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- [00:00]
Chris Risig
Foreign.
- [00:05]
John McMahon
Welcome to the Revenue Builders podcast with John McMahon and John Kaplan. This podcast is brought to you by Force Management. Force's solutions help companies, small teams and individuals improve sales performance. Be sure to check out their new sales performance accelerator, Ascender. Today we bring you a conversation on scaling sales at startups. John Kaplan and John McMahon sit down with Chris Risig, a five time CRO at early stage tech companies. Chris has been there, done that when it comes to scaling sales and he really shares some great insight and what you need to watch out for when scaling the sales function. Here we go.
- [00:47]
John Kaplan
Well, Chris, hey, let's, let's hop right into the deep water. So you've done four raw startups and you had to find, you know, product market fit, you had to sell the first customer, hire the first sales rep, build an icp, create the initial sales process and more walk the listeners through some of the learnings from the, you know, doing four raw startups.
- [01:11]
Chris Risig
Yeah, I think, you know, you said it, you know, when you're, when you're in at that stage, you sort of have to be a jack of all trades. You're, you're all about finding that icp, who is our ideal customer, what's our repeatability model? And in order to do that, you have to do a couple things right. You have to be out in front of customers, you have to be on those first 20 deals, you have to be in the meetings, you have to be understanding the objections, you have to be finding the pockets of value that your technology can create and then you need to bring that back and communicate very clearly to the technology team that's building the product. What you're seeing, what you're hearing, what you're finding, what the competitive landscape looks like. How are customers reacting to the messaging, how are customers reacting to the product? Are they comparing us to something else on occasion and how do we handle that? So it's a lot of, in the earliest days, it's a lot of wearing two hats. You're almost a product manager and a sales professional at the same time until you get to a point and there's a whole bunch of levels to the maturation of a company that's, I'd say from customer 1 to customer 20, that's the mode you're in, is learning every day, being in sales meetings, being in campaigns, trying to understand where your product market fit resides. Then once you get past that, there's a whole other level of stuff that has to come into that sort of first part of scaling. Going from being an infant to being a toddler. Right? From a, from a company perspective.
- [02:53]
John Kaplan
Yeah. But first, you know, you re like you said, you're really almost a product manager. And that's what I think a lot of people don't understand when they go in really early. You know, you're a product manager and you're trying to figure out your icp, but at the same time, every time you take feedback back to product, they start, they go to engineering and they start developing the product more. And your ICP kind of is in flux. Right. That starts to change also. Right. Talk a little.
- [03:21]
Chris Risig
And you know, there are, there are choices you have to make because as a small company, you know, you can't, you can't create everything the market needs with one small team of 20 or 30 developers. And you know, and a trick duck, as I used to say, right. You really have to focus. And so it's important as you put that product management hat on to try to communicate back to that team what are the most important things? How do we, how do we measure what will have the biggest impact in our ability to generate revenue off of this product we're building? And what things do we maybe put to the side for a while while we build the stuff that we think can generate immediate revenue and differentiate us in the marketplace? It's interesting because the other thing you're dealing with at that time is investors have made a bet and typically you've raised a seed or a series A. And those investors that invest at that level are looking for different data points than later stage investors. And so you have to make sure you're also communicating with those investors what you're finding and what you're seeing. And sometimes those investors who do that a lot can be super helpful in giving you feedback on what do these signals mean that I'm getting from the marketplace. So there's a whole bunch of things. You're part product manager, part salesperson, part investor relations. It's a lot of stuff going on at that stage.
- [04:46]
John Kaplan
And how much are you looking for the pains as you talk to different customers and different use cases? How much are you looking for the pains that they have to try to steer product, you know, because you're a product manager, steer it around those types of pains because that can bring you high differentiation maybe later on, you know, in the company's history.
- [05:06]
Chris Risig
I mean, I think that's the critical thing. To your point, you and I, the three of us, have all kind of grown up in the same value selling environment. If you cannot find pain that's acute in your customer. You have to keep looking. Because unless you have something that's painful enough for a customer to invest money and time in, it's interesting but not relevant. They're not going to do anything. And so you're always looking for pain. And the more pain, the better. So the deeper the pain, the more, more cost involved in not doing something in that particular area of the technology landscape, the better off you are. And so I think when you're in that early selling mode, it's always hunting for pain. And I think that's also how you, I mentioned earlier this idea of prioritizing technology components at the early days. That's how you prioritize is how much pain is the customer in because of this piece of functionality that we might build. If it's a lot, we're going to go invest the cycles to build it. If it's not that much, we got to keep looking to find the area where there's, there's a lot of pain. Because pain, people spend money to solve that.
- [06:19]
John Kaplan
Yeah, exactly. Now talk to us about when you feel like, okay, now it's time to. Was kind of starting to product market fit is starting to gel. Maybe one or two customers give you a little bit of money for it, but you know, you know, not extracting lots of money yet. Tell us when you start to think, okay, it's time to hire one or two sales reps.
- [06:41]
Chris Risig
I think when you start to see, you know, all of my career, I've been good at what I call pattern recognition, right? So when you start to see a recurring pattern of at the same point in our sales pitch, the lights go on. Right? Like I'm talking about this piece of functionality, all of a sudden, you know, the customer lights up because they have pain. When you start to recognize that in 2, 3, 4, 5 sales campaigns, kind of at same point with the same thing, you start to say, okay, now I have some sense of repeatability. And that's really important, John, because as you know, it's one thing if you and the founder can go out and do 10 deals as a team, and just like superhuman powers of a founder with vision and a good salesperson, that's great. But unless you can teach other people beyond the founder and the first sales leader to close a deal, to take a deal from, you know, first presentation to a po, you don't have a scalable business.
- [07:45]
John Kaplan
And so that's like, it's not repeatable.
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Chris Risig
It's not, it's not. It's. That's really the first, you know, as an investor now looking at it from the other side like that's the first sign in my opinion, that we have something really repeatable. If a founder can turn to me and say, hey, the last five deals we did, I only came in to shake hands at the end. Okay, now you got my attention. There's something there.
- [08:11]
John Kaplan
But some can understand. But some get frustrated. Some founders get frustrated, they say, well, I can go out there and sell the deals. Why can't my sales guys go out there and sell the deals?
- [08:22]
Chris Risig
It's funny how often I hear that, John. Yes, you're absolutely right.
- [08:26]
John Kaplan
Yes, you're absolutely right, Chris.
- [08:27]
Podcast Host or Moderator
What? But that's a huge point because sometimes I think that technical founders, I found it's kind of like some type of badge of honor or courage. And I don't want to say it, like, I don't want to say it like, you know, the kid grew up one way and then, you know, they're, they, they realize that they can do things that other people can't do and so they're, they're, they hang on to that longer. It's not a badge of courage. Like you're an advising Chris. And like what feedback do you give to the, the founders that really seem to kind of want to hang out in that, in that sales process and they hang out there too long. And so therefore it's a self fulfilling prophecy. It's like nothing can survive without me and then nothing can survive without them. So how do you, how do you coach people around that?
- [09:29]
Chris Risig
Well, that's, you know, that is a first of all common occurrence and it's one that I spent a lot of time trying to coach early stage CEOs to get out of that day to day selling. And there's another angle to it too. Either they want to be in the weeds on the sale too much or they want to try to do everything and solve every problem with their technology because their vision is so big and either one of those problems is huge. And so the first one, you know, I spent a lot of time with, you know, first or second time founders. And by the way, there's a huge difference between a first and second time founder, just to be clear, like first time founder, that's really hard to get them out of that mode because they built that company off their own back, right? Yeah, it's their vision and they, they treat, you know, the good ones treat every customer interaction like it's gold. Right. They want to make sure that that customer is heard and that they're, they're understanding the technology that they've worked so passionately and hard to create. So you have to sort of walk them through that. Like there are stages of building a startup and there's a stage where it's appropriate, absolutely appropriate for the founder to be in every single sales discussion and to have input in every single sales discussion. But if that stage goes on more than the first six to 12 months, something's not right. Either the technology's not solving a problem that's painful enough for people to, to kind of standardize on it, or that founder is not willing to give up control. And you do see that these founders takes a lot to be a founder. It's not for the faint of heart. And so I give founders a tremendous amount of credit to go off and jump off that cliff of I have no job, I have no paycheck, I'm going to go build a business because I believe in it. That's one of the bravest things anyone can do in business. And so it's easy to sit here, three of us who have sort of done a lot, seen a lot to say, oh, you know, the founders need to get out of the way. Well, it's not that simple. Right. You need to help them understand that them stepping away and making sure the right pieces are in place for them to step away without the customer experience being degraded is an important part of growing a business. And until they're able to do that, the company's not going to grow beyond them. The other problem I mentioned and cut me off if I'm going on too long, but the other problem I mentioned is actually I see a lot, even in second time founders or multiple founders, they have a huge vision, right? They think their product can as the old Saturday Live skit's, a floor wax and a dessert topping. I don't know if you remember that one, right? So they have a vision, it's a big vision, it's a bold vision. And by the way, that's great. You want every founder to have a big and bold vision. But guess What? In sub $1 million revenue land, you can't sell that whole vision. You have to find a piece of that vision. This is the age old anecdote that you eat an elephant one bite at a time. You might have a vision for a startup that's going to dominate the world of data integration or the world of robotics or whatever it is that the technology sector you're in, that's great. But in order to get a salesforce to a level of repeatability. You have to break that down into bite sized chunks of value that can be packaged and communicated and sold to specific painful business problems and then repeated a bunch of times to prove that you have something for that specific problem. And then you can add to it and expand and go on and on and on. And so I encourage founders, don't lose sight of your big vision. That's an important, that's the heartbeat of this business. But recognize you got to break that big vision down into bite sized chunks that can be digested by your go to market team and by the market, by customers. Especially if you're building something new in a new category, it's important to keep the framework simple enough that it can be absorbed.
- [13:31]
John Kaplan
Yeah. And someday, to your point, we may sell to every company on the earth, but in the early stages, where are we going to place our salespeople? Where they're going to be the most productive? That's really a key point. So to your point, I've seen a lot of founders that basically get a whole bunch of money and spread sales guys all across every city on the continent and then realize after a while, wow, it's really hard to sell into some of these bigger accounts or accounts that aren't in their icp and then they try to back up and now they burnt an awful lot of money doing it.
- [14:09]
John McMahon
There's more insight on scaling sales in our full episode with Chris Risig, John Kaplan and John McMahon. Check it out, it's linked in the show. Notes make it a great week.