Episode Summary: “20Sales: $0-$4BN: The Databricks CRO’s Playbook to Build the Fastest GTM Engine in SaaS History” with Ron Gabrisco
Introduction and Guest Background [04:10 - 05:09]
Harry Stebbings welcomes Ron Gabrisco, the Chief Revenue Officer (CRO) at Databricks, highlighting his impressive journey from joining the company in 2016 to scaling revenue from zero to over $4 billion in Annual Recurring Revenue (ARR). Under Ron’s leadership, the sales team expanded from scratch to over a thousand globally, spearheading Databricks’ expansion into enterprise, government, and international markets.
Joining Databricks and Early Days [04:19 - 07:05]
Ron shares how Ben Horowitz introduced him to Databricks in late 2015. Initially exploring opportunities with companies like MongoDB and Square, Ben saw immense potential in the early-stage Databricks team, comprising highly intelligent Berkeley PhDs passionate about transforming the world through open-source software. Ron recalls meeting the founders, particularly Ali Ghodsi, the CEO, describing Ali as “like one in a billion” due to his technical prowess and inspirational leadership (05:09).
Building the Sales Playbook and Team [07:15 - 14:00]
Upon joining, Ron was tasked with creating a sales playbook from scratch, as Databricks had less than a million in revenue. He focused on assembling a team of skilled salespeople to explore what customers would pay for. “The first thing I did was like, hey, let's build out a team of people that I know know how to sell, and let's just go find out what customers will buy” (07:51). Ron emphasizes the importance of founder-led sales, stating, “No one can sell the vision and the passion of the company better than the founders” (08:03).
Pricing Strategy and Product-Market Fit [14:00 - 18:00]
Ron discusses the strategic decision to adopt a consumption-based pricing model, allowing customers to start small and scale as they derive more value. “We priced based on consumption so you could start super small, but as you started to consume more, it could get super big” (15:22). This approach minimized customer risk and aligned pricing with value delivered, facilitating significant early revenue growth.
Targeting Enterprise vs. SMB and Scaling [18:00 - 27:00]
Ron explains the deliberate shift to targeting enterprise clients early on, believing it offered more substantial and sustainable revenue streams compared to digital natives and startups. “We made a big bet early on to invest in enterprise because I thought that's where the money was and long-term sustainable for a company” (19:00). He highlights the importance of securing big logos and providing dedicated resources to ensure enterprise success, which later became critical as the company grew.
Hiring Salespeople and Building Sales Culture [27:00 - 34:00]
Ron outlines his criteria for hiring sales talent—intellectual curiosity, technical aptitude, and a strong work ethic. “Find somebody who's smart, intellectually curious, that you trust, you know, is going to work their tail off” (10:11). He stresses the need for salespeople who can teach customers to extract value from the technology, rather than just selling products. Additionally, Ron emphasizes maintaining founder involvement in sales to preserve the company’s vision and ensure alignment with customer needs.
Scaling the Sales Organization [34:00 - 45:00]
As Databricks grew, Ron transitioned from hands-on selling to building a robust sales organization. He shares insights on scaling from a small team to thousands, focusing on developing leaders who can mentor and inspire their teams. “If you have the best team on the planet and you inspire, motivate, mentor them, you get to win” (40:35). Ron also touches upon maintaining company culture during rapid scaling, ensuring that the innovative and gritty startup spirit remains intact.
International Expansion and Partner Channels [45:00 - 56:00]
Ron reflects on the challenges and strategies of international expansion, advocating for transplanting existing talent to new regions to build local culture and expertise. “Take four or five of my best young hungry sellers and say, okay, you're going to go to EMEA for a year” (46:20). He acknowledges that Databricks could have invested more in partner channels earlier, recognizing the importance of establishing strong relationships with large partners as the company scales.
Compensation Plans and Performance Metrics [35:00 - 47:00]
Ron discusses effective compensation structures, ensuring that salespeople are motivated with achievable yet stretch goals. “Goals I want them to be stretch but achievable” (36:31). He highlights the importance of rewarding top performers to drive recruitment and retention. Additionally, Ron emphasizes tracking pipeline and activity over time, understanding that enterprise sales cycles are longer but yield substantial rewards.
AI in Sales and Future of Sales Teams [53:00 - 56:00]
Ron explores the impact of AI on the sales process, acknowledging that while AI can automate tasks like prospecting and research, the human element remains crucial for building trust and rapport. “I don't think you can completely replace humans there” (54:50). He envisions a future where AI enhances the efficiency of sales teams, allowing humans to focus on relationship-building and strategic decision-making.
Competition and Market Positioning [57:00 - 61:30]
Discussing competition with Snowflake, Ron asserts Databricks’ strategic advantages and higher growth rates. “We're three times their growth rate. We've done 250 Snowflake, the Databricks migrations eight of their top 10” (59:32). He believes Databricks will continue to outpace competitors through continued investment in R&D and strategic partnerships, leveraging its private status to remain agile and innovative.
Final Advice and Quick Fire [61:30 - 71:30]
In the closing segment, Ron offers valuable advice to aspiring sales professionals and founders:
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For Young Sales Professionals:
- Choose Growing Industries: “Go in an industry that's growing and you're passionate about” (68:17).
- Focus on Learning: “Go where you're going to learn the most” (68:17).
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For Founders:
- Engage in Founder-Led Sales: Maintain involvement in the sales process to stay aligned with customer needs.
- Invest in Sales Leadership Early: Building strong leadership from the start is crucial for scaling.
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On Company Culture:
- Preserve Startup Spirit: Ron emphasizes the importance of keeping the innovative and gritty culture intact as the company scales, ensuring that the team remains motivated and aligned with the mission.
Notable Quotes:
- “Enterprise sales is kind of a system. A lot of people think it's a black box, but it's not. It's a science.” ([07:05])
- “No one can sell the vision and the passion of the company better than the founders.” ([08:03])
- “We priced based on consumption so you could start super small, but as you started to consume more, it could get super big.” ([15:22])
- “Find somebody who's smart, intellectually curious, that you trust, you know, is going to work their tail off.” ([10:11])
- “If you have the best team on the planet and you inspire, motivate, mentor them, you get to win.” ([40:35])
- “We think it's early in the market. I say it's top of the second inning.” ([60:13])
- “Most people think, like, oh, you're in sales. Like, the only people in sales they've had an interaction with is, like, a used car salesman.” ([65:46])
Conclusion
Ron Gabrisco's insights provide a comprehensive blueprint for building and scaling a high-performing sales organization in the SaaS industry. From the importance of founder-led sales and strategic pricing to the challenges of international expansion and leveraging AI, Ron's experiences at Databricks offer invaluable lessons for sales leaders and startup founders alike. His emphasis on culture, team-building, and continuous learning underscores the critical elements necessary for sustained growth and market leadership.