20Sales: How the Best Sales Teams Use AI to Win Enterprise Deals | Sales Teams Will Be Dramatically Smaller | How to Ramps Sales Reps Way Faster | Why Unpaid Design Partners are BS | Why this Generation of Sales is Soft with Ishan Mukherjee @ Rox

Summary

Podcast Summary: The Twenty Minute VC (20VC) Episode on AI-Driven Sales with Ishaan Mukherjee @ Roxx

In this insightful episode of The Twenty Minute VC (20VC), host Harry Stebbings engages in a deep conversation with Ishaan Mukherjee, the co-founder and CEO of Roxx, an AI-powered sales productivity platform backed by Sequoia. Drawing from his extensive experience scaling New Relic’s self-serve business from zero to $100 million in Annual Recurring Revenue (ARR), Ishaan shares valuable strategies, lessons, and perspectives on leveraging AI to revolutionize sales teams and processes.

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1. Balancing Product-Led Growth (PLG) and Enterprise Sales

Key Discussion Points:

• Centralized Go-to-Market Strategy: Ishaan emphasizes the importance of focusing the go-to-market efforts on a captive audience. At New Relic, this involved concentrating on a core group of developers who remained loyal to the brand, allowing for efficient scaling and revenue generation.

  "The center word is focus. So we centralized the entire go-to market engine on a captive audience of developers..." [04:05]

• Challenges of Dual Approaches: Attempting to manage both PLG and enterprise sales simultaneously is fraught with difficulties unless led by a visionary C-suite executive who deeply understands both domains.

  "It's very hard. It's only possible if you have a dialed in CEO or kind of a C suite who really gets it." [05:00]

2. Optimizing Marketing Channels through Focus and Divestment

Key Discussion Points:

• Selective Channel Investment: Ishaan advocates for concentrating resources on high-performing marketing channels such as Performance Marketing (SEM, SEO) and Organic Content, while divesting from less effective avenues like event marketing.

  "Focus on performance marketing, which is SEM SEO and then organic content. It's kind of a slower ball but just do those two things, the rest is distraction." [07:31]

• Efficiency Over Broad Strategies: By shutting down ineffective channels, companies can allocate their budgets more effectively, enhancing overall marketing ROI.

  "If events are not working for you, if you don't have a dial in operation, don't do it." [09:32]

3. The Transformative Role of AI in Sales Teams

Key Discussion Points:

• Smaller, More Efficient Teams: The integration of AI tools like Roxx is projected to reduce the size of sales teams by 80-90%, allowing the remaining members to focus on high-impact activities.

  "Sales is a power law. The top 10% bring in 90% of the revenue." [00:02]

• AI-Enhanced Productivity: AI enables sales reps to ramp up faster, perform deeper customer research, and manage larger customer portfolios with greater efficiency.

  "Ramp faster is deep research, understanding kind of pain and kind of building our own internal frameworks of how to communicate your kind of solution to the pain." [24:16]

4. Sales Compensation Models and Talent Management

Key Discussion Points:

• Performance-Based Compensation: Ishaan discusses the effectiveness of compensation models where sales reps have significant skin in the game, aligning their incentives with company goals.

  "There's two kinds of salaries... traditional salespeople... complete owners." [19:24]

• Identifying Outliers: Emphasizing the recruitment of top-performing sales individuals who can drive substantial revenue without relying heavily on brand presence or extensive marketing support.

  "The most important thing is to find these outlier sellers who can sell without a massive brand, a demand engine and perfect product market fit." [21:35]

5. Transitioning from Founder-Led to Rep-Led Sales

Key Discussion Points:

• Establishing Repeatable Sales Motions: For a successful transition, it's crucial to develop sales processes that allow reps to autonomously secure high-quality meetings and close deals without constant founder intervention.

  "Repeatable sales motion is are you able to go from a list of potential customers to a high quality first meeting autonomously without the founder helping you?" [48:22]

• Training and Onboarding with AI: Utilizing AI tools to expedite the training process, enabling new reps to become proficient more quickly and effectively.

  "When you're fully ramped push the envelope of how many customers that they could support and those would be three things without obviously losing overall quality and attainment levels." [43:51]

6. Lessons for Founders: Enhancing Sales Efficiency with AI

Key Discussion Points:

• Hiring the Right Talent: Prioritizing the recruitment of sales reps who are not only skilled but also adept at leveraging AI tools to maximize their productivity.

  "First hire the right folks who are future proof like they understand the word. So are they using these tools maybe illegally in their personal lives?" [43:51]

• Leveraging Data and Tools: Providing sales teams with access to comprehensive data and AI-driven tools to reduce friction and enhance their ability to engage effectively with prospects.

  "Give the power of data and tools to them and reduce friction." [26:47]

7. Future Outlook: Smaller, AI-Driven Sales Teams

Key Discussion Points:

• Dramatic Reduction in Team Sizes: AI advancements are expected to significantly shrink sales team sizes, focusing human efforts on building long-term, non-transactional relationships with top-tier customers.

  "Sales teams will be dramatically smaller. It could be 10 to 20% of current kind of org sizes." [42:37]

• Emphasis on Relationship Building: The remaining sales professionals will concentrate on strategic engagements, fostering deep connections that drive sustained revenue growth.

  "They will be able to do two to maybe three times more this year like we're seeing some of the best organizations increase their book size." [43:42]

8. Retaining and Managing Talent in a High-Performance Sales Environment

Key Discussion Points:

• Maintaining Morale: Strategies to keep sales team morale high include continuous work ethic, transparency about successes and failures, and focusing on supporting top performers.

  "Keep cranking, you got to keep working. Second is truth seek. Call your gaps and wins early." [63:55]

• Dealing with Performance Disparities: Acknowledging the power law distribution in sales performance and creating pathways for underperformers to improve or transition.

  "There's going to be those 10 to 15% of the folks who are true believers who are going to be there for the long term just double down on them." [64:52]

9. Integrating AI Tools: Roxx’s Approach

Key Discussion Points:

• Comprehensive Customer Insights: Roxx integrates with existing CRMs to provide real-time, actionable insights, enhancing the sales rep’s ability to engage effectively with customers.

  "ROX runs in parallel to your CRM HubSpot Salesforce Dynamics, it runs in your warehouse, it indexes all internal context and brings in public context." [31:59]

• Personalized Outbound Efforts: The platform enables highly personalized outreach, maintaining authenticity despite the increased volume facilitated by AI.

  "The email needs to come from your email. Second, the email that comes out should be personalized in your voice and tone." [33:16]

10. Conclusion: Preparing for the AI-Driven Future of Sales

Ishaan Mukherjee concludes by reiterating the inevitability of smaller, more efficient sales teams empowered by AI. He underscores the necessity for companies to adapt by hiring visionary leaders, investing in top-tier talent, and continuously integrating advanced tools to stay competitive in an evolving market landscape.

"Ultimately, it's AI. The top 10% who are working with customers building long term non transactional relationships both from product and a commercial standpoint." [07:15]

This episode offers a wealth of knowledge for founders, sales leaders, and venture capitalists aiming to harness AI’s potential to transform sales operations, drive efficiency, and secure long-term growth.

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Notable Quotes:

• "Sales is a power law. The top 10% bring in 90% of the revenue." — Ishaan Mukherjee [00:02]
• "It's very hard. It's only possible if you have a dialed in CEO or kind of a C suite who really gets it." — Ishaan Mukherjee [05:00]
• "Sales teams will be dramatically smaller. It could be 10 to 20% of current kind of org sizes." — Ishaan Mukherjee [42:37]
• "Repeatable sales motion is are you able to go from a list of potential customers to a high quality first meeting autonomously without the founder helping you?" — Ishaan Mukherjee [48:22]

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This comprehensive summary encapsulates the core discussions and insights shared during the episode, providing valuable takeaways on the integration of AI in sales, optimizing sales team structures, and strategies for sustained growth in the competitive landscape of venture-backed startups.

Transcript

[Harry Stebbings]

Will sales teams be dramatically smaller in the future?

[Ishaan Mukherjee]

Yes, dramatically smaller. It could be 10 to 20% of current kind of arc sizes. Sales is a power law. The top 10% bring in 90% of the revenue.

[Harry Stebbings]

Do you think we have a generation of salespeople who are not ready for the challenging nature of sales that is to come?

[Ishaan Mukherjee]

Yes, we had it relatively easy the past four to five years and I don't want to be morbid, but things are hard. Winning is hard. It's hard work.

[Unknown]

This is 20 Sales with me, Harry Stebbings. 20 Sales is the monthly show where we sit down with the best sales minds to discuss their tips and tactics. Today we sit down with Ishaan Mukherjee, co founder and CEO of Roxx, a Sequoia backed AI powered sales productivity platform. And before Roxx, Ishaan was Chief Growth Officer at New Relic where check this out, he scaled their self serve business from 0 to $100 million in ARR. Incredible story there. Prior to New Relic he founded PixieLabs, which new relic acquired and before that Knowledge graph at Apple Lattice Data, which was acquired by Apple and Amazon Robotics. This was an incredibly granular and deep show, so get out the notebooks and this is one to listen to a couple of times. 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 20vctoday and turn payment friction into your competitive edge. And when it comes to sales, timing is everything. But if you're relying on 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 [e-mail] 20VC and if you want to turn insight into action, GONG has you covered. Gong is the number one revenue AI platform that's changing the way sales teams win. You know guesswork doesn't close deals, so Gong captures every customer interaction and gives you real time insights so you can drive predictable growth. With Gong, you can power all your critical revenue workflows from prospecting to renewal on one AI platform. That's why go to market teams at LinkedIn, Snowflake, ADP, Nasdaq, Shopify, such incredible companies and thousands others Trust Gong Masterclass even used it to assess and prioritize key areas of their sales pitch ultimately leading to a 44% increase in win rates. Get started today at Gong IO and unify your data workflows and teams with AI to win more.

[Harry Stebbings]

Ishan I am so excited for this dude. Listen, it is so much nicer to do this in person so thank you for joining me.

[Ishaan Mukherjee]

Thanks for having me on and great we put it together in such last notice dude.

[Harry Stebbings]

It is lovely to do. So I want to start with a little bit of foundation story. New relic from 0 to 100 million I want to start on actually the PLG motion that you developed there. There's so many founders that listen that are building their PLG motions as we speak. What did you do specifically well that you think was so instrumental to the growth from 0 to 100 million?

[Ishaan Mukherjee]

The center word is like focus. So we centralized the entire go to market engine on a captive audience of developers for whom New Relic was still the default. New Relic kind of lost its aura but there was this audience of about 100,000 plus developers who joined the workforce 2008-2014. For them new Relic was still the hot brand. So we basically shut everything down, reallocated investments to really go after them and earn the right for them to use the product again. And that's what the whole machine was built on. Divest everything else, invest where we are, default. So we came in in a position where the company had reduced their investment or shut down the PLG motion. So there was this kind of latent demand that we just had to unlock. So we just went back out to the developer community and say hey we have this unlimited free offering. You get all of what you need in a pretty kind of cost effective manner. And then that just was like Drilling into an all reserve.

[Harry Stebbings]

Do you think it is possible for early stage companies to do PLG and enterprise at the same time?

[Ishaan Mukherjee]

It's very hard. It's only possible if you have a dialed in CEO or kind of a C suite who really gets it. If not, do not do it. You need a singular person who understands the motion. If not, I wouldn't do it.

[Harry Stebbings]

What do you mean a C suite that gets it? And what does investing in PLG actually look like in reality?

[Ishaan Mukherjee]

Absolutely. So the core idea is you can invest in bits or atoms. Bits is in the product. Atoms is in distribution or sales. Like a person that comes to mind is Amit Agarwal at Datadog. Not a lot of people know about him, but he's the brains behind the product LED distribution engine at Datadog. The core idea is how can you keep investing in the product so that it does most of the product? Yes. And then layer in humans to the commercial. Yes. So you have to have a singular figure who understands engineering product sales, services support to really manage that funnel on a day in day out basis. If not, it's going to become like two or three siloed organizations who just don't work effectively.

[Harry Stebbings]

Given the rise of PLG and the centrality of product being so good and people just wanting to touch and feel it so much sooner. The importance of marketing and content like we discussed before, does the role of sales become ever reduced in a world where PLG starts, marketing helps it along and then really sales is kind of signing the enterprise deal.

[Ishaan Mukherjee]

Ultimately I do think the largest customers need humans to actually work with to build non transactional long term relationships between a buyer and a vendor. And what I look for is customer pull. Even the customer is pulling the company along both in terms of building out the roadmap or coming up with a commercial construct. That's where you have to learn. Enterprise sales fully believe that you need humans because customers want their problem to be solved. They don't give a F about products or services. They want their pain to be solved and they want to build a non transactional relationship with these vendors. That's where sales come in. So my view is get the product to do product. Yes. Get humans who are super strategic to the commercial. Yes. But they're doing non transactional commercial. Yes. They're not just signing an order form. They're really working with the customers figuring out what is the multi year and a roadmap both from a product perspective. And that's how I think about the future of sales. The top 10% who are working with customers building long term non transactional relationships both from product and a commercial standpoint.

[Harry Stebbings]

So we unlock this PLG motion that was kind of latent demand. What did we do? You said their focus specifically in terms of the investments that worked in PLG and those that didn't. What are the elements that come to mind when you unpack and review what worked and what didn't and how that shapes how you think?

[Ishaan Mukherjee]

Absolutely. I am not a seasoned go to market tech sec. I'm a first principal founder. This is what I live for. So when I came in I just had a simple Jason Lemkin funnel mindset. Let's break out all the channels. Let's break it down into awareness, consideration, conversion. Kind of break down the funnel and when you look it out, most growth organizations or marketing organizations will be stretched too thin. They'll invest in six or different channels at the top of the funnel. So for me, what tactically it meant was if you look at the data, organic content and then performance marketing worked really well for New Relic. New Relic was the original current brand that did land and expand everything else. Events, devrel other pieces. You do it because people want you to do it, but they don't really work. So I kind of went out of the way and actually completely shut down event marketing. We don't need to go to conferences where nobody comes to our booth. Why not? Because we couldn't do a good job but we couldn't be world class at it. Datadog and Amit, they were pouring all their capital in re invent and they were doing a phenomenal job. What's the point of spending money going to reinvent where you're in a medium sized booth when your competitor has the biggest booth in the so let's just not do it like play to your strengths and dominate that. So I just shut everything down. Focus on performance marketing, which is SEM SEO and then organic content. It's kind of a slower ball but just do those two things, the rest is distraction and then you get to the next phase which is consideration. So you got the eyeballs. How do you get developers to consider your product the biggest mistake? Even I did. I made some mistakes. I made more mistakes than successes. Is people treat a free tier product as a converted customer. They're not conversed customers. Free tier product is just a better website. Like people come in instead of browsing the website and marketing, they're just tinkering with the product. So just move your free tier customers to hey, this is consideration. So what that Means is now we're investing in converting customers from consideration to converted customers in the product. So those two were the singular things. And then once you do that, then you don't have resources so you start divesting everything else.

[Harry Stebbings]

I get worried when I see startups actually doing a lot of booths at events. You don't have the money, as you said. Would you say that events don't make sense to the majority of startups?

[Ishaan Mukherjee]

Yeah, I'm somebody who goes all in on things that work and then you bet on finding the next thing. If events are not working for you, if you don't have a dial in operation, don't do it.

[Harry Stebbings]

I think also you've got to take a really holistic approach to events which like ramp do really well. Which is like they'll also sponsor the key card for your hotel and they'll also sponsor the billboard outside and they'll also do five other things which make it like a really multi channel thing, not just a booth.

[Ishaan Mukherjee]

Absolutely. One of my kind of ex colleagues and a mentor now, Manav, who's the chief product officer, he was early. Twilio early.

[Harry Stebbings]

We spoke to him.

[Ishaan Mukherjee]

Yeah, he's amazing. He's probably the greatest exec I worked with. I worked at Amazon and Apple. He's that good. And these are these operators who build businesses from the ground up who don't look for the fame and glory, but they're really, really good. His kind of point was the dinner after the event around the conference is a lot better than the conference itself.

[Harry Stebbings]

Yeah, right.

[Ishaan Mukherjee]

So the best thing to do is take your dollars. We still did the events. Just don't do the booth, don't do the one of a hundred sponsors. Just have an amazing ball or dinner right after, have an authentic conversation. You get two or three kind of.

[Harry Stebbings]

Deep relationships moving, step along. How do you think about SEM and SEO that will shift so significantly over the next few years? Bluntly with the rise and dominance of ChatGPT. I've seen also Guillermo Rauch Vercel's mentioned it's moved from like 1 to 4% of their kind of inbound. How does that change and how does that impact how you think about it?

[Ishaan Mukherjee]

I think SEO is a long term strategy. It takes a lot of time to build credibility and that will change in form factors with kind of AI answers and kind of search, I guess perplexity like systems. But that's not going away. You need a core engine that produces high quality content that's indexed and is kind of discovered in new form. Factors. For me, it was not an option. I owned a 14 year old brand like the first few blogs still outworked every new blog that you wrote. So what I look for is what's their top 10 to 15 kind of percent blogs or pages that return 90% of your value and then distribute it really well. So I think SEO, you still have to produce super thoughtful content, but just do fewer but higher quality ones and make sure they're distributed SEM, right? You want us to be proactive. Like I came in first principles. I think it's a complete cartel. So if you really look at how you invest capital into the SEM game, you're just kind of selling your soul to a pretty messy market.

[Harry Stebbings]

Sounds like venture capital.

[Ishaan Mukherjee]

You're bidding on keywords and topics and kind of subject matters. But if there's money to be made, each keyword or brand name is a market of its own, like competitors bidding. So it's really hard to figure out kind of signal to noise. But for us at New Relic we had figured out there was 10 to 20 keywords where we were really good and we could put customers on a stitched path. They could see an ad, get to a landing page, use the product, get to an aha. And these could be very boring things. How do I debug my Kafka key with New Relic? Very specific. Those made a lot of sense. We could pour money in and see returns within the quarter, maybe within the month. The rest. I really think I don't buy this ROI. And that's where kind of SEM's headed is if you can get really good at capturing intent and producing stitched path, keep investing. The rest. I'm very skeptical.

[Harry Stebbings]

I think this is the thing that everyone forgets with content, which is it takes two years often before you even see ROI come back at all.

[Ishaan Mukherjee]

Exactly.

[Harry Stebbings]

So patience. So I totally get you there. You mentioned that like hey, consideration. If it's free, it's like a website. I see a lot of people today doing design partners and heavy collaboration with early partners instead of the plg. Let everyone test and then we iterate from there. How do you feel about the free design partners and build with them versus open and iterate and learn.

[Ishaan Mukherjee]

We don't do any free design partners. Like we really focus on doing paid customers with like a pilot clause. If the customer is not separating with some sort of cash, there's just not enough skin in the game for them to put in the time to work with you for a few weeks, for a few months, for a few quarters to build a product. So I'm very anti unpaid design partners because the cost for them to just say yes is a lot lower than it is for you to keep kind of making them happy. So my view is kind of first have paid design partners who are on an alpha or a beta. Like we're on an open beta now. In parallel, the product has to be open, especially for competing with incumbents. Incumbent enterprise software is gated by demos and implementation steps. This is three to six to nine month time to value. If you are a product shipping machine, you have to have it out even if you're extremely embarrassed. Like we are at rocks. Like oh man, this is not perfect by any means, but you got to have it out there because at the very least it reduces friction from your sales motion. At the core is this undeniable confidence that you can ship your way out of holes and also ship your way to the promised land because you're not hiding anything. So my view is paid pilots and paid design partners. And then as product gets better, keep it open. Don't put gates.

[Harry Stebbings]

You mentioned that incumbents, if we go back to the new relic, Datadog bluntly dominated the market over the last few years. Why do you think they won in a way that new Relic didn't?

[Ishaan Mukherjee]

Initially I thought product. When Zen, myself, Eric at Benchmark, we were starting Pixi, we thought hey, we're just going to build a 10x better product. But when you actually compete with them day in day, it was consistency and specifically consistency in go to market execution. So you're in the trenches. You're kind of competing with Datadog and Splunk and these other kind of really established public companies. You realize that Datadog is a machine. Olivier, Amit and that whole crew, they never changed segmentation, they never changed comp models. They just ran a dialed in machine for six to seven years and they compounded value while everybody else kind of kept thrashing. Change pricing models, change segmentation, change comp. It seems very boring at the surface level, but you just think we were.

[Harry Stebbings]

Always told though to be reactive to, hey, you're always going to change your pricing. Be flexible, be plastic minded to it. I thought we were meant to be reactive.

[Ishaan Mukherjee]

Yes and no. The no is including myself. A lot of folks want to reinvent the wheels with enterprise sales and distribution. There are certain things where you don't want to reinvent the wheel. Like how do you segment customers? The comp model. Because the cost of reinvent the wheel is you're avoiding the ability to compound like for example Datadog and a bunch of those companies, if their enterprise reps today joined as inside sales reps, they've grown through the ranks. If the segmentation was changing, the comp was changing, you just wouldn't have this talent flow. Who knows the product, who knows the customer? They've seen everything and now they're kind of on an elite level. If we're changing it all the time, it's just not compounding any institutional knowledge.

[Harry Stebbings]

You mentioned they're reinventing the wheel where maybe you don't need to or you don't have to. In a world of AI, do we need to reinvent the way that we.

[Ishaan Mukherjee]

Do enterprise sales 100% like across the stack. And that's what I learned the hard way. You talked about new Relic. Obviously we had a lot of success in the first part of my time there. The second half the backside of COVID we just realized the game had changed. And specifically what the game changed was there's a boring detail where the way you sell the revenue models change from commit based revenue to users or consumption based revenue. So now you the dollar values in the contract were just words. You only made money when people actually used the product. When you do that, you have to have the right leader. You have to retrain your entire frontline kind of workforce and the underlying systems have to fundamentally change. And that's where kernel rocks comes from. So that's that core thing that has changed. And now with AI, what we're seeing with cursor and cognition on the building side is the best are going to get better. Your president's club, sellers, your best VP sales, your best CEOs, like Eric at Ramp, they're just going to get better. They're not going to stop. This is information arbitrage game and they'll get better. So the rest has to adopt AI to fundamentally get better or they they risk kind of being irrelevant. I. E. The sales is a power law. The top 10% bring in 90% of the revenue and it's going to get more acute if you're not using what is now like LM or the new.

[Harry Stebbings]

And there's so much for me to unpack there with the change from commit to usage based contracting, how does that change how we need to invest in our different functions? Do we suddenly have to have a huge amount more in customer success because we fundamentally need to make them a champion as soon as possible.

[Ishaan Mukherjee]

Two schools of thought here. There's a Slootman school of thought and the non Slootman school of thought. Right.

[Harry Stebbings]

I've had Degnan on the show from Snowflake. He's like fuck customer success.

[Ishaan Mukherjee]

So Slootman school of thought is only invest in the bag carriers, get the AES people who can hold a number, you eat what you hunt. Like those folks, they should hold both the commit number but also the consumption number. And it's an intense way to operate, but I actually think that's the right way.

[Harry Stebbings]

Is that even possible though if you're continuously chasing megadeals, your biggest companies in the world. And then I've also got to build internal champions, get wall to wall adoption, build multi champions, multi thread and one person.

[Ishaan Mukherjee]

Exactly. So what I'm seeing is now you have AES, AMs and sometimes SC sales engineers. They're all AMs, account managers. So if you're a large account, you kind of have this relationship focused but strategic kind of account manager, which is cs. No, CS were traditionally designed as a function to onboard the customer, make sure you go through the checklist, kind of CSAT was their primary metric. Expansion or renewal wasn't their primary metric. AMs are completely hold the number for expansion and renewals, which is manage a large account to make sure there's kind of growth across the organization or depth within our existing teams and they are comped to a certain degree on the upsell. Right. So again, the philosophical thing kind of I learned again the hard way is not every human can hold a number.

[Harry Stebbings]

How did you learn that?

[Ishaan Mukherjee]

By making mistakes.

[Harry Stebbings]

What showed you that? What was the lesson that taught that?

[Ishaan Mukherjee]

Again, just like you and a bunch of founders, the best way to get it is you got to go close to the source. So I just joined customer calls. I own managed customers. You can tell how people behave.

[Harry Stebbings]

What does it mean though to not own a number? Like you just can't hit the number. What does that mean?

[Ishaan Mukherjee]

So there's two kinds of salaries. There's two ways people make money in kind of go to market where you might have a, let's call it a 5050 split. 50% of your salaries is salary. The 50% you only make if you can kind of bring in revenue commission. The other is 100% is fixed and then you could get a bonus. Right. Two very different things. So the first one is what traditional salespeople. Hey salespeople. The term from eat what you hunt is you only get your full salary if you brought in. So that is holding a number. I have to bring in revenue to actually put in some way food on the table. Like that's how a CEO thinks. About it. That's how a founder thinks. It's kind of this owner's mindset and I do believe that it is a hard path, but that is where modern businesses will go. You will invest in people who have full skin in the game and have this kind of owner mindset.

[Harry Stebbings]

You said that that DeFrank stickman was one school of thought. What was the other school of thought?

[Ishaan Mukherjee]

The other school of thought was the more traditional thing where every account has account executives, AMs, CS, customer success, sales engineers. It's kind of 5 to 6% but there's only one true hunter there. The AE is the one who's actually commissioned. Everybody else is on a fixed salary. Right. That's a fine way to go about it. Datadog has a similar model. If you have really good leadership where you can kind of manage the incentives well. But in most companies, like in my case, it's really hard. As Charlie Munger says, it's all about the incentives. It's really hard to set up the incentives across a five to six person team to make sure they're all focused on making the customer happy and for them to actually kind of increase kind of usage or consumption.

[Harry Stebbings]

Dude, you're a pro. What are your biggest lessons in sales comp? Imagine you're a first time founder. Now is rocks and you've never done this before. It's really hard to know what would be your advice to someone building sales comp plans for the first time knowing all you know.

[Ishaan Mukherjee]

Now I support some of the best go to market leaders in the world and honestly I know like 0.1% right? So like it was GC at OpenAI and these, these folks are legends. What I see is two folks, some CEOs and CROs and CFOs want to run a go to market engine where they're really going for high revenue targets and they want to keep the vibes good. They want more and more people to be attaining 80 to 90% of their revenue. The other are more who really want to see a normal or bimodal distribution, the top 10%. So there's actually two different philosophies. So first philosophy is you set up the comp in a way where everybody's kind of winning. Yes, you have your club killers, but most people are hitting quota in that that model works. If the whole company is growing. The tam's large and you're getting there. The rest is the power law which is now getting more and more extreme. My general view, I'm doing early stage sales at this point in early stage sales. The most important thing is to find these outlier sellers who can sell without a massive brand, a demand engine and perfect product market fit. And you're trying to find those outlier humans.

[Harry Stebbings]

Do you think we, as we move forward into a next decade of sales, we're finding these outlier humans and we're them even more exceptional? Does that not create a two tiered system where you have this 1%, suddenly the 10% become the 1% and they leave behind all the other people who maybe just aren't as good.

[Ishaan Mukherjee]

Bluntly, it's hard to avoid the kind of impacts of technological progress, but it's.

[Harry Stebbings]

Hard when it's in the same team.

[Ishaan Mukherjee]

Right?

[Harry Stebbings]

Do you see what I mean? It's fine if Datadog's exceptional and then there's shit other people, but if there's killers in Datadog and then really average, it creates this two tiered culture.

[Ishaan Mukherjee]

Absolutely. And that's where management leadership comes in. The business owners and the leaders have to understand that the distribution is getting more and more bimod. Like you got people who are falling behind, people who are actually rising. So the opportunity is to completely retrain the workforce. Hey, the job has changed, the way you do your work has changed and you hope to kind of have them evolve and thrive in the modern kind of economy. If not, it is an existential decision.

[Harry Stebbings]

So on sales as specifically as possible, how has the job changed in the way that a salesperson works?

[Ishaan Mukherjee]

So there's two phases of as a salesperson, first you ramp to the job, you learn up, how do you actually do the job? And then while you're doing the job, you're trying to hit or exceed kind of your targets. In the ramp phase, what used to take two, maybe two and a half quarters to run a rep, where you're reading everything about the customer, about the product and training, onboarding. If you're really savvy person, you go to Perplexity, you go to ChatGPT, hopefully with rocks, you understand everything about the customer, everything about what you're selling, and really ramp much faster. So you're talking about gaining a quarter, quarter and a half.

[Harry Stebbings]

How do you ramp faster? What is it that allows you to.

[Ishaan Mukherjee]

Ramp faster is deep research, understanding kind of pain and kind of building our own internal frameworks of how to communicate your kind of solution to the pain. Which at the nitty gritty of it is the game of sales hasn't changed for a long, long time. Like what people used to do is print out 10Ks, 10Qs SEC filings, read every CEO transcript. Now you can do that on your phone in a few days. It's just reducing the time to do research and forming your opinion.

[Harry Stebbings]

Do you think people know the research they need to get to to get that information quickly?

[Ishaan Mukherjee]

The best too. So Rocks focuses a lot on enduring enterprises. We work with large legacy, some old school enterprises. When you spend time with 20, 30 year vets who've been selling into automotive or airlines in Europe, they get it because that's the only way to earn the credibility to even get a conversation, kind of, let alone kind of move pieces. What has happened over the last five to seven years is people think this is easy. It's not easy. You have to be kind of a consultative expert in the customer's business and you have to do the research just like you all do on founders. And that's the only way.

[Harry Stebbings]

Like we call Manav beforehand and ask tons of questions. I totally get you. Do you think we have a generation of salespeople who are not ready for the challenging nature of sales that is to come?

[Ishaan Mukherjee]

Yes. And it implies to most functions in venture founders, builders. We had it relatively easy the past four to five years and I don't want to be morbid, but things are hard. Winning is hard. It's hard work. And if you look at sales specifically when everybody's spending and everybody's kind of buying, it became pretty easy. You're kind of becoming order takers. You're, as they say, like shooting fish in a barrel. But when you're selling something new or selling something large, there's no easy way around deeply understanding the customer's pain and how to actually solve it. I'm seeing that constantly. Like honestly, candidly, like we've done really well the last year, but it's taken me maybe two to three months longer to find those outlier sales reps is because it's just, it was pretty easy.

[Harry Stebbings]

And it's like you didn't need the outlier sales reps because people were spending so freely and sales cycles were so compressed. I totally get that. There's so many areas that I do just want to dig in. You said that like segment one is the ramp and the compression of ramp from two and a half to maybe one and a half. If I'm a sales leader today listening to this, what can I do to reduce the ramp of my new reps?

[Ishaan Mukherjee]

Give the power of data and tools to them and reduce friction.

[Harry Stebbings]

What does that mean? That sounds wonderful.

[Ishaan Mukherjee]

Exactly. So very basic things. Most sales reps in the world use ChatGPT, Perplexity LLMs in their private life, but they can't use it in their.

[Harry Stebbings]

Professional life because of data access problems.

[Ishaan Mukherjee]

Data access, these same simple things. I think the world's changed. Just give them access to the tools. Second is when you think about how you train onboard folks, it's very similar to schools versus teaching your kids through YouTube, which is you got to completely change how you train people by making it more kind of AI enabled and so that you basically get them in front of deals, give them live customers versus having them going through like two to three months of basically old school training because that information is stale.

[Harry Stebbings]

How do you think about how quickly to put reps in front of customers? Customers are precious. You must treat them so carefully.

[Unknown]

If you put a rep who's kind.

[Harry Stebbings]

Of not ready, it may not be the best representation of your company.

[Ishaan Mukherjee]

Yeah.

[Harry Stebbings]

How would you advise me?

[Ishaan Mukherjee]

This is where I'm not the expert for scale. Kind of go to market because I kind of lean. Even early stage, my mindset is still the same, which is get them in front of customers with mentorship as fast as possible. So what I do, early stage is after a few weeks you have to shadow a ramped AE or myself without being in that room. It's just really hard to replicate what's happening in the world. The world is just moving too fast. I'll give you an example. We have a capability where you can basically do deep research on your customers. Four weeks back, people were wowed by what we had. Three weeks later, deep research launched. They were like, oh no. I now expect PhD level research and if your training doesn't keep up to date, if you're not in the front line, you just won't see customer expectations change because they're changing every day. So my general mindset is hire somebody in the first week. I have a sense that if they're based on the questions that they're asking, whether they have it or not, what.

[Harry Stebbings]

Are those questions that make you reflect and think they are great candidates versus not?

[Ishaan Mukherjee]

So there's questions that they ask me or us and then there's questions I ask of them. The questions if they are asking us to deeply understand the psychology of the customer and the buyer. Things like, hey, what is their expectations? What do they think of ui? Those are really good questions because the thing that you have to really understand is what is their pain? What is their propensity to buy or sell? But now deeply, every consumer's expectations of software has changed. Where are they in their journey? Do they get it. Are they early? Those questions are important versus any boring discovery question. Right.

[Harry Stebbings]

Our consumer expectations high when you're selling into the biggest enterprises like you do when they're traditionally working with pretty shitty legacy enterprise software in their professional lives.

[Ishaan Mukherjee]

Right. So this is the first time I'm seeing what they're doing in their personal lives carry over to their professional lives. In the personal life they're teaching their kids with chatgpt anthropic and now they're coming in and their expectation is totally different. Like if you look at the intent logs of how people are using Rocks, they expect software to not just do some work, they in some cases they wanted to do all the work. Humans across the board, including my mom in India, everybody has been obviously sold on the promise of AI and LLMs. When they come into the workforce, they actually want the software to do as much work as humanly possible. Specific word is humanly. The software should do anything that a human can at scale so that they could do more and more in my domain is support more customers.

[Harry Stebbings]

Why does it make sense for ROCKS to be verticalized versus people just use ChatGPT is data.

[Ishaan Mukherjee]

The alpha is in being able to index all context about your customer.

[Harry Stebbings]

So I give you my CRM.

[Ishaan Mukherjee]

Exactly. So ROX runs in parallel to then.

[Harry Stebbings]

You love the way I invest. So how does this work?

[Ishaan Mukherjee]

How does this work?

[Harry Stebbings]

So I give you the CRM and then you get all of the company level data of all of my targets and all my pipe and that allows you to do what?

[Ishaan Mukherjee]

Let me go back to the origin story a little bit because you kind of brought up new relic early when I was competing head on with six or seven public companies, the difference what I was seeing in the trenches in customers in calls where most account customer facing reps were just not proactive enough. They knew a partial view of the customers but they had no real time understanding of how much are they using, what do the support tickets look like, what are they looking to buy, how are they growing? Everything was not in the CRM. So the kind of future of sales is how do you feed in real time context? Hopefully I'll kind of complete context about the customer so that the human in front of the conversation is essentially supercharged with this kind of batsuit and actually moving the deal along. So what we do is Rocks gets installed in parallel to your CRM HubSpot Salesforce Dynamics, it runs in your warehouse, it indexes all internal context and brings in public context and it's trying to do the work for you so you have a team of ROCKS agents or this team of analysts working for you so that you have full context and are basically kind of moving the conversation along.

[Harry Stebbings]

Now I get it. Well, that was fantastic. I'm so glad. Totally makes sense. What is the primary task that ROCKS does today for sellers?

[Ishaan Mukherjee]

Absolutely. So today it does all customer research and prioritization. So we're doubling, tripling the customer's books and now they have tens, some hundreds of customers that are dealing with. So it does all the research and prioritization for them.

[Harry Stebbings]

So now I can outbound way more effectively with way more personalization.

[Ishaan Mukherjee]

Absolutely. The second is outbounding. We're the anti aistr. My kind of view on automation is the human evolves to become an orchestrator or quarterback. So we do all the work of composing your sequences who to reach out to but the human reviews and sense. This year we look at this data pretty closely. We're not at a point where a CEO or CRO can just fire on the hole, kind of fill the pipe with these kind of outbound systems because it's going to dilute your brand. On the outbound we basically do compose Oliver outreach where the human kind of reviews and sends. So that's the second part. So it's called ROCKS outreach after that when you do reach out it does all your meeting work. So it does your pre meeting research in meeting support follow ups. Again, the mindset was let's just call it Obama or like a president. Before you go into a meeting you usually get a brief like a folder with everything lined up like that's kind of what we want to do is what if you had every knowledge worker had a. A team of analysts who are basically preparing you to be the best version of yourself.

[Harry Stebbings]

Why is this just for reps though? This would be super helpful for VCs.

[Ishaan Mukherjee]

So we have tons of VCs on the platform and 100% we're pretty maximalist in terms of where systems like these could be helpful. We think deeply about what's going to happen to Knowledge Force across the board. But today we have some of the best VCs hopefully like you as well. Using us, we tune our agents based on the context. So the email that it drafts, it's not really trying to convince a founder to take a meeting or those are things that we have to do. But it's completely feasible.

[Harry Stebbings]

Don't worry, I send Twitter DMs as you know is fine in a world where you have this infinite supply of outbound emails because you Create it and you're able to do so much more. Does outbound become less effective when supply becomes infinite?

[Ishaan Mukherjee]

Yes and yes. So supply is infinite. Yes, it becomes less effective. What our view is how do we make the communication authentic? So very basic thing, the email needs to come from your email. Second, the email that comes out should be personalized in your voice and tone and then you should probably review it. And that's the only way to actually rise above the noise floor because noise floor is increasing like exponentially. Everything else just will not work. So second thing is you kind of brought up like multi threading and kind of talking through it. The key thing is the human has to create a human connection and one email is not going to do it. It usually takes 13 to 15 touches. So emails, linkedins, meeting them in person, getting on plane as Jason says. So again our idea is how does this kind of swarm of agents help you kind of produce the content but you have to really put in the work to have those touch points. If people think that you can close enterprise deals, but having one email go out, that's not going to happen.

[Harry Stebbings]

You mentioned earlier everyone's spending in a prior generation and how it impacted actually the quality of sales reps. Maybe there is a real belief today that we are seeing this massive contraction in spending. Are we seeing CFOs spend less and consolidate more?

[Ishaan Mukherjee]

Consolidate more? Yes. The definition of spend, what I'm seeing is changing and is changing from program to people. What I mean by that is when you look at traditional SaaS and I was a new relic and I've been in the space for a while, we're thinking about cc, you're thinking about productivity tooling and basically selling from the IT budget. Now a lot of sophisticated buyers are looking at systems hopefully like rocks as well is hey can I just make my humans a lot more productive so that I might not have to hire as many Just kind of brass tacks, right? So it's their view of kind of the ROI is changing from ROI on just software to kind of the people spend. So what we focus on is we want to be the only for right now is we only convert if we hit our ROI metrics. We run a 30 day white glove like Palantir, like, like kind of boot camp where we work with the cfo, the CRO and the C suite on three metrics. The first one is dollar normalized outcomes whether that's pipeline generated or progressed. The second one's adoption. Third one's activity. The system needs to return all three. If not you can fire rocks.

[Harry Stebbings]

What is it? Number one?

[Ishaan Mukherjee]

Number one is some dollar normalized outcome. It could be they choose pipeline generated, pipeline progressed.

[Harry Stebbings]

What do you prefer they choose most a pipeline progressed.

[Ishaan Mukherjee]

Like, because these agents are really good at making sure a human can manage a larger book of customers really effectively if they have tens or hundreds of customers. Because the agents are doing most of the back office work, is doing the research, it's outbounding, it's prepping for meetings, managing opportunities so that you can actually engage.

[Harry Stebbings]

Number two, adoption.

[Ishaan Mukherjee]

Traditionally the adoption about a lot of these tools, they're abysmal like the NPS scores and tilts. So we kind of index ourselves in pretty aggressive. We've hit 75% weekly active usages with more than 50% daily actives. Like we want to be the daily driver application.

[Harry Stebbings]

You want to be daily active, right?

[Ishaan Mukherjee]

Daily active? Yeah, close to like we have an iOS app, we have a slack. Like we really want to craft like the application that people use to do their work. So we index. If people are not using it, you can remove us.

[Harry Stebbings]

What are the reason why people have not fallen into daily active usage with you?

[Ishaan Mukherjee]

Three things. Relevance is our agents. It is an agentic CRM. These agents are trying to do a lot of the work for you. So it collects all the data, finds relevant opportunities to reach out, and then tries to compose all of your outreach. And because we just got pulled so fast out of us, like Rocks is still beta, honestly, it's public, it's open, but we're still pretty early. If like finding relevant moments to actually reach out to customers is actually a pretty hard engineering problem. Earnings coming out might be interesting, might not be compelling enough for you to actually reach out to those customers.

[Harry Stebbings]

I find the most compelling moments are actually personal posts on LinkedIn.

[Ishaan Mukherjee]

Exactly.

[Harry Stebbings]

When it's like, hey, my daughter just graduated from Brown and this is a picture of the commencement. And just that like, oh, I was at Brown and you send an email like I remember my day graduating at Brown. And they're like, oh, wow. I like Ishaan.

[Ishaan Mukherjee]

Exactly. So you kind of hit on. You should be on head of product as well. Give us a lot of feedback is we're moving from kind of company level like insights to contact or human level insights. And that's kind of the journey. That's the number one piece. The second thing is it is in net new form factor, net new ui. Like if you look at our product and ui, it kind of looks like a CRM, but it's actually a sum of Agents working for you. So there's a new paradigm of UI or UX which is between a chat interface and a traditional like flat SaaS experience where it is kind of more task oriented and that's where we're at. So the history of Rocks is it's a pretty experienced team. The first three to four months we built a God Mode agent that knows everything about every customer. With a chat interface, this does not work.

[Harry Stebbings]

Do you think chat interface is the right interface for a next wave of AI and AI adoption?

[Ishaan Mukherjee]

I think I'm pretty pragmatic because we have to be very iterative on the interface. We're very opinionated about the backend and how to manage all the context. But in the front end we just have to really try to track consumer expectations. What we learned was chat interfaces are very powerful, but we're very limiting to do daily work.

[Harry Stebbings]

Why are they limiting street idy wise.

[Ishaan Mukherjee]

Because our kind of end users expect the software to do work. So they essentially want workflows. Right. So if the agent went out, did a customer research, they just need all the customer researches listed versus them asking hey, tell me this, tell me that. So we have account reports and org charts created, pre created for them. Similarly for outbound sequences, instead of you going and say hey, produce an email, we just queue up all of your email tasks. So these are these places where the software does have to lay out its outputs. Like chat is a interface for them to like do more introspection and go deeper. So I'll give you a very simple like first we start with chat app with just a blank Google bar. Next is give me pills, give me suggested things to click on. Then you hit pills like hey, give me more like output panels. And those things work really well in consumer applications like Perplexity, which is amazing. Love the product. But in a B2B software where people are coming in to get job done, we had to just do more. So what we did is we decomposed the experience to a part where we have essentially kind of workflows designed for the job at hand. So we went like Bill Belichick style, like what are the jobs to be done? How do we actually kind of organize it that way? Like meetings are separate than emails, emails are separate than account research. And the adoption just completely, it was insane. We go from the few people using us to the whole company using it very, very fast. And again, is that a terminal state? I'm not sure. Right. I think we'll be iterative on the.

[Harry Stebbings]

UI ux, you mentioned adoption. There Are we about to see a wave of the most unprecedented churn in enterprise AI tools?

[Ishaan Mukherjee]

Churn and retention is the one thing that keeps us up at night. Like the biggest thing.

[Harry Stebbings]

I think it's actually a six month.

[Ishaan Mukherjee]

Old dude, but churn it's like Dane. We've chosen the hard path is we want to be on the mao dao train and build applications where people come in and do important work every day, which is not easy. I think where people are going to die off is in terms of usage is if they just lose trust. What you have to understand is these products are inherently non deterministic. These are probabilistic systems. Right. So the experience, the research output that you get for say your Siemens agent could be different. What I get from the Siemens agent because the LLM is trying to figure out what's relevant to me and if the end user sees something that's not good, it's going to kind of shave away like some of their trust. And if it gets to a point where like I just can't trust this thing, I'm not going to come back. That is the biggest thing. Is there going to be retention and churn issues from an end user perspective? 100%. We're seeing so many tools come in and out.

[Harry Stebbings]

Do you think we're still in the experimental budget phase for enterprises buying AI.

[Ishaan Mukherjee]

Tools, there's massive amounts of experimental budget. Like we've made the decision of not tapping into it at all because of the focus on retention, usage, adoption, roi. We only work with customers from their operational budget program now kind of people budgets. That's a way for us to control be truth seeking. But we are in the very early stages of the adoption curve. What I see is small group of outlier operational CEOs, CEOs, CFOs who really understand that there is an existential decision to be made this year to transform the business to kind of keep their lead. The rest are still figuring things out.

[Harry Stebbings]

When we think about bluntly giving agents to every sales rep and allowing this swarm effect so they can be so much more productive and efficient. Will sales teams be dramatically smaller in the future?

[Ishaan Mukherjee]

Yes, dramatically smaller. Just like engineering, just like any other function in any business it could be 10 to 20% of current kind of org sizes and it's just a harsh kind of reality. But that is a probable productivity gain path we're on. And it's tough, it's brutal and I've seen like I've worked on automation systems all my career. I built robots in warehouses like the company that Amazon acquired like we've seen these things happen all the time and.

[Harry Stebbings]

And the 10 to 20% that retains is the human to human that gets on a plane to Dallas and comes and shakes your hand and says Ishan, I can't wait to work with you.

[Ishaan Mukherjee]

That's why I'm here in London. Right. I think Jason's point is important is those folks who are there to build non transactional long term relationships at a strategic so high acv deeper conversations they will be able to do a job a lot more. They will be able to do two to maybe three times more this year like we're seeing some of the best organizations increase their book size. Hey, you would have supported 5 customers last year this year maybe 7 next year 12.

[Harry Stebbings]

If I'm a founder listening today, what can I do to dramatically increase the sales efficiency performance of my team with AI today?

[Ishaan Mukherjee]

So first hire the right folks who are future proof like they understand the word. So are they using these tools maybe illegally in their personal lives? If they don't run using it, they don't see the alpha in their personal life they're probably not going to get it. Second is I might be completely wrong here but ramp much faster because A you can just do it faster B the consumer expectations are changing too fast that you have to do. So once you're fully ramped push the envelope of how many customers that they could support and those would be three things without obviously losing overall quality and attainment levels. Will there be teams which are much dramatically smaller who are pulling in the same numbers? I think it has to be proven but strong intuition that that's where we'll get to.

[Harry Stebbings]

Do you not kill data providers when you look at your zoom infos of the world respectfully, I don't want to choose them out but your zoom infos, Apollo, Moses, any of the others, you don't need them if you're supported by an agent swarm.

[Ishaan Mukherjee]

We didn't start rocks or this amazing company is kind of working in the space kind of deeply thinking about how to source agents. But the agents have gotten phenomenally good at scale gathering information that is in the public Internet and now like systems like Lean and stuff in the intranet or in the internal systems. So yes, the agents will get more and more capable to just collect information especially with search APIs and the access of the world. Having said that, the data providers they provide a kind of source of value where they have 10 to 15 years of back tested data of human kind of gathering kind of contact information LinkedIn information that they've been verifying through a lot of software but also a lot of operational rigor that's really hard to replicate. Like Henry and Zoom Info for example, a phenomenal business. They have probably the highest quality contact data. They have a huge machine that they've basically kind of built up to have that.

[Harry Stebbings]

So you partner with them then and use that internally.

[Ishaan Mukherjee]

So when we go into a customer, our agents will go enrich contacts. Like hey, if you have data, Zoom Info data in Salesforce or whatever, it's going to go search and kind of verify that information. And internally we have kind of OEM'd a few data partners and that we waterfall like clarity just to kind of bootstrap us. So these agents today are enriching the information that you already have versus going and actually gathering it. There's a split like company data is free crime, company data is public. Agents are like pretty much at par. Contact data is where the divergence happens. Like if you look at what the question that you brought UP is like LinkedIn information. LinkedIn is a walled garden, rightfully so. It's an extremely kind of valuable network that Microsoft and LinkedIn have. People who have LinkedIn data as a data product that they sell into is just a different world that we don't see ourselves going into.

[Harry Stebbings]

We chatted before actually about agentforce and they are a core competitor. When we think about who wins in this next wave, whether it's incumbents with distribution and just a lot of touch points like they do have, or whether it's your rocks of the world with speed, with innovation, with agility, how do you think about that trade off and who wins? It's a brilliant quote from Alex Rampel. It's like will the incumbent acquire speed before the startup acquires distribution?

[Ishaan Mukherjee]

Yeah, he's spot on. Benioff's the goat. You respect him a lot. I've learned so much from him. I used to read about his stuff way back in smartdown India. Kind of our approach is just time to value going back to new relic learnings and just kind of being like a product Focus founder is incumbent systems have data and distribution. They have massive amounts of both from our perspective. But it takes quarters system integrators to actually implement things. To prove ROI for us is how do we leverage our shipping machine to land something that gets started today and gives you ROI in an extremely kind of time compressed manner and then we earn the right to connect span from there. So what's going to happen is all the incumbents have Obviously repositioned as AI companies now or agent companies. And they're also all bundling. Like as SaaS exploded, there was massing unbundling across sectors. Definitely in the CRM space. Right. You have phenomenal businesses like Clari and Gong and Clia and folks. So they're all bundling and they're AI companies. We're in this bundling cycle. With us, we want to be hopefully the default new option of an AI native kind of bundled software provider. Yeah.

[Harry Stebbings]

Now when we think about kind of getting in the field, it's really difficult to build out a sales team. And I think the hardest thing is moving from founder led sales to sales rep led sales. You've done this before, but you're doing this now with Rock. What are your biggest lessons in the transition from founder led sales to sales rep sales that you are remembering today as you do it again?

[Ishaan Mukherjee]

Yeah. Do you have repeatable sales motion or not? And are you being absolutely truth seeking?

[Harry Stebbings]

What is repeatable sales motion?

[Ishaan Mukherjee]

Repeatable sales motion is are you able to go from a list of potential customers to a high quality first meeting autonomously without the founder helping you? The second one is can you go from a successful first meeting to landing the customer without extreme founder assistance? If you can't do both, you don't have repeatable sales motion. So in this early stage where I do have to kind of grow really aggressively, what I'm looking at is the first part is based on the case studies, reference studies. Can an enterprise a come in, build their own list of target customers without needing a BDR team, without needing marketing people, and then go from there to the first meeting autonomously? Can I completely take a step back after M1? We just have to be truth seeking. Like look, we don't have a massive brand, we don't have a huge demanding engine. It's not perfect product market fit, we're early, it will be founder assisted. So that's what we're looking for. The working session that I do is I'm going to walk you through the whole strategy. Here's what's worked, here's how we messed up. Here are reference customers. How would you go about producing your list of people to reach out to and how would you actually get to having a high quality?

[Harry Stebbings]

Do you go for a sales leader who brings in the reps? Do you go for reps who are more junior, who you train with, that playbook? What's that first step?

[Ishaan Mukherjee]

There's different variations. I back myself to recruit, train and build a machine with five reps reporting to me directly and then bring on a sales leader who kind of doubles the team and takes it from there.

[Harry Stebbings]

In those reps, do you want reps who've sold that size deal before or sold in that segment before?

[Ishaan Mukherjee]

Yeah. Should have held the number at that ACV size for two to five years. Not less than two, ideally not more than five. Within those they need to show that they've been innovative in the pocket within deals. They either built tools on their own or were actually creative in kind of progressing or closing the deal. Because early stage selling requires a lot of creativity. The founders can come in and we can use investors and hires involved, Suka's involved to kind of paper over cracks. But they need to be kind of creative. That's the number two thing. The number three is just they need to want to make money. Right. Like I really can deeply think about DD hold. You would be surprised. A lot of AI companies AES are not compensated with commissions.

[Unknown]

Really?

[Ishaan Mukherjee]

Yeah, a lot of them. Especially in Covid like. So I really try to get deep into. Did you actually hold a number? What did your compensation look like? Where do you want to get to? Because it kind of gets deep to the psyche of a person. Like the best A's are just are complete owners. They're owners of the their own book. Not very different than a CEO, than a founder. And that's kind of the third thing I try to get to. And that's kind of separates a lot of folks who are doing it because it was easy. They also have a real estate portfolio on the side. They're doing a lot of things like. And so you're trying to hone in on those kind of three things. Bag has some experience holding a bag, a real enterprise bag. Second is kind of creative. Third is did you hold a number? Like I go really deep into that.

[Harry Stebbings]

How quickly do you know if they're good or not good?

[Ishaan Mukherjee]

My interviews are long. I don't believe in 30 minute interviews either. I believe in my kind of trust on a network of folks telling me somebody's good or not. Or I do hour and a half working sessions. In the working session by I would say the half hour mark, I can tell based on the quality of the question they're asking.

[Harry Stebbings]

I am coming into one of your working sessions. How do we spend that hour and a half?

[Ishaan Mukherjee]

Try to overshare context. And the Silicon Valley ethos is don't hide anything. Just share what you're working on. Because if somebody beats you in your own game, that's on you. So I just share everything. Like, hey, here's the product strategy, here's where we are. Here are customer case studies. That's probably about the first 30 minutes. So when I'm doing it, I'm trying to see the questions that they're asking. They might ask about pricing or case studies, what worked, what didn't work. That could take a lot of time, like 30 to 45 minutes. And I do that for every candidate because I'm trying to understand kind of how they would go about because that's where we want them to abstract it, build a list. From there their brain should be running. After that we get into specific scenarios. Okay, now that we want to do a scenario, let's say we're working a strategic deal called a large company in Europe. If I gave it to you, how would you run this deal? And then I flip. Then I ask them questions, right? Like what if this happened? What did that happen? So the first 30 to 45 minutes is me sharing context. And them asking the next 30 minutes is like them walking through a deal. The last 15 minutes is if you feel it, you're talking about next steps. If not, you wrap early.

[Harry Stebbings]

Do you do hiring panels? Are you happy to make a decision after that 90 minutes?

[Ishaan Mukherjee]

Yeah, I try to like founder led early stage sales, which is what customers and talent like you need to be able to make deals in the room. Again, a big difference between going back to obviously I idolized kind of Dave and Mongo and Amit Oliver Data. If you look at these dialed in machines, a lot of the times deals don't happen because the account team has to go back, talk to deal strategy, come up with some. The best teams are enabled with tools that they can make things happen, like if there's some heat there in the room. So if a candidate has gone through it, I'm spending an hour, hour and a half and I try to kind of progress things along.

[Harry Stebbings]

Reps get paid a lot actually in a lot of cases. What's your take on, hey, I'm willing to pay over market for the best. We pay market and then comp. How do you think about lessons on that?

[Ishaan Mukherjee]

So my framework is a framework of explainability. Like the idea is comp and how much money make people make an equity. I'm still old school. It doesn't need to be public, but let's just say it did leak and became public. Like everybody's compensation should be explainable. There should be a rational reason as to why somebody is compensated a certain way. So I have guardrails explainability, guardrails that I don't want to kind of breach because if you're giving somebody some irrational package and it leaks and is going to have like trickle down effects on the team and the company is the team, the team's the most important part. So what I try to do is if somebody's truly outlier and they've kind of went through the thing and they're really capitalist and thinking about kind of incentives, very aggressive with performance based either compensation or equity grants and 100% the outlier victories happen when you go, you break rules. Right.

[Harry Stebbings]

I totally agree with you Archie on the opacity of salaries. I think people always view everything with the expectation that everyone's rational and actually everyone's entirely emotional and human which means they are irrational and also they're volatile. So at some point they'll be like that's completely unfair, I just signed a massive deal. And then when they've had a dry spell it's like that's actually a fair representation. Something that I'm worried about is you mentioned target setting earlier and you mentioned Jason Lamkin earlier. I grew up with the Jason Lamkin school of thought for founders which is.

[Unknown]

Triple, triple, double, double.

[Harry Stebbings]

And we're like, you know, this is what you need to do to get great rounds done. Truth is now you've got your macaws, you've got your lovables, you've got your mid journeys. These companies are scaling to 40, 50, 100 million, I mean in 12 months. And I'm worried that we've lied to a generation of founders of what it takes to get great rounds done with revenue trajectory. How do you think and feel about that as an AI founder today?

[Ishaan Mukherjee]

Probably the most interesting thing for me to just manage my psyche around I would say the way I think about it is you're building something long term and what matters is enduring revenue, high quality revenue from customers who can be with you for the long long term. And is the unit economics, are the numbers looking great for that? For us it's traditional enterprise land and expand. Are we landing the right logos? Are we landing them at a decent land acv, are we growing?

[Harry Stebbings]

What is a decent land? Obviously don't give a number.

[Ishaan Mukherjee]

Yeah 100k like low 6 figures and then really prove value and we're doing that is a no brainer. Quick land, we compete on time to value and is there a path to high six figures, seven figures and that's what we really care about.

[Harry Stebbings]

What do you want to see in terms of that Sales cycle and and then expansion time.

[Ishaan Mukherjee]

So if it's upper mid market enterprise we want to be at 45 days from M1 to having kind of that first initial land basically done and signed after. It depends on how we can construct it. There's a one year contract with a 30 day paid eval period where 30 day the customer. I know there's a lot of discussions and we're still beta. Right. So enterprise are buying beta software. So we give them the right. Hey, in 30 days if you don't have the ROI, you can downgrade to our freemium product or we can have a conversation after that it kind of converts. So once it's converts then we're looking to deliver more value and can drive more expansion. So 45 days to get to the first land and then the clock starts. First is we need to prove value in 30 days. After that 30 days it's about delivering more value, kind of finding an expansion and I think that's the. We've already at that six figure range. And how do you kind of really kind of grow from there? Ultimately we want to be the essential software system that's helping you secure and grow your replacement revenue. So we want to be essential just like SAP is or Salesforce was.

[Harry Stebbings]

Totally get that. In terms of the desire for enterprise sticky revenue and building enduring value in the long term and not getting caught up in kind of sugar high hype cycles. I actually tweeted last night. It's really unfair of me. I tweeted last night like preemptive rounds are incredibly dangerous. It encourages you to do more stuff that you shouldn't. Lose focus to your point earlier, be less capital efficient and then you're unable to scale into the price that is too high and you get people then leave because they know that and then the negative vortex continues. You have taken preemptive rounds.

[Ishaan Mukherjee]

Absolutely. A few times.

[Harry Stebbings]

Why am I wrong?

[Ishaan Mukherjee]

I don't think you're wrong. It's really, really hard. And I've gone back and forth. Ultimately my framework and our framework is we're building this to the long term. Who do we want around the table? Who can help us build this long term?

[Unknown]

Did you put the cash in the.

[Harry Stebbings]

Bank for the rainy day?

[Ishaan Mukherjee]

We raised 50. I think we have keep me honestly 5047 in the bank. We put in our own money to the pre seed so we have full screen in the game. We're not going anywhere.

[Harry Stebbings]

Bastard should have come to me.

[Ishaan Mukherjee]

Yeah. So day in, day out I managed a billion dollar revenue book. I've seen Large businesses operate and been part of it. So it requires a lot of experience being able to manage capital.

[Harry Stebbings]

Well, I think it requires the mental, mental discipline. Honestly, what I see is young founders who raise the 50 and then go oh well we could do this as well. And then we could do this it. Why don't we just do that as well? And suddenly they do so much more and they don't have the discipline to say hey, I'm putting it away and this will sustain us for eight years if we want it to. And so we can build with long term in mind. And they just do too much and bring everything forward.

[Ishaan Mukherjee]

And I make mistakes all the time. I think where.

[Harry Stebbings]

What's the biggest mistake you've made?

[Ishaan Mukherjee]

With rocks between us, between us and everybody listening in. I think I spend 40 to 60% of my time on talent the team. I underestimated how important and how powerful it is. We built a founding team of mostly all kind of top AI engineering talent. And that team has built the product, the culture and hindsight. I would have moved faster to build out that team and then kind of going back after going to San Francisco, I need to spend more time. So the biggest mistake is I would have maybe 5x. The value I would put on just hiring. Second is very detailed. When thinking about AI hiring specifically the first 3 months, I wasn't pragmatic enough like I was still looking for, hey, maybe we could do research and let's hire like researchers. No, we're pragmatic, we're building apps here, we're building products. So let's work with the best intelligence providers. Opening eyes of the world in tropics of the world and together of the world. And let's centralize our focus on working with them to build an amazing application. So about month four, month five, we learned that hey, we will hire amazing applied AI engineers who are shipping products. We're not a research company. I would say those are the two.

[Harry Stebbings]

Things I'd have game designers in your product team if you're thinking about the weekly and daily. Most importantly, I would just think about how do I create retentive loops, levelings, this addictive desire to continue to be in the platform. And actually you can see it especially in sales teams which are highly competitive where you really create these kind of leadership style boards, real competition dynamics.

[Ishaan Mukherjee]

Absolutely. You're spot on. I think that is the biggest learning is getting designers, early people deeply thinking about experience, getting kind of product engineers who really thinking about the application, some gamification kind of post kind of feature Market fit and really doubling down on that. Get there faster. We're a year in, we're doing okay. But I would have been more opinionated on day zero.

[Harry Stebbings]

Listen, I want to move into a quick firearm.

[Ishaan Mukherjee]

Let's do it.

[Harry Stebbings]

I say a short statement. What sales tactic has not changed over the last five years?

[Ishaan Mukherjee]

Jason? Guess it. Get on planes, meet people.

[Harry Stebbings]

Totally agree with that. What sales tactic has died of death?

[Ishaan Mukherjee]

Like no more automated emails.

[Harry Stebbings]

Totally agree. Tell me about a deal that you've closed where you've done something really creative outside the box to get it done.

[Ishaan Mukherjee]

I helped a buyer map out their path to promotion in a large streaming company that had nothing to do with the technology that we're providing. Was about how to deeply understand his career objectives to help him be successful. Nothing political. He was just looking out for help. I probably spent like two months on it.

[Harry Stebbings]

He got promoted and then didn't do the deal.

[Ishaan Mukherjee]

He did the deal. He did the deal and he's running the whole show now. It's a pretty large kind of public company.

[Harry Stebbings]

Oh wow. That's amazing. You said about your love for Perplexity earlier. I love it too. Does it survive in a dominant monopoly world of ChatGPT?

[Ishaan Mukherjee]

If they keep the eyeballs and keep shipping the end features that they are doing, I think there will continue to be a player. Is ChatGPT the default? Yes.

[Harry Stebbings]

Do you not think it follows the same market dynamics as. I'm an investor in Perplexity, by the way, so I'm a big champion.

[Ishaan Mukherjee]

But like Arvind talks about this as well. It's really hard to build what they have built and the talent that they have. At the very minimum, they'll find a massive kind of niche like a large dao shopping rate, finance. Yeah. Large dao segment that they will be the best at. If not, they would be like a strong player in the top three for sure.

[Harry Stebbings]

What will be the most significant structural change to sales teams in the next five to 10 years?

[Ishaan Mukherjee]

Change of their quota. As humans get more productive as they are able to support more and more customers, the book size that they support fundamentally changes. If that changes, the complete structure of the organization changes. Instead of having large teams, you need fewer teams who hold more book and management layers kind of compress and then you need different kinds of leaders and that completely changes. Like sales and marketing is 40% of your opex, right? It could potentially go down to 20%.

[Harry Stebbings]

Where does that shift to then? If it goes from 40% to 15%, that's not going to be a 25% difference in technology spend. So where else does it get redistributed to? Are they just much more margin, much.

[Ishaan Mukherjee]

Healthier business like 50% of the customer that we work with. This is boring stuff. Is private equity owned like new RELIC is? Yeah, 50%. People who come inbound are portfolio wide rollouts. So there is definite element of efficiency. Can businesses run dramatically more efficient manner when they're not kind of growing at all costs? Yes, there's a huge part to it. Where does the capital go? Hopefully some of it goes to increasing the compensation of your supercharged kind of frontline sellers. The other I'd hope. Hope I'm confident. I still do think there's so much more to invest in R and D. I think if you're a technology business who wants to be a winner or be the number one. I still feel like R and D is severely underinvested in most scale businesses. I'd hope for their kind of frontline quota carrying reps to gain time to make more money. So the company is doing well and that capital to be reallocated to R and D because we don't do enough of it.

[Harry Stebbings]

How do you maintain morale when goals and missed in the sales org?

[Ishaan Mukherjee]

If you're running kind of the motion where everybody's hitting or hitting and the company's doing great. The morale hits happen when the company collectively isn't doing great because of something macro or the tam if it's the other where there's winners and losers constantly. There's two different things. In general my view is three things. First is keep cranking, you got to keep working. Second is truth seek. Call your gaps and wins early. Take extreme ownership, talk about what worked, what didn't work. And the third is in terms of morale. I do believe in the power law. There's going to be those 10 to 15% of the folks who are true believers who are going to be there for the long term just double down on them. If they hit, great. If they miss, how do we help them win the next time? And then the middle kind of 40 to 50% will they sway to the top 10% or the bottom 10%? And that's what you have to manage. But the only way to manage that is have doubling down on your kind of outlier.

[Harry Stebbings]

What do you think salesforce have done really well with agent force that you.

[Ishaan Mukherjee]

Take and you learn from everything Mark Vignette's ever done. Like he's this phenomenal visionary really told the story well. Marketing and sales is obviously like top Notch from what they've done. They have taken legacy enterprise buyers think like CIOs and European, Asian kind of industrial companies to really go on this kind of age agent kind of journey where every CIO in the world is buying this year. Right. And that is a lot of it is because of him and agent 4 so painting the vision of what a agentic workforce could look like. He's in a great job and he's. That's why he's the goat. Right.

[Harry Stebbings]

Which other company sales strategy have you been most impressed by recently?

[Ishaan Mukherjee]

I think my time horizon from a recency perspective, like let's call it like maybe the five years. I would say MongoDB, Dave and that whole crew. I see their leaders in every great company like ex Mongo. People running go to market in AI companies or fostering companies is so common. Like they just build a winning culture. And he's completely transformed the business and it's a huge success. I learned a lot from him. And the other one would be ramp like Eric and those folks. They were our kind of second primary private, private beta customer. Now we have like one of the most used products and there what I've seen is really high horsepower. Sales folks who've really grown from selling one thing to selling multiple things and now going up market selling to some of these largest large customers. And it's all because of this kind of core talent base that they had those two things.

[Harry Stebbings]

Dude, listen, I've so enjoyed this. I love shows like this where I can bluntly just have a very fluid conversation and you do not stick to schedule. You've been fantastic. So thank you so much.

[Ishaan Mukherjee]

No, I appreciate you having me in. And from every founder and every operator, thank you for doing what you're doing.

[Unknown]

I want to say huge thank you to Ishaan for joining me in the show today. That was so much fun to do in person. It really does make such a difference there. I could not be more excited for the times ahead with Roxx. But before we leave you 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 offer 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 captchase 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 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 [e-mail] 20VC and if you want to turn insight into action, GONG has you covered. GONG is the number one revenue AI platform that's changing the way sales teams win. You know guesswork doesn't close deals, so Gong captures every customer interaction and gives you real time insights so you can drive predictable growth. With gong, you can power all your critical revenue workflows from prospecting to renewal on one AI platform. That's why go to market teams at LinkedIn, Snowflake, ADP, Nasdaq, Shopify such incredible companies and thousands others trust Gong Masterclass even used it to assess and prioritize key areas of their sales pitch, ultimately leading to a 44% increase in win rates. Get started today at Gong IO and unify your data workflows and teams with AI to win more. As always, I so appreciate all your support and stay tuned for an incredible episode coming on Monday with Bernie, founder and CEO at Carvana.