← The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20Sales: Rippling's CRO on Why Founders Should Not Create Sales Playbooks | Why Discounting is BS and How to Create Urgency in Deals | The Biggest Lessons on Pricing and How to Win the Pricing Game with Matt Plank
01:10:15
Matt Plank is Rippling's Chief Revenue Officer where he oversees all Sales and Account Management functions in the US and Internationally. Matt joined Rippling in the very early days when Parker Conrad (founder) was building V1 in a basement with $0...
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- [00:00]
Matt Plank
Founders definitely should not create the playbook, but I think founders wait too long to hire a go to market and I think they do that because they feel like they can't hire a good salesperson potentially without a bunch of traction. The big mistake that people make as they transition to the next phase is people don't increase price into a point where they find friction.
- [00:22]
Harry Stubbings
This is 20 sales with me, Harry Stubbings. Now 20 sales is the monthly show where we sit down with the best sales leaders in the world to discuss how they built a sales machine. And today we're joined by one of the best, Rippling's CRO, Matt Plank. Matt joined Parker Conrad, Rippling's founder, when Rippling was just a V1 idea in a basement and had $0 in revenue. Today the company has hundreds of millions of dollars in ARR and is a market leader. Prior to Rippling, Matt was a sales director at Zenefits where he helped scale the company to $70 million in ARR. But before we dive into the show today, one of the easiest investment decisions I have made over the last three years is investing in workers. Don't just automate tasks, they transform your business. With 24. 7 operations, multilingual capabilities and human like intelligence, they're revolutionizing how work gets done. From Prospecting to closing, 11x is the all in one platform that allows you to reduce costs, increase pipeline and boost conversion rates. And that's why companies like Pleo, Handshake, Sourcegroff and more are customers and lovers of 11X. Check them out today at 11X AI you won't regret. Speaking of incredible products, AppSumo started with one simple idea. The tools you need to grow your business shouldn't put you out of business. That's why they work directly with developers to get exclusive discounts of 80 to 90%. 80 to 90% off software, saving entrepreneurs over half a billion dollars since 2010. Some of the biggest names in tech like Mailchimp, Zapier and Dropbox got their start on AppSumo. And with a rotating selection of hundreds of tools, you'll find all the software you need to make your life easier in 2025 plus 60 day money back guarantee. You can try any tool risk free. Start the year off with savings. Get 10 off your first order with the code 20 lowercase VC and a free tool exclusively for 20 VC listeners. That's code 20 lowercase VC for 10 off plus a free tool@appsumo.com you have.
- [02:28]
Parker Conrad
Now arrived at your destination. Matt I'm excited for this Dude, I've heard so many good things, both from Ashley and from Parker. So thank you so much for joining me. Stay, man.
- [02:37]
Matt Plank
Yeah, absolutely. Thanks for having me. I likewise have heard a lot of great things and watched a lot of great episodes on the podcast. So excited to join you.
- [02:44]
Parker Conrad
Yeah, bribery goes a long way, dude. Listen, I think there's a moment when people fall in love with sales. Can you take me to when did you fall in love with sales and realize that this was the career for you?
- [02:55]
Matt Plank
Candidly, I've been in love with sales since I was, you know, selling wrapping paper in fifth grade and elementary school. And I think for me, uh, it's always come from probably some part of competition, you know, wanting to. To sell stuff and. And kind of be number one on whatever leaderboard it was. And believe it or not, that's. They get you primed for that in elementary school when you're selling wrapping paper or discount codes to your local stores or whatever. But then all the way through college, I was selling hot tubs and appliances at Sears and Cutco. Knives and really anything you could, you could think of. There was a commission job. Uh, I was doing it from a pretty young age.
- [03:30]
Parker Conrad
Do you think that people are born salespeople or do you think it's something that can be learned?
- [03:35]
Matt Plank
I think there's a lot of people that are born that could be salespeople, you know, just given the kind of the attitude that you have. And I think there are certainly some people who are born who probably don't, you know, would like, run in the opposite direction from any sales job. But I think it comes from, you know, wanting to be competitive and being okay when you lose. Because in sales, like, yes, of course you win, but you lose the majority of the time, really. And so I think there's a. There's a lot of dynamics that I think are that you have to kind of have the ingredient, the right ingredients. But I think from there you can certainly, you know, teach a lot of the skills that, you know, that make a good salesperson good.
- [04:11]
Parker Conrad
Do you think it's okay to be good with losing? Like, I fucking hate losing. I would. I would kill my kids if they ever said that they were okay to lose. It should hurt every time in every way, and you should remember it so you never feel it again.
- [04:22]
Matt Plank
Yeah, well, I think look like loving, winning and having, like, a deep hatred when you lose are kind of one in the same, in my opinion. And so as long as, you know, losing stings and motivates you and all of that. But I mean, if you think about in sales, I mean, even the best sales reps, I know, depending on whatever segment you're in, you know, their win rates are anywhere from 15, 20%, maybe 30, 40% at the absolute highest end. And so regardless, like, every month, every quarter, you're. You're losing the majority of the opportunities that you're in. So you got to be able to know how to, you know, lose an opportunity and come back and bounce back and, you know, focus on the wins and all that. So, yeah, you gotta be. Gotta be okay with accepting a lot of rejection if you're in sales.
- [05:01]
Parker Conrad
Why are win rates so low? Matt, I'm an amateur. This show is brilliantly successful because I know very little. Why are win rates 15 to 20% and you're just losing to competitors?
- [05:12]
Matt Plank
You know, the number one reason why you lose a deal in most cases, at least at rippling, is indecision. People that are basically end up staying with whatever solution they have today. I mean, at least in our case, you know, we are ripping and replacing something pretty much every time, you know, we bring on a new customer. And so the overwhelming majority, I mean, if you look at the pie chart of closed loss reasons, you know, almost half of them are basically, like, unresponsive, right? Or maybe a third of them are unresponsive. Like, literally, you do a few calls and it's going well, and they just completely ghost you. Some other big chunk of them are people who get back to you and are like, hey, we decided to hold off for now. You know, whatever. Something in the company change, priorities, budget, someone left. And so there's a lot. Like, if I think win rates are different, if. If you think about a decisioned deal, right, Like a deal where they decided to go with you or a competitor, then I think you'd look at win rates that are. That are much higher in those cases.
- [06:05]
Parker Conrad
Indecision. Is that not just a sign that you haven't articulated the solution articulately enough?
- [06:11]
Matt Plank
For sure, I think someone not deciding in many cases mean that you didn't, you know, you didn't prove enough value in the solution you're selling or whatever it may be, but there are also just a lot of good reasons why, you know, someone's not ready for whatever reason or really, like, dynamics change in the company. A lot of time the person that you're evaluating with might leave the company, or so they might hire someone new who now owns that decision. And so there's plenty of good reasons. And I actually think the way that you deal with that is really, really critical. And like the best reps, over their time and their tenure, they grow and they build a pool of those types of people. And as long as you have really good engagements with both the people that you win and also the people that you lose, they start to come back around. Like once you've been in a role for even a year, 18 months, like you just get this, this circle back loop of all these people that you've spoken with in the past 18 months. And a lot of times when they come in the second time, they're immediately ready. The deal cycle moves way faster. It's a lot easier. And so sometimes I think people, they get a no from somebody and they just like abandon. Sometimes in the worst cases, like they won't even respond, you know, hey, thank you so much for your time. Thank you for evaluating all that good stuff. But I'm like over the top, like kill them with kindness when they say no. And that really just builds you this like big circle back kind of loopback pipeline that will help you, you know, in years the road.
- [07:25]
Parker Conrad
Matt, is it easier to sell a product where you are replacing an existing line in a financial model or in an expenses page or budget, or is it easier when you are a net new line item?
- [07:38]
Matt Plank
I think it's way easier when you're replacing something. In my opinion, when you're trying to create a category or create budget for a thing that doesn't exist. There's just a whole bunch of different things that you have to go through. I have always for the most part sold the product where you're. I mean, I think early on, I guess in the early days back with Sam Blonde, when we were at a Echo sign, you were selling an E Signature solution. It was like net new. And it was hard because you go down an evaluation and someone at the very end would be like, nah, we're just going to keep doing this on paper. You'd be like, how is that even, you know, a consideration? It's so crazy. I think today at Rippling we're replacing another system every time. And I find that to be a lot easier to know that like there's a deal to be had here, they're going to pick somebody and you really just need to beat the competition, you know, to win the deal. I think, I think that's much easier.
- [08:26]
Parker Conrad
You said about like often it's like indecision and just kind of ghosting when we think about that. That often comes from outbound, an effective outbound that's got you. To those few calls, everyone says, today, outbound, dead, 2024, no outbound, a Lapu bell to the trash in Europe. Do you agree or not?
- [08:46]
Matt Plank
I think people that say outbound is dead are either one of two things. Like they're either engagement baiting, you know, looking for a reaction on LinkedIn or whatever. Did they know that there's a whole army of people out there where that's their profession and they're trying to kind of create, you know, whatever, some conversation around it, or they're generally not good or having grown something of large scale. I mean, to. To even claim that outbound is dead, it's just absurd. It's like, what else, how else would you build a business if you think you can rely on, you know, marketing form fills or marketing programmatic email or whatever? It just means that you've never scaled something. In fact, I'll tell you that in the early days of Rippling, one of the great mistakes is that I didn't push Outbound harder. Like, the marketing team at Rippling was absolutely one of a kind. They generated thousands of inbound demos every month. And we got to a kind of crisis point throughout our journey where we looked at the plan for next year and we looked at what the growth, growth rate needed to be in marketing was kind of like, hey, we can't grow form fills by that percentage. Like, there's no way. And we had to, like, very, very quickly build an outbound or from scratch overnight. It was super stressful, and I wish we would have done it much earlier, but there's no way to grow and scale a big company without doing outbound. So it's harder and it's different. But to say that it's dead, I think, is insane. I mean, we book 50% of our outbound demos. We book over the phone. So we schedule like a thousand outbound demos a month in our sdr. Org and literally half of them are booked over the phone. And so anyone who says it's dead, I think, just doesn't know how to do it effectively.
- [10:17]
Parker Conrad
I'm fascinated. Before we drill down into them categories, you said that they don't know how to do it effectively. Teach me. You did it too late and you regret it. What are your biggest lessons in how to build an outbound function effectively?
- [10:30]
Matt Plank
There's really two things that are important. I think the first is you have to have, like, a very deep partnership with marketing where you don't care about, like, credit. So, for example, when marketing shows up and they generate 100% of the pipeline and it's all inbound demand gen, you know, form fills, hand raisers and they're flowing to your inbound team. When you start to spin up outbound, you're trying to create a new like incremental, you know, pipeline, right? Like if you obviously hire 100 SDRs and you end up with the same demos you had when you had inbound, like that's obviously a bad equation, right? Way more cost and like no more pipeline. And so marketing, you have to like have such a partnership with them where a lot of the stuff that marketing does, it drives outbound success, right? And so when you schedule outbound demos, like you've got to also give marketing credit where credit is due. And I think a lot of companies, they break that and a lot of times they'll have marketing in, you know, different orgs and sales, which is true at rippling as well. Marketing does not roll into me, but we just have this like incredible cross functional partnership. And so what marketing is a goal on helpbound is they are telling us essentially like who should we reach out to and when. And they're doing that by capturing all this like intent over the Internet, right? Who's on our website, who's on our review sites, who just recently changed the job on LinkedIn. And so they're curating like intent across all of our, you know, accounts, right, that we would want to go after. And they're teeing it up for us. Hey, this person you should reach out to right now. And then they of course help with like the messaging, right? Like here's the most effective sequences, like they help us with the cold call scripts. And so the sdr. Org has an opinion on all of those things. And we're responsible for like ruthless like execution of like a very daily driven, you know, KPI business. But marketing is absolutely critical and like making it work. And if you don't have a really.
- [12:13]
Parker Conrad
Strong partnership, how do you do that effectively? Yeah, you need marketing and sales to be like super tight so that marketing get part of your comms when you get new customers and marketing financially incentivize. How do you literally do that?
- [12:26]
Matt Plank
First it comes from like the culture of the org and generally from like the CEO, right? Like if I show up to a meeting with Parker and I'm like, hey, we're going to massively with revenue this month. But like it's all marketing's fault, you know, like they didn't generate the demos they said they were. I giggle at like the idea of that, right, like, that would absolutely never fly. Right. Like, that conversation wouldn't be able to happen. And so you can't, you can't like blame marketing when you miss the plan because it's like, so what? Like, we have a plan, what are you going to do about it? And you can't take all the credit for yourself when you build an outbound or all of a sudden the pipeline splits and you've got 50, 50 or whatever. You have to acknowledge and give marketing credit. And while they're not incentivized from like a comp perspective, it's a deeply built into the culture that like our marketing team has a pipeline plan that they sign up for. They don't have like a, you know, how many, you know, webinars did you do and how many content downloads did you get? Like, those things are important, but like their goals are, how much pipeline do you generate? Like, that's all we talk about in our forecast meetings. Like, that's, that's what they're geared around. And so I think culturally you have to have it be that way from the top down.
- [13:30]
Parker Conrad
So we have like a top pipeline number and that is revenue. Who sets that? How is it distilled down to the Org.
- [13:37]
Matt Plank
There's two different ways that I think you think about a plan. And for us, historically, we start with usually something that Parker is like, hey, like, if we want to continue to be in the top, you know, 1% of SaaS companies out there, this is a number that we need to go get next year. This is the growth rate that we need. Like, this is, this is what we need to hit to continue to be like, you know, an outlier in the market. And you look at that number and you're generally like, wow, that's, you know, that's definitely not an easy number to go hit otherwise, like, of course, why would it be an outlier? But then you go through like a ruthless, detailed planning process. For us at rippling, we have 50 different sub segments, right? So you have, you know, SMB and mid market and enterprise and channel sales and product sales and all the different products. And so if you think about there's like 50 capacity plans in a spreadsheet and it's like, how many demos are we going to generate? How many reps are we going to hire? Like, what are their quota? And you go through that in great detail, through all of the different teams, and you basically ladder and you kind of ignore the number. Like, you're not focused on the number that someone asked you to get to. You start from a place of if I just make reasonable assumptions about growth and all these different things, like what does that get me to? And then generally there's like the plan that you believe is attainable and then there's like the plan that you want to get to and there's a gap there. And then you go through this exercise of like, how are we going to plug that gap? Like, what are the 10 or 15 different, you know, levers that we could pull this year to be able to close that gap and for us.
- [15:01]
Parker Conrad
So I, so I understand. So you set the pipeline number of, let's say, fuck, I don't know, 20 million in error. We want to add 20 million in error. I could add 21 million enterprise contracts or I could add, you know, 200, 100,000 contracts. Do you just leave it to your team to determine where it comes from? How do you think about that breakup, that segment breakup?
- [15:24]
Matt Plank
I mean, it really depends on like the stage, right? So when you're early on, you actually start from a place of like, who are we getting demos from? Right, like we're getting demos today, you know, like, what do they look like? And you know, in your kind of, in many ways, like that is your segmentation, you kind of build around that. I mean, we had one sales team when we started, right. And we branched off from there. As you start to go market a little bit, a bunch of things happening, you branch off. And so I, you know, I always tell people, like by the time you get to be maybe, I don't know, 200 million or something, like your job as the CRO completely changes to essentially like head of sales operations, that you have a great sales operations team. But at some point it transitions completely from like, can you close the deals and you know, are you the best salesperson or whatever to like operational planning. And so you take the demos that exists. What did we do last year in all these different segments? And you kind of figure out like, where do I think we can do a little bit better? And you just kind of start to slot in all of the humans against those different segments. So Parker doesn't care. He's not like, hey, we need this much revenue from all these different segments. He's like, we need this revenue. Like you go figure out how to do it. And then we build like a tops down plan from there based off of how many demos are we going to get in what segment and you know, how many people do we want to staff against those and so on and so forth.
- [16:34]
Parker Conrad
Okay, so when we think about the different segments, we've got like SMB, mid market and enterprise. When we think about like demos booked, what does the different close rates look like across the different segments?
- [16:46]
Matt Plank
I mean we, we sell the companies as small as 3, 4 employee founders running payroll for the first time. Right. And so on the very low end of that market, you know, we win 50, 60% of the opportunities. And honestly the majority of the ones we don't win, they're just like, you know, funding fell through or whatever, like they don't need to run payroll anymore for some reason. And on the high end of the market we're selling to companies that are up to about 5,000 employees. It really has like a wide range of the different segmentations. Now for us we have segments that are based off of employee size like any traditional company. But then we also have a bunch of products that like our core new logo reps sell. But then we have too many products. We've got like 30 different products at rippling. And so as we started to spin off different product suites, like we launched a finance suite to compete with your Brexes and your ramps of the world. We launched a global payroll suite to compete with your deals and remotes and buy global. And so at some point we had to carve off like a, a separ, what we call product account executive team. So you have like a core rep that bring, you know, sells the majority of the HR stuff. Then you've got like a different finance suite rep, you've got a global suite rep. And so that's how you end up with like 50 segments. When you're kind of, when you end up with a product suite that's you know, 30 plus products.
- [17:55]
Parker Conrad
I get you totally. So we have like a 50, 60% on SMB. What does mid market Enterprise.
- [18:01]
Matt Plank
Sorry. Yeah, so mid market is probably around you know, like 20ish percent. And then I think enterprise is maybe closer to like 15%. And I think the way you think, the way I think about this is it really depends on what you measure. Right. And so for us like if you schedule a demo and somebody like takes the call and basically says like yes, I would like a follow up email. Like, you know, we don't go through like do you have a budget and you know, what's your timeline? I mean we do that in a sense in the evaluation, but we're not incredibly strict about like who do we bring into the pipeline. And so when we you know, convert a demo, we call it stage two and S2, we measure win rate, like from S2, you know, all the way to the one deal. But that's going to be like a penalizing kind of win rate. If you've converted something to stage three, that means like they've engaged in like scheduling the second call, right. Like they actually have some commitment to like do a proper valuation. And if you measure win rates from like stage three to win then like you actually have a much higher win rate. And I think companies do this in very different ways.
- [19:00]
Parker Conrad
What's ACV size? What average contract value size is enough to justify Outbound. Because if you're three to four people and you're doing like I don't know the ACVs on the three to four people but they're not going to be huge. You can't afford an expensive model. What is it now?
- [19:16]
Matt Plank
So it's a good point. So when we don't do outbound for those type of companies like that team is 100% an inbound team. We do outbound in our mid market segment which is essentially 50 to call it 250 employees. And then we do you know, enterprise air quotes from like 250 to a thousand and then we have a team that works from a thousand to five thousand person companies. Now one of the benefits of Rippling is when you buy rippling you're buying a seat for like every single person in the company. So like a lot of products, if you're buying you know, Confluence or something, right, you get a seat for everybody. But it's like $10 Pepin, right? If you're selling Salesforce it might be $100 Pepm but like you're only getting you know, five seats in a 50% company, right? We are fortunate that you, everybody at Rippling, you know, you're getting a seat for everybody. And our average pepm is like 60, $70 pepm across the customer base. So for our mid market segment, selling the company's 50 to 250 employees, the average deal size of like 45k and so 45k you can easily build outbound, right? And then going up from there it just gets easier.
- [20:14]
Parker Conrad
You can easily build outbound. What are the sales cycles look like.
- [20:18]
Matt Plank
In our mid market segment where we have a $45,000 average deal size, it's probably 50 days. Like you'll get deals that come in and you know, a month at the right time of year and then you'll get deals that take you know, three, four or five months on the longest end but on average it's probably 50, 60 days. In our mid market segment there's not a lot of companies closing $45,000 deals in 60 days. That's a very uncommon kind of, you know, funnel.
- [20:42]
Parker Conrad
At 45k outbound is justified. At 45k is customer success justified.
- [20:49]
Matt Plank
So in terms of customer success, like at Rippling in the very early days we had customer success which I think of as like their charter is make customers successful, renew them. But like it's not to, you know, it's generally not to like sell new products. And so you know, early on at Rippling again we had three products when the company first launched and now we have over 30. And so at Rippling early on we had customer success and when somebody signed up for Rippling and then they came back six months later to add a product, like we would bring it back to the original sales rep and like over time that was just like clearly a terrible model. And so we converted our.
- [21:26]
Parker Conrad
Why was that clearly a terrible model Model? Because that does the purity of the customer success and sales relationship.
- [21:32]
Matt Plank
Because our sales reps are very like high velocity. They're doing a lot of calls and they're, and they're focused on, you know, if a new logo deal is $45,000, like an add on contract for some one that signed up six months ago might be $5,000 or something. And so when, you know, when their calendar is stacked up with deals that are 40, 50, 60k and then all of a sudden you throw this meeting on their calendar for a $5,000 deal, they're just not going to be able to give it the attention that it needs. And so we, we split the team and we, or we, we changed the function. We said look, we need like account management. We need people who you know, have had sales, carried a quota, want to be held accountable to quota and all that kind of stuff. And so at Rippling we have new logo sales reps, you know, pass a deal over the fence and then they have account managers who own the commercial relationship renewals they still own like, like success. Like unsuccessful companies will not buy anything new from you obviously. And so they, they do have to make them successful. But they are much more, much closer to like a sales team than a support team.
- [22:32]
Parker Conrad
For us I had Chad Peets on the show. A very famous CRO who works with SATA Hill has been in some of the most awesome enterprise companies. And he was like, no, actually it wasn't him, it was Degnan. It was Chris Degnan at Snowflake. And he was like CS is, you have like professional Services, you pay for it. It's a stellar service or customer support. But customer success is bs. Do you agree?
- [22:56]
Matt Plank
It's a good question for multi product companies, yes. Because the reality is you can't have both. You can't have like a customer success manager and an account manager. Now Rippling, we do have account managers that own the commercial relationship and kind of, you know, expanding their usage within our product suite. But then we do have what we call technical account managers whose like sole focus is like adoption of the product success, retention, whatever. And then we have like a phenomenal support team who can respond urgently, jump on chat, jump on calls, whatever. Right. But I do believe that you have to pick one or the other. And at Rippling, like I, you know, for me account management and like sales DNA at the core, you can get those people to have like empathy for the customer and like understand and care about making them successful. But I don't think you can take a CSN and make them like a.
- [23:44]
Parker Conrad
Quota carrying rep. For the account managers. How are they incentivized and is that aligned to the upsell that they you want them to drive?
- [23:53]
Matt Plank
You also have to do both. So when we first launched account managers they only had a new revenue quota. So the 100% of their focus in compliant was tied to selling new products. You know, they were, they cared about retention but like they didn't own a retention number. And you know, when you're high velocity, a little bit more down market, there was just a belief that like you know, they would care and do the right things but like you didn't need to incentivize them. And then we did that for like you know, 912 months and we quickly realized okay, this doesn't make sense. And this year actually we changed the comp plan. So I think like 70% of it is tied to selling new business and 30% roughly is tied to retention, specifically like dollar retention. And it completely changed everything. And our have just like completely outlier, like off the charts low churn metrics. And so they got to own new revenue and churn absolutely has to happen. Can't do it any other way.
- [24:44]
Parker Conrad
When we think about getting deals over the line, a lot of people discount today. It's an incredibly competitive landscape. Respectfully, you have many competitors across many different segments. How do you think about discounting?
- [24:56]
Matt Plank
So first of all, discounting is a completely like made up thing. Like at the end of the day the only thing that matters is like net price, right? And so discounting is simply a factor of like where do you set your, your list price? Like list price doesn't matter, right? Like net price. So what if you say your, if you discount 50% off or you just got 25% off? Like it's all relative to whatever your list price is, which for most people is like a fake price. Like nobody cares about list price, they care about net price. And so I'm a big believer for.
- [25:25]
Parker Conrad
Those that don't know, which is including me on this one. What do you mean by list price and net price?
- [25:29]
Matt Plank
So, so let's say that your list price meaning when you show up and you send. I mean look, starting all the way with like some companies have a price on their website, right? If you're very SMB and down market and you have a bunch of like self serve signups and trials and all that, you basically need to have like a price on your website where someone can see it and sign up, whatever. That's not our business. Like for us we are generally, you know, getting something on a call understanding, you know, what their pain points are, what products are they interested in. Because we have 30. And so for us, you know, we have a list price meaning there's a book price for every SKU that we have. So let's say it's $10 Pepin for a random them skew. But like the actual price point that we're trying to target might be, you know, $8 or $7 or $6. Like it depends on the size of the company. If you come in and you're 50 employees and you want to sign up in one week, like I've got a little bit more room to make that happen. If you're, you know, if you're 50 employees and you want to evaluate for three months, then like it might be a different price book. It might depend on the different, you know, amount of products that you buy.
- [26:28]
Parker Conrad
Do you worry about different customers talking about different prices? Hey, I got rippling for 20 pepam. Oh, you got it for 30. Wow, they overcharged you.
- [26:37]
Matt Plank
Yeah, well, I think a couple things. So one is we have like an extremely consistent and firm like discount policy. So it's not like a rep can just, you know, make up whatever they want to do. And so we'll tell a customer when they come in like, hey, here's what pricing looks like on a one year deal versus a three year deal or like depending on your timeline or depending on the amount of products that you buy. Right? And so for us you could come in and buy three products in a week or you could Come in and buy 10 products and take six months. And so there's a bunch of different, like there's probably five different levels of how big are you? What are you buying? What's the timeline look like? You know, all these different things and this happens. Like people definitely talk in the market and you know, we've got 20,000 plus customers. And so for sure people are talking and comparing invoices and whatever. But if somebody were to come back to us, which has happened before and been like, hey, this is bullshit. I like that someone's quoted rippling and I got a different price than you. And when I walk them through, like, hey, look, here's like, you might think these things are the same, but they're a little bit different. But you, as long as you can, like walk through the policy and stand behind it, then I think you're good. But you can't have like wild wild west where people just make up whatever price they want, or else that it can get out of control pretty quickly early on.
- [27:43]
Parker Conrad
People are often told that logos are so important. Get the, you know, you go to the startup pages and it's like retool the customers stripe of customers. Like, you name your companies that look sexy at customers and that's so important. To what extent do you think logos are super important in driving sales versus just get early wins on the board?
- [28:02]
Matt Plank
Yeah, I think there's like an evolution in a few different phases. I think the first one is when you're a zero to one company, whatever, you're a billion bucks, 2 million bucks. Like early, early stage, like nothing matters. The only thing that matters is winning customers. It doesn't matter what they pay, it doesn't matter what their logo is. Like, you need customers to, to validate that, like you can charge something for your product and that they'll buy it. If you look at what we charged at rippling in the early days versus now, like it's, it's not even on the same chart. And so you need customers. I think founders make a mistake. They're trying to like maximize the revenue of one specific deal, which is crazy. It's like never, ever walk away from any deal, any price that's not free. Like, you sign them up, right? The big mistake that people make as they transition to the next phase where they're at maybe 5, 10, they're going to 20 million, is people don't increase price into a point where they find friction. Right. And so you, you need like friction around price is good. And so to your question earlier, like I get this all the time. I'll talk to, you know, an early stage founder who's often a technical founder, who's a referral from one of our, you know, VCs or something. And they're like, hey, we have win rates that are like 60, 70%. We have an incredible go to market fit. Like, it's so great. My first thing I always tell them is I'm like, that's not good. You don't want win rates that are 60, 70%. You're either not in enough deals, right? Like you're just way too narrow or your price is way too low. Like if you win 70% of deals then like that's not good. It's a bad there at least you could go much, much bigger, right? And so I think people don't raise price up until they get to a point where you're about to lose deals because like people think you're overpriced and.
- [29:32]
Parker Conrad
There'S like, how, how do you know when that point is, Matt? Is it when people go, oh, I'm not doing it, and then you walk them back? When is that moment of realization that you've gone as high as you can go?
- [29:43]
Matt Plank
First of all, like, I think the main thing here is like you, you gotta, you should continue to inch it up over time until that friction of like, hey, this is like, this is more expensive than I thought it would be. This is, is like outside of our budget. This is 100% more than our competitor 2x the price of a competitor or whatever. Until you get people that are like, you know, walking away. Then you, you then like you haven't found the right amount of friction, right? When you get to that point and again, you got to go up gradually because you never, ever, ever, ever want to like go back, right? You don't want to like raise them and then be like, oh, never mind, we're going to like lower our prices. Like that's bad. And we don't do this by the way on existing customers. Like as we inch price up over time, like our existing customers that bought early on, like we locked them in pretty much forever. But you, you and you have to find that friction. And I think it's, it's, you'll squeak out a lot more revenue by finding if you raise your prices 20% and like you, you know, you keep winning, maybe win rates go down a tiny bit. Like that's okay over time.
- [30:36]
Parker Conrad
How do you think about like multi year contracts often today it's like, hey, as, as much as possible Lock people into multi year contracts. It does mean that you're stuck on price. It means there's more rigidity in their minds. Maybe they won't upsell as much because they've got a contract with you. It's kind of a pain like multi year to kind of change that multi year. How do you think about that and advise founders?
- [30:55]
Matt Plank
Multi years is really important and we, we have multi year deals and we incentivize our sales team to sell multi year deals. So if you sell a one year deal versus a three year deal, like we'll give you like a kicker in the comp plan to sell a multi year deal.
- [31:08]
Parker Conrad
What difference is the kicker? I just have so many people who will ask me like what is the difference?
- [31:14]
Matt Plank
The way I think about it is like, you know, what is your, you know, commission rate on a, on a new logo and like that could range anywhere from 10% to 30% depending on like are you outbound, are you inbound? Like you know, what's your, what deal size, whatever. And so you want to make sure that the kicker you're paying on a deal isn't much more than like 10, 15% of the deal. Right? So maybe if you're, if your commission rate is 20% then maybe you're giving them an extra like 2 to 3% kicker for a multi year deal. But you can't make it that your commission rate is 20% and then you sell a multi year deal and you get paid 40%. Right? Like that math doesn't work. And so it's, it's generally I'd say maybe 10, 15, 20% of the original contract like the year one contract like or thinking of the commission rate like that's the right way to think about it.
- [31:56]
Parker Conrad
So discounting in price is a way to instill urgency in deals. Hey, let me get Matt. You know what, it's the end of the quarter, I need to hit my number. I'll give you a 10 cent discount if you sign with us today. Any other big lessons on how to instill a sense of urgency in deals and sales cycles?
- [32:12]
Matt Plank
The first big mistake that people make around you know, discounting is there they offer a time based discounts before they even understand if somebody can possibly move that fast. Which is like a terrible experience both for like you because you have no leverage once you've like thrown it out there and then for the, for the customer it just like it feels awkward, it doesn't make sense. So the first thing you have to do is understand from somebody up front like in the first call, what is your ideal timeline? And the way we talk about that is like, look, you're obviously evaluating rippling. You've described these pain points up front, just assuming that you wave a magic wand and rippling literally solves every single one of those pain points that you have. What is your like ideal timeline of when you'd like to be up and running in a new system? Just like if you could have everything, every box checked, your perfect scenario, what does that look like? And then when they tell you that, and like, look, a lot of buyers are honest about that. Some buyers don't. Some buyers know that when they're upfront, they're like, I don't want to tell this salesperson that I want to move quickly, right? Like then I lose some leverage in the negotiation. And so they'll, they'll be like, ah, this is, you know, like next year, you know, Q1 or whatever. But you got to find out from people what are they looking to do and like build some trust up front. And then before you get to pricing, you have to like make a little bit of pokes out there, like, hey, if we can get, you know, so competitive pricing that's kind of based on, on a timeline, this timeline we talked about, does that seem like something that you'd be interested in and like get some buy in from them? Because people do not sign contracts on the last day of the month because they're worried that their discount's going to go away. Like, that's absolute bullshit. Like if you ever bought software and it's the 31st of the month and someone's like, you have this quarter end discount, it's extremely unlikely that if you come back on the third or the fourth, they're going to be like, no, I won't give you that price. Like certainly there might be a different price. You might have to go through a whole cycle, whatever. But the reason that the majority of people like sign that contract on the 31st, the end of the quarter, whatever, is because you've built a relationship throughout the entire evaluation of some, like trust. Like they feel they've agreed to do some things and they want to like meet their part. But without that then time based discounts don't work for anybody. And they're actually anti, you know, they're like, they really are counterproductive.
- [34:22]
Parker Conrad
How do you do deal reviews and how's that changed over time?
- [34:25]
Matt Plank
I'll pick like our, you know, let's, let's call it our middle, you know, mid market team who's kind of like in the middle. The main thing that you're looking for in a deal review is like salespeople by, by almost like definition are like optimistic. Oftentimes they like, they get happy years and they hear things that they want to be true that might be true, but they don't sometimes ask like the second third layer question to figure out if it is true. And so for me, deal reviews are all about asking your rep, you know, who are we talking to? Who does that person report to? Were they there when they bought this system? Like, you know, a bunch of questions around, who are they talking to? How do these decisions get made? What do they think the timeline is like, you're trying to basically poke a hole in this. Perfect. If you're just sitting there and your rep is like, hey, here's the next step and here's who I'm talking to. And you know, it's all good. And you're like, okay, great, sounds good. Like, let's go to the next one. Which is what a lot of pipeline reviews looked like. That's like zero helpful. You got to create a relationship with your rep where you can poke holes at them. And they're trying to like prove to you why this is a solid deal and there's no friction there. They're like, hey, this is what my manager shows up to do.
- [35:30]
Parker Conrad
How, how often do we do deal reviews first?
- [35:33]
Matt Plank
I mean, we have pipeline reviews every week at Ripley.
- [35:36]
Parker Conrad
Pipeline reviews every week. Who's invited? Everyone from sales.
- [35:39]
Matt Plank
I mean generally we're doing pipeline reviews with like, you know, managers and rep in like a one on one setting. Usually there are times where we do a pipeline review that might be with like a manager and their team, but you can't sit around a 40 person segment and do deal reviews. Right? Like it won't be, it won't be time effective.
- [35:56]
Parker Conrad
So we do it. Manager and rep say, so to speak. Okay, when we think about like an acceptable versus a non acceptable reason for a deal to slip, what is an acceptable versus a non acceptable? If you're sitting down with me a.
- [36:10]
Matt Plank
Wrap, the first thing I think about is like, what is the historical tendency of like this rep? Because deals do push in sales all the time. As Parker would say, did it push or did it poof? You know, when I show up at the end of the month and I'm like, hey, like, you know, had a rough month, like, but we had some really good deals push, he's like, ah, you know, I don't believe like every time you Say that they poof and they don't push, they never come back and blah, blah, blah. Which is generally not true. But he's a deep skepticism of that. And so, but you got to look at a rep, like, does this rep normally close deals in this timeline and this deal did push then like, that's very different than someone who's a perennial. Like, my deals always push. And I think the thing you gotta, you, you gotta help reps understand is like deals that put like a lot of times reps will think that a deal that pushed because of this person left the company or a new person joined or a budget, you know, dried up or whatever. They convince themselves that like, hey, this is delayed, you know, like this is just delayed. Like this new person joined and like they need, they want to make sure that they get a demo. And it's like there's no such thing as like delaying a deal for like those types of reasons. Like you're starting over from scratch. You might not know it, but you're starting over from scratch. And so time kills all deals. And so you really want to try to like get them in not to like hit your quota so that you don't go on a pip or whatever. Like you want to get them in because over time, like, if we push as a company, 25 deals in a month, like, for sure we're not closing those 25 deals in the next month. Right. Like some percentage of them just do push, poof and evaporate. So, you know, there are good reasons, but like, I'll tell you the worst reason. The legal team didn't get the review done. Nothing, nothing is more frustrating than somebody being like the legal, their legal team. Right? They didn't get the red lines done on time.
- [37:47]
Parker Conrad
Why is that so frustrating? Because that seems like it's out of the hands of the rep. They don't control the legal team. That seems like a very bizarre negative externality.
- [37:56]
Matt Plank
Well, I think it depends on. So when, when you want. First of all, for me, when a deal pushes, what that fundamentally means is that like you forecasted it to come in, like you said it was going to come in and it didn't come in. And so if you if telling us and rolling a deal up that, hey, this deal is definitely coming in, like they just need to get red line signed. And a lot of times when you pro back in there, it's like, look, when did you send them the red lines? You know, they're like, yeah, they told me yes, you know, two days ago. And I got Them the red lines the next day. That's like, well, hold on. Like there's problem, right? Like at the end of an evaluation, you should be asking somebody like, hey, what does the contract processing look like within your company? Like, who's involved in that process? Who signs off on contracts? Like, do you know, does your legal team do a review for contracts of this size, whatever. And you want to like, parallel track those things so that they're there. Someone's reviewing the terms of service. Like, a lot of times you'll get the like, vendor of choice designation before someone gives you the like, yes, send me the contract, I'm ready to sign. So you have to parallel track those like, legal things, budget review. You can't just like, get a yes and then start all those processes over. And that's the number one reason why people push a deal, a committed deal, because of legal review is like, they just didn't run this. And like, you know, they didn't run these parallel tracks.
- [39:10]
Parker Conrad
There's a lot of deals today, Matt, sadly, which are poof. Which are gone, silent, gone, dead. Budgets have gone. What's been your biggest lesson as a sales leader on how to maintain morale in volatile times?
- [39:24]
Matt Plank
I. Two part question. I think the first thing is I really believe very deeply in. In like a core thing that I had to learn over time. And, and one of the things going back to the beginning of our conversation, when you're like a deeply competitive person and you do like, expect to win and you like, really, really hate losing. I. I can definitely tell you of examples in the past where I like, reacted poorly to someone that said no. Right. Or someone that. Where it was just like, it made no sense to me and like, my initial reaction was just like the wrong reaction. Right. And it's very easy for even the best salespeople because they're generally like the most competitive, can get like pissed off and react poorly on a deal. And I had to learn over time that, like, you have to literally, like, kill them with kindness. Like, you, you have to make them. When someone tells you no, it's like, hey, like, thank you so much for your time. You know, evaluating, rippling. I know how busy you are. I'm sure doing all these evaluations was like a total time suck for you. Thank you so much, much for, you know, taking the time. I would greatly appreciate any feedback you could give me. I'm always looking to learn. You know, by the way, like, if anything ever changes, like, I hope that you're successful with XYZ vendor, but if Anything ever changes, like, please just know that, like, I'm here for you, blah, blah, blah, blah. If you leave every single interaction with that type of, of like, mindset, I promise you, you'll get stuff that bounces back that you, like, never, like, expected to bounce back. They'll come back in two months. They'll be like, hey, this competitor, like, lied to us. The implementation is terrible. There's a bunch of shit that they don't do that they said they did, but you have to leave it like that. And so I think on one hand, you got to, like, make sure that you do not sour when you, when you miss. And you like morale. You're moping your head around and you're all frustrated and upset. Like, that doesn't do you any good. It's a waste of time. And I think as a sales leader, you've got to, like, own the miss. Like, you can't play viewpoint fingers at people. And that's the MO that you have as a leader. Like, it sounds very cliche, but it's like you're going to walk up to and be like, we, like, we love the sales org loss. I didn't set the team up successfully. Like, I screwed this up. Like, you got to own it with the CEO. You got to own it with the people down below you. And I think weak or like, insecure sales leaders will try to deflect blame to some other leader or the team or you train. It's like Parker told me once a long time ago, and I think something that really stuck with me, he's like, you don't get any credit for knowing how to do something yourself. Like, zero credit that you know how to do X, Y and Z. But your job as a sales leader is to get everybody else to do that. And so, like, you can't stand there and have like, my team didn't execute and be feeling like, dude, I told them exactly what to do. And like, they didn't execute. You know what I mean? Like, it's not me. I got to get a new team or something. It's like, your job is to make them execute. It's not to know what to do. You're the head of sales, obviously you should know what to do. That's table stakes.
- [42:00]
Parker Conrad
Matt, when you evaluate your go to market team. Today we're sitting here, they got a fire beside us, a whiskey and a cigar. We're just like, shooting the shit now. Where are you? Like, oh, that bit is the weakest part of the go to market. And what are Some lessons for you from that.
- [42:14]
Matt Plank
Up until literally 18 months ago, I'd say up until two years ago. Up until two years ago, like, the sales Org myself. And, like, everyone that reported to me literally never once thought about generating an outbound demo or, like, even, like, it was 100%. Like, demos pop up on your calendar. Like, marketing does a bunch of stuff, inbound sdr, schedule them, and, like, you just sit on, you know, go show up and you do four or five calls a day, and, like, that's all you do. Over time, we got to this. I mentioned this pinnacle point, like, two years ago, where ak, Ashley Kelly, we were like, oh, my God, we have to do outbound. We hired her. We, like, you know, grew it from 0 to 100, whatever. And, like, we started to weave into the culture. Like, hey, like, as a sales rep, like, you should care about where your pipeline comes from, but they still don't own it. Like, outbound SDRs own the quota. Like, they schedule the demos. If you're a rapid rippling, you have zero actual prospecting targets. And so over time, it was like.
- [43:06]
Parker Conrad
The wholesale, which is unique because, like, actually, every guest that I have on the show says that a rep should be also responsible for leads and that you can't just be like, outbounds, feed me. Yeah, it's almost presumptuous.
- [43:18]
Matt Plank
I understand that belief, and I think that rippling definitely will, of course, get to some scale and, like, saturation of the market, where that's kind of true. But I believe that it is, like, critical to, like, avoid that as long as you possibly can. And the reason why is, like, we've done outbound in 15, 20 different, like, segments. And every single time there's a funnel of, like, number of accounts you work, dials, emails, your call to connect, rate, your connect, the demo rate. Like, there's this funnel that just. If you put all the things in the top, it just spits out demos. Every single time we look at a new SDR team, somewhere in that funnel is broken. They're not doing enough of this, enough of that. They're, like, called to connect. Like, there's always some part of it, and then you hammer it and you go fix it and you train on it, and then it turns green. And, like, all of a sudden, they spit out demos. And in my opinion, you can get an SDR or to do that way, way, way more effectively than you'll ever be able to get sales reps to do it. So sales reps, what they want is they're like, give Me, a book of accounts that I can like, control my own destiny, right where I'm not, like, told I can't prospect, but, like, let me do something. But then when you give them accounts, like, without a whole bunch of structure and focus, like, they're not ever going to show up and do the, like, the way. The way that you manage a rep doing outbound, not the same as the way you manage an SDR doing outbound.
- [44:29]
Parker Conrad
You said that not doing outbound was a big mistake. What did you do that you wish you hadn't done for the longest time.
- [44:36]
Matt Plank
Up until maybe two years ago? Like, I did the pitch decks with our cmo. Like, we'd be, you know, cranking away in the. In the. In the middle of the night, like, working on the slides. And then we roll out the pitch deck and I do the trainings and I do the script. And like, when you're an early stage company, that makes a lot of sense. And then all of a sudden you get 5 segments, 10 segments, 20 segments, and, like, you're no longer the expert about all of them. And so I definitely held onto that, like, way too long, kind of being the, like, the number one person in the org who, like, knew the script and the pitch and the competitors. And two years ago, I hired, like, my first kind of like, layer of just, like, really kind of successful VPs underneath me. And then over time, now it's like, I literally don't even think about those things. Like, I was completely owned by the VP of SMB or the VP of Mid market or whatever. And I should have done that, like, a lot sooner because what happened was we would be doing deals or we'd be in.
- [45:24]
Parker Conrad
We.
- [45:25]
Matt Plank
We'd have. We'd have a deck that sucked. And I'd go look at it. I'd be like, this deck is terrible. Like, this is. This feels so stale. Like, how does. How does the SMB Org stand up and, like, give this deck every day? Like, it's so bad. You know, this is 18 months old. And there was just a general thinking of, like, well, you made the deck. Like, you authored this thing. And I'm like, no, no, no, no, no, no. Like, you guys are better than me at all of this stuff. Like, you're doing it all day long. Like, everybody should feel empowered to be like, this thing that you're telling us to do is dumb and it doesn't make sense. It doesn't work. And I don't think I, like, inflicted that, like, early enough in enough places. And today, you know, My team is a lot more useful than I am in terms of actually winning business and bringing customers on board.
- [46:03]
Parker Conrad
When we look at revenue, what's the revenue makeup between SMB mid market and enterprise?
- [46:08]
Matt Plank
It's a tough question to ask because we have like direct segments, channel segments, product segments, like there's literally 50, 50 segments and so, but, but like at the end of next year my SMB mid market and enterprise teams will all be like roughly the same size, probably like SMBs, maybe 60 reps mid markets, maybe 90 reps and enterprise is maybe you know, 40ish reps or something, but that's 150 reps and there's probably 300 reps across the board that are at different types of places. So it's, it's kind of a mixed bag.
- [46:38]
Parker Conrad
Okay, but like is it like 30, 30, 30%? Like how do you think about that?
- [46:43]
Matt Plank
The fastest growing segment for sure is like our upmarket segment. Like our, you know, we were moving up market very quickly and you know, used to not compete with the work days of the world and now that's weren't a lot of deals with them. And so that piece of the business is and you, if you're going to grow 60, 70, 80, 90% year over year at hundreds of millions of dollars, like you have to be able to have some things that are growing, you know, 2, 300%. Like that's the only way you'll maintain the growth rate. And so, so I'd say our upmarket teams are growing a lot faster.
- [47:11]
Parker Conrad
What's not growing fast enough today I'm.
- [47:14]
Matt Plank
Thinking about, Parker would probably say everything but I think probably like international to be honest. Like in international we have teams now go to market. Teams in Dublin selling into Europe. We've got a team in Sydney selling into kind of Australian market. There's a bunch of international teams in place where we feel like we have incredible product market fit. We're trying to crack the code of like, you know, you can't just like land in these places and run all the same playbooks and do all the same stuff. And so I think our growth internationally is like there could be explosive growth and there will be soon, but we're like still kind of tweaking the ingredients a little bit.
- [47:53]
Parker Conrad
Why do you think that hasn't gone to plan?
- [47:55]
Matt Plank
When you enter a new market, everything is way more expensive. Like is it big? Like when you're in an early stage company like efficiency like doesn't really matter, like you don't even have a business right. Like it's not about how efficient are you. It's like you're just trying to win any way possible and you're losing money and all that good stuff as you get to be larger and you're, you know, our size like all of a sudden like efficiency is like the number one constraint. Like there are things that we could go do to win more business in places that we don't do because we couldn't do it efficiently and we're not trying to light money on fire. And so in the US market there's all these other things. There's organic, there's brand, there's all this like free, you know, like accrued crude benefit over time. And so you can afford to go pay money and do different things to acquire leads in more expensive ways. When you go internationally, like all you can do on day one, right, you can go put money in the LinkedIn machine or the Facebook machine or the review sites or whatever and you can get demos. But like you don't have all of the like, easier, more free stuff to like blend the portfolio into something that works. And so your growth is just like it's a little bit stunted if you want to grow efficiently. Like we, we don't get to grow in these markets the same way that early stage companies do who don't really care that much about being efficient. Like we do care about being efficient. And so there are kind of these, you know, guardrails that we have to operate within. And so that has made growth a little bit slower than it would have been.
- [49:12]
Parker Conrad
Why be there a tool? Let's have this thought exercise. You have a lot of markets still to get. In the US you've got a lot of products that you can, you know, bluntly expand penetration across. Why, why bother with Australia?
- [49:23]
Matt Plank
I think one, all of the non US markets like starting with Canada and for sure and Europe and you know, in apac, like their HR software landscape is at least a decade behind where the US is. Like in the US you have 10 plus like major public company payroll providers, right? Like there's just an enormous, you've got all these IT companies like all the ramps and Brexit of the world world. Like it's a deeply competitive market and when you go internationally, pretty much in every country, whether it's, you know, the UK or France or Germany or Australia, whatever, there's literally like two people at max that are in that space and one of them is like a completely old, archaic, like awful system and one of them is like a brand new startup that's like modern and easy to use but has like enormous issues kind of like supporting all the different various use cases, large companies, whatever. So there's just those markets are like extremely ripe for disruption and I think we have a really strong product market fit. And then there's a bunch of other things where like, you know, we, we do really well with multinational companies in all.
- [50:28]
Parker Conrad
But then it's like why, why is it not working then? Because it's like, I'm Matt, I say this, we're ideating here, like the efficiency side I kind of get, but I kind of don't. Dude, I'm an investor in early stage companies and we compete with rippling and it's like, ah fuck, these Americans have so much more, more cash than we do. Yeah, like you have so much more money than U.S. efficiency.
- [50:48]
Matt Plank
Well, so, so a couple things. One is it is working in the sense that like the win rates are really good, the ACVs are really good, all that kind of stuff. What, what is scaling slower than you would like is pipeline generation and top of funnel. And that's because no matter how much money we have, we could be sitting on a billion dollars of cash. Like we are not going to go invest in top of funnel that is inefficient just to grow faster. Like that's just like our guardrails. There's a certain cat k back.
- [51:17]
Parker Conrad
Why not? Because that top of funnel that's inefficient can increase in efficiency over time as you build word of mouth, local brand network effect within nations. Is there not a time where actually you spend always inefficiently at the beginning as you did in the US to get more efficient over time.
- [51:37]
Matt Plank
That's certainly a way to do it. I would say that we are pretty disciplined in the kind of finance function at rippling to like not, you know, get the cheap thrill and go sink a bunch of money into these markets? Because like the reality, it's not just that it's inefficient, it's that like we don't know exactly what works. Right. Like it's not the same playbook, the growth playbook is not the same. And so yeah, you could think that you could convince yourself that you could spend inefficiently and of course it'll work because it works in the US but like you also might just light a ton of money on fire and like your whole strategy just might not work at all for a long time, whatever. And so I think really the answer for us as like outbound has been the thing that we've been able to scale the most because all of the growth demand gen stuff is expensive when you can't offset it with referrals and word of mouth, whatever. And so the outbound thing is working really well for us. But like, you got to hire 20, 30, 40, 50 outbound SDRs. You got to ramp them, you got to train them. Like, it just takes longer to ramp the engine when you can't just go spend a million dollars, you know, on kind of, you know, paid advertising and get a bunch of demos that show up.
- [52:39]
Parker Conrad
I totally get you. You mentioned the word playbook there. I'm constantly oscillating on this one. Should the founders be the one to create the Playbook in the early days or is it. Okay, this is where champs did say this. He was like, founders, they're not the ones to create the playbook. And you know, you were with Parker from like basements. You know, we talk about expanding in Australia now with, you know, the huge scale of Ripple, but you were there from the beginning. Should founders be the one to create the playbook or should it be a revenue leader like you?
- [53:06]
Matt Plank
Founders definitely should not create the Playbook. And I would say that Parker is like exceptional go to market CEO. In fact, I think one of his strengths is that he really is the main product kind of roadmap guy. His product vision is really strong, but on the go to market side, that guy can sniff out, you know, bullshit from anywhere. Like, he knows just like all the places to poke all the weak spots, all the bruises. And so Parker is like involved in go to market. Is this really working or are you like, you know, making it appear as though it is when it's not? Having said that he does it, he would never want to, like, you need to do it this way, pitch people this way. And I think the reality is founder Parker is the best at articulating, like, why somebody should care about our product, like why they should want our product. Why did we build it this way? What is all where all the benefits of building it this way. There's no one that does that better than Parker. But he's, he doesn't think like our buyer, you know what I mean? Like, he doesn't, he doesn't know how to transform his like, brilliant thought into like a consistent, repeatable sales playbook. He doesn't know how to do that. Like, that's not his thing. And so he's involved in like, the direction, you know what I mean? Like, he gives a lot of feedback. He's he's kind of like, this is what I think. But if I push back on him, you know, there's friction and it's good. Like, friction is good and that kind of stuff. But eventually he'll get to a point where he's like, okay, okay, okay. That makes sense. He'll start from a place of extreme pessimistic view. Like, I think that's wrong. I think that's wrong. Here's why. Here's why. And then if you, like, defend the position and you convince him of why you think your way is the right way, eventually he'll just be like, okay, that makes sense. You, like, convinced me that that's better and you should do it that way.
- [54:41]
Parker Conrad
Okay, so founders should not be the ones to create the playbooks. So as a founder of an early stage company, you should hire a salesperson from day one.
- [54:49]
Matt Plank
When you're a founder from day one. I. First of all, I think you should hire salespeople way sooner than conventional wisdom. And there's a lot of salespeople that will tell you that that's not true. Like, hey, you're a founder. You got to make sure that you can sign customers up and you have product market fit. Like, don't hire this poor VP of sales to come in here who will never be successful because like your product blah, blah, blah, blah, blah, blah, blah. Right? Like, I don't believe in any of that. Like, I believe that. I mean, I started a Parker's house when there were four engineers literally in the basement of his house. Like, there were no customers, There was no CRM, there was no anything like, granted. Like, me and Parker had a relationship. And so, like, would I have done that with a stranger? Like, probably not. But I knew that Parker was gonna like, build the right thing. And I knew that he needed me to like, help him figure out like one, like do the sales so that I could take that off his plate. But there was a trust there of like, as we're building stuff and you have constrained resources and engineering, like, what is the most important thing to build first? Like, how do you sequence the things we need to build? And a good go to market leader that you trust will help you figure that out. You know what I mean? They're part of that journey. And so I think you should hire a sales leader, like, very early on. You probably should have some customers that have paid you some money. But I think founders way too long to hire a go to market. And I think they do that because they feel like they can't hire a good salesperson potentially without a bunch of traction that maybe.
- [56:08]
Parker Conrad
Okay, so we hire them a little bit earlier. Let's go with that. Matt, should we hire juniors or like a senior sales leader who builds a team around them?
- [56:16]
Matt Plank
You want to hire for slope, right? Like you want to hire for how steep you think somebody is like going to be able to kind of grow and scale like the number one thing that I look for. I think if you're looking for an early stage, you know, sales leader, there's a bunch of things that we could get into. But I think one of the things that stands out is you want somebody who has been like rapidly promoted at the same company two or more times. Like that ingredient. And what I mean by that is like if you're an account executive for like a year and then you're a sales manager for like nine months and you're like a director of sales for like a year, when you look at high growth companies that are just like growing super fast, right, whatever. All of the historical SaaS companies, you might want to go look at you back, where should I hire someone who worked at a high growth company and you find somebody who was promoted multiple times. There are lots of people that get promoted once and it's a mistake, right? Like they're not good at being a manager, they want to be a manager, whatever. But when you find someone that's been promoted two times at the same company, it's like an immediate signal that that person is good, right? Like you don't get promoted twice at high growth companies if you're not good. And when they've done in a rapid succession, right? If it's like three years in this role, three years in that role, three years in this role, it's like, okay, that's good too. But there's nothing better than like one year, one year, one year. It's like that means you promoted them. They took on a bunch of new stuff, it was growing, everything was broken, they didn't know how to do it and boom, they solved it. And like now they're onto the next role. And so I think you find people like that, then they may top out at like their experience has only been a director of sales of a 20 person team or something. And it's like you don't need more than that when you're building a company from scratch.
- [57:48]
Parker Conrad
Do you agree with Jason who says Lankin, that is, who says you'll never be able to get the all star VP of sales to join your little company? They've been through it once. They're not going to go through it again. They'll join you at 60 million ARR, maybe, maybe 100 million ARR, but they're not going to join your 1 or 2 or 5 million dollar ARR company.
- [58:07]
Matt Plank
I think that's exactly right. I mean, in fact, I'll give you the perfect example. Like when Parker started Rippling, who's the first person he wanted to hire? Like, it was Sam. Blonde, right? He's like, I want to say I've come work here with me. And Sam was like, no, man, I can't, you know, I can't do it again. You know, and I started, you know, Sam hired me at Zenefits and I started there as the, you know, 25th and Plaza account executive. And so I had kind of grown up in the underneath, kind of like Sam at the Org. And so when Parker was like, okay, like Sam's not the guy who's going to come start in the basement again for a second time four years later, he immediately went to like the tree. All right, like, you know, what's Plank doing? What's Jameson doing, who, you know, built Gong for many years and now works at Rippling. So he picked like both of us.
- [58:50]
Parker Conrad
What's exceptional about you? And you know this as well. So this is probably me telling you you don't normally last. You normally fall out of this tree at 10 million an ARR. In Rippling's journey. I don't know what your ARR is and I'm not asking because it's private, but you guys have done unbelievably well. Normally your profile has fallen out five years ago. What have you done to scale with the company in a way that no one does?
- [59:16]
Matt Plank
I mean, look, like the first thing is, generally speaking, if you are successful on the whole journey, then there's only like one reason that you don't make it. Like, if you're successful, it works. And Rippling has been fortunate to be successful. And like, yes, in some part do I feel like I run sales and I own some of that. Yeah. But like we've been successful for a million other reasons that I that are not me. Right? The product that we built, built the marketing team, we have all these other things, right? But I think when you, when you are winning, like the reason that you, that you top out and some companies, right, like they're winning, they're doing pretty well by all metrics. But then they're like, but we gotta go hire like a CRO because this person is like, you know, we're doing great, but we just. They're not gonna make it. 100% of the time is because you can't hire people that are better than you or overqualified. Like, you can't hire people, people. And then the biggest thing is you don't. You don't acknowledge the organic growth that you built. So, for example, like, when you grow early on, you're going to promote a bunch of people. Managers become directors, like, all this stuff, right? I mean, you look across your, you know, 10, 15 leaders that you've built that are all homegrown and organic, right? You're a 10, 20 million, whatever. You haven't hired anybody from outside the company. Really. You know them so well, and you're like, you're. You. You convince yourself that, like, there are not gaps and they're all going to scale, and it's just like, they're not all going to scale. And so you got to be able to go to that person that you brought over from your previous company that's done really well and know when they're, like, hitting a breaking point where they can't scale, and you've got to be able to, like, layer them in a way where hopefully they stay at the company.
- [60:44]
Parker Conrad
Final one for you before we do a quick fire. What is the biggest signs that someone is not scaling? How does that most often show itself?
- [60:52]
Matt Plank
I think when someone is not scaling there, there are two things I think. One is they end up becoming like they're. They're leading from the back and not the front. And what I mean by that is they're. They believe that their job now is to, like, tell people, like, what to do because they've done it. But, like, they don't believe their job anymore is to, like, do it for them. Show them how to do it. Be involved in, like, you know, leading the way and being like, everybody, follow me. And they just kind of hit a point where they, like, they. They kind of think that being a director or a VP or whatever means that, like, all of a sudden you don't have to do that stuff anymore. And usually when that happens, they start to lose the locker room. And, like, even if it's a winning team, like, their team starts to not really like them. You know, it starts to fall apart and kind of flounder from there. And you can't come back from someone who, like, loses, like, an organic promotion, who was amazing all the way through, but then they, like, lose the locker room because they think that that's not my job anymore. I think that's. That's it.
- [61:48]
Parker Conrad
When was the closest time you felt to losing the locker room?
- [61:52]
Matt Plank
It was around the time where kind of, you know, speaking to this, it was. It was at a point in time where there were people that reported into me, you know, who had maybe lost the locker room a little bit. Or at least when anybody is questioning, like, is my manager or my director or whatever, are they scaling with me? Right? Like, when anybody starts to question that, they immediately look to the CRO and they're like, what's the CRO going to do about it? Right? Like, is this person going to, you know, kind of let that, let that fly? Because they know the person, they've been here for a while, whatever. And a lot of companies, like, that's what happens, happens. And so I think for me, like, you first, like, see with your own eyes, like, there's a problem here and I'm giving the feedback, but, like, it's not changing. But then you start to, like, feel that, like, other people, like, see that. And if you don't take action, like, very quickly when those things start to fester, then, like, that's how you can lose the locker room. Like, people need to know that you're willing to, like, just like every rep is like, if I don't hit my quota, then, like, I'm gone. Everybody knows that, right? If you're a manager, your team isn't hitting your quota. It's like, like everybody feels that performance culture. But there can be a moment where you get so high up in an org chart that people start to feel like, you know, when things are failing, like, nobody blames the person that runs that thing, right? They blame everybody else. And like, that's a really bad place to be.
- [63:03]
Parker Conrad
Dude, I could talk to you all day. I've so enjoyed this. So I'm going to do a quick fire with you. So I say a short statement. You give me your immediate thoughts. Does that sound okay?
- [63:11]
Matt Plank
Yeah.
- [63:11]
Parker Conrad
Which competitor do you most respect and why?
- [63:15]
Matt Plank
I think maybe I would say probably like in the HCM space, maybe like Paylocity is, you know, of the legacy. Legacy competitors, like, they generally seem to be people we see in most of the deals. You know, they do a good job, I think, of selling around their. Their product gaps potentially. There's other players in, you know, our product suites. At one point, is there a player.
- [63:33]
Parker Conrad
Where you're like, they're in here. We got this covered. We're going to sweep the floor with them.
- [63:38]
Matt Plank
You know, I guess maybe when I Think about like competitor I respect the most. I think of it mostly from like a go to market team perspective. And so I think like when we lose to like a legacy payroll provider, I'm kind of like, damn, we got outsold. I know our product is better than Paylocity or ADP or whatever. And so when we, you know, when we're in a competitive deal and it's neck and neck and I'm just like, man, like they must be doing something good on the go to market front to make up for like all of the like horrible blemishes that exist under the surface of that product when you actually use it. It's true.
- [64:08]
Parker Conrad
Respectfully, that's all on you by like an adp. It's like it's.
- [64:14]
Matt Plank
Yeah, it's like you should really look in the mirror and you know, you should really take that one on the chin for sure.
- [64:19]
Parker Conrad
Tell me what sales tactic has not changed over the last five years?
- [64:23]
Matt Plank
I think more so now than ever. Like working your ass off and hustling is like, has always been able to get you ahead. But there was a culture pre Covid where that was like table stakes and what everybody did and you were in the office all the time and you showed up at 8 and you left at 6 and it was just like everybody did. That was obvious. And I think over time now the true, like I just like. And it's not like I work on the weekends and I work all night. It's like when I'm like in the, the walls of like the arena, I am like million miles an hour grinding, just like working my ass off as fast as possible to just like do more output. I think that is like less common than it used to be or is more of a, you know, is, is more of like an advantage than, than maybe it once was.
- [65:05]
Parker Conrad
When are you going to go back to all in person?
- [65:08]
Matt Plank
You know, candidly, like, I really, I really miss the days of being like the vibe that's in a company when like you're all in there on the same days and whatever. I think having said that, I mean we are like we're. If you're in an office for us anywhere in the country, like you have to be in the office three days a week. But we do have people that we've hired remote across the world really. And you know, we have access to better talent, all that. So I think the remote people are part of the company culture. But yeah, I mean if I could wave my magic wand and keep the people I have and force them to come to an office. Like, I would do it in a heartbeat. I believe that we've lost something over the years of like, not having the same, you know, company culture of an office.
- [65:46]
Parker Conrad
What piece of advice would you give to a new sales leader starting a new role tomorrow?
- [65:51]
Matt Plank
You really should work for a CEO whose ambition and expectations make you deeply, deeply uncomfortable. The. The best coaches in the world, right? Like, they're not you, they're not your best friend. Like, they coach you and they're like, you know, if you look at the whatever, all the different people, the Nick Sabins, the Bill Belichicks of the world, right? Like, you have to want to work for someone that, like, demands greatness, like, every day. Often it's completely unreasonable, like, feels like is unfair and all this stuff. Like, you're going to get more out of yourself by working for someone like that than you would ever possibly get. Like, by thinking you can push yourself, you know, that hard. Like, and so for me, it's like, don't work for a company because you think it's. It's chill or it's easy or like, the CEO gets it and like, they're not, you know, a huge, like, go to market. They're not going to bust your, you know, ass all the time to go to market. It's like, work for someone who you kind of walk out of there and they're like, man, that guy was intense. Like, I don't know. Or woman was intense. Like, I don't know, you know, I mean, that might be uncomfortable, right? Like, you should feel that when you're going to go work for a CEO.
- [66:52]
Parker Conrad
Final one for you, Matt. What company sales strategy have you most been impressed by recently? Where you've gone? That's good.
- [66:59]
Matt Plank
I mean, honestly, I think for us it's more of like a macro strategy of like, breaking up our. Our sales org, right? Like, at one point we had reps who sold all of the products at Rippling. And when we finally got to a point where we launched our, you know, Spend management suite and I had a rep who had like, their 12th product that was competing against like a rep at Ramp or Brex where, like, all they sold was that very specific thing and just asking my rep to like, be able to compete with that rep when they had 12 other products they needed to sell, it just became clear that, like, there's. The cup is too full here. Like, we can't put more knowledge in, like, the sales rep, you know, cup, and we need to basically carve off this kind of product account executive model and then build this like you know, culture of like partnership in those deals so that when you are a new logo and you want to buy HCM stuff and spend stuff like you know, there's two people working together and we kind of splintered that off now in a bunch of different places and had we not done that we never would have been able to compete in these kind of like hyper competitive like vertical spaces like finance and global payroll. And you know we've done a really good job in those spaces by being able to do that strategy which is operationally very complex. But like my RebOps team kind of makes it, you know, takes it on and makes it happen.
- [68:10]
Parker Conrad
Matt, listen, I've so enjoyed this. I so appreciate you being flexible, moving with the schedule and you've been a fantastic, fantastic guest dude.
- [68:17]
Matt Plank
Awesome man. I appreciate the time Harry, thanks for having me and hopefully we'll do it again sometime.
- [68:23]
Harry Stubbings
I mean what an incredible GTM motion Matt has built at Rippling. If you want to see the video then you can check it out by searching for 20VC on YouTube to see the full interview in video. Now before I leave you, one of the easiest investment decisions I have made over the last three years is investing in 11X. Their digital workers don't just automate tasks, they transform your business. With 24. 7 operations, multilingual capabilities and human like intelligence, they're revolutionizing how work gets done. From prospecting to closing. 11x is the all in one platform that allows you to reduce costs, increase pipeline and boost conversion rates. And that's why companies like Pleo, Handshake, Sourcegraph and more are customers and lovers of 11X. Check them out today at 11X AI. You will not regret it. And speaking of incredible products, Appsumo started with one simple idea. The tools you need to grow your business shouldn't put you out of business. That's why they work directly with developers to get Exclusive discounts of 80 to 90%. 80 to 90% off software saving entrepreneurs over half a billion dollars since 2010. Some of the biggest names in tech like like Mailchimp, Zapier and Dropbox got their start on AppSumo. And with a rotating selection of hundreds of tools, you'll find all the software you need to make your life easier in 2025. Plus with a 60 day money back guarantee, you can try any tool risk free. Start the year off with savings. Get 10% off your first order with the code 20 and a free tool exclusively for 20 VC listeners. That's code 20 lowercase VC for 10% off off plus a free tool@appsumo.com as always, I so appreciate all your support and we are taking a little bit of a break for the Christmas period, but we will be back on January 6th with a set of incredible episodes on 20 VC.