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Transcript

The Playbook for Going Upmarket with Stripe’s CBO and Checkr’s COO · The Official SaaStr Podcast: SaaS | Founders | Investors

• 0:00
  SPEAKER_01: It's not one of those things where you wake up one morning and are like,
• 0:02
  SPEAKER_01: today I think we'll do enterprise.
• 0:03
  Maybe particularly because a board member suggested you might
• 0:06
  want a bigger TAM or
• 0:07
  SPEAKER_01: higher growth rate.
• 0:08
  SPEAKER_01: That would not be the signal in my view.
• 0:10
  I think two good signals are one,
• 0:13
  your existing customer base is pulling you up market.
• 0:16
  SPEAKER_01: So often we're starting many folks in this room selling into a startup.
• 0:20
  SPEAKER_01: Those startups mature and start to have more sophisticated requirements.
• 0:25
  The other one is that you start to get early wins in enterprise
• 0:28
  that are meaningful.
• 0:31
  SPEAKER_01: So we actually had a term at Stripe on that in particular,
• 0:35
  SPEAKER_01: which was if you go into enterprise,
• 0:37
  SPEAKER_01: you wanted to get the whale,
• 0:39
  SPEAKER_01: not the finn.
• 0:41
  SPEAKER_01: Finn was like our little derogatory term to me,
• 0:43
  SPEAKER_01: like you didn't really get a legit workload at that company.
• 0:46
  SPEAKER_01: So I think a lot of times people will get a side project,
• 0:49
  SPEAKER_01: an experimental business line,
• 0:50
  SPEAKER_01: the innovation lab,
• 0:52
  SPEAKER_01: and think you are in enterprise and you really aren't.
• 0:55
  SPEAKER_00: Please welcome Jean DeWitt Grocer,
• 0:57
  SPEAKER_00: CBO at Stripe,
• 0:59
  SPEAKER_00: and Lindsay Scrace,
• 1:00
  SPEAKER_00: COO and former CRO at Checker.
• 1:03
  SPEAKER_01: It's good to be here with you all at SASTR.
• 1:05
  SPEAKER_01: I love SASTR.
• 1:06
  SPEAKER_01: Also so great to be here with you, Jean.
• 1:08
  SPEAKER_01: We're going to kick it off.
• 1:09
  SPEAKER_01: We have a lot to talk about.
• 1:11
  SPEAKER_01: Before that, we're going to dive into introductions.
• 1:13
  SPEAKER_01: And instead of introducing ourselves,
• 1:16
  SPEAKER_01: Jean and I are going to introduce each other because we go way back to
• 1:19
  SPEAKER_01: So a little bit about Jean.
• 1:21
  She started working on Gmail at Google right after Gmail
• 1:25
  launched in operations.
• 1:27
  SPEAKER_01: And then in 2010,
• 1:29
  SPEAKER_01: Jean moved to Google Enterprise,
• 1:30
  SPEAKER_01: now known as Google Cloud,
• 1:32
  to help build out their SMB sales team for APAC as well as the
• 1:36
  Americas and ran that.
• 1:39
  Then from there,
• 1:40
  she went to Dialpad,
• 1:42
  which is a SaaS communications platform company.
• 1:45
  And then from Dialpad,
• 1:46
  she went to Stripe in 2016,
• 1:48
  where she was a very early Stripe.
• 1:51
  SPEAKER_01: She built out the sales team in the Americas.
• 1:54
  SPEAKER_01: And just to put that in perspective,
• 1:56
  SPEAKER_01: There were, what, 10?
• 1:57
  SPEAKER_01: 10 salespeople when she joined.
• 2:00
  SPEAKER_01: She scaled it to hundreds and hundreds of sellers,
• 2:02
  SPEAKER_01: built out many functions from scratch,
• 2:04
  SPEAKER_01: including SDRs,
• 2:06
  SPEAKER_01: customer success,
• 2:08
  SPEAKER_01: solutions engineering,
• 2:09
  SPEAKER_01: architects.
• 2:10
  SPEAKER_01: And now Jean is the chief business officer at Stripe,
• 2:13
  SPEAKER_01: where she runs all technology and financial partnerships,
• 2:16
  SPEAKER_01: as well as corporate strategy.
• 2:18
  SPEAKER_01: So Jean, excited to be here with you today.
• 2:20
  SPEAKER_01: Awesome.
• 2:21
  SPEAKER_01: Thank you, Lindsay.
• 2:22
  SPEAKER_01: Lindsay was the second female to join that group.
• 2:26
  And one of the things I remember immediately about her is how
• 2:29
  analytical she was.
• 2:31
  SPEAKER_01: She's a hardcore operator, and she also really cared deeply about people.
• 2:35
  So she and I hit it off and basically have tracked each other's
• 2:39
  careers since then.
• 2:41
  SPEAKER_01: Prior to Google,
• 2:43
  SPEAKER_01: Lindsay started at AP Muller Maersk,
• 2:45
  where she was in a GM trap doing all sorts of operating roles
• 2:49
  around the world.
• 2:50
  SPEAKER_01: She joined the Google Workplace team,
• 2:53
  SPEAKER_01: where we were part of the leadership team,
• 2:55
  SPEAKER_01: and built out a number of functions there.
• 2:57
  She ended up running the entirety of Google Cloud for SMB,
• 3:02
  mid-market,
• 3:02
  and startup.
• 3:03
  SPEAKER_01: So across Workplace, Google Cloud, GCP, et cetera.
• 3:07
  And then she transitioned over to Checker two years ago as its
• 3:11
  CRO and within short order,
• 3:13
  SPEAKER_01: expanded that to become its COO.
• 3:15
  SPEAKER_01: And she runs the bulk of the company's operations these days.
• 3:19
  SPEAKER_01: Similarly excited to be up here with you.
• 3:20
  SPEAKER_01: Yeah, I love it.
• 3:22
  SPEAKER_01: All right, so we're going to take it off.
• 3:24
  SPEAKER_01: A lot of startups start focusing and targeting other tech companies.
• 3:28
  So early adopters of technology,
• 3:31
  the early wedge in how they start growing the company.
• 3:34
  But then there becomes a moment and like a second chapter of
• 3:37
  source where one needs
• 3:39
  SPEAKER_01: to pivot into an additional new segment,
• 3:41
  SPEAKER_01: often upmarket,
• 3:42
  SPEAKER_01: often enterprise,
• 3:44
  like the holy grail of moving upmarket to enterprise to unlock
• 3:46
  a lot of TAM,
• 3:47
  SPEAKER_01: a lot of value up there.
• 3:49
  SPEAKER_01: Often people get this timing wrong.
• 3:52
  SPEAKER_01: More often than not, probably.
• 3:53
  SPEAKER_01: And it's really important to understand the signal.
• 3:55
  SPEAKER_01: So let's talk about that.
• 3:56
  SPEAKER_01: What have you seen in terms of signals of when to move up market,
• 3:58
  SPEAKER_01: when to start tackling enterprise?
• 4:00
  SPEAKER_01: Yeah.
• 4:01
  SPEAKER_01: So first of all,
• 4:02
  I would say it's not one of those things where you wake up one
• 4:04
  morning and are like,
• 4:04
  SPEAKER_01: today I think we'll do enterprise.
• 4:06
  Maybe particularly because a board member suggested you might
• 4:08
  want a bigger TAM or
• 4:09
  SPEAKER_01: higher growth rate.
• 4:10
  SPEAKER_01: That would not be the signal in my view.
• 4:13
  I think two good signals are one,
• 4:16
  your existing customer base is pulling you up market.
• 4:19
  SPEAKER_01: So often we're starting many folks in this room selling into a startup.
• 4:23
  SPEAKER_01: Those startups mature and start to have more sophisticated requirements.
• 4:27
  The other one is that you start to get early wins in enterprise
• 4:31
  that are meaningful.
• 4:33
  SPEAKER_01: So we actually had a term at Stripe on that in particular,
• 4:37
  SPEAKER_01: which was if you go into enterprise,
• 4:40
  SPEAKER_01: you wanted to get the whale,
• 4:42
  SPEAKER_01: not the fin.
• 4:43
  SPEAKER_01: Finn was like our little derogatory term to me,
• 4:46
  SPEAKER_01: like you didn't really get a legit workload at that company.
• 4:49
  SPEAKER_01: So I think a lot of times people will get a side project,
• 4:52
  SPEAKER_01: an experimental business line,
• 4:53
  SPEAKER_01: the innovation lab,
• 4:55
  SPEAKER_01: and think you are in enterprise and you really aren't.
• 4:58
  SPEAKER_01: So for Stripe in that first camp,
• 5:00
  SPEAKER_01: this was back in 2017 that we started our foray into enterprise.
• 5:05
  SPEAKER_01: And it was the Shopify's,
• 5:06
  SPEAKER_01: the Lyft's,
• 5:08
  SPEAKER_01: Squarespace's were all growing up,
• 5:10
  SPEAKER_01: bringing in adult CFOs,
• 5:12
  SPEAKER_01: contemplating IPOs.
• 5:14
  SPEAKER_01: And so they had a bunch of demands.
• 5:16
  SPEAKER_01: And then on the other side, we won Amazon's, Amazon.com in Singapore.
• 5:21
  SPEAKER_01: So sure, not the U.S.
• 5:22
  business,
• 5:23
  but if you go down in Singapore,
• 5:24
  I think Bezos is going to notice.
• 5:26
  SPEAKER_01: And so those were our signals.
• 5:28
  And what we did from there was look at all of the requests we
• 5:33
  were getting from
• 5:34
  these startups that were moving up markets and try to
• 5:38
  understand the degree to
• 5:39
  which we thought those were generalizable to larger businesses
• 5:43
  in general.
• 5:44
  SPEAKER_01: And then similarly went really deep on the Amazon like wins.
• 5:48
  SPEAKER_01: Why did we actually win?
• 5:50
  SPEAKER_01: Why did they buy us?
• 5:52
  SPEAKER_01: And like truly wrote that down.
• 5:55
  The other thing that we did that I think is key is you have to
• 5:57
  understand what is
• 5:59
  SPEAKER_01: your ideal customer profile today?
• 6:01
  SPEAKER_01: Where do you just win constantly and why?
• 6:04
  SPEAKER_01: And then with those three things,
• 6:06
  SPEAKER_01: we were basically able to do like human heuristic lookalike modeling,
• 6:11
  SPEAKER_01: not a fancy data science model,
• 6:12
  SPEAKER_01: but just,
• 6:13
  SPEAKER_01: OK,
• 6:14
  SPEAKER_01: given those qualities,
• 6:15
  SPEAKER_01: what's another sort of like set of the market that's bigger than those,
• 6:19
  SPEAKER_01: but looks almost exactly like where we've already won?
• 6:22
  SPEAKER_01: And as a result,
• 6:23
  we're able to have a really focused enterprise strategy rather
• 6:28
  than scattershot of
• 6:30
  SPEAKER_01: let's contact everyone and see who bites and creating a lot of roadmap
• 6:34
  SPEAKER_01: schizophrenia for your NGT.
• 6:35
  SPEAKER_01: Absolutely.
• 6:36
  SPEAKER_01: Yeah.
• 6:37
  And I love that point on the signal of your early customers
• 6:40
  pulling you up,
• 6:42
  SPEAKER_01: seeing as they grow,
• 6:43
  SPEAKER_01: you need to be able to get there with them.
• 6:45
  SPEAKER_01: At Checker, our first customer was DoorDash.
• 6:48
  Over 10 years ago,
• 6:49
  a smaller company than it is now,
• 6:51
  like a $10 billion run rate.
• 6:54
  And as they grow,
• 6:55
  as Lyft grew,
• 6:56
  we had the entire gig economy as these players grew.
• 6:58
  SPEAKER_01: We had to develop enterprise strategies for them.
• 7:01
  But then also,
• 7:03
  there's a somewhat separate playbook for traditional enterprises.
• 7:06
  SPEAKER_01: And really thinking about those two is both enterprise,
• 7:10
  SPEAKER_01: but different tactics often or different product strategies.
• 7:13
  SPEAKER_01: We've talked a little bit about signals,
• 7:15
  but just because you're getting signals doesn't mean you're
• 7:17
  actually going to do it well.
• 7:18
  There's definitely a graveyard of companies that have tried to
• 7:21
  move up markets.
• 7:22
  So what are some of the things that have made Checker more
• 7:26
  successful in your push
• 7:27
  SPEAKER_01: into enterprise?
• 7:29
  So I would say the very first thing is that you can't dip your
• 7:32
  toe in like a pilot enterprise.
• 7:36
  SPEAKER_01: And Checkr years ago did this wrong.
• 7:40
  SPEAKER_01: So there were all the signals Jean was mentioning there.
• 7:42
  SPEAKER_01: Our customers are pulling us up.
• 7:44
  A lot of demand and interest,
• 7:46
  even like closing some early more innovative enterprise logos.
• 7:50
  And the team at the time,
• 7:52
  before I was there,
• 7:52
  built a go-to-market sales engine for enterprise.
• 7:56
  SPEAKER_01: Got a lot of traction, talking to customers, demand, pipeline.
• 8:00
  SPEAKER_01: But then as they were solutioning the deals,
• 8:02
  SPEAKER_01: realized we have some really major gaps in what we need to deliver.
• 8:08
  SPEAKER_01: And the product roadmap was not set up.
• 8:10
  SPEAKER_01: There was not product capacity,
• 8:12
  engineering capacity to figure out how to build and be agile to
• 8:16
  be able to deliver
• 8:17
  SPEAKER_01: what was needed.
• 8:19
  SPEAKER_01: And so at that time, I said, we got to pause on this.
• 8:22
  SPEAKER_01: We have a ton of other priorities doing too many things.
• 8:24
  Let's retrench,
• 8:26
  go outside of enterprise and very successful,
• 8:28
  great momentum.
• 8:30
  SPEAKER_01: And then now we have recommitted.
• 8:32
  And as a leadership team,
• 8:34
  our C-suite,
• 8:35
  we sat down and said,
• 8:35
  we're going to lock arms.
• 8:37
  SPEAKER_01: We're going after this in a meaningful way.
• 8:38
  SPEAKER_01: And it's not just go to market.
• 8:40
  SPEAKER_01: It is our product team, our engineering team.
• 8:42
  SPEAKER_01: We're going to have dedicated people, dedicated capacity on the roadmap.
• 8:46
  SPEAKER_01: And it's been incredibly successful in that way.
• 8:49
  I think the second thing I would say is,
• 8:51
  to your point earlier,
• 8:52
  you really have to focus.
• 8:54
  SPEAKER_01: You can't spray and pray.
• 8:56
  SPEAKER_01: You got to figure out what are your ICPs or verticals where you win.
• 8:59
  SPEAKER_01: And this can be gleaned through like the heuristic models you mentioned.
• 9:04
  SPEAKER_01: You can look at down market, like the segment right below.
• 9:07
  SPEAKER_01: Look at your win rate by industry.
• 9:09
  SPEAKER_01: Look at your funnel conversion math by industry and see,
• 9:12
  SPEAKER_01: hey,
• 9:12
  SPEAKER_01: where are you winning and why are you winning?
• 9:14
  SPEAKER_01: Where is there that strong product market fit?
• 9:16
  SPEAKER_01: So for Checkr,
• 9:17
  SPEAKER_01: it was staffing,
• 9:18
  SPEAKER_01: retail,
• 9:18
  SPEAKER_01: manufacturing,
• 9:19
  SPEAKER_01: hospitality,
• 9:20
  high volume hiring industries where we could add a ton of value
• 9:24
  and make very
• 9:25
  SPEAKER_01: strong differentiation and product market fit.
• 9:28
  SPEAKER_01: And then within those verticals, you got to be all over it.
• 9:31
  SPEAKER_01: So attending industry conferences,
• 9:33
  SPEAKER_01: not just tech conferences,
• 9:34
  SPEAKER_01: like retail,
• 9:35
  SPEAKER_01: manufacturing,
• 9:36
  SPEAKER_01: go where they go.
• 9:38
  SPEAKER_01: And you may have to manufacture some early logo wins,
• 9:42
  whether it's doing a natural acts on pricing that aren't
• 9:45
  necessarily sustainable
• 9:46
  SPEAKER_01: over the long haul.
• 9:48
  SPEAKER_01: And make sure your sales teams are not trading away logo rights.
• 9:53
  You have to get those logos to be able to have them as
• 9:57
  referenceable customers.
• 9:58
  SPEAKER_01: And often it takes one big lighthouse logo in an industry,
• 10:02
  and then the dominoes start to fall and you start to be able to
• 10:04
  go further.
• 10:05
  SPEAKER_01: So that's a focus.
• 10:06
  And then the third thing is,
• 10:08
  I'd say,
• 10:09
  customer obsession,
• 10:11
  but with discernment.
• 10:13
  SPEAKER_01: And so by that,
• 10:14
  SPEAKER_01: often in tech,
• 10:15
  SPEAKER_01: and we saw this at Google,
• 10:17
  SPEAKER_01: there's this perception that our technology is just amazing.
• 10:20
  SPEAKER_01: It's going to transform.
• 10:21
  SPEAKER_01: Everyone should stop the way they're doing things and do things this way.
• 10:24
  I remember,
• 10:24
  I don't know if you remember this,
• 10:26
  it took like an act of Congress to get
• 10:29
  SPEAKER_01: product to build page numbers into the G Suite portfolio.
• 10:32
  SPEAKER_01: For years, no, we don't need page numbers.
• 10:35
  SPEAKER_01: And we just think people don't use those anymore.
• 10:38
  SPEAKER_01: I think that there was an evolution in learning.
• 10:40
  SPEAKER_01: No, we have to really learn and understand what are core needs.
• 10:43
  SPEAKER_01: And the discernment part I mentioned is,
• 10:46
  SPEAKER_01: as we're going into enterprise and seeing success at Checkr,
• 10:49
  SPEAKER_01: we,
• 10:49
  SPEAKER_01: every deal,
• 10:50
  we list what are product blockers that are like product gaps
• 10:54
  that are deal blockers.
• 10:55
  And what are product gaps that are simply nice to have for the customers,
• 10:59
  but not blockers.
• 11:00
  SPEAKER_01: And if you can't get those two columns right,
• 11:03
  It's going to be really hard because either you're going to
• 11:05
  under develop and
• 11:06
  invest or you're going to build every single thing for one
• 11:09
  customer and like
• 11:10
  SPEAKER_01: completely bend your product roadmap.
• 11:12
  SPEAKER_01: So that nuance is really important.
• 11:15
  I wanted to reinforce the first point you made because it was
• 11:18
  key for us at Stripe
• 11:20
  SPEAKER_01: and something I see a lot of companies get wrong,
• 11:22
  SPEAKER_01: which is the decision to move up market is not a go to market decision.
• 11:26
  SPEAKER_01: It's a company decision.
• 11:29
  SPEAKER_01: So for us at Stripe,
• 11:30
  SPEAKER_01: when we started having those early wins and saying,
• 11:33
  SPEAKER_01: OK,
• 11:33
  SPEAKER_01: I think it's time,
• 11:34
  SPEAKER_01: I literally sat down with Patrick,
• 11:36
  SPEAKER_01: our co-founder,
• 11:37
  SPEAKER_01: and was like,
• 11:37
  SPEAKER_01: all right,
• 11:38
  SPEAKER_01: are we doing this?
• 11:40
  SPEAKER_01: And we established a couple of things.
• 11:42
  SPEAKER_01: One was a lighthouse account list.
• 11:44
  SPEAKER_01: It was 30 names that we all agreed to.
• 11:48
  These ones are going to be worth winning and worth doing what
• 11:50
  it takes to win so
• 11:52
  that you didn't have a scenario where sales went out and talked
• 11:54
  to a company and
• 11:56
  got them interested,
• 11:57
  but we actually weren't going to be willing to do the work.
• 11:59
  SPEAKER_01: The second was we established a lighthouse engineering team.
• 12:02
  SPEAKER_01: It was small, talking like five people.
• 12:05
  But five people who had been at the company for a long time
• 12:08
  knew how to get things
• 12:09
  SPEAKER_01: done and were really well respected.
• 12:11
  And I brought them into every single sales call that we had so
• 12:15
  that they could
• 12:16
  SPEAKER_01: develop empathy for enterprise needs and it not just be,
• 12:20
  SPEAKER_01: oh,
• 12:20
  SPEAKER_01: sales isn't good at objection handling.
• 12:22
  SPEAKER_01: Yeah.
• 12:23
  So I really think that sort of like this is a top-down company
• 12:27
  push has to be true
• 12:28
  in order to be able to cross the chasm into that segment at the companies.
• 12:33
  The second I would reinforce is you're going to need different
• 12:37
  functions and go to market.
• 12:39
  SPEAKER_01: And so for us,
• 12:40
  SPEAKER_01: when Stripe was selling into developers,
• 12:43
  SPEAKER_01: believe it or not,
• 12:43
  SPEAKER_01: when I showed up to run the sales team,
• 12:44
  SPEAKER_01: we didn't have a single sales engineer or solution architect.
• 12:48
  SPEAKER_01: And I was shocked.
• 12:48
  SPEAKER_01: I was like, how is this possible?
• 12:49
  SPEAKER_01: We sell an API.
• 12:50
  SPEAKER_01: You need technical resources.
• 12:52
  SPEAKER_01: And then you figure out Stripe had world-class documentation.
• 12:56
  SPEAKER_01: Our prospects were our own solution engineers.
• 12:58
  SPEAKER_01: We didn't need it.
• 13:00
  SPEAKER_01: But as we moved into enterprise, you're ripping something out typically.
• 13:04
  SPEAKER_01: And there's a lot more risk associated with that.
• 13:06
  So we had to really layer in solution architects from a
• 13:09
  pre-sale perspective and
• 13:11
  then your integration engineers to actually do that migration
• 13:14
  and get things live.
• 13:16
  But I also want to reinforce there,
• 13:18
  you need to know what are the roles you need.
• 13:21
  SPEAKER_01: I feel like people move into enterprise and you immediately say,
• 13:23
  SPEAKER_01: okay,
• 13:24
  SPEAKER_01: I need a one-to-one SCR to AE ratio.
• 13:27
  SPEAKER_01: I need a CSM.
• 13:27
  SPEAKER_01: I need a TAM.
• 13:28
  SPEAKER_01: I need 10 TLA of roles, right?
• 13:32
  SPEAKER_01: So thinking through which ones are right for you.
• 13:35
  SPEAKER_01: And then lastly is you got to have an aligned business plan for this.
• 13:40
  SPEAKER_01: It's not going to print money overnight.
• 13:42
  So we put together a board level plan with an operating model
• 13:47
  associated with it.
• 13:49
  SPEAKER_01: We were clear about the payback period.
• 13:51
  We were clear about leading indicators of how we would know
• 13:54
  that we were tracking
• 13:55
  SPEAKER_01: towards that outcome and could course correct accordingly.
• 13:59
  But another one that people really struggle with is this is a
• 14:01
  multi-year endeavor
• 14:02
  SPEAKER_01: before you actually create an enterprise flywheel.
• 14:05
  SPEAKER_01: Love what you said on the alignment and having engineers.
• 14:09
  We have certain engineers and product folks who are on every
• 14:11
  single call,
• 14:12
  join at the hip.
• 14:13
  SPEAKER_01: And then the solutioning and solutions engineering,
• 14:15
  SPEAKER_01: solutions architects,
• 14:17
  that is so critical before you close and sign a deal to ensure
• 14:21
  it's solutioned appropriately.
• 14:22
  SPEAKER_01: And it's so easy to sign on the line and then down the line,
• 14:25
  SPEAKER_01: no one's happy if that's not working well.
• 14:27
  SPEAKER_01: So I completely echo that.
• 14:28
  SPEAKER_01: So Jeanne, you talked about new roles, adjusting the go-to-market.
• 14:31
  SPEAKER_01: Let's talk about pricing and packaging and how we've talked about this,
• 14:35
  SPEAKER_01: how that evolves as you go upmarket into enterprise.
• 14:38
  SPEAKER_01: What are you seeing at Stripe?
• 14:39
  SPEAKER_01: What are you doing differently?
• 14:40
  SPEAKER_01: Yeah, this is a big one for us.
• 14:41
  SPEAKER_01: So Stripe was always known for 2.9 and 30, right?
• 14:44
  SPEAKER_01: Super simple pricing for S&Bs.
• 14:46
  SPEAKER_01: Turns out enterprises don't love that.
• 14:48
  A lot of us,
• 14:49
  I think,
• 14:49
  start with simple pricing models,
• 14:51
  consumption-based,
• 14:52
  pay-as-you-go.
• 14:53
  A lot of founders love the purity of that,
• 14:56
  of I'm going to earn your business every single day.
• 14:58
  SPEAKER_01: Enterprises like predictability.
• 15:00
  SPEAKER_01: They also like a lot more modularity.
• 15:02
  SPEAKER_01: They like more a la carte.
• 15:05
  SPEAKER_01: And so we really had to do a lot to unbundle our pricing for enterprise,
• 15:09
  SPEAKER_01: let them buy more subcomponents,
• 15:12
  SPEAKER_01: and in some cases,
• 15:13
  SPEAKER_01: price fundamentally differently.
• 15:15
  That being said,
• 15:16
  we also then had to think through enterprises want to buy solutions.
• 15:21
  And so how do you then repackage some of those things into new
• 15:25
  bundles or solutions
• 15:26
  SPEAKER_01: that you can sell from an enterprise perspective?
• 15:29
  SPEAKER_01: So that's been a major journey for us as well.
• 15:31
  You really have to think about how is this buyer buying today
• 15:34
  and map out and be
• 15:36
  SPEAKER_01: able to at least translate your pricing into how they're doing it.
• 15:39
  SPEAKER_01: And as you're thinking about commits up market with enterprises,
• 15:42
  it's really critical as well to make sure your sales teams are
• 15:45
  incented and comped
• 15:46
  SPEAKER_01: according to that customer being successful.
• 15:48
  SPEAKER_01: There can be a nuance there as well.
• 15:49
  SPEAKER_01: Gone are the days of growth at all costs.
• 15:53
  SPEAKER_01: So let's talk about how to actually do this efficiently.
• 15:55
  SPEAKER_01: What are some of the things you guys are focused on?
• 15:58
  SPEAKER_01: Yeah, the free money days, as you all know, are somewhere behind us.
• 16:02
  SPEAKER_01: And you see this playing out just as context.
• 16:04
  SPEAKER_01: If you look at SaaS companies,
• 16:06
  the amount that they're spending on sales and marketing is a
• 16:09
  percentage of revenue.
• 16:10
  SPEAKER_01: This was as high as over 50,
• 16:13
  SPEAKER_01: 55% in 2019,
• 16:15
  SPEAKER_01: the peak of spend,
• 16:16
  SPEAKER_01: free money,
• 16:17
  SPEAKER_01: investment,
• 16:18
  SPEAKER_01: growth at all costs.
• 16:19
  That's down to 30% in 2024,
• 16:22
  just because it's not sustainable and investors won't.
• 16:26
  SPEAKER_01: tolerate that level of lack of return.
• 16:28
  SPEAKER_01: Also,
• 16:29
  SPEAKER_01: if you think about payback period,
• 16:31
  SPEAKER_01: if you look at top quartile SaaS companies versus bottom quartile,
• 16:36
  top quartile have 3x shorter payback period than the bottom
• 16:40
  quartile and 7x higher valuation.
• 16:44
  SPEAKER_01: This is really important now.
• 16:46
  Some of the things we're thinking about or like how I think
• 16:48
  about managing this,
• 16:49
  SPEAKER_01: first of all,
• 16:50
  is really getting crisp and clear on what are the metrics
• 16:54
  you're going to be
• 16:54
  SPEAKER_01: looking at and getting alignment across the entire company,
• 16:58
  SPEAKER_01: CEO,
• 16:59
  SPEAKER_01: CFO,
• 16:59
  SPEAKER_01: or sales organization on those.
• 17:02
  SPEAKER_01: For us, it's
• 17:03
  Payback period,
• 17:04
  gross margin adjusted payback period,
• 17:05
  which takes into account all the costs.
• 17:07
  SPEAKER_01: The cost of acquiring a customer.
• 17:09
  SPEAKER_01: When are you getting that back net of all costs to deliver the product?
• 17:12
  SPEAKER_01: And then second is LTV CAC.
• 17:14
  SPEAKER_01: That can be inflated because you can build out,
• 17:17
  SPEAKER_01: blow up your LTV calculations,
• 17:18
  SPEAKER_01: very sensitive on assumptions.
• 17:20
  SPEAKER_01: The payback period for us is the key.
• 17:23
  SPEAKER_01: And then we've gone in and looked at that.
• 17:24
  SPEAKER_01: What are our expectations per channel, per segment?
• 17:28
  SPEAKER_01: And to Jean's point earlier,
• 17:29
  SPEAKER_01: for enterprise,
• 17:30
  that's going to be longer and really getting alignment up front
• 17:33
  on what are the
• 17:34
  early signs of success you need to see and how do you build
• 17:37
  that over time.
• 17:37
  SPEAKER_01: You need to be watching it closely.
• 17:39
  SPEAKER_01: And then what we've done is break down for every segment,
• 17:42
  SPEAKER_01: for every channel,
• 17:43
  SPEAKER_01: giving visibility to my go-to-market teams.
• 17:47
  SPEAKER_01: So sales, marketing, solutions engineering, customer success, operations.
• 17:51
  We break down for,
• 17:52
  let's say,
• 17:53
  SME channel partners or SME mid-market sales.
• 17:56
  SPEAKER_01: What is the cost breakdown?
• 17:58
  SPEAKER_01: How much of that is SE?
• 18:00
  SPEAKER_01: How much of that is sales, CSM?
• 18:01
  SPEAKER_01: And so they're feeling the tension.
• 18:02
  And before asking for another headcount or asking for another
• 18:06
  overlay resource,
• 18:07
  SPEAKER_01: they're managing it themselves and acting like an owner.
• 18:11
  SPEAKER_01: And we've gotten really creative to say, hey, maybe we can scale more.
• 18:15
  Instead of this ratio,
• 18:16
  we can expand the ratios to be more efficient and more scalable.
• 18:20
  SPEAKER_01: And then holding people accountable,
• 18:21
  SPEAKER_01: we look at this in every single revenue call I do,
• 18:23
  SPEAKER_01: every forecast call.
• 18:25
  SPEAKER_01: We're seeing the metrics that we're managing to them,
• 18:27
  SPEAKER_01: which is critical to be able to allocate resources and make decisions.
• 18:31
  SPEAKER_01: So I think that the number one thing to get right is an operating model.
• 18:37
  SPEAKER_01: So often you start with your top down.
• 18:40
  SPEAKER_01: We 10 million in ARR from the sales team or from the segment or whatever.
• 18:45
  Not enough folks are building very granular bottom up versions
• 18:49
  of what actually
• 18:50
  SPEAKER_01: needs to be true to hit that.
• 18:52
  SPEAKER_01: This is, it's just funnel math.
• 18:54
  SPEAKER_01: We all know it.
• 18:55
  SPEAKER_01: How many leads do you need?
• 18:56
  SPEAKER_01: What's the conversion rate going to be?
• 18:58
  SPEAKER_01: What's the average opportunity size?
• 19:00
  SPEAKER_01: What's your win rate?
• 19:01
  SPEAKER_01: How long does revenue take to ramp, right?
• 19:03
  SPEAKER_01: If you're in a consumption business,
• 19:04
  SPEAKER_01: it's actually a long funnel,
• 19:06
  SPEAKER_01: but you've got to build that and you've got to,
• 19:08
  SPEAKER_01: to Lindsay's point,
• 19:09
  SPEAKER_01: build it per segment.
• 19:11
  SPEAKER_01: The key to this actually is it gives you a diagnostic,
• 19:14
  SPEAKER_01: either when things are going well or poorly.
• 19:18
  particularly as you move up market,
• 19:19
  you're going to have to make some assumptions.
• 19:21
  SPEAKER_01: When we moved into enterprise,
• 19:22
  SPEAKER_01: we were able to look at that segment below enterprise,
• 19:25
  SPEAKER_01: what was our historical performance?
• 19:28
  And then we also looked at external market data,
• 19:30
  like on average,
• 19:31
  what do you see in enterprise?
• 19:33
  SPEAKER_01: And for year one, we just had to make some reasonable assumptions.
• 19:37
  But then when we were deviating,
• 19:39
  and we definitely did,
• 19:40
  we knew exactly where.
• 19:42
  SPEAKER_01: In Stripe's case,
• 19:43
  SPEAKER_01: actually,
• 19:43
  SPEAKER_01: it turned out that we were doing a lot more deals,
• 19:46
  SPEAKER_01: but they were smaller and higher velocity in enterprise in year one.
• 19:50
  SPEAKER_01: And so if you don't do that,
• 19:51
  SPEAKER_01: then you don't know when,
• 19:52
  where to correct and where to potentially double down if things
• 19:55
  are going well.
• 19:57
  SPEAKER_01: So that's my number one thing is like massive spreadsheet,
• 20:00
  SPEAKER_01: well understood again across CRO,
• 20:02
  SPEAKER_01: CFO,
• 20:03
  SPEAKER_01: CEO,
• 20:04
  SPEAKER_01: and something that you're reviewing on a very regular basis.
• 20:07
  SPEAKER_01: Exactly, like tracking that.
• 20:09
  The other piece on efficient growth that I think is important
• 20:12
  to underscore as well
• 20:13
  is you want your teams and you want the math to be looking at
• 20:17
  both costs and
• 20:19
  conversion throughout the funnel and then also maximizing the
• 20:21
  ACV of every deal.
• 20:24
  SPEAKER_01: And
• 20:25
  SPEAKER_01: At Google,
• 20:25
  SPEAKER_01: we were religious about looking at average revenue per user,
• 20:28
  SPEAKER_01: ARPU,
• 20:29
  SPEAKER_01: for every single customer we signed up for G Suite.
• 20:31
  SPEAKER_01: Or GCP, how are we layering on add-ons over time?
• 20:34
  SPEAKER_01: Because that also can help.
• 20:36
  SPEAKER_01: If you're seeing, hey, the LTV CAC or the payback is not working,
• 20:40
  SPEAKER_01: It could be you got to get your costs really tight in your belt.
• 20:42
  SPEAKER_01: Or it could be,
• 20:43
  SPEAKER_01: hey,
• 20:43
  let's think about what are we layering on in the lifecycle of
• 20:46
  the customer,
• 20:47
  SPEAKER_01: either at point of sale or through upsell down the line.
• 20:50
  And then that kind of layering on is really important as you
• 20:53
  think about your model,
• 20:54
  SPEAKER_01: your operating model,
• 20:55
  SPEAKER_01: and then how to scale.
• 20:56
  SPEAKER_01: Yeah, the same has been really true for Stripe.
• 20:58
  So our enterprise customers,
• 21:01
  on average,
• 21:02
  buy at least two products for Stripe.
• 21:05
  So key for us to get efficiency has actually been the growth of
• 21:08
  our revenue and
• 21:09
  SPEAKER_01: financial automation product.
• 21:11
  SPEAKER_01: So strike billing, strike tax, rev rec, etc.
• 21:16
  SPEAKER_01: Those layer in really well and drive up ACGs, as Lindsay's mentioned.
• 21:21
  SPEAKER_01: Lindsay, I think you and I are two very action oriented people.
• 21:25
  So I thought we might leave the audience with two things that
• 21:29
  you can leave here
• 21:30
  SPEAKER_01: and maybe do differently.
• 21:31
  SPEAKER_01: So for you, what would be that one?
• 21:33
  It's really understanding the unit economics and the math of
• 21:38
  your sales team,
• 21:39
  making sure that you are not under-investing or over-investing
• 21:44
  and that you're
• 21:44
  SPEAKER_01: getting that equation right and that you're tracking it,
• 21:47
  SPEAKER_01: benchmarking it,
• 21:48
  SPEAKER_01: and holding the team accountable to act as owners to drive results.
• 21:53
  SPEAKER_01: And as another sort of modern CRO,
• 21:55
  SPEAKER_01: I am going to double down on math and reinforce the operating model.
• 21:59
  SPEAKER_01: A lot of you are probably in planning periods right now.
• 22:02
  If you do not have a hundred line item bottoms up spreadsheet
• 22:06
  supporting your top
• 22:07
  SPEAKER_01: down revenue model,
• 22:08
  SPEAKER_01: I think you will be less effective in 2025 than you would be otherwise.
• 22:12
  SPEAKER_01: So strongly encourage that one.
• 22:13
  SPEAKER_01: 100%.
• 22:16
  SPEAKER_01: Thank you everyone for coming.
• 22:17
  SPEAKER_01: Great to see Standing Room Only and have a lovely day at SASTR.
• 22:20
  SPEAKER_01: Thank you.