The SaaS Podcast

A Data-Driven Approach to SaaS Sales Management – with Pete Kazanjy [278]

A Data-Driven Approach to SaaS Sales Management

Pete Kazanjy is the co-founder of Atrium, a sales management tool that uses data and smart analytics to help sales leaders and managers improve team performance.

He's also the author of Founding Sales, a book on startup sales for founders and other first-time sellers. And he's the founder of Modern Sales Pros, the world's largest sales operations, leadership, and enablement community.

In 2009, Pete co-founded TalentBin, a talent search engine and recruiting CRM, which Monster Worldwide acquired five years later. After the acquisition, Pete led new product sales for over 600 sales reps at Monster.

Although Pete is known as a sales thought leader, author, and speaker, he doesn't come from a sales background. He started in product marketing, became a founder, his startups' first sales rep, and accidentally became an early-stage sales leader.

In this episode, we chat about how Pete learned to sell and how he's applied his product marketing and data-driven mindset to managing sales teams. He explains why dashboards don't help sales managers and what they need instead to improve sales team performance.

I hope you enjoy it.

Transcript

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Omer Khan: [00:00:00] Welcome to another episode of The SaaS Podcast. I'm your host Omer Khan. And this is the show where I interview proven founders and industry experts who share their stories, strategies, and insights to help you build, launch and grow your SaaS business. And this episode I took to Pete Kazanjy, the co-founder of Atrium, a sales management tool that uses data and smart analytics to help sales leaders and managers improve team performance.

[00:00:40] He's also the author of Founding Sales, a book on startup sales for founders and other first-time sellers. And he's the founder of Modern Sales Pros, the world's largest sales, operations leadership. And enablement community with over 15,000 members. In 2009, Pete co-founded TalentBin a talent search engine and recruiting CRM, which Monster Worldwide acquired five years later after the acquisition, Pete led new product sales for over 600 sales reps at Monster.

[00:01:15] Although Pete is known as a sales thought leader, author and speaker, he doesn't come from a sales background. He started in product marketing became a founder, then his startups, first sales rep and accidentally became an early-stage sales leader. In this episode, we chat about how Pete learned to sell and how he's applied his product marketing and data-driven mindset to managing sales teams.

[00:01:43] He explains why dashboards don't help sales managers and what they need instead to improve sales team performance. So I hope you enjoy it. Pete, welcome to the show.

Pete Kazanjy: [00:01:54] Great to be here.

Omer Khan: [00:01:55] Do you have a quote inspires or motivates you or just gets you out of bed that you can share with us?

Pete Kazanjy: [00:02:02] When I saw that I was like, damn it, quote, maybe the title of a book would count here. One of my favorite books is by Bill Walsh and the title of the book. I was the coach of the 49ers is a Stanford football team. And the title of the book is The Score Takes Care of Itself. And what it is. It's a terse encapsulation of this idea that like, when you have big goals, like big monolithic goals that are made up of like, you know lots of precursors, the problem is like, you can't think about like, achieving that goal.

[00:02:30] Like you can't think about winning a game. Literally what you have to do is you have to break things down and just think about what are the precursors and what are the, what are the things that I can actually control do them excellently, right? Do them repeatedly. And with high excellence, And if you do that, the score will take care of itself.

[00:02:47] And so that actually kind of informs a lot about how I think about, you know, company building sales, management, sales, performance management, but also just kind of like life in general, like focusing on the precursors, if you do things right, the score will take care of itself.

Omer Khan: [00:03:01] Yeah. Yeah. It's not just sales, right? It's it's, it's whether you're running the entire company or your life and setting goals and it's beautiful because it is encapsulated in five words. Right?

Pete Kazanjy: [00:03:16] It's good. Fun too. But like, but the title kind of gets you like most of the thesis.

Omer Khan: [00:03:21] It's like, I wish I could come up with stuff like that. When you, when you look back, you're like, Oh yeah, I could have done that.

[00:03:26] All right. So for people who aren't familiar, tell us about Atrium. What does the product do? Who is it for? And what's the main problem you're helping to solve?

Pete Kazanjy: [00:03:35] Yeah. So, so Atrium makes software that helps sales managers, sales leaders, and sales operations folks do what we like to refer to as data-driven team management, essentially bring data and analytics into the tactical day-to-day management of SDRs, AEs, AMs, CSMs and essentially what the software does is it, it instruments the kind of the meat and potatoes, the core KPIs that are important for for SDRs, AEs, AMs, CSMs, it instruments, instruments, those KPIs, and importantly monitors them as well. Kind of the way that like we all would do. If we were trying to like stare at a bunch of graphs, but it turns out that humans are really bad at staring at a bunch of graphs and we don't like to do it. And so computers are really good at that. And so, as a result, if you can have computers paying attention to these, these metrics for you and giving you the answers, managers can spend more of their time coaching and managing and fixing problems, as opposed to trying to like search them, search them out.

Omer Khan: [00:04:31] Great. Before we get into how you came up with the idea or how you and your founders came up with the idea. Let's talk a little bit about your background.

Pete Kazanjy: [00:04:41] Sure.

Omer Khan: [00:04:42] I think that's, that's kind of relevant and important here. So give us a kind of a quick overview of that.

Pete Kazanjy: [00:04:47] Yeah, for sure. So my background is actually a little, little funny, right? Because. Yeah, I'm, well-known in the software industry, the SaaS community, as a, as a sales, you know, sales thought leader, author, speaker, et cetera. But I actually don't have a background in sales. Historically. I started my career in product marketing and product management at a company called VMware way back in the day.

[00:05:10] And so when I, when I started my last software company, TalentBin really had this kind of recognition that, so TalentBin is a recruiting software company. There was a pivot out of a prior company. And so we pivoted from a B2C, the idea to a B2B idea, which essentially was just like LinkedIn recruiter for the entire internet talent search and kind of like lightweight talent marketing automation.

[00:05:32] And so what we will realize is somebody had to sell it or else the company got up business. And given the fact that the company was like six people at the time, it's like my co-founder has worked. Who's let our product efforts and probably like five engineers. He's like, all right, cool. Well, like you're the only one who like your job is to sell this.

[00:05:49] And, and so what I, what I did was I was our first sales rep, our first sales manager and eventually our sales leader. And so through that process really kind of came to derive my philosophy on modern sales management, which then when the company was acquired by Monster Worldwide in, in 2014, I kind of brought to monster where I went from running a 20 person sales organization at TalentBin that I was responsible for new product sales at a thousand person sales organization a Monster. And so for folks who are probably familiar with Monster, or maybe not familiar with Monster, because it eventually got acquired by, by Randstad is kind of a legacy kind of declining prior kind of like [ ], Monster was a very old school sales organization that really struggled with data-driven sales management. And I kind of struggled with their struggles associated with data-driven sales manager, because I was coming from my experience at TalentBin where I was like, I got this whole place tricked out. I got like, everything's instrumented. I know what everyone's doing like that. Like nothing surprises us.

[00:06:52] This is just a factory that we have completely. You know, it completely tricked out and instrumented. And what I kind of came to realize was that the way that we were running the organization at TalentBin then was kind of like in the future, if you will. And that it was very challenging for most organizations to, to, to use data, to manage the day-to-day. And, and that seemed like there was a market opportunity to making that way easier.

Omer Khan: [00:07:15] What was the main reason why you took on sales to start with, I mean, I know somebody needed to go out and sell, but why you, and how did you go about learning? Cause this was like something pretty new to you, right?

Pete Kazanjy: [00:07:32] Yeah, for sure. So probably a, a really big contributor to that was we were a portfolio company of the investors first round capital. Which I'm sure you and probably your audiences is very familiar with. And so first round capital, they have an internal kind of like stack overflow, if you will like a community, your question, the answer community.

[00:07:50] And, and so when we first started trying to figure out like, like how we were going to take this TalentBin thing to market, we had done like our customer development. We had done interviews with like recruiters and so on and so forth in order to figure out like what the pain points were and the kind of like parcel hypotheses around fitting technology in order to solve those. And then, so we're at this kind of juncture. It's like, okay, well now we need to start selling this thing. And like, you know, asking for money for an exchange for the value that it delivers. And so when I, when I started doing that research and there were a couple of things, one was, you know, asked folks like, well, what's the right way of going about this.

[00:08:23] And some, so some other kind of more senior founders in the first round capital portfolio were very helpful there. So like Angus Davis at the time, he's now a general partner at Foundation Capital. He was running observe, or I think it was called Swipely back at the time, Sean Black, who was one of the heads of sales at Trulia way back in the day, he was running a company called Crunch and their recommendation was that it was important to kind of sell initially yourself.

[00:08:48] The other thing too, was that we had a board member, a gentleman named Paul Lee. He's an investor. He was an investor at Light Bank. He now runs a fund called builders.vc, I think is the name of it in Chicago. He's a great guy. And we were having this board meeting where we were talking about like hiring a head of sales.

[00:09:06] And this is a little bit after I had like my initial reps and Paul kind of, and we were talking about where we were going to potentially hire a sales leader from, and we only had two A's at the time. And Paul kinda like took a step back and he's like, why don't you just keep doing this? Because you're doing a good job at it.

[00:09:24] And it seems like a high-risk proposition to like, handoff like change horses in the middle of the river. And we're like, okay. Fair point fair point. Let's let's consider that. And so that's kind of where, where that came from. So I think in short, the notion of a founder having to do this themselves to start kind of like was pointed in the direction of, of some of the existing founders who had, who had previously done it.

[00:09:49] Unfortunately, there wasn't a lot of documentation on it and this is why I ended up writing the book that I wrote on. And then similarly, after kind of initially doing that, selling the notion of at least proving it out more before you then hand it off to a professional. A professional manager was something that like, we kind of converged on in board discussions.

Omer Khan: [00:10:08] So let's talk about Atrium. You launched the business in 2016. Where did the idea come from?

Pete Kazanjy: [00:10:18] It short it came from our experience at Monster. So I had my sales organization and TalentBin was very heavily instrumented. We had eight account executives. We knew what our win rates were. We knew how many customer-facing meetings.

[00:10:30] Our reps should be having weekly, monthly, how many net new demos, what the average selling price was like. We had it all instrumented. It was, it was essentially a factory. And we did that because I had gotten pretty good at like Salesforce reporting and then like, you know, putting those dashboards and meeting invite reminders and essentially just like operationalizing everything.

[00:10:47] And then when we got at Monster. Yeah, we, we really struggled from a scaling up the sales of TalentBin and it was, it was super surprising to us cause we were like, well, we know what our win rates are on qualified opportunities. We know that our AEs run these opportunities. Well, we know like we'd run like 5,000 opportunities prior to the acquisition.

[00:11:07] So like what's changed, what's changed. And so in order to answer that question, we want me to get into the data to kind of figure out what was, what was going on and quickly what we will, I realize was that there just wasn't a sufficient quantity of, of selling activity that was, that was going on. We were selling it the way they were previously been selling it this notion of an acquirer who brings to bear a bunch of existing customers to sell it to you. It wasn't transpiring largely because like the demos weren't happening. And so the reason why I knew this is because I was still running my own shadow CRM. I still running our own instance of Salesforce. You know, I had my own Google sheets.

[00:11:43] We had these overlay request form. So like the Monster sales reps would palm and submit a request for an overlay assistance, whatever. And so literally we just like, okay, there's not enough. There's not enough activity happening. And so when I brought this to the leadership, I was like, look, you know, we just have a deficit of new opportunities here.

[00:12:03] Like the win rates are still fine, the ASP's are still the average selling prices are still fine. There was a lot of defensiveness. On the part of the sales leadership, like what are you talking about? You know, it's happening, it's happening, it's happening. Like the selling is happening. But then when we went and looked in the, in the CRM, like the Monster CRM, You couldn't see anything.

[00:12:20] There was no data. It's like, okay, well there's no like meeting's being recorded in here. There's no opportunities to finger. Oh, well, yeah. They're just not getting logged in there, et cetera, et cetera. So eventually what we did was he broke into the exchange server. We're like we, we got access to the exchange server in order to pull all the meeting data and then ended up kind of massaging in an Excel and so on and so forth.

[00:12:39] And what we, what we ended up finding out was that there was just across the entire sales organization. There was probably about like 60%, but. The level of selling activity happening that was actually that they thought was happening. It's kind of like a big deal, right? Like, yeah. And so we kind of had this like, aha moment.

[00:12:58] We're like, man. Yeah, this is a pretty large organization right here with like a lot of sales reps. And, you know, if I imagine you have a boat that's being road, right. And say you have like 10 people who are rowing the boat. If it turns out that like all 10 people are running at 50% speed, like. For effort, but that's kind of, kind of be a problem.

[00:13:18] And so what we realized is like, okay, well maybe there's an opportunity here. And so what we ended up doing was after we left Monster, we did a bunch of customer development interviews in order to figure out how organizations go about this. And it just, it was the same story again. And again, it's like, Oh yeah, you know, They're to figure out the metrics that we want to track.

[00:13:36] And then we have to get the data into some sort of data warehouse or the CRM. Then we have to build a bunch of reports and dashboards. And then the problem is like, nobody looks at them because it's such a pain in the ass. And like, you know, people are just spending their time, like, you know, working on deals or trying to help their reps.

[00:13:50] And so what ends up happening is like people spend all this time and energy creating visualizations that nobody actually ends up consuming. If you knew people do try to look at them, it's just kind of like a spray of spaghetti across the screen. They're trying to like figure out signal from, from all that noise.

[00:14:08] And so we had this hypothesis that if you could build software that could just essentially do statistical analysis and an anomaly detection on these things in order to say, Hey, you know, watch out this rep right here. Yeah, he's got half as many customer facing meetings as the other reps who are like him.

[00:14:25] That's not, that seems problematic. Like it's not ML, it's not like AI or whatever. It's just statistics, but it's the sort of statistics that an individual manager doesn't do because they're so busy doing other or like, Hey, you know what? Look this SDR right here. His, his opportunity creation is declining over time as compared to his prior performance.

[00:14:45] What's going on there? Right. And then the converse to, Hey, you know, this, this rep right here has a dramatically higher average selling price than everybody else on the team. Even though she works, you know, she's in the same segment as them, she works the same ops. What's the secret to her success? Like maybe we should investigate there because then if we can generalize that to everybody else that we gave to everybody else's average selling price, 25% up.

[00:15:08] Well guess what? Everyone's happy. So that was the initial kind of thesis. And then we kind of spent second half of 2016 and 2017 building an alpha and then really started taking it to market in 2018 and validating that the product was solving his problems.

Omer Khan: [00:15:29] What products does atrium integrate with now, you don't still hacking some exchange, so yeah.

Pete Kazanjy: [00:15:39] Precisely. Yeah. I mean, this is why, unfortunately for good, bad. And it was it's funny cause I was just reading something about like door a door dash just went public and you're reading the initial experiments that they did around. Like they just put up a landing page and like people would order from like with like four PDFs.

[00:15:54] Have a menus, give them an order from them. And then they would like go off to the restaurant and like order it for them and like deliver it. Unfortunately, we didn't have something that it could be like, man, behind the curtain so easily, largely because in order to have good data-driven management success, like you got to know what metrics are important to track.

[00:16:11] It turns out that like the same metrics that apply to this, the AEs over in this organization apply to these AEs in this organization. It's bookings wins, win rate, ASP deal, cycle opportunities, pipeline, new opportunities, new pipeline customer facing there's this there's not a hundred. But there's like a couple dozen that ended up mattering.

[00:16:29] So it's not dissimilar to athletics in that regard. Like it turns out there's a set of KPIs that you can use to describe a basketball player or a baseball player. Right. Like, you know, and maybe the metrics for a point guard are going to be different than the metrics for a, a center, but they're all like these are knowable.

[00:16:44] So that's the first thing. The second thing is that. You gotta be able to capture the data in order to calculate those metrics. And so by virtue of that, as talk, as we discussed in the Monster example, by virtue of the fact that capturing that data oftentimes can be challenging. So you just end up with like no data.

[00:16:59] You're like, well, there's no data. So like let's just throw our hands up in the air. The good news is, is that there's API nowadays. So we integrate with Salesforce for opportunity, data there's APIs there, or calendar and calendar and email well data. The good news is Gmail has, and Google calendar have APIs.

[00:17:17] The same is true with Office 365. And so the way that Atrium works, it takes about 90 seconds to set up. Someone just shows up. They sign in with their CRM right now, Salesforce is the only CRM that we, we support the signing with that. You know, they sign in with Google calendar and what we're able to do within a couple of minutes is just like pull all that data, calculate all these metrics and essentially give them a, a metrics  aren't the sort of metrics harness that normally would take like the sales operations person a couple of weeks to put together. But in our case, we're able to populate it in a matter of minutes because we already know the KPIs that matter the data's being pulled directly from the sources. And then from an ongoing standpoint, the software because computers love to do math.

[00:17:58] Humans, hate math, computers love to do math, the software just continuously monitors those KPIs on behalf of. The on behalf of managers and leaders and sales, operations folks, and essentially just presents to folks like, Hey, there's an issue over here. You should investigate. Hey, this rep is killing it. And here's specifically here's specifically. Why?

Omer Khan: [00:18:18] So when you first build the product, who was your target customer, who are you selling to or who did you want to sell the product to?

Pete Kazanjy: [00:18:26] So I think we had that figure that out initially and, and figure out what job exactly we were we were doing. And what we eventually converged on is the organizations that we are really, really great for is organizations that have they, they have a repeatable sales motion, right?

[00:18:42] Like they're not trying to figure out what their sales motion is. But instead they, they know what they're, they have a repeatable sales motion. They have a hand, they have reps that are repeatedly selling. And now what they need to do is they need to instrument to make sure that those reps are selling successfully.

[00:18:56] And then as they bring new reps on, they need to make sure that those folks are ramping into band and being successful. And so what those organizations, we, we have these internal nomenclature of tier one, tier two, tier three, and tier four .Tier one organizations are those who don't have any sales, operations in place. Usually what that means is that there's less than 10 account executives. Usually those organizations, they're not necessarily an amazing fit for Atrium because oftentimes they actually don't have a repeatable sales motion.

[00:19:25] When an organization actually gets to the point where they're starting to add a sales, operations person. That's used to like tier two that's when they're like, okay, look, it's time for us to start system. Like we know what the. The repeatable sales motion, it looks like we have an idea of how many first meetings our reps should be having a week or month. We know how many opportunities it should be managing.

[00:19:43] We know know we have a sense of what the win rates are. Maybe you haven't calculated them specifically in those situations. That's where Atrium is extremely helpful because they're like, you know what? We could go and build all this stuff. Or we can just like flip on. A switch and have it done for us. And that way we can spend our time managing instead of, instead of building this stuff.

[00:20:03] And then, then the next tier of organization called tier three is where there's like a handful of sales, operations, people in those organizations. That's usually like. You know, 25 to like a hundred, 150 sales reps. Usually in those organizations, there is some dashboarding in place or maybe some BI, but the problem is, is that the non-technical user, so sales managers, SDR managers, they struggled to consume dashboarding and reporting largely just because there's not like, like math is not part of their life necessarily.

[00:20:34] And it's, it's not because like, you know, they're bad people or whatever. It's just that like, You know, day-to-day, you're, you're firefighting with SDRs or with AEs or what have you. And so who's got time to go look at a dashboard populated with like 30 tiles, different reports and what have you. And so what we, what in those organizations Atrium ends up being very helpful because it's essentially like software that has brings the data into the specific management cadence.

[00:21:03] Their weekly meetings, their one-on-ones, their pipeline reviews, et cetera. Whereas if you think about like Tableau or Looker or Salesforce reporting, or what have you, those are more kind of like horizontal reporting and analytics solutions that have kind of been like shoehorned into data-driven management.

[00:21:22] And so the people who are like, they're great for data analysts, and maybe they're great for like, if you have enough sales, operations, people to actually consume that information and then hand the insights, the managers that can be, that can be good, but most organizations don't have that, which is why the, the next stage of organization tier four is we kind of shy away from because usually those are larger organizations that maybe have a pretty robust Tableau infrastructure, Looker infrastructure in place. And then unfortunately, what they've done is they've run into the fact that then they spend all this time and money building this stuff, and then the managers don't consume it. And then they're like, Oh, well, gosh, why are the managers not consuming these dashboards?

[00:22:00] Well, for the reasons why we discussed earlier. All right, well, let's hire a bunch of like 24 year old finance grads and we'll give one of those guys or gals to four or eight managers, like as a shared resource and they'll do the interpretation for them. And so we just do that with software, of course, but trying to engage with an organization has already built out that, like who's already solved it with humans, if you will, is usually a little bit more of a slog. So we're right in those tier two, tier three areas.

Omer Khan: [00:22:29] Got it. Okay. So you have the product ready. You effectively become the first sales rep, sales team, everything in, in the company. What were some of the struggles with trying to sell the product in the early days? And what did you learn from that? How did you change the way that you were selling?

Pete Kazanjy: [00:22:52] Yep. In terms of struggles, I think there was an earlier kind of pre-scaling lesson and kind of challenges and their upcoming post scaling challenges. I think the first thing that we, what we realized was that, that kind of the crux. The job to be done, if you will, of of atrium was really in the interpretation, like, yes, it's a nice value proposition to say like, Hey yeah, just turn this on.

[00:23:16] It takes 90 seconds. You'll have all these KPIs that are pre-baked for you. Like those are really great value propositions for those tier one and tier two organizations that maybe don't have any reporting or dashboarding in place for their rep performance analysis with it's kind of like a one-time value proposition.

[00:23:33] Right. I think what we came to realize is the real struggle was with the sales managers and the SDR managers who are in. You know, they're in the trenches day to day and making it really easy for them to be able to bring data to an analytics, to manage your team. And so what that means is making it simple, interpreting it, not saying like, cause this is essentially the struggle that we call it marriage counseling. When we get into these larger organizations, it's like sales, operations is like, Oh my God, we made all these dashboards. Why don't you guys just consume it? And the sales managers are like, Oh, but like a wall of charts, this isn't helpful to me. Like, who's got time for that. What am I supposed to do?

[00:24:14] Like go through here with a fine tooth comb, like what's going on? And so you get this kind of like frustration. And so what we realized was that really the crux of it was that what you needed was something that was specifically for managers. You know, an SDR manager who used to be an SDR three years ago, or an AE manager who used to be an AE like three years ago, who just needs something that they tells them what's wrong.

[00:24:39] Hey, Bob, Frankie is kicking ass, here's why go get him a high five. Susie looks like she's struggling. The reason why we think Susie is struggling is because her new opportunity I was on a call with a fairly large sales organization this morning, talking to the CRO it's like Atrium is noting that this rep who you think is your top performancer.

[00:25:01] She is the top performer right now from a booking standpoint. In the last three months, she has had no new opportunities coming into our pipe. Everybody else on that team averages five new opportunities a month. She has had no new opportunities coming into our pipe in the last three months. Everything might be fine.

[00:25:16] However, that seems like something that is worthy of investigation and the problem, of course, like we, we hear that and we're like, well, we could just like, go look and find that it's like, no, the problem is, is that in order to go look and find the problem, you actually have to look at all 40 potential problems.

[00:25:33] And validate like that's okay. That's okay. That's okay. That's okay. That's okay. That's okay. Oh, here's the problem. And then do that for every single rep. And of course, as humans, we just don't have the time to do that. So that was like the key insight was that it's for the manager it's for the non-technical user.

[00:25:50] Yes. Tableau and Looker are great for the technical users. They're great for like the data jockeys, et cetera, et cetera. It is not what we like. We don't need a drag racer just to go to the grocery store. We just need to go to the goddamn grocery store. I've seen him in the van. Right. And I want it to have good mileage and I wanted to have company seats.

[00:26:05] That was the first that's like more of a product insight, but it also, it showed up in our go to market because like we had this really amazing, like this thing that people could like manipulate the hell out of. And it was like super easy to set up and like, people could dive deep in the data and managers were just like, eh, this is like, who's got time for that.

[00:26:24] And so that's when we realized, like it has to deliver insights to them so they can be like, Oh man, I need to, I need to intervene with Susie because she's going to be hosed in 90 days. So that was the first thing. The second biggest struggle that we had, and that was like a 2017, 2018 lesson.

Omer Khan: [00:26:38] So that one was the main thing. There was like, don't just give me the data. Just, it just tells me what to do.

Pete Kazanjy: [00:26:46] Yeah. Tell me what to do. I mean, essentially it was just like a product management insight, right? Like we thought we were servicing, you know, the nerds sales, operations land, but it, when it turned out the people who were really unserviced and where the real kind of like market opportunity to pain was, was the unserviced like the sales manager, right?

[00:27:03] The, every sales, operations person, there's going to be, you know, three to six sales managers. And they're the ones who like, who are not being serviced. That was the first thing. The second big error that we had, it's actually kind of funny cause it runs counter to a lot of the, the writing. And the speaking that I do is that, you know, I was doing founder led selling in 2018.

[00:27:24] I had acquired, you know, maybe a dozen customers or so, and, and then beginning of 2019, I hired a hired a new rep. It was great. Got him to success. He was closing deals and in March and April of 2019, and then I got a little greedy and what I did was instead of what I should have done was hired another two reps.

[00:27:45] Brandon prove that actually we did have repeatability of the sales motion. Cause that's actually the crux of what the sales motion, where you're trying to do is like first you're trying to prove that you can repeatedly sell it as a founder. Then you're trying to prove that other people who are not, you.

[00:27:58] Can repeatedly sell it. And then once you've done that, prove that again, that like, okay, can we do this like four or five reps? All right. Maybe now is the time to get a manager in here to take this off of the founder's plate. I tried to like jump up two steps at once on the staircase, if you will. And triptans slammed my face.

[00:28:15] And so was, I ended up hiring a sales manager concurrently with two reps in April, May of 2019. And so essentially what had happened there is, you know, I was trying to hand off the team to a new manager who himself, you know, was not intimate with the sales motion. But then the problem was is that the sales motion itself was not super refined. Like it was repeatable as repeated by me and also by the first rep, but it wasn't like super, super packaged. It wasn't super, super, like we essentially skip that step. So that second cohort of reps would have been the, that like the first rep rep has the alpha test. The second cohort or reps is the beta test.

[00:28:54] Right. And so in the beta tests, you take off more of the bugs and the rough edges and so on and so forth. And, and so what ended up happening was I hired that sales manager. We really kind of struggled the existing rep kind of flat-lined a little bit from a sales standpoint, the new junior reps didn't ramp as quickly, you know, to our credit.

[00:29:13] Atrium indicated to us that there were problems. Hey, like these, yeah. I know it's super meta with these reps are used to have like way higher win rates and you know, it's deteriorating. And so the good news is, is that like, you know, I kind of re-interview mean three months in and it was like, okay, cool.

[00:29:31] I've been too distant on this. And like got back in the weeks again. And what was good about that is that then come you know, September, October, November, December, the new reps, the first rep got back into band. The new reps got into band as well. They ramped back up. And so we were really humming come January and February ended up having to have never happened, but like, that was really the big headfake.

[00:29:54] Was essentially abstract, like abstracting too early, if you will, which is funny. Cause this is one of the things that I, I warned about in my book, founding sales on the book I wrote on Sales for Founders and also in a lot of the speaking that I did, but I, you know, I think that like we made a calculated risk.

[00:30:10] I calculated, we took a bet and ended up not working out, but the good news was is that like, because we knew it was a bet. We were like, we had our eyes on it. Right. And so we only lost like three or four months versus. You know, if we had been like, all right, cool. Like this is the way to going about it.

[00:30:25] And potentially like, you know, wasted six months, nine months, 12 months. So should have, could have been better, but at least we only lost like, you know, three, four, five months.

Omer Khan: [00:30:34] So I'm sure that that's not an uncommon situation that a lot of companies get into. So if somebody is struggling with that right now, where maybe they have hired a couple of salespeople, And are struggling to make that transition or I stood in founder- led sales and want to move over. What are some insights, some advice you could give them to sort of think about how to get there. And I know that, you know, we can't go into a lot of detail and I'm asking you to. Basically give a lot of information, very, very concisely, and we will cover this in more detail. When we, when we do the next interview, we talk about the Founding Sales in the book, but just in terms of giving some people, some food for thought,  what would you say?

Pete Kazanjy: [00:31:22] Yeah, so we talked about this in the book, and then also there's a presentation that I give a lot called founder-led selling and startup sales, maturity stages.

[00:31:32] And I think that the key insight there is that. There are steps, right? It's there are steps in a process. And at each step, there are things that you should be focused on and the things that are you should not be focused on. And if you focus on things that are appropriate for a later step, too early, you prematurely kind of like I did abstracting into a manager you're potentially in for trouble.

[00:31:55] So in your example, there, if you have somebody who's successfully founder selling. And they're struggling to transition that or like to, to prove that somebody else who's not them can repeatedly sell this. Well, the important thing there is like your job at that point is, is actually not selling anymore.

[00:32:15] Your job is actually proving that abstraction for like the engineers are listening. It's like, Oh, well it runs on my machine. It was like, well, too bad. Right? Like you got to figure out why it's not running on somebody else's machine or like, you know what, when you go to push the product, like why does it break?

[00:32:28] They're like, that's literally your job right. There is proving that abstraction. And it's tough because you all obviously want to continue to acquire customers as an individual. And like, you might take a revenue hit there. But the only way that you're going to get to scale is to approve. That you can abstract that out because the way that you scale up a sales organization is abstracting that out too many sales reps.

[00:32:48] So the first step there is proving that that can run on something that's not your local, if you will. And then in the, in the second example, you know, handing it off to somebody else. It's, it's, again, just kind of very much focusing on that. If there's if there's a struggle in handing that off to a, you know, another leader, the question then is like, okay, well, is this sufficiently packaged?

[00:33:10] Right or does it just live in your brain? Does it live in your brain? And it lives in the reps, the brains of the two reps we have? Well, then that's probably going to be pretty challenging. For a manager to come in and understand the sales process, unless you're going to have him run a bunch of opportunities himself, and maybe that takes three months or six months.

[00:33:24] So how do you package the sales motion? Are the slides all there are the processes they're like, do you have a, essentially like a PRD or do you have a Google document or like the different stages? Do you have a lucid chart of like what the decision tree in your sales process is? Oh, if you don't. Okay, well, that would probably make, maybe indicate why somebody would be struggling in ingesting this and then using your recipe, if you will, to then make more of these cakes.

[00:33:53] So those are like two things that kind of popped in mind there, but really the important thing is like, what stage are you at? And like, what are the things that we needed to do at this stage in order for us to get to that, to set us up for success for the next stage?

Omer Khan: [00:34:06] Do you find that that's an easy thing for many founders to be able to do, because I'm sort of just thinking this through that on the one hand, a lot of founders may not necessarily be comfortable with sales in the first place. And it's something that they have to to learn just like you did, but then there's, even if you are really good at sales, there's a certain, you need a different mindset to be able to actually package it up and systemize what you're doing. And do you see that is a struggle for most people or, or is it just more about once they, they can see how to do it? It becomes easier or is it really about mindset as well?

Pete Kazanjy: [00:34:52] My thesis on this is because you can imagine two situations. You can say, look the initial go to market comes after initial customer, you know, customer research, customer development, initial like lightweight customer, like customer development, MVP development.

[00:35:05] So you kind of have to two opportunities there. You can either say, Hey, the business founder is going to go and sell this because you should be extraordinarily intimate with the problem space and why you made the product decisions that you did. Like this feature exists. These, this set of features right here exists because of these pain points right here that we heard from all of these, you know, from all these interviews that we did.

[00:35:25] So you're super, super, super intimate with the problem space and why the product fits fits those problems. But maybe you're not good at sales, right? Like that's the tradeoff there. Or what you could do is you could hire a salesperson who does have selling experience, but is not intimate with the problem space.

[00:35:40] And it's not intimate with why, how the product fits those it's those problems. And so we're really on for those first, like the claim I advanced is that for those first 10, 20, 30 customers, that it is easier and higher. It is a higher probability of success for that person who is super intimate with the problem space.

[00:35:59] And the reason why the product was developed, the way that it was to learn, to grow some sales muscles than it is to try to abstract that expertise into somebody, into somebody else that like that's the initial thing. And then also, if you think about it from a product development standpoint, early on, like the product's not going to totally fit the market and hit the mark.

[00:36:19] And so having somebody if the seller has some product acumen, you're gonna say, Oh yeah, you know what? Like this is, this is bouncing off of these people in a bad, like in a bad way cause it's missing X, Y, Z kind of the thing I was telling you earlier about our key insight we're like, man, this is really not about like, you know, being a better.No geek data tool for sales operations that center it out on as much as we'd like to do that this is really about the managers and so every time we get this in front of managers, they're just like, yeah, there's too much here because it's just tell me the answer. Right? Like that's a product that's. So like that feedback loop essentially like incremental feature collection and like user data collection.

[00:37:00] Or user story collection is something that is going to be better done by the founder. And I think that's the initial time, then the next thing would be okay. Well then is it like super hard in order to learn how to do just MVP selling and the response that is like, no, it's not, it's not rocket science, right?

[00:37:17] I mean, like selling is not easy by any stretch of the imagination, but like, you know, you have to get used to. Rejection, you have to get used to having the same conversation five times a day. It's like, you know, you have to get used to the notion that you're only going to win. And if you're winning 15% or 20% of your opportunities, like that's pretty okay and that means like 80% of the time people are going to be saying no, or just like ghosting you. That's just new, that's a new skill and a new mindset, but it's totally learnable. It's totally learnable. And that's kind of the crux of like my book is that this is something that you can learn now.

[00:37:52] You shouldn't then full-time it go like, all right, cool. Like now I'm a seller and I'm going to be a sales leader for forever because that's actually going to be a gate on your growth of the organization. But at least like having minimum sufficiency selling capacity really is a superpower for founders for the reason why we discussed earlier.

Omer Khan: [00:38:10] So tell, tell us a little bit about the book, anyone who has ever tried to write a book or thought about seriously, thought about writing a book knows that it's not an easy job. It takes a lot of, lot of work. So why did you decide to do that? And who is the book? Really intended for who did you have in mind when you wrote this book?

Pete Kazanjy: [00:38:40] Really the, the audience of the book is, is Pete in 2011. Right? So anybody who's like a founder or a product manager, like future founder, product manager, engineer, designer, consultant. So essentially the people who turn into founders and start companies who don't have experience with sales, it's largely for them.

[00:39:00] And the reason why I wrote it was because I'm a pretty bookish guy when I try to attack a problem. Usually what I like to do is to see what they do like a literature review and understand what the state of the market is or what the state of the art is. And so when I did that in 2011 with TalentBin, what I found was that there was a lot of really great information on, on scaled selling.

[00:39:25] So like, you know, challenger sale and spin selling. And of course, Aaron Ross's Predictable Revenue and what have you, but really what most of those are about is, you know, taking the audience for those folks is usually existing sellers or existing sales management and saying, Hey, here's a better way of, of selling or who's a better way of, of sales management.

[00:39:43] And there really, wasn't kind of like a early-stage sales and early-stage sales management for dummies or early-stage sales management, early-stage sales the missing manual. And I was kind of surprised by that because I was like, gosh, that's weird that this book doesn't exist. But then as I thought more about it, it kind of made sense cause we're in this era of, you know, growing startups, like the explosion of B2B SaaS companies. And so only now, like previously you didn't really have a lot of, you know, 30-year-olds or like late 20 somethings or what have you. Saying like, all right, cool. I'm starting a company. I need to learn how to sell.

[00:40:17] Right. And so it made sense that we were at that moment. And so I was like, all right, well, company had been acquired. I was kind of in the right place at the right time. And I was, I said to myself, well, I'm probably in a good position to, to write this so I should just.

Omer Khan: [00:40:30] And so the book is, I think people go to foundingsales.com to check out the book and it's, it's sold through Holloway. Right? Is that how it works?

Pete Kazanjy: [00:40:42] So the entire book is available online. So you can just go to foundingsales.com. That's actually, I'm a big fan of like using hypertext for content like this, because you can search it and send links around to people, et cetera. So the book is available, foundingsales.com. If you want to read it in a browser, we also have, you can buy the hard copy as well as just links off to a Shopify store there as well.

[00:41:03] And then yeah, if you want to buy a Kindle copy or a, or a PDF Holloway has that as well. But yeah, I mean, it's, it's a great resource since we got the physical books live and in September, it's actually kind of funny cause like the digital book had been around for a while, but people, people, they love themselves, some paperbacks.

[00:41:22] So the, we've seen some really great feedback. I hadn't really thought about the fact that product managers and engineers would be so into it, but I have a, some kind of clever stuff set up when we get a new order, it hits Clearbit to enrich the email address and kind of see what their title is and you know, their company and so on and so forth.

[00:41:41] And I thought it was the primarily going to be founders when the senior, like a ton of like product managers and engineers and designers find the book, which in retrospect makes a lot of sense. It's like, Oh yeah, these are people who are going to start their own company. So it makes sense. Or they're having to sell internally, et cetera. So I'm really happy with the reception we've seen so far.

Omer Khan: [00:41:58] Yeah. And, and I think, I mean, what I loved about when I came across the book was that it is how I would think about modern sales. I don't know. I don't know how I would define that, but to me coming from a product and a technical background, there's something about it that, that clicks and, you know, I think maybe that's why you're also seeing, you know, more product managers and people like that, sort of connecting with them.

Pete Kazanjy: [00:42:27] Sure. Yeah, for sure. I mean, it's like the docs, right? Like, you know, it's like, You know, RTFM go read the docs. RTFM sound like, all right. Cool. Well, like here's, here's the manual. Let's let's let's read it.

Omer Khan: [00:42:40] Yeah. Good. And we're going to, we're going to go into that and, and, and do a deep dive, but for now let's wrap up and I'm going to go into the lightning round.

[00:42:50] So I've got seven quick fire questions for you. Are you ready to go do it? All right. What's the best piece of business advice you've ever received?

Pete Kazanjy: [00:43:00] As relates to startups? I think the the Steve Blank, Eric Ries insight of, you know, startups are not small, big companies, but instead that they are focused on detecting a problem in the market and fitting the solution to that.

[00:43:15] And like, without that, you don't become a big company. I think that's a, that's one of the most impactful things, most impactful insights. When I think about early-stage companies.

Omer Khan: [00:43:26] What book would you recommend to our audience and why?

Pete Kazanjy: [00:43:29] Well, aside from founding sales, one of my favorite books, so I already talked about Bill Walsh is The Score Takes Care of Itself.  Another book I really like is, is called The Goal. It's an operations research and kind of like Toyota lean manufacturing book that was written in the late eighties, early nineties, and it's written as a novel, but it's really about just like process optimization and essentially it, it encapsulates the revolution that happened in, in manufacturing, lean manufacturing, which then eventually made its way into in startups in the form of lean startup, it's really entertaining because it's written as a novel.

Omer Khan: [00:44:04] What's one attribute or characteristic in your mind of a successful founder?

Pete Kazanjy: [00:44:08] I'm sure this is the thing that everybody says, but I think grit is the most important thing, because it just turns out that things take like way, way, way longer than, than you think.

[00:44:18] And you just have to get really good at. All right. Well, here's another unpleasant thing that I have to go into, whether it's like selling or, you know, data cleaning or, or what have you. So I guess I'm just going to get to it

Omer Khan: [00:44:30] And even more grit if you're the guy who's doing the selling and hearing no every day as well. Right?

Pete Kazanjy: [00:44:34] And that's yeah, for sure.

Omer Khan: [00:44:37] What's one of your favorite personal productivity tools or habits?

Pete Kazanjy: [00:44:40] I'm a big fan of just really great calendar management. I know the calendar is not like a whizzy productivity tool. But one of the things that I tell my sales reps all the time is that calendar is destiny.

[00:44:51] So you don't make space on the calendar to like do tasks for instance, or if you don't, you know, if you have your sales sales meetings and you're back-to-back on them, but you don't have, you don't block sufficient time after a sales meeting to execute your follow-up and your, you know, your action items and you don't block sufficient time ahead of a sales meeting or prepare in order to really execute the hell out of that sales meeting, you're going to have problems. So Just getting really good at calendar management. And it is, I think you know, a productivity superpower.

Omer Khan: [00:45:20] What's the new, crazy business idea you'd love to pursue if you had the extra time?

Pete Kazanjy: [00:45:26] As if I have extra time, you know, one of the things that my co-founder and I were toying around with like way back in the day after we started. So after this conference we went to, with TalentBin to HR tech, HR tech conference. We have this huge backlog of email and we need it. It was in Las Vegas and we needed a place to go work on email while, and we wanted to watch football at the same time. So we went to Buffalo Wild Wings. It was the first time we'd ever gone to Buffalo Wild Wings. Like his place is amazing. Oh my God. Right. I mean maybe a little like a little chintzy, like maybe a little like day class day or, or what have you, you know, and, but, but like so great. You know, strong wifi, good power access. And then of course, like lots of football and, and lots of when we were like, man, what would this look like as like, what would the upmarket version of this be?

[00:46:15] What would like the Tesla version of this be as opposed to the, you know, the peruse. So who knows maybe after Atrium goes public I'll I'll, I'll go back and I'll work on a, you know, an upmarket version of Buffalo Wild Wings.

Omer Khan: [00:46:29] There you go. What's an interesting little fun fact about you that most people don't know?

Pete Kazanjy: [00:46:33] I think the thing that people probably don't know is that I don't have a background in sales and You know, before, before eight years ago or nine years ago, when I started doing it through TalentBin because most people come to sales through, they graduate from college. So they become an SDR, then become an ag and then become a sales manager, sales leader, et cetera, et cetera.

[00:46:54] And so this notion of somebody who is a product marketer or product manager now is you know, a sales, operations and leadership expert and thought leader is kind of like, huh. Interesting.

Omer Khan: [00:47:04] What's one of your most important passions outside of your work?

Pete Kazanjy: [00:47:07] I would say, especially with the, the, the pandemic, I think I have a three-year-old son and it's just been really amazing to be able to spend more time with him as a result of working from home.

[00:47:19] And so I think that that's on our Monday morning sales team is we always talk about, you know, what are the great things that you were able to do this weekend to, to recharge. And I'm kinda like a broken record cause it just talk about going to the park or which park we went to or, or, or what have you. So I would, I would say that.

Omer Khan: [00:47:36] Awesome. Pete, thank you for joining me and sharing the story of Atrium and some of the. The lessons you've learned along the way as you've gone through this transformation, into the world of sales. Yeah. If people want to find out more about Atrium, they can go to atriumhq.com.

[00:47:56] And if they want to check out the book, go to foundingsales.com. If folks want to get in touch with you, what's the best way for them to do that.

Pete Kazanjy: [00:48:03] Let's just find me on, find me on LinkedIn. Find me on Twitter. I'm the only @petekazanjy. In the world as far as I can tell.

Omer Khan: [00:48:11] Okay. Well, we'll include links to those in the show notes, just in case there's another Pete Kazanjy out there.

Pete Kazanjy: [00:48:17] Yeah.

Omer Khan: [00:48:17] All right. Cool. Thank you. It's been a pleasure and we'll be chatting soon and I'm doing a deep dive into the book.

Pete Kazanjy: [00:48:24] Wonderful.

Omer Khan: [00:48:25] Awesome. Take care. All the best!

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The Show Notes