How to Develop Your Go-to-Market Strategy with Sam Blond

0:06 Sam hey am Ron thanks for joining me of course happy to be here would you like to give a quick 10-second 15c background on yourself sure yeah I don't know how far you want me to go back but I grew up in Kansas City so I'm from the Midwest went to University of Missouri for college moved out to San Francisco in 2008 and have largely been in Tech sales ever since so I started as an SDR at a company called echosign was

0:28 there for a little over 5 years I was in VP of sales at zenitz I was there for about two and a half years most recently I was cro at brex I was there for about 4 and a half years and now I'm a partner at Founders fund investing in B2B software companies awesome you know I'd say there's probably three stages of a startup's life when it comes to sales I'm probably over abstracting it but one

0:52 is Founders founder lead sales that's from 0 to $1 million let's say $1 to $2 million they're at that plateau trying to figure out product Market fit and growth and then the third phase is probably 3 million and up as a Founder that's thinking about this that's primarily mostly technical why should Founders be selling first well I think there's two reasons that come to mind I I think initially most technology businesses the the initial

1:23 customer acquisition is founder Le and that's because from the business's standpoint the founder has the best probability of closing new customers and no one understands the product or the vision of the business as well as the founder does no one understands the target market or the intended audience to sell to as well as the founder does and so if the founder isn't able to acquire customers en close Revenue there's no way that a salesperson that

1:53 doesn't understand these things as well as the founder is going to be able to the other way of thinking about it so that's sort of like the business perspective what's best for the business the founder is going to be better at acquiring customers the other way of thinking about it is from the salesperson's standpoint where you really want to enter an environment where there is an existing set of customers that you can pattern match off of and you can also understand what has

2:18 resonated and worked well in acquiring those customers and so you as a sales rep don't come in with this sort of blank canvas without anything to to sort of pattern match or go off of and again you sort of aren't set up for Success from a sales wrap standpoint so I think it's it is better from both parties perspectives if you're the company you have a better chance of acquiring customers if you're a sales rep you have a better chance of

2:41 acquiring customers if the the founder already has done some of that but Founders are you know on like an order magnitude more introverted right like you know they're focused on building a great product and you know they're working with their engineering teams so what advice would you give to Founders that are kind of of scared to make the first step sure well I think maybe one of the first things is to find comfort that every company

3:09 that I've ever interacted with which at this point is hundreds if not thousands they all started the same way including many of the most successful Tech businesses that that we know of where Founders stepped out of their comfort zone and began interacting with customers and closed the first set of Revenue I think there's a number of things that you can do to make that experience more comfortable and more effective you had a a very popular tweet

3:41 where you let a sales kind of talk at Gary Tan's house and you had this very vibrant tweet thread where I think a lot of the founders in our community read and and learn from as well and one of the things that that D asked is like how do you build out your community and you mentioned something called in network sales and something that you did at at BRS could you explain that concept and you know for those that

4:08 aren't YC or Alliance how do you think about building that type of community yeah well it goes back to one of the things that I just mentioned which is there are a number of things that you as a Founder can do to make that experience more comfortable you talked about stepping outside of your comfort zone and you know being effectively A salesperson and also more effective and so the way that I think about acquiring customers both your initial

4:32 set of customers and then beyond a good analogy would be think about this like concentric circles where you want to start with a the the closest concentric Circle that you can and that often times is going to be your personal Network so if you are a Founder we can use brex as an example if you're a Founder at brex you are selling to other startup Founders we were the first corporate card for startups and so one of the

5:02 things that you may want to do if you were Pedro and Enrique you may just want to look at your LinkedIn and do a report on who are my in network connections that are startup Founders at companies between you know this size and this size and so you start reaching out to those people first you know as you sort of expand on these concentric circles you mentioned YC was an advantage that brex had and so one of the things that

5:27 we did was we reached out to the batch that Pedro and Enrique were in and then we went back to previous batches and so again we're sort of expanding on these concentric circles if you don't have YC you do have things like the networks of your employees you do have things your investor networks where if you've raised any financing you can ask for introductions to other portfolio companies or people that the investors may be connected to that would be a good

5:56 fit for your business and then you start a acquiring customers and so you have the networks of your customers once you've onboarded some customers you can then ask them for referrals the thing where I see Founders and and sales teams maybe at the early stage making mistakes on I would say the the most common approach to outbound or customer acquisition is they will acquire you know CRM they'll acquire a database of contact information like Zoom info so

6:27 you get people's emails addresses and phone numers and they will acquire a system that does email sequencing like Outreach and they'll just start dropping people into cold outbound emails and if we think back to the time where I joined brex we had no web presence we actually didn't have a website it said coming soon we hadn't officially launched the product we were acquiring customers in beta and so if you if you a founder of a company that receives an email from

6:57 somebody you don't know a company you've never heard heard of that doesn't have a website you're not going to reply to that email and so that's where this concept of concentric circles is just really effective because you're you're not doing these activities that ultimately don't lead to success and this all goes back to the idea of you know starting with founder Le sales that's how we started the coners conversation if you are a founder and you are talking to somebody that you

7:25 know personally because you used to work with them or they were in your you know computer science class at Stanford or whatever that conversation is going to come much more naturally to you than you know maybe somebody that you got lucky and they replied to one of your cold emails and so again it helps sort of solve for some of the resistance that you may have as a Founder in acquiring customers so let's say I'm a Founder I did my first sales

7:51 call what does a Founder do then how do you qualify a customer yeah I I think you know you you just you do want to qualify the customer so let's let's maybe start with that because it's less it's less obvious and then how you qualify a customer you you you just want to ask I think at the end of the call the the oftentimes first call you just say something like how impactful would this be for your business or or you

8:21 know what's your interest level given everything that we've talked about today and you don't want to sort of fly fly blind on this where you're wasting Cycles following up with people that would answer those questions as like you know low priority or anything like that you really want to focus on the folks who like this is actually super interesting and then you prioritize those folks and then one thing that I think I alluded to in the tweet that you

8:45 referenced if you're consistently hearing this isn't really a priority for us and this is the the Target customer that you have built your product for that that is a sign that you may want to go back to the drawing board a little bit on product Market fit and so your mindset as you enter a lot of these conversations might be customer acquisition if you're consistently hearing feedback from your Target

9:16 customer this actually isn't interesting to me you may want to sort of like go back a step to that product Market fit stage and where I see some Founders make a mistake is they actually try and push forward with things like bringing on sdrs or bringing on AES without the product Market fit evidence that you really want prior to reaching that Milestone you talked about creating a a b a buying process where you outline who the the decision makers are

9:49 and kind of showcasing this to the customer that you're selling to why why is this important and why should all founders be doing this yeah well I think two things come to mind one is from the perspective of the founder one thing that I heard or hear a lot of is is like a hesitancy to ask for money or just like uncertainty around how do I approach the pro the process of a sales cycle and and acquiring a customer so

10:21 one you're solving for mapping that out from the founders perspective like sort of putting pin to paper like these are the steps that I should follow and then the other side is the buyer side and the the buyer doesn't know how to buy your product it is your job as whether you're a founder or a salesperson to to educate the buyer on the best way the best path forward like how do people get started with using your product and so you're

10:51 solving for both of those personas at the same time and lastly how do you manufacture fomo and you know you you mentioned discounts I think that's one element but I think there's a lot more to manufacturing fomo so how do you kind of would tell first time Founders to do that yeah maybe to take a a bit of a step back I think so much of sales is psychology yeah and one way that you can tap into the psychology of sales is

11:22 this concept of creating fomo and it's certainly not one size fits all but there are different ways that you can do this at different stages of the business and at a very early stage one of the things that you might want to do with the folks that say this is actually High you know on a scale of 1 to 10 this is like a 10 in terms of impact and so the folks that you sort of qualify into there is an interest

11:50 here one way that you may do that is you say brex we'll use brex as an example we're in a beta program as you see we don't have a website right now we're taking on a limited number of customers we're almost at that limit we can get you in we just need to know if you want in and if you do you know here is the process let's get started and so then there's a bit of

12:12 a time constraint that drives urgency on the buyer side and you know as the business continues to scale there are other ways that you can accomplish this you know it's zenefits we had a a really effective implementation fee that we would wave depending on when the customer would move forward and so we are talking you know let's just say early December right now if somebody's to move forward by the end of the year

12:43 we'll wave the implementation fee entirely and that creates a little bit of urgency on the buyer end so you're a Founder that has hit $1 million in Revenue and I'm going back to kind of your experience as at BRS which is where when you came in roughly right when should you hire your first salesperson yeah so I don't know that it necessarily maps to revenue okay the way that I would think about it everyone should start with founder Le

13:10 sales okay this is of course B2B when you have several what I will call non-friends and family Revenue generating customers that is when you can bring on external sales support and when you are ready to hire your first salesperson and by the way the this will map to different amounts of ARR right and different number of customers if you are I'll call

13:43 it an Enterprise solution where you're selling to much larger businesses the in of customers is going to be smaller the amount of Revenue is probably going to be higher you know if your ACV is six figures or something like that you may be bringing on a sales rep when you have three or four paying customers half a million dollars of ARR at brex we were going after startups we actually had a few dozen customers before we brought on our first

14:07 sales rep and we were generating very little Revenue it was interchange revenue on limited card spend and so that's why I flag it's it doesn't map exactly to AR or number of customers let's just qualify it as a few or a handful of non-friends and family Revenue generating customers bring in your first salesperson when you're ready to bring in your first salesperson bring in two bring in two bring in two do not hire just one sales rep why is that

14:36 there's a number of different reasons but let's let's just start with the the speed with which you learn is basically multiplied by two where you have one person that is trying and failing on certain different you know things that they're testing and the same is true with another person they're sharing it with one another and so the pace with which you are moving to get these people successful is effectively

15:07 2x because you have two different people trying different you know methodologies different things that they've learned in the past and then they're sharing it with one another so you're you're just moving much faster the other big reason while there are several if you just make one hire and that person isn't successful you don't know if you've made a bad hire you don't know if you have a lack of product Market fit whereas if you hire two people there are a few

15:34 different outcomes both can be successful and that's of course like the the most desired path when that's true I think really strong evidence of product Market fit and really strong evidence that you can continue scaling the business if one is successful and one is is not successful you likely made a bad hire and so you remove the person that isn't successful you hire somebody that maybe looks more like the person that is successful if both are unsuccessful that's pretty

16:02 good evidence that you do not have product Market fit and it's maybe like back to the drawing board a little bit on how you can make an external salesperson successful the likelihood that you made two bad hires is just low and you get none of those learnings if you just hire one person and so hire two people instead of one once you have a handful of non-friends and family Revenue generating customers and the next step in this process is

16:31 once you have two successful salespeople you then can hire a sales leader to continue scaling the go to market organization got it and when you mentioned in one of your talks where you shouldn't hire sales leader right away right you should hire two sales reps first and if that goes really well then you hire sales lead why is that yeah again not one siiz fits all there are outlier but my my you know opinion on this

17:04 for every is that you hire salespeople before you hire a sales leader when I joined brex the best salese that I brought in and hopefully even the the sales people that were there they were better sales reps than I was and it's because I had been a sales leader for a very long time time and so me trying to go back to being a sales rep after a

17:34 number of years in sales leadership I actually was hopefully worse at that job than a really good salesperson so that is one reason I think another big reason is for most companies the best sales leaders will not want to join a business that has no other salespeople and only a set of customers that the founder has been able to acquire because that is elevated risk for a sales leader

18:07 to join and so I would argue that the quality of a sales leader that you will be able to hire if you are hiring them first before you have any successful salespeople in place is going to be lower than if you follow this sort of happy path of let's get two people in seat successful let's get to a million dollars of r r then we bring in a sales rep to continue scaling the goto market organization and doing what they are

18:34 best at which is leading a team recruiting and hiring people and not selling deals individually that's sort of the the philosophy behind it often times we get questions from Founders that say well should we start spending money on marketing and Partnerships everybody you know that's a common recurring theme and so what what do you tell Founders in the preed maybe seed stage should they be focusing on marketing or Partnerships or should they be purely focusing on you know product

19:03 Market fit sales yeah let's go back to the concentric circles concept when you're first getting started you definitionally have no brand no marketing in place you have a a Founder and and some Engineers that have built a product and you want to test this product with you know in network connections that we talked about where you can sort of more easily get folks on the call to pitch them you start acquiring some customers like you you

19:34 have evidence of product Market fit okay let's bring in a couple salespeople we now have you know a production website that we can send people to we have some salesp people they're starting to do some of the same things that were effective for me as a Founder we're acquiring more customers we sort of expanded outside of this concentric Circle one of the things that we did at brex and one way that I would approach this for you sort of like in the

19:58 abstract for other startup Founders as these con concentric circles continue to expand you're going to want to leverage some marketing or brand to to make your customer acquisition efforts more effective so I'll give two examples that we did at brex one was when we launched this product we wanted this was sort of like June of 2018 we wanted to make a really big

20:30 splash and the thing that we did was we well in addition to you know some PR around the fundraise we maybe sponsored some podcasts the big thing that we did and this was like a20 to $300,000 expense we put Billboards all over San Francisco so that's like you know squarely in the category of brand marketing but what it allowed us to do if you think about like again this concept of concentric circles literally the the day before so let's

21:01 call it June 20th if we launched on June 21st nobody knew who we were that we didn't already you know specifically Target and then on June 21st when we launched we had a bunch of PR around fundraises and then we put these Billboards up everywhere and you know everybody changed their LinkedIn and posted about it we specifically then targeted companies and Founders that would have been in the area that we were launching these Billboards in the

21:33 likelihood that a Founder that walked by you know downtown San Francisco headquarters that walked by a bunch of our Billboards on the way to work or whatever the likelihood that they would respond to us was significantly higher than somebody you know based out of New York that wouldn't have had that same experience and so to directly answer your question around marketing and investing in marketing you want to do that once you have relatively strong evidence of product Market fit and I

22:05 think the stage that that starts to happen is founder has acquired customers your sales reps have been able to acquire customers and now you have confidence that you can scale the business so let's start investing in marketing programs that make our customer acquisition tactics more effective one final question crypto largely is a slow growing Market in terms of like SAS businesses that are being built around that ecosystem what do you tell Founders that don't have many Enterprise customers to sell but

22:36 more on the smaller side or SMB side and is the question the the addressable Market for this type of a company is limited compared to like because there aren't that many crypto companies that exist compared to yeah makes sense well look I think it is yeah that makes sense you know it it's not directly analogous to brex but it is in a way brex launched as the first corporate card for startups if you think

23:08 about the startup Market as a percentage of businesses that exist in the world in the United States it is it is small it's not as small as crypto but I'll sort of get to what I would do there we were really deliberate and maybe even lucky but but we benefited from maybe not deliberate we benefited from two things in our early launch time frame that I think is relevant to the question that you just asked one is it was really obvious what

23:39 we were we were the first corporate card okay so everybody knows what a corporate card is and so I think that the sort of The Clarity in our product offering was one thing that we benefited from and then the second thing that we benefited from was we were the first corporate card for startups and so we were very deliberate in the market that we were going after one

24:11 thing that is well if you know the bre story one of one of the reasons that brex was so successful with startups is because we had this concept of no personal guarantee where the incumbent credit cards required the founder to personally guarantee a credit card so if they didn't pay the bill it impacted their credit score and they were personally liable for the payments the other thing that we did was we underwrote based off of the cash balance

24:35 that the company had in the bank and so if you're a startup with a couple million bucks in the bank you got a really high limit you compare that to what you get with American Express where the founder only qualifies for a $10,000 credit limit significantly higher credit limit if we're underwriting based off the cash balance what is not super welln is that we weren't the first to offer that underwriting model there was was a company called divvy and there may have

25:00 been others but they were less deliberate about who they were targeting as customers and so when brex launched as the first corporate card for startups when people saw that branding if you were a startup founder you immediately sort of became interested in what that offering was because you identified with this sort of narrow Market that was startups and so I I think for companies that are selling into

25:31 crypto there are a couple things to remember one is be really deliberate about what you are and who you are for and the other thing is this community much like startups is very tight-knit and so show up where they are often times these are going to be things like conferences the other thing is you know much like startup Founders crypto founders people that work at crypto companies they are going to know other people that are in the community

26:03 and so really leverage existing relationships that you have to drive brand awareness with potential new customers and I think that's possible when you're selling to a really narrow Market that is less possible when you're everything for everyone Sam thank you so much for your time yeah so nice talking with you likewise