Matt Rosenberg: Why You Should Not Hire Sales Leaders From Big Companies | E1068

1. 0:00 – 6:55

   Matt Rosenberg’s Journey to CRO of Grammarly

   1. MRMatt Rosenberg0:00

      If you want to find efficiency, find a mom. They will be the most efficient people on the planet. Find a parent, particularly a parent of young children. More stuff will get done in an eight-hour block than you could imagine. (instrumental music plays)

   2. HSHarry Stebbings0:12

      Matt, I am so excited for this. As I said to you just now, I heard so many great things from many mutual friends. So first, thank you so much for joining me today.

   3. MRMatt Rosenberg0:21

      Well, thank you, Harry, I really appreciate you having me on. It's, it's an honor.

   4. HSHarry Stebbings0:24

      Now, I would love to start with a little bit of context. I want to start on entry into sales. How did you make your way into sales in the first place? Let's start there.

   5. MRMatt Rosenberg0:33

      Yeah. So I am a little bit of an accidental sales leader. You see, um, after graduating college, I didn't know what to do, so I went and backpacked through South America. And along the way, I decided to go to law school because I figured you could always make a living as a lawyer. That is a very bad reason to go to law school, it turns out. So after graduating law school, I became a lawyer, and not a very good one at that. And it was there that I said, "I need to do something else with my life. I need to actually have impact." And so this was the late 1990s, the first dot-com boom was happening out in California. I was a lawyer in Chicago sitting in a very large office building wearing a suit in a very large, um, office, and I was lonely and my soul was dying, and I thought to myself, "Boy, if I just move out to California and join a startup, everything will take care of itself." So I remember telling my parents, "I'm moving to California. I'm gonna take a pay cut of about two-thirds, and I'm gonna join a startup." And they said, "Are you out of your mind?" And that's what I did. I moved to California, I joined a startup as the second employee, and along the way, um, you know, I joined them as their head of business development. They were raising money, I knew how to fundraise, I knew how to structure contracts, I knew how to structure core partnerships. So they hired me to be their head of BD, and along the way, we had multiple pivots. The business, like most startups, failed a number of times, and we kept pivoting our way into a new market, and I was the one that helped the company figure it out and sell the first big solution. And then I fell in love with sales. The, uh, intellectual aspect of it, the emotional aspect of it, all of it. And that's how I ended up in, in sales and as a sales leader.

   6. HSHarry Stebbings2:11

      Can I ask you a really personal question? I didn't expect to go here, actually. I, I actually did law as well, because I thought you could always earn a living as a, a lawyer. And I, I always wanted that security. I wanted something to fall back on. Um, I saw my grandparents lose all of our money when I was younger, and it really just instilled this fear of having nothing, and so I wanted that security of I could always have that. Why do you think you had that need for safety of, "Oh, I can always make money as a lawyer"?

   7. MRMatt Rosenberg2:40

      Yeah. Well, I grew up in a family of professionals, right? When you grow up in the middle of the country, you do a job and you typically do it for life. Like, that is what you are and that is what you do. My father, I think, has had one job his whole career. So for me, it was always about you have to earn a living. And so being a lawyer, you could always earn a living. The irony of all of that is when you get into sales, you're probably in the least secure profession because it really is a performance-oriented profession. But I found that much more suited to my temperament and personality. I loved the competition, the challenge, the striving. And so it sort of struck me in ways that, that law didn't. But I think that was the original thesis, was you just have to earn a living. And then I found by trying to earn a living being a lawyer, it just didn't comport with my personality, with my sense of what I wanted to do, and that led me in a, a very different direction.

   8. HSHarry Stebbings3:33

      I mean, I don't think it comported with your personality 'cause I think you had a personality. The lesson I have from law school is the ones that succeed don't have one. (laughs)

   9. MRMatt Rosenberg3:41

      Right.

   10. HSHarry Stebbings3:41

       But, uh, there's a reason no lawyers listen to this show. Don't worry, I haven't offended anyone. Uh, my, my question to you is, a lot of people go through career pivots or transitions, and it's quite a difficult and unnerving thing to go through. What are some of your big lessons having been through really quite seismic pivots from lawyer and then to sales leader? What would you say some of those reflections or lessons are?

   11. MRMatt Rosenberg4:06

       Yeah. Well, I think as you heard in my narrative of going from lawyer to sales leader, it just takes a lot of courage and conviction, right? And so one of the big lessons is when you make that pivot, just remember why you made it. Like, remember what drove you to make it in the first place. And, and that is an anchor for you, because there are all sorts of moments of insecurity and doubt and fear, and I think the more you have that, uh, reminder of the conviction of why you made it, I think ultimately the more successful you'll be. And then along the way, it really is about momentum. I think as you move into something new, there are little wins along the way. There are lots of defeats, but it's those little wins that you have to focus on and celebrate, because win begets win. And I just think that momentum really helps you get through all the inevitable challenge that you have as you, as you make that pivot.

   12. HSHarry Stebbings4:58

       Can I ask a weird one? And I, I'm just so jumping around here. How do you build momentum in a sales team in the early days when you join as a sales leader?

   13. MRMatt Rosenberg5:06

       When you think about early, early days, it could be... Momentum could be the first time you pick up the phone. Momentum could be the first meeting that you're able to secure. Momentum could be you have a first meeting, you actually get a second meeting. Momentum could be you have a first meeting and you're able to translate that meeting back to the product team to help them understand what it is you heard. There are lots of little ways to do it in sales that doesn't have to manifest in the win, because the win is a byproduct of lots of little things that you do along the way, and you sort of have to study each one of those things that got you to the next thing, that then gets you to the next thing, that gets you to the next thing. And each one of those things, it's actually a win along the way. It may not feel like it because you feel the overwhelming stress at the organization and having to build and go out and win and place and all that stuff, but those little wins actually add up to, in the end, the ultimate win, which is you can win your first customer.

   14. HSHarry Stebbings6:01

       I totally agree. I always think it with new hires as well. I say you have to manufacture hype around new wins, which is like you get that second call, "I'm gonna, like, buy a cupcake to celebrate with you because I want you to feel it's, it's almost more than it is, just to give you that confidence."

   15. MRMatt Rosenberg6:18

       A- absolutely. And, and confidence is, is really everything because it's such a hard job, particularly in the early days of a startup. You're, you're listening and you're processing and you're trying to figure it out, and there is this actual overwhelming pressure if you let it overwhelm you because the company rests on your shoulders, right? You're brought in to figure all this out and the, the reality is nothing's been figured out. And as much as the founder who sells you into the job says, "There's product-to-market fit. We've figured it out. It's gonna be glorious. All you have to do is work, walk into the market and it'll sell itself," well, it never does.

   16. HSHarry Stebbings6:52

       (laughs)

   17. MRMatt Rosenberg6:53

       It just never does.

   18. HSHarry Stebbings6:54

       Ca- can I ask

2. 6:55 – 12:42

   How to Build and Impliment a Sales Playbook

   1. HSHarry Stebbings6:55

      you, you said there about kind of walking into the market, selling itself. It reminds me of the wonderful term of sales playbook. How do you define the term sales playbook, Matt?

   2. MRMatt Rosenberg7:05

      Yeah, I mean, a playbook is simply a set of repeatable processes that lead to the best possible outcome.

   3. HSHarry Stebbings7:11

      Do you believe that there is, like, a sales playbook? 'Cause I find there's a sales playbook for each stage of a company.

   4. MRMatt Rosenberg7:16

      I've had a lot of debates with my colleagues around playbooks and, um, I, I tend to fall in a little bit of a different, um, place than a lot of my peers. A lot of my peers have their playbooks and they come into th- their business, they get a new job, they bring their playbooks and that will somehow manifest to victory. I, I am not a subscriber into, "Here is my playbook. Hire me and I'll run my play," because I think every company is actually unique and hopefully people (laughs) agree with that because every company has different products, it sells into a different market, has a different position, has a different way of pricing, has a different way of thinking about it, has a different culture. All of these things ultimately are unique for a company. While certain processes may be repeatable, there's 80% of commonality, it's that 20% that actually is the difference between winning and losing. And that 20% of the playbook that you really have to build only once you get there and you understand the business deeply and you understand the process, that's where the win happens. So you can come with a set of ideas about how to run something based on stage, based on product, but it'll all be upset once you get into the market. It's a little bit like the Tyson quote, "Everybody has a plan until they get punched in the face." Well, when you get into the market and you start to get punched, you then develop your playbook because you have to figure out how to get around the punches, how to move through and navigate the process. And that navigation, the nuance of it, when you start to, start to crystallize that into a playbook, that's where winning happens. That's the difference, I believe, between building a high-performing team and a team that may win once or twice but it's not gonna win repeatedly because that's the magic is in that 20%.

   5. HSHarry Stebbings9:00

      Speaking of that magic being in the 20%, can I ask, are there elements which are continuous throughout? Like, how as a sales leader can you know what things you should be rigid on and yes, it worked at last company and so it will work at this company versus well, that worked at last company but it may not work? How do you know the things you can be rigid on and take versus the things you need to be plastic on?

   6. MRMatt Rosenberg9:26

      I would encourage, and again this is why I fall probably on the other side from a lot of my peers, I would encourage a lot more flexibility than rigidity. You know, the great sales leader is able to, uh, deeply and uniquely understand the market they're in, what they're positioning, what the process needs to be to maximize the success of the team and they're able to build that in a way. And I've kind of lived this, right? I've never worked in the same industry twice. I very rarely work in the same sales motion twice because I believe part of the, the challenge and the joy is figuring out hard problems. And I think what I bring to companies is a unique perspective that is formed from lots of different experiences because you're seeing sales models start to merge. You're seeing... It used to be enterprise, then it's SaaS, and now you're seeing a lot of different motions all come together in unique ways. And I think sales leaders need to be flexible and understand that and be able to pick up different signals from different parts of the m- of the market and pull it together. Otherwise, you end up with a playbook that's probably 80% right but you need it to be 100% right to actually build a motion that wins repeatedly.

   7. HSHarry Stebbings10:36

      I mean, there's so many different areas that I wanna k- (laughs) go in with this. I, I, I wanna start on, you know, when you said about kind of the sales leader building out and taking those from company to company, often the founders are tasked with, "You should build the sales playbook." I have a strong feeling that it is the founder that should build the sales playbook. Do you agree with me or should it be created by the first sales hire?

   8. MRMatt Rosenberg10:59

      Harry, let's call this our first point of divergence. Um, I think f- I think founders are... Th- they have superpowers in lots of areas but my point of view is building a playbook ain't one of 'em, and lemme explain. I think you need a level or a layer of abstraction to be great at building a playbook. Now, founders are so close to their business, they're so close to their product, their language is the language of going out and talking to investors, of talking to pilot customers and they hear things through that lens. That's not actually the lens through which I think you oughta build a playbook. I've worked with some amazing founders and their language, their narrative is always a little bit different than the customer. The challenge of sales is translation.... right? You have to translate what you do in a way that the buyer can hear it, and you need to take the buyer's language and translate it back to the company in a way the company could hear it. That translation is what's gonna ultimately lead, I think, the company to build to product market fit. And founders sometimes hear things very differently based on the universe and world in which they live because they've been told certain things from investor community, from early employees, and it doesn't really matter. What matters is how the customer hears them. And so I think that layer of abstraction actually is important, and I think sales leaders can hear things differently than the founder. Now, the founder will be great at positioning and they should be in the meeting because they understand their product deeply, but I think in terms of building that process, that abstraction actually is a benefit to the business. So I think we diverge a little bit in, in points of view there.

3. 12:42 – 23:24

   Best Tips on Hiring for Sales

   1. HSHarry Stebbings12:42

      I, I'm fascinated then, 'cause I, I genuinely advise a lot of companies and so (laughs) I want to advise them the right way. How do you then know what type of leader to hire if you don't have a playbook in place? So my s- my pushback to you is, if you don't have a playbook, you have no idea who is the right person to hire, a PLG motion versus a heavy enterprise motion. You have no idea on your channels, you have no idea on your messaging, your positioning, your ICP. Well, jeez, Matt, you know there's so many different types of sales leaders. It varies so much. You could hire totally the wrong type of leader if you don't have a playbook. So the founder should be the one to identify the playbook to a certain extent, to have clarity around it, because that will hugely inform the type of leader they hire.

   2. MRMatt Rosenberg13:28

      Yeah.

   3. HSHarry Stebbings13:29

      How do you think about that?

   4. MRMatt Rosenberg13:30

      Yeah, so I agree with you there. I think founders have a point of view around the type of leader they want to hire based on the model they're selling in. That, that to me is very different than a playbook which I'm defining as a process by which to win an account. Now, what I will tell you in terms of your question around sales hire, this is again one where, um, I may have a slightly different view than most, which is the mistake that I see founders make all the time is to hire for pedigree, or they try to match perfectly someone from the sales motion that they're selling in. So, I have seen time and time again, "I'm hiring someone from Google." Harry, don't hire anybody from Google, okay? Um, don't hire anybody that says on their LinkedIn, ex-Google, ex-Amazon, ex-Facebook. Okay? When they put that on their LinkedIn, they're associating themselves with the success of the business and it is almost impossible to tell what contributions they actually made to the success of that business. But the founder sees it and says, "Well, I'm hiring an executive from Google. They must know." The reality is they don't. What you're looking for when hiring that sales executive is something very different, the first sales executive. And, and here's my point of view. You want to hire an ex-banker, an ex-consultant, an ex-lawyer. You don't even necessarily want to hire an ex-sales leader, right, or a sales leader. You want to hire someone that can listen, that can radically listen, that can actively listen, that can ask probing questions, that is able to think critically, analytically, and is able to figure out patterns based on a set of conversations to quickly hone in on, here's actually where the market is. Here's actually where the ICP is. Here's the kind of things that the buyer is actually asking for. Those types of folks are great active listeners. They ask incredible questions to get at the essence, the root of things. That is where you're gonna build your playbook.

   5. HSHarry Stebbings15:37

      I love that, and I, I totally understand the difference there in terms of kind of the processes and the type. Can I ask you, when we think about seniority level, I know it's hard because it is generalizations, but broadly speaking, what would you advise me if I was an early stage founder hiring my first sales hire? Should it be sales rep or should it be sales leader where they then can build out the junior team themselves?

   6. MRMatt Rosenberg16:00

      I think it should be sales leader. I, I really do. I mean, I think the, the junior rep has a lot of success because they're, they're figuring it out. They're the first one on the ground, and so you want to invest behind that person. The reality is you're trying to build a s- you're trying to build for scale, right? And, and the, the problem is that junior rep then will ultimately be replaced and it creates a whole bunch of challenge internally. And I, I just think you could avoid that because someone that has been there and seen that and has a little bit of maturity, um, you're gonna be able to build around that person and scale that, that team a lot faster. And so my point of view is, why not just start there? Just start with someone that can see the patterns, that could ask the questions, that understand it. They'll bring that junior rep along and train and develop them so that perhaps they could become a director of sales or run a team. You're not gonna lose the junior person if you bring the right senior person in over them. You're gonna give them actually a lot of headroom in which to grow their career. But junior folks will hit the ceiling and then they'll burn out and fall apart, and it just doesn't end well for the business or the culture of the business. My bias, if you're a founder, is shoot above the junior mark because you want someone that you can scale with to the next level. You may have another decision to make, like that person you brought in, you have to scale above them, but I would start higher.

   7. HSHarry Stebbings17:16

      You said there about banker, lawyer, consultant. You don't want that to be your first hire though, do you? Because they won't know how to create sales process, structure, the foundations of a sales team. Or do you actually want them as your first hire?

   8. MRMatt Rosenberg17:30

      You know, that's how I started, so I have a particular bias. It's not recency bias because I'm old, but they, they figure it out. Like, the first thing you're doing for that first hire is you're trying to figure out how you're gonna sell this thing, right?

   9. HSHarry Stebbings17:44

      Yeah. (laughs)

   10. MRMatt Rosenberg17:45

       Like, how do you spell it? How do you build it? How do you ask the questions? How do you build discovery? Now, they may not think about it in terms of the traditional, "Well, here's the discovery process. We're gonna move from stage, to stage, to stage, to stage." But this is why I always say the second most important hire is getting a great, great sales operations lead.... to partner with that person. Everyone always neglects sales ops, but sales ops is sitting in the background figuring out the process, the motion, the stages. They're very different skillsets, by the way, and if you separate the two skillsets, I think you end up with the best of both worlds. You end up with a documented process that's following along with someone that understands how to actually figure out what the customer needs, what questions to ask, what product to build, and then you end up in a pretty good spot I think.

   11. HSHarry Stebbings18:30

       Uh, I, I totally get you. Do you hire them both at the same time?

   12. MRMatt Rosenberg18:34

       That would be ideal. Very hard to do 'cause most companies, particularly at the very, very start-up stage don't have the capital budget to do it, and so... And typically, sales ops will wanna, you know, have a little bit more certainty around what it is they're building to, so it's a hard thing to hire initially, but a fast follow for sure, if you can. I think that's, that's the way to do it.

   13. HSHarry Stebbings18:55

       I specialize in asking dumb questions. It's why the show's been successful. Is sales ops the same as rev ops?

   14. MRMatt Rosenberg19:01

       Yes. You could use them interchangeably. Revenue op, sales ops. It's a little bit like heads of sales sometimes get confused with CROs. It's, uh, it, the- the- the devil's in the detail of what the role is, but think about them as functional equivalents.

   15. HSHarry Stebbings19:13

       Okay, so we've got rev ops there. Uh, when we're hiring, uh, underneath, should we hire two-by-two? Jason Lampkin at SaaStr says we should hire two at the same time and do this kind of competitive mechanism. Should we do that?

   16. MRMatt Rosenberg19:26

       Yes, but, uh, did you say, like, a comparison mechanism?

   17. HSHarry Stebbings19:30

       Yeah. To understand, 'cause otherwise if you get one and they're crap, you could just think that it's your product that's not selling or it could just be that they're not very good. But if you get two, you'll clearly understand, "Oh, the product sells, but this one's not very good," or if both fail, maybe it's the product, but you actually get a much more holistic picture by having two at the same time.

   18. MRMatt Rosenberg19:50

       Yeah. It's, uh, it's interesting. Um, I definitely like the idea of two and support that. I would- I would come at it a little bit differently. And I understand the value of comparison for sure, um, but I think it's the collaboration value that actually outweighs the comparison value because, one, you're doubling your conversations. Two, if you have two in a box that are really working together and not competing with each other... The, the, the challenge with two is you end up with two people competing and they're kind of racing, and it's like who's better than the other? Even the way you set up the question, it, it felt like one's going to do better than the other and that's gonna say something.

   19. HSHarry Stebbings20:23

       Is that not good? Do you not want to create that competition between team members?

   20. MRMatt Rosenberg20:28

       Not with your first two sales hires. Not that early. You want collaboration, not competition. You want people to be able to experiment with each other and say, "I asked this. This is the response I get. What do you think? This worked for me, does it work for you?" You're essentially in a laboratory, right? And you want scientists collaborating, you want people working together. I think that collaboration of idea and idea, what works, what doesn't work is much more valuable than person against person. The market, e- e- it's too small a sample size to be able to draw real conclusions from two people. What you wanna do is you wanna draw conclusions of what's working and what's not working, two different styles. You wanna figure out your styles that are working and marry the two. I think, for me, that's gonna give you, I think, a more positive outcome at the end of the day than chaos, because look, you could have a great salesperson and a bad salesperson and bad product-market fit and a great salesperson who can sell anything either, and then what are you really told?

   21. HSHarry Stebbings21:26

       I, I agree totally. Can I ask you, if you're a founder or a sales leader sitting above these two reps, I completely agree in terms of, uh, the transferable learnings. How do you actually make that happen? Do you have, like, a weekly learning review? Do you have a Slack channel with lessons from calls? Do you review calls together? How do you ensure the transferral of those lessons?

   22. MRMatt Rosenberg21:48

       Yeah. I mean, early, early days we're talking, like, there is no reason every call shouldn't be recorded. There is no reason that every call shouldn't be listened to together, e- if it's sales leader and two, three in a box in a room breaking down the call. It's like any athlete breaks down tape, and you're listening and stopping and asking and probing, "What else could you do?" And I think the three-by-three framework here works really well. What are the... You ask the person that did the call, "What are the three things that you felt went extremely well and what are the three things you wish you did differently?" Capture that, call's played, ask the person listening to the call, "What are the three things you went well? What are the three things that you would've done differently?" And then sales leader, you go through the same process. This is why the laboratory and everybody in a room, in a box is so important. You're all trying to figure it out because at the end of the day what you're striving for is an optimal process that, um, leads to a best practice, right? And that leads to better recognitions. So when you're starting to talk to a customer, it's like, "Oh, I've heard this story before. We all agree here's the best way to approach it." That's gonna give you a lot more scale early on than any other mechanism, because it's all about exposure and at-bats. And so I think that, that really does help.

   23. HSHarry Stebbings23:07

       Does the learning become much more challenging when you are remote?

   24. MRMatt Rosenberg23:12

       Yes, it does. It becomes more challenging because the level of conversation amongst your peers is just different.

   25. HSHarry Stebbings23:21

       Uh, no, listen, I, I totally agree with you. You mentioned

4. 23:24 – 33:00

   How to Do Sales DIscovery

   1. HSHarry Stebbings23:24

      the word discovery there and you mentioned, like, what could be done better. I think discovery university could be done better, bluntly. And you've said before if you can't identify a customer's three biggest challenges that they want to solve and can't map your solution to it, move on. Can you just unpack this for me in terms of what questions do you ask to identify their three biggest problems?

   2. MRMatt Rosenberg23:46

      Yeah. I mean, I've always... If anyone that's ever worked for me that happens to be listening to this, um, will know, I say, uh, it always comes down to discovery and deals are won and lost in discovery, right? I mean, it's j- it's very simple. You win a deal in discovery or you lose your deal in discovery. Now, you may not realize you've lost it because bad discovery leads to very long losses. Good discovery leads to very quick wins. It's just a, it's in my, it's a truism in my world, right? So to your question, how do you do it, what questions do you a- do you ask? Well, great discovery starts way in front of that conversation with great research. Now, the person you're talking to cares about certain things. They typically care about what their boss cares about, right? So if you understand what their boss cares about, you probably understand what they care about. Now, what does their boss care about? If you do the research on the company, you could understand a lot about what the boss cares about. What are the core strategic objectives for the business? What are their priorities? And a lot of this is very readily available. If it's a public company, it's all out there.... just read the filings. It'll give you a pretty clear roadmap into what the business is trying to achieve. Once you understand that and then you ask what is that person's priorities, how does it map to what the business priorities are, you'll generally find some pretty good alignment. The next set of questions is how do you- how is your success measured? Like, what do you care most about? And how do you know whether you're being successful or not? Next set of questions: What are you doing very well? Always start with what's going well, because people will open up, like, a-a-and they'll talk about it. And then you pivot to, what could you improve? And if it's nothing, that's fine. What are things that aren't going so well and why? They'll tell you that, and then that's where you're really listening. If you were to fix those things that aren't going well, what impact would it have for you, for your business, for how you're measured? That's the question that's always missed by salespeople. They're just so happy to hear something that they think they can sell against that they move too fast. Slow it down and ask that payoff question because if you truly understand what the value is of solving it, then you'll have a business case, then you'll reduce discounting in the end, then you'll be able to build close plans and you'll actually be able to close that customer quickly. And then at the end of it, you repeat back what you heard. How would you prioritize those issues? 'Cause you need to know what they care most about, one, two, three. And then you have a map to winning the account. You understand how to win it. If you don't have that information, if you don't understand their biggest pain points, what it means to solve them, you're probably gonna be on a slow road, road to a, to a closed loss in the end.

   3. HSHarry Stebbings26:29

      I love it. My one challenge: People aren't always open (laughs) and so they won't always reveal that in the most transparent way. How do you make sure that people are open and honest in revealing what's not going so well? What, what is actually their boss's priorities? How do you get the truth, bluntly?

   4. MRMatt Rosenberg26:49

      Well, people will feel comfortable expressing themselves more openly if they believe that you are a trusted partner and have some insight to share, right? Like, are you worthy of getting the truth? And that's just human nature. So, if you're doing that research in advance of the discovery call and you have a pretty good idea of what their strategic goals and priorities are, you know, start with some insight. Bring it back to them. You know, in our experience, we've found through talking to cus- to potential customers like yours that people are struggling with the following issue. And we also find that with people struggling with that issue, they can solve it through whatever. Does that resonate with you? And just get 'em talking. Once it- if that resonates with them, you're on the track to issue identification. And it gets them to open up because they don't feel alone, they don't feel isolated. "Yeah, someone else has that problem too. Well, that's interesting. So do I." "Oh, you do? T- tell me more about that." "Yeah, it's like what you said..." and then all of a sudden you're off and, and, and, and on your way. So, those things called insight discovery openers just give them something that shows connection, understanding, empathy, and people do open up.

   5. HSHarry Stebbings27:56

      I agree with you in terms of empathy and people opening up. I always think kind of vulnerability breeds vulnerability. I'm always quite open to sharing the challenges of my life, so I totally agree with you there. The, the hard thing is also just urgency. You said there about kind of, um, good discovery can lead to actually good sales cycles. I'm kind of bastardizing what you said, but relatively. How do you create urgency in a sales process? 'Cause it is fricking hard to move the ball down the field.

   6. MRMatt Rosenberg28:21

      To me, uh, that's why I said early on, like, if you run really great discovery, you actually create urgency because great discovery points to a business outcome for solving the problem. If you understand the pain and it's quantified in a way where you know if you could solve it, your prospect agrees there's this economic benefit that they will realize, every unit of delay is equal to some value. So you could actually start to work with them to say, "Look, let, let's agree we- we'll get this done by the end of the quarter," as an example. If it doesn't hit by the end of the quarter and it extends a month, you know what a, a month's worth of lost revenue, lost time, lost economic value unit equates to, and you start framing it that way. That does create urgency if, only if you understand what that unit is worth to them. If you don't, you're basically playing their game. There's no reason for them to try to jump over their procurement queue to get their deal done faster because you haven't created the urgency and you haven't aligned on it. So, to me, if you can create and understand that unit of benefit or economic measure, it creates a level of urgency already that wouldn't otherwise be there.

   7. HSHarry Stebbings29:33

      Does that mean you can only create urgency if you sell a painkiller and not a vitamin?

   8. MRMatt Rosenberg29:37

      It's a lot harder when you're selling vitamins. It's a lot harder when you're selling vitamins. You, you could do it, and then it comes down to really understanding what their goals are and what, what achievement in whatever it is you're giving them helps them achieve as opposed to, you know, pain reduction. But at the end of the day, it is gonna be a lot harder. Then it comes down to budget, it comes down to process, it becomes down to really understanding how they move the deal forward and holding them accountable to a timeline that they set out early on. You, you don't have the economics behind you, but you have a timeline and a process and an agreed-upon process, and that's hard because that slips all the time.

   9. HSHarry Stebbings30:15

      Matt, y- you're a mentor to so many. I get a lot of heads of sales calling me and they're just like, "Harry, just every CFO is running budget today. And regardless of whether the chief product officer, whoever in the company wants to buy the solution, the CFO is just not open for business. Not open for business. W- I don't know what I'm gonna do. What do I do?" If you were asked that by a friend who's a head of sales who's just facing a brick wall because the CFO is not buying new...... products, what do you say to them?

   10. MRMatt Rosenberg30:46

       I start a discovery process, frankly, and try to understand what is it they're selling and what is it they're solving because here's what I found with CFOs. CFOs start oftentimes from a place of, "I'm not buying because I'm controlling the budget." The reality of CFOs are, they are very rational actors. In fact, they're some of the most rational actors within a business. They can be very objective and if you have something that adds demonstrable value, then they will buy it. I think it's a falsism to say, "My CFO's gonna block." What that says is, you haven't done a good enough job of showing the value and you haven't made it a priority for the organization. It also says you haven't brought the CFO along in the process, and that's a huge exposure point. And so one of the things I always tell my team is, "You keep your eye on the CFO." You have to get this to their desk in front of them and understand what they care about.

   11. HSHarry Stebbings31:39

       I totally agree. How do you bring in the CFO without making the other side feel a bit of a second-class citizen? You know, "Matt, it's great to get to know you, but can we bring in your CFO? 'Cause I know who the real boss is." How do you get around that?

   12. MRMatt Rosenberg31:55

       Well, you don't say it like that because that's gonna get you in trouble. (laughs)

   13. HSHarry Stebbings31:58

       (laughs)

   14. MRMatt Rosenberg31:59

       You're, you're, ve- very upfront. "Look, as part of our process for you to be successful, we found that we collectively need to engage the CFO because the CFO at the end of the day is the person that's speaker 2

   15. NANarrator32:10

       Mm-hmm.

   16. MRMatt Rosenberg32:10

       ... like, approve the process or not." And so being very clear about your process upfront and giving them a roadmap to how the deal's gonna progress is exactly how you bring the CFO in. And sometimes say, "Look, we're not gonna continue the lesson until the CFO's engaged because we've seen all too often that these deals will fall apart if the CFO isn't involved. And I don't wanna waste your time, I don't wanna waste my time." It's a very hard position to take. I always call it the power position, but if you know the CFO's gonna be there and you don't take it, you're just going down a long path to lead to a very unfortunate outcome. Pull it forward, be clear, be transparent, bring the CFO in, and you'll have a lot more success. But if y- if you know it's out there and you avoid it, you're really not serving yourself, your investors, your founder, your business. You're not doing them any good.

5. 33:00 – 38:34

   How to Do Discounting

   1. MRMatt Rosenberg33:00

   2. HSHarry Stebbings33:00

      Tell me, discounting. Often CFOs come in and say, "Hey, Matt, love it, but I'm adding a thousand seats to a relatively big customer. I want some discounts." How do you advise heads of sales on discounting? When to do it, when not to do it, and lessons from your experience?

   3. MRMatt Rosenberg33:17

      So let's start with the utopian state and then we'll work down to the realistic state, okay? The utopian state is, "Well, I've done such a fantastic job doing discovery, uncovering pain, demoing perfectly against the pain point, quantifying value, putting out pricing that has a huge ROI, I don't need to discount and I'm gonna hold firm." Sure. That's great. Like, let's, let's call that the utopian state. Let's say you run a perfect process. Some percentage of deals, you just don't have to, right? The reality though is oftentimes, um, even the company you're working for has a tradition and habit of discounting at the end of quarter, so you sort of set the market up for the discounting conversation. That's a hard one to overcome because everybody's waiting, you're under pressure, you have to hit your number, and inevitably you're faced with, "Should I discount to close or not discount to close?" That's a very personal decision for this, the, the sales management team on whether to do it or not. I have discounted in the past, this is true. Um, and it will be because there will be something that is so important to the business that I need to do it. And that's the reality of it. Like, there are times when you will be forced down an discounting path and you have to make the tough calls. You may not like it, but at the end of the day, if you're gonna do it, just do it with principle, do it with guideposts, do it so it doesn't get out of control, make sure the customer understands exactly why you're doing it so it's defensible. Otherwise, it does get out of control and it's a big problem.

   4. HSHarry Stebbings34:44

      Out of control is like more than 50%? More than 10%? I'm, I've no idea what is reasonable to ask as a discount. What's like, oh, if it goes above X, they're really asking for too much?

   5. MRMatt Rosenberg34:56

      Yeah. I mean, a discount is a concession, so you could start from a place of any discount you wanna contain because you really shouldn't discount your product if you're solving customer issues and you're pricing it appropriately. But I, I would say like, you know, 10 to 15% discount or more is a problem. Like, I think 10% discount is really where you wanna be, if at all. And from there, you're looking at, um, a slippery slope because 10, 15 all of a sudden becomes 30, becomes 50, and then you're in a really bad spot.

   6. HSHarry Stebbings35:26

      (laughs)

   7. MRMatt Rosenberg35:26

      It may be a price issue, you may look at the root causes for why you're discounting in the first place. It's usually a process issue, it's usually a product issue, or a pricing issue.

   8. HSHarry Stebbings35:36

      I, I, I totally get you and agree with you in terms of product or pricing issue. Can I ask you, in terms of, uh, you know, process that you mentioned there, you said a brilliant thing to me earlier. You said let the data speak and guide your process. It was a bit of a cliffhanger, honestly, Matt. Um, I was wondering what you meant by that. Can you unpack that for me and how it leads your thinking?

   9. MRMatt Rosenberg35:58

      Yeah. I mean, there's a lot of ways to use data. My job as a sales leader is to make everybody wildly successful. Like, what, what I, what I will tell my teams when they join me is like, "My job is to get you set up for the next best job." I want every speaker calling you because you are desirable in the market, you are a known entity, you work for the best business in the world, and you go on and do amazing things. So my job is to develop your talent and make you incredible at what you do. To be incredible at what you do, you have to understand the data of every single person in your organization. Because if you're understanding what that process is and where the gaps are in their process, the data will tell you that. It will tell you, for example, a sales rep is really struggling with discovery. They're losing at a much higher rate in the discovery motion than another rep. Boom. I'm in there, I'm helping them, I'm diagnosing the issue, I'm getting them out of that hole-... onto success. The average time to close, win rate, loss rate, average transactions. The data's telling you a million stories about your team. Your job then is to figure out, "How do I coach and develop talent so they could overcome those roadblocks to become wildly successful?" Data will also tell you your sales process as a whole. Is it working? Is it not working? Where do we slow down? Where can we speed up? What's happening on pricing? Am I discounting? Am I not discounting? Am I upselling, cross-selling, expanding? Data will tell you all that. It'll even tell you your sales motion. Where do I invest my time? For example, I'm a big believer in connecting dots on data to be able to prospect efficiently and effectively. An example, at Compass, the company I was at prior to coming to Grammarly, um, all real estate data is public. So you could see every real estate agent when they did a transaction on the other side, who the other person was on the other side. I could understand the person on the other side who was a prospect. I could see into their data and understand their volume. Was their business increasing? Was it decreasing? I could then ask my customer, did they enjoy working with this prospect and were they willing to make an introduction to that prospect? I could do that all in the background with data. If the answer was yes, in Salesforce, those opportunities would be surfaced to my sales team, so they would know exactly who to go after. So these are all different varying degrees of how to use data. But at the end of the day, data, if you're a great CRO or great revenue leader, use it. It's your friend. It'll guide your team, your process, and your individuals to success.

6. 38:34 – 42:12

   Story of Joining Grammarly & How to Prospect for Talent

   1. MRMatt Rosenberg38:34

   2. HSHarry Stebbings38:34

      Do you think prospecting has done well to date, Matt? I love that, in terms of how you broke that down. I don't see that level of thought put out there very often.

   3. MRMatt Rosenberg38:41

      No, it has not done well. If you just check my LinkedIn messages, um, it is done very, very poorly. Uh, a quick aside where it's done really well, so this will give all prospectors out there hope, I actually came to Grammarly in, in the most unusual of ways. Um, I got a email, a cold email from the CEO of Grammarly, and the CEO of Grammarly, um, reached out to me with a very precise message. His interest in talking to me because of a number of different reasons based on my background, and it was a cold outreach. And I read the email and I was like, "Wow, like, that's a very interesting approach. I understand what they're looking for. I believe there's a good conversation to be had." So I picked up the phone and here I am as CRO of Grammarly. But, so I think that kind of prospecting is incredibly effective, but really understand your message, understand the person on the other end, do your homework, and it works. Where it doesn't work is what's happening today. Proliferation of AI, prospecting, proliferation of, "I know you, you may have a problem with pipeline." Do I? How do you know I have a problem with pipeline? I'm insulted now. Don't, don't tell me I have a problem with pi- 'cause I don't. You know, it's like all these things that go wrong today, people are just putting back at you.

   4. HSHarry Stebbings39:57

      I love that in terms of the email from the CEO. I d- I had no idea about that, so that is, like, fantastic. And what b- also, like, what humility, respectfully. I don't know many CEOs that will do that, quite frankly, especially not at Grammarly's scale.

   5. MRMatt Rosenberg40:11

      Absolutely. And, and I'm also, I, I loved it for so many reasons, not the least of which is the humility and the non-alpha nature of that leader to be able to be like, "Hey, I'm, I'm, I'm looking for assistance here. I think you're an interesting person to talk to. Let, let's have that conversation." I just loved it.

   6. HSHarry Stebbings40:27

      I do wanna touch on the alpha side, but you mentioned data and also kind of identifying upsell and expansion. Customer expansion is hot again. How do you view this? How do you think about this? And what do you think you see that others aren't, Matt?

   7. MRMatt Rosenberg40:41

      First of all, isn't it crazy that it wasn't hot? I mean, like, can you imagine a world where it wasn't the thing? Um-

   8. HSHarry Stebbings40:48

      (laughs)

   9. MRMatt Rosenberg40:48

      ... because it's always so much easier to expand and retain a customer than go get net new.

   10. HSHarry Stebbings40:54

       Why do you think that was? Do you not think it was just 'cause it was easier? There were so much people with new budgets and there was so much free money going around that actually just a net new customer was a win for the person. Ince- show me the incentive, I'll show you the outcome. The incentive mechanism was set up to reward that.

   11. MRMatt Rosenberg41:09

       I think that was a huge part of it. It was also how investors thought about the value of the business and was there a product/market fit and all of those things sort of led to this, um, emphasis on net new when you have this unbelievable opportunity with your installed base of customers who have already raised their hand. They said, "I like the product. I want to use the product." And if you're not paying a lot of attention to how

   12. NANarrator41:33

       it

   13. MRMatt Rosenberg41:33

       ... all the opportunities to continue to expand it, you're missing the huge opportunity because it is, it is all there in front of you. And by the way, those reference customers, um, make your net new acquisition a lot easier, and by the way, help you dramatically reduce discounting because when people hear the reference stories of all the benefit that they get from the solution, you essentially create the urgency around the solution, the need around the solution, the conviction into the business case you've laid out, and therefore their motivation to hold you to a heavier discount is, it ends up dissipating. And that, that's natural. That's human, right? You want the solution more, so you'll do more to get

7. 42:12 – 47:50

   How to Expand Your Customers

   1. MRMatt Rosenberg42:12

      it.

   2. HSHarry Stebbings42:12

      Matt, you're CRO at Grammarly, obviously one of the f- uh, most unbelievable products I think that (laughs) is the machine behind so many of us. Customer expansion. How do you think about really getting the juice and the value out of every customer most efficiently today?

   3. MRMatt Rosenberg42:28

      Specifically at Grammarly, you know, we, a third of the Fortune 500 use and deploy Grammarly today. There's over 50,000 teams using Grammarly today across businesses. What's interesting about that is typically the deployments will start in a particular function. So marketing as an example or CS as an example. The reality of Grammarly is we work across fif- 500,000 applications across the enterprise. So the issue is the average...... company is deploying hundreds of apps in their environment and each of those apps, as an example, is bringing AI to the party. So all this content's being generated, Grammarly is the only one that works across all the applications within an enterprise. And so what ends up happening is you want a broad-based deployment because we're able to solve communication issues across the business because every department is trying to be effective communicators. That's how business works, it's essentially the operating system of a business. And so when you're talking to a customer you're able to really help them understand and ask for the introductions to other departments who see the value but they don't know how to buy it. And so this is where we then get into these conversations with IT around enterprise license agreements and that's where expansion happens. Once we become part of that ecosystem, then we can expand quite quickly. But we have to do a lot of work with customers to get them to understand that.

   4. HSHarry Stebbings43:54

      Grammarly was the ultimate PLG. It was the ultimate consumer product-led amazing wow moment scaling into enterprise. Moving from a consumer grade product to an enterprise sales led product in many respects is really hard making that transition. What do founders not know about moving from consumer to enterprise that you just really think they should?

   5. MRMatt Rosenberg44:19

      Um, everything. I've done it twice. I was at Eventbrite. Eventbrite was a $30 million product-led growth company. I was brought to come in and build out enterprise motion on top of it. Grammarly, the same. Everything about enterprise versus product led is different. Language is different, messaging is different, positioning is different, customers are different, product is different, pricing is different. It really is a very different business. The differences have to be reconciled against the strengths of product led growth 'cause they have to work together. There can't be cannibalization, there can't be conflict. But founders need to understand it's a very different business. It deserves different levels of staffing, different types of staffing, different capabilities from the marketing team, from the product team, um, from the security teams. And it's a, a very hard thing to do to build on top of a very successful motion because again, the data will guide your enterprise motion because you have a lot of data coming out of product led growth. How you use that data to build a brand new enterprise motion is gonna be unique and different. How you position in market is gonna be different than what you've done on the individual or consumer side. But it all, again, has to work together and so it is a very complex but achievable thing, but it is hard and founders should know it's all different.

   6. HSHarry Stebbings45:41

      Given the scale of just everything is different, how do you think about advising founders on when's the right time? You don't wanna go too early, distract resources, distract team, but you also don't wanna go too late, potentially let competitors in, leave money on the table. How do you think about the right time?

   7. MRMatt Rosenberg45:59

      There's a point where you really understand your product led motion, where it is measured, it is calibrated, you know what dials to turn to be able to optimize spend against acquisition. You understand how to optimize retention, your retention lifecycle mo- motion is going to the point where you feel like you have some control. When you feel like you have some control, you'll never feel great. When you feel like you have some, that's the time. I wouldn't encourage you to wait 'til it's perfected, but I would encourage you to wait 'til you feel like you have control and visibility into the motion of the business, and then I'd start on the other side.

   8. HSHarry Stebbings46:38

      Is there a way to test it without committing a huge amount of resources? Like Stevie at Vanta said it's she'd like to wait to kind of dip your toe in the water, so to speak. Is there a way to do that or do you have to fully commit full scale, "We're gonna be going enterprise"?

   9. MRMatt Rosenberg46:54

      The testing happens organically. Like the testing's already there, it's in the data because like so for example, you know, at Eventbrite you started to see very large organizations adopting Eventbrite and deploying it in enterprise-like ways. At Grammarly you see the proliferation, I think at Compass, my alma mater, 30,000 employees, there were 3,000 people using Grammarly. It's there, it's in the enterprise. If, if I were to look at almost any enterprise, Grammarly's there and in a lot of product led motions it already sits in the enterprise. People are bringing their applications to work more and more and so the, the signal's already there. It's already sort of been proven out that it can be used in that environment. Now should it always be used in that environment? No. Is it optimized for that environment? No. But there's enough signal that you don't really have to dip your toe in because your toe is already in the water. You just gotta see it and understand it for what it is.

8. 47:50 – 51:57

   Quick-Fire Round

   1. MRMatt Rosenberg47:50

   2. HSHarry Stebbings47:50

      I find incentive mechanisms foundational but also really challenging. When we look at a product like Grammarly, incentives especially in comp structure, where do they go? 'Cause you've got a PLG motion in a lot of ways that can get it into the hands of the end user which gets it into the enterprise in the first place. As a sales leader, can really turn that from a customer into an enterprise customer. But then CS can also do a lot in terms of upsale and expansion. How do you think about, especially in this new world of PLG to enterprise and that transition, where comp structures and incentive mechanisms should be placed?

   3. MRMatt Rosenberg48:28

      It's a very hard one because cannibalization is the trickiest of all issues that you have to wrestle through. But remember, selling an enterprise license is very difficult and it's very different. And you know, the product led motion into an enterprise is very different than selling an enterprise agreement where the enterprise sanctions, supports, and budgets for your solution. That deserves compensation. Separately, just getting an enterprise, uh, license in an agreement and then expanding it across the whole business is difficult as well and that deserves compensation. They're unique aspects of the same value chain, right, which is start all the way through expanding to the whole enterprise.... but each of those things are different in and of themselves, complex in and of themselves, and do require a degree of specialization that warrants that kind of compensation.

   4. HSHarry Stebbings49:18

      What sales tactics have not changed over the last five years?

   5. MRMatt Rosenberg49:22

      Well, great discovery. Ne- Never changes, it's always important. That would be number one.

   6. HSHarry Stebbings49:26

      What sales tactics have died a death?

   7. MRMatt Rosenberg49:28

      (laughs) Yeah, cold call. Who, who picks up their phone? Like literally, who picks up their phone?

   8. HSHarry Stebbings49:34

      What one piece of advice would you give a new sales leader today starting a new role?

   9. MRMatt Rosenberg49:39

      My piece of advice would be, and I do this for every role, I create a very detailed list of questions, a question rubric for individuals, every line of leadership within the business, every function within the business. Same set of 20 questions. I go and I ask the same questions over and over again to every person in the business that I can. Right?

   10. HSHarry Stebbings50:01

       Mm-hmm.

   11. MRMatt Rosenberg50:01

       Because what happens is, it speeds up your rate of learning. There is pattern recognition that emerges. You understand strengths and weaknesses. And I think spending that time, it's painful asking the same questions over and over again. But if you just map it out, you'll see the organization in ways that it would take probably six to nine months to see, but you can do it within 30 days.

   12. HSHarry Stebbings50:22

       Penultimate one. What would you most like to change about the world of sales?

   13. MRMatt Rosenberg50:26

       I'd like to see more women in sales leadership roles. If you really wanna find a great sales executive, um, hire a mom. Hire a mom because they know how to multitask. They know how to d- drive behavior. They listen. They have empathy, all of these things. I think it's very hard for women, particularly younger mothers, to be successful in this field because there is a level of alpha. There's a level of you gotta grind, you gotta put the work in. If you wanna find efficiency, find a mom. They will be the most efficient people on the planet, or dad. I don't mean to be discriminatory with moms versus dads. But find a parent, particularly a parent of young children. More stuff will get done in an eight-hour block than you could imagine. That's what I'd like to see.

   14. HSHarry Stebbings51:14

       Final one for you. What one company sales strategy have you most been impressed by recently?

   15. MRMatt Rosenberg51:19

       Yeah. I'm, I'm always impressed by companies that make markets, that they sort of take something and make it into something that they then own. I think you'd have to look at Gong. I'm just amazed at what Gong has done. Um, now it's very common in my profession. Everybody records calls. Everybody breaks down the calls. Um, every sales leader leverages the application. So kudos to them for not only creating the technology but then creating the market, the brand, all of it. I think they've done an exceptional job.

   16. HSHarry Stebbings51:46

       Matt, this has been such a joy. Thank you so much for, for being so flexible with my questions, and I've absolutely loved it.

   17. MRMatt Rosenberg51:53

       Thank you. I have as well. And it's a, it's an honor and privilege to be here. So thank you, Harry.

Episode duration: 51:57