Sam Blond: Why Startups are Doing Outbound Wrong and How to Fix It | E1139

1. 0:00 – 1:15

   Intro

   1. SBSam Blond0:00

      Where people over-index is domain. If you are hiring your first AE, first, like, AEs number one and two, they need to have seen an early stage startup environment. There are three things that I look for in terms of measuring the success of a sales hire. For almost all startups, the bottleneck to growing faster is actually around demand gen. Opportunity creation.

   2. HSHarry Stebbings0:27

      Ready to go? Sam, listen, I am so excited to have you back on the show. Wher- it was a while ago since we last made this happen. Hopefully I've improved as an interviewer. So thank you so much for joining me again today.

   3. SBSam Blond0:50

      Arie, I'm pumped to be here. Thank you for having me. Last time we did this was, I think, a month or so after I joined Brex in 2018. The world is quite different six years, uh, later as we sit here.

   4. HSHarry Stebbings1:03

      I mean, six years ago, fuck me I'm getting old. But, um, I- I do have to start (laughs) on-

   5. SBSam Blond1:08

      Yeah, but it's better than me.

   6. HSHarry Stebbings1:10

      Uh, uh, dude, you're ancient. I mean, you- you are just- I try. ... I mean.

2. 1:15 – 3:10

   Entry into Tech Sales

   1. HSHarry Stebbings1:15

      (laughs) Uh, I wanna start with the entry into sales before we dig into specifics. What was the entry point for you, and when did you realize that you loved sales?

   2. SBSam Blond1:24

      I attribute a- a couple data points of luck to- it- to being in sales and in tech sales in the first place. So I graduated from University of Missouri in 2007, and, uh, wasn't considering, like, you- you know, but for my brother being in the Bay Area doing tech sales, as a graduate of the University of Missouri, that's not even on y- your radar. I got a job as an SDR at a company called EchoSign, so I sort of lucked into getting into tech sales in the first place because of my brother, and then I lucked into, um, joining a- a successful business like EchoSign that allowed me to progress my career. I didn't know what I was looking for at the time, and fortunately I found Jason Lemkin, who's a friend of both of ours that was leading this company, and joined as an SDR when it was effectively being run out of a- a garage, an actual garage in Palo Alto. The question around when did I sort of figure out that, uh, uh, you know, tech sales was for me, something like that, I was able to start differentiating myself from peers doing the same thing. The feeling of being successful was addictive, and so, uh, you know, it was- it was pretty evident to me early on that I had found something that aligned well with my skillset that- that, you know, eventually e- evolved into a tech sales career.

   3. HSHarry Stebbings2:52

      Dude, I think momentum and confidence are two of the most important things to have in a team, because as you said there, success is so addictive. I always think, "How do I create that momentum in teams?" Uh, you've been in sales respectfully then for, Christ, 17 years without aging you. Um, so with

3. 3:10 – 7:13

   Lessons Learned from Early Career

   1. HSHarry Stebbings3:10

      that in mind, what do you know now that you wish you'd known when you started 17 years ago in that garage with EchoSign?

   2. SBSam Blond3:17

      I didn't at the time appreciate how hard building a successful startup is. You know, I took a handful of interviews when I first joined, uh, a company, and, uh, you know, EchoSign gave me an offer, maybe I had offers from other people, and I probably looked at, like, you know, the comp or something like that. It- one of the things was how far is the commute to make my assessment on which firm to join, and, um, y- you know, the reality is, uh, the- the importance of picking the right company, uh, it- it- it just really defines one's career. I attribute so much of my success to joining the right businesses. Uh, now like, I was able to perform within those businesses, and, you know, for context we're talking about EchoSign, Zenefits, a- and then Brex on the sales side, so much of my success was predicated on the success of those businesses, and I don't know that I had an appreciation for, one, how hard it is, and two, um, the importance of p- picking correctly.

   3. HSHarry Stebbings4:25

      Okay, so on that note then, for people listening going, "I want a rocket ship career. I want great trajectory," Sam, how do you pick which company to hitch your bandwagon to, so to speak?

   4. SBSam Blond4:37

      It depends on the stage. So there- there are companies that are, you know, 100 pl- 100 to 500 employees, let's say. There's a lot of signal around those companies. The trajectory with which they are hiring, the- the sort of, like, what I'll describe as heat around fundraising that exists for those businesses, the revenue growth that those companies are experiencing. And so you can join a 100 person company as the 10th sales rep, you have a lot of s- sort of historical signal to go off of that y- you're picking a- a company that is a rocket ship, to use the cliche. We'll have to come up with a better word. You know, earlier stage, it's much more subjective, right? The things that I mentioned there around fundraising events, employee headcount growth, revenue growth, those are all things that are objective. Um, the subjective side of things, and what I think I was able to get right at Zenefits and Brex, so much of the success of a really early stage company is predicated on, um, the- the founder, founder or founders, and their ambitions and aptitude to building a big business. Um, and I remember, uh, uh, you know, this was- this was further in my career, but when I joined Zenefits I think I was 29 years old, and I was fortunate to have Jason, uh, again from EchoSign, who had moved on from Adobe, he was introducing me to a number of startups, and I started to sort of pattern match around what I believed an exceptional founder looked like. Uh, not physical looks, of course. Uh, but, y- you know, by the time that I met Parker.... Jason had sig- Parker from Zenefits. Jason had signaled, one, that like, you know, Parker is incredible, they're raising a very competitive round at Zenefits, th- this could be the one, something like that. Um, and I met Parker, and he was, i- i- in, in the best way possible, just different from everyone else, and I knew it. It didn't matter what Parker was building, it, what he was actually building was all-in-one HR, um, which, like, it, it doesn't sound, it is not sexy. Um, I just wanted to join this guy's company because he was going to build $100 billion business. You know, we, we didn't realize that outcome with Zenefits. He's going to with Rippling. Um, so, you know, it's all an intuition there.

4. 7:13 – 9:27

   Sequencing Sales Hires

   1. SBSam Blond7:13

   2. HSHarry Stebbings7:13

      Sam, when you're joining such a rocket ship in sales, are you not just an order-taker? I don't mean that disrespectfully, but like when it's, like, being pulled out of your hand, it's quite fun being in sales, isn't it? But when you are fucking slogging your guts out in enterprise sales, in long sales cycles, uh, it's, it's a different game. Is it not quite easy when you're in a rocket ship?

   3. SBSam Blond7:40

      I think in any sales environment, there is, um, a lot of nuance that leads to huge discrepancy in performance. And so you described, you know, there, there are, of course, sales environments where selling the product is more challenging. There are sales environments where the sale cycle is significantly longer. There are sale cycles where the AEs are controlling more of their own destiny through outbound versus taking up leads from marketing and inbound. Um, but what happens seemingly universally, even at the best companies in the world, like Zenefits in 2014, is there are outlier performers that perform at something like 3X to the bottom performer. And so you get a team of, like, 10 people, even when you're in an environment where the product is flying off the shelves, there is still this huge discrepancy of performance. And I love sales because it's so objective compared to other areas of the business where you have a 10X, you know, performer, and, and it's, it's, it's, like, hard to, hard to know that, or, or certainly harder than it is in sales. And so that's what comes to mind. Like, of course, you want to be in an environment where, uh, the business is doing well, um, but it doesn't mean that the role becomes easier or, you know, your success is more guaranteed or anything like that because you still need to be the best. If you want to get promoted faster than anybody else, if you wanna make more money than anybody else, you need to be number one. And it doesn't matter if you are at a startup that is less successful or the hottest, fastest-growing startup there is. Those dynamics

5. 9:27 – 13:03

   Sales Hiring Process & Profile

   1. SBSam Blond9:27

      still exist.

   2. HSHarry Stebbings9:28

      So I wanna discuss the team build-out. This is one of the most challenging areas for founders. You mentioned that, kind of, you need to be number one. We need to get the team in place first, Sam, in this hypothetical situation where you are advising me, a terrible, uh, and inexperienced, uh, founder, uh, so you don't need to imagine that hard. It's not difficult. But let's start with a very challenging question, which is how do I sequence sales hires?

   3. SBSam Blond9:55

      The way I start is hire two individual contributor account executives. Those are sales reps. Always start with two. There are a bunch of reasons why. Um, we won't go on too much of a tangent here, a- as to the reasoning. Once you have two successful individual contributors in seat, you probably wanna take a parallel path of hiring more individual contributors and hiring your first sales leader because once you have two successful votes in place, you're sort of qualified to bring in a great sales leader. When I joined Zenefits, there were two successful sales reps. When I joined Brex, there were two successful sales reps. Um, the, the recruiting process of a sales leader is going to take time. You don't want to entirely stall the business, as you are taking the four to six months possibly to find the right sales leader. And so these parallel paths of continuing to hire, uh, individual contributors and hiring your first sales leader are oftentimes what I recommend. Once you have a sales leader in place, you can then start to do some specialization like hire an SDR. I don't like hiring SDRs prior to hiring a sales leader because they need a lot of hands-on management.

   4. HSHarry Stebbings11:12

      I wanna go deeper in a chronological order, specifically.

   5. SBSam Blond11:15

      (laughs) Okay.

   6. HSHarry Stebbings11:15

      We mentioned, we mentioned, just so it follows cohesion, we mentioned that, you know, hire two at a time. Before that point, does the founder need to be the one to create the playbook and do they always need to be the one to sell? I argue yes. People tell me I'm full of shit.

   7. SBSam Blond11:31

      Uh, you're not full of shit. Uh, you're absolutely correct, and, uh, good, good point on the, the, uh, sequencing here. So I, I jumped right into when, when you are ready to hire, but what are the signals that, that you are actually ready to hire? You should have a handful of non-friends-and-family revenue-generating customers and a process that you believe is repeatable in terms of generating more of these customers. The reason that I say handful is because i- it's not the same for, uh, businesses that differ from one another. If you're in a very transactional business like Brex was, Brex actually had tens of customers before bringing on their first sales rep. Now, if you're more of, uh, an upmarket enterprise-like product, your ACV is six figures, you may actually only have two or three paying, uh, non-friends-and-family, what I'll describe as more enterprise-like customers before you're ready to bring on a salesperson. But look, if, if you, as the founder...... cannot close customers and generate revenue. Um, people that sort of specialize in sales will definitely not be able to. There is no one better qualified to acquire your first set of customers than you as the founder, um, regardless of sort of your professional training. Uh, and so do not hire a salesperson before you have, uh, uh, customers.

   8. HSHarry Stebbings13:01

      Okay, Sam. Very

6. 13:03 – 19:13

   Sourcing Sales Candidates

   1. HSHarry Stebbings13:03

      as, as specific as possible. I now have customers. We mentioned those enterprise customers and revenue-paying non-friends and family. And now I'm gonna go out and hire my two reps. You said two. Okay? I'm gonna make them fight to the death, like Hunger Games. Uh, kidding, obviously.

   2. SBSam Blond13:19

      By the way...

   3. HSHarry Stebbings13:20

      That would be im- it'd be immoral to suggest such things. Um, but, uh, my question to you is, what's the profile and where do I find these people? How, how do I hire them?

   4. SBSam Blond13:31

      Profile, the things that I would solve for and that, and then one specific thing that I would not, and then we'll get into sourcing. Uh, the, the things that I would solve for, early-stage startup experience. If you are hiring your first AE, first B- AEs number one and two, they need to have seen an early-stage startup environment. Do not hire from, an extreme example being Salesforce, but gosh, even today, you know, don't hire from a rep who came from Rippling and joined Rippling when they were 500 employees. The experience that they're going to have onboarding into that environment is radically different from what they will experience onboarding into your environment. And so I would qualify this as something like one of the first 10, ideally 10, AEs at a startup, and the earlier the better. So early-stage startup experience is, you know, top of, uh, uh, sort of, like, profile things that I would solve for. Next on the list is they have to have a track record of success. Um, sales is objective. You wanna hire the best possible person that you can. If they're coming out of an environment that had eight sales reps, y- you really hope that they are one, one or two. And we're gonna talk about how to solve for that in the, the, like, category of sourcing. So track record of performance, early-stage startup experience. You want somebody who has seen similar, uh, deal sizes, uh, with similar company types, uh, company sizes specifically. So if you are a very transactional sale, selling into companies less than 100 employees, you do not wanna hire somebody who is a field sales rep coming from deals where, you know, they closed, uh, a deal every six months and these deals were six figures. So, you sort of want, like, the, the deal size, meaning the ACV and the customer segment that they are selling into to be similar. Um, the last thing that I will mention that, uh, people over-index on, where people over-index is domain. And so if we are taking something like, let's just take EchoSign, which is electronic signature product. Um, if Jason had solved for hiring people from either DocuSign, which was, like, the direct competitor, or from, like, a company that generates documents, like, like, simi- similar category. Uh, uh, so they just, like, you know, understood the space a little bit better and could talk the talk. That would have been the wrong trade-off because it's already so hard to find an exceptional early-stage track record of performance sales rep. If you are sacrificing or making a trade-off on somebody who is, who has senior domain, you're, you're sort of definitionally trading off somewhere else, and that is the wrong trade-off to make. You know, I, I'll... And not to make this about me, but I'll now make it about me. Electronic signature, all-in-one HR, Zenefits was a, a health insurance broker that had HR software, and Brex was credit cards, fintech, bank account. These are radically different types of software. And I think that people who are effective just pick this stuff up pretty quickly. So I'll pause there. Any, any follow-ups before we move on to sourcing?

   5. HSHarry Stebbings16:55

      Yes, I do. I'm the founder. That sounds great. They need to have been early and seen the stage, one of the first few reps, and they need to have an early track of success. Sam, from that description, that sounds like someone of your caliber. You are few and far between. Just let me finish here. You're few and far between, you're very expensive, respectfully, and it was impossible to hire you. I'm just a startup, dude. You're not gonna join me again, having seen what you've seen and having... H- Are we not living in a bit of a dream world having this early track a- of success also trying to get them to an early-stage startup?

   6. SBSam Blond17:35

      I think it's the right question. Um, and it, it's surprisingly the in, like, number of these people is quite high. If we think about, you know, how many, uh, technology startups... Uh, a- and, and by the way, there's one thing that you don't necessarily need to solve for here and that is you shou- you do not need to solve for the logo. Meaning, this person doesn't have, needed to be an early sales rep at a company that ultimately realized a multi-billion dollar valuation. In fact, you know, th- there's, there's logic to the inverse being true where if they were a sales rep at a company that had a product that was harder to sell, if, if your product is easier to sell, th- they can sort of be freed. That, um, that they will, they will be more effective at selling. That said, um, if we think about the number of early-stage startups that hired up to 10 sales reps over the last five years, that's a large number of startups and that's a large number of people. Um, and so, you know, when I joined Brex-... the, the recruiting ground for me was, uh, fertile. Uh, th- there, there were countless AEs that I could, could, um, recruit from my personal network that met, met this criteria. And so y- you'd be surprised at, um, how, how many folks there are. Now, there are also a lot of folks who are less good, um, meaning they weren't at the top of the leaderboard. But if we just multiply the number of startups that have existed over the last three years times the top two or three sales reps, we're in the thousands. There are thousands of

7. 19:13 – 29:28

   Onboarding Sales Reps

   1. SBSam Blond19:13

      these people that exist.

   2. HSHarry Stebbings19:14

      All right. I can buy that. So then there's thousands of these people. It's bigger than we think. Great. What a relief. (laughs) Uh, I was getting worried there. Um, so how do we source them? We get a G sheet out and... What does that look like?

   3. SBSam Blond19:28

      Yeah. Y- so, so maybe... And I'll try and do this, um, throughout our conversation. Here's what I see most folks doing. What I see most folks doing... So Harry, you are an exceptional founder. Um, you were, uh, number one at your class, i- in your class at Stanford i- in computer science and, uh, you, you maybe were like, you know, the, the CTO at a, at a great startup prior to joining. But your background is not sales. Your personal network is not sales. It's engineering, you know. So you got e- e- recruiting your first set of engineers came easy for you. It was just like your, your Stanford classmates that, uh, you were friends with and it was folks that you worked with at, uh, Rippling prior to starting your company. Okay? But now it's time to hire salespeople. You, you, you aren't close with salespeople. This is not your personal network. What most or many folks do is they, they leverage something like an external recruiter. And, you know, they have a recruiter send them, uh, candidates that they look at their resumes and then they interview them and they spend a bunch of time, uh, uh, on interviews with potential sales candidates. And the reality is th- the best... These people that you were talking about, Harry, how many of these people do exist, d- e- exist in the world? Most of them do not go through a third-party recruiter. They want to go somewhere where their reputation precedes them a little bit. And so, um, sourcing by leveraging your personal network is just of the utmost importance. Now, there are a few flavors that this can take shape. The first is you might have been, uh, you know, um, a, a, a successful technical lead at a prior company. Like, go, go potentially recruit from the sales team there where you may know some of the sales folks. So that's your personal network. Of taking Brex as an example, our first couple sales folks before I had joined came from our, our CFO at the time. His name is Michael Tienengbom. He recruited 'em from SoFi. So you can leverage the networks of some of the folks on your team as well that are bringing in, uh, your potential early sales reps. Um, you can leverage your investors. So, uh, Harry, you're an investor. You may know some exceptional AEs that you can help, uh, place at some of your companies certainly refer to potential founders. Um, but this leveraging of your personal network, I, I would not stray from that. And, um, to take it one step further, at Brex, we did not use recruiters, internal or external, to source candidates for the sales organization ever. I hired the first, let's call it five folks, from my personal network after the first two sales reps came from personal networks of people that were already within the company. After I hired those five people, they had personal networks. I'll, I'll be specific. I hired a guy, Brandon Boyle, who just crushed it at Brex. He brought... He came from Gusto. He brought in the number one rep from Gusto as soon as he joined. And so you're, you're just constantly, um, leveraging the, the networks of the existing team, of your investors, and, uh, uh, of the successful folks that you hire, and the probability of success is just so much higher for a number of reasons.

   4. HSHarry Stebbings23:03

      Is a good hire today better than a perfect hire in the future? You know, I'm sure... I'm a founder now and "I, yeah, met, met, met Sam. He's... Yeah. I think he's good and I like him and the co-founder likes him. Yeah. Couple of things off, but should be fine."

   5. SBSam Blond23:21

      There are always sacrifices. Uh, I don't know that there is such thing as the perfect candidate. There are a few things that w- with these early hires that I would not sacrifice on. I referenced a few of them. Um, there's another one that, uh, uh, Jason loves to talk about and that's, would you buy from this person? So I think what you need to do as a founder is you need, you need to sort of decide, uh, what, what are the areas that I'm open to sacrificing and what are the areas that I'm not? Uh, and then solve for the areas that you are not open to sacrifice.

   6. HSHarry Stebbings23:56

      Do you do case studies? Do you test it literally?

   7. SBSam Blond23:59

      Meaning do you have the candidate do a case study?

   8. HSHarry Stebbings24:01

      Yeah. "Sam, sell me Brex or sell me your prior company."

   9. SBSam Blond24:05

      Oh, I think, I think the prior company is a really interesting one. Because I think what's hard about sell me and my company, meaning, you know, le- let's, let's say, uh, uh, sell me 20 VC, right? You're a 20 VC expert and I'm not. So you know how to pitch this product better than anyone in the world and they're almost like destined for failure. But they should be exceptional at pitching their existing product. And so if they can pitch you and, you know, "Yes, I would buy your existing product from this person," that should be an easy exercise for the rep to go through. I like that, Harry.

   10. HSHarry Stebbings24:41

       Yeah. I, I, I think it's important in some ways. Um, so yes. Okay, so we're there. Um, any advice to me on... Uh, I'm, I'm loving kind of this chronology. So we, we've got these two. Um, we wanna make them an offer. Any advice on sales comp, Sam? I've got no idea. I'm, I'm giving these two reps. It's the first time I've hired them. What's the right way to approach sales comp for the first two?

   11. SBSam Blond25:05

       You know, I think for the, for the early ones, I, I think you probably should have a conversation around just, like, "What are your comp expectations?" You, you're probably going in with an idea of what you believe is market rate for the hire that you are making. Let's just say, like, you know, at maturity, you think this sales rep is gonna be able to close something like a million dollars in ARR. We're a mid-market sale, um, you know, and we could, we can afford to pay somebody in this role, let's call it 200K. Uh, you know, we're early stage, so we're gonna give them a bit more equity. We think ballpark is gonna be like 160K total comp. That's, like, you know, where we think it is. Harry, you're the candidate. Um, you know, what are your comp expectations?" "Well, Sam, today, I'm at 180. My company's a little bit bigger. I would, um, you know, I, I would take a little bit of a hit there." And, you know, you go in at, at 160 and you give them a bit more of the equity of the company. But I think, uh, but it's not one-size-fits-all. You don't have an idea based off of how much revenue you think a sales rep can generate at maturity. AE range, 100 to 250 is, is like the AC, uh, is the, um, uh, total comp, uh, for, uh, uh, a sales rep. So wide range there based on a number of factors.

   12. HSHarry Stebbings26:19

       Sold. We got them. We got these two reps, okay? So they, they're joining now. Um, you know onboarding, it just freaking sucks every way you do it, right? And I've never hired reps before in this hypothetical situation. Um, they turn up on day one. What do I do for onboarding, Sam? Like, how do I set them up for success as best I can?

   13. SBSam Blond26:41

       Yeah, this is why the startup experience is so important. Um, hopefully the rep comes in understanding a little bit of what they need to be successful in an environment where there isn't a lot of structure and there is a lot of ambiguity. So, you know, you as a founder can be confident. Here's your computer starting day one. Uh, I'm gonna teach you as much as I know about what has been effective for selling here. But, you know, what, what ideas do you bring to the table for us to generate and to close more revenue? And so, you, you know, hopefully setting them up for success by giving them access to any information that they, uh, need. And then, you, you know, the, the sort of, like, next iteration of this, Harry, is how do we then measure performance and success of this new hire? And, you know, ultimately, it's going to be around, uh, generating revenue, their ability to generate revenue. I think during, you know, 30, 60, 90, you probably do want to have agreed-upon objective measurements of success. Gonna be different for every company, but you wanna be transparent about, here are the things that are important over the first 30 days. Here are the sort of, like, milestones that, uh, we would like you to achieve i- in your first 30 days. Many of them are gonna be objective. Some of them are gonna be subjective and just, you know, you're, you're, uh, as a founder watching them, uh, sell. Is this person, uh, uh, picking this up quickly or not? It's slightly subjective. And then as we mature, there are three things that I look for in terms of measuring the success of a sales hire. This is true for the first hire and this is true for the tenth hire, the 100th hire. The first is performance. Super objective. Uh, sales, you know, it's, it's, uh, how much revenue is this person generating? Where do they stack The next two require no skill and are more subjective. The first is effort. Um, is this person working hard, setting the bar for what hard work looks like? And then the third one is attitude. Is this person reflecting positively on their peers? Are they, uh, you know, coming into the work, b- coming into the office motivated with a smile on their face, uh, positive about the environment? You know, how do they, uh, handle change? Those sorts of things. And if number one doesn't exist, meaning if the performance isn't there, you sort of default to, okay, what is the effort and the attitude like? And if either are lacking, this is either like a, a zero-time or one-time conversation with the person around

8. 29:28 – 33:13

   Measuring Success & Performance

   1. SBSam Blond29:28

      performance.

   2. HSHarry Stebbings29:28

      Can I ask you, sometimes it takes quite a lot of time to ramp, especially in an enterprise sale. The numbers won't be there early on. How do you really... And, like, effort, it's a little bit, it's a little bit hard to tell. And if you're a founder and CEO, uh, you've got other shit to do rather than just mon- monitor Sarah's effort levels, which are pretty subjective other than just kind of looking across the room. Uh, so my question to you is, how do you measure success when the sales cycles are super long, and is effort really that easy to tell?

   3. SBSam Blond30:00

      I think the effort thing depends. Um, you know, I grew up in a world where, uh, people were in the office five days a week. And yes, it was, it was easy to tell who was working hard and who wasn't. And, you know, especially in sales, um, one, there's the, like, when are they getting in and when are they leaving? And then there's also the, you know, "Gosh, this person, I hear them on the phone all the time." Um, and, you, you, you can just sort of, like, see and hear the activ- activity levels, especially in sales. Um, you know, some folks today are remote, and that, that is a new challenge. I think, Harry, though, um, if you make the right hires, there are...... metrics that you should start seeing improve almost immediately, regardless of how long the sales cycles are. Some of those metrics will be things like, um, the number of opportunities that we are working. Uh, Harry started two weeks ago. Harry, he immediately started pounding the phones. He came up with this, like, really creative outbound campaign, and we're, like, I'm joining calls with Harry, uh, with, you know, um, Square. Uh, we've got, we've got a demo with Square today. The CFO that Harry broke into the account and, um, now I'm the founder CEO, this is an important call that I'm joining. Like, high five to Harry for breaking into this account. Square is now in the pipeline. This was a real call. Um, and so even if your, your cycle times are long, there are sort of obvious metrics that should be improving if you have made the right hire. A- a sort of easy one is around opportunities and pipeline that, that you are tracking.

   4. HSHarry Stebbings31:48

      How long does it take to know if you've got someone's shit?

   5. SBSam Blond31:53

      Oh, man. Um...

   6. HSHarry Stebbings31:56

      Like, I think it's, like, a week. I think people are way too nice. I know in a week if someone is good or not.

   7. SBSam Blond32:01

      You know, the, it, it's funny. I, the, the number that was coming to mind for me, it almost doesn't matter how long the cycle is with these early hires in particular. I, I think 30 days, um, and, and Harry, you're, you're probably closer to right with your week. Most of, you know, many folks say a quarter. Many folks say nine days. That, that seems way too long for me.

   8. HSHarry Stebbings32:22

      If you hired me, I'd show up on day one with, like, segmented customer lists, the buyers in each.

   9. SBSam Blond32:28

      For sure.

   10. HSHarry Stebbings32:28

       I would be ready on day one to email them, ready to go with my fucking email. I would have already done Canva marketing collateral that I've done in prep for the day ones. Like, hit the ground r- You know on day one that that's good.

   11. SBSam Blond32:44

       You only get one chance to make a first impression and so, you know, um, it generally doesn't get better, uh, which I think sort of piggybacks off of your comment, Harry. If you're having sort of, like, performance expectation conversations really early on, you know, I, I think that is a, a bit of a red flag. Um, but, uh, uh, you know, not, it, um, it's not one size fits all, once again.

9. 33:13 – 35:10

   Hiring Mistakes

   1. SBSam Blond33:13

   2. HSHarry Stebbings33:13

      Sam, what's your biggest hiring mistakes? Everyone makes mistakes. My mother always tells me I was one. (laughs)

   3. SBSam Blond33:21

      (laughs) Your, your mother has very high expectations 'cause you're crushing it here. Well, okay. Um, I think my biggest hiring mistakes were pretending that concerns that I had in the interview, uh, uh, and hiring process didn't really exist. In sales in particular, uh, you know, it, it is performance based. Um, but it's also, like, the, the team dynamic is so important. Like, this concept of building a winning culture and, and having people that are positive influences on their peers. You cannot have folks that sort of sit around and complain about the product or complain about marketing or whatever the, like, complaint of the day is, because it rubs off on their peers. And before you know it, you have just, like, an unhappy sales floor where one person is negatively impacting the broader team. And I have probably rehired or hired people where, you know, this concern had been flagged, where it's like, "You know, they hit quota, but there, there is some serious baggage, uh, that, that comes along with this person." It's like, "Oh, they hit quota? We need to hire 10 people. Come on. Like, join." And, and so, you know, that's one example but I think it's, it's pretending that things that were concerns in the interview process didn't really exist, because, like, either they were coming from this place or you, you, I, I, um, just pr- again, being sort of blinded and, and then those things oftentimes come to manifest, uh, and bite,

10. 35:10 – 42:13

    Diagnosing Bottlenecks in Growth

    1. SBSam Blond35:10

       bite me.

    2. HSHarry Stebbings35:11

       So we've got, we've got our sales team. They're, they're, they're doing okay. But wait, they're not actually doing okay and there's something that's not working. How do most founders diagnose bottlenecks in growth and how do you advise the right way to diagnose bottlenecks in growth? Now we have the team in place.

    3. SBSam Blond35:31

       You know, I did some consulting between Zenefits and Brex and I talk with founders, uh, as, as part of my role at Founders Fund, uh, my prior role at Founders Fund, regularly. And the conversation almost universally goes something like this. "Harry, we're sitting here in late March. Let's just pretend the quarter ended and, you know, we, we missed our revenue target." And when I ask, "Why did we miss our revenue target?" Um, almost universally the answer is something like, "We had a couple big deals that had those big deals just closed, um, we would have hit our plan and, you know, unfortunately they pushed, uh, and we missed." But, like, you know, I'm sort of diagnosing our problem with we, we didn't close, uh, you know, company A and company B that were in the pipeline. And the reality is that I would say for four out of five startups, maybe more, what they're effectively diagnosing the problem or the bottleneck to growing faster as is conversion rates. And for almost all startups, the bottleneck to growing faster is actually around demand gen.... opportunity creation. If you think about just sort of a simple version of this, if everything else remains constant and you are able to 2X the number of opportunities that you are creating, you have effectively just doubled your sales. And doing the same thing on conversion rates is much more difficult to do, meaning, you know, 2Xing conversion rates is far more difficult than focusing on generating more demand, or focusing on opportunity creation.

    4. HSHarry Stebbings37:27

       Why? Now actually, I, I, I ju- I'm pushing back in a respectful way.

    5. SBSam Blond37:32

       Of course.

    6. HSHarry Stebbings37:32

       You can carve out a much more structured sales process, uh, be more involved as a founder in that sales process. I think actually if you want high quality, great leads, they're hard to come by. Like, 2Xing that, I don't know if that's easier than increasing conversion. And I'd rather increase conversion because then we're not gonna... Once a lead is not converted, h- even harder to get them back a second time. So I'd rather increase conversion than just burn more leads.

    7. SBSam Blond38:01

       What I find is the environment that exists for most tech startups is what I would describe as a lead poor environment, where you look at the calendars of the salespeople. "Harry, you just hired two salespeople." It, you know, we're, we're at this phase of the company where it's now you and two other salespeople, and I pull up the calendars of your two salespeople and they are spending an average of one hour a day customer facing. This is whether it be, you know, new demos that they are taking or a existing pipeline where they're following up with a customer, and they are clinging on to any possible opportunity that exists in the pipeline. And they're salespeople, so they're sort of waiting for more opportunities to come in, um, because, you know, their focus is on closing the deals, and we don't have anybody in marketing, and I'm a founder, I've got all this other stuff going on. And so, you know, if I'm spending one hour a day customer facing as a salesper- person, I'm clinging on to the limited number of deals that I do have, that creates an environment where I am incentivized almost, Harry, to tell you as the founder, you know, "This deal actually has a good chance of closing," even though it doesn't, because I've gotta tell you, I have some form of pipeline. I can't tell you we're gonna close nothing this month. But if I had more opportunities, if my calendar was more full of demos, we would be closing more revenue. And I just believe that demand masks a lot of other potential problems in almost all startups. The bottleneck to growing faster is demand. We are, we are constrained by the number of opportunities that we are creating. We are misdiagnosing this as a conversion rate problem, and our resources and our focus are being mapped to where we are misdiagnosing the bottleneck, which is the middle of the funnel. We have more salespeople than we do people focused on opportunity creation. Our focus is on the deals that are in the middle of the funnel, when all of this resourcing and attention should be on generating new demand, uh, because we will... That is the bottleneck to growing faster.

    8. HSHarry Stebbings40:23

       I think we are horizontal products in a lot of ways. You know, you sold quite horizontal products in the past in terms of to a broad customer base of industries, not just, uh, uh, y- I don't know, the auto industry or the whatever industry we wanna focus on. I think it's, like, packaging is one of the biggest problems, getting it to resonate with customers, verticalized sales playbooks. I find so often people try and be everything to everyone, and then it doesn't hit with anyone. That's one of the biggest problems, I find.

    9. SBSam Blond40:51

       The thing that really differentiated Brex in the early days was the underwriting model, where we used the cash balance to issue credit, versus a personal guarantee from a founder based off of their personal credit, which was the way that all of the credit card companies did before Brex. We actually weren't the first to do that. Divvy, who was a competitor at Brex, um, they started before Brex and they used the same underwriting model. But Divvy sort of approached the market as, "We are going to be a corporate card for any type of business." And Brex launched as the first corporate card for startups.

    10. HSHarry Stebbings41:31

        Mm-hmm.

    11. SBSam Blond41:31

        So we were really explicit in our branding around what we were, we were a corporate card, and who we were for. We were the first corporate card for startups. And because of that, we gained really meaningful market share in this vertical of, uh, technology, this segment of startups, because of the branding association and the focus that we had. We took the innovator's dilemma approach, which was we went after, um, a, a small segment of the market, very differentiated product, gained huge market share, and expanded from there. And so, you know, at least in that example, it was really effective.

11. 42:13 – 46:19

    Importance of AE’s Sourcing Revenue

    1. SBSam Blond42:13

    2. HSHarry Stebbings42:13

       And so I, I totally agree, and I, I remember that so well. It was like wildfire when it was bluntly so proliferated among the startup class, especially NYC as well. It had this unique channel acquisition as well, which I think is so important. And with more specialization, you get higher conversion rates in channels because you're more targeted messaging-wise. So, like, I, I think that's really important. You mentioned about kind of generation. Reps expect things to be handed to them. (laughs) Marketing are not geniuses, uh, not in a disrespectful way but they're not magic. They can't just... Who is responsible for lead generation, and how do you think about that?

    3. SBSam Blond42:53

       Well, certainly in the early days, and I would argue as companies progress as well, I- I- you know, if you only have two AEs, those AEs have to be responsible for generating some of their own demand, um, that often takes form of outbound, but they can come up with, uh, clever ways to generate demand outside of the outbound. But salespeople should absolutely be responsible for cr- controlling their own destiny in a way, generating their own demand that often manifests through outbound. I think this is true on day one, this should be true on day 1,000. I'll tell you a quick story about Brex, um, where I think, you know, it really illustrates the importance of this point. When we were a relatively mature startup, uh, so let's call it $50 to $100 million of annualized revenue, one of the things that we noticed was that the AEs were sourcing far more of their own revenue than their SDR counterparts. Uh, so even though they were full cycle, they were also closing this revenue. So you have an SDR who's spending 100% of their time on outbound and an AE who's spending, let's call it, 50% of their time on the- on outbound, and the AE is sourcing more closed revenue. It shouldn't be that way, Harry, right? But it was. And the reason behind that is because AE's had- uh, their opportunities converted at higher rates and the opportunities that they were generating, uh, generated more revenue. And it's because AE's had this intuition around what a quality opportunity looked like, which companies would spend more on their card, and so they were sourcing higher quality, higher revenue generating opportunities than their SDR counterparts were. Now, of course, we took this information, we made a bunch of changes. We sort of took away the ability of SDRs to decide which accounts to go after. We said, "These are the accounts that you should go after. These are the people you should reach out to in these accounts because we know conversion rates by persona." We also changed the model by which SDRs were compensated. They were originally compensated on opportunity creation, we moved it to revenue. Eventually, SDRs began sourcing more revenue than their AE counterparts. Now, the AE counterparts, they didn't change, they were still sourcing the same amount of revenue, but SDRs caught up. And we get none of these insights, we drive none of these changes if we don't have AEs sourcing their own revenue. Um, so that's just one example of why I think it's important, but ultimately, um, I think that, you know, it's a missed opportunity to not have AEs... and like, they're, uh, if we think about ROI on AE time, number one is closing revenue. There's no higher ROI than an- an AE spending their time closing deals. Number two, sourcing additional revenue. And so if they aren't spending 100% of their time, let's call it 45 hours a week, closing deals, whatever that excess time is going towards, it is less ROI positive than sourcing their own deals, um, so I think they should, uh, be doing so.

12. 46:19 – 52:04

    Outbound Strategies

    1. SBSam Blond46:19

    2. HSHarry Stebbings46:19

       Are we entering a world where SDRs are like, " (exhales) It's a bit old school really, isn't it? Bit- bit of cold outbound, that sounds nice." In a world of content, short form video, creating audiences, creating community, you know, really people are sold before they even enter sales processes now. I think there's a Gartner thing that says like 88% know that they're gonna buy when they enter a sales process. I'm butchering the number, but it's- it's- it's a high number. Like the old SDR, "Sam, I liked your post about, you know, HR integrations. We're a great provider." Is that not gone and we've moved to a world of content now?

    3. SBSam Blond46:58

       It's the right question. Um, I love outbound. I love sales outbound. Uh, and I think, you know, what- what you're describing, Harry, is a form of outbound that I think is not effective, and- and maybe- maybe let's- let's- let's approach it like this, what I see most sale- early sales reps, SDR teams, startups, what I see most folks doing is they purchase, you know, CRM, they purchase, um, Zoom info to get, uh, contact information, they purchase outreach to, uh, have email sequencing, and then they write like a- a, you know, version of the copy that pitches their product a little bit, and then they drop the universe into, uh, seven email sequence outbound cold email. And Harry, these are going, like, we're- we're- we're a 10 person startup, nobody knows who we are. Harry, you are a 22-year-old SDR that just started at- at our 10 person startup, nobody knows who you are. So you're sending an email to, let's use your example, the- the, um, VP of HR at, uh, Brex, 22-year-old SDR, 10 person startup, it's the 12th email that they have received today trying to pitch them on a payroll or whatever product they're pitching them on, and it goes right into the trash. So everyone, most people, sorry, not everyone, most startups are doing outbound wrong. I think the way that startups should be approaching this, first is on who you are targeting, and then how you target them. So who you are targeting, think about the universe in terms of concentric circles.And you wanna start with the sort of, like, closest concentric circle to your business. So Harry, we're still this 10% startup, okay? You, Harry, and you're per- you're the founder. You have a personal network that is a bunch of other founders, so we're gonna start going after companies that are in your personal network. We've also raised, um, a seed round from a number of different investors. We're gonna leverage the networks of our investors. We've got 10 employees. Our engineer, um, th- they were at three companies before they joined, uh, our company. They've got a bunch of connections that they can reach out to at other early stage startups. Let's, let's re- leverage their personal networks. Okay, now we're starting to acquire some customers. Some of these customers are really happy. How can we leverage these customers to generate additional customers? Hey, Harry, you're VP of HR at this company. Do you know anybody else who could leverage our product to realize some of the same value that you are realizing? Because, you know, the HR community is, is sort of tight-knit. So I- I just think the way that we are doing outbounder, who we are targeting, is wrong. Think about the world in terms of concentric circles and, uh, like, closeness to the business. At Brex, we started with personal networks. We moved to investor networks. We moved to YC companies. We moved to former YC companies. We then put billboards up all over San Francisco and we targeted companies that were headquartered in downtown San Francisco that would walk past our billboards. These concentric circles just keep getting further and further out until you get to the point where you have such a brand that you can email the VP of HR. You are no longer a no- nobody company. You are Rippling. And VPs of HR at 250-person tech companies, they know Rippling. And the probability of getting a response to that email is just significantly higher when you don't get there on day one. Okay, you got, you got... It, it's, it's a process. So that's on who you are targeting. Now, um, w- the way that you target them, I think, you know, you really wanna have contrarian, you know, really demand gen efforts, but specifically contrarian outbound efforts. And I've talked about, um, a, a champagne campaign that I did at Brex where we sent founders a bottle of champagne early on, um, and, you know, congratulated them on a recent fundraise. That's differentiated. It r- received a ton of responses. I, I think, you know, um, you just wanna come up with something that is different from what everybody else is doing that stands out that oftentimes can come in the form of, you know, some, some physical delivery, a handwritten note. Uh, you just wanna be different.

13. 52:04 – 54:04

    Scaling Sales Function with ACVs

    1. SBSam Blond52:04

    2. HSHarry Stebbings52:04

       I totally agree with you in terms of just wanting to be different. You know what worries me a lot of the time that I see now is that, like, a lot of companies I'm in, they'll have this, like, quite intense SDR, AE sales function, they'll have CS functions, and the ACVs are 10K. And it's like, "Ugh." And they're like, "Ah, but it'll scale. It'll scale, Sam." It rarely scales. And so we're layering on this, like, enterprise cost base for this very SMB PLG revenue base, which has really been born out of the PLG motion, and I'm just seeing a generation of companies have shit economics because of this. Do you see it too, and am I just getting jaded and old, Sam?

    3. SBSam Blond52:49

       I think the approach to, uh, acquiring customers and how much you can spend on that, it needs to be influenced by your ACVs.

    4. HSHarry Stebbings52:59

       And your LTVs. Like, if you are Brex, the, the LTV is much longer than I would imagine a people management solution. Maybe not, but other solutions which are just generally shorter.

    5. SBSam Blond53:10

       You know, within different businesses, uh, you, you have different segments of customers and you can approach acquiring, uh, one customer very differently than a significantly larger customer that generates more revenue. But what you can't do is scale that down. And so I use this, this example of we sent bottles of champagne. It was 40 bucks a bottle. Um, it, you know, it's expensive. Like, after delivery, maybe we're, we're upwards of 60 bucks. You can't spend that, um, y- you know, on customers that generate $100 a month in revenue for your business. Um, and so if, if you think about the world, um, uh, or your company in terms of multiple businesses based off of the segments, uh, y- you, you just target customers differently depending on how much revenue they're gonna be able to generate. It, it's, it's certainly not one size

14. 54:04 – 56:30

    The Role of AI in Outbound

    1. SBSam Blond54:04

       fits all.

    2. HSHarry Stebbings54:04

       I, I, that's not... I totally agree with you there. One thing I worry about with outbound though, Sam, is you mentioned like, oh, people get 10 emails a day and da da da. I think they're about to get 100 emails a day and I think they're about to get 100 text messages a day and 50 WhatsApps. I see so many WhatsApp sales tools now as well. AI is gonna m- massively increase the amount of outbound sent. Will we see the commoditization of outbound with the rise of AI?

    3. SBSam Blond54:34

       I think that, that what I'm seeing is the tools today are making, uh, the, the, the category of outbound or the function of SDR or AE more effective in the same way that something like... Or, or they, they're streamlining a lot of manual process the same way that something like, you know, Outreach did a number of years ago. Harry, when I joined a-... EchoSign as an SDR. Um, Marketo existed, but I was manually sending all of these emails one at a time and I'd like copy and paste it, and then I'd like put it in somebody's name, and then I'd hit send. Um, but it was a very manual process. And along comes Outreach and I'm able to send like 100 at a time and that allowed me to, you know, be far more efficient as an SDR, but it didn't get rid of the function of SDR. In fact, like, maybe there are more SDRs in a world where Outreach exists than there were before. And, you know, I think we're continuing down this path of automated... You know, now we can personalize emails. The, the AI is gonna write me an email that knows things about Harry that I wouldn't even be able to find out if I spent a bunch of time researching it. So, you know, the AI is gonna write me copy as well. I think what, at least today, AI does not accomplish that humans still do, is this, this, um, aspect of being creative. You know, the, the AI isn't going to tell you, "Here is your contrarian or unconventional outbound sales campaign that is different from what everybody else is doing." And, you know, that's, that's generally gonna come from a, a human. Um, and you know, there is a process that I go through to determine these things, if it's helpful.

    4. NANarrator56:29

       Yeah. I'd love to hear

15. 56:30 – 1:08:46

    The Importance of Human Creativity

    1. NANarrator56:30

       it.

    2. SBSam Blond56:30

       For each different channel, I love to do, um, just a whiteboard session. And, you know, outbound is one example. So let's take the outbound example, but this applies to, to so much more. And then I'll give specific examples of, uh, outputs that, that this process has produced. So with outbound, we wanna be different. You know, at, at a 10% startup, Harry, you're the founder, you're gonna be in this meeting, the two sales reps are gonna be in this meeting, and then maybe we have like somebody in growth, that person's gonna be in this meeting. So you've got four people in this meeting. We are going to do... It's, um, at eight o'clock on Monday evening meeting. It's the end of the day, we're gonna do a whiteboard session, this meeting can go until midnight. There's no end in sight because it's the last meeting of the day. Okay, everybody come in with your top three ideas on what you, you suggest we do that is different from what everybody else is doing in outbound, okay? We go around the room, "Sam, who are, what are your top three ideas?" "Okay, Harry, what are your top three ideas?" We go to each person, everybody comes with three like contrarian or different ideas on how to do outbound. We discuss them all, we select the ones that we think are the best, and we go out and we try them. And you do this with outbound, you do this with events. I remember the first time we sponsored, uh, SaaStr at, um, Brex. We have late-night whiteboard session, we get everybody that, that, uh, we think is, you know, contributing to this meeting in a room. Everybody come up with three ideas, what are the things you want to do differently? We, we don't just show up to SaaStr with a $100,000 booth and some pens to give away to people. We show up, we had TaskRabbits outside of the event in Brex T-shirts handing out Brexfast burritos to every single person that walked in the venue. So the first experience that they have at SaaStr is they get a Brex burrito on, when they walk in. Four bucks a person, so like not, not expensive. They walk in, you know, our booth, we have a magician that is using like, you know, Brex cards to do tricks, um, that, uh, we're giving away $25 gift cards, he's incorporating the, uh, uh, uh, Brex pitch into his magic tricks. Everybody is around our booth for these $25 gift cards. We had all the billboards that were around the SaaStr conference. We bought them at Papermill, so on the walk from the hotel to the conference, you're seeing Brex billboards. When you check into your hotel, your key is a Brex credit card. When, when the hotel gives you your key, it's a Bre- you use your key like four times a day to go in and out of your room and your-

    3. NANarrator59:16

       How do you do that? You do a partnership with The Four Seasons? Like, w- how is my room key?

    4. SBSam Blond59:21

       You pay for the sponsorship. Um, and we, you know, we actually brought this idea to SaaStr and SaaStr was like, "That's free money for us." And we didn't even have this sponsorship before. Yes, we, we, we have these room blocks. We can tell the hotel, like, "Use these key cards." We ordered the key cards.

    5. NANarrator59:36

       That's smart. I like that. The key cards is really good.

    6. SBSam Blond59:39

       And none of this stuff... And, and again, you do this with every channel. And actually, I'll give you one more example because I think, you know, Harry, you seem to like the, uh, like, like outlets of some of this stuff. But the way you get there is late-night whiteboard session, we're sponsoring SaaStr, everybody come with your top three ideas of things that we can do to stand out at the conference. We're doing outbound, everybody come with your top three ideas of things that we can do differently than everybody else for outbound. I'll give you one more. Paid advertising. Actually, there's two outfits. So paid advertising, everybody just pays LinkedIn and Google and Twitter and they pay them a bunch of money to like service some ads. Okay. Brex, we went offline. So everybody's doing online advertising, we put billboards all over San Francisco, we did it offline, very contrarian. We had a, a concentrated target market geographically. My favorite one, though, that was super effective, what Rippling has done, they have a campaign right now where instead of paying LinkedIn money to surface ads on LinkedIn, they, uh, they are, uh... When new employees onboard to their customers, they onboard through Rippling. And at the end of their onboarding pro- you know, it's W4, I9, payroll, all that stuff, benefits. At the end of the onboarding process, they do an NPS survey. How would you rate your, rate your experience with Rippling? The folks that say nine or 10...They send them an email that says, "If you post on LinkedIn about your onboarding experience with Rippling, we will give you..." I don't know if it's 25 or 50. 25 or $50 Visa gift card, um, just #rippling, #sponsored, something like that. And so you have thousands of posts on LinkedIn that are sort of organic, where a new hire at a company is saying, "Just joined Company X, onboarded through Rippling, awesome onboarding experience, uh, you know, #rippling, #sponsored." In all of these posts, they get tons of engagement because you see when somebody joins a new, a new company, everybody likes it. It's like, you know, "I joined this new company." It's an announcement. Everybody likes it. Congratulations on joining the new company. And they're paying 50 bucks each time somebody does one of these with hundreds of likes in some instances because they joined a new company. How much more effective is that $50 than paying LinkedIn $50 to service an ad that says, "Rippling all-in-one HR and IT"?

    7. HSHarry Stebbings1:02:14

       I, I totally agree with you there, and it's like, that, th- we, we both know brand-building. That "I'm moving" is one of the most high-engagement valuable posts you will ever do. The "I'm moving," "new fund," "big round" is, are the ones that get it. Everything in between is nice, but it's activity. Those are your needle movers. And so you're getting it for 50 bucks. So I, I totally agree with you there. Um, I've got to ask, what was the most successful paid campaign you did, and what was the, "Oh, my God, we just fucked up" on that one?

    8. SBSam Blond1:02:51

       Okay, so, so the most successful campaign, and we'll now be Brex-specific, the most successful we cam- campaign we did at Brex was the billboards. And I think it's the type of thing where, you know, our mind share, eh, within our target buyer, went from zero. When, when Brex launched in 2018, when I joined Brex, we didn't have a website. I went to the website and it said, "Coming soon." We had no PR. We didn't announce any of our funding rounds. We were in stealth. And so, so it was almost impossible for, for our target market to know who Brex was. So, you know, market mind share, uh, of Brex was, like, near zero. And when we launched, we did a bunch of things, including announcing the fundraising that we had done historically. Of course, we launched a marketing site. But the very day that we launched and GA'd the product, we put billboards up all over San Francisco. And I think the campaign cost something like $300,000 over three months. But we were, we were everywhere. And that just made everything easier for us. You know, we talked about outbounding. I can't tell you the number of, eh, it, because it was in the hundreds, the number of responses to our outbound emails that were, "I see your billboards everywhere." And they, they just, like, they probably don't respond to the email in the first place if they don't see our billboards everywhere. So one, customer acquisition became so much easier because of the brand awareness from that campaign, but where it was bigger than that, like, uh, the in- uh, uh, fundraising became easier because of that cam- We, we sort of became famous because of this billboard campaign where we were all over San Francisco, and so for, you know, $300,000, it was really effective. I understand that for many tech startups, they can't spend $300,000 on a billboard campaign at an early stage. We were well-funded at the time, which, uh, not, not everyone is.

    9. HSHarry Stebbings1:05:10

       Okay, so we have that as the best. What was the, "Oh my God, I can't believe we did that"?

    10. SBSam Blond1:05:17

        Brex is a corporate card, a credit card, and if you think about, you know, American Express was our biggest competitor, uh, when we first launched. We were mostly taking market share from American Express. Folks had used their business or corporate card, and American Express is really famous for airport lounges. You know, they've got these, like, Centurion Lounges, uh, at a bunch of airports. And around the same time, Capital One was launching these, like, Capital One Cafés, and we decided at a very early stage, we were less than 100 employees, we decided that we were going to open a restaurant and lounge. And so we opened a, uh, uh, in South Park, in San Francisco, we opened a Brex lounge on top of, uh, South Park Café, which was a restaurant. And, Harry, running a restaurant is hard. Uh, and it's also expensive, and it, it is distracting, and, you know, in hindsight, that was a big mistake. We should have focused on, uh, what was working, building a credit card company, uh, using our dollars to acquire things like customers and not, you know, remodeling a hundred-year-old, uh, restaurant that was in dire need of, uh, a, a remodel.

    11. HSHarry Stebbings1:06:58

        How much did it cost?

    12. SBSam Blond1:07:00

        Oh, I, I don't know the exact number. All-in, you know, look, I think there's, there's two costs. There's the hard costs...... which, uh, hundreds of thousands, if not low millions, of dollars, you know, when all was said and done, in terms of, uh, remodeling the restaurant, the rent, the, uh, a- and just everything that goes into it. But, Harry, it's, it's the opportunity cost that was so much higher. It is hard to run a restaurant. It takes resources from whoever we put in charge of running the restaurant. They have to hire people, they have to manage those people. Um, it was, uh, uh, that was the biggest mistake that we made at, at Brex.

    13. HSHarry Stebbings1:07:41

        Yeah, that was a shit idea.

    14. SBSam Blond1:07:43

        (laughs)

    15. HSHarry Stebbings1:07:43

        Like that, that was a-

    16. SBSam Blond1:07:45

        You

    17. NANarrator1:07:45

        Did you-

    18. HSHarry Stebbings1:07:45

        ... world-class shit idea.

    19. SBSam Blond1:07:47

        Uh, uh, if you were in, if you were in some of the exec meetings where we discussed it, you might have been like, "This is gonna be great." Um, but it wasn't.

    20. HSHarry Stebbings1:07:54

        No, no. No, no, because it's not, it's like, it's just in South Park. Like, it's not like at AMEX lounges around the world with a network effect and a brand effect. I mean, like, this feels like if I was the founder, I'd do it just to have a good place to have lunch.

    21. SBSam Blond1:08:10

        Here's maybe the glasses half full way of thinking about this, is something like not 100% of your really creative or crazy ideas are going to land. And I think it's better to have tried than not tried at all. Something like that. Um, but, uh, you know, so maybe even, like, celebrate the failures in a way.

    22. HSHarry Stebbings1:08:33

        If you think about the contrarian winnings, I totally agree with you, and I would way rather fucking try and have some out there stuff that fails than doesn't. I think you just want to cap the losses, hopefully in the not millions. Um,

16. 1:08:46 – 1:15:56

    Quick-Fire Round

    1. HSHarry Stebbings1:08:46

       I want to move into a quick fire, Sam. So I'm gonna pepper you with questions, 60 seconds per one. Does that sound okay?

    2. SBSam Blond1:08:53

       I love it.

    3. HSHarry Stebbings1:08:54

       Okay. Discounting. Do we ever do it? Do we not do it? What, what's the advice?

    4. SBSam Blond1:08:59

       Yes, with qualifications. You know, early stage startup, if I can describe the environment that I prefer to be in, it's something like, we are perceived as the premium product both because of the, uh, quality of our product but also the price point with which we sell the better product. And I have the ability to discount that product to accelerate deal cycles. So much of sales is psychology. And if you're a buyer, you, y- the, the feeling of getting a good deal drives behavior. You know, there's a saying, Harry, um, "Time kills all deals," especially in the early days. If providing a discount does things like accelerates deal cycles, prevents people from looking at competitors, and allows you to move on to another opportunity, um, I do like leveraging it in certain instances. I think where people make mistakes, and salespeople in particular make mistakes, is like just defaulting to discounting. Um, this is something that happens very late in a deal, and it happens with a very clear trade-off, which is driving urgency to close.

    5. HSHarry Stebbings1:10:21

       I, I, I totally agree with you there. What sales tactic has died a death? What's no more?

    6. SBSam Blond1:10:27

       There are two. We talked about one. Uh, this spraying and praying of emails, especially at an early stage, uh, I think, um, is, uh, uh, something of the past. The second thing that comes to mind is people are going to start meeting their customers in person again. You know, pre-2020, a lot of customer interactions happened in person. And then 2020 hit, people went remote, and I think, you know, we have not returned to an environment where we're meeting our customers in person, we're meeting our prospects in person. And I think that today if you're doing that, it's a real competitive advantage. But I think forward-looking, this idea that we never are going to meet our customers in person, that, i- we're just gonna return to the norm here. Uh, we measured conversion rates at Brex. When we met a customer in person, we had 3X the likelihood of closing that deal than if we didn't. And so like the days of working from home, doing Zooms only to meet with customers, not meeting customers and developing personal relationships those days, I, I think are going to be a thing of the past, if not already.

    7. HSHarry Stebbings1:11:41

       Do you buy remote sales teams?

    8. SBSam Blond1:11:43

       If you are a mature business and you've gone remote, think it's, that's, that's a tough, tough to put that back in the bottle. The genie's out. I think if you are starting a business today, I am very biased towards building in person, uh, both the, i- i- you know, the entire company, but also the, the sales organization.

    9. HSHarry Stebbings1:12:08

       I totally agree with you. I, I, I fund, uh, in-person companies. What would you most like to change about the world of sales moving forwards?

    10. SBSam Blond1:12:16

        My experience with many salespeople today, and, you know, we've talked a little bit about this remote environment that I think has had influence, but I think today's salespeople have gotten a little bit lazy. And I think, um, they and we, because I consider myself, you know, part of this community, couple things have happened. One, we have become overly dependent on marketing, SDR, anybody, to source our own needs. We, we are, we are consumers of, uh, demand. And if we're not well-fed, then you can't expect us to close revenue. So that's, I think, one, one, like, trend that I believe needs to change. And the second one, it, it, it is around effort.Um, and especially with remote companies. And I think that this is true with sales and it's likely true beyond sales where, you know, H- Harry, when I joined Brex in 2018 and we did this podcast, startups were really fucking hard. And my first day at Brex, I had a meeting that was at 8:00 AM and I had a meeting that was our exec t- our weekly exec team meeting, and it started at 8:00 PM and didn't end until midnight and I walked home from the office after midnight and I was in meetings from 8:00 AM until midnight. Same thing was true at Zenefits. It's, it's just, it... And look, I was an executive employee there, but, uh, y- you know, I think, um, uh, all of the people at the company were working that hard and it required it. And I think today many salespeople in a remote environment are waiting for leads to be placed on their calendar and working something like a 30-hour work week. It just doesn't really work, especially for early stage startups. Like, if, if you want to separate and be successful, it just requires a lot of hard work and, and no entitlement around, you know, getting leads placed a warm spoon fed leads on our calendar.

    11. HSHarry Stebbings1:14:42

        That's the greatest opportunity of all to me, for young people, because I sound so old saying young, but like, yeah. I've been doing this 10 years and a lot of people coming out of university ask me, "What do you advise?" I always say it's so easy to be different because everyone else is so mediocre. If I actually just do those little things to you, Sam, I write that thank you email to you post the first day, highlighting the couple of things that I thought were interesting from that first day that maybe we could do better, you're like, "Hmm. Harry's, Harry's good. Good start. Perceptive." Little things that don't take much, really don't take much, but it's so easy to be great because everyone's quite mediocre, I think.

    12. SBSam Blond1:15:22

        I think it's, um, really insightful and smart. Um, and there are so many of these things, you know, you talked about, uh, they, they just apply beyond, uh, what we're, what we're describing right here, but like the little things can go a long way.

    13. HSHarry Stebbings1:15:34

        Sam, I've loved this. Thank you so much for putting up with my sometimes impassioned rants and opinions. Uh, you've been fantastic and I hope we don't have to wait another six years to do this again.

    14. SBSam Blond1:15:45

        Harry, I, I appreciate the invite so much. I've had a blast as I always do. And, uh, let's hang out in person. I'll be in London early June and, uh, I expect to see you and, and spend some time together then.

Episode duration: 1:15:57