just, like, shooting the shit now. Where are you like, "Oh, that bit's the weakest part of the go-to-market"? And what are some lessons for you from that?

    3. MPMatt Plank43:23

       If I think about the, the, like, the way that the, the company kind of evolved, (clears throat) I would say that, um, up until literally 18 months ago, I'd say up until two years ago, up until two years ago, like, the sales org, myself and, like, everyone that reported to me, literally never once thought about generating an outbound demo. Or, like, even, like, it was 100%, like, demos pop up on your calendar, like, marketing does a bunch of stuff, inbound SDRs schedule them, and, like, you just sit on, you know, go, show up and you do four or five calls a day, and, like, that's all you do. Um, and I think, over time, we got to this, I mentioned this pinnacle point, like, two years ago, where AK, uh, Ashley Kelly, we were like, "Oh, my God, we have to do outbound." We hired her, we, like, you know, grew it from zero to 100 or whatever. And, like, we started to weave it into the culture, like, "Hey, like, as a sales rep, like, you should care about where your pipeline comes from," but they still don't own it. Like, outbound SDRs own the quota. Like, they schedule the demos. If you're a rep at Rippling, you have zero, like, actual prospecting targets. And so, over time it was like, the whole sales org-

    4. HSHarry Stebbings44:28

       Which is, which is unique, 'cause, like, actually every guest that I have on the show says that a rep should be also responsible for leads, and that you can't just be like, "Outbounds feed me."

    5. MPMatt Plank44:38

       Yeah.

    6. HSHarry Stebbings44:38

       It's almost presumptuous.

    7. MPMatt Plank44:40

       Y- you know, like, I understand that belief, and I think that Rippling definitely will, of course, get to some scale and, like, saturation of the market where that's kind of true. But I believe that it is, like, critical to, like, avoid that as long as you possibly can. And the reason why is, like, I have seen outbound... We've done outbound in 15, 20 different, like, segments, and every single time there's a funnel of, like, you know, number of accounts you work, dials, emails, your call to connect rate, your connect the demo rate. Like, there's this funnel that just, if you put all the things in the top, it just spits out demos. (clears throat) And every single time we look at a new SDR team, somewhere in that funnel is broken. They're not doing enough of this, enough of that, they're, like, called to connect... Like, there's always some part of it, and then you hammer it and you go fix it and you train on it, and then it turns green, and, like, all of a sudden they spit out demos. And in my opinion, like, you can get an SDR org to do that way, way, way more effectively than you'll ever be able to get sales reps to do it. So sales reps, what they want is, they're like, "Give me a book of accounts that I can, like, control my own destiny," right? "Where I'm not, like, told I can't prospect, but, like, let me do something." But then when you give them accounts, generally speaking, (laughs) like, without a whole bunch of structure and focus, like, they're not ever gonna show up and do the, like, the way, the way that you manage a rep doing outbound is not the same as the way you manage an SDR doing outbound.

    8. HSHarry Stebbings45:58

       You said that not doing outbound was a big mistake. What did you do that you wish you hadn't done?

    9. MPMatt Plank46:03

       The slides, and then we roll out the pitch deck, and I do the trainings, and I do the script. And, like, (clears throat) when you're an early stage company, that makes a lot of sense. And then all of a sudden you get, you know, five segments, 10 segments, 20 segments, and, like, you're no longer the expert about all of them. And so I definitely held onto that, like, way too long, kind of being the, like, the, the number one person in the org who, like, knew the script and the pitch and the competitors. And probably two years ago, I hired, like, my first kind of, like, layer of just, like, really kind of successful VPs underneath me. And then over time, now it's like I literally don't even think about those things. Like, that is completely owned by the VP of SMB or the VP of mid-market or whatever. And I should have done that, like, a lot sooner, because what happened was we would be doing deals, or we'd be in, like, we'd, we'd have, we'd have a deck that sucked and I'd go look at it and I'd be like, "This deck is terrible." Like, "This is, like, this feels so stale." Like, "How does, how does the SMB org stand up and, like, give this deck every day? Like, it's so bad." You know? "This is 18 months old." And there was just a general thinking of like, "Well, you made the deck," (laughs) right? Like, "You, like, you authored this thing." And I'm like, "No, no, no, no, no, no." Like, "You guys are better than me at all of this stuff. Like, you're doing it all day long." Like, everybody should feel empowered to be like, "This thing that you're telling us to do is dumb and doesn't make sense. It doesn't work." And I don't think I, like, inflicted that, like, early enough in enough places. And today, um, like, you know, my team is a lot more useful than I am in terms of actually winning business and, and bringing customers on board.

14. 47:28 – 54:46

    The Revenue Split Across SMB, Mid-Market & Enterprise

    1. MPMatt Plank47:28

    2. HSHarry Stebbings47:28

       Matt, can I ask, when you look at revenue, what's the revenue make up between SMB, mid-market, and enterprise?

    3. MPMatt Plank47:33

       It's a tough question to ask, because we have, like, direct segments, channel segments, product segments. Like, there, there's literally 50 segments. And so, but, but, like, what I would tell you is my... Um, like at the end of next year, my SMB, mid-market, and enterprise teams will all be, like, you know, roughly the same size. Probably like SMBs maybe, you know, 60 reps, mid-markets maybe 90 reps, and enterprises maybe, like, you know, 40-ish reps or something. But that's 150 reps, and there's probably 300 reps across the board that are at different types of, um, places. So it's, it's kind of a mixed bag.

    4. HSHarry Stebbings48:10

       Okay. But, like, is it like 30, 30, 30%? Like, uh, uh, uh, how do you think about that?

    5. MPMatt Plank48:14

       The fastest growing segment, for sure, is like our upmarket segment. Like our, you know, we are moving that market, like, very quickly, and, you know, used to not compete with the Workdays of the world, and now that's, we're in a lot of deals with them. And so that piece of the business is... And you, if you're gonna grow, you know, 60, 70, 80, 90% year over year at hundreds of millions of dollars, like, you have to be able to have some things that are growing, you know, two, 300%. Like, that's the only way you'll maintain a growth rate. And so I'd say our upmarket teams are growing a lot faster.

    6. HSHarry Stebbings48:44

       What's not growing fast enough today?

    7. MPMatt Plank48:47

       I'm thinking about Parker would probably say everything. Uh, but, but I think probably, like, international, to be honest. Like, in international...We have, we're, you know, we have teams now, go-to-market teams in, uh, Dublin, selling into, you know, Europe. We've got a team in Sydney selling into kind of, um, the Australian market. Um, we're ... so there's, there's a bunch of international teams in place where we feel like we have incredible, like, product market fit. But we're, you know, like, we're trying to crack the code of, like, you know, you can't just, like, land in these places and run all the same playbooks and do all the same stuff. And so I think our growth internationally is like, um, there's a, there could be explosive growth and there will be soon, but we're, like, still kind of tweaking the, the ingredients a little bit.

    8. HSHarry Stebbings49:30

       Why do you think that hasn't gone to plan?

    9. MPMatt Plank49:33

       You know, candidly, like, when you enter a new market, um, like, you have to be ... like, everything is way more expensive. Like is, is it big ... like when you're an early stage company, like efficiency, like, doesn't really matter. Like you don't even have a business, right? Like it's not about how efficient are you, it's like you're just trying to win any way possible and you're losing money and all that good stuff. As you get to be larger, like, and you're, you know, our size, like all of a sudden, like, efficiency is like the number one constraint. Like there are things that we could go do to win more business in places that we don't do, because we couldn't do it efficiently and we're not trying to light money on fire. And so, in the, in the US market there's all these other things. There's organic, there's brand, there's all this, like, free, you know, like, accrued benefit over time, and so you can afford to go pay money and do different things, to acquire leads in more expensive ways. When you go internationally, like, all you can do (laughs) on day one, right, you can go put money in the LinkedIn machine or the Facebook machine or the review sites or whatever, and you can get demos, but, like, you don't have all of the, like, easier, more free stuff to, like, blend the portfolio into something that works. And so your growth is just, like, it's a little bit stunted if you want to grow efficiently. Like we, we don't get to grow in these markets the same way that early stage companies do who don't really care that much about being efficient. Like, we do care about being efficient, and so there are kind of these, like, you know, guardrails that we have to operate within, and so that has made growth a little bit slower than it would have been.

    10. HSHarry Stebbings50:57

        Why be there at all? Let's have this thought exercise. You have a lot of market still to get in the US. You've got a lot of products that you can, you know, bluntly expand penetration across. Why the, why bother with Australia? There's no one there anyway.

    11. MPMatt Plank51:10

        (laughs) Um, be- because, uh, I think one, the, all of the US, non-US markets, like starting with Canada and, and for sure in Europe and, you know, in APAC, like, their HR software landscape is at least a decade behind where the US is. Like in the US you have, you know, 10 plus, like, major public company payroll providers, right? Like, there's just an enormous ... you've got all these IT companies, like all the Ramps and Brex's of the world. Like, it's a deeply competitive market, and when you go internationally, pretty much in every country, whether it's, you know, the UK or, or, uh, France or Germany or Australia, whatever, there's literally, like, two people at max that are in that space, and one of them is, like, a completely old archaic, like, awful system, and one of them is, like, a brand new startup that's, like, modern and easy to use but has, like, enormous, uh, you know, like, uh, issues kind of like supporting all the different various use cases, large companies, whatever. So there's just, those markets are, like, extremely ripe for disruption, um, and I think we have really strong product market fit. And then there's a bunch of other things where, like, you know, we s- we're, we're, we do really well with multinational companies in all of those markets.

    12. HSHarry Stebbings52:25

        But then it's, but then it's like why, why is not working, then? Because it's like th- we're s- I'm ... Matt, I say this like we're ideating here. But, like, the efficiency side I kind of get but I kind of don't, dude. I'm an investor in early stage companies and we compete with Rippling and it's like, "Ah, fuck, these Americans have so much more cash than we do." (laughs)

    13. MPMatt Plank52:42

        Yeah. (laughs)

    14. HSHarry Stebbings52:42

        Like, you have so much more money than us.

    15. MPMatt Plank52:45

        Yeah.

    16. HSHarry Stebbings52:45

        Efficiency ... uh, mm-

    17. MPMatt Plank52:48

        Well, so, so a couple of things. One is, it is working in the sense that, like, the win rates are really good, the ECVs are really good, all that kind of stuff. What, what is scaling slower than you would like is pipeline generation and top of funnel, and that's because no matter how much money we have, we could be sitting on a billion dollars of cash, like, we are not going to go invest in top of funnel that is inefficient just to grow faster. Like, that's just, like, w- our guardrails are, like, there's a certain CAPA-

    18. HSHarry Stebbings53:17

        Why, why-

    19. MPMatt Plank53:18

        Go ahead.

    20. HSHarry Stebbings53:18

        ... why not? Because that top of funnel that's inefficient can increase in efficiency over time as you build word of mouth, local brand, network effect within nations. Is there not a time where actually you spend always inefficiently at the beginning, as you did in the US, to get more efficient over time?

    21. MPMatt Plank53:37

        Yeah, I think that, uh, uh that's certainly a way to do it. Um, I would say that, um, we are pretty disciplined i- in the kind of finance function at Rippling to, like, not, you know, get the cheap thrill and go sink a bunch of money into these markets. Because, like, the reality ... it's not just that it's inefficient, it's that, like, we don't know exactly what works, right? Like, it's not the same playbook, the growth playbook is not the same. And so yeah, you could think, you could convince yourself that you could spend inefficiently and of course it'll work because it works in the US, but, like, you also might just light a ton of money on fire and, like, your whole strategy just might not work at all for a long time, whatever. And so I think really the answer for us is, like, outbound has been the thing that we've been able to scale the most, because all of the growth demand gen stuff is expensive when you can't offset it with referrals and word of mouth, whatever. And so the outbound thing is working really well for us, but, like, you gotta hire 20, 30, 40, 50 outbound SDRs, you gotta ramp them, you gotta train them. Like, it just takes longer to ramp the engine when you can't just go spend a million dollars, you know, (laughs) on, on kind of, you know, paid advertising and get a bunch of demos that show up.

15. 54:46 – 1:03:24

    Who Should Create the Playbook: Founders or Revenue Leaders

    1. HSHarry Stebbings54:46

       I totally get you. You mentioned the word playbook there. I'm constantly oscillating on this one. Should the founders be the one to create the playbook in the early days, or is it okay... Uh, this is where Chad Peets did say this, he was like, "Founders, they're not the ones to create the playbook." And, you know, you were with Parker from, like, basements.

    2. MPMatt Plank55:02

       Yeah.

    3. HSHarry Stebbings55:02

       You know, we talk about expanding in Australia now, with, you know, the huge scale of Rippling. But you were there from the beginning. Should founders be the one to create the playbook, or should it be a revenue leader like you?

    4. MPMatt Plank55:14

       Founders definitely should, should not create the playbook. And I would say that Parker is, uh, Parker is, like, exceptional, like, go-to-market CEO. In fact, I think one of his strengths is, like, that he really, like, is the ch-... you know, main product kind of roadmap guy. Like, his vision, you know, his product vision is, is really strong. But on the go-to-market side, like, that guy could sniff out, you know, bullshit from anywhere. Like, he knows just, like, all the places to poke, all the weak spots, all the bruises. And so, Parker's, like, involved in go-to-market from a, like, "Is this really working, or are you, like, you know, making it appear as though it is when it's not?" Having said that, like, he doesn't, he would never want to, like, "You need to do it this way, pitch people this way." And I think the reality is found-... Parker is the best at articulating, like, why somebody should care about our product, like, why they should want our product, why did we build it this way, what is all, what are all the benefits of building it this way. There's no one that does that better than Parker. But he's, he doesn't think like our buyer, you know what I mean? Like, he doesn't (laughs) , he doesn't know how to transform his, like, brilliant thought into, like, a consistent, repeatable sales playbook. He doesn't know how to do that. Like, that's not his thing. And so he's involved in, like, the direction, you know what I mean? Like, he gives a lot of feedback. He's, he's kind of like, "This is what I think," but if I push back on him, you know, there's friction, and it's good. Like, friction is good in that kind of stuff, but eventually, he'll get to a point where's he's like, "Okay, okay, okay, that makes sense." He'll start from a place of extreme, you know, pessimistic view, like, "I think that's wrong, I think that's wrong. Here's why, here's why." And then if you, like, defend the position and you convince him of why you think your way is the right way, eventually he'll just be like, "Okay, that makes sense. You've, like, convinced me that that's better and you should do it that way."

    5. HSHarry Stebbings56:55

       Okay, so founders should not be the ones to create the playbooks. So, as a founder of an early stage company, you should hire a sales person from day one?

    6. MPMatt Plank57:03

       I mean, I think... So, you know, like, when you're a founder from day one, I, I... First of all, I think you should hire salespeople way sooner than conventional wisdom. And, and there's a lot of salespeople (laughs) that will tell you that that's not true. Like, "Hey, you're a founder, you gotta make sure that you can sign customers up and you have product-market fit. Like, don't hire this poor VP of sales to come in here who will never be successful because, like, your product..." Blah, blah, blah, blah, blah, blah, blah. Right? Like, I don't believe in any of that. Like, I believe that, um... Uh, I mean, I started at Parker's house when there were four engineers literally in the basement of his house. Like, there were no customers, there was no CRM, there was no anything. Like, n-... Granted, like, me and Parker had a relationship, and so, like, would I have done that with a stranger? Like, probably not. But I knew that Parker was gonna, like, build the right thing, and I knew that he needed me to, like, help him figure out, like, one, like, do the sales so that I could take that off his plate. But there was a, a trust there of, like, as we're building stuff and you have constrained resources and engineering, like, what is the most important thing to build first? Like, how do you sequence the things we need to build? And a good go-to-market leader that you trust will help you figure that out. You know what I mean? Like, they're a part of that journey. Uh, and so I, I think you should hire a sales leader, like, very early on. You probably should have some customers that have paid you some money, but I think founders wait too long to hire go-to-market. Uh, and I think they do that because they feel like they can't hire a good salesperson potentially without a bunch of traction. And, like, I... You know, that may be true-

    7. HSHarry Stebbings58:30

       Okay, so, okay, so w- we hire them a little bit earlier, let's go with that, Matt. Okay? Should we hire juniors, or, like, a senior sales leader who builds a team around them?

    8. MPMatt Plank58:39

       Y- you wanna hire for slope, right? Like, you wanna hire for how steep you think somebody is, like, going to be able, uh, to kind of grow and scale. Y- b-... But, like, oftentimes, like, the, like, the number one thing that I look for, I think if you're looking for an early stage, uh, you know, sales leader, there's a bunch of things that we could get into, but I think one of the things that stands out is you want somebody who has been, like, rapidly promoted at the same company two or more times. Like, that ingredient... And what I mean by that is, like, if you're an account executive for, like, a year, and then you're a sales manager for, like, nine months, and then you're, like, a director of sales for, like, a year, right? Like, when you look at high-growth companies that are just, like, growing super fast, right? Whatever all of the historical SaaS companies you might wanna go look at today, "Where should I hire someone who worked at a high-growth company?" And you find somebody who was promoted multiple times... There are lots of people that get promoted once, and it's a mistake, right? Like, they're not good at being a manager, they don't wanna be a manager, whatever. But when you find someone that's been promoted two times in the same company, it's, like, an immediate signal that that person is good, right? Like, you don't get promoted twice at high-growth companies if you're not good. And when they've done it in rapid succession, right? If it's, like, three years in this role, three years in that role, three years in this role, it's like, okay, that's, that's good too. But there's nothing better than, like, one year, one year, one year. It's like, that means you promoted them, they took on a bunch of new stuff, it was growing, everything was broken, they didn't know how to do it, and boom, they solved it, and, like, now they're onto the next role. And so I think you find people like that, that they're, they may top out at, like, their experience has only been a director of sales of a 20-person team or something, and it's like, you don't need more than that when you're building a company from scratch.

    9. HSHarry Stebbings1:00:18

       Do you agree with Jason, who says... L-... Lamkin, that is, who says you'll never be able to get the all-star VP of sales to join your little company, 'cause it's so fucking hard? They've been through it once; they're not gonna go through it again. They'll join you at 60 million ARR, maybe, maybe. Maybe 100 million ARR. But they're not gonna join your one or two or five million dollar ARR company.

    10. MPMatt Plank1:00:39

        I think that's exactly right. I mean, in fact, I'll give you the perfect example. Like, uh, when Parker started Rippling, like, who's the first person he wanted to hire? Like, it was Sam Blonde (laughs) , right? He's like, "I want Sam. Come work here with me." And Sam was like, "No, man. Like, I can't, you know, I can't do it again." You know, and I started... You know, Sam hired me at Zenefits, and I started there as the, you know, 25th & Plaza account executive. And so I had kind of grown up in the, you know, like, underneath, kind of like Sam at the org. And so, uh, when Parker's like, "Okay, like, Sam's not the guy who's gonna come start in the basement again for a second time four years later," he immediately went to, like, the tree, all right? Like, you know, what's Plank doing, what's Jamison doing, who, you know, built Gong, uh, for many years and now works at Rippling. So, he picked...... like, both of us-

    11. HSHarry Stebbings1:01:22

        Matt- Matt- Matt- w- what's exceptional about you, and you know this as well, so this is probably me telling you something, you don't normally last. You normally fall out of this tree at 10 million in ARR in Rippling's journey. I don't know what your ARR is, and I'm not asking 'cause it's private, but you guys have done f- unbelievably well. Normally, your profile has fallen out five years ago. What have you done to scale with the company in a way that no one does?

    12. MPMatt Plank1:01:50

        I mean, look, like, the first thing is, uh, g- generally speaking, if you are successful on the whole journey, then there's only, like, one reason that you don't make it. Like, if you're successful, it works, and Rippling has been fortunate to be successful. And like, yes, in some part do I feel like I run sales and I own some of that, yeah. But like, we've been successful for a million other reasons that I- that are not me, right? The product that we built, the marketing team we have, all these other things, right? Um, but I think w- when you, um, when you are winning, like, the reason that you, that you top out... And- and some companies, right, like, they're winning, they're doing pretty well by all metrics, but then they're like, "But we gotta go hire, like, a CRO," because this person is like, "You know, we're doing great. But we just- they're not gonna make it." 100% of the time, it's because you can't hire, like, people that are better than you or overqualify. Like, you can't hire people i- and- and the biggest thing is you don't acknowledge the organic growth that you built. So for example, like, when you grow early on, you're gonna promote a bunch of people. Managers become directors, like all this stuff, right? And when you look across your, you know, 10, 15 leaders that you've built that are all homegrown and organic, right? You're at 10, 20 million, whatever. You haven't hired anybody from outside the company, really. You just, like, you know them so well, and you're like, you're, you- you convince yourself that, like, there are not gaps and they're all gonna scale. And it's just like, they're not all gonna scale. And so you gotta be able to go to that person that you brought over from your previous company that's done really well, um, and know when they're, like, hitting a breaking point where they can't scale, and you've gotta be able to, like, layer them in a way where hopefully they stay at the company.

16. 1:03:24 – 1:04:31

    The Biggest Signs When Someone Isn’t Scaling

    1. MPMatt Plank1:03:24

    2. HSHarry Stebbings1:03:24

       Final one for you before we do a quick fire. What is the biggest signs that someone is not scaling? How does that most often show itself?

    3. MPMatt Plank1:03:32

       I think when someone is not scaling, um, I- I think there are, there are, there are two things. I think one is, um, they end up becoming, uh, like, they're- they're leading from the back and not the front. And what I mean by that is they're, they believe that their job now is to, like, tell people, like, what to do because they've done it. But, like, they don't believe their job anymore is to, like, do it for them, show them how to do it, be involved, and like, you know, leading the way and being like, "Everybody follow me." Uh, and they just kinda hit a point where they, like, they- they kinda think that being a director or a VP or whatever means that, like, all of a sudden, you don't have to do that stuff anymore. And usually when that happens, they start to lose the locker room. And like, even if it's a winning team, like, their team starts to not really like them. You know, it starts to fall apart and kind of flounder from there. And you can't come back from someone who, like, lose, like an organic promotion who was amazing all the way through, but then they, like, lose the locker room because they think that that's not my job anymore. I think that's a, that's it.

17. 1:04:31 – 1:07:03

    Quick-Fire

    1. MPMatt Plank1:04:31

    2. HSHarry Stebbings1:04:31

       Dude, I can talk to you all day. I've so enjoyed this. So I'm gonna do a quick fire with you. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

    3. MPMatt Plank1:04:38

       Yeah.

    4. HSHarry Stebbings1:04:39

       Which competitor do you most respect and why?

    5. MPMatt Plank1:04:42

       Oh, gosh. Which competitor do I most respect and why? Um, (laughs) I don't know. That's such a, a, like, so- so- uh, this is not a quick fire question. I'm so, like, con- you know, constrained. Like, I don't know, probably in the HCM space, like, I think maybe I would say probably, like, uh, in the HCM space, maybe Paylocity is, you know, of the legacy competitors, like, they generally seem to be, uh, like, people we see in most of the deals. You know, they do a good job, I think, of- of uh, (laughs) selling around their- their product gaps, potentially. There's other players in, you know, our product suites. Um, that one comes to mind.

    6. HSHarry Stebbings1:05:19

       Is there a player where you're like, "Puh, they're in here? We got this covered. We're gonna sweep the floor with them."

    7. MPMatt Plank1:05:25

       You know, I- I guess maybe when I, when I think about, like, a competitor I respect the most, I think of it mostly from, like, a go-to-market team perspective. And so I think, like, when we lose to, like, a legacy payroll provider, I'm kinda like, "Damn, like, we got outsold." Right? Like, I know our product is better than Paylocity or ADP or whatever. And so when we, you know, when we're in a competitive deal and it's neck and neck, and I'm just like, "Man, like, they must be doing something good on the go-to-market front to make up for, like, all of the, like, horrible blemishes that exist under the surface of that product when you actually use it." (laughs) Uh-

    8. HSHarry Stebbings1:05:56

       It's true. Respectfully, that's all on you. (laughs)

    9. MPMatt Plank1:05:59

       (laughs) I agree totally.

    10. HSHarry Stebbings1:05:59

        When- when you get beaten by, like, an ADP, it's like, "Ugh."

    11. MPMatt Plank1:06:02

        It's, yeah, it's like, you should really look in the mirror and- and- and like, you know, uh, you should really take that one on the chin, for sure.

    12. HSHarry Stebbings1:06:09

        Tell me, what sales tactic has not changed over the last five years?

    13. MPMatt Plank1:06:13

        I mean, honestly, like, it sound- (laughs) it sounds cliche, but it's like, like, I think more so now than ever, like, working your ass off and hustling is like, like y- al- al- has always been able to get you ahead. But there was a culture pre-COVID where that was, like, table stakes and what everybody did, and you were in the office all the time, and you showed up at 8:00 and you left at 6:00. And it was just like everybody did that, it was obvious. And I think over time now, like, the true, like, I just, like... And it's not like, "I work on the weekends and I work all night." It's like, when I'm, like, in the- the- the walls of, like, the arena-

    14. HSHarry Stebbings1:06:47

        (laughs)

    15. MPMatt Plank1:06:47

        ... I am like million miles an hour grinding, just like working my ass off as fast as possible to just like do more output. I think that is, like, less common than it used to be, or is more of a, you know, is- is more of like an advantage than- than maybe it once was.

Episode duration: 1:10:55