Latest / Growth After Headcount / AI in Go-To-Market: Building a Revenue System for 2026 — Jacco van der Kooij #005
Transcript
- Haris Odobasic: You need to build a revenue system. Those are the words from Jacco van der Kooij, founder of Winning by Design. What is a revenue system? It means that your whole commercial org is connected from front to end. That when you get the signal, you can directly improve your strategy. And that's the necessity into this time. Let's hear more about it Jacco. Haris: Jacco in your long SaaS career and tech career, how big of a change is AI for the whole industry? Jacco: The change is quite big, and let me explain to you why. Previously, when we saw a change occur, think of something like an introduction of Sales Loft or Outreach, that technology only impacted a very small part of the customer journey. Today, we see that the entire customer journey is affected on both the seller and the buyer side. And that is a huge change that we are quite uncomfortable with. Haris: how companies are deploying this technology in the business or where does this come from? Jacco: True, but we have been used to to in introducing technology. so technology itself is not the problem. The problem is what it does. And let me give you an example. Historically, when if I go back 20 years, right, right at the start of the internet, which is probably closer to 30 years, what we would see is that the seller always has an advantage in knowledge. The knowledge gap is asymmetrical and it favors the seller, the seller knows more. About all the customers they visited, knows more about the systems deployed, and so on that has more knowledge about the technology and whatnot. And in those days, when you would go to the buyer, you would, you know, you would be welcomed in the room and you would would would share that knowledge. Today, that knowledge has actually become very symmetrical, both buyer and seller. So, for example, if you go today to the doctor and and you you know that you get a diagnose, or in my case, I got the x-ray sent to my home. I already, when I step into the conversation with my doctor, my AI has already analyzed my pictures, and I'm already an educated person while having the conversation with the customer with the doctor. Same thing happens with buyer and seller. And this asymmet asymmetry that existed that has now changed actually favors the buyer because they have Haris: Mm-hmm. Jacco: all the information they have on their own products, services, and systems, which the seller still needs to acquire. And as a result, What it feels like is that the asymmetry has flipped. It is now the buyer who has more knowledge. And many of you experience that where you're on the phone of the of with a buyer as a seller and you don't know what to act, and we don't know how what the role of sellers is in this case, right? So that's that's a major change. Haris: all are now talking about implementing AI how big do you see the opportunity? Jacco: Well the opportunity is fantastic. So for example, if I look at my son who is twenty three and and you know, has just established himself in the workforce, he now at the company is becoming the AI expert. And why? Because he's very you you know used to it, you know, adopting to something new and exciting, right? And so as a result, he he was explaining to me yesterday over over dinner how he's now having meeting with the CEOs and the CXOs, every person in the company wants to know. What Luke is doing with AI and give and letting him give a demonstration. That is a fantastic new opportunity for you know new people that are that are entering new in the world, in into the working world. Second, the change that we're seeing is not that of people or even people powered by AI, that that very popular statement. That's not the case. The the the change that we're seeing is that we're going from a people-led-based approach. To a system-led-based approach. Now, the people-led-based approach is where we use human resources to do something that they have never should have been doing. Like, really, think about SDRs. Is it really the job of a human being to type emails all day long and stuff like that? That's not the need. Communication is like having conversations is. And obviously, an email is part of that. But to exclusively sit in the corner of a of the office and write hundreds of emails a day and trying to set up meetings. There's more to it to sales than just that, right? And that that points to that systems can do a better job in many places places. Now, what we see with the companies like Cursor and what we see with companies like lovable is that when we remove people from the equation, the systems can go a lot faster. Now, if I use the examples lovable and cursor, I can say it's like, okay, those are fantastic, but Jocko. Lovable is more of a consumer pro-user kind of application and Cursor has a tremendous amount of market demand behind it. That you know we don't apply to that. Then I would say look at companies like Harvey, which are more selling a platform-based like solution, and are combining the best of humans and the best of systems-based AI. That I think is where we need to look at. And in this case, AI will really help us in a few things. A connect the inter interfacing between the tools, making sure that information flows through the system the way it was supposed to, and two, augment wherever possible data with real signals and real content and real context and whatnot to make sure that the data that you have is accurate, recent and relevant. Haris: And you mentioned the new players, Loveable Cursor etc. many of them I might describe as AI native because they're not just building an AI product. They started also designing the operations differently from the beginning, like building the systems from scratch. While some of the existing software incubants, they still have to go to some form of a transition because they built over decades heavy on people How difficult or easy do you see to make this switch to also become more AI driven Jacco: Extremely difficult and that is primarily for the reasons why for two reasons. Number one, that data infrastructure is not capable yet. They don't have the same systems infrastructure behind the scenes. And number two, the mentality of the humans that are running the systems are not correct. Those two things are huge bottlenecks we run into every day. Data and human behavior. Haris: how do you see then the role of brand and trust in this new AI driven future. Jacco: Okay, for the short time that we're in, the coolness factor of an AI technology firm will supersede brand. However, that has a limited fuse to burn on. And so as time progresses and as more AI companies fail, brand becomes important and as more and more features become commonplace. So for example, call recording technology. I think that we all know right now how cool it is to record a call. But that in its of itself and extracting information for that call and summarizing it, that is no longer a differentiating factor. Right? And so, like what we now do with that information contextually is important. So you can be the coolest company with the coolest new features on recording a call, but you go like, yeah, that's been done before. Right? Like, and and so you're not looking at that. and so over there, brand is more important. Think of Gong. Gong is a number one brand. Productivity is my AI protected. So you'll see that in that case, brand will supersede the coolness of a feature. Haris: Okay, no, that is a very interesting And do you think that when looking at companies that their brand, existing customer network can protect them against newcomers? Jacco: I think that the the the human relations that we have is gonna be a differentiated but for the for the wrong reason than you think. Many people say human relationships are important because it is of trust and because we know each other. Stuff like that, it doesn't really matter that much because in the end we know that the relationship was built on commercial trust anyway. So you know, like can you trust somebody who you've been on vacation with? For four weeks and you lived in in a tent? Absolutely. Can you trust somebody who you've never met in person but who looks nice and always says the right things on a Zoom call? Probably not. Right? Like, like so, so let's put into context what trust is here. Trust is based on years of delivery and coming through in the moment that it mattered and when the stakes were high, right? Like, and that often is not built. Most companies don't have that level of personal connection. What personal connection is important with is that it creates reach. And what most companies are finding that we are sitting on the brink of three you know significant drop-offs. We see in in parts due to AI, but in parts this was long in the making. and the first one is that SEO no longer steers people to your website. SEO, which now has become AIO, has essentially is now referring to you in the in the search results, but very few people actually click there, go there and and then Perform the call to action that you've created your website for. Doesn't mean that your website is not important. It's important in order to become a supply line to AI systems. Number two, we see that emails, open rates still are fine because many people have now auto email openers that read the email, that click off the cookie and that determine if what value it is, what the summary is, and so on and so forth. So email open rates that are being being proposed, yeah, that that's not. But the click-through rate and the actionability of that and has actually a human being see it is extremely low. Emails no longer have it. And then the third, LinkedIn, with the changes of its social media algorithms over the past couple of months, content itself can no longer be used as bait and generating an inbound. So when these three things fall down, yeah, then we're having a significant problem. And that means that the humans need to hit the road, knock on the door, so to speak, organize events, create communities. in involve their existing customers to generate pipeline rather than depending on automated email systems, SEO algorithms and content provisioning via LinkedIn. Haris: Yeah, I this resonates to a previous chat that I have on Amos from Swan AI and they are trying to build an autonomous business, but he said it's the rise of analog. Like while a business can be automated as much like he's going on a world tour, meeting people, going on events because exactly like you mentioned, like this stuff is going to probably trade in a higher premium. than even before because it's so noisy out there. Everyone is doing the same automation, Everyone tries to automate the LinkedIn content, It's just like so much noise and you need to stick out, of course. Yeah. Jacco: And that's why we launched Growth Journal, the mag the the quarterly growth journal, a ninety-six page doc you know, like a quarterly journal with interviews, research and whatnot, in order for that exact thing. And you can find that on our website. but that and it's a free subscription if you're if ⁓ an ⁓ electronic s subscription. But it's a physical magazine that we essentially here in Silicon Valley we have a paper route on that we you know, like like that with a cover letter is You know, hand delivered to every person in Silicon Valley on the list. Haris: That's amazing. Yeah, I think it's really the rise to analog. And I think many businesses are going through transformations. When I went to your website, you also have like your AI avatar to talk to with. how do you like your professional service company and like how do you do an AI transformation internally in your business? Jacco: Yeah. We have it we have multiple ways of looking at it. Number one, we have are our employees become a familiar with AI. They need to learn what AI is. So we teach our own teams how to use AI in their daily jobs. And whether that is how to get an invoice done or whether that is how to perform a training or whether that is how to do an a a growth analysis, it's all the same thing. How do you use AI in your day-to-day workflow in order to make that beneficial? Now we're on a on a Google suite, so In part we are on what was previously called Vertex, what's now is called what whatever the new is, you like Google Enterprise or something like that. But so we use that and we use Claude a lot for our external facing communications. The same way how we use different tools, Zoom is for example our external tool, where grain is our internal call recording tool, right? Like we have internal and external tools that are exposed to different sets of scrutiny. So that's one. One is how do we deal with it internally? Number two, how do we deliver our training and how do we deliver our program and then deliver in our engagement with our customers, right? And so that is in that is for us super important as well. In other words, our trainers need to say, okay, here's a training on how to do a sales call or how to perform an action, and here's how AI can help you with that, right? So that's the second part. And then the the third part is. How do we modernize our our own products and offerings with AI? So think of that as product. So those are the three things that we do. And our product is modernized, for example, our growth guidance completely runs on AI analysis, in which we determine what the most likely probabilistic scenario is, and then help you plot a course, run scenario analysis, what the effects of it of deploying an extra seller or replacing it with an with an AI seller and so on and so forth. And all these things. are possible by any any organization could develop this if they wanted to. That's not the point. The point is that when an organization like ours focuses on it, we can go much farther and deeper. And so the illusion that we are led to believe with AI is that we can become a lawyer and that we can be a doctor and that we Haris: Yeah. Jacco: can learn all these things. But in reality it shows that it will help you to become more educated But that overall it will not help you. You cannot become a doctor and start an operation. You not you cannot become a world champion swimmer just by listening to on AI what the best stroke in the water should be, right? Eventually that expertise still lies in the hands of of humans. Haris: now with all the AI improvements, are you planning to hire more? And second, what do you see the industry trend of making more with a powering more people with AI or focusing more on hiring? Jacco: I don't think that I think neither is the the the the right approach. I don't think we should focus more on AI or focus more on people or contemplate. I think that we should focus on is building and architecting better systems. And whether those systems have tasks that can perform better by human or AI depends on a business, right? Like I think in some cases people like to have a lot more online and do it themselves and get that. And obviously with the cost lower at that, that is fantastic. but when things go wrong, every human being wants to talk to another human being, right? The moment things go wrong. So dependent on what business you're in. But the number one thing is you gotta build the right systems. And what we see today, and I'll give you example. When you saw Jack, Jack is our agent on our webpage, it's a reflection of me. And I encourage any listener to this to go to our website, winningbydesign.com, and have a conversation with Jack to understand what Jack is possible of and and so on and so forth. In order for Jack to train, Jack is essentially a reflection of me, we learned that an AI system needs a lot more training than than we provide historically provided to sellers or to people on our team. Now, is that truly the case? Is it it why is that? Well, we know that if we don't train Jack correctly, our AI system, that essentially he starts to hallucinate. And that's a problem. Haris: Mm-hmm. Jacco: And then because we check the records frequently, we see when he hallucinates, immediately correct it and and say, Jack, don't do this, but do that. Put a guardrail up or put some alternative path up, right? Well, the thing we learned is we never did that with the human beings. That should have been done with the human beings too. What we assume is that human beings will figure out when they go wrong and solve it themselves. And that is not the case. Human beings don't know where they're wrong because often they think they're right. And so we now come to the conclusion that historically we have actually under-educated most of the humans on the on the team and that we relied on them to figure it out. That is what AI teaches us. And it is not that the AI therefore needs to be having a lot more insights in order to perform. It is that it exposes us that we have never given the humans the proper training here in GTM of Silicon Valley. We just gave them a book, a website, point to go, you'll figure it out. Haris: Yeah. Jacco: That is is is a harsh reality that we didn't deal with today. Haris: Now we have call recorders that can analyze all the calls across all the reps. And then you find patterns. they don't talk about this, And like you mentioned, AI helped because, we need to correct the AI. And now we actually have visability on everyone else who's doing it. Jacco: I want I want to use specific words, and both of us are not native English, so these are two non-native English speakers trying to correct each other. But when you say Haris: Yeah Jacco: AI helped us, I think the better word of saying it is AI revealed the situation. And to me, that this is this is a big aha that I had over the last months is that AI, and and I give an example, again a practical example. Does AI really have Grow faster or did does it reveal how to grow faster? And and to me that that that small change is really important because what to me what it tells, AI has revealed how to grow faster, which is if the humans learn to communicate better, right? And and most companies that we deal with, the main problem is the humans are not communicating in a common language, in a uniform methodology. They are just all over the place. they're not consistent and so on and so forth. And and as a result, the humans are the problem. That's not because AI is doing it better. No, it's because, you know, in this case, humans are doing it worse. AI shows us what a system can do. That level of insight is again very sobering, realizing that that that what we previously joked at, how marketing and sales never talk to each other, is essentially Haris: Mm-hmm. Jacco: the entire problem in a nutshell. Haris: That makes complete sense. Jacco: Can you imagine that your marketing system and your sales system by AI are designed not to talk to each other? And what what the con what what the damage of that would be? Haris: Yeah, that would be insane, but that is the reality of many companies, People, Jacco: Right. Haris: right? So the communication, that's actually interesting, right? Which is in a way a soft skill. So AI at the same time democratizes technology. So looking in the future, right, because somebody who want to do technology, SaaS, more selling, go to market. Should they invoice more in their technology skills or more into their communication and other soft skills? Jacco: They should invest in systems. And what I mean with systems, systems architecture, system design. Look that the we are relatively outdated in GTM world. Haris: Mm-hmm. Jacco: Right? Like and and we need some sooner or later that is going to be fixed. Now obviously winning by design is at the forefront of trying to fix that and helping companies to fix that, but the appetite for that is still really, really low. Where about 20 years ago when we wanted to fix the system, or 15 years ago when we wanted to fix the system, people said, hey, we would just hire a bunch more SDRs and the AE's and that will fix the problem. Today we're still ignoring the system and we say it's like, well, we will invest more in AI tools and AI tools will figure it out. Right? Like until I I saw the other day Eleanor Dorfman from from Anthropic give a fantastic talk about like how they are modernizing their approach using themselves Anthropic. or Claude in order to upgrade their their GTM motion. But I'm going like she's still using an outdated model in the form of a funnel. They're still at that point in time they're counting on users to building their growth and being anthropic you're having a fantastic tailwind right now so you don't have to worry about that. Most companies don't have that. Most companies are having to fight for every proper deal and lead and and they don't have 10,000 leads per hour coming in right like and if you don't have that Yeah, then you need a different system and that system is you're reliant on your customers and your users and your your your companies that you work with over the past decades to help you grow and spread the word. That is a different system than I have ten thousand leads coming in every minute or every hour or every day and I I can process that. Haris: How urgent do you think it's to build the system? Jacco: It's the most urgent thing that a company can do. Everything else pales in comparison. It doesn't matter. Now you have to pay for it, but you know, like and what is that what do I mean with a system? Because people go like, okay, if it's so urgent, what do I need Haris: Yeah. Jacco: to what what do I need to build? Okay, here's what you need to build. If and I'll give you an example. Do you have a real-time data system? And if and and let me show you what that means. If there's a win rate. That is improved in a particular region or discount has been significantly reduced. For example, I'll pick a country. We suddenly realized that our sales in Canada has has increased because our win rate has gone up from 24% to 28%, while a discount dropped from an average 18% to 14%. And that happened over the past 30 days. How long would it take for an organization to digest, learn from that, and apply the best practices elsewhere today? What do you think? Haris: weeks because you probably need to tell somebody to dig into it because nobody does it proactively. Jacco: Okay. The the companies we deal with call hundred million and above. Three months is the norm, while many scuff a little bit and saying it's like, well, two, it could take actually six months if it happens at all. We don't even know if you recognize it. What AI natives do, that this happens in 24 hours. Right? And it doesn't happen because somebody designed it, it just s happens because the system natively is operating like that. I don't want people to think it's like that there's some Super smart GTM expert at an AI native company that knows how to do this. No, that's not how it works. They built a great product, and because of that great product, they have great inbound. And what their system is is really well set up. They are based on a data lake. They are not based on Salesforce with some 20 year olds CRM solution, right? And so Haris: Mm-hmm. Yeah, Jacco: they are natively built on the right solutions, and those solutions allow for faster processing in real time data. So that's one thing. Second thing is you want to create closed loops. Closed loops is super important. And you'll see this today everywhere. I I see all major people have started to talk about it. Obviously, I wrote a book about this very topic three years ago, revenue architecture, with the with the importance of these growth loops. And what these growth loops are doing is they say is like, hey, let's build and learn what we're doing and make it smarter the next time go around. Like a growth loop is a customer creating a word of mouth. We call that an air loop. It goes over the air, but you can still you may recognize it in attribution when you ask an inbound lead, where did you come from? They I spoke to Johnny over at so-and-so and he told me to come your way. That's a growth loop, right? A growth loop is when a customer posts on on LinkedIn or on some social media what great the experiences want. That's a growth loop. A growth loop is when a customer comes and renews. That's a form of a growth loop. Or where a customer buys more consumption and says, like, hey, I had the impact I achieved, I want to buy whatever, 10,000 more coins or whatever the denomination we're looking for. All those are growth loops. Historically, unfortunately, the SaaS industry has relied primarily on acquisition of new clients as their primary idea of growth. Win more new customers, which is an open loop system, which is highly expensive. And is normally only there to suppl to supplot what do you call it? Yeah, supplement that what was lost in retention. But nowadays the the companies are floating entirely to overcome retention retention that has dropped from you know 95-96% to to 75-80%. That drop in retention is so significant that it cannot be supplemented any longer by acquisition. Haris: looking in the future, when I talk to people who building AI native companies, for them, one of the core KPIs that they try to optimize is revenue per employee. So how much revenue can we generate with an employee Do you think existing SaaS companies should also focus on that KPI? Jacco: I honestly, you know, like the the problem that we're running is and and and again it's it's an infrastructure system problem. If the company is focused on creating wealth for its founders, then those metrics, which are often VC/PE rendered metrics, matter. Why? Because they refer to the payout that the company gets, the multiple. And that multiple results in personal wealth for the people who run the company. So in that case Yeah, I'm not gonna argue that that is important. I mean, like if you set the system up that way, that's gonna respond that way. For those companies who are import who are looking at, hey, the outcome of the company is the result of how im how the impact that the customers achieve with what we deliver for what they pay for, impact-based, outcome-based approach. The met that met metric may still work very well for for a venture capitalist. I get that, but it may not work very well for an operational yeah, head of operations who has to run this. And this these two worlds: what is important to a VC metric and what is important to run a business, they over the past 15 years have been closely aligned because they were the same thing: hire more people, increase growth, growth creates a multiple, multiple pays out, you know, people make money. But today, what we're seeing is that at multiple. Is no longer based on just growth rate, it's all also based, you know, like we see that with public companies nowadays, more and more companies are faltering because the market recognizes, you know, that growth comes at a higher cost than than than we're willing to pay for it. And I realize that, you know, the revenue per headcount is a reflection, and why? Because headcount often was seen as the most expensive item on the list. I think Haris that you know very well that in most cases headcount is no longer the most expensive and we now see that and and hear the stories that in many cases we spend more on AI coins than we spend on the human who would have have performed that job, right? And so the the the the price per headcount may no longer be or the dollar revenue per headcount may no longer be an indicator in a place where most of the money is spent under cocks. And tokens that a spend an LLM Provider s Haris: people talk about token maximization, but actually we should be talking about token optimization, not the other way around. Right. And, and it's a very interesting topic where this whole AI pricing will develop at the same time. Every SaaS company has also any AI feature that they try to price with tokens, credit, et cetera. So, That's a big one as well. but slowly coming to an end here when going on the journey to build those systems, like what would be like one to two, three steps to really focus to get it right towards the right direction. Jacco: When in a time of great change, don't focus on what changes, focus on what stays the same. Is a statement that that was reiterated by Jeff Bezos a while ago at the start when he started Amazon. What do we know for sure will not change? Customers will continue to buy products that help them solve the problems. Customers will continue to be willing to pay 10x for that which they provided. So if If if I'm if I'm offering you ten dollars, you'll be more than welcome to pay me one dollars. And I keep pay if I keep giving you ten dollars, you will do that endlessly. Okay? Number number two. Customers, in order to do that reliably, we need the systems in place to do that. You can't do that just on manual, it's very hard to deliver, although manual has an important. So you need to system on that. So that's number two. And number three, in order to do all that relatively, data is the key. So if you put those three things together. They will be the same thing. In other words, customers will continue to buy, build the systems, have the data. Those three things will stay the same. Focus on that, and everything else will turn its way around. We are going to see that how people make money in the forms of acids will go from different KPIs. Nothing is set in stone right now. But those three things are set in stone. Help make customers successful, create a system in order to create it repeatedly, and have the data to make sure that you guide the entire system the right direction. Haris: Of those three things, the third one had the most neglect in the past. And I think that's where many can like learn and have to put the investment and have to put the work on. Build out the data build the data layer because just going to get more and more important because it's the foundation of any LLMs in any app. Jacco: Well, I wanna thank you for having me. I wanna appreciate all the listeners for sticking with us on the podcast for for up to this point. Harris, thank you very much for having me today. Haris: Thank you, Jack, anytime.