← The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20Sales: From $2M ARR to $40M ARR: The Playbook | How to Use AI To Supercharge Your Sales Team | Why Pipeline Reviews are BS | The Sales Call Script that Closes 99% of Prospects and How to Hire the Best Sales Reps with Kyle Norton, CRO @ Owner
01:18:34
Kyle Norton is the Chief Revenue Officer at Owner.com, where he scaled revenue from $2M to $40M ARR in under 3 years while selling to one of the toughest markets: SMB restaurants. Before Owner, Kyle led sales at Shopify, where he helped architect one...
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- [00:00]
Harry Stebbings
You are listening to 20 Sales with me, Harry Stebbings. Now 20 Sales is the monthly show where we sit down with the best sales leaders to discuss how they start, scale and maintain incredible sales teams today. Now I'm so excited to welcome an incredible guest in the form of Kyle Norton. Kyle is the Chief revenue officer@owner.com, where he scaled revenue from 2 million to 40 million in ARR in under three years while selling to one of the hardest markets, SMB Restaurants. Before owner Carl led sales at Shopify where he help architect one of the most operationally elite GTM orgs in sas. And Carl is really known for turning sales orgs into machines. At oner he systematized this incredible revenue engine that we really unpacked today in this show. Get the notebooks out. It's a very granular, tactical episode where Kyle was fantastic. But before we dive into the show today, if you're ready to leave rigid payment terms behind, Capchase is here to change the game. Capchase brings B2C buying convenience to B2B software and hardware purchases. Capchase offers your buyers the flexibility they demand on annual and multi year contracts. While you get paid upfront every time. This means faster closings, higher deal sizes and a streamlined process without the hassle of discounts or collections. Over 2,000 companies already use Capchase to accelerate their sales and secure predictable revenue. It's time to unlock your team's full potential. Try capchase on even just one deal you've lost over price or terms, no obligations, no platform fees and no heavy implementation. Visit capchase.com today and turn payment friction into your competitive edge. And when it comes to sales, timing is everything. But if you're relying on outdated CRM data, you're probably already behind. And that's why today's most innovative companies trust Go to Market Intelligence to fuel their AI powered growth. Ready to join them? ZoomInfo is hosting an interactive online summit in May that will help you get the competitive edge you need to stay ahead of competition. Find out how leaders in AI and Go to Market are building their growth engines and get practical advice, including hands on demos of cutting edge AI tools from ZoomInfo, the go to Market intelligence platform that makes every seller your best seller. Learn more and subscribe to be the first to know when registration opens@ZoomInfo.com 20VC and if ZoomInfo helps you find the right opportunities, Otter AI makes sure you close them. Hey, managers and leaders want to make your meetings way more efficient and save time. With over a billion meetings Processed Otter AI is the ultimate AI meeting productivity tool. It gives gives you real time transcripts, quick summaries, action items and insights. Plus a voice activated agent that keeps you focused and productive. It's unbelievable. Imagine cutting down your meeting prep and follow ups and freeing up more time for what matters. Odd is trusted by over 25 million users, including Fortune 500 companies to boost productivity and collaboration. So are you ready to take your meetings to the next level? Well, head over to get Otter AI forward slash 20 VC and grab a 30% discount. My word, they're so generous. When you subscribe to a business plan for your team, that's get Otter AI forward slash 20 VC. Let's make your meetings work for you.
- [03:21]
Kyle Norton
You have now arrived at your destination.
- [03:24]
Carl
Carl, it is such a joy man. I literally was chatting to Jack Altman last night. I was chatting to Jason this morning. They said wonderful things. I'm not sure how much you paid them, but so appreciate you joining me. Stay man.
- [03:34]
Kyle Norton
Yeah, I'm stoked to be here. Being a listener since the very very beginning. So this is a ton of fun, dude.
- [03:41]
Carl
So glad we could do it in person. I would love to start though. I think we're shaped a lot by our experiences and you were obviously at Shopify before. How did your time at Shopify impact how you think about effective selling today with owner?
- [03:53]
Kyle Norton
So I actually think the lessons that I most deeply took from Shopify are on the product side. And you can't be taken seriously at Shopify without being well versed in the language of product. I oftentimes joke that the hierarchy is engineering is the top of the totem pol. Then it's design and product management. There's janitorial services here and then sales is like just below that. So if you want to be somebody whose opinions are listened to you like you have to know product and have to speak in that language. And so as soon as I got there I started to get to work. I did like a reforge course.
- [04:24]
Carl
Did you become a better sales leader through product knowledge?
- [04:28]
Kyle Norton
A thousand percent.
- [04:29]
Carl
Wow.
- [04:30]
Kyle Norton
So much of building a great go to market organization is systems engineering. I'm sure we're gonna talk about this a ton today. And product management and building is that it's. It's systems engineering. It's being able to get to first principles and root cause and then reason up from there. That skill set has translated tremendously like even the individual frameworks from Teresa Torres. I use her opportunity solution tree or like I take Marty Kagan's vision setting template and so, like, I only discovered these things.
- [05:01]
Carl
So what is an opportunity solution tree and how do you use it?
- [05:04]
Kyle Norton
It's a way to map from symptom to root cause. And I think one of the biggest challenges that revenue leaders have is we solve things at a surface level. And oftentimes we just like reason. By analogy, we see a best practice on a podcast or something like that, and then we slap that into our business and we don't ask ourselves the question, okay, win rates are low because of rep execution, so we'll go fix rep execution. But you don't go, why is rep execution not good? Well, is it a management thing or is it a training thing? It's a training thing. Well, why is there a training deficiency? Why, why, why, why, why? And you can sort of map from this opportunity solution tree from like, sy all the way back to root cause. And oftentimes with this tree, you get back to the root cause, and then actually there's something else to fix there instead of, oh, like, we just need to update the scripting. Well, you might get up to this top opportunity, this root cause, and then actually find. Because you're trying to think of, like, okay, what are the other ways that I could solve this opportunity? And it just forces you to more deeply ideate and solve problems more foundationally.
- [06:08]
Carl
I find, I love that. I find a lot of the time we need frameworks. A lot of time, it's like we need just clarity to understand the next step. I want start, dude, on something you said to me before. You said, revenue leaders spend way too little time here and don't think about it strategically when it comes to recruiting and talent development. If we start at the beginning of the funnel sourcing.
- [06:28]
Kyle Norton
Yeah.
- [06:28]
Carl
What are your biggest lessons on what it takes to source amazing sales talent?
- [06:32]
Kyle Norton
So, number one, I think revenue leaders need to see this as one of the most core components of their job. Oftentimes they look at this as the realm of ta and it's the talent team's job to bring them candidates. Well, let's post jobs. We'll put it on a bunch of boards, and then we'll see what we get from there. And that's just totally backwards, in my opinion. Revenue leaders, especially if you're trying to operate at a pretty dynamic scale, this needs to be something that you're spending a massive part of your day on or thinking very deeply and strategically about it, because many of these bets have long, long time horizons on them. So, like, content. So I've been writing on LinkedIn for 67 years, I've amassed a bit of a following. And so in the early days of owner, I could post a role. We would get 1200 applic. We would get 60 to 100,000 impressions on every single job post I put up. And then that was picking from an incredible funnel of people who I'm basically sourcing myself.
- [07:27]
Carl
Was the quality high?
- [07:29]
Kyle Norton
Yeah, yeah, for sure. Because these are all people that are 1 and 2 degrees connected to me and then working referral networks really, really hard because everybody I know sees that. My whole network sees it, and they know the quality of what I do. And if I'm putting my name on this new company, they're like, oh, that's probably a good opportunity. And sure. A former BDR of mine introduced me to his cousin. His cousin was our first bdr and he's like an absolute savage, this guy named Braden. Then from that same company, now there's nine people that work at ONR from that.
- [08:01]
Carl
Wow. I bet they're thrilled with you. When did you join owner in terms of sales team stage?
- [08:08]
Kyle Norton
There was a manager and four reps.
- [08:10]
Carl
Manager and four reps?
- [08:11]
Kyle Norton
Yeah. We parted ways with two of those reps fairly quickly. And then we've built to, I think, 60 folks in sales today. Wow.
- [08:18]
Carl
Okay, let's go back to that. That. So Adam starts the sales process. Does the founder need to be the one to build that sales playbook?
- [08:25]
Kyle Norton
So, not to get into semantics, but it really depends on what you mean by playbook.
- [08:29]
Carl
Basically, a framework for what customers want, where they get it, how to message them, and what a standard sales cycle.
- [08:37]
Harry Stebbings
Looks like with a price average.
- [08:39]
Kyle Norton
If that's what we're calling a playbook, then yeah, I firmly believe so. I don't think you can outsource that to a new VP of sales from the outside. I mean, I hear you talk about this all the time. I hear the range of opinions, but. But unless a founder can do that, I don't think that they're going to understand the customer in enough depth. This is a Toby thing. You know, he talks a lot about compressing the distance to frontline. How can you make sure that the entire organization is as close to the frontline, as close to the customer as possible, and not have these massive chains of information that are oftentimes diluted? And so I think if you're a founder trying to outsource that, you're not really going to be able to build the rest of the organization if you have so little understanding of what persuades a customer. So I think you should build the basics of it and then a sales sales leader can come in and build all the rest.
- [09:24]
Carl
What was wrong with the first two reps? Like, lesson from that, what do you see most founders make a mistake on when they're hiring those first reps?
- [09:31]
Kyle Norton
They just want anybody in seat. I had this conversation with the founder I advise yesterday and pushed them on it. Even though it's uncomfortable, I'm like, look, you know, this guy's got a jumpy resume. I know that you want somebody in seat really, really badly and he's got some relevant experience, but he's probably not your guy. And I know that advice sucks to hear because you've been trying to fill this seat, but it's so tempting to just try to get a body there. And it's so hard to recruit when you're an early stage startup with no traction, no brand equity, but you just have to hold a really high bar.
- [10:04]
Carl
And the pain of getting it wrong is so significant because you'll spend three months searching, six months with them, and then three months searching again and you're like nine months down and you've got nowhere.
- [10:14]
Kyle Norton
It's one of these lessons like the founder sort of has to touch the hot stove to really learn that one. Sometimes when I'm doing early stage advisory, this is one of the things I'm trying to press on as much as possible, like, don't take that shortcut.
- [10:26]
Carl
So for sales leaders, you mentioned going back to the sourcing side because I do want to go to the funnel of it. Should every sales leader have a brand and be creating content? Because without it, you wouldn't have that sourcing funnel.
- [10:36]
Kyle Norton
Again, if we go back to first principle, you need some sourcing mechanism like it's the same as you as a vc. One of your comparative advantages is a massive megaphone and a huge funnel because of this content game. But not everybody can play that way and not everybody wants to. And so they can solve that problem separately, but they need to be able to source candidates. You need to be able to create your own funnel.
- [10:59]
Carl
So another example would be you came out of an incredible sales division at Databricks or at, yeah, wherever you name it. And you've got the best mafia of knowledge from 500 salespeople.
- [11:09]
Kyle Norton
You can bring some people with you. Or if you don't really have those advantages, you have to just go grind it out and you have to build really compelling messaging and you're sending those LinkedIn messages yourself and your hit rate is going to be lower, but you got to do it. I have long believed that building audience has compounding advantages, as we've seen. Like, you're a perfect example of that. And so I got to work on that like six, seven years ago, and now it pays off like crazy.
- [11:35]
Carl
You said the next stage of the funnel is scorecard. Can you talk to me about scorecard and how you think it builds into building the best sales team?
- [11:42]
Kyle Norton
This comes back to systems engineering. It comes back to like, do you have a programmatic way to identify the right talent on a consistent basis in a way that you can then have somebody else do it it? Or is this all going to fall apart as soon as you hand it off to your first sales manager, first VP of sales? And so for us, I've been using the framework of the same scorecard for five to eight years and I've iterated on it over time, but it has three components. One is DNA, it's mindset. So what are the intangibles and the things that are fairly intrinsic to the individual? The second piece of that is craft. What does their sales craft look like? And then the third piece is specific knowledge. And depending on the type of sales role that you're filling, your weighting is going to be different. I'm hiring SMB reps, so I'm like 70% DNA in mindset. I just want people who have a performance track record of excellence and I don't care if it was sales or the valedictorian, captain of a sports team, first chair tuba at their, like, you know, local orchestra. Like when you do things, do you do it at a really high level? Are they curious? Are they coachable? Are they an absolute grinder? Do they have resilience? There's a bunch in there. And because I'm hiring folks that are early in their careers, 70 to honestly, 80% can be just like DNA and I'll teach them the rest. I feel really confident in our sales training program. That's different. If you're hiring enterprise, if you're trying hiring legit multimillion dollar quota carrying enterprise reps, you're going to be much more craft and specific knowledge weighted. So if you're databricks, you might have great craft, but you probably need really specific expertise or they're going to have a hard time getting up to speed because it's a highly technical product. You need that credibility. My framework is relatively the same, but my weighting will change depending on the role that I'm hiring for.
- [13:26]
Carl
Have you made mishires owner?
- [13:28]
Kyle Norton
Oh, yeah.
- [13:29]
Carl
When you reflect on them. What should you have seen that you didn't see?
- [13:33]
Kyle Norton
Something that we've doubled down on recently is references and not taking any excuses for not being able to get the exact references that we want.
- [13:43]
Carl
What mistakes did you make? They. They gave you references and they were okay. Or.
- [13:48]
Kyle Norton
Or it was not their direct manager. It was like a manager from another team. And we just sort of accepted it because we were trying to move too fast. And now really pressing on, like, no, no, no. I need your last two direct managers. Maybe not the one they work for now for obvious reasons, but being really specific there and if, if there's any hesitation or oh, well, like, I don't know if I can get in touch with them, you know, that's a massive red flag. Think we really want to stress on references.
- [14:14]
Carl
Develop that one further. And so you didn't get the references, maybe, and they turned out to be not as good, not as strategic, not as good at sales, not as good at work ethic. Where did they fall down that you should have seen?
- [14:27]
Kyle Norton
So there were two scenarios like this one. Yeah, it was about values and work approach. We have a company value called bring good energy and it seems really cheesy, but I think when you're working as hard as we do and you're trying to build something generational, you actually do need people that are going to bring positivity, optimism, enthusiasm so that, you know, the organization just has a certain mindset. And that wasn't the case. And luckily this was in person. I caught this on day 11. I was like, hey, this doesn't work. Like, we're done here.
- [14:57]
Carl
You will cut it that soon. Wow.
- [15:00]
Kyle Norton
Yeah. Yeah. For things that I don't deem to be coachable. Yeah. I'm going to try to make a call there asap. Same thing. A couple companies ago, there was somebody in the onboarding program who was treating our enablement leader really flippantly and wasn't taking it that seriously. He was a little rude. I just said, get rid of them. If you're already treating this person, you're like, supposed to be in your best behavior in weeks, you know, in the early weeks and months. And if that's how that person acts today, then it's only going to be worse later.
- [15:30]
Carl
Can you help me? I join owner. I'm a BDR sdl, whatever I am, but I'm a junior. What does my first week look like? I think training is done so badly and often we don't set them up for success.
- [15:41]
Kyle Norton
Yeah.
- [15:42]
Carl
What have been your lessons on how to do that?
- [15:43]
Kyle Norton
Really well, structurally, we have invested very, very heavily in this. I think one of the things that people find surprising about our business is the headcount allocations. So we've got 26 AES and 30 something BDRs and there's five people in enablement. Some of those support other functions like our onboarding and CS functions. But we have a big enablement team for the size of company. We've had enablement since way earlier than.
- [16:07]
Carl
Most people would tell you how Many in enabled?
- [16:09]
Kyle Norton
5 total.
- [16:09]
Carl
5. And what's that core role?
- [16:12]
Kyle Norton
Program building. And then some of it is delivery. Our sales enablement manager, he actually runs all of onboarding for new reps. It doesn't really fall to the manager all that much.
- [16:23]
Carl
Okay.
- [16:23]
Kyle Norton
Because the managers are running a million miles a minute trying to hit the number every single month. And we're bringing in new cohorts of reps every single month between like five and 10 people. We have built and rebuilt a bunch of times this onboarding program. So week one is mostly remote and asynchronous. So they're listening to calls, there's baseline product training, there's stuff about the company. They really get to know our methodology. And then week two, everybody comes in person to Toronto now and we're doing much more practical application. Some of that is done through this tool, Avara, which is like an AI sales simulator that we use. So they're getting tons and tons of practice reps in the sales simulator and then they're doing live fire reps with our sales enablement manager. And so really like practical application, they're building, building an owner restaurant themselves. They're finding a prospect and doing all the pre call research. Then they're running a mock demo on that exact customer. It's very, very practical. Then they graduate into the team.
- [17:19]
Carl
Sorry, I have so many questions, I just want to break them down. Week one, remote Async. Fascinating. Do you record all calls? I think there's so much value in calls. How do you use calls effectively for training?
- [17:30]
Kyle Norton
So we have a hall of fame of calls. And I think the important thing is it's not just an entire call. Oftentimes it's call snippets. We use Momentum, which is our call recorder and it's this AI tool that we can find the parts of calls that match our sales methodology the most closely and then we can pull those clips to show exactly those things. So how to open a call, how to introduce, we have clips for that, how to ask good discovery questions and Go two to three levels deeper. You've got examples for that value prop, how to ask for the sale. It's like all scripted to the word.
- [18:04]
Carl
Can we not just hire some monkeys? If we just have everything, I mean it in the nicest way, but if we have everything, like this is how to open a call. This is how to ask if they're the buyer. This is how to multi thread. Fuck me, I can do that.
- [18:16]
Kyle Norton
I don't believe so yet. And for the next little while, here's my big thing with scripting. Scripting the basics enables you to offload that cognitive work. If I'm just thinking about where to take this call next and I don't have a pattern that I've repeated all of these different times, spending all of my cognitive load on low level stuff. Instead what I need to be thinking of is, okay, so these are the things I learned from my discovery. So this is how I'm going to tailor that in the demo now. And I know this is going to be an issue and I want to ask this question later. So I've got a note about that. I think you can spend your mental energy on higher order things if you are executing a really like repeatable process. It's the same thing with sports teams. Unless you are highly regimented and rigorous and drilled on all of the basics, you can't worry about the most sophisticated tactics and strategies.
- [19:08]
Carl
Okay, so week one, they are absolutely taking the notebook and pen out on momentum and learning basically the playbook of.
- [19:14]
Kyle Norton
What'S worked and going through our learning management system. So everything is broken down into modules with specific content and then the examples. So we don't just throw them into.
- [19:25]
Carl
The call library in the nicest way. Do you find that effective? I mean, I've never met anyone who likes a learning management system.
- [19:31]
Kyle Norton
Yeah, it works, works for us.
- [19:32]
Carl
It works well.
- [19:33]
Kyle Norton
Yeah. I mean the content I think is pretty interesting. It's going to get a good facelift and we move them fast. They are getting through a lot and there's check ins pretty consistently and they know week two is practical application so they have to be ready for it.
- [19:48]
Carl
So week two, they head to Canada. Okay, so are we fully in person?
- [19:54]
Kyle Norton
No, no. We still operate primarily as a remote company and then there's certain roles that we're bringing back into office. I don't think you need your staff software engineers in an office to, to do their job well.
- [20:07]
Carl
I agree. Do you not think you need sales teams in person?
- [20:09]
Kyle Norton
All of our new SDR and BDR hires are Five days a week in office in Toronto now.
- [20:14]
Carl
Yeah, I was about to say, I think it's the most important thing.
- [20:16]
Kyle Norton
And of our recent cohorts, the two newest SDRs both broke the first month record for EMR sourced.
- [20:24]
Carl
So what's Emma?
- [20:26]
Kyle Norton
Estimated monthly recurring revenue.
- [20:27]
Carl
Okay.
- [20:28]
Kyle Norton
Because there's subscription plus transaction revenue. So we have an estimate. The two new ones broke the record for first month. The newest BDR in person broke the record for first month. And then the SDRs that are at month two and three both broke the previous records. This is the purely in person team, so clearly there's been a sizable impact just having them all around one another sitting next to their managers. I'm in the office a whole bunch. I wasn't really supposed to be in the office, but I'm there like three, four days a week just because it's awesome.
- [20:58]
Carl
Yeah, no, I. Listen, I totally agree. I think you need to be. Can I ask, what are the ACVs? I know with transaction it's tougher, but.
- [21:04]
Kyle Norton
Like blended like 8,9k a year.
- [21:07]
Carl
How do you do like an outbound sales motion with really low acvs instrumentation?
- [21:14]
Kyle Norton
Common wisdom would tell you that, oh, you can't make outbound work. You can't make a sales led motion work at these ACVs. Again, that's reasoning by analogy. People aren't thinking from first principles. Okay, well, why don't you think that's possible? Well, they can't close enough transactions to get that much MRR on a per person basis. Well, why not not? Well, if you really look at IT, reps and BDR spend 50% of their time doing nonsense, doing account research and finding leads and filling out their CRM.
- [21:43]
Carl
Is that nonsense?
- [21:44]
Kyle Norton
It's not very valuable. It's valuable at a macro level, but it's not valuable on an individual revenue generation perspective. And so we automate all that. So BDRs don't do any lead research. We centrally manage every lead, every record, do all of the enrichment.
- [22:01]
Carl
What do you use for lead research?
- [22:04]
Kyle Norton
So we built in house a whole ton of our own tools. Now we also use this company called Datalane. They're like ZoomInfo for SMB, essentially. And through Datalane we get 95% of our leads mobile enriched. So now the economics of your team changed drastically. If you previously, before we went on this mobile enrichment campaign, our call to decision maker, connect call to DMC was like 3%. So you'd have to make a hundred calls to talk to three decision makers. Yeah, you can't scale and it's worse if you're going mid market or selling to corporate.
- [22:37]
Carl
Why is it so bad?
- [22:38]
Kyle Norton
Well, you'd have to be calling a restaurant line, not an office line. People don't pick up their office phone anymore either way. But now our call to DMC is like 13 to 16%.
- [22:49]
Carl
How come?
- [22:50]
Kyle Norton
Because we have mobile phone numbers for everybody. So you're calling somebody's cell phone. And so now BDR making 100 calls, can talk to 16 people and be booking two meetings a day every single day. With good win rates. Now two meetings a day, every BDR, half of those closing at like a 9K ACV, the numbers start to really add up.
- [23:10]
Carl
Wow, that's fascinating.
- [23:11]
Kyle Norton
Yeah.
- [23:11]
Carl
What percent of converted sales are cold calls?
- [23:14]
Kyle Norton
Much less today. So we've, we've gone back and forth. When I started, we were 90% inbound, and then at some point, 90% inbound.
- [23:22]
Carl
Wow.
- [23:22]
Kyle Norton
And then at some point we were 70% outbound. And then we hired a new head of growth who's done an amazing job and now we're 60% new inbound. And then we prospect into the base. So former inbounds, the BDRs will go after, plus some cold outbound, plus we've got a partner channel now, so there's a channel diversity. So it's ebbed and flowed over the years and it will continue to do that. This is why it is so important to have a multichannel strategy, in my opinion, so that as certain channels hit saturation or find challenges, you've got other places to go.
- [23:56]
Carl
When did you go multi channel? Because I think people can go too broad too soon, really early.
- [24:01]
Kyle Norton
We built an outbound team in Q4 of 2022 and I started in June. June. So pretty quickly if you want to.
- [24:09]
Carl
Do an outbound team. Well, I'm a founder and I'm like that girl. I need an outbound team. What would you advise me?
- [24:14]
Kyle Norton
Depends on a lot. Depends on the market and what you're trying to accomplish. I think some generic advice is overpay for a BDR who's really good and then give them a path to account executive. There's a lot of companies that are stagnant and there's a lot of BDRs who are quite good that don't necessarily have that path to AE where they're at.
- [24:32]
Carl
Can I be a dick? Where did the best BDRs come from? Where did not good BDRs come from?
- [24:37]
Kyle Norton
You can find good BDRs everywhere. I like Jason's advice. Go to a company that's not number one in their category. Who's the number one BDR at a second and third place company? Because that's hard. And if you have a great product and you bring that person into your environment, they'll do really, really well. We've hired a bunch of people. You know that company where we've hired nine people from, that's a mediocre product in a very competitive market. And those people are well trained salespeople that come into our environment and they rip because our product's great. And so now they have, you know, good sales craft. They've. They've got the grit and now they. You marry that with a number one product in its category and people will take off.
- [25:16]
Carl
Okay. And so I just want to go back. So we have like this data enrichment layer, which is super smart. And so when we look at the economics, when it's 9K, you know, I go back to Chris Degnan actually, who we both know, and he said that basically you can only have six to eight calls a week. When you think about that, for you, obviously yours is a much higher volume game. How does yours differ?
- [25:37]
Kyle Norton
So in Chris's context, there will be so much pre call research and post call work and coordination and quarterbacking. Like I've sold enterprise before, so I think that makes sense. We aim to have roughly four demos booked per AE per day, with three held. We know that there's gonna be some meeting.
- [25:56]
Carl
Three demos per day every day.
- [25:58]
Kyle Norton
Yeah.
- [25:59]
Carl
Wow. So they're going to do 10 to 12 calls a day.
- [26:02]
Kyle Norton
Three demos a day, plus probably two to four follow up calls from previous pipeline. We also close a ton of calls on the first demo. We're doing a bunch of analysis right now to figure out exactly what that marginal point is.
- [26:17]
Carl
How many net new lead calls do you think your team have a week?
- [26:20]
Kyle Norton
Hundreds for sure. Yeah. Because 26 account executives, they're probably.
- [26:25]
Carl
But each of them. Do they do 20 a week each?
- [26:27]
Kyle Norton
10 to 20, probably 12 to 18, I bet is like.
- [26:30]
Carl
But if they have 12 to 18, that would mean every single one of them converts to a demo every. You said they need to have three demos a day.
- [26:38]
Kyle Norton
Yeah. So the. And the BDRs are booking those for them.
- [26:41]
Carl
Ah, I got you. Okay. Got you. Okay, so the BDRs book them. How many BDRs do we have?
- [26:46]
Kyle Norton
35. Ish.
- [26:47]
Carl
And so 35 book three net new each.
- [26:51]
Kyle Norton
Or call it two. Call it two.
- [26:52]
Carl
Two each.
- [26:53]
Kyle Norton
Yeah.
- [26:53]
Carl
Wow.
- [26:54]
Kyle Norton
Inbound is different than outbound. So those it's two net new for. Outbound is One and a half to two inbound is a lot more than that. Inbound they could be doing 5 to 10 because it's, it's higher intent.
- [27:07]
Carl
Should AES be responsible for pipeline generation in SMB?
- [27:11]
Kyle Norton
I don't think so. In general, I think relying on account executives to prospect is probably a losing proposition. Why would you pay a 250k rep money to make cold calls when you could potentially have an 80k BDR do that work for you? If they're good at it. I think account executives, especially mid market enterprise have to do some prospecting. But it's not banging the phones.
- [27:33]
Carl
No offense bdrs. If they're paid like shit, which respectfully they are. Aren't you always just going to get bad people? No offense. And again like they're the front line of your company. How do you think about effective BDR hiring given they are more junior?
- [27:47]
Kyle Norton
They are the future leaders of our industry and our company. We hire super high caliber people that have a ton of potential and so you got to do a lot of training. But this is the point of their career. That they're at an 80k is awesome for them and they have a path to 100 and 150 within two years. You're 22 years old. That's awesome. I don't necessarily think it's like a. It's bad comp.
- [28:12]
Carl
How do you think about target setting with them? Because I always think that incentives can be gamified. So you can do like demos booked? Sure. But I could just fudge the qualification process and get you a load of donut shops that are going out of business. Not going to help.
- [28:26]
Kyle Norton
So our BDRs only get paid on close one business alignment. Our account executives only get paid when their customers go live. We are month to month contracts. So we want to make sure that our account executives are doing high quality handoffs, setting good, setting good expectations or closing high quality customers. And so again they are highly incentivized to make sure that those customers are good so that they go live.
- [28:51]
Carl
And that comp doesn't include transaction reference.
- [28:54]
Kyle Norton
It does, it includes an estimate. So we have these two machine learning models. One is egpv so it's an estimated gross payments volume. So we scoop in a bunch of information from them online and we can make an estimate of how much they'll actually do on our platform. And so that goes into their comp so that we're rewarding them for closing the highest quality deals because there is a spread.
- [29:16]
Carl
Wow. Does that ever get you in Trouble. And what I mean by that is say a chain goes out of business and you pay comp on estimated volume and actually you they didn't hit it, they're way off it. Not happening.
- [29:27]
Kyle Norton
You'll win some, you'll lose some. It all comes out in the wash. We feel really good about our economics and we know that when we changed comp to include egbv which means they are going to be more focused on the higher value customers for the business, our estimated MRR on a per deal basis went up pretty significantly.
- [29:47]
Carl
What is a good ratio? Say you pay an AE. I'm just making it up like 200k. Is it 5 to 1? Is it in terms of like revenue booked? What is good?
- [29:57]
Kyle Norton
Depends on company stage early. You probably won't get that more mature for sure. We're way above that because we have instrumented so much. The product's really good. A bunch of it's inbound.
- [30:07]
Carl
So what are you at?
- [30:09]
Kyle Norton
A good account executive. Like our inbound account executives close 250k ARR every month.
- [30:16]
Carl
Wow.
- [30:17]
Kyle Norton
So it's a little different because we're.
- [30:18]
Carl
Not going to say basically close a client a day. Day.
- [30:20]
Kyle Norton
Yeah. Or more. More in a lot of cases.
- [30:22]
Harry Stebbings
Wow.
- [30:23]
Kyle Norton
Efficiency. This is the thing. So when people talk about, well you know, one of the things that surprises people is on the outbound side we have two BDRs for every account executive. Oh, that makes no sense in S and P. Well it does if on a per BDR basis the LTV CAC is really strong and then you're closing a high percentage of those deals. Again, this goes back to first principles. As a revenue leader, do you really understand your P and L inside out and backwards? And do you understand inputs and outputs of your unit? Economics?
- [30:54]
Carl
Where do most revenue leaders misunderstand their P L?
- [30:57]
Kyle Norton
They don't even understand it. They don't know where to start. They think it's the domain of, of finance. And finance gives them a headcount number and they say you have 17 reps and you have to do this. And they say okay or they get the number and they just complain about it. But they don't really understand cell by cell the ARR model that we have. I understand it cell by sell every single input because I own demand gen and growth as well. And so I have to connect all of these things to make sure that not only this month but six months out we have the right trajectory for all of these things to ladder up to the number. What's our AQL forecast from Growth. What is the confidence interval that we're getting to this number by this date? Okay. What are the redundancies we have in place? And I'm always trying to layer in more than I actually anticipate we'll need because one channel will find falter, something weird will happen. But then on a input by input basis, you have to have a high degree of proficiency or else you get surprised. This is what ends up happening to a lot of first time VPs of sales is they go into a quarter, they don't have enough pipeline and they go, oh, we have to generate like an extra 4 million in pipe and close it at a 25%. But our deal cycles 120 days. You're cooked. There's no way to recover. You made that mistake six, six months ago. And so. So unless you really understand the model and are able to think both about today and delivering what's happening right now and be thinking six and 12 months into the future, you really struggle.
- [32:27]
Carl
What channel has outperformed expectations and what do you learn from that?
- [32:32]
Kyle Norton
Organic, probably.
- [32:33]
Carl
What do you think you did well to inspire organic to do so well?
- [32:37]
Kyle Norton
I did nothing.
- [32:39]
Carl
Never start with that. Always it was me. It's the takeaway. But yeah. Yes.
- [32:43]
Kyle Norton
Yeah. This was a founder insight. This is Adam having an incredibly deep understanding of the customer and the market. And way before it made economic sense, he was all in on organic. Adam just has like such an intuitive understanding of our customer base. And he was like, we're all in on YouTube. We are going to be the central hub for restaurant marketing. No one owns this position online. And so we hired people that manage the YouTube experience for like the biggest creators in the entire world. And we were paying millions of dollars for this organic strategy when it was driving like a handful of leads every single month.
- [33:18]
Carl
That's a really bold leader because you have to basically be comfortable losing money without guarantee that the rewards will come.
- [33:27]
Kyle Norton
Yeah, long payoff time horizon, but compounding. So now we have more social media followers than our public company rivals already and we're only in the early innings of getting great at this. And people will come inbound and be like, I've watched 12 hours of Adam's YouTube, like, here's my credit card. That happens like fairly frequently. And we weave his content into our onboarding journey into customer marketing. This channel seemed like a crazy bet at the time and I knew better than to second guess this one. Like, Adam just has an ability to see ahead and make a bet and when he does that, he's almost Always right.
- [34:07]
Carl
Do you not think this is where marketing completely blends with sales though? Because so you have outbound. Sure. But outbound is made far more successful when you outbound to someone who already watches your videos 100%.
- [34:21]
Kyle Norton
This is something that a lot of folks get wrong is they like squabble over attribution. They're like, oh this is sales generated, this is marketing generated. And you end up at these local maximas and we have a sort of a strange org structure where our VP of marketing who owns brand and PMM and customer marketing roles directly into Adam. I own growth and demand gen. You would think like oh that's a little squirrely and it works awesome and everybody collaborates and it's a really productive structure. And my growth leader doesn't worry about like organic attribution. Neither does the VP of marketing. They understand that a ton of organic is actually driven by the paid marketing halo. So we don't worry about it.
- [34:58]
Carl
What channel has sucked when you thought it would be good?
- [35:01]
Kyle Norton
We just tried CTV and didn't have a ton of success with it. Connected to connected tv. So running pre roll ads on Amaz prime or the like set top boxes.
- [35:11]
Carl
What do you think happened there?
- [35:12]
Kyle Norton
Really what happened is we've got too many other things that are successfully taking off and we just diverted resources.
- [35:17]
Carl
Was it expensive?
- [35:19]
Kyle Norton
Wasn't that bad. That's the cost of experimenting. You know we're going to spend hundreds of thousands of dollars on these channels to try to figure it out and we know that not all of them will take off immediately and that's totally okay. You know, you got to think in bets. Andy Duke the world is probabilistic and some of these will work and some of these will won't, some of these won't and we're going to triple down on the way winners.
- [35:39]
Carl
And what are your sales cycles?
- [35:41]
Kyle Norton
A lot of one call closes but average sales cycles under a week.
- [35:46]
Carl
Under a week. How is that the case? I mean that with the most respectful. That is extraordinary.
- [35:52]
Kyle Norton
It's a compelling product that helps and it's a burning platform for people. Like we are helping them make money which is very important so folks are willing to move on it. But something else we do that I think helps a ton. The style of selling that I teach is radically transparent. So selling at the beginning of every demo, what we lead with is both the strengths and weaknesses of the product. So like one of the first things I'll say to a customer when I'm a call is so I feature dump number One which everybody tells you not to do. But I actually think people talk in such weird abstractions that customers don't understand. And I'll be like, okay, we do five things. Website, online ordering, email, text message marketing, custom branded app, listing management, all rolled out into one. So that's like the product. But here's what you need to know about what's different than us and our competitors. We are going to give you way less flexibility and customization if that's your main priority. Owner's probably not a good fit. But in exchange for sacrificing this flexibility, you're going to get way better results. And why that is is because we have thousands and thousands of these restaurant customers and we're constantly doing experiments and a B tests and the things that work, we're going to roll out to every single customer, customer. And we're not even going to ask you some of the time. And you have to be comfortable with that. But in being comfortable with that, you now get an army of experts. Legitimately, the best restaurant marketers in the world and some of the best restaurant marketing technologists are working constantly on your behalf to do one thing and one thing only, which is make you money. You make more money, do way less work. But if you've got a custom font that you really love or you want videos everywhere and a spinning pizza sign at the top of the website, you have like really strong, strong brand opinions, then it's not really going to work. And so what happens is the wrong customers opt out immediately. And so you're not wasting a bunch of time in sales cycles. And the thing that drags on your total sales cycles is actually time to lose more often than it is time to win. But because we lead with that transparency up front, what you notice is that you're starting that conversation with massive trust with the restaurant. This is like the four star review thing from Tacopone. Like people don't trust brands that have only five stars. They actually have a higher trust in four stars. I'm leading with strengths and we weaknesses. So now people are trusting the rest of what we say and we're really honest.
- [38:03]
Carl
When you're selling to SMB and mum and pop, how many want customization?
- [38:08]
Kyle Norton
Some for sure.
- [38:09]
Carl
Really?
- [38:10]
Kyle Norton
Yeah. And we have some larger brands, 10, 20, 30 location brands now, many who have grown up on us, you know, we've helped them be so successful that they've franchised, they've opened a whole ton of locations.
- [38:22]
Carl
Do you have a constant internal battle of how far into enterprise you you.
- [38:26]
Kyle Norton
Go it's surprisingly easy because we're committed to the mission and we're committed to this product philosophy. We're not against working with a 30 location brand but we are against working with a brand that wants high degrees of customization. More of those brands are going to want more flexibility and choice and are going to be are just going to say oh actually this isn't the right fit. But you know we closed a 33 location chain the other day and they came to us and they're like yeah, I don't want to deal with all this stuff. I just want somebody else to figure it out for me. Okay, great here.
- [38:58]
Carl
But if you look at olo if we're blunt, why are they not a good business where you are.
- [39:03]
Kyle Norton
They're playing a different game. They're playing a very different game.
- [39:06]
Carl
I'm sorry I'm naive. How so?
- [39:08]
Kyle Norton
Well they're way up market, they're trying to win enterprise brands and they're trying to play the customization and flexibility and the headless game in tons of cost pressure there from these major franchises. I don't know that it's a bad business but they're just doing something completely different. We don't cross over with them hardly at all.
- [39:26]
Carl
When you look at how you run your internal processes today there's real velocity action to your sales cycles. They're very fast compared to others. How do you do pipeline generation meetings? How do you do deal reviews? What are the staple meetings in a sales week at owner?
- [39:42]
Kyle Norton
So we don't do pipeline review.
- [39:44]
Carl
Okay.
- [39:45]
Kyle Norton
Why we don't do deal review? Because you can just see it on a dashboard. Dashboard. It's all programmatic. At the beginning of the month I can basically tell you where we're going to land because I look at what is coming in top of funnel from marketing. What do we project from the BDR team and we can drive to that number. So it's really about butts and seats. Ramp the average attainment. You can mathematically just figure out where that's going to be. So oftentimes I can tell you that from dashboards I don't need to do a bottoms up. What's your confidence level on this deal? Like that makes no sense in S SMB enterprise Obviously it does and you're going to do a weekly scrutiny on every deal and stress testing it. But for us I can understand everything I need about the business basically from the salesforce.
- [40:27]
Carl
What's your ramp time on on new new AES.
- [40:30]
Kyle Norton
So we've interestingly extended this recently why we wanted AES to start in the role better trained. We used to put people on the phones on day five and now it's like day 11 or 12 because again, the deal doesn't matter unless it launches. And so if you are a new rep and you're saying a bunch of stuff that's like sort of not accurate, then you get into launch and they're like, wait, I didn't know about this and this and this, then the trust is completely broken and oftentimes people will pull out again because we're contracting month to month.
- [41:04]
Carl
Does that matter though? And what I mean by that is your pool of net new leads is so large compared to insurance. Insurance SaaS business where they sell to enterprise where there's like, don't up a lead here, dude. Like, yeah, you can't afford to. Do you not bluntly have such a big universe? Like you can get them on the call earlier and not it up?
- [41:23]
Kyle Norton
There's still an opportunity cost because we've paid money to generate that opportunity that another more seasoned rep could have closed both inbound and outbound. That's true. And so we're also mindful of the reputational risk as well. And we want people to be really successful and competent. If you throw them in way too early, then sometimes it actually stunts their growth.
- [41:45]
Carl
Do you do shadowing? Like, will you join? Will sales leaders join calls for the first call, second call, third call?
- [41:50]
Kyle Norton
Oh, yeah, big time.
- [41:52]
Carl
Talk to me about that because again, dude, I've never run a sales team. That's why these shows are successful, because I ask the questions that everyone who has no idea what they're doing asks too. How do you do that? When do you handle off?
- [42:03]
Kyle Norton
The reps will go through the training and then they do a bunch of the sales simulation, then mock calls. They get certified, they get certified on the craft and then they do an operator certification, which is like, do you know if you know how to use Salesforce and all the other stuff? And then their first calls, the managers are on all of them basically. And you'll give the rep more and more rope as they show competence. So maybe at the beginning all the rep can do is open the call, ask a few discovery questions, do a little bit of the demo before they get that deer in headlights look. And then the manager can jump in and take it over. So we see a lot of like manager closed deals in that first couple of weeks.
- [42:41]
Carl
In the nicest way. How sophisticated are the clients? And what I mean by that is if you're a Mom and pop shop with maybe a couple of Chinese stores or a couple of Indian restaurants. Are you really, like, jumping onto, like, sales demo calls from a plush office, being like, oh, thank you, Kyle and Jessica, lovely to see you. Are you like, hey, why are you bothering me? Yeah, fuck off.
- [43:00]
Kyle Norton
A lot of people are joining the Google Meet from their phone. They're in the back office. Smoking a dart is not an uncommon experience on. On our demos, for sure. And so, like, yeah, these are salt of the earth mom and pop business owners. We'll meet the customer wherever. Wherever we need to meet.
- [43:16]
Carl
How important is it to go in person?
- [43:18]
Kyle Norton
We don't do any in person.
- [43:19]
Carl
You don't do any in person?
- [43:21]
Kyle Norton
Mm.
- [43:21]
Carl
A la belle. Why?
- [43:23]
Kyle Norton
Mm. The economics don't make sense. We're so efficient running the sales cycle digitally.
- [43:29]
Carl
I'm not being rude. If you go to, like, a highly dense metropolitan area, they're not like 50 mom and pop shops in a square and you can like.
- [43:37]
Kyle Norton
So we are highly targeted. I mentioned that we have these two ML models, one that tells us the size of that potential restaurant. So, like, how much revenue they'll do. And we have this thing called an E win score. And so that's our estimated win rate.
- [43:51]
Carl
Wow, this is fascinating. What size restaurant is interesting.
- [43:55]
Kyle Norton
So we don't want little tiny restaurants that are just, like, scraping by and have no customer traction because we charge a premium. We charge 500 bucks a month.
- [44:04]
Carl
And you don't want Churn. Yeah, obviously. Okay, exactly. So they're doing like 500k to 5 million.
- [44:08]
Kyle Norton
Yeah. And so we know that there's certain GPV bands where churn starts to tick up. So we say, okay, like, this is our minimum for this segment. And then we have this estimated win rate. So you could knock on 50 doors.
- [44:22]
Carl
Don't laugh. Is the likelihood of closure greater in different cuisine types? So, like, if your GPV is under 300 grand for Indian, but under 700 grand for Italian, is it different in that way?
- [44:34]
Kyle Norton
I don't know. We haven't run that analysis.
- [44:36]
Carl
It'd be fascinating to see that, ah, the Italians, they close under a million, but Chinese, they're better on 500k.
- [44:42]
Kyle Norton
Yeah, we look at all sorts of stuff. Churn by cuisine type, churn by size, churn by the quality of their setup. Like, everything in our business is instrumented so that we can understand it in a lot of depth.
- [44:53]
Carl
Got you. Because you don't want to spend a ton of resources if the churn. Super high. Okay.
- [44:57]
Kyle Norton
And so going back to your question about in person, A rep on our team that is getting, you know, three to four demos a day and closing one or two of those and then being able to chase down all of their follow ups. It's really hard to compete with the efficiency of that model. Knocking on doors. Some of those doors are relevant. Some of those doors don't meet our scoring model model. Most of the time the owner's not there. You're now like feet on the street. It's just a ton of time. And our competitors who run that model, we're anywhere between like three and four times more productive on a per rep basis than those companies.
- [45:31]
Carl
The thing that really shines through for me from this conversation is like a velocity engine of a sales machine. Do you know what I mean? Which is like very systematized and very scientific. Yeah, it's fascinating. So we have that. With different stages of sales come different challenges. You guys scaled really fast. How fast did you scale to 10 million in revenue? What were you at when you joined?
- [45:55]
Kyle Norton
Two and a half.
- [45:56]
Carl
You're at two and a half?
- [45:57]
Kyle Norton
We're at like 40 today. Yeah.
- [45:59]
Carl
Fucking miss.
- [46:00]
Kyle Norton
Under, under three years. Yeah. And we're actually growing faster today than.
- [46:05]
Carl
Three years to 40 million.
- [46:06]
Kyle Norton
Yeah. Two and a half to that. Yeah. And we're actually growing faster today. Today. And so I'm very optimistic about what this year will bring.
- [46:14]
Carl
Does customer acquisition get cheaper over time because you have brand, you have word of mouth, you have a humming sales and marketing team, or does it get more expensive as you expand beyond your core icp?
- [46:28]
Kyle Norton
It depends. So it depends on how big the market is. I think many markets you hit a saturation point and you've closed the low hanging fruit, the early adoption and you see sales and marketing costs rise. It's falling pretty rapidly for us. We're getting more and more efficient as we grow. But we've also made tremendous investments up front. Rev ops, enablement data and biz ops like these are for anybody else looking at it would think like these teams are way overweight for the size of team and the ARR we are at today. But we've built these systems and foundations that are allowing us to get increasingly efficient. And now as we bring in more and more reps and spend more and more on demand gen, that flywheel is pretty tough to stop.
- [47:11]
Carl
What is the biggest thing that Rev Ops has done to make a humming and efficient machine, do you think?
- [47:16]
Kyle Norton
A few things. So one is trying to automate and obfuscate all of the low value stuff. So we use momentum that looks at the transcript of every single sales call. And it fills in the salesforce fields for the rep, it fills in their opportunity record, it updates the account, the person, it says whether or not the event was run or not. All of that stuff that could take a rep a whole bunch of time to manually fill out. That's all done for them. We try to simplify the business process as much as we can for the reps. And then tooling, we're really insistent on trying to bring in tools that make the team more and more effective, both pre and post sales. Like, I think sometimes the pre sales gets all of the investment and post sales doesn't. But a company that I know you know is Pavlov. And they're. I was. We were their first customer. Customer. Yeah. Mark and I worked together very closely at Shopify.
- [48:08]
Carl
I didn't know that.
- [48:09]
Kyle Norton
I had dinner with them last night.
- [48:10]
Carl
You know, we led that round.
- [48:11]
Kyle Norton
I do.
- [48:12]
Carl
Oh, wow. Fantastic. I should have known that. I love him. He's so good.
- [48:18]
Kyle Norton
They're an awesome team. I'm very bullish. And so we're using a tool like Pavlov to post sale, incentivize the customer to take actions that we know lead to higher gpv, higher retention. And again, that's now an automated flow where they go through these campaigns of incentives. They do the right things, not just for us, but for them as businesses.
- [48:42]
Carl
How do you think about that? How do you do that successfully? Because, you know, as you said, there's the SaaS revenue, which is great, but also transaction revenue is a meaningful, meaningful part of it for you. And so when you think about really ensuring customer success, what have been your biggest lessons in how to do that?
- [48:57]
Kyle Norton
Well, again, it goes back to data and infrastructure. So one of the things that the biz ops team did is build. Build a scoring model for customer configuration quality. So it's called the growth potential score. So they did a big regression analysis and we know exactly what things in the product, if they're set up well or not well, drive GPV drive growth. And if a customer's making money, they're making us money, and they're much, much higher retention. So we get paid back multiple times there. So we built this GP score the biz ops team does. And so we now know what a really high quality configuration looks looks like. That information is available to the launch specialist. So as they're setting up, they can see their GP score. They can see all the gp.
- [49:40]
Carl
Sorry, what's a launch specialist?
- [49:42]
Kyle Norton
An onboarding rep.
- [49:43]
Carl
Okay. And so what do they?
- [49:44]
Kyle Norton
Do they set the customer up? So sales closes it, they pass it to the launch specialist and they get access to their domain, their Google business profile. They build the website, figure out their menu and photos, the integrations. They're doing all, all of that work.
- [49:58]
Carl
Wow.
- [49:59]
Kyle Norton
Mm.
- [49:59]
Carl
It's quite cheap, isn't it? Like 500 bucks a month. You actually think about it. Six grand a year. I'm with you. But for everything you get. Feels pretty good.
- [50:08]
Kyle Norton
It's a pretty good deal.
- [50:09]
Carl
Yeah.
- [50:10]
Kyle Norton
And a bunch of these customers end up making.
- [50:12]
Carl
But I'm thinking like the margins are not great then because if you've got like a launch specialist doing all of that shit, making menus, domains, making sure site's up to quality for them. They're happy with color schemes and the font constant.
- [50:25]
Kyle Norton
They do a lot of launches every month on a per person basis.
- [50:28]
Carl
How many launches?
- [50:30]
Kyle Norton
Over 20 per person. Plus they're Latin American based.
- [50:35]
Carl
Are they comped on a launch?
- [50:37]
Kyle Norton
They are, yeah. And going back to this growth potential score thing, so the launch specialist knows what they need to fix in the configuration so that that person is as successful as possible. What are their photos? What's the density of and quality of those photos? What's the story we have tell? Do we have connection to their Google business profile? Have we done all the business listings work? Is the SEO done properly? All that stuff is again delivered programmatically.
- [51:05]
Carl
You said they're Latam based. Talk to me about that. Are they internal resources Extra. Okay. Why latam based? Just like a pricing arbitrage.
- [51:13]
Kyle Norton
Yeah. And on a per dollar basis we get incredible talent. There's an exciting opportunity in Latin America to not treat it as this like BPO at an arm's length type thing. We've made them pop part of our team.
- [51:27]
Carl
They're how like that's really hard to do.
- [51:29]
Kyle Norton
Anything worth doing is hard to do. We just like did the work to go source and so we've got a really good recruiting team. We like posted the roles and did all the normal stuff, but they were going and outbounding into these markets, looking at where are the hubs of potential talent. So big American tech companies that probably are getting good talent. Let's go source there. And once we found the patterns and they inter, we interviewed hundreds and hundreds of people and found a system system to basically identify good, good folks.
- [51:57]
Carl
How many do you have in Latam?
- [51:59]
Kyle Norton
70 people probably.
- [52:00]
Carl
Wow. How big is the company now?
- [52:02]
Kyle Norton
Approaching 250F.
- [52:05]
Carl
What breaks with scale?
- [52:07]
Kyle Norton
Everything. Yeah. I think one of the things that I am most hyper paranoid of is the quality of leadership breaking. Because I think once, you know, if there's a long period of time where tons of people reported directly into me, ICs did and then managers did. And so I was really close, like within arms reach of every person in the org. And now there's multiple layers between me and any ic.
- [52:32]
Carl
Is that good? Yeah. We hear about founder mode and the importance of being close to customers. Is that good to be having multiple layers between you and an IC who's then going to speak to a customer?
- [52:42]
Kyle Norton
Well, I still get on demos almost every week.
- [52:44]
Carl
You do?
- [52:45]
Kyle Norton
Oh, yeah. At the end of a month, I'll be on demos almost every single day, running calls with reps jumping in if they need help closing. I love it. It's fun for me, but also it's very important for me to keep my craft sharp and to know what's happening on the front line. And I got involved in all the biggest deals last month. I was like, hey, anything above 10 locations, like, get me in there. That's what I'm going to prioritize. And I run a. Ran a bunch of these calls and the reps are like, oh, like you said this and this, like, I'm going to do that. Can you send me. Can you send me how you're thinking about it? We like quickly sketched out some because I've had these new ideas. The best way to figure out if they work is just do them myself. So I'm pretty intentional about staying connected. My BDR manager rips dials himself. The AE direct director runs demos. Still. The new manager who started is going to be like an AE basically for his first 30 days and get like very, very close to the customer.
- [53:33]
Carl
What bit of the machine keeps you up at night?
- [53:36]
Kyle Norton
Talent acquisition. Yeah, because it's really hard.
- [53:39]
Carl
As specific as possible. I'm so sorry, but is it BDR acquisition? Is it Launch Specialist acquisition?
- [53:44]
Kyle Norton
It's the speed at which the number is growing in every single role. Because at some point my content engine, like, Basically me cranking LinkedIn will only get us. And so we need new channels and I'm trying to make sure that we have these new sourcing channels lit up before we hit a point where it's like, oh, man, we're supposed to have seven people starting, we only have three. And then you're starting to take action and it's sort of too late. I just did a university tour. I went and spoke at all the best business schools in and around the gta as Part of like a new way to source candidates. And we have seven new SDR starting next month just from this and then another four in July. And so again, like it comes back to this theme of how can you hit today but also think about tomorrow.
- [54:33]
Carl
We're both fans of Jason Lamkin. Jason always just tells me, listen, young people just don't want to work today like they used to. They just don't want to work. Does that chime true with your perspective?
- [54:44]
Kyle Norton
I think in general there may be some truth to it, but there's still plenty of people out there with the grit and work ethic and tenacity for us to build a world class to team with highly motivated people. I have not personally found that with my, my.
- [54:57]
Carl
Do you think raps are coin operated?
- [55:00]
Kyle Norton
No, no. I think it's. It's always a mixture of incentives. It's too binary to say like, oh, they're either money motivated or they're mission motivated. I think a lot of people are really excited about our mission because you get to help an SMB. A person that's like easy to feel good about helping. But yeah, everybody in sales wants to earn money.
- [55:17]
Carl
If I came to you and said I didn't give a about the mission, just being honest. I care about making money and I'm going to crush quota and I'm going to be here night and day. Crushing quota makes me nervous. Does it?
- [55:29]
Kyle Norton
Yeah.
- [55:30]
Carl
Why?
- [55:30]
Kyle Norton
They'll just go to the next thing where they get offered more money.
- [55:33]
Carl
Is that not okay? If I crush quota for you for.
- [55:35]
Kyle Norton
Two years, I might not even get two years out of them if that's the case. Especially because owner has so much brand equity now. This happens all the time where founders see us and they go, I just need to seed my team with people from, from that organization. Yeah, they're going to try to overpay. But if that individual believes in the mission and we're doing the other parts of that engagement methodology. So I have this methodology called Cramps. So there's like five things I want to do to make sure people are highly engaged and retained. So community. So do people feel a sense of connection to the business and to the mission that we're supporting? Recognition is huge. Huge. I didn't invent any of this stuff. You can read any of the engagement research and get this stuff. Autonomy. So this is from Daniel Pink. Autonomy, Mastery. Purpose. Do they have a sense that they are empowered to go out and do their thing? Do they have an internal locus of control? Because there's this thing called the overjustification effect. If you are glomming on to them constantly and getting people to do their job as a just push, push, push, push, push, push, then you take away their internal locus of control. Control and they actually will become less motivated. So I want to give them a sense of autonomy that they are in charge of their career and their business. So community recognition, autonomy, mastery. Mastery is. Do they feel like they are on the path to mastering the craft of sales? That is deeply motivating for people. Do they have a sense of purpose? That's all about mission. So that's like 20% of this methodology. And then the S is steps. So do they have a steps is career progression. Do they have a path to grow their career from BDR to AE to senior AE to manager? And so I'm very cognizant that we are equipping people to do that and then giving them the opportunities. We promote a lot from within. Even though I could go hire basically whoever I want now from this market. We promote heavily from within because I think that's such an important engagement driver.
- [57:27]
Carl
You're scaling into a new phase of sales leadership for you. What are you nervous about as you scale yourself as a sales leader? Leader?
- [57:34]
Kyle Norton
That's a really good question.
- [57:36]
Carl
I'm a podcaster, a good one at that. I go on dates and girls like. That's a. That's a really good question. I'm like, I have had practice.
- [57:48]
Kyle Norton
I had an old boss who used to say I pay it or be paranoid. And I'm just sort of paranoid about everything. I'm paranoid about everything. Breaking our management team. Am I scaling them fast enough to keep up with the pace of the business? Are we going to have the recruitment engine? Are we going to be able to continue to source deals? I'm sort of scared of it all. And that is like a really positive motivation.
- [58:09]
Carl
What did you do that you wish you hadn't done?
- [58:11]
Kyle Norton
We haven't had as much success hiring senior reps, like reps with a whole bunch of experience. We've actually had more success hiring people in like a two to four year experience range.
- [58:23]
Carl
Jason Lamkin would say they know how hard it is and they don't want to go back again. Their heads of sales or they've promoted up the hierarchy. Rocky. And actually if you've done it once, you don't want to do it again. True or not true?
- [58:35]
Kyle Norton
I think it's more like we are highly. As you can tell by this podcast, I'm highly opinionated about how I want Things done. And we're going to give you a lot of coaching and a lot of feedback and we want you executing on our system.
- [58:46]
Carl
Yeah, very systematized. Like, not much room if you want to bring a new flavor of sales.
- [58:51]
Kyle Norton
Respectfully, there's freedom within a framework. I want people to have some creative freedom, but it's got to be within a methodology.
- [58:57]
Carl
You know, when your wife says, do you know, of course you can go out with the boys. It's your choice. If you choose to leave me home, that's kind of the same thing. Oh, I think I'll stay. Yeah.
- [59:07]
Kyle Norton
And so I think more senior reps come in and like, I know how to do this. I'm good. I'm going to do it my way. That's worked for me for a whole bunch of time. And oftentimes they can't outdo our system. Even though they have more experience in a more developed skill set. Them executing their skills but within this other framework is less good than a newer rep that says, like, yeah, this sounds great, I'll do it your way. They tend to accelerate faster and that's not all the time. Like, two of our very best reps had a lot of restaurant tech experience beforehand. But in general, I think, like, as we've gotten to this point in the company, people that are earlier innings of their career and more malleable and open to ways of doing things and coachable, we're just like a hardcore coaching environment. You're going to get coached every single week. Every month you get a monthly report card that that talks about what you did well and where the areas of development and then you develop your secret sauce. Like, what are we going to do for the next 30 days together to move the needle on whatever conversion rate. Some people just aren't about that anymore at this point of their career. And we had somebody opt out in like three or five weeks just because she was a really senior seller and clearly was like, nah, I'm not about this.
- [60:16]
Carl
So that's what you had done that you wish you hadn't done? What have you not done that you wish you had had done?
- [60:21]
Kyle Norton
I wish I had been more insistent about hiring a head of Applied AI.
- [60:28]
Carl
What?
- [60:28]
Kyle Norton
We're just hiring this role right now. I have been come absolutely obsessed with all things AI. Like as soon as ChatGPT came out, I have like a clay table for my podcast prep that's connected to tally intake forms where the person fills it out, then it updates the clay table and it runs these enrichments and creates questions for me and does all of this stuff. Like I have this everywhere in my.
- [60:51]
Carl
Life as you sound like a riot on a Friday night. I've actually remind me to reserve my calendar. Sorry dude.
- [61:01]
Kyle Norton
I actually vibe coded in an app on a Friday night a couple couple weeks ago. So you're not wrong. Stevie Case. So I had her on my podcast. She was talking about her initiative. I was like, I want this. Like I need that for myself. And you know, I mentioned the role and we're like, well like let's come back back to that. And I should have at that point being like, no, no, no, like let's get this role in today. And now I think we've just put up the JD online because I want somebody that is just like thinking and breathing all things AI across our entire business. I would like to be farther ahead than we are with AI. Even though people tell me that like we're so far ahead. I'm.
- [61:38]
Carl
I respectfully. Why? Why do you need custom AI versus off shelf AI application Could be off shelf.
- [61:45]
Kyle Norton
We're using a lot of off shelf. But somebody has to think think about, okay, that entire ecosystem is this build or buy and how is it all getting weaved together in a really cohesive manner? I'm pushing on my our rev ops team to all get really conversant with GTM AI and we're starting to get there. But I just want somebody dedicated to go absolutely all out on it.
- [62:07]
Carl
Wow. What do sales teams do today? There's no way they'll do in five years time.
- [62:12]
Kyle Norton
Account research, lead program prep, lead research, figuring out who to call. I think it's insane that companies do that today that they have BDRs doing manual lead research. If you look at most BDR teams, like 30 to 50% of their time is just flushed down the toilet with work that a data ops team should be doing for them.
- [62:30]
Carl
Does outbound become less valuable in a world of infinite supply? What I mean by that is I can just bluntly send 10,000 emails in a minute with AI outbound email system systems. And we've got AI SDR tools. I mean, I'm laughing with the teamsakers, obviously. I'm an investor for a living too. I think we've seen 15 AI SDRs in a week. That's just what we've seen in a week.
- [62:54]
Kyle Norton
You see these massive trends and ultimately that advantage gets competed away. Same thing with sales engagement when I was one of the first customers of Salesloft Cadence. At that time you could just have every BDR sending 100 emails a day day. The BDR team that I inherited at Vision Critical 5X, their per person output after my, like seventh month there. And a lot of that was just nobody was using sales engagement tools. And so we loaded up all of these lists and we were just blasting out fairly generic messaging. Straight from the old school, predictable revenue playbook.
- [63:27]
Carl
God. Aaron Ross. Oh, yeah, yeah, fuck me, that takes me back.
- [63:31]
Kyle Norton
But that playbook was incredible when it first broke and then everybody started doing it and then it started stopped working. And so there's this Red Queen's race where everybody has to move to the next thing and the next thing and the next thing. And yeah, I still think there's a tremendous advantage with some of this generative AI outbound. It will get competed away.
- [63:50]
Carl
And a tip for all sales leaders that I think they should do is leverage podcasts to acquire customers and speak to stakeholders. And so what I mean by that is, you know, we have an amazing company that sells to patent lawyers.
- [64:03]
Kyle Norton
Yeah.
- [64:03]
Carl
Interview the partners at the largest patent law firms and talk about their challenges, how they think about the future. Don't sell the company at all. And then after the show, they'll be like, so what an owner do?
- [64:15]
Kyle Norton
Yeah.
- [64:16]
Carl
And you're like, oh, sure. Let me tell you for five minutes, you do one a week. You've got 52 leads a year.
- [64:21]
Kyle Norton
I met a guy who generates 60 something percent of his company's funnel this way. They have five podcasts, this company, and all they do is interview the biggest names in their industry. And that person almost always introduced them to the person they actually want to talk to. And then that person posts the episode on their podcast.
- [64:41]
Carl
And I'm on Owners the manual podcast, and I'm so excited. And then all of the competitors like, oh my God. What? Yeah, is that. It's a great strategy, but no, but it's so underutilized. And it's actually underutilized because the cost of advertising entry is still quite high versus posting on LinkedIn. You have to get Riverside, you have to get a microphone, you have to get the gas versus tweeting or blogging or doing any of that. Still quite hard.
- [65:06]
Kyle Norton
But even that is a nothing investment. What's. What's a podcast? Like 200 and something bucks.
- [65:11]
Carl
And I have no idea. But not much. No, I completely agree with you.
- [65:14]
Kyle Norton
My entire home studio setup was like two grand.
- [65:16]
Carl
I completely agree with you. But people are lazy. They are. And it's still much harder than posting on LinkedIn.
- [65:24]
Kyle Norton
Yeah. You're not wrong.
- [65:26]
Carl
And my favorite Thing about secrets is you tell the world and people still don't listen. Do you know what I mean?
- [65:31]
Kyle Norton
People ask me this all the time. Like, aren't you afraid you're, like, giving away all of this stuff that your company's doing? And I tell them it's like, one. I don't think anybody's really going to do it that well. This was something from Stevie. Like, execution is the only moat. And I'll always execute out. Execute these folks. Yeah, I'm 100% confident in that. And the other piece is like, if you're a direct competitor of mine and you start using my tactics, I'm in your head, you know, now that I'm better than you are, and you'll have to carry that with you, always knowing that you're one step behind and you're just trying to copy me.
- [66:08]
Carl
My mother, actually, I walk with her every weekend, a marathon. And she always says, what the fuck? Why are you telling everyone to do this and to do what you do do? And I'm like, because I'm telling them that I'm making spaghetti bolognese. I use analogies for her. And she's like, right? And I'm like, yeah, but there's two different types of people. One goes to Trader Joe's and buys the bolognese mix and the pasta. The other makes the fresh pasta with the whole wheat that they got from the farmer's market. They do it the night before so it can aerate in the fridge. They then go to the farmer's market for the tomatoes. It's the how you do what you do. You could tell me to do the podcast like you. You do. But, dude, if I don't have the processes that you do, the clay tables, the research, the tone, the excitement, doesn't fucking matter if I do the podcast. Yeah, it's how you do what you do.
- [66:54]
Kyle Norton
And again, this comes back to first principles, reasoning. You know, people are going to hear what we do, and they can try to slap that onto their business. But what we do only works because of this entire ecosystem of what we do. Like, we run a highly structured system and we invest in a certain way. Like, you need to follow my playbook. You need to do all of the things. You can't just be like, oh, we're going to do AI lead enrichment, and we'll just drop that in. Unless you have the enablement and adoption from the BDR team so that they're not just, like, doing their own stuff on the side. Execution is the whole piece.
- [67:27]
Carl
Do you think it's valuable to have competitors in your head. Do you like to inspire teams with like, hey, we're beating X competitor.
- [67:34]
Kyle Norton
We don't that much. Yeah, we'll joke around about it, but it's not really like our driving motivation. It, it is the mission. Like it's easy to feel good about helping like a restaurant down the street just survive and get by. And a lot of the motivation for the team is sharing these success stories. Like you see your customer in one of the channels that's grown like 3x and they're making like 6 grand more a month. Which you know, it doesn't seem like a lot of money but if you're a restaurant owner and your take home is like you're working 100 hours a week and net, net, net net, you're only making 80 grand and now there's an extra 40 grand in your pocket. Because we've helped you grow online which is highly profitable. It's easy to be really excited about that. We do pay attention to some competitors, but we're right.
- [68:19]
Carl
Which competitor do you most respect?
- [68:21]
Kyle Norton
I have a lot of respect for Toast. Good product craft. Their GTM execution is really good. They operate in a pretty like respectful way too. Like we don't find Toast doing shenanigans to their customers. I think like the competitors that I have come complete disregard and disrespect for the ones that treat their customers poorly because these are SMBs and you're like trapping them into a contract. You're holding their domain hostage so they can't move over. You're lying to them about all of this stuff and trying to fear monger as they're. They're trying to leave your, your that's really inexcusable.
- [68:54]
Carl
Especially when it's like mom and pop shops who are vulnerable and don't have the power.
- [68:58]
Kyle Norton
That makes me mad. I know that in the long run we will win because of that. You know, in the short term I'm sure it's helped them hold on to some deals and stem some churn here and there, but none of those customers feel good about that relationship. And again, I think one of the smart things that we do at Owner, and certainly a lesson I took from Toby is like Toby always talks about we're building a 100 year company and one of the things that at Owner we've done is, is like optimize for the long term. Like why don't we lock customers into year long contracts? We probably, probably could. Well, we want to earn your business every Single month. Does that lead to some short term churn? Yeah. Does it put tremendous pressure on us on product and execution to deliver an amazing customer outcome? Yeah. And I think long term that compounds and becomes a durable advantage. Like we, we part ways really nicely with people. If you want to leave owner, we'll actually help you move on to your next thing. You want to revert your website, you need us to give you DNS records and stuff. We actually do more than we really need to make it easy for somebody to transition. I think that brand in the market compounds over time and is clearly something that builds steam for us.
- [70:07]
Carl
Dude, I want to move into a quick fart.
- [70:09]
Harry Stebbings
I can talk to you all day.
- [70:10]
Carl
You are advising a 23 year old. I'm your little brother, okay? And I'm 23 and I've got my first job in sales. I'm a rep. What do you advise me knowing all that you know, now entering this workforce?
- [70:24]
Kyle Norton
Focus on the inputs and not the outputs. Focus on your work ethic, your rate of learning, your coachability. Learn consistency every day, daily discipline and know that the outcomes will eventually come.
- [70:38]
Carl
Got it. Love it. Reflect back on your time with ona. You can relive one of the days. Which day do you choose to relive and why?
- [70:46]
Kyle Norton
That's a really good question. We had a pretty good one recently. On Wednesday, the end of April, we had to have a big surge to hit the the number and I was in the office in Toronto. There was a bunch of reps in the San Francisco office. They're all remote but we, we had them go in to basically just like do this end of month surge. Bring the vibes. I was in the office till like one in the morning with just like one rep left over and we closed the last deal at like 12:15am Toronto time. And the west coast reps closed deals even, even later than that. It was just a really cool moment because we knew it was an important month for the company. And even at 10:30 there was BDR still making calls to the west coast to try to get like last demos done. We were closing the very last deals. I just had a blast. We were collectively pushing for this number even though almost every one of those reps was already at their number. They didn't really have to do it for themselves. And I think that is a special part of owner's DNA. Yeah, we have people that are very individually motivated, but this like collective is pretty special.
- [71:49]
Carl
What have you changed your mind on most in the last 12 months? I think ChatGPT and OpenAI are unwaveringly the dominant leader for the next 10 years, and I think there'll be a $2 trillion company. I questioned actually that in the early days.
- [72:02]
Kyle Norton
Something that I changed my opinion on Quite recently is O3 is potentially AGI. I wrote about this a bit on my newsletter. There was such a stark difference to the capabilities of O3 compared to everything before for it. I mentioned how I wanted to hire this head of Applied AI earlier. I started playing around with O3 and I updated a bunch of my ChatGPT workflows to use O3, and I was just like, holy crap. This is so different. The memory, the reasoning, the speed, and being able to do research and also deeply reason. It made me think that this roadmap is moving even faster than I anticipated.
- [72:39]
Carl
You can take Jason's side or Rory's side on who is right. Is AI going to bring mass unemployment in a way that we haven't seen before?
- [72:50]
Kyle Norton
I don't think so. Because of Jevons Paradox. You saw this argument as compute got cheap. Well, all these foundation models are going to be less valuable. It's like, no, it's cheaper now. Everybody's using way more compute. And so if the effectiveness of every salesperson and the effectiveness of all these individual contributors go way up, are we going to want way, way more of those? I think yes. And I think AI is going to drive so much more company creation that there will be a consistent demand for these roles because the economics of the roles get better. There's more companies that need sales reps. I mean, I cannot read the future on this topic, but Jevons Paradox may lead to high employment.
- [73:33]
Carl
How do you motivate sales teams when numbers are missed?
- [73:37]
Kyle Norton
It's about the actions you take before you miss the number. I think if you tie your identity to whether or not you hit the number, then when you miss the number, it's. It's much more difficult to handle. But a thing that we talk a lot about at Owner, it's about the inputs and the daily grind, and it's about the journey. A thing that I get quoted for saying is sales is a personal development exercise disguised as a career. Sales being hard as a feature, not a bug of this job. Failure is a feature, not a bug of this job. And so if you can get people into this, like, more stoic mindset that, like, the challenges are the journey and failure is the journey, that's. That's what helps us get better as people. That's what helps us grow and develop ourselves. Then when you inevitably have these down periods, you're prepared for them mentally. Like we've vaccinated people against those difficult times times.
- [74:32]
Carl
Tell me, owner, 20, 35, 10 years out, where is owner then?
- [74:38]
Kyle Norton
I think we'll be a a generational public company. The only reason I left Shopify because I loved my setup there. I still love Shopify. I think it's an amazing company. I think Toby is one of the greats. There was nothing making me want to leave shop. The only reason I joined Owner is I think Adam has the chance to be a generational start CEO. I think he's got all of, all of the DNA. This is a massive market and this is a chance for me to hit a grand slam. It seems really arrogant, but like I want to be one of the handful of people that have taken a company from early to ipo. You need an incredible team and market and all this stuff to be able to make that happen. And I thought owner was that bet and I actually feel more bullish today on that than I did three years ago.
- [75:21]
Carl
Dude, I have loved this. I so appreciate you sending over your thoughts. So we obviously have art research. I'm very glad that I bluntly freestyle most of the time. It's so much nicer. But you've been amazing, so thank you so much.
- [75:34]
Kyle Norton
This was awesome. I really appreciate the invite. This was like a career bucket list thing for me. You know, I've been a fan and a listener of yours forever, so this was a blast.
- [75:43]
Harry Stebbings
I mean that was such a special show to do. It makes such a difference being in person. We have so many incredible founders reach out and post shows like this and say how they change their organisations because.
- [75:53]
Carl
Of shows like this.
- [75:55]
Harry Stebbings
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