A (3:34)

Yeah, I agree. I love that. So you mentioned a few things in there and it's funny because the episode we dropped yesterday, it's Tuesday. For anyone that's curious, the third while we're filming this, we had someone that specifically talked about AI and I wasn't going to go right into this, but I think it's interesting because one of the things that I talk a lot about with people in my network is companies that are running strong direct response to performance ads, to gated content, which I would say not so relevant gated content creating some sort of false mql. You define it as a waterfall and I love the way that you kind of deliver that. To just hit these numbers to come back to the VPs or to come back to your investors to show that you're hitting certain metrics just for SDRs to try to find a golden nugget or because of their incentive structure passing through trash that's in the gray area so they can maybe close deals and meet their commission standards or whatever they need to do to then find at the very bottom of this entire equation that oh, sales is the problem. When I don't think it's really that your salespeople are bad and that we need new salespeople or new sales framework. It's that the entire process fundamentally is just fucking broken. And I think a big part of this is SDRs. And to my point, we had someone come in talking about replacing SDRs with AI. It's not totally there yet, but a lot of what's being outsourced overseas or a lot of what's happening in terms of the efficiency and SDR is eating up a lot of the payroll. These other things that we talk about. I would love to get your thoughts on AI and how it can integrate into the sales process and the entire model that we see being that the SDR function I think at least to my core is just completely. It's just broke. I don't see how this can move forward any longer. And I think I could be a possible solution in the next year or two.

B (5:19)

Yeah, so I used to think the same thing and I used to say the same thing to you when I came at it from a go to market angle. Like SDRs are unproductive, we must spend so much money on them, blah, blah, blah. If you look at the budget, SDRs are actually a very small part of the overall budget for new logo. 10% maybe compared to marketing programs, sales reps, commissions, operations, tools, brand trade show events, fucking everything. So it's really actually a small part. And when you stop looking at it from the lens of a CMO or a CRO and then you zoom out and you look at it from the lens of a CRO, you see that it's actually the whole fucking factory is broken. And that it's not that we have individual departments that are underperforming, it's that we have a factory that doesn't run properly. And so I'll give you a very easy example. It's the same thing that happens and go to market. Let's say you, you run a factory and the first thing you need to do is you need to get all the parts in that people will then assemble and work. And the people that bring in the parts are incentivized to get the most parts at the lowest cost, which therefore compromises quality. That allows them to go and hit their goal. And then they dump all these parts into the next place incoming inspection. SDRs that are responsible for sorting through all that garbage and then they have to sort manually sort through all the garbage, which becomes very expensive. And as the the other department wants to get more parts, then they have more Parts to sort. It's very ineffective. They have to scale headcount. You're just scaling a model that doesn't work. Then you have the salespeople that actually are not the problem at all. And if they had good pipeline and stuff like that, you would hit your CAC target, you would close deals, you would hit prp. It just shows up as a sales metrics problem. But it's really a problem that only from my perspective now, very clearly, only the CFO can fix the go to market planning model that drives how marketing operates and the guardrails that they can play in and what they have to measure and what they can do. Same thing for SDRs, prevents people from doing the right things. And so I have a bunch of marketing leaders that come to me and say, we're ready to invest in the dark funnel. We want to do brand. I have these conversations all the time and I tell them very clearly, if you want to go and do that, it will fail in six months because at some point the CFO is going to ask you, unless you have massive market tailwinds like 2021, which is likely never going to happen again in six months you're going to have the conversation is what is the ROI of these brand investments that we're doing with the cfo? And you do not measure the right metrics, you have not collected the right baselines. You're not going to have a story to tell around why this works and they're going to get cut even if they're working.

A (7:39)

Yeah.

B (7:39)

And so the marketing leader can't fix this. The marketing leader has to allow and flag this problem to the cfo. So the CFO can fix the revenue factory, which just all that does is allow the CMO and the CRO and the head of Biz Dev and the head of Rev Ops to play in a sandbox that allows them to be successful. The finance team sets the rules that the go to market team has to play in. They set the goals, they set the ROI models, they set the waterfall conversions, all these different things.

A (8:06)

Okay.

B (8:07)

So it really, that's where the problem lands and it's just a hard pill to swallow for a lot of revenue leaders.

A (8:12)

Yeah. So I think we agree on something. You're changing my mind a little bit here on the SDR thing. I'd like to dig a little bit deeper into that. Maybe, maybe later.

B (8:20)

I'd love to. Yeah, I have a very clear perspective there.

A (8:22)

Yeah, I, I definitely want to dig into that in a second. But I think what we're talking about here is it comes down to. Or I believe this would come down to maybe not the SDR function itself, but how and when to maybe bring on more SDRs. That could be maybe where it's more fundamentally flawed. Would you think that that would be something where it comes down to finance making the right decisions with marketing to solve part of that problem? Or how do you solve that problem?

B (8:45)

There's effectively zero companies on this whole planet that can, based on data, plan and scale their SDR headcount model. Zero. Why? Because the only thing they track is how many meetings did this person set. They have no data underlying about why they reach out, what they say, what was the conversion, where are they dropping off. They can't use science and data to say because of all this data, we need four more STRs next year. That's the amount of supply that we have to feed people based on our capacity and ROI model. Nobody can make that call because the way that they collect the data is just around how much did SDRS do? And so the whole model of measurement is just to pick a little box and say marketing did that and SDRS did that and sales did that to divide the credit. Which leaves you with no insights about how the fuck do I scale this thing. So all the data is collected to divide credit, not to drive strategy tools are built around it, the CRM architectures, the planning models. And so it just leaves people. And then when you do that. And all those models were built in a time where economic tailwinds, lots of funding, SaaS, companies getting 500x revenue valuations where literally nobody cared. And you could just say, oh, let's just put a million dollars more on marketing and 2 million more in SDRs and just keep scaling these things. And now today, where you actually have to be intentional around do I put this 500,000 on marketing, SDRs, account management, rev ops, the strategic initiative with a consulting firm. And you can't just throw money at everything. And you have to be strategic and selective. These models, the models that people use two or three years ago, totally break. And so that's why people say we don't have visibility in the top of the funnel. I don't know how many SDRS we have or whether it's working or not. Should we use AI for SDRs, which is being given right now as blanket advice? And it's totally shouldn't be blanket advice. There are only very specific use cases where you should try that right now. Yeah, I just, I think that is the clear perspective. And when what people do right now when they try to compare did marketing do that versus SDRs, is like comparing the wheels in the factory compared to the people that put the wheels on the car. So you're comparing apples to oranges or even something more complicated than that. Because SDRS book meetings and create pipeline. Marketing does not book meetings. They do not create pipeline. They generate first party signals that allow SDRS to prospect or salespeople to prospect or AI to prospect to get meetings. They're two independent processes that right now get measured together and really fuck the whole thing up.

A (11:18)

So one of the things that we've been doing is we've been hiring what we're defining as like full sales cycle AES to substitute for the SDR function. But you're saying here that when we look at everything all the way through, if it's done the right way, not only are SDRs affordable, but they're effective. It's just that the way that we're measuring it. I don't know if this has anything to do with something that you. You've talked about a lot on other episodes on your podcast, revenue Vitals and you talk about departmental silos and people looking at each department has these different objectives. Is that a part of why you think this happens?

B (11:52)

What I want to say on this topic is that all the free advice that you get isn't free. It costs you the time and mistakes that you implement and how it blinds you to the things. 90% of the advice I see on LinkedIn is treated as blanket advice. I see it every day. Yesterday it was the only thing that's going to matter in the future is distribution. And sure, if you're Miro and you sell to B2C, $10 a month, massive TAM, then yeah, distribution will be a huge advantage. But what about the company that only sells to the hundred or thousand top CPG brands at 500k a year? Distribution is not an advantage there. Not content. Organic content distribution is an advantage. And so we take these and just like we need to eliminate the SDR role. Yeah, if you're a 4K ACV product and you have cost compression, you literally can't afford the role. You have to get rid of it. But for 100k, 150k, the model could be working perfectly fine and just needs to be optimized. And so it's really about understanding all the details and nuances of the business and then having appropriate advice. Which is why I really want people to think about the cost of taking the wrong advice. And right now With AI and free content and people scaling this all out, the real superpower is not how do I get the answer, it's what is the right answer for me? And I think that people need to be thinking a lot more about that when they make strategy decisions, all right? That they hear about something that's working, like in a. You're in a community, right? And somebody's like, oh, like Google Ads is crushing it for us. We're like at a 3x roas. And so then people take it and they're like, oh my God, 3x roas. We need to do that. What are you doing? And they copy this whole strategy. When the company doesn't measure ROAS appropriately and it's against MQLs or they're taking it against three year contract value. And they take this blanket advice that's not communicated or calculated in the same way that they do internally thinking that they're good or bad. And so I think people should really be cautious around how they're getting their advice today, especially when it comes to very high order expensive decisions.

A (13:47)

Well, I can appreciate that that was a very carefully curated answer. I don't know if that's something that you're just speaking on a lot. It feels like that there's no. There's obviously no set solution. We have to be able to have frameworks of understanding the complete picture based on the business size, based on the model, what the contracts look like, and just have a way to interpret for each account individually what the right model would be. Right. When I hear you talk about stuff like, this is a big reason why I wanted to have you on, and I'm going to bring this up and you can answer it any way you like. A lot of the hot takes, for lack of a better term that you have on LinkedIn, they spiral. Like, if you look at anyone else that's posting things, I think that you get the most heat out of anyone else on LinkedIn. But when I speak with you individually, if I go to your live event, if I listen to your podcast, you have the most precise and articulated answers that are clearly well thought out. And the sound bites that are being criticized don't have any thought behind the big picture. I just want to get your thought on. Why do you feel like people criticize your belief systems the way that they do on LinkedIn?

B (14:51)

Specifically because it challenges their comfort zone, Because I'm in a political place to share this information that everybody believes. But if they like my post and then somebody on their team sees that they like My post about how attribution is destroying their company, they might have to go to hr, they might get a little talking to for supporting that or commenting on my post that calls out a clear problem that they see in their own business but they can't politically fix. And so my advice is not made up. You say it's like clearly well articulated. All I do is just work with a ton of companies, communicate the patterns that are in real life, and then bubble them up to here. Right. So it's basically like an insights engine. I'm finding what's happening that's real and then just telling everybody about it. And the second thing is that I grew up teaching marketers how to make calculations and do things in marketing. And when I was doing that, I didn't have the SDR budget, I didn't have the sales budget, I didn't have the rev ops budget, I didn't know nrr, I didn't know what the marketing internal headcount budget was. And so how the fuck am I supposed to tell them how much money they should spend on advertising? Yeah, but I did that for a long time and didn't get challenged on it. And now that I've moved to a higher level, people disagree with where I'm at because I'm communicating the issue at a level that's not relevant to them anymore. So, like, while I really believe that my point of view should be the exact same point of view that every single marketing leader, a true CMO business leader, should believe the exact same things that I'm saying, it's not going to happen overnight. And then as you move further down the organization to manager and director, you're just talking about things that are a lot over their head. While they could benefit from them, it's going to take them a long time to understand the concepts and think three or four levels higher in the organization. So I'm communicating now what happens from the cfo, the CEO and the board down to go to market. And sometimes I have to share unfortunate news and people don't listen to my show for me to tell them what they want to hear like some of the other fucking vendors do. They listen to my show because I tell them what they need to hear, even when it's hard. And I'll take the heat for telling the things that are hard. But I'm going to keep telling the truth because then I can go back in three years and pull this clip about how I'm talking about stuff and say, look, I'm more interested in being Right than like, which is different than how I used to be. I would massage my answers. I would be political around it. I would try to be nice around the things that I said. Now I don't care about impressing people. I don't care if I rub people the wrong way. The people that are smart, that see how deeply I understand these issues and know that I can help them, whether it's from free content or expensive, you know, consulting to solve their business problems. The smart people see the problems.

A (17:26)

Yeah. Well, I think that the way that I've seen You debate on LinkedIn is typically respectful and again articulated. This is the first time you might be hearing this. I don't know if I sent this to you in the email. I do have biased around my buy in behind your belief systems. I'm a sales guy. Anyone that listens to this show knows that I'm a sales guy. We coach sales, we teach sales, we deploy sales. And one of the big missing elements is go to market and that marketing attachment to make sure that we have a complete product. And that's something that we're working on. And when I first tried to figure out how do I make sure that these departments are acting as one and unified and we can look at the big picture, I had to find a way to get reliable information. And one of the things that I found was the vault. When you had launched the vault, I was a part of that program for, I don't know, I was in there for maybe a year and a half, two years and just self taught information. I was able to solve at least eight major problems for the company that I was with consulting on and part of how I was able to start the brand that I have now and we're talking about like various, like across the board things, not just you know, how to run paid ads on LinkedIn or what your philosophy is on your profile on LinkedIn or dark social or your event flywheel, all these things that you've curated in the past and put into that portal. There's so much in something like that that's valuable for people that are listening and don't know where they could just access this and understand, oh, this is why Chris is saying what he's saying. So part of what I wanted to bring up today was not just particularly in defense of what you're teaching, but I wanted to provide some anecdotal advice or some sort of testimony to a degree to say I've literally witnessed this. I've self applied these things that have worked not just for me, but for the clients that we have, when my marketing background was really small, it was only sales focused. And I would just say that that was a game changer for me.

B (19:17)

Here's the crazy insight. I am starting to believe that many people that come from sales would be better marketers than marketers that have been a marketer for seven years. I know it's going to piss off a lot of marketers to hear me say that, but a marketer that has been a marketer for seven years carries so much baggage around. This is what we do with multi touch attribution. And we have to do the trade show boost because of brand and blah, blah, blah, blah, blah. That a salesperson is going to come in and say, does it drive fucking revenue or not? And you can feel it. You can show up at the trade show booth, the company spends $500,000 as a sales rep and know this is a fucking waste of time standing in the booth, you know? Right. But the company keeps every year $500,000. Let's build this booth and then tear it down after three days and chalk it up. We'll make a report about, we had seven meetings and we had this much brand value. And every person that's in there says, I created zero opportunities, I talked to nobody important. And so, yeah, I just think sometimes chief revenue officers and salespeople don't have all of the baggage, for lack of a better way to say that a lot of marketing people bring. That is so far away from does this drive business results in roi? Is this working or not? And there's a lot of things in marketing and how it's propped up right now that you can do them, you can feel good about them. They drive no results and somehow they get defended or allowed.

A (20:30)

Well, I've felt this. And so this is the last thing I'm going to say about this is that for me right now, we're a small team, okay, that this business has been operational for six months. We've got three people on the entire team right now, including myself. It's four. And we do have attribution software. Right. We are tracking things. We are looking at that.

B (20:48)

Which you should.

A (20:48)

Yeah, exactly.

B (20:49)

Right.

A (20:49)

So Chris Walker doesn't hate attribution. Right. Let's just clear the air there. But at the same time, you know, one of the things that I look at is, well, what's effective for our team? And I get more business from things that I literally cannot track, at least easily than I do directly from any of my branding campaigns, any of My performance campaigns. And there's an entire ecosystem of the things that you do that contribute to the business that comes in. It's not so simple to just say this is the best way to do it.

B (21:19)

Right.

A (21:19)

And so if I could tell you the amount of DMS or messages that I get between TikTok, Instagram, Facebook on hey, we found this thing relisting your podcast. You know, we'd like to book a call that is more common for us as a small business than it is spending maybe, you know, 30, $40,000 a month, which is a big risk for us, into Google Ads, LinkedIn and Social for branding for some super long term return that could happen way down the line, that could possibly bankrupt us. But yet I see that this is one of the recommendations that's made by brand marketers as well. You need to create awareness. Well, awareness is not always, in my perspective, going to be the number one thing that I need. I need to find people that need work right now, that need to buy something right now. Because we're a startup, we're bootstrapping and we don't have $100 million in funding.

B (22:08)

Totally. I mean, I think the new way to build a company is to have a $10 million company with 10 people. And it's totally possible now with the way that AI works and the way that if you really understand your customer and drive significant value. It's going to take a while. But you can see SaaS pricing models changing already. Where the model used to be per seat or just like an overall license fee, you're seeing smart people with AI now change to a cost per result, like cost per ticket closed by AI or something like that. And over time it's just going to cross all the way to did you get the fucking business result or not? We said you were going to grow by 40% over the 12 months. Did you grow? We get paid based on your growth, we get paid based on pipeline production, we get paid based on that type of stuff. That the best companies will get massive pricing leverage because they provide an actual result, not a tool. Right. So it's just like an investment, right? If I was going to go out and I did something and turned $1 million into $5 million, like in real estate, the real estate agent or the person that helped me get there would take a percentage of that fee and I would be pumped to pay that fee because they increased my investment by 500%. Now the same things will exist somehow and go to market based on results and those types of people will Charge millions of dollars and drive hundreds of millions of dollars in value. And it's a good trade for everybody involved, where right now that responsibility gets spread out between six different vendors, nine technologies, and no one has accountability to. The only real accountability comes back to the cfo.

A (23:39)

Yeah, well, you've been talking a lot about finance and marketing and the disconnect that you're finding there. Is that something recent that you've been focused on? I just feel like a lot more of the content's been focused around finance and marketing.

B (23:51)

So I've been communicating around, like, gross margins and customer acquisition costs and how lowering CAC actually just increases and accelerates your growth rate. You get more customers for the same amount of money when you lower cac. I've been talking about that stuff for almost a decade now. The different switch now is what is the primary angle that you're coming from? And so the primary angle that I came from used to be marketing philosophy, which is what most people talk about today on LinkedIn that I've just moved on from, which is like, we need to do brand because our customers want it, or like, we need to do whatever. These philosophical arguments that when it comes down to it in the boardroom, never hold water. What holds water in the boardroom? Business cases, financial information, vision about what we're going to do, a true plan of how it works. And when you come at it from that angle, it becomes a lot easier to say, if we fix marketing, we add $500 million in enterprise value to our company. This is something that we all should be talking about at the board level. We've been sitting here for six quarters saying, we don't think our marketing's working. Meanwhile, it's costing shareholders and investors a fuckload of money. And when you come at it from that angle, it gets a lot easier to change the marketing strategy or do something differently. Because you see it where right now it's we need to do brand. And we have a couple of touch points to show for it. I'm all for brand when it drives business results, when it drives appropriate roi. I just don't believe that most of what it's done today does. And they hide behind the idea that it's brand and we can't track it with attribution. And the real issue is that attribution has become the primary measurement model. When it should be tertiary, it should be the third level of your. Of your stack, where right now it's the first level. The first level should be, we spend $25 million to get new logo customers. How many customers and how much revenue did we get, AKA what is our cost of acquisition? Then break it into the investments to create pipeline versus closed logos. And it's not just marketing versus sales. The investments can be blended and moved around so you have a new way. Then you look at those two and you look at the ROI of the 15 million we do to create pipe and the 10 million that we close it and you can immediately say, is our factory working or not? Where's the biggest problem? And then with that, you have the financial information that you need that 90% of CMOs don't even have the visibility to create those calculations.

A (26:15)

Okay, where do you start? Because when you're talking about something like that, just for our audience at least the much less of the audience is going to be diving really deep into go to market.

B (26:25)

Let's break it down for people in a, in a simpler way. Okay, so let's look at it instead that you're a salesperson, right? You just won the lottery. Okay, so you won the lottery. You won 10 million bucks, right? And then let's just pretend there's no taxes involved. So you just have 10 million net of tax. So now you have the $10 million and you need to allocate it into a portfolio of investments. And those portfolio of investments, you say, I don't want to be all in with one person. So I'm actually going to have four different advisors that all manage two and a half million. And then inside of each of those two and a half million, those advisors are going to buy this stock, this private equity, this piece of real estate, this bond. And so you have all these different levels of the money that's being shifted and then the ROI of each individual investment as well as the advisor's portfolio overall. And when you look into that, after a year, you're going to find winners and losers and it's very clear to know what is the return on each one. And then you're going to take the investment that comes from the losers and say, forget this, I'm going to sell these losers and I'm going to move it into my winners and I'm going to add new stuff. And that process of portfolio optimization doesn't happen in go to market. What people are used to is let's run all the same stuff and just put a little bit more money into all the the same stuff next year. And that model is totally breaking today. So the mindset around how investments get scrutinized and then how they get reallocated is totally broken and that's the problem. Impacts everyone on the go to market team, but can only be fixed by finance.

A (27:48)

Yeah, that makes a lot of sense. One thing I wanted to bring up was this is a separate problem. I'm just kind of looking at some of the notes I wrote down for this.

B (27:55)

Yeah.

A (27:56)

I wanted to touch on some of your thoughts around events. This is also how it applies to salespeople. Most specifically, I've been a part of teams. A lot of people listening to this have been a part of teams just constantly being sent out to large events. I think that the landscape of events has changed slightly. I still see a return in some cases if it's done the right way, going out to events and networking, but I think that it's been watered down greatly the past couple of years. I wanted to get your thoughts for people that are listening again in sales on the most effective ways possibly to attend an event if you have to, or your overall thoughts around going out to a bunch of events throughout the year to get new business.

B (28:31)

It's not about whether or not you should do physical experiences and in person experiences with your customers and prospects. You should, unless the ACV doesn't allow it. But the way that companies do it is basically the same strategy from before 2010 when it comes to events. And what was different in 2010. Like a lot of the companies right now didn't exist. Most of the social networks that are popular right now didn't exist. Some B2B companies didn't even manage their website back then. They didn't have a Facebook page or a LinkedIn page. There was no information on the Internet. And so when people wanted to understand what was going on in the industry and to understand what new products are coming out, one of the best places to do it, there were no communities like Pavilion or something like that or any other subspecialty. So you would go to this trade association meeting, you would carefully sit through all the content because you can't find it. It's not available on the Internet. It's the best stuff you can find once or twice a year and then you carefully peruse the floor to look at every single innovation because you don't. Companies don't update their website or do digital marketing. So it's the number one way to, to do it. It's fucking 2024 and companies do the exact same thing right now. And all that's happened is the cost of the events have skyrocketed and the ROI is falling off a cliff. Yeah, because the way that the, the options that a buyer has available to get the content that events offer and to discover the products that are on the trade show floor, they don't need to fly to New Orleans for three days for that anymore. They don't. And when they go, they are there to see their friends and peers, to connect with.

A (30:08)

Exactly right.

B (30:09)

To see their friends and peers. The sessions are not that great. I go to the events, sometimes I speak at them. I think that my content that comes from here is better than the events that I speak at. And I sit through the content and I'm like, all these people paid money to the event to speak and they're giving me a fucking sales pitch. I'm not learning anything. And so just the whole system of these national and regional trade shows and the investments compared to the roi, the fact that people are still doing them is totally ludicrous. Ludicrous to me. But if you rethought it, which is what I do, and many smart people do and say, all of our target customers are going to be at these seven events over throughout the year. Maybe we don't need a $500,000 booth. Maybe we can send four of our people, their thought leaders on the Internet. They produce content on our video show. Everybody's going to recognize them. We're going to have a bunch of conversations, set up coffees with our customers, meet all of our prospects, talk to all of our partners, do business development. It costs us $10,000. It's almost impossible not to get a 10x or 100x ROI on that strategy. You're paying for hotels and flights and fuck the sponsorships and all the other stuff. You don't need those people to prop you up anymore. You have the Internet, you have your own website, you have all your own channels, you have all your own database. You don't need them anymore. That's about as clearly as I can talk to when we analyze every single strategy for events. And we've probably done 50 of them so far. So if you think about the money, it's probably on average, 10, 15 million per year per customer, 50 customers, $500 million in event spend that we've looked at over the past 12 months. And out of that, if you look, the bigger the event, the higher the cost and the lower measurable roi. So the national trade shows are by far the worst. Then the regional conferences are the second worst. Then these, like owned smaller dinners end up being something that actually does have high value or some smaller, more intimate, whether owned or third party events and then lastly webinar the highest roi, not lastly the highest effectiveness webinars driven because it's the lowest cost and quite trackable. And so if we just stack them up and look at them, why do we keep spending on the most expensive things, 3, 6, $10 million in budget every single year with no measurable ROI and say it's because of brand and everyone in the fucking company knows it's not paying off. I don't know, I struggle with how people keep doing it, I really do.

A (32:27)

Yeah, I'm not, I'm not sure we always tell people or at least private conversations. I think the primary function for people to go to these, these trade shows and everyone thinks the national trade shows are the best ones. When you speak to them, you got to go to the national trade shows. It's a short vacation away from your wife and kid. That's what I tell everyone they used to be.

B (32:45)

If you got measured on MQLs, you're going to have the most volume, you're going to have probably be able to achieve the lowest cost per MQL. It's different if you only have a dinner of 10 people. If you're going for a thousand MQLs, that dinner doesn't help you very much. It's going to be an expensive cost per mql. And so the whole thing is built around, used around a metric even if it doesn't get measured anymore. The mindset and the strategy is built around how the old metrics used to work and how the old world used to work.

A (33:10)

Yeah, it's crazy. I don't have as much data around this as you do, but if we go to an event, we will only go if we have appointments booked at the event with people that are already in our pipeline and it gives us an advantage to sit down with them in person one on one and sometimes close the deal at the event while we're there. That's the only use case that we've seen to be effective for whether it's regional or national.

B (33:31)

The whole strategy is as you work the lower and lower in the funnel for events, the more effective, higher roi, better overall strategy always. So like you have customers, right? So like customers and NRR and retention would actually be number one. Then you work up to active in pipeline deals, then you work up to the people that the places where you think people are in market or the next set of tiers. But when you work all the way up to brand, it's just a really, really, really ineffective way to market your brand. To build a fucking booth in a big trade show floor with a thousand other booths that most people don't even walk through anymore. Like, it's just such a bad way to chalk it up against brand. People aren't even seeing your booth. They're at a bar, they're at an event, they're talking to their friends, they're at a session. They're not. I haven't walked through one of those things. Can carefully looked at all the booths in fucking almost 10 years. I feel like I just don't know. Yeah.

A (34:28)

Now I think. I think part of it is employee feedback. This is. I have nothing to go off this. I'm just speaking strictly off opinion. Is employees coming back from trade shows saying that they had a good time and it remains part of a strategy. I think that has some influence on why it continues because that's exactly what people are doing. They're going to the bar, they're having drinks, they're going out to dinner. It's a. It's a short vacation away from where they do not want to be every single day trapped inside their homes. And I just can't get over the fact that I believe that that is a reason that people continue to fly across.

B (34:58)

Yeah, you can still go. You can still go to the bar. You can still have fun. Just don't spend a quarter million dollars on a booth. Like, you could still do all the other stuff.

A (35:08)

Well, I learned that early on in my career, before I was into sales and now dipping into marketing with some of our services. My career began in the fitness industry. And when I. My first business that I had failed miserably just was a complete flop. I would go to these big national events, these fitness events, and literally hand out business cards to people I met and I would get business. I never had a booth. I never had product that I was selling. And so to this day, every time we go, we've never sponsored an event. The last six months, the last company I was a part of, before I started this venture, we didn't sponsor the event. We would just go and people would say, how do you kill it at events? Or intentional with who we're meeting? We have a strategy and we're not wasting money on. On things that people are not recognizing anymore.

B (35:53)

So here's another thing that I've been like, really thinking about is that why do all the event budget and all the discretionary event spend go to the marketing budget? Why? Because they administratively organize the fucking event. Sales would better spend the money. I think that customer success and account management would also better spend the money. And so why are events not a program that can be used across all departments? Not siloed in marketing is something I really want to challenge.

A (36:20)

I'm going to start a forest fire the second we get off the show, which is the sales will better spend the money. Chris Walker.

B (36:28)

Yeah, that's why people are like, oh, what a hot take. Because they just take my shit out of context.

A (36:33)

But yeah, that's exactly right. Okay, you caught that. That's hilarious. Yeah, I mean, I actually was going through prior to today and I wanted to get some interesting things that you had said on LinkedIn, if you're open to it and if you can provide some context around it.

B (36:45)

Yeah, let's go.

A (36:46)

All right, so this, this one I thought was pretty cool. So the LinkedIn post said Inbound was a tech vendor. HubSpot's marketing message in 2013 and somehow 11 years later is still considered the best practice across B2B. So my question is, what does this mean and how do you fix it?

B (37:00)

This is another thing about, like just what I said about the trade shows. Right? Okay, when, when did HubSpot talk about inbound? They started talking about it maybe in 2008, 2009, and it really started to get steam 2013, 14, 15. And what was the point of Inbound? To create First Touch Attribution to provide credit to marketing, to say marketing did something and then what happened after that? Drive gated ebooks. Get gated ebooks to get First Touch Attribution and get someone in your database so you can send automated emails with HubSpot and you'll be able to say how good marketing is doing. And the whole strategy was built around getting credit for marketing, not about delivering a scalable business engine. And so we just need to rethink it. The Inbound, Outbound. All it says is whether SDR started prospecting from a signal that came from a first party asset that we confuse with marketing. A website, a webinar, an event, or it came from a third party data provider like Zoom Info, Apollo Intent Data, the fucking user Gems, the other million things that salespeople use. And the only difference is what data provider gave the data to the prospecting team. We should instead be comparing the success of all of the first party signals and the third party signals together. Rev Op should be doing that, but they're fucking not and they've been sitting on it for years. Rev Op should be breaking down this silo and looking at all those signals together and then separately evaluate Our prospecting Engine, which includes SDRs for lower market, higher velocity deals and AE self sourced for more strategic high touch or dedicated touch deals. And the prospecting layer and the signal sales trigger layer are two totally different things. And right now get completely mixed together.

A (38:46)

Yeah, this is going to be just for time's sake, I want to just keep jumping topics here. There's three things I want to make sure we don't miss. So that, that was great insight for that quote. I found that I was laughing. I was literally scrolling through trying to find some things that I thought were interesting. And I think I thought that one was, yeah, pretty cool. We're going through, you know, high touch, dedicated touch. It immediately brings me back to the revenue architecture model and talking about, you know, the way to design the business as a factory. And one of the things that I've received pushback on, and I'm sure you have as well to at some point is the idea around the stages of growth and expansion. And a lot of the pushback that I've received is just really simple. And I, I think that this is another thing taken out of context. But I want your thoughts. Here is when we look at expansion being one of the areas of multiplying your growth, people say, well, there's not unlimited expansion and so these numbers don't really exist. And so I want to get clear on how would you define that stage of growth, expansion, why does it work? And that's it. I just want to get your thoughts on this.

B (39:48)

So first off, revenue architecture, another thing about blanket advice is they say 10 million ARR is when it starts getting applicable. And I think you could start thinking about it at 10 million ARR, but you really need it at 20 mm, you really do. And so that's one thing. And then when you think about just expansion, all you have to look at is how fast are we going to grow and how much is it going to cost. Okay. And I work with companies that have 122% NRR so they could spend no money on sales and marketing and get no net new customers and eventually that train will run out of the station. But for the next 12 months they would still grow 22%, which is better than most companies combined that have a 93% NRR. And so all it does is set the calibration point for how hard your new logo has to work to be able to grow 30 plus percent. So you're either playing 10% above the game at 110% NRR or you're playing 10% behind the game at 90% NRR. And the reality is that once you're at 50 million, right, let's say you're at 50 million and you have a 120% NRR, which means you're getting $10 million in new business from your base and then on top of that you're going to have so that's 20% growth. And then on top of that you're going to get 5 million in new logo. So you're actually getting twice as much net new ARR from your base than your the stuff that's coming from new logo. And then that will continue to compound. And what the problem that people have here is that people say, oh NRR is so important. Let's have marketing stop marketing to new logos and just market to nrr. And like that is one of the stupidest recommendations that I've ever heard personally. You need both sides of the equation running optimally. And yes, there is crossover. If you sell bad customers and non ICP customers with the wrong way, they're going to have higher churn rates. You sell good customers, they're going to stay longer. So there is overlap, but you really can look at them as two distinct parts of an engine. I love the connection point because over time, years of time, not nothing soon you'd be able to see the customers that come from these channels or from these programs or from these sellers are the ones that churn. So those are some interesting insights that'll be available at some point.

A (42:00)

Cool. Yeah, I've just, I've received a lot of pushback on expansion. I was curious your thoughts. I've got a couple things, but anyone.

B (42:05)

That'S really run a business that's been a CEO or CFO understands how much retention matters. It's really, really fucking hard to grow a business if you're 20% of your customers leave every year.

A (42:16)

I think that's foundational. That's why I don't understand when people try to debate this. And I had a couple other things but for time's sake I've got one more that I feel like is equally as fundamental. Why should cmos care about marketing Return. I feel like you break this down the best. So I save this for. I know couldn't even keep a straight face. I saved this for last deliberately. So I want to skip to this. Get your thoughts and we'll conclude everything here.

B (42:43)

We'll keep the noise in here. For those of you that didn't see, I just spilled a sparkling water all over my chair and now my Pants are now My pants are what? Could you repeat that question? What we're talking is a little distract.

A (42:51)

Yeah. Why should CMOs care about marketing?

B (42:54)

Why should CMOs care about Marketing ROI? Because Marketing ROI is the inverse of growth. So if you have no more money to spend, if you can't just spend 20% more to get to your target next year, literally the only way to do it is to improve your marketing ROI by 20%. And most CMOs I know don't have their budget going up a bunch. Their targets are going up, but their budgets aren't. Which means that they need to make their budget work harder. The only way to make it work harder is to improve the blended ROI of all of those investments, which involves looking at your investments like a portfolio, having a process to identify what are my lowest performing investments, and then reallocating them to things to get a better roi. It is about as simple as it gets. Anyone that disagrees with that argument shouldn't be a a C level executive. They should be a VP or director.

A (43:35)

Love it. Well, I could say there's not many people within network that I am a part of that would disagree with this. However, you find on the Internet a lot of people trying to hide behind the fact that we never have to calculate roi. And well, my hot take would be this is why those brands don't grow themselves. And when you see marketing companies not growing with their own marketing philosophy, that tells you everything that you need to know about the strategy. And this is just something that I feel when I try to listen to people that challenge my own beliefs. I try to stay open to this. What are some things that I could do differently? And it's hard for me to get behind that.

B (44:11)

People think that marketing, especially in the early stages, people like people think that marketing is going to come and save the day. It's not. It's a business strategy problem that is combined with how you deliver to a customer, the margin that you collect there, your cost basis on sales and marketing, your product strategy, the competitive landscape, your offer, your pricing strategy, and then all of a sudden you have your brand marketing. You know what I mean? Like it's just a small piece of the puzzle. When you're a hundred million ARR and you have 122% NRR, marketing is going to fucking help you. But it's not going to save the day at 2 million in revenue when you don't have any of those things figured out. And I think that's one of the core misconceptions that people have Marketing accelerates a strategy that is already working. It does not start a car from scratch that's going nowhere now.

A (45:00)

Well, from as a, from a sales point of view, sales reps would love to sell brand marketing because a lot can't go wrong when you're pitching it the way that it's being taught. But the reality is that's not going to get anyone anywhere. Right? So anyhow, Chris, we'll wrap it up. I know you got to jump in a few minutes. It's been a pleasure. I hope everyone else enjoyed this episode as much as I did. And before we jump here, what's just one piece of advice you would give? Maybe an early startup B2B SaaS company. If they're just getting started, they're bootstrapping. We like to leave off with just one, one little insight. What's the most important thing you would recommend to do?

B (45:32)

The insight forever for early stage entrepreneurs is when you are David and you're going up against Goliath. Don't fucking play Goliath's game. Stop being the series A company that raises $30 million and deploys the investment the same way $100 million company would. You're going to lose. When you're David, you actually have a lot of advantages. You are fast, flexible, customer focused. You don't have all these constraints of how the organization has been built, the politics and all the bullshit. You can have AI native in your business. You can build professional services that get your customer result, that create leverage long term on your pricing strategy because you actually deliver a result. And I think that it's almost an advantage today to be a five person company when you're competing with a hundred million dollars company. I really believe that. I think it would be easier to win today as a 5 person bootstrap win in the next 10 years to win as a 5 person bootstrap company. Compared to the $100 million SaaS company that has a cap table that's underwater where they have to grow revenue by 3x just to clear preferred returns. That company's dead and they're not going to figure out how to, they're not going to kill their existing business and try to figure out how to add services and kill their existing revenue flows and figure out how to add AI native into their product. It's going to be a little bell and a whistle. It's not going to be native to their company. And I, yeah, I just, I've never felt more confident that being small and bootstrapped today is actually a big Advantage. Small teams go way faster. With AI you don't need 40 person marketing teams, you need four people and a strategist and the four people need to be experts that know how to operate AI and get the most out of it. And it's a totally different way to do sales and marketing. It's not going to happen overnight. But I'm watching upstarts copy. AI is one really smart one right now. Kyle Coleman is a great CMO. He was the CMO of a hundred million dollar plus company before this with a 50 person team. Now he's a startup. He's got 44 people and knows how to use AI and knows clearly he gets 10x or more output in productivity from a 4 person team with AI than a 50 person marketing team because the layers and the people create politics and slowness and meetings and a bunch of fucking bullshit. And so I think when we think about as business leaders the paradigm has changed completely. And to lean into your strengths and stop looking at what Salesforce did or what the guy at HubSpot is telling you what to do about what HubSpot's doing, it's not going to help your $3 million startup or your seed stage pre product market fit company. So build the company for how the world works today, not how it worked 10 years ago.

A (48:04)

Great, that's what we're doing.

B (48:06)

So fuck yeah, me too.

A (48:07)

Love it.

B (48:08)

And it's even different even when I built my first company in 2019 versus the way how it is today, night and day difference, the environment changes frequently and it presents opportunities or risks on both sides.

A (48:20)

I think people forget that. So it's a great way to end the show. Chris, thanks again for being here man. Love what you're doing. You've helped me personally, you've helped thousands of other people. Continue doing your thing. We'll be watching and talk soon. Thanks a lot.

B (48:31)

Awesome man, Keep it going. Thanks for doing this. See you soon.