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- [00:01]
Carolyn
Hello, everyone. Welcome back to Go to Market Live, the show where we break down how the best B2B companies are designing, measuring and scaling their Go To Market engines. Today's episode is going to be a really good one. I'm super pumped about it. We're talking about something that's at the heart of high performing revenue teams, but rarely gets the attention I think that it deserves. And that's Go To Market systems design. And so joining me today is somebody who's been at the forefront of this kind of thinking for quite some time. It's Dave Boyce. He's the Executive Chair and EVP of Product at Winning by Design, a company that many of us in this space are really familiar with, where he's working with some of the most innovative B2B companies in the world to rethink how they scale. He's also built and sold five SaaS companies and serves on the board of Forrester, amongst many other things. And his whole approach is rooted in systems thinking and it aligns really closely with the work that we do at Passetto, where we focus on Go To Market and data architecture to help teams not only improve performance, but actually measure it with complete clarity. So. So if you're a revenue leader, a founder, a GTM operator who's really tired of siloed execution and flying blind on what's driving growth, I think you're really going to enjoy this one. You're listening to GTM Live, a podcast by Passetto. All right, here we are. Hey, Dave, great to have you on today. Yeah, thanks for joining us. I'm very pumped about this particular recording and interview that we're doing today. So thanks for coming on.
- [01:32]
Dave Boyce
We'll try to live up to expectations.
- [01:36]
Carolyn
Do you want to give our listeners a little bit of a background in sort of what you do and where you come from?
- [01:42]
Dave Boyce
Sure. I'll make it short, though. Executive chair and head of product Winning by Design, which is a global growth advisory firm. And before that, I've helped build and sell SaaS companies and since about 1999, I've been building. We didn't even have the word SaaS back then, so I'm old. But we've done five of those and one to Oracle, one to Amazon, two to private equity, one to a competitor, and just learn kind of the stuff that works and the stuff that doesn't. And some of that really kind of ingrained in me a passion for treating growth like a system, which I know is a passion we share. We're going to talk some more about that and I went really heads down on product led growth. One of the companies I ran was a PLG kind of freemium company and I really liked the automation and predictability that you can build in kind of program in. So I wrote a book on that too Carolyn, and that's coming out later this summer in August. And yeah, and just working with winning by design to kind of think about overall growth. Whatever the growth is, it needs to be architected and systematic. So love that.
- [02:46]
Carolyn
Thank you. I'm really excited for everything we're going to cover today. And you're right that we do have a shared passion for this idea of systems thinking inside go to market. That's a big one for us at Passetto. Something we're talking about all time. So I want to get into the topic of today. We're talking about value systems thinking inside the go to market function. But I'd love to hear what's your definition when we were talking about value systems thinking, what does that mean to you? What does that mean to winning by design?
- [03:15]
Dave Boyce
I mean there's some really, really simple handles that you can grab onto. But in general like growth for a recurring revenue business, especially like growth anywhere you kind of make an adjustment, it's going to show up in other parts. Like and we all know this. Even in a linear thinking mindset, you kind of know this. Like you, you under qualify leads on the front end and you let more through than should go through. Your sales team's gonna have more work on their plate to like do the rest of the work to filter through all those unqualified leads. Like it's just a lot of work. So I make an adjustment over here, I see an impact over here. Or sales sells kind of off label kind of use. It makes promises off label promises in the sales process and lets customers that actually aren't core ICP customers. Okay, then I'm gonna, then my CS team's gonna have a whole bunch of work. Then my CS team's going to have a whole bunch of work like trying to onboard an off label usage or trying to renew somebody or trying to keep up with promises that sales team. So it's a whole system and we need to manage it like a system. And it's very hard to do that based on the way we organized ourselves in silos. I can't tell you how many board meetings I've walked out of where the marketing leader says yep, up and to the right, everything's great. Like we are. We hit all our goals and then leaves the room. And then the sales leader comes in and says, well, we didn't, you know, we're not winning. Maybe we'll get them next quarter. That ain't right. We're either winning or we're not winning. And we're playing as a team. And it's really the company goals that we're after. It's growth that we're after. It's like the valuation metrics don't reward us for having good wins in onboarding. Valuation metrics reward us for overall revenue growth. So we actually have to treat those.
- [05:02]
Carolyn
I love personally, when companies can actually recognize that where they can acknowledge we have data, we can see what's happening. But, like, the economics aren't working and we need to know why. And like, when we're looking at performance in silos, it's not telling us the story or isolating why. Like, why aren't the economics working? And I think once you really see things in a unified system, you really get to the heart of why the economics aren't working and what's driving that. Why do you think it is so common for B2B SaaS to be organized this way, to be organized in silos, and to still be functioning that way? Even though, like you, me, a lot of other leaders in go to market, we know that that doesn't work. We know it's a problem. So why is it still such an issue today?
- [05:51]
Dave Boyce
I'd love for you to respond to this. I'll give you an opinion, but I'd love for you to respond to it. So I live in, I built my career in, in Boston and then Silicon Valley and now Utah. And Utah is super well known for having really, really good SaaS go to market teams and specifically SaaS sales teams. I've gotten to know that culture really well. And I think that the era of building companies, the way Utah has built companies is over. So I'm not trying to throw my kind of friends under the bus. I think we all did what we were incented to do. But it's indicative of the question that you just asked. When money was free, when you could raise money, when charisma and fundraising were the main kind of characteristics of a successful entrepreneur CEO, then she could just bring money in and then just throw money at growth. And then when you get in that mindset like, I'm going to get free money, I'm going to throw it at growth. And you start thinking that salespeople are units of growth, I'm just gonna go buy salespeople and you throw money at them and you sort of incent them by giving them a competitive base pay, but then also a really highly leveraged kind of commission pay and then that ladders all the way up the sales structure. And I used to, we sold a company at Oracle, I stayed at Oracle for like five years. Oracle has a very sales driven culture. When you're throwing money and commissions and incentives at humans who you know and you give them a job, they're super creative, they're going to go solve that problem any way they can. And some of those ways are more healthy for the company and other ways are not more healthy for the company. And it's going to end up showing up in my overall growth. But basically what I think we did is we turned, we turned humans into coin operated kind of operators inside of these silos. And so we incent sales on, we marketing on leads, we sales on flow business sales says dumb things like never confuse sales with implementation. They're like, nope, nope, it's sold. Like I'm going to hand it to you. Then we incent customer success teams on renewals and then maybe expansion. And so everyone's got their individual metric and the only place those all come together is with the CFO and the CEO. And at that point like messing with the mojo of the individual revenue leaders is really tough because they've set up a whole system that's all coin operated.
- [08:17]
Carolyn
I agree with that entirely. I think the way you framed it is really, really interesting. But I think my perspective on this is very similar to yours in that we're operating based on the way we actually measure individual functions. And I think it really comes down to the way that we measure and track performance is antiquated and broken. I think that comes down to data architecture, how we're actually capturing data across the full revenue factory at every stage. But also I think that this is a real mindset shift. Like I think a lot of CEOs, investors, CFOs, leaders at the top maybe haven't totally recognized that we need to adjust sort of how we think about, go to market and sort of thinking about them in systems. But I think a lot of that is now perpetuated again by the data architecture. Because if we don't have a better way to measure, how can we shift our thinking? Right. It's like the two really go hand in hand. And I think in my opinion, sort of like the data architecture and the systems thinking kind of comes first as a way to drive impact and change across an organization.
- [09:21]
Dave Boyce
Okay, so you would say yes, it's compensation, but compensation is a function of measurement and measurement is a function of data architecture.
- [09:29]
Carolyn
Correct.
- [09:29]
Dave Boyce
And we just don't have everything we need to see the dashboard clearly.
- [09:33]
Carolyn
That's my perspective from sort of my vantage point. And you know what we see at Passetto, I think a lot of the questions that we get when we propose sort of like introducing new ways of thinking or new ways of tracking go to market performance, it's always like, well, our commissions are structured around this and so there's, I think there's more sort of like change management that comes with approaching go to market this way. And I know we have a question later in the conversation that touches on commissions and sort of like what to do differently. But you see a lot of times that like go to market leaders say they're customer centric or they're cross functionally aligned, but they still run their teams in silos. Right. So we're now talking about what systems thinking is or designing a system across go to market. But what does it actually look like to build that around customer value instead of departmental KPIs? What does that mean to you?
- [10:25]
Dave Boyce
It's hard to your point. I can't tell you how many times we'll get engaged in a situation. We'll hear exactly what you just said. But our commission plans are built around, but that's how our quotas are built. That's how our territories are built. And I get it, like there's lots of kind of sedimentary layers that have built up to get us to where we are now. And I honestly think a lot of it is a function of the funding environment. Carolyn, like when, when the next investor would pay me, would give me a higher valuation for growth no matter what it cost. I had no incentive to kind of do system fundamental systems thinking and data architecture thinking for measurement. All I needed to do is just get more into the funnel, close more, just keep it moving with growth going up. And the unit costs were not an issue and the compounding was not necessarily an issue because I could always go raise money and we could always throw more money at it. So I think there's complicity across the board here for how we got here. But now the question is, well, we're not there anymore. We're not in a zero interest rate environment anymore. We got to go fix these systems that were built on shaky foundations. So what does good look like? I'll tell you, there aren't too many people who've done it correctly, but we're talking about product led growth at the top of the call, that is a system that you can learn a lot from because when the product sells itself, installs itself, renews itself, expands itself, there are no commissions involved. The only thing that you're architecting for is the customer experience because there's not even any humans around to help the customer get through that experience. So you actually have to build all of this with real empathy in mind and real kind of understanding of how does the customer achieve impact on her own. And that's a customer centric mindset by design, programmed right into the machine. And now you think about, all right, well, does it have to be PLG to be empathetic? Does it have to be PLG to be not commission driven? Not necessarily. Companies like Atlassian, who's everybody's favorite PLG company, they have a giant, they call them customer advocates, but they have a giant sales team that's not commission driven. They get paid a super high competitive ote, but most of it, almost all of it is salary. They get customer centric or overall company centric kind of objectives on which they're paid a modest bonus. So now they're working for the company, they're working for the shareholder. They're not just working for their own personal enrichment now. They're not going to undermine kind of, they're not going to say, well I sold it, now it's customer success's problem, or I renewed it by doing a huge discount and now at least I got my check. I'm not sure what the company's going to do. That behavior gets eliminated when you remove kind of the self interest out of the equation. That's not the whole thing. You also have to program empathy into the equation. Empathy for the customer. We want the customer to achieve impact. Revenue is a function of impact. Recurring revenue is a function of recurring impact. And so we gotta, we gotta architect that in and make that the center of our business, not our own personal paychecks.
- [13:32]
Carolyn
I love that I actually post on LinkedIn maybe last week or something like that. It was a reflection from a CMO about these sort of like systematic things we keep seeing in go to market. And one of them was sales and marketing sort of like butting heads, competing for credit. And there was a comment that resonated with the person who wrote this post that said, well, marketing is paid a pretty competitive salary where as much of the livelihood of a salesperson really depends on the commission they earn from closing deals. And I really like your approach here, which is let's just rethink how Sales is compensated entirely. Maybe it's more ote centric than commissions based. And I think this aligns with sort of our general philosophy because it's not necessarily one team or another that drives revenue for a business. Right. And so when we think about the metrics that are currently used to measure performance, you've got MQLs, you've got marketing source deals or sales source deals. I see in the like this is not just my personal opinion. I see this in the data that it's never one team or the other. And to just say oh, sales hunted this and closed it I think is really problematic across go to market. And it perpetuates, I think all of the wrong behaviors. And I think this really comes down to what you had said, that it's really about self interest at that point. It's not productive though for actually driving revenue. But yet investors or the C suite want to shortcut the answer of what department performed, how successful is each department in generating revenue. But I think that that approach is really, really flawed. It sounds like you sort of share the same perspective there.
- [15:18]
Dave Boyce
And the culture's going to start at the top. Forget about the board. I know that we raised money from them and I know they're going to try to tell us what to do and they've got opinions, but that doesn't mean that they're running our company like we're running the company. So the CEO gets to set the culture and the tone. So if I'm a CEO today, no matter what environment I grew up in, it is not the same environment that we have today. By definition, we have an onslaught of automation coming in to go to market. And if PLG wasn't enough, now it's AI and anything PLG couldn't automate, AI will automate. So forget about human powered renewals, forget about human powered expansion, forget about human powered qualification, forget about human powered kind of contracting. Anything that can be automated will be automated, which is how some of these companies are building to 10, 20, 50, 100, 200 million in ARR with less than 100 people in their company because everything's just automated. It's all self service. So now I'm running a SaaS native company. I cannot compete. If I want to just run the old Playbooks, I will have to figure out new Playbooks. Got it. So once I get myself out of that mindset that I'm running yesterday's Playbooks, the ones that got me to where I am, once I'm out of that mindset, then I got to figure out what are the playbooks. And that's where we get to what you're calling for. Like, look, so now, now I've cracked it open. There are patients open on the operating table. What do we want to do? Let's actually fix the problems. Let's automate what we can. Let's build systems thinking in, let's take self interest out. If it's turning our people into suboptimizers, you know, for their own interest, you know, but it's not their fault. We asked them, please be as aggressive as you can to hit these targets. And they just did it. They did exactly what we asked them to. But if that's hurting us systematically, now's the time to fix it.
- [17:10]
Carolyn
Where's the first, in your opinion, what you do with customers at winning by design? Like, what's the first sort of thing to focus it on? Like, I think plg, like you had said, obviously it's an area you're really passionate about. But we see all the time how PLG is just done suboptimally. Right. Like I think it takes a lot to really master PLG and do it right. So that's what sort of one way of coming at this, like, where would you recommend companies start?
- [17:40]
Dave Boyce
Well, not surprisingly, since we're, we see the world the same way and we're, we work together and we're partners, the companies are partners. Like, I definitely think that being able to measure the business in a standard and normalized way is what you need to do first. And the bowtie is a great way to do that across the entire customer journey because it captures the whole system, not just the acquisition funnel, but all the way through kind of the second half of the bowtie, which is onboarding, first impact, renewal, expansion. I want to see all of that and then I want to carve it up. You mentioned a revenue factory. I want to carve it up into go to market motions, meaning I don't want to measure by averages. Hey, what's your NRR? Oh, our NRR is 101%. Okay. What is it in SMB? Well, it's probably lower than that. That's not good enough. I actually need to know, how is my SMB motion running? How is my mid market motion running? How is my enterprise motion running? And I can actually codify that in bowtie metrics, which is amazing because now they're benchmarkable. I can compare enterprise to enterprise, mid market to mid market, SMB to SMB and they're improvable because now when I make improvements, I can see where it hurts. I can make an improvement, I can measure it, I can isolate it, I can fix it. It's just like in a lean revenue factory. Think about the Toyota production system. Whenever something went wrong on the line, they had this thing called an andon cord. It's like a cord above every worker's station. They pull it, the line stops. So we're wasting hundreds of thousands of dollars a minute for a stopped production line. Yeah, but if we can figure out why that's going wrong and we can go fix it upstream and then we start the line again, that's how you tune a system. If you just let inventory pile up or you let defects make it all the way through and we'll fix them later, you just kind of ignore it. That is not how you fix the system. So we got to be able to see it and then we got to be able to isolate things and we got to be able to fix them. It's really about visibility. You said it before, like a data architecture that gives me, that will allow me to operate at like a responsible kind of revenue factoring.
- [19:44]
Carolyn
Yeah, I love that. And I think I see this all the time. Like it's about capturing the whole system, not just the acquisition funnel. But I think so many companies just look at the left side of the bow tie and they're so laser focused on new logo generation and, and completely ignore the other side of things. Yet I come up through marketing, right? So I have like a very marketing centric approach to all of this. But very rarely do we look at the impact that marketing actually has on the right side of the bow tie with renewal and expansion and retention. And we're so caught up in like top of funnel MQL generation. I don't love that metric. I actually like, quite dislike it because I think it's really problematic. But I think when you can capture the whole system and not just the acquisition funnel and be able to actually appropriately measure the impact that marketing has through the entire journey, I think that's really, it's really just game changing because I think in many ways marketing is very much under leveraged in sort of like the power and the influence that they have within an organization. And when you're just looking at top of funnel activity, I think you're really undermining the strength and talent of what marketing is really capable of.
- [21:00]
Dave Boyce
I came up through marketing too, Carolyn. I did some sales and some partnership and strategy stuff. But in my heart, like I really do believe what you're saying. The marketing. And just think about it this way. We talked about customer centricity. You know, revenue leaders say they're customer centric. Where are our customers? That side of the bow tie, not that side of the bow tie. Those are our prospects over there, but our customers are over there. So if we want to be customer centric, we actually have to get close to them. And we got to understand how they're experiencing the product or the service. And we got to understand where impact is coming from. And in my point of view, I love, I 100% agree with you that we're ignoring that not only when we take care of our customers do they renew and expand, they also evangelize. You grab a customer, you help her tell her own story internally at her company, maybe externally to her peers, maybe eventually, like on a stage or on a webinar like this or. Or with us in our marketing materials. She's loyal for life, right? We help her tell her story, and then not only is she loyal for life, she uses her voice to bring other people in. And trust networks are peer to peer. They are not vendor to customer anymore. They used to be, but they're peer to peer. So we take care of our customers, they pull other customers in. Now we've got another source of new customers coming into the front of this funnel. And it's all based on actual kind of impact delivery and taking care of our customers. But if we don't even let our marketing team focus over there, or for whatever reason, because MQLs or whatever, they just feel like, I just got to bring in brand new cold leads. That's my job. I really wish I could take care of our customers, but nope. And then cold leads suboptimal.
- [22:41]
Carolyn
Yeah, I really agree with that. And one thing that I really see in the companies that we analyze is retention is a problem. And I think the C suite is often sort of like undermining the magnitude of that problem. Right. Like NRR, grr, might be in the 80s or low 90s. And yet we're just like, oh, let's just hire more BDRs. Like, you know, let's spend more in marketing. And when you do the math and you actually do some scenario modeling.
- [23:10]
Dave Boyce
Yeah, I thought we were talking about marketing. But if math stuff in here.
- [23:16]
Carolyn
But if your growth is declining, right. And they want to figure out why, like our growth is going down, our CAC is going up like it's a shitstorm. Let's figure out what's happening. Honestly, one of the biggest levers I think that you can pull is to fix your retention and keep your customers happy, renew them. Like we're not even talking about expansion. We're just keeping the customers that came into the new local factory to begin with. I think in many cases, if you want to reverse the trend around like growth rate, if that's an issue, that should be the thing to focus on. And marketing can go a long way into fixing that problem before it even happens. I think lifecycle marketing is such an underleveraged function within a marketing team and usually an afterthought. Yeah, yeah.
- [24:03]
Dave Boyce
And you brought up BDRs too. There's a lot of BDR teams who are not delivering the way that was written down in the spreadsheet in the 2025 financial plan. So we're paying salaries and we're not getting. We're not getting the production that we thought we'd get. On new logos. I see customers literally like redirect those teams towards just to the right of the knot of the bow tie. Hey, let's just. We got these people, they know how to talk to customers. They're naturally empathetic. That's how they're built. Instead of commissioning them on qualifying inbound leads maybe, or, or even prospecting externally maybe I just. If I've got any retention problem, maybe I have them show up. Instead of saying, what can I sell you? They show up and say, how can I help you? Because that customer who gets over that initial hump to First Impact and got some kind of empathetic help along the way, that customer is going to retain and expand. So I might just think about redirecting marketing and if I want to think about it in a bigger picture, I could even think about some of the humans like the BDRs and SDRs and redirecting them as well.
- [25:07]
Carolyn
Yeah, I really love that. And I think this really goes back to what we were saying before, which is like peer to peer networking is really, I think important in building trust and actually supporting the left side of the bow tie. I think it's really hard to sell an enterprise when you don't have evangelists to support you throughout that. I've seen it so many times and I think it's just such an underutilized play in go to market. Love that. Where do you see some of the biggest leaks in value across like a typical go to market system and how do you go about diagnosing them? I know we had talked before this about left side of the bowtie first and then right side. So maybe let's Talk about the left.
- [25:48]
Dave Boyce
Yeah, it's tough out there. I just came off the road. I think I did five presentations in eight days to portfolio PE portfolio. So like rooms full of CROs, CPOs, CEOs and it is tough out there. Like it is harder for public SaaS companies. Growth has basically halved and the cost per additional ARR$ kind of net of all the ups and downs basically gone up by almost doubled like 1.65%. We're paying like $2.64 for every $1 of net new ARR. So it is tough out there. All of that on the left hand side of the bowtie comes back to volume. Like we're just not seeing the inbound interest. We're just not seeing people pick up their phone or answer or respond to emails or all the things that we used to do just aren't working. So then we get desperate, then we start panicking. We start like you said, we start telling our SDRs to work harder. We add additional SDRs to the or BDRs depending on the motion, the equation. We think that's going to solve it. That is not going to solve it. It's a industry condition. The industry is running on trust and peer networks, not on anything that we do. So what we really need to do on the left hand side is pave. In Boston they, you know, when they built the city they didn't build it on a grid we all wish they would have like they did like New York, but it was already a thriving kind of town. So they literally paved the paths that were already being used. They call it paving the cow paths. We got to figure out what are the trust networks that are already there, what are the peer to peer and we got to pave them. We got to make it easier for customers to achieve impact and then share that impact and show up in the same places as prospects. So traditional marketing, traditional sales, it's a facilitation of what's going to be naturally happening, not a redirection. We admit we've lost control. So on the left hand side we're going to solve the problem in a different way. On the right hand side we got a center impact. It is not true that the best measurement of onboarding is implementation complete or customer is live software. What they want is impact. So we got to get to impact. We got to recenter impact in the way that we work with customers on the right hand side of the bowtie because if they achieve impact then all the rest is going to flow. Renewal is going to Flow expansion is going to flow. Evangelism is going to flow. So we're seeing a volume problem on the left, generically, and that's going to be solved in a different way than just more of the same. And then we're seeing an impact problem on the right. And that can be solved. That can actually be solved by just channeling your inner humanity, helping actual humans get impact from the thing that they put their career on the line to do. And if we have to invest a little bit more to your point, that might be a higher return on our investment on the right hand side of the bow tie than just throwing more, not working on the left.
- [28:48]
Carolyn
Yeah, I think that what you were saying about it's tough out there. I think that really resonates because what I'm seeing from our perspective is just the things that marketing and sales have historically done. Producing content, running paid channels, paid social, Google search, things like that. Outbound is just not working. In fact, one company I just consulted with, I think they had basically logged like 10,000 outreach activities to prospects. Okay. In one quarter, and converting less than 5% of them. How do you wrap your head around that? How do you fix that? Because not even the old way, the current way that we have been marketing and selling is just. It's broken. It doesn't work. And then, you know, we're also marketing's over here capturing signals, and then, you know, a lead reaches a score of a hundred points and we pass them to sales, and then we see virtually all of those marketing qualified leads go nowhere. Right. And so I think the overall intent is to build trust, build awareness, become the brand that people want to know more about. They raise their hand, they want to get a demo. And so I think to achieve that, we need to sort of adjust how we're actually going to market to do that. So I really like what you're saying, which is the peer networks running on trust. And I think, honestly, inner humanity goes a long way on that side of things too.
- [30:19]
Dave Boyce
I was just talking to someone last night over dinner, and he said, when I purchase something, I don't want to have to schedule a demo. I'm like, exactly. So what about our customers? Do they want to schedule a demo? Probably not. Like, whatever you like to do as a customer is probably what they like to do as a customer or however you would want someone to show up on a call. How can I help? Is probably how they want us to show up on a call. How can I help? Goes a long way. I agree.
- [30:45]
Carolyn
Yeah, very much so. We were talking about Atlassian a little bit. I'd love to hear just a little bit more into their story and some of the things behind their success. If you wouldn't mind sharing. I think you had another example in there too.
- [30:55]
Dave Boyce
The cool thing about Atlassian, I was able to study Atlassian and interview them for the book that, that I wrote.
- [31:01]
Carolyn
But very cool.
- [31:02]
Dave Boyce
They call their AES customer advocates. They pay them a high base and a low kind of variable. But the other thing is they don't allow them to talk to non customers. Not allowed?
- [31:15]
Carolyn
Really?
- [31:16]
Dave Boyce
Wait a second, then how do I get new customers if I can't talk to non customers, how do I get new customers? They have all customers. Doesn't matter if your name is Chevron or Citigroup or Shell Oil or Disney. They have all customers start in the self service onboarding flow. They're very committed to it. They get up to 10,000 and they believe in it so much that they want you to get up to $10,000 of usage, kind of, you know, footprint. And then they want to engage and they want to engage not with. What can I tell you about how great it's going to be to use our software? It's how can I help you expand the impact that you're already achieving? That's how Atlassian does it. It really centers this notion of kind of customer centricity and empathy in those customer advocates minds and they're not distracted by commissions. All they're trying to do is help you expand the impact that you've already achieved. Canva is the same way Canva is. Not only have I studied Canva, we also work with Canva as a client and their chief customer officer really truly believes, and I love this, that it should be up to the customer how she wants to engage. So if the customer wants help from a human, we'll show up and we'll help you. If the customer would love help from an AI, then great, we'd like an AI to help. So maybe it's 11:30 at night or maybe I don't want to schedule a 30 minute call or maybe I don't want to talk to a commission driven human. I just want to get some answers and I'm happy to do it with a bot. Great, we'll make that an option. The customer just wants to get hands on the product and just start going. We'll make that an option. And it's not implemented perfectly yet at Canva. But if I know Rob, he's going to make sure that they're ahead of the entire industry. He wants the customer to be able to switch lanes at her option and they want to just facilitate that journey in a way that's customer friendly. Of course they have salespeople. Of course you have to scale canva within a large organization. Of course you're going to need help with stakeholder management once you want to do that. And that's why they're there. They're going to help me scale it. Those are two great examples of just putting the customer at the center and taking the commission mindset out of the center of a go to market operation.
- [33:23]
Carolyn
I think that's a big, big shift for a lot of companies. So commission I think is sort of like a byproduct to think of how we're measuring performance. But let's talk about like, I feel like one of the hardest things is to sort of like break this obsession with really like where the deal came from or who gets the credit. At least that's what I see a lot. And so we're talking about shifting a team's mindset from like ownership to outcomes. I think eliminating commissions is potentially one way to do that. What are other ways to sort of break free of these limiting KPIs that we clearly know don't work? Like, I hear that all the time. If I'm not measuring a team based on that, what do I measure them on? And I think I'd love to get into a little bit about like overall business metrics. Nrr, for example. Great one. What's your point of view on that?
- [34:13]
Dave Boyce
How nerdy do you want to get?
- [34:15]
Carolyn
Oh, I'm ready to nerd out.
- [34:18]
Dave Boyce
So another thing that really hurts us, Carolyn. So it's the silos. The siloed metrics hurt us, but the point in time metrics hurt us too. What you really want to do is measure cohorts. And that is to your point. If it was hard for me to measure my kind of system wide metrics, it's even harder to measure cohorts. So think about. I'm not saying this to you, I'm saying this to anyone who's listening, who's like, I know what a cohort is, but asking for a friend, what's a cohort think about a time based. There are many different cohorts, but think about a time based cohort. So now I have a brand new cohort that consists of people who engaged with me for the very first time. Either engaged with marketing materials identified themselves for a very first time, and there's a thousand people in that cohort who all engaged with me for the first time In January of 2025, what I really want to figure out is of those thousand people, what happened of their lifespan. So I'm going to measure that cohort for six months, nine months, 12 months of those thousand people. I'm just going to keep the math easy. Even though we would all love this to be true, it's probably not. It's not true. 100 people became customers. Okay, great. Of 1,000 people, 100 companies became customers. Okay, great. That's at the center of the bow tie. Out of those, 100, 80 actually got achieved. First impact. Okay, not so good. And then of those 80, 90% of them renewed. Okay, that's okay. It's got a nine handle, at least. And then we got a 10% expansion again, which got us back up to the 80. Okay. Well, most of my leakage in that cohort is around onboarding. Okay. So now let me focus on onboarding. Now I make some improvements to the process. I figure out onboarding. Maybe I invest in people, maybe I invest some automation, maybe I invest some AI. And then I measure my next cohort. And this is a thousand people who engage with me for the first time in June of 2025. Is their experience any different? Oh, actually it is. Like, now I still get 1,000 to 100 new sales, but of those 100, not 80 get to first impact. 95 get to first impact because of all the improvements that I made. So now I'm measuring it by cohort. If I just threw that cohort into the mix, and I'm just trying to measure my first impact rate, and I look at it across all vintages of customers from the beginning of time, I'm going to hardly see any movement. I'm going to see that. Well, we used to be 80, and now we're 81. That's not going to change. Yeah, now we're 95. That is going to change something. But I have to isolate out the cohorts to see it.
- [36:48]
Carolyn
That's huge. I really like that. And I think, too, this is where the architecture really comes into play, because you can measure end to end. And so I've seen some, like, really cool visualizations of this, like a Sankey chart, for example, where you can see where somebody started, but then really see sort of like the friction points in that journey to see, like, where here's where we started, here's where we ended up, and here's where people sort of dropped off in the process. I really like that. For analyzing, like, the sales process specifically from stage one to close. Because a lot of times I think we're talking about cost of growth or go to market efficiency. And, you know, you said the industry average right now is double. One customer that we're working with is paying over $6, close to $7 for every $1 in new logo revenue, which is. We really want to fix that. Right. And so all you got to do.
- [37:40]
Dave Boyce
Is renew them at 90% for 20 years and you're going to be.
- [37:44]
Carolyn
Yeah, yeah. But they don't have a lot of visibility into, like, the sales cycle. Like, that's where they're losing. Right. Where their efficiency there is just not good. And so when you sort of can look end to end across everything, I think there's just so much insight that can be surfaced there. And not necessarily just the left side of the bow tie, but across everything. I love that.
- [38:03]
Dave Boyce
And if you isolate out those cohorts and you figure out what's working and what's not, one way to cut it is by time. Got it. Okay. So I've actually made some improvements. I can actually see them in that cohort. And now I'm going to propagate those improvements ongoing. So everything from that point forward is going to be 95% first impact achievement. Amazing. You can also cohort in different ways. In your example, they're paying $6 for every $1 of new logo. ARR. Okay, But I bet you could find a segment where they're not paying $6. I bet you could find in SMB, they're actually paying $3. Or in inbound, they're actually paying $2.50. Or in referrals, they're actually paying a dollar. If there's anything in there that is actually working, I gotta isolate it out. But I wanna go find that and then I wanna figure out how to grow that and then kill the things. Like, maybe I'm paying $12 for everything that's SEM sourced. Like, okay, that's bad. This is good. Let's do less of that and more of this.
- [39:06]
Carolyn
Yes. I just, like, I'm nerding over this because I love when you're able to actually have data and then segment it in different ways or cohort it and then you reach that unlock. Right. We see that a lot with MQLs, the leads that come inbound and then, you know, do X, Y and Z and then they reach an MQL threshold. We pass them to sales, we look at. If we cohort those by basically where they came from. You can see that that's probably driving up that cost because they convert just at such a low rate. But unless you have the data to look at that, how do you measure it? You don't.
- [39:40]
Dave Boyce
And it could be frustrating. Just so nobody get surprised when you go running, when you go home and run this, you're like, oh, I found something really cool and you go run your, your lead conversions and cost per dollar by lead source. I guarantee you your number one performing channel will be organic for sure. Just forget about that. Like of course it is.
- [39:58]
Carolyn
Yeah.
- [39:59]
Dave Boyce
But you can't do anything to boost organic directly. So just set that to the side and now look at everything else. That organic will grow over time as you build reputation and as you kind of LLM optimize your company and as you referral optimize your company. Like organic is going to grow over time, but it's not something you can pull a lever on right now and see an impact on.
- [40:17]
Carolyn
So yeah, that's I think where companies have, well, a lot of companies don't have the luxury of time. Right. But building your, your brand and awareness and credibility organically is the best path, I think to revenue. But that takes time and you could do that through thought leadership. You can do that through building relationships where ultimately the customer recognizes your name and comes to you. Right. That's what we all want. But that's not going to be something you could put like a dollar into machine and pull the trigger and then it's overnight you're going to get these types of results. I wish it was because it would make every marketer's job a lot easier.
- [40:57]
Dave Boyce
Spoken like a true marketer.
- [40:59]
Carolyn
Yeah, Well, I think you and I are both like aligned on what's the first, best next step that anybody who like feels these pains and these challenges, what can they do? Obviously it's like install the bow tie or the revenue architecture. Right. We both like fundamentally feel that way. Who owns that responsibility? Right. Because I think that that's a really big point of contention. I think with a lot of people that come inbound to us, it's just like our CEO thinks that marketing should solve it or that sales should solve it. Right. I have my own perspective on this, but I want to hear yours.
- [41:33]
Dave Boyce
We had a really interesting. Two of those five conversations that I talked about from my kind of week on the road were with rooms full of CEOs and for private equity owned companies, they're there because they're the best. But the conversation that was really interesting with them was around what Made you the best and got you into this seat. No matter what channel you came up through is not what is going to help you go win today. In today's market, where nothing's working, where it's tough out there, where AI native companies are completely redefining the way winning happens in their segments, and maybe if they're in your segment, you got to move even faster like they might. An AI native approach might disrupt you before you can disrupt yourself. So in my opinion, just through that mindset, it's the CEO's job. Like, I think the CEO has to insist that they see the factory metrics clearly. And that wasn't always true. The CEO used to say, oh, that's Mike's job. He's got it. Oh, that's Nancy's job. She's got it. She's done this a hundred times. Vivian knows how to do this. Pick a person. FP&A, Rev Ops, CRO, CCO. They got it. They got it. I'll be over here with the board and raising money. You guys have got the operations right. I don't think that works today. I think the CEO has got to be committed and cannot let up and has to go work shoulder to shoulder with sleeves rolled up as an architect. Because for Vivian and Nancy and Mike, they also didn't do it this way as they came up. They did it a different way. They're also kind of rewriting their playbooks as they go, and they need help. So I think it starts with the CEO and then I'm sure that's not the answer you're looking for. The CEO partners with whom is probably the answer you're looking for. And I really like you. May. I don't know if you're going to agree. I would love your response. I really like a partnership between the CEO and the head of FP&A.
- [43:33]
Carolyn
I love that.
- [43:33]
Dave Boyce
I know I'm stepping over the CFO. CFO should be in there, but head of FP&A. And then I want the head of FP&A, which is an objective witness, to kind of build out the growth model. And then I want the CRO to be a customer of that. I want Revops to be a customer of that. But the kind of objective truth I think should live with FP&A because they have no commission. Clouded judgment.
- [43:57]
Carolyn
Yeah. I also think there's something really important about somebody in FP and A too, because they have financial acumen. Right. And a lot of times as marketers and sales leaders, I think that's important. To be able to speak finance language, but it shouldn't be their core focus. And I think sometimes FP and a sort of like acts as a really important bridge or like glue between go to market and like the CEO essentially, which I really quite like. I think we're really aligned on that perspective.
- [44:25]
Dave Boyce
What they often don't have is GTM knowledge though. Right. So they may know finance for sure. And now they have to take kind of the CRO's word for it on how, you know, on how GTM works. So I think there's a role for a company like Passetto to step in there and be like, okay, we understand gtm, we understand finance, let's get in the room, let's build this objective model and let's get the right metrics in front of the company, let's help the CEO run with a full, kind of full instrumentation panel and now we can go run experiments. I often say, what's the point of running an experiment if you can't measure it? Yeah, just throwing spaghetti against the wall. You actually want to see if it worked. But you're going to have to measure it the way we talked about on a bow tie by cohorts. You're going to have to see. Oh, I moved the needle. Cool, keep that. Oh, I didn't move the needle. Fine, deprecate that. That's how I gotta go tune this system and I need that partnership to do that.
- [45:18]
Carolyn
Yeah, just going back to what you were saying is I think the CEO owns this. I, I really agree with this and I think the CEO needs to be on board with sort of like the approach at a philosophical level too. Otherwise we will forever be at the mercy of like how they see or want to measure go to market. Like I think a lot of times CMOs, VPs of marketing really feel this, like really viscerally. They feel the problem because they acknowledge they're not making smart decisions, but they don't have an alternative way to measure or optimize and they want to fix it and they can't do it alone. It's too cross functional, it's too in the weeds. And so sometimes when the CEO sort of like forces their hand and says, we're going to do this and we're going to do this as a collective and this person is going to quarterback it and we're going to bring in this partner to help us, those are the companies in my opinion that are the most successful. It really requires, I think cross functional alignment and buy in. And when marketing says, oh, I really want to do this. It's like an uphill climb to get everybody to. To see it their way, I guess.
- [46:30]
Dave Boyce
Yeah. Couldn't agree more. Okay, cool. So we solved all the world's problems. There you go. Sign off.
- [46:38]
Carolyn
I wish one day. One day. Well, listen, I love this conversation. I was had high expectations, but you've exceeded them. So I'm really happy about that and very grateful for your time. So thanks for coming on. We'll have to do it again soon. I would love to go down the path of PLG one day in more detail. But if folks you had mentioned you got a new book coming out in August. If folks want to learn more, where can they get more information?
- [47:01]
Dave Boyce
So you can available for pre order anywhere now it's called Freemium. It's from Stanford University Press. If you I think freemium is easy to remember so you can go Google it. But if you want to go to productledgtm.com that's my substack and I've got all the links where you can order it from Amazon or Target or Barnes and Noble or Waterstones or wherever you live in the world. And it comes out August 25th.
- [47:23]
Carolyn
Oh, very nice. Well, congrats on that. That'll be exciting. I think a lot of people from this audience here will want to check that out. So I'll link that out in the show notes too. But thanks again. It was great to chat. Really appreciate your time.
- [47:34]
Dave Boyce
So good. Thank you. Carolyn.