Founder-led sales | Pete Kazanjy (Founding Sales, Atrium)

1. 0:00 – 5:05

   How Pete met Lenny

   1. PKPete Kazanjy0:00

      The, the thing that I just like to encourage founders and, and product managers, what have you, is just don't be afraid of sales. There's a lot of people out there who, like, who would love to tell you a story that it's, you know, it's magical or like, "Oh, you gotta be a born seller," things like that, and it's really not, right? Like, those people are just talking their, their book, if you will, and so just, like, getting good at, at those behaviors is gonna, you know, it's gonna benefit you in a myriad of ways.

   2. LRLenny Rachitsky0:23

      (instrumental music) Welcome to Lenny's Podcast. I'm Lenny and my goal here is to help you get better at the craft of building and growing products. Today my guest is Pete Casangie. Pete is the author of my single favorite book on sales called Founding Sales, which I point every B2B founder to. He also runs a huge community of salespeople called Modern Sales Pros. He's also the CEO and founder of Atrium, which is a SaaS product that helps you make your sales team more efficient through analytics and data. In our conversation we focus on three things. One, why founders should be doing sales themselves for a long time before hiring your first salesperson and also when it's time to hire that first salesperson. We get into how to hire for your first salesperson, what to look for in her profile, and the most common mistakes people make. And finally, we cover a bunch of tactical tips for getting better at sales. Pete didn't come from a sales background and he learned everything by just doing it, learning, researching and repeating. I know that you'll learn a ton from this conversation. With that, I bring you Pete Casangie. This episode is brought to you by Vanta, helping you streamline your security compliance to accelerate growth. If your business stores any data in the cloud, then you've likely been asked or you're gonna be asked about your SOC 2 compliance. SOC 2 is a way to prove your company's taking proper security measures to protect customer data and builds trust with customers and partners, especially those with serious security requirements. Also, if you wanna sell to the enterprise, proving security is essential. SOC 2 can either open the door for bigger and better deals or it can put your business on hold. If you don't have a SOC 2, there's a good chance you won't even get a seat at the table. But getting a SOC 2 report can be a huge burden, especially for startups. It's time-consuming, tedious and expensive. Enter Vanta. Over 3,000 fast-growing companies use Vanta to automate up to 90% of the work involved with SOC 2. Vanta can get you ready for security audits in weeks instead of months, less than a third of the time that it usually takes. For a limited time, Lenny's Podcast listeners get $1,000 off Vanta. Just go to vanta.com/lenny. That's V-A-N-T-A dot com slash lenny to learn more and to claim your discount. Get started today. Hey, Ashley, head of marketing at Flatfile. How many B2B SaaS companies would you estimate need to import CSV files from their customers?

   3. NANarrator2:53

      At least 40%.

   4. LRLenny Rachitsky2:55

      And how many of them screw that up, and what happens when they do?

   5. NANarrator2:58

      Well, based on our data, about a third of people will consider switching to another company after just one bad experience during onboarding. So if your CSV importer doesn't work right, which is super common considering customer files are chock full of unexpected data and formatting, they'll leave.

   6. LRLenny Rachitsky3:17

      I am zero percent surprised to hear that. I've consistently seen that improving onboarding is one of the highest leverage opportunities for both sign-up conversion and increasing long-term retention. Getting people to your aha moment more quickly and reliably is so incredibly important.

   7. NANarrator3:32

      Totally. It's incredible to see how our customers like Square, Spotify and Zuora are able to grow their businesses on top of Flatfile. It's because flawless data onboarding acts like a catalyst to get them and their customers where they need to go faster.

   8. LRLenny Rachitsky3:49

      If you'd like to learn more or get started, check out Flatfile at flatfile.com/lenny. Pete, welcome to the podcast.

   9. PKPete Kazanjy4:00

      Hey, Lenny. Super awesome to see you.

   10. LRLenny Rachitsky4:03

       Even more awesome on my part. Ever since I launched this podcast, I have always wanted to have you on it. We're finally here. We've been online buddies for a few years now, ever since I discovered your book on founding sales, which we're gonna talk about, and it's just been a lot of fun knowing you, so thank you again for being here.

   11. PKPete Kazanjy4:20

       The quick story was Lenny had shipped his, um, different genres of marketplaces and how to, like, start the liquidity and growth and whatever, and I was obsessed with it, and then somehow I ran into you at Brianne Kimball's SaaS School and I was like after I s- I, I gave a presentation on founder led selling and there was like a scrum of people around me and I was talking about, like, amazing writers and amazing content online and I referenced uh, the, this series and, and then you raised your hand. You were like, "That, that was me." And I was like, "What? You're amazing!" And then we got beers and like, you know, and, and now, now like happily ever after.

   12. LRLenny Rachitsky4:53

       Look at us now.

   13. PKPete Kazanjy4:54

       (laughs)

   14. LRLenny Rachitsky4:55

       And then you encouraged me to make a book out of that post, which I have not yet done. Maybe one day.

   15. PKPete Kazanjy5:00

       Eventually.

   16. LRLenny Rachitsky5:00

       Eventually. So we're gonna be talking a lot about sales and a lot of the stuff that you cover in your book.

2. 5:05 – 7:20

   Pete’s background

   1. LRLenny Rachitsky5:05

      Before we get into it, could you just take a minute to share a little bit about your background and some of the wonderful things you've done to kind of give folks a sense of your experience in the sales world?

   2. PKPete Kazanjy5:14

      I think probably the most important thing to characterize for folks is that I don't actually have a background in sales, like originally, which is where most sales leaders and, and sellers come from a, you know, they, they graduate from school, b- or BDR, become an AE, AE manager or BDR manager and then go on to sales leadership. My background's actually in product marketing and product management. I started my tech career at VMware back in the day, uh,... tons of, like, amazing, like, fun VMware diaspora. And then I started a software company called TalentBin. It was a recruiting software company in, um, jeez louise, 2009. And, um, just like we quickly realized that like, man, this software, like this B2B software stuff, like, doesn't sell itself, like, irrespective of what, maybe what people say (laughs) on the internet, at least back then. And so I had to be our first seller, our, you know, our first sales manager, our first sales leader and that's kinda like where I learned how to do sales, and also just kinda like realized like, man, this isn't, this isn't rocket surgery, um, like anyone can can learn this. Like, if I can learn this, like, other people can learn this even though there's, like, not documentation on it. And so the software company was, uh, eventually acquired by Monster Worldwide in 2014 and then I wrote, I wrote a book on, on sales f- for founders and other kind of first time sellers. It's called Founding Sales. Mainly it was like the book that I wished I had. (laughs) Right? So rather than like, you know, having to learn (laughs) via narrative from, uh, you know, the rest of the first round capital portfolio and what have you. And then subsequent to that I started the, uh, what became the nation's largest sales operations leadership community. It's called Modern Sales Pros. It's 30,000 sales operations, sales leaders, et cetera. And then started a new software company called Atrium that makes data-driven sales management software and, and then here I am. (laughs) So I think a little bit about sales it turns out. Modern sales, right? Not, not, not that old sales. Modern sales.

   3. LRLenny Rachitsky6:59

      Ooh, I'm curious to hear what that is, but before I ask you that question, I just wanted to mention the book, your book, Founding Sales, is like the book I give every founder that is trying to figure out sales. And every time I give it to them or point them to even your site that has all for free, they're always just like, "Holy shit, this is exactly what I needed." So, we're gonna be covering a lot of that stuff in our little chat.

3. 7:20 – 9:17

   Modern sales vs. old-school sales

   1. LRLenny Rachitsky7:20

   2. PKPete Kazanjy7:20

      Rad.

   3. LRLenny Rachitsky7:20

      Can you actually just briefly talk about what is modern sales versus what you called traditional sales or old school sales?

   4. PKPete Kazanjy7:25

      Oh, I just think that like, you know, there's a little bit of like a mindset change. It's kind of a, it's a little bit related to some of the reasons why founders and kinda other folks maybe have like this perception of sales of being like, "Ew, sales, ugh." And it's really because like people are y- like, you know, their only experience with sales is like Glengarry Glen Ross or like, you know, movies with, you know, sleazy used car salesman and stuff like that. Whereas the way to kinda think about like what sellers are is they're kind of like the, the microeconomic agents in the market that bring supply to demand rather than waiting for demand to find supply. Like, they, they have supply in their back pocket and they, they run around trying to find people who ought to have the demand. Maybe they have the demand right now and maybe they don't realize that they have the demand and then they like elucidate to them why they ought to have the demand. So like A, that process is very important from a technology deployment standpoint, and also B, it's like very measurable, especially in a modern environment where like, you know, um, with modern CRMs and also kind of like all the digital activity that we do, email, calendar, phone, Zoom, et cetera, like all this information is now being recorded such that you can then like measure, manage, and improve behavior. So very similar to how like back in the day you'd do product analytics by like licking your finger and sticking it in the wind and then like, then Mixpanels showed up, then Amplitudes showed up, then, you know, so on and so forth, and the same is kind of the tr- case in, in sales as well. And so like modern sales is a more thoughtful, operational, rigorous, analytical kind of bent. It, like it's been around for a while. It's kinda like one of those things where like the future is here. It's just like wasn't widely, widely distributed. But, uh, but now it's like being much more, you know, much more distributed and much more, like, embraced. Kind of like the, you know, the pre-Moneyball moment in, uh, you know, in s- in sports and, and baseball to kind of the post-Moneyball moment. We're now kind of like just flipping over there. So that's h- kind of the delta.

4. 9:17 – 14:58

   What is founder-led sales, and why is it so important?

   1. PKPete Kazanjy9:17

   2. LRLenny Rachitsky9:17

      Awesome. I definitely wanna talk about ways to get better at sales and like things you've learned about just how to improve at sales, but to set a little bit foundation for that conversation, I wanna talk about founder-led sales. You touched on this topic. Your book is basically named after this concept of founder-led sales. Can you talk about what that is, why it's so important, and maybe why founders often get this wrong?

   3. PKPete Kazanjy9:37

      Uh, the way I kinda think about Founding Sales, the b- the book Founding Sales is it's kind of like the, um... I, I like to think of it as like the sequel to Eric Ries' like The Lean Startup or like Steve Blank's, um, Four Steps to the Epiphany or like Startup Owner's Manual or whatever, where if you think about the stages of, um, you know, that like... And this is all B2B, right? If you think about the stages that a, a product goes through, it's one, you gotta like know what problem you're solving, right, and validate that, and it's gotta be real (laughs) . It can't be like, "Oh, well, I thought I had this problem." Gotta be validated. And that's like customer development, that's customer research, right? And that's more of like a product management function. And then there's, um, you know, building the minimum feature set in order to prove that like maybe technology can fit to this, this problem and like solve it. Like, and that's how like we create t- create value as technologists is like piecing together, you know, technology and code or like bits and atoms and, and what have you in order to solve a problem that people have. But then the next step is like, okay, cool, now I gotta get someone to pay for this. And I gotta do that in a reliable fashion and I gotta do it in a scalable fashion. And so like there's kind of like a little bit of a loop there, right? It's not like, all right, the product's done. Throw it over the wall. Have fun, kids. It's more like, uh, it's a loop, right, where like the minimum, like the minimum viable version of your product is probably gonna suck, right? Y- And then in order to get to the minimum valuable step, like you gotta be interfacing with a lot of customers, with a lot of, you know... And that, and that's like, that's a sales behavior, right? Like, getting in front of people and being like, "Hey, I think you probably have this problem if you look like these other folks right here." And the point is is that like you can't outsource that behavior, right? The founder's gotta do that stuff. And a lot of people kinda ask me that question. It's like, "Well, uh, I, I suck at sales," or like, "I'm afraid to talk to people," or, you know, v- like, "Interfacing with non-friendly parties is like, makes me uncomfortable." And the way to kinda think about it is like, it's, um... I forget who the, the person was who said, "Startups versus incumbents is a race between, like, can innovation get to distribution before distribution can get to innovation?" And so this is a kind of related concept where as a founder it's gonna be way easier for you to get good or like minimally viable good at selling by having, like, interactions with-... like, non-friendly parties and like, you know, having commercial conversations and asking for money in exchange for their, in exchange for the value you deliver. It's gonna be easier for you to do that than it is for some third party to become as expert at the subject matter that you're tackling that you are. Because as a founder, early on, like use Atrium as an example. We make data-driven sales management software which, it, it exists to help sales managers and teams use metrics and data to improve the performance of their reps. It, I mean the way they kinda think about it is kinda like Amplitude-y, kinda data doggy Amplitude-y but like for your, your sales reps. I'm, I'm probably the, (laughs) the, the expert in, in sales like analytics in the world, right? And so like back in 2016 and 2017 when we were doing this, if I had like, you know, put aside the fact that like I already know how to do minimal viable selling, if I had tried to get somebody else expert at that in order for them to go out and do that in the market, like that would have been not good, right? And then this is why Steve Blank always talks about like startups can't get through, can't get to scale without firing their first VP of sales. It's oftentimes because they skip that step and so the founder's like, "Hey man, I'm gonna like pour a little bit of sales on this, hire some, you know, sales leader or what have you, or some sorta seller and outsource this," and you really just can't do that. Not for the first like couple dozen customers. It's just not tenable. You're like, you lose that feedback loop, you lose the learnings of like whether or not your message fits the market, all that sort of stuff. Like you're playing a game of telephone with that, with a sell- like a third party seller versus you and like you just wanna keep that in one brain to start. Then package it and then when, when you have a, a, a repeatable like while loop, right, like a selling while loop, then package it and hand it to someone else. So that's kinda like my diatribe on like why founders have to do this.

   4. LRLenny Rachitsky13:35

      I was gonna try to summarize the reasons that you should be doing this and it sounds like there's so many. One is-

   5. PKPete Kazanjy13:41

      (laughs)

   6. LRLenny Rachitsky13:41

      ... figure out what you should actually be building. That's a reason founder should be selling. Two is learn how to position and s- pitch and sell.

   7. PKPete Kazanjy13:47

      Yeah.

   8. LRLenny Rachitsky13:47

      Three is figure out what you could teach your salesperson when you hire them. Is that kind of the summary of why you should s- be selling as a founder for a while?

   9. PKPete Kazanjy13:55

      Yeah, for su- I mean like one, it's gonna help you with your product development because you're not gonna have that abstracted, for sure. Two, it's gonna hel- like you're gonna be the person who's gonna figure out how to talk about it in an effective way. And then three, it's gonna make it such that you can package that up such that other human, 'cause like that's the way that B2B startups scale is like it's not like WhatsApp or, or like t- you know Twitter or like, uh, Airbnb or whatever where you have like this kind of like scalability by a marketing. Um, the way that, uh, B- B2B organizations scale primarily is by adding more salespeople who then have customer-facing meetings with prospects, and then you cap out with like the number of meeting, eh, the number of hours that are in the week. Like there's only 40 or 50 hours in the week-

   10. LRLenny Rachitsky14:38

       Mm-hmm.

   11. PKPete Kazanjy14:38

       ... especially if, like as a seller, um, because you interface with other people during business hours. And so the way that you scale up is by just adding more salespeople, right? And so that's why packaging that up is really important because then you're gonna shove it into the brains of, you know, two more salespeople. And then once they're successful, you're gonna go to four, and then once they're successful, you're gonna go to eight, and then

5. 14:58 – 18:20

   When to hire your first salesperson

   1. PKPete Kazanjy14:58

      once they're successful, you're gonna go to 16.

   2. LRLenny Rachitsky15:00

      You talk about this while loop concept, which I love. What are signs that it's time to hire your first salesperson? It's kind of like-

   3. PKPete Kazanjy15:07

      Right. (laughs)

   4. LRLenny Rachitsky15:07

      ... begs the question, when do I do this?

   5. PKPete Kazanjy15:09

      Yeah. I'm not a software engineer but like I like to use technical metaphors with technical audiences when I'm, because I think it's like helpful. And so it's kind of like when it runs on your local, right, now it's time to like see if it reproduces over here, right? So if it reliably runs on your local and it doesn't like error out, (laughs) right, um, and so go- so then what would be the definition of like not erroring out look like? And, and so generally speaking, it's like e- it kinda is t- contingent on your, on your sales motion, but it's gonna be like you know that you can reliably at like a, at a pretty okay win rate, so like maybe 15% or 20% or 25% turn first meetings into eventual customers, right, and like do that in a reliable fashion. It's not like, you know, I, I engage 10 arms length parties and I got two customers closed. It's like, "Hey, that's great. G- that's good start." Do that five ti- like 5X that. (laughs) 10X that. Right? So, you know, take 50 at-bats, take 100 at-bats, and now that you know that you reliably for every, you know, for every cohort of 10 first meetings, the what's known in, in sales land as opportunities, for every cohort of, of 10 that you engage, are you closing, you know, are you closing one? Are you closing 1.5? Are you closing two? Are you closing 2.5? If you're in there, but i- if you're at like, "Yeah, for every 30 I interact with, I close one," oh, it seems like that's probably like pretty inefficient unless, you know, you're selling $500,000 deals or something like that. So it's, it's at the point where you like, you have the, like it feels like it's statistically significant, it feels like it's repeatable because what you're gonna then do is like now it feels like it's a safe bet to try to abstract that out to somebody else. Because the only way we're gonna get to success is like we're not gonna have Lenny go and like sell from morning, noon to night, right? What we're gonna do is we're gonna take the information out of Lenny's brain and we're gonna put it into slides and we're gonna put it into scripts and we're gonna put it into email, templates, and all that sort of stuff, and then we're going to shove that into the brain of two more reps and see if we, now we can get it to like run in the cloud, right? In the, in the sales (laughs) cloud here. And th- and then to start out like you may, it may fail like the same way, like, "All right, cool. Like it runs on my local. Uh-oh, it breaks over here. Okay, why?" Right? And then that's like the sec- the next stage is now you're figuring out how to get those other folks to sell as successfully as you have, and that becomes like the next job. And this is a, actually this is the presentation I gave at Brianne's, um, SaaS school was there's a, if you google it, it's just called like founder led se- uh, selling. It's like available online. It's essentially, uh, there's like a bunch of stages in the B2B maturity journey and like you have to go through them in order to get to the next one. If you jump stages, like you're kinda hosed. And so in this case like if you know that you can reliably sell this yourself, that's great. Then the next thing to do is get, you know, at least a couple people reliably selling as well as you. Not 10 because you're never gonna get too successful if you're trying to onboard 10 concurrently. And then if you get those two successful, now you've earned the right to go to...... four,

6. 18:20 – 19:34

   Why you should keep your in-person events to around 10 people

   1. PKPete Kazanjy18:20

      eight, et cetera.

   2. LRLenny Rachitsky18:21

      I love this heuristic that you shared, that you wanna get to about 15 to 25% of contacts closing to a customer. Yeah, I see you shaking your thumb. I think that's, uh, really useful. So it's like a third, a bit less than a third, and doing like 50 to 100 attempts is roughly where you wanna be.

   3. PKPete Kazanjy18:38

      Yeah. Yeah, and, and importantly what you don't wanna do is, and I think probably a lot of the product managers who like to listen to, um, Lenny's podcast here might appreciate this, is like you got, yeah, like you wanna bring on like cohorts of users and then kinda like see what's going on, then learn, and then bring on new co- cohorts of users, right? So going and like doing 100 at-bats and then being like, "Okay, did it work or not?" Versus like, "Hey, let's, let's have 10 for like prospect and try to get 10 first meetings," have all those, like have all those interactions, see how your conversations land, see how the discovery questions are, are evoking the right response or not the right response, see how your slides land, see how your demo lands, all that sort of stuff. If it's working well and you're getting to the next stage, "Yeah, this is great. I would love to introduce you to my boss." Ah, that's a good sign. If it's like, "Yeah, I'm just not getting it," all right, cool. Back to the drawing board, right? (laughs) R- versus doing like 100 c- like 100 all at once and then like, "All right, now did it work?" Right? We wanna like break it up and th- and then like constantly just be iterating,

7. 19:34 – 20:55

   What a sales motion is and why it needs to be updated regularly

   1. PKPete Kazanjy19:34

      iterating, iterating. And like, uh, again for your au- I think your audience might appreciate this, the way to kinda think of a sales motion. So a sales motion is like a fancy pants way of describing just like all the things that you do in order to take a prospect and like, you know, bring them through the sales process and then eventually close them. And, um, uh, one helpful way to think about it is kind of like software, right? And like what you wanna be doing is like constantly updating it. Like, "Oh, that was a really interesting question that, that the prospect asked right there. I didn't have a good answer for it, and moreover I didn't have a slide for it. You know what I should do? I should make a slide that handles that objection, right? So it ha- so I can show it to them visually, and also it'll help, it'll help give me, uh, guard rails and a talk track, and that'll be nice. So I'm gonna do that and I'm gonna, like, I'm uh, and then I'm gonna update the, I'm gonna update the source code, right?" And like now my sales motion has been updated, right? And then the next loop through, ideally, the next time that person says like, "Oh, I don't know, Lenny. It doesn't really sound like, you know, X, Y, Z," you're like, "Oh, you know, a lot of people say that, but here, if you, if you look over here, you can see this." "Oh yeah, that's a really good point. Wonderful." So as a next step, let's go ahead and talk to your boss, right? And so like now your sales motion has been updated and the collateral has been updated, and now we're like, we're being more effective sellers. And y- you're just gonna do that dozens and dozens and dozens and dozens and dozens of time before you're like, you have a, a repeatable sales motion.

8. 20:55 – 23:54

   What are the leading indicators of success?

   1. PKPete Kazanjy20:55

   2. LRLenny Rachitsky20:55

      What's interesting is with this heuristic, like two-thirds of the time it's not gonna work out.

   3. PKPete Kazanjy20:59

      No. (laughs)

   4. LRLenny Rachitsky21:00

      And so a lot of times you're gonna be like, "Ah, I don't get this. Leave me alone."

   5. PKPete Kazanjy21:03

      Yeah.

   6. LRLenny Rachitsky21:03

      Is there other leading indicators that tell you you're improving, knowing that like only a third or maybe a fifth of the time it'll work out? Is it like talking to the boss of- more often? What else do you look for?

   7. PKPete Kazanjy21:13

      Yeah. Yeah, exactly. Totally. So right, and so like what are the leading indicators of success? Because if you're only looking at like lagging indicators... So again, it's probably like a, it, it's like a funnel on an, on a new feature, right? Uh, so the opportunity is, is like an, an at-bat, right? Or a potential transaction. And so usually what you do is you model out the stages in your opportunity. And so generally like there will be kinda different stages depending on the, the sales motion. So like use Atrium as an example. We, we sell on, on customer data. It takes like five minutes to turn on an Atrium account. So it's, you know, with... It's, it's really, really helpful for folks. They just sign in. They OAuth with Salesforce. Great. So a really c- important part, like stage in our sales motion is did we... We call it data light, right? Has data been lit up? And so that's a stage, right? We have a discovery stage. We have a data light stage. We have like a, um, what we call a preview stage, like are we previewing it with the staff? Then we, you know, get to commercial discussion. And so you can measure how you're getting to those stages, which is kind of like, you know, if somebody lands on like whatever page that, that Lenny was in charge of at Airbnb, and like did they click on the right thing, and do they get to the next thing, and they get to the next thing, get to the next thing? And so in sales it's kinda the same thing. And so the more ph- sophisticated version of this is looking at stage conversions, what have you. The less sophisticated version of it, which early on I think is an appropriate way of doing it is like, "Hey, man, are we getting second dates," right? So like just, you know, just, just metaphorize it to, to, to Hinge or, you know, Coffee Meets Bagel or like whatever the, the, the more recent one is. It's like, "All right, are we getting to second dates? Are we getting to third dates?" 'Cause if we're, if we're not getting to second dates, like probably something's n- like amiss there. And so what we wanna do is we wanna say, "Great. Of all of our f- 10 first meetings, how many get to second meetings?" Like it would be great, like if the lagging indicator is, you know, two wins out of 10 or what have you, but I'm gonna come into these conversations and I want, out of my 10 first meetings, like I want seven of them to get to the second meeting. All right? And then I want, uh, of those seven, maybe I want like, you know, I want 4.5 of them to get to, uh, to get to the third meeting. And then ultimately I want like two or three to, to win. And that's the way to kinda think about that. Th- like those are the leading indicators, and so like as those conversions get better, like, "Man, I'm not getting any second dates." Oh, okay, cool. You need a haircut, right? Or you need to shower, right? And the same applies to your, uh, to your sales motion as well. Like your message is not landing, right? You're targeting the wrong people. Why? Like what's going on here? You need to th- you know, you need to think about it.

   8. LRLenny Rachitsky23:42

      You need a better pickup line.

   9. PKPete Kazanjy23:43

      There you go, right? Now you're not even getting first dates, man. You're just like, man. Like, yeah, go all the way up to like... And you need a better Hinge profile picture, right? You're just like not getting any ma- any matches.

9. 23:54 – 28:28

   Why founders don’t need to be rock stars at sales

   1. PKPete Kazanjy23:54

      Ugh.

   2. LRLenny Rachitsky23:55

      As a founder, do you have to get good at sales? You know, a lot of founders are like, "Oh my God, I don't... We're gonna do PLG. We're gonna be self-served, freemium. We don't need sales. I'm just gonna let people figure it out." Like is that, is it a requirement of a B2B business to get good at sales as a founder?

   3. PKPete Kazanjy24:11

      I would say you don't have to get good at it. You just have to get non-zero at it. (laughs) Right? There's this really great article on Lenny's newsletter on adding a sales, uh, sales organization to a self-serve product that Lenny had me write, and then, uh, he edited the heck out of it. And it's, it's, it's really a fantastic asset. But what I would say there is that there are a lot of PLG or self-serve motions out there that have really kind of like... They, they stagnated themselves because they didn't add the, the sales piece to it, and I would encourage people to read that article. I forget what it's called. You, you added a really cool name.

   4. LRLenny Rachitsky24:47

      Oh, The Transition-

   5. PKPete Kazanjy24:48

      Yeah.

   6. LRLenny Rachitsky24:48

      ... layering on sales to product lead growth.

   7. PKPete Kazanjy24:50

      Yeah, see, you have a, you, you're good at naming things, right? Um-

   8. LRLenny Rachitsky24:54

      I was inspired by, uh, David Sacks' The O- The Cadence, which I love-

   9. PKPete Kazanjy24:57

      Ah.

   10. LRLenny Rachitsky24:57

       ... for how to operate.

   11. PKPete Kazanjy24:58

       There you go, yeah. That's a, that is a great, that is a great article.

   12. LRLenny Rachitsky25:01

       Yeah.

   13. PKPete Kazanjy25:01

       So it's not that you have to be great, you just have to recognize that it's important. And so like a good example of this would be probably like the most famous example of an organization that, like, maybe didn't get sales religion as quickly as they should have would be, um, would be Dropbox, and you... Dropbox has phenomenal early sales leadership. So like, one of our investors here at Atrium is a gentleman named Mike Marg, he's a partner at Craft, uh, Ventures. He was an early sales manager and leader there. Kyle Parrish was the head of sales at Figma. Mercer Furer is over at Figma as well. There's all these just like absolutely fantastic Dropbox folks, but the problem was is that like the organization from a product standpoint never kind of like put all their calorie, uh, as many calories behind product development that would like support the ability to sell to across an entire organization. And so the way that I kind of like try to succinctly describe that is like never mistake your lead gen for your business. And I think the good news is, is that like a lot, like a lot of people took a lot of lumps there and folks have learned that. Like maybe Slack almost like missed that, but then they brought in a bunch of like Salesforce, um, Salesforce folks and other folks. Um, actually Mike Marg was also a early sales manager at, at Slack as well, and like really got religion around that because it turns out that, you know, people paying, you know, 19 bucks a month or 29 bucks a month or what have you is like really great. But, um, you know, getting to a 50,000 or 100,000 or $250,000 dollar contract, like that's like where big ARR numbers start racking up, and organizations like wanna talk to a human in order to navigate that, right? So PLG is great for landing, right, and like permeating an organization and there's a bunch of great... Like Craft inve- invests in this like crazy, so like Scratchpad is a great example of like very bottoms up. I mean, Atrium's pretty bottoms up as, as well. It's like a, it's like... I don't... What is the Robin... or what is the, uh, the Silicon Valley joke? Middle out or whatever?

   14. LRLenny Rachitsky26:53

       Yeah.

   15. PKPete Kazanjy26:53

       (laughs) 'Cause we land with like sales managers and SDR managers, but it's still like what you're doing is you're ta- like you're solving the problem that the user has. But the problem is is like the o- the user doesn't necessarily have like large budgetary authority. So you can get them stoked up, but then you gotta talk to the person who's got the purse strings. And so like that's gonna require sales. That's okay.

   16. LRLenny Rachitsky27:13

       And just to punctuate that, basically 100% of B2B companies end up building a sales team, right?

   17. PKPete Kazanjy27:20

       I would say that's the case. I mean, i- it's, it's like it's more of a question of like when versus if. So like even like the really famous ones like Atlassian, right? And you know, Atlassian, they had a, um, they ha- they had a sales organization, they just didn't call it sales organization. And they went like pretty, pretty far without a lot, but instead what they did was they just like priced their product like breathtakingly low. And um, and I think developer tools can oftentimes do this where because like developers are like pretty technical, they can adopt product. They don't need like handholding in order to adopt like a product that is like complicated enough to be valuable. Like Datadog's a good example or New Relic or Appti, but even those guys like, you know, very early on had, um, had meaningful sales organizations. And like one of the reasons why Datadog really... I mean, there's a lot of reasons why Datadog ended up winning that market, but their sales organization is no joke, right? So even like, even developer tools like you might like think, "Okay, cool. Well, the developers can just like swipe their credit cards." Like yeah they can, but then you're gonna be eventually capped there. I mean, look at Snowflake. Snowflake has like, I don't know, 500 salespeople. Like, you're gonna need a sales

10. 28:28 – 33:30

    Sales mindset changes—the number-one tip to improve your sales

    1. PKPete Kazanjy28:28

       org. (laughs)

    2. LRLenny Rachitsky28:28

       Let's shift a bit to talking about just how to get better at sales, at the skill of sales, and I think it's interesting because you don't have a sales background and so you've had to learn how to do this and you did a lot of research in building your business. You've had to get really good at sales. So maybe a first question, what's like the number one tip that you have for getting better at sales?

    3. PKPete Kazanjy28:50

       The first chapter of Founding Sales talks about what I, what I call sales mindset changes because I think the big thing is it's, it's just so weird, right? It's just like such a weird shift in behavior 'cause if you think about as like a product manager or as a sale- like as a engineer or whatever, like how many people do you interact with day to day? Oh, six? Ten maybe?

    4. LRLenny Rachitsky29:10

       Yeah. Not too many.

    5. PKPete Kazanjy29:11

       Right? And it's always the same people, right? And so it's like super comfortable, whereas in sales or anything customer facing, what ends up happening is like you're meeting multiple new humans every day if you're doing it right. And that just is like such a mindset shift. Like you're not gonna be able to remember everybody. You're gonna have to write it all down. You're gonna have to use the CRM for that. You're kind of like in the starting blocks, like you know, in... (laughs) like on the track. Like you're in the starting blocks and like you have 90 seconds or like a couple of minutes to, to like form rapport to make, to make somebody feel like they should trust you and they want to be honest with you, right? You have to be very focused on activity orientation, whereas like engineering and product management is a lot of like super deep work. It's kind of like Paul Graham's like maker versus manager schedule. Salespeople have manager schedules, interestingly enough. Where what you're doing is you're constantly context switching, right? Like a, an ideal salesperson's calendar or a founder who's doing sales is like two, three, four, maybe five customer facing meetings a day with different humans. And then moreover, you're hav- like then you're having incremental interactions with those folks later on, like later that week or the next week or what have you, so then you have to keep continuity of these multiple parallel conversations, right? So it's like it's v- it's, it's a totally different sk- set of skills and so it's, it feels super weird to start out, but what ends up happening is it's just a skill-And so you just start doing, you start doing, you start doing it, um, and you just kind of become used to it. You become calloused, right? It's like, I'm incorrigible now. Like, you put me in an elevator, I can talk to anyone, right? And one of the things that, um, so, so like one, just recognizing it's gonna be a pretty big mindset change. And then the second thing you can do is then once you know that there's gonna be a mindset change is you can focus in on making those behaviors be better. So as an example, one of the things I challenge my staff to do is, I call it turbo rapport. (laughs) It needs a better name. But like, think about, um, people that you interact with in the world who maybe are like a little shields up, right? Like, they're probably used to interacting with people who are like not gonna be super nice to them. Like, maybe it's bartenders or a flight attendant or like barista or, or fill in the blank, right? Think about how quickly you can become friends with them, right? Like, how you can break that down. Because like that's gonna be a, a really good skill for you to have when you're interacting with, with, uh, with a prospect. And then what that's gonna allow you to do is then ask them candid questions about their current situation that either A, they may not know about or B, you ask provocative questions that make them think about the world in a way that like may- that you want them to and realize that they have pain they didn't want, or they, that they didn't know that they had. So it's kind of like, um, my, my friend Brett Burson had this great tweet one, at one point where he said, "Think about the things that you do in your day-to-day that are like a pianist, like a piano player playing scales." Like (singing) . What is the version of that for, for selling? And that's like, you know, rapid rapport building, asking good questions, asking follow-up questions, being willing to ask uncomfortable questions, right? All those sort of things. And like asking for money and then shutting up and waiting for them to answer. All these are very uncomfortable things that, but the more that, the more you do 'em, like the better, like you'll just get good at 'em.

    6. LRLenny Rachitsky32:31

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11. 33:30 – 36:00

    How modern sales should focus on helping customers solve problems

    1. LRLenny Rachitsky33:31

       One of the things in your book that most shifted my mindset on sales was this kind of shift from you're trying to convince someone to buy this thing to you're trying to help them, and maybe this will make their life easier. Yeah. Can you talk a bit about that?

    2. PKPete Kazanjy33:44

       Yeah. I think this is kind of like the, remember the mod- the, like the modern sales versus like old school sales thing?

    3. LRLenny Rachitsky33:50

       Mm-hmm.

    4. PKPete Kazanjy33:50

       Like, the old school sales thing is like, all right, I'm gonna sell something to a mark, right? Or like the best example of this is like, "Man, that guy's a great sales guy. He can sell ice to an Eskimo." It's like, man, if you're selling ice to an Eskimo, you're an asshole (laughs) , right? Like, what is wrong with you? They don't need ice. I mean, unless they're like, you know, they're te- they're visiting, uh, southern California. And so like as a seller, the way you should be doing, the way that I like to f- frame it to people is that you're a consultant that has a particular predilection for a given solution. Your solution, right? But we're not trying to like ... (laughs) Use Atrium as an example, right? Like, Atrium's minimum ICP is probably like SDRs plus AEs in an organization should probably be like at 10 all the way up to like 300, right? So if someone shows up and they're like, "Man, I gotta get really good at sales. I need to buy your software, Pete." And I, I'm like, "Okay, cool. Like, how many, how many salespeople do you have?" And they're like, "Oh, uh, like one." I'll be like, "Man, I'm not gonna sell you Atrium. Like, you're just gonna be unhappy. It's gonna be dumb. Like, it's gonna be a waste of our customer success resources. You're gonna churn." All those sort of things, right? But if instead what you, what you're doing is you're saying, "Hey, I'm gonna go out in the market and I'm gonna find the people that match the, that are, have a high proclivity that our technology solves, and then I'm gonna talk with them about how they're solving that problem right now. And ideally through, you know, a series of questions, I'm gonna reveal that to them that they're doing it probably not great, right?" And then once I've revealed to them the fact through kind of this, you know, directed questioning, what's known as discovery, that they're not solving the prob- like, they, they have this high magnitude problem, that it is costing them lots of money, that it is a pain in their ass, and that, and then I reveal to them that there is a better way of approaching it and, and magically, magically enough I happen to be a representative of that (laughs) of that solution, well now, like, that's an ideal transaction and everybody, everybody wins. And so like that's... And then scale that up across an entire economy and you can kind of see why I was saying that, you know, sales is like kind of the grease that makes the economy work like that, and also importantly brings new technology to the market in a way that, um, that makes every, like,

12. 36:00 – 36:40

    A few tips to help you get better at sales

    1. PKPete Kazanjy36:00

       that makes everything better.

    2. LRLenny Rachitsky36:01

       If someone's listening to this and they're like, "I wanna get better at sales. What's like one thing I could do differently tomorrow, this week, to improve my ability to sell my product," what, what would that be?

    3. PKPete Kazanjy36:12

       There's like the non-complicated version and there's complicated version. I think the non-complicated version would ju- be just like walking down the street and make eye contact with everybody and then every person that you h- like every person you stop next to at like Starbucks or the, or like, you know, the crosswalk or whatever, just like strike, strike up a conversation with them. Like, figure out a mechanism by which you can start a conversation with them. Like, look, like compliment their, their shirt or their shoes or remark on something. Don't use the weather because that's lazy, but like figure that out because like, so like that's the, the, the first version.

13. 36:40 – 39:14

    ICP and personas

    1. PKPete Kazanjy36:40

       Probably the more sophisticated version is like, you know, just be very, very tight on your ICP. Just get very, very, very crisp around who has your problem and why. And so being more crisp around that and then having, you know, having that understood is a great way of, um, of, of making sure that you're not wasting time on people who don't have your problem and that you're, you're doing more of those loops with people who are like right in the white hot center. So like one is kind of like a behavioral thing and one is a more thoughtful thing.

    2. LRLenny Rachitsky37:07

       That's great. Can you actually explain ICP briefly? 'Cause a lot of people may not know what that term...

    3. PKPete Kazanjy37:11

       Yeah. Thank you. Um, so ICP stands for ideal customer profile and, and actually it's important to kind of think about there's two things in a, in a B2B sales motion. There's like the account, the characteristics of the account which is like the company that's gonna buy, and then there's the characteristics of the human and the personas that you're going to be interacting with. And so, um, let's use like Amplitude as an example. Amplitude's ICP would probably be organizations that make software products that probably have at least a couple of product managers 'cause if there's like a single product manager, it might be like too much. Like they might be at the point where they, they don't need a full b- like a full-blown enterprise analytics suite. And that's probably it, right? And then on the, and then on the human side, who are the people who participate in that conversation? Well, the product managers are gonna be the ones who are gonna be the users but engineering is probably involved in order to make sure that Amplitude can talk to the cloud data warehouse and so on and so forth. And then moreover, the person who owns the budget might be the VP of product, not the product manager or it might be the VP of engineering or the CTO, right? So, there's three different folks that we talked about there so like different humans. And so ideal customer profile is understanding what those kind of like parameters look like for looking at an organization in order to say, "Man, that's an awesome op. Let's go get in front of them," versus, "Eh, I don't know if that's a very good opportunity. Like maybe that's, let's pass on it." And then the personas are, "Great. That's an awesome op right there. All right. I know that I'm gonna have my first conversation with Lenny but with an intention that I'm eventually gonna get to the VP of product at Airbnb and that's Suzy over here. And then, you know, once we get validation from her then, um, then we're pro- like I know that the VPE over here is Frank," and like sort of like knowing who the personas are. So that's what ICP and personas are.

    4. LRLenny Rachitsky39:06

       Awesome. There's a template that you've created that helps you kind of lay out your ICP and so we'll try to link to it in the show notes. I have to find it again.

    5. PKPete Kazanjy39:13

       Nice.

14. 39:14 – 45:40

    Why you should hire junior sales staff in the early stages

    1. PKPete Kazanjy39:14

       Sounds good.

    2. LRLenny Rachitsky39:15

       So we've talked about founder led sales and how founders should be starting sales. We've talked about just how to get better at sales as a founder, as anyone. I wanna talk now about hiring salespeople and-

    3. PKPete Kazanjy39:27

       Sure.

    4. LRLenny Rachitsky39:28

       ... and great mug by the way. Coffee is for Closers.

    5. PKPete Kazanjy39:31

       (laughs)

    6. LRLenny Rachitsky39:31

       I love it.

    7. PKPete Kazanjy39:32

       Right.

    8. LRLenny Rachitsky39:33

       Can people buy that online or is that just a one-off?

    9. PKPete Kazanjy39:36

       Uh, this is like a modern sales pros-

    10. LRLenny Rachitsky39:38

        Oh, perfect.

    11. PKPete Kazanjy39:38

        ... um, modern sales pros mugs. I think we have like a bunch of yetis that we give away for Atrium as well but like yeah. We're, we're big onto like sales jokes here because you have to, it's, like we, we, we stole this from New Relic, right, like being very user centric in your, in your swag, right? So like I got my Sales Nerds jacket on here, I've got my Let's Get It hat here, I've got my Coffees for Closers mug. Like these are all inside sales jokes that maybe your audience won't necessarily get or maybe they will but our audience very much gets them. They're like, "Oh man, your hat's so funny. Can you send me one?" I'm like, "No problem. You should buy our software." (laughs)

    12. LRLenny Rachitsky40:10

        Mm-hmm. Love it. So hiring salespeople. We've talked a bit about a lot of these things like maybe when it's time to hire a salesperson, when you're closing like a fourth, a fifth of your opportunities, when this wild loop is kicking in. So in terms of the who to find for this first sales role, and you mentioned that VP of sales are often let go. It's like a very high rate of not working out.

    13. PKPete Kazanjy40:32

        (laughs)

    14. LRLenny Rachitsky40:32

        Is, is that true?

    15. PKPete Kazanjy40:33

        Yeah. Yeah, I mean the way to, um... Again, this is kind of mapped out in the, the founder led selling presentation and then also in Founding Sales the book. I mean, generally what you wanna do is you, you probably don't wanna start with like a VP of sales to start, like a sales leader and there's a couple of reasons why there. Like even if you figured it out yourself, that's required, right? You, you got to, you have to get to that minimum sufficiency of 10, 20, you know, 30 customers yourself first, right? But then the reason why I advocate for folks to like hire a couple of sellers or a couple of AEs to start is because again you have that like software in your brain. Like unfortunately there is no GitHub for sales motions so it's in your brain, it's in your documents, et cetera and so now you're gonna teach these other, these other folks. So what you wanna do is you wanna hire a couple like early stage kind of pioneer sellers to take that sales motion. The downside of hiring, like seeking to hire a VP of sales or like a head of sales or what have you who actually is a head of sales, like is coming out of an organization where maybe he or she is a manager of managers or like manages like, you know, 10 re- like eight reps or something like that is that person hasn't been selling for a hot second, right? And I think actually Jason Lemkin had a pretty funny tweet about this the other day where he was like, you know, hiring the VP of sales who's like been there and done that before like, "Why exactly does she wanna do it again?" (laughs) Right? Like, "Oh, you scaled up a, you know, Datadog or like Figma or whatever. You should come to my like crappy little startup." It's like, "Ah, I'm professionally rich." And, and so instead the, the, the great folks to look at are like the deputies, right, or like those early stage sellers. So the example I always use here, um, my last software company was in recruiting so if you have like a new recruiting technology... So, you know, my buddy Troy, um, runs this recruiting software company called Guide, right? They make this like really cool guided, hey, hiring process for candidates, whatever, but it, they sell to recruiting organizations. So the kind of early, the early stage sellers that he would be interested in would probably be like early people at like Lever or Greenhouse, right, who sell to the same persona probably around the same like average selling price but ideally like not an AE who joined Greenhouse like last year or like two years ago. So like Greenhouse, um, Greenhouses has a phenomenal sales organization. Their sales leadership is, is absolutely fantastic. The gentleman who's the CR over there is a good friend of mine, Sean Murray. But like early stage selling takes like early stage sellers or people who have been there because you're not gonna have all the collateral, like slides and scripts and whatever aren't gonna be like all...... buttoned up and with a bow around them. And so looking for those early stage kind of like grimier, grittier sellers is a, is a more effective way of going about that. So like, those are the folks that you wanna look for once you've gotten to that statistical significance of your own selling capacity.

    16. LRLenny Rachitsky43:37

        To make that just even clearer, the suggestion is if you're like, say, a series A founder, you... What's like a profile of a person you look for? You said it's like a deputy at a successful sales org.

    17. PKPete Kazanjy43:48

        I'll give you a couple examples. So like, I don't know. Say, say you're doing some sort of like, um, design tool, right? Like I would go look at the, the Figma sales organization and I would look at some of the earlier sellers who were there maybe two years ago or three years ago or what have you, right? Maybe you could consider getting a sales manager there who's like not super far from selling, right? Like a great example of this is there's this woman, Marissa Feuerer, who works at Figma. She's absolutely fantastic. She works on the enterprise team there. Like she... And she was at Dropbox previously as a seller for a long time, so like she would be a great profile for someone who's not too far from having sold and is like willing to like, you know, roll up her sleeves. But ideally what you're doing is you're... Like that would probably be the person who you'd want to hire after you've hired those couple of sellers and gotten them to success. Because the other thing too with like Marissa, she's probably gonna look at your organization and be like, "Cool, prove to me that your product fits the market because like I don't wanna necessarily take a bet on you." And then you would say, "Well, in addition to having a 25% win rate with me, I have these two sellers right here and they both have 20% win rates and you can see that they're both closing $50,000 of, of, uh, of bookings a month. All I need you to do is scale it up." In which case that, that early stage head of sales is like, "All right. Let's do it," (laughs) right?

    18. LRLenny Rachitsky45:10

        She's about to get a bunch of LinkedIn requests. (laughs)

    19. PKPete Kazanjy45:12

        I know. She's great. This is... Like one of the things that we really love at Atrium is like we have, um, we have really great customers because... I mean, like we're creating a new category of software and so it's kind of one of those things where like more advanced, more modern sales managers and leaders like really get it. It's, it's kind of how it always is in, in category creation. But when you find the people who like really get it and like really get it, they turn out to be like awesome. And like that's one of the, the things that just makes startups fantastic.

15. 45:40 – 47:38

    Signs your new hires aren’t a good fit

    1. PKPete Kazanjy45:40

    2. LRLenny Rachitsky45:40

       What's a sign that maybe it's not working out when you hire your either first salesperson, either... or maybe like first five? What are signs? 'Cause you said it's often does not work out. What are like early signals like, "Mm, we should rethink this"?

    3. PKPete Kazanjy45:53

       Presuming that you have... And this is another reason why it's really important to do it yourself to start. But presuming that you've done that, like that you've been able to close business on a reliable basis, again, with like arm's length prospects. Like it can't be, you know, it can't be Lenny's mother-in-law buying my, um, buying my software, right?

    4. LRLenny Rachitsky46:13

       Which man for real, actually?

    5. PKPete Kazanjy46:15

       Yeah.

    6. LRLenny Rachitsky46:16

       She is.

    7. PKPete Kazanjy46:16

       But like, I mean, God bless but like she's not ICP for, for Atrium, right? So like you can't... Um, this is like kind of the danger of, of like, you know, doing revenue trades in your accelerator or like whatever. Like it's just, it's not real, right? So if you have done that and you've sold like 20 or 30, um, you know, deals, you know it can be done. We have an existence proof of this. So if someone else can't do it the way that you do it, uh... And this is why hiring like two folks to start is, is effective, right? Like you don't want to hire just one. Maybe three, but like four, it's like, ugh, that's a lot to manage, um, at least to start. And, and so if, if you have done that and the person's like their win rates are poor, right, or their ac- their activity levels are poor, things like that, those are usually indicators that it's like not gonna, that it's not gonna work out, that they're not getting those second dates, they're not getting those third dates. But importantly, they have to have the materials in question, right? Like did, did you create the slide deck that you take people through and did you give this to them? Did you take all the discovery questions that were in your brain and write them down into, you know, a Google Doc or a Notion page or what have you? Do you have a demo script for them? If those things are not present, then, you know, probably no one's gonna be successful, or at least they're gonna have to like re-derive all that stuff that you already did. But if you have all those precursors and it's not sticking for some of them, that's probably a good leading indicator that like they're not gonna, they're not gonna

16. 47:38 – 49:33

    The importance of using metrics for success

    1. PKPete Kazanjy47:38

       work out.

    2. LRLenny Rachitsky47:38

       How much time do you give these folks before you make a decision?

    3. PKPete Kazanjy47:42

       This is why it's so, so, so important to look at leading indicators, and this is something that like we just think about all the time here at Atrium from a instrumentation and data-driven sales management is like if someone's not having customer-facing meetings, if they're like low activity, you're never gonna win anything, right? Like if, if you have a 50% win rate on two opportunities in a month, um, that's probably still not gonna be super helpful unless you have a very, very, very high deal size, right? And so looking at those leading indicators like are they having first meetings, right? Are they having second meetings? What does their email volume look like? Are they getting, um... Are they progressing things through? Are they getting things to proposal? And then eventually are things closing? And so that's why bird-dogging... I do a bunch of like master classes for Atrium on data-driven sales management and one of them is on ramping. It's called like, you know, ramping for success. I forget the name of the master class. But like looking at those leading indicators like opportunity inflow. Is a person putting tim- like putting meetings on their calendar? Are they progressing them? Are they being active in the meantime? Those are all really good leading indicators and so, I mean, if somebody's like not getting first meetings on their calendar like, you know, within a month it's like, "Okay, cool. This isn't working out," (laughs) right? Now, if they're not getting to second or third meetings but they are getting those first meetings, well now you know you've got a different problem, right? Which like they're getting, they're getting those first dates but they're not getting a second date and they're not getting a second date the same way that you were. Okay, maybe that's a coaching issue, um, or maybe it's just like a behavioral problem that's not, you're not gonna be able to surmount. But the point is, is just like having instrumentation on the most leading indicator possible gives you eyes onto whether or not things are working or not and you can make judgments about it. Because the worst possible situation is like nine months in you're like, "Man, it's not working." It's like, man, I bet if you looked at the leading indicators, you probably knew, you would have known like two months in like this wasn't

17. 49:33 – 51:19

    Month-by-month expectations for sales hires

    1. PKPete Kazanjy49:33

       working.

    2. LRLenny Rachitsky49:33

       I like that you gave us kind of a bottom end of the range, like in a month you should be able to know. A lot of times, what would be like the max by which like-If things are going okay by, like, six months, you're probably, it's probably gonna be good. Or, or what is that timeframe?

    3. PKPete Kazanjy49:46

       Oh, like where you know you're successful?

    4. LRLenny Rachitsky49:48

       Yeah. Like, it's like, it sounds like maybe from a month to some future month, this is a period where you can get a sense if th- this person is gonna work out. What's like that range in your mind?

    5. PKPete Kazanjy49:58

       Yeah. It's almost (laughs) kind of like you're, you're kind of continuously monitoring, right? So like in the first month, maybe you spend that time like onboarding the, the rep. Teaching them, you know, going through mock discovery conversations, mock demos, et cetera. Having them ride along with you. In the second month, we would expect them to have, like t- you know, 10 first meetings or maybe 20 first meetings, and we would expect 50% of those to get to the second meeting. So we'd measure those things. In the third month, we would expect some subset of the month of, of those first meetings and second meetings that happened in the second month to get to a proposal, all right? To get to a commercial conversation. And then maybe we would expect some of the deals in the, in that month to close, right? To close when, or, or maybe the next month. And so it's like, it's essentially like you're looking at the leading indicators in the appropriate timeframe such that like if someone is in month three and they're getting a bunch of their deals to proposal, you can't declare victory yet because like the money is not in the bank. However, things are looking good. So if you get to month four and then, and lots of things are getting to proposal, but nothing's closing in month four and nothing closing in month five, you should still like... You still can't say olly olly oxen free. You should still be very concerned, right? But if you, if like the leading indicator is at the right level for the right period or right interval in ramp, then you can like, you can feel confident, but not

18. 51:19 – 54:19

    Why work from home is bad for junior salespeople

    1. PKPete Kazanjy51:19

       declare victory yet.

    2. LRLenny Rachitsky51:20

       Got it. Something that this reminded me of is we were chatting ahead of this call, and you mentioned that work from home is really bad for salespeople in your experience. Can you talk about that?

    3. PKPete Kazanjy51:31

       Yeah. It's, it's primarily bad for, um, junior salespeople.

    4. LRLenny Rachitsky51:34

       Mm-hmm.

    5. PKPete Kazanjy51:34

       Like senior salespeople have been like selling, you know, out in the f- what's known as the field for, for a long time. But when you think about the behavior that we're talking about, which is y- learning, right? So like what, what needs to happen? The, the new sellers, they need to learn the sales motion, and then they need to be audited, right? Like instrumented. And so th- like the faster the loops are on that, the better off you're gonna be. And so if the loops are once a day of like, you know, listening to their calls or maybe even like a, like a, a, a longer interval, then just like the correction loops are just gonna be way too slow. Versus if you're sitting next to somebody or v- you're sitting amongst like three or four people and like listening to all their calls concurrently, and then they get off of a call and it's like, "Hey, that was really good." You know, correction here, correction here, correction here, correction here, here. Run it back to me. Now the loops, right? This, this speed with which you're able to like update their software and making, make sure that, (laughs) that the sales motion is running appropriately on them is, is quite high. And like in early stage startups, that's the only thing that matters is like how... It's a race against time to make sure that you get to success so you can raise your next round of financing or get to profitability or what have you. And so like having distance, right, having asynchronous distance is really problematic for that, especially for, for junior folks like SDRs, junior AEs, all of that. It, it really is, it really is problematic. Once that sales motion is baked and can be like distributed, okay, that's like potentially a different, a different situation. But like very early on, having someone sitting, like s- being able to sit side by side with your sellers is really pretty li- it's, it's hard to, hard to beat.

    6. LRLenny Rachitsky53:17

       So what's the solution? Is it if you're starting now a B2B company, your advice is don't be remote? Work in an office?

    7. PKPete Kazanjy53:25

       My point of view on that is, is like you, uh, especially at like early stage, you, you cer- like from a founder's standpoint, like being, you know, uh, shoulder to shoulder with your, with your co-founders certainly, but e- even with like, you know, a s- a founder who is, has a couple of sellers that they're working with, being side by side with them in order to like help them learn faster, teach them more, have accountability, and then have like, you know, um, like training loops is really what you need to, what you need to do. Because the alternative is like there's, there's a whole generation of SDRs who are like, it's kind of like learning loss if you will. There's a bunch of like 24-year-olds who have never c- like, you know, like never learned the skills that are needed at the same way, at the same clip that they would've sitting amongst like 10 others with a, wi- with an SDR manager sitting in the middle of them or an AE manager

19. 54:19 – 55:19

    Why you shouldn’t be afraid of sales

    1. PKPete Kazanjy54:19

       sitting in the middle of them.

    2. LRLenny Rachitsky54:20

       Any last pieces of wisdom before we get to our very exciting lightning round?

    3. PKPete Kazanjy54:24

       I think probably like the biggest thing is like the, the, the thing that I just like to encourage founders and, and product managers or what have you is just don't be afraid of sales. There's a lot of people out there who like, who would love to tell you a story that it's, you know, it's magical or like, "Oh, you gotta be a born seller," things like that. And it's really not, right? Like those people are just talking their, their book, if you will. And so just like getting good at, at those behaviors is gonna, you know, it's gonna benefit you in a myriad of ways. Even if you don't wanna necessarily be an early stage founder, even as like a product manager within a enterprise organization or even a, you know, a consumer organization, selling behaviors and like good communication and persuasion and like what, always like thinking about like what's in it for them, et cetera. Like those are really good skills for internal selling, for external selling, for you wanna interface with customers, et cetera. It's like, you know, all these skills are very important and impactful for, for a myriad of personas.

20. 55:19 – 1:01:40

    Lightning round

    1. PKPete Kazanjy55:19

    2. LRLenny Rachitsky55:19

       Amazing. Well, with that, we've reached the very exciting lightning round. I've got five questions for you.

    3. PKPete Kazanjy55:25

       (laughs)

    4. LRLenny Rachitsky55:25

       We're gonna go through it pretty fast. Are you ready?

    5. PKPete Kazanjy55:28

       I am.

    6. LRLenny Rachitsky55:28

       Question one, what are, what are two or three books that you recommend most to other people?

    7. PKPete Kazanjy55:33

       The books that I recommend the most there would be, um, The Goal by, uh, Eli Goldratt. There are two books that inspired Atrium. One is The Goal, um, which essentially is a novelization of the Toyota Lean manufacturing system, so it's like a process engineering book written as a novel. It's like really fantastic. And sales organizations are just revenue factories, so it's a really ... Like, if you wanna think about like systems thinking and kind of like, you know, processes, but in a way that's like not a textbook, it's absolutely fantastic. And then other one is a book by Bill Walsh called The Score Takes Care of Itself. Bill Walsh is a really famous football coach for the, um, for Stanford Cardinal and the San Francisco 49ers. And he just kind of like broke down how you can't worry about the score in the football game. You can only worry about the things that are in front of you you can control, and that if you do a high quantity of high quality actions, like whatever your position is, as a quarterback or a linebacker or running back or whatever, then the score will take care of itself. And, and that's very applicable to sales as well. Like, if you focus on those leading indicators and make sure that you're doing them in a high quantity of high quality, uh, way, then the score t- score will take care of itself. So those are two, two great books I like to recommend to folks.

    8. LRLenny Rachitsky56:41

       Favorite other podcast?

    9. PKPete Kazanjy56:42

       Oh, boy. I don't listen too many. I listen to Lenny's and I listen to, uh, the All In podcast, just, you know, so I can get my fill of like doom and gloom. (laughs)

    10. LRLenny Rachitsky56:51

        (laughs) And knowledge with this one. Uh, favorite-

    11. PKPete Kazanjy56:55

        (laughs)

    12. LRLenny Rachitsky56:55

        ... recent movie or TV show that you really enjoyed?

    13. PKPete Kazanjy56:57

        I've got a five-year-old, so like we're all Disney all the time, so I think probably like the, the one that's been on, on repeat recently has been Encanto. So yeah, there you go. (laughs)

    14. LRLenny Rachitsky57:06

        Love that one. Favorite-

    15. PKPete Kazanjy57:09

        Yeah.

    16. LRLenny Rachitsky57:09

        ... interview question that you like to ask folks?

    17. PKPete Kazanjy57:12

        So I'm gonna change this up on you. It's less about, uh, interview questions. One of the things I'm a really big fan of is, um, job simulation, especially in, in sales. And so, I'm a big fan of doing screens. So we actually have a written screen that we do with folks where it's just a Google Doc that has like a dozen or so biographical questions that we allow people to answer, and you'd be shocked at like the way it, the, how well it screens people. Like, you know, 50% of people won't do it, and this is not, these are not complicated questions, right? It's like, "Lenny, tell me about something that you've built that you're proud of," right? Like 'cause a dozen of those questions, and so like, one, you can filter out people who are not serious. You can filter out people who, you know, have low levels of give a shit. You also can see whether or not people can communicate in an, in a compelling fashion, right, with a beginning and a middle and an end. You can also see their attention to detail, whether or not (laughs) like, they, it's like ridden with typos or they like forget to answer some of them or what have you. So it's not an interview question thing, but like, that's a huge hiring hack from my perspective.

    18. LRLenny Rachitsky58:10

        And, and this is a form that folks fill out when they're trying to apply to work at Atrium, is that right?

    19. PKPete Kazanjy58:14

        Yeah. Yeah, or it's just something that I, I mean, I, I, for all my portfolio companies as well, I, I, they, people just use it. It's a Google Sheet, right? Or sorry, not a Google Sheet, a Google Doc, right? It's just like, and you just clone it, give it to 'em. "All right, you have edit rights. Let me know when it's done." And you'd be shocked, like, you know, people are like, "Oh, I didn't, I forgot to do it." "Okay, great, you told me everything I need." (laughs)

    20. LRLenny Rachitsky58:35

        (laughs) Amazing. Final question, do you have a favorite story of you or a salesperson closing an awesome deal, something that seemed impossible, something that you're proud of?

    21. PKPete Kazanjy58:47

        There's a gentleman on, in our sales organization named Sean, uh, who was an early seller here. He's now a sales manager. He's absolutely fantastic. And, um, you know, I think one of the things that early stage founders and also sellers have to remember is like, you're, you're not gonna cl- you're generally speaking not gonna close the deal on the first time through the pipe. Like, as we discussed earlier, if you have a 30% win rate, that's pretty great. If you have a 20% win rate, that's like pretty solid, but that still means that like four out of, you know, four out of five are not gonna close. But, the next time around, they might, right? So like win rate on the second time through the pipeline. And so Sean, you know, closed ... One of our biggest customers is a company called Grin. They're absolutely fantastic. They make, um, influencer management software for brands. Very cool stuff. And, you know, I think Sean probably ran like three or four ops with them before they were, were able to get a toehold in the account a couple years ago. They were much smaller, and so now, you know, they, I think they have like 100 SDRs and like 80 AE s that are being managed using Atrium. And so I think there's a good lesson there which is, you know, it's not gonna be the first, it's not necessarily gonna be the first time through the pipe, and it's m- maybe not the second time, but you just have to keep like pushing that boulder up the hill and eventually when you do, good things happen.

    22. LRLenny Rachitsky59:59

        What a great lesson to leave us with, very empowering. Pete, this was everything I hoped it would be.

    23. PKPete Kazanjy1:00:05

        Yeah.

    24. LRLenny Rachitsky1:00:05

        Two final questions. Where can folks find you online if they wanna learn more, learn more about Atrium, the book, and then how can folks be useful to you?

    25. PKPete Kazanjy1:00:12

        I'm pretty easy to find online. I'm the only Pete Casangi in the, uh, in the United States as far as I can tell, and Google will autocorrect my name if you, uh, if you Google it wrong. So like, that's pretty helpful. Yeah, find me on LinkedIn. Find me on Twitter. You can also find Founding Sales at foundingsales.com, as Lenny notes. The, the whole book is available online as like hyper text. Yeah, I mean, you can buy a physical copy as well, but the reason why my wife put it into a Squarespace (laughs) site was because we wanted people to be able to search it and come back to it and use it as a reference and so on and so forth. And then in terms of like folks, you know, how folks can be helpful to me, if you, if you work for an organization that has, you know, between 10 and 300 salespeople and you're looking to make them more f- like manage them better via metric, make them more efficient, right? That's a big watchword these days is efficient sales organizations through better management. Atrium is fantastic for that if you just Google it. Like, atriumhq.com is the, is the domain, but you can also just, you know, Google Atrium Sales and we'll be the top result as well.

    26. LRLenny Rachitsky1:01:13

        Amazing. Pete, thank you for being here.

    27. PKPete Kazanjy1:01:15

        Yeah, it was awesome. Thanks, Lenny.

    28. LRLenny Rachitsky1:01:17

        (instrumental music) Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

Episode duration: 1:01:40