Scale with Strive Podcast
Welcome to the Scale with Strive podcast - the place where you come to listen to some of the worlds most influential leaders in the SaaS industry!
Scale with Strive Podcast
'The Four Pillars of SaaS Growth' with Mark Stephenson
Welcome to the Scale with Strive podcast, the place where you come to listen to some of the world’s most influential leaders of the SaaS industry. 🚀
Our host is John Hitchen and on today’s episode, we are excited to welcome Mark Stephenson, Fractional CRO, Advisor and GTM Coach!
Mark brings over 30 years of experience in Solution Sales and Go-To-Market Leadership, having worked with high growth venture-backed SaaS companies like Evisort and AVI Networks, as well as large organizations such as HP and Cisco. He's built a reputation for consistently delivering outstanding results, surpassing quota in 24 out of 27 years.
Today, we focus in on SaaS Growth, and the four pronged growth approach that Mark believes is essential here: Ideal Customer Profile (ICP), Talent, Collaboration and Sales Process.
Some of our key takeaways from the conversation were:
💡 What defines an ideal customer profile in today's market?
💡 Strategies for identifying and attracting top talent in competitive markets
💡 Best practices for improving cross-functional collaboration between sales, marketing, and product team
💡Metrics and KPIs to measure the success of a sales process
Let’s Dive in!
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Connect with Mark here - https://www.linkedin.com/in/markstephenson-consultant/
Connect with John here - https://www.linkedin.com/in/johnhitchen/
Learn more about Strive here - https://scalewithstrive.com/
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Chapters
00:00 Introduction to Mark Stephenson
02:56 Understanding the Ideal Customer Profile
05:51 Talent Acquisition and Sales Debt
09:59 Collaboration in SaaS Organizations
16:45 Sales Process Design and Implementation
Welcome to the Scale with Strive podcast, the place where you come to listen to some of the world's most influential leaders of the SaaS industry. Welcome to another episode of the Scale with Strive podcast. I'm your host, john Hitchin, and today we've got an exceptional guest with us, mark Stevenson. Stevenson Mark brings over 30 years of experience in solution sales and go-to-market leadership, having worked with high-growth venture-backed SaaS companies like Evisor and Avi Networks, as well as large organizations such as HP and Cisco. Mark's career started in sales at Xerox and he's since built a reputation for consistently delivering outstanding results. A reputation for consistently delivering outstanding results, surpassing quota in 24 out 27 years. He's developed a proven four-pronged growth approach that helps businesses scale and succeed, with a focus on building cohesive, high-performing teams. Known for his creativity and high-energy leadership, mark has both experienced direct and indirect sales, as well as marketing and customer success organizations. He's passionate about aligning go-to-market strategies with business objectives, hiring top tier talent and building scalable customer engagement processes. Mark, it's great to have you on board today. How are you? Oh geez, john.
Speaker 2:I'm blushing. What an intro.
Speaker 1:Thanks, great to join you from San Francisco here today. Great, great to have you on board. So look, you know I'd give you a go at an introduction there. But do you want to give us a little whistle-stop tour about you for the viewers?
Speaker 2:Ah, you did a great job, but I just say it's a third of a third of a third of a third very large corporations, as you said Cisco back in the day, when they were acquiring a company once a quarter at least, and so from that calling on high-tech accounts in the backyard of Cisco, like Apple when it had the original orange carpet pre-iPhone, and all the way to Xilinx and Google and the hyperscalers in between, it was a great time and a great time for me to understand how to bring technologies to enterprises.
Speaker 2:But I always felt like the next third of my career was really early stage because, candidly, when you're working at a large company like Cisco with 65% gross margin and about that in market share, you pretty much ought to win every time and I felt like I was presiding over somebody else's best practices. And so the second third of my career is really early stage. Like you said, AI for contracts with Evisort and different tech domains. But it's what black marks you put on white paper in an early stage firm that makes it run, which was super great. Early stage firm that makes it run, which was super great. And then the last third I've been about 24 months working with technical founders with about a handful of VCs, who will bring me in CEOs who are having thoughts about their go-to-market and really help them with my playbook that I developed as an operator to really help them think about how to optimize their go-to-market and don't create sales debt that you don't need Nice.
Speaker 1:I like it, I like it. Well, today's going to be really interesting then. So we're going to focus on those four pillars that you work with technical founders and CEOs on when you know, doing some fractional advisory board business work with them. So, first pillar ideal customer profile. So, first pillar ideal customer profile.
Speaker 2:I guess from your stance, where do you start when talking to founders about this subject? Yeah, I mean everybody's. Oh gee, icp, what a shocker. Everybody gets that as a super important concept but I think few really operationalize it deeply and at its basic level in an early stage business. My frame of reference is early stage firm. The bias is to fail and you have to do extraordinary things every day and be very efficient to break that bias and get your flywheel going and escape velocity. And so everybody being on a true north focus about what customers you want to go after is super critical for the whole company.
Speaker 2:And at its basic point, an ICP should have three things. Three things Number one the customer you're going after, going after you're trying to serve, has the most pain or need for what your solution provides, the use case, super critical. Number two is in the initial sale. You don't sell a hundred percent of your total addressable market. You don't sell 100% of your total addressable market. Ie there's expansion sales beyond the first sale and SaaS is so great about that right. And then, third, you can get predictability about the business by serving that customer base gross margin, but also the timing of deals, the average order size. You need to be able to model a business out of a customer segment you're going to go after. So those three things are the basics that we think about when we figure out that ICP.
Speaker 1:And when you work with technical founders or come in, I guess, how do you work with them? They'll probably come to you with some form of ICP and I can imagine you're going to challenge them in some way and say, why is that the ICP? And make them realize what it might be. So what does that discovery stage look like to you?
Speaker 2:Yeah, it's super fun. I have kind of a workout process that I work with the CEO. It's you know what's the vision, the true north that you're going to go after. What's the mission, which is what's our operating plan. What have you signed up with? A board do you got to go deliver? And new logos, expansion, sales they are our growth, etc. And then what's your strategy? Um, that's less than five things you're going to go do to capture the market and suck the marrow out of the opportunity. And then what's your structure? A lot of people muddle that around. That's the order of operations is super critical. And then, with that structure that you're going to go after, hey, is it a slg motion, plg motion or both? What's the talent you need, key processes, leading, lagging metrics. Anyway, I have this workout framework that I do with them and really the idea is to challenge what's the opportunity in the business? Like, for example, you could have founders that say I want to go after enterprise. Okay, strap on your seatbelt. Those are the long sales cycles.
Speaker 2:I like to take out a triangle and start segmenting the demographics of the opportunities. Is it global enterprise or enterprise, or high-end, mid-market or mid-market, or commercial or SMB that you want to go after, let's chart. You know, if you've got N equal 40, you've got 40 customers, you can start charting. Okay, what was the average order size? What was the sales cycle time? You know I love going after global enterprises or big deals, but the other side of that coin is mid-market, where the average order sizes could be, you know, real good, but shorter sales cycle. So doing that segmentation is really key. Three ways you want to cut the ICP, though, is the demographics, like I said, key.
Speaker 2:Three ways you want to cut the ICP, though, is the demographics, like I said. Also, I think, especially with open source projects, the attraction could be well, I got customers all over the world, okay, great, but you could probably drive by five customers on the way to the airport to get on a 10-hour flight. I love to stay focused, so pick a geography. If you're in North America, good God. Resist the urge to have a global tan, because it just drives I mean global go-to-market, because it drives complexity needlessly. So the demographics. Next, the technographics. Hey, when a customer buys your solution, what else do they buy? You can use those technographics as a marker for your ideal customer profile persona within that, and you put all three of those together and you try to score that and you try to. Then Clay is a great solution right now to where you can really see your ICP in the data and start triangulating a really tight ICP to go after.
Speaker 2:So those are some pragmatic elements in the ICP.
Speaker 1:I love the exercise of it and the fact that you're not coming in working with founders. Right, let's make your icp work. You've got a challenge in you and you're testing them to see why it works. And then you know, you kind of mentioned there, I think, the geography really stuck out to me. You know, you know in our field we have an icp in recruitment, but 90 of my clients are in the icp and you know there's 10 as salesperson. You just can't say no to right. Business is business, but it's good to be super structured because I imagine that falls into the messaging and maybe even the mission statement and everything else which comes around it. So really important for individuals to think about the ICP.
Speaker 2:Well, I'd say even further, further. It's just a, it's a super cheat, because if you, if you can get the whole company around a true north of what customer you're serving, you know I guess we're. You know we're talking about go to market, okay great. But think about product and if I'm really talking to my icp all the time, then the rfe's request for feature enhancements are market and, uh, it really becomes efficient. About how you market product cost, uh, sales and customer success. Right, I mean customer success really gets advantaged by having customers that they onboard who really need what you have. Back to to that first point of ICP Go vector on who has the deepest use case for what you're selling.
Speaker 1:Yeah, I completely agree and I could dive into this all day. The ICP is so layered as well and it maps out. But I guess thinking about your second pillar, because this will reflect the type of people you recruit to manage the ICP sales. So talent, super important for you, right? This is the second part of your pillar. So what's the importance of a talent acquisition in scaling a business at the earliest age?
Speaker 2:Yeah, this is where you know, I started in my advisory with Series C companies even some E's and I was like gosh. I got here too late in a lot of cases to avoid sales debt and I'm clearing sales debt. When I get in, I do a talent assessment. Okay, half these people shouldn't be here.
Speaker 1:And just for everybody, just help us understand what you mean by sales debt.
Speaker 2:Just inefficiencies. Just like you have tech debt, right, I think it applies in sales debt and I have kind of an operational factory mindset around things. I want efficiencies, I want to find the bottlenecks in your go-to-market and I want to have the most efficient go-to-market. And when reps aren't making quota, when you're burning headcount, those are all. You know that's sales debt and you know it's your biggest expense is the talent that you have in the organization and putting them productively to work in your factory is super critical, right. So having that operational mindset is very important.
Speaker 2:The big thing I see is see technical founders typically go with what they know and they will really evaluate, go to market talent, marketing, sales, customer success, sdrs on how well they know the tech domain. Because they don't know how to evaluate the functional domain, functional being marketing expertise or sales expertise or customer success expertise. And I think you need a modicum of the tech domain. But over multiple engagements now, 14 different engagements across many domains I can tell you with absolute fact in go-to-market, functional expertise trumps tech domain and what I do is make sure they have a minimum of tech domain and I can tell you how we do that. But it's the functional experience. There is sales experience.
Speaker 2:If we're talking about AEs or sales leaders, do they's the functional experience? There is sales experience. If we're talking about AEs or sales leaders, do they know the journey that you're in right now? Yeah, that is the biggest mistake I see, and I usually get involved when the CEO becomes consciously incompetent. They've made the mistake and they realize okay, I don't know what, I don't know, I need to get expertise here. Those are the good ones. Those are the CEOs who are really savvy and looking for continuous improvement, versus still filled with some hubris.
Speaker 1:Yeah.
Speaker 2:I get you.
Speaker 1:I'm working with a founder at the moment of an early stage cyber vendor and he has no previous experience in cyber, but his approach and energy to things is so business focused that he's focusing on the business elements and not just you. So let's just dig into that a little bit. We call these functional expertise, but they're also like the characteristics of a person, right. So what are things you look for in bringing in go-to-market look?
Speaker 2:Yeah, well, let's focus on the sales rep. Okay, so three things it seems to be always three, right, but let's put a Venn diagram up on the board here. So you have functional experience, which would be sales. You have tech domain and then you have customer experience those three. You're a sub-5 million ARR company. You want to hire a sales rep who's been in a sub-5 million dollar company. They were the first, second or third to open a region. As an example.
Speaker 2:You want to look at their resume and see not a lot of words but a lot of numbers. I'm shocked at how few sales reps have. This was my quota. Here's what I attained. Here's what the key deals that I did in that time period to do it. And if you're a technical CEO and you're listening to this, run it by the numbers. If they don't have that clearly in their resume, it's a yellow flag.
Speaker 2:But check and ask them. I want to go through the last four years. Tell me each year and what you attained. That type of prior performance is a super good indicator of future performance. Is it a similar average order size? Is it a similar sales cycle timeframe? These are really good metrics that you can figure out and a big one for an early stage firm is how does he get pipeline? Ask them.
Speaker 2:I want an equation with four numbers. Number one how much of your pipeline was marketing sourced? Second, how much of your pipeline was SDR sourced or BDR sourced? Third, how much of your pipeline was AE source and how much was channel source? If you've got somebody in your early stage under 10 million in ARR, they better not answer channel or marketing. They better answer I build my own pipeline and anything that I get from a BDR and I work well with a BDR, it's the pod that matters. That's the answer you want. So that sales experience have you hit quota? How do you build pipeline? Run it by the numbers and you got a really good indication.
Speaker 2:This is somebody I want to talk to, the tech domain. What I typically do is have a CTO or an SE group somebody develop a technical interview question. So that second interview, after the first interview where you're sussing out their functional experience, would be a technical interview and it's two part. One is you share the technical value prop of the company. Get them excited about that. And the second part of that interview is to ask them some strategic questions and score them on their tech domain experience, so you can relate one candidate versus the next. And then third is customer experience. Back to where they've been selling. What customer have they sold to? Rolodexes? Everybody should look that word up. Don't necessarily translate from one company to the next, but if you sold to Citibank and Citibank is one of the accounts you want to go after, by the way, that's a nightmare to go call on, but then that's a good indication that they'll be off and running pretty quickly to your ITP.
Speaker 1:I love it. Functional over technical. You kind of touched in there around sales, marketing and customer success, which brings me on to your third pillar, collaboration. Super, super important in the modern day SaaS org. So talk to us all about the role of collaboration fostering innovation and growth within SaaS.
Speaker 2:Yeah, sure, hey. Just one more point on talent, because I can't get past it. It's just so important and it just so happens. That's your business, right, but the hacks on this and I got a lot of gray hair made a lot of mistakes. These are the hacks for hiring talent.
Speaker 2:Number one is the tight spec. Get the recruiter, or your own internal recruiter or yourself, an objective mark to hit. We've talked about the Venn diagram, but really get granular about what this person looks like before you meet them. Number one the spec. Really get granular about what this person looks like before you meet them. Number one this back.
Speaker 2:Number two is have a really tight two-week interview process, no more than five people. I don't want to have all the reps freaking. Interview the person You're not rushing a fraternity for crying out loud. And third, have a challenge in that interview A 30, 60, 90. Give them a prompt of your facts about your business. So it's not an academic exercise, but I want to see a rep's 30, 60, 90 day plan or a sales leader's 30, 60, 90 day plan.
Speaker 2:Can they put black marks on white paper? That's relevant. Do you have confidence that they'd make best use of the first 90 days? Yeah, and then the last hack is to avoid false positives, meaning I hired somebody, they got past my defenses. That I really shouldn't have is I have a five-week onboarding program where there's some stand and deliver elements and I've fired people that couldn't deliver the first call deck as an example. That means they can't become conversationally fluent about the value prop in the first five weeks. It ain't going to be good. So it's a way to make sure if you make mistakes it's an imperfect science you catch them quick. Those are big hacks, and I could go a lot deeper on that. It's uh, I have actually written uh, kind of some some missives on this point. Uh, because it's so critical to get the right people on the bus in your, in your company anyway, so yeah, definitely.
Speaker 1:I mean from a recruitment point of view. There the thing that stands out to me is two weeks for a process. Time is your best friend as a hiring manager. It's your advantage because you know some of these organizations and I bet the bigger ones are even worse. It could be weeks and in some cases months. So having a two week process gives you real competitive advantage in the market. But, um, as I say, I can talk about these individual subjects all day, but I want to make sure our viewers understand your pillars, and we have some collaboration, yeah, collaboration.
Speaker 2:And it's another thing that sounds trite. Oh yeah, sure, I want everybody working together, but it starts at the top. Do you have? And I never got this?
Speaker 2:Early days in my career, I worked for great companies and I took culture for granted until I worked. You take culture for granted until you work for a company that's got a shit culture and then you don't ever again. But is there an emotional pull to the vision of the company? Do you break it down into a mission with BHAGs? Big, hairy, audacious goals that are credible? And then this is the super critical piece Can you then cascade those OKRs into a way that belies interdependency? That's how you get collaboration going.
Speaker 2:So for marketing, by the way, I wouldn't hire a marketing person that they want their number one objective being MQLs. I want to hire a marketing person that their number one objective is pipeline. That closes. So you see the difference there. So, pdr, I wouldn't give them a comp plan that's just on meetings. No, it's meetings and pipeline. Well, wait a minute, I'm not qualifying that meeting as pipeline. Well, wait a minute, I'm not. I'm not. I'm not qualifying that meeting as pipeline. The rep is yeah, isn't that great. You have an interdependency with the rep. The rep I want, I want them to have an interdependency for really knowing what the use case is and handing that off to customer success so that customer can be wildly successful in in the onboarding. Uh, so every the ceo and the executive team needs to cascade cross-functional metrics all the way through the organization. That stitches the leading and lagging metrics of the company together. That's how you you get this flywheel going and everybody's going down the same direction.
Speaker 1:I love it and I think the obvious thing here that maybe founders or VCs who are involved in a company want to know is how do you come into a business and overcome the challenges? Because what you said there is a brilliant start to a business. If I was a founder and I was at zero revenue and I was building, I'd build with the vision of head. But what about the founders who are a few million ARR? They've built out the org and maybe there isn't the North Star and it's not dripped down. What's the challenges and tactics there?
Speaker 2:Well, it's just classic gap analysis. I mean, you never Look, I never get into a situation that's all perfect or I wouldn't be there. So all these things are in various degrees of completeness, and there's a good Japanese word called kaizen, or continuous improvement. Everything needs to be completely tweaked all the time, with the market forces you have and everything else. But if you've got that mindset ahead of time, you can really drill in all those things and cement the interdepartmental teamwork in your OKRs, in your compensation plans. Everything is developed around that.
Speaker 2:I'll give you another hack. This one I didn't come up with, but I stole it like crazy. It's called Value One, and Looker did this. And what Value One is? What's the first value that a customer would get that would make them want to underwrite buying your solution? So is it? You know, the classic three would be hey, by buying your solution, I can get access to more a dollar of revenue, or take a dollar of cost out, or mitigate risk, or all three.
Speaker 2:So that's the M in MedPick, by the way, and it's the I. What's the metric of improvement? What's the implications of that pain? What's the P? And it's the I? What's the metric of improvement? What's the implications of that pain. What's the P, the pain? All those work together in MedPick but it all comes together with value one. It's like what's the first value that a customer will get? That's that land or initial use case that you want to be really good at.
Speaker 2:So sales reps need to do discovery to figure out value one. They need to sell the value one, they need to do POCs or POVs to value one and they need to tell customer success what value one is. So it's a great customer baton that you can hand off through the organizations and customer success. Here's a big hack. Everybody will say I'm done in customer success when the customer is onboarded. And yet why do you have cancels? Technically, onboarding is table stakes. You want to make sure that the customer had value one before you try to get value in and try to sell more to the customer. And once you understand those business impacts then you feed that to marketing and marketing should be marketing to value one Right.
Speaker 1:Back to your.
Speaker 2:ICP? Right, because what was the thing I said about ICP Number one thing is to find customers that need you the most, and if you quantify that business value through value one, you can expert your ICP as well. It's a systems way of thinking about it.
Speaker 1:I love it, mark. I love it. I think very logical and I think very, almost very needed, but not overcomplicating it. Value one the initial value we can offer without going into everything else, I think is really important to keep at the forefront. So I guess, with value one, that neatly puts me into your last pillar around sales process. So sale process is a huge topic. I can imagine you do a lot of work here with founders, so designing an effective sales process tailored to the ICP. Who has the pain? Where do you start?
Speaker 2:Yeah, a little bit of commentary. I think in the last 10 years it's been this kind of acid crazed. Everybody would buy anything kind of timeframe. Those days are kind of over and I would argue that was a unique time. If you look at reps, I don't think they really had to follow a sales process in the last 10 years. Everybody's over their number. I mean, even a turkey can fly in a tornado.
Speaker 2:Now, all of a sudden, sales process is more, more important. It's because people aren't just buying willy-nilly, right, they, they. I think it's useful to build a sales process where you think there's a caustic, green visored finance person on the other side of your sales order agreement looking at this and saying why the hell would I buy this? So that's something I do in my engagement. I hate doing advisory as a fractional CRO. I like being there one or two days a week to really ground these changes into action. And so what we'll do is we'll interview the best reps or interview the CEO, the founders, and we'll understand what's that sales cycle. Every sales cycle known to man has interest, development and commitment. With a couple of. You know you've qualified discovery, break down those milestones, get what are the best practices in each stage, what's the customer verifiable outcomes, that you know where you are in those stages and then what's the SLA about how long each, how long a prospect should be in those stages. And you can instrument through HubSpot or Salesforce. Then a real great way to get telemetry on your forecast where you are in the business and do it in a way that's got good ergometrics for the rep so it's not burdensome. You're not asking all these freaking Dilbert questions. You're asking the right questions at the right time. Bant for meeting qualification You're not going to do med pick in a meeting. Do they have the need? Am I talking to somebody who's probably accountable? Program in BANT for qualification between the BDR and the AE for something being on pipe. Then program MedPick into it with your best practices. Constantly refine that you know that value one piece all the way through. So that gets done and instrumented into Salesforce Such a wonderful renaissance right now and RevOps tools you can use and AI tools and everything else.
Speaker 2:So instrument that process, kind of staple yourself to a suspect or a prospect. What's that flow with marketing? What's that the lead flow then to the sales process and what's the work process from sales to customer success. So engineer that workflow, have the right technology in play. It's all stuff we do, I'll tell you. The other good hack though I think this is a good visual is try to instrument a four-call close. Oh Mark, what are you selling typewriters? Yeah, in 1988, I was selling typewriters. But if you don't have a simple sales cycle, if you don't engineer it to be simple, it sure won't be.
Speaker 2:So your first call should be you should have a first call deck. Who am I? What problems have I solved? It really answers the three whys why do anything? Why do it with your company and why do it now? So that first call deck, that's one of the things I look at before I even start with a company. I have a reading list that I ask for Let me have your first call deck. That tells you a lot.
Speaker 2:Second call deck is two slides what's the customer's current state and the problems they have with that current state?
Speaker 2:Hey, and if they were going to fix it, what's the desired state? That's the second call deck about the problems they're having today versus what you want to achieve. The third call deck is how you construct a POC or a POV. What are the critical versus nice to have requirements? What's the governance about it and that I will have an executive presentation at the end of this POC with the economic buyer to do a readout of how the solution met those requirements. And then the fourth call deck is the proposal. And if you put all four of those call decks together and you had to sue in a higher court for dollars for your solution, it would represent you well. And so we engineer a sales cycle with those four kind of call decks in mind customer facing artifacts that you can use and anchor for the decision all the way through. So sales cycle is super critical. That can be tailored. It doesn't matter the freaking tech domain, all that can still apply and you really give reps and the company what they need to drive great customer outcomes and great customer conversations.
Speaker 1:Mark, I think, speaking to you there, I mean you went into hyper growth with just the excitement and passion behind you. It was radiating experience and having the simplicity of it, but also the confidence before getting technical and what everyone tries to jump into straight away, was great. I could chat to you about this all day and go into metrics and defining the process. Love it. But look, it's been great to speak with you today.
Speaker 1:If I had to sort of summarize a few key points for our listeners today, I think ICP doesn't just mean a Fortune 1000 company or Fortune 500 revenue. Who's got the pain? Okay, that's a great start and a great piece of criteria, I think. Secondly, on talent, functional expertise over technical expertise is overlooked so much and I think really you nailed it there in terms of what are we looking for, not just someone out of the ecosystem. And then I really liked your work on the sales process, where you were talking around engineering it. To be simple, here's four steps. Here's the customer journey in our eyes getting them from A to Z, getting that deal closed. So a real pleasure speaking to you today. I guess if people want to follow up with you or get a hold of you and talk shop some more. What's the best way to do it?
Speaker 2:So LinkedIn or my cell phone is 408-406-9174. And my wife says I need to keep busy 1174. And uh, my wife says I need to keep busy. Uh, I'm uh, I work uh with a client, uh one or two days a week, currently working with four, uh, which is fantastic, and uh ride motorcycles and uh cars on friday, uh, to keep my sanity. But it's been my pleasure to to be on this with you, uh, john, and you know much to my chagrin, your, your accent belies how smart you are and it turns out you really are. Uh, it's been great to to to work with you here. My pleasure.
Speaker 1:All right, Mark, take care. Thanks for listening. I hope you enjoyed today's episode. Don't forget to subscribe and if you want more information about the podcast, head over to our website Scale with Drive.
