I need people just to be blunt that are a little fucked in the head like I am.
That's what I need.
When I wake up at 3 o'clock in the morning, at the moment I become conscious of being awake.
I'm thinking about work.
I can't help it.
I'm obsessed.
And I wake up at 3 o'clock in the morning, 6 o'clock in the morning, 10 o'clock at night, and I can't help it.
I'm obsessed with making sure we are doing things correctly.
And I need people that are a little bit fucked in the head like that.
This is 20 Sales with me, Harry Stebbings.
Now 20.
Sales is the monthly show where we sit down with one of the best sales leaders in the world to uncover their tips, tactics and secrets to starting and scaling sales teams.
Now, the best 20 sales that we've ever done was with Chad Pete, and I thought we had to have him back to start the year.
He is the best CRO sales leader that I have ever met.
He is the most noble shit that I've ever encountered.
And across companies, he has consistently delivered.
This is the most no BS conversation with one of the best sales leaders of our time.
And quite frankly, it's why I love what I do so much.
So I want to thank Chad for being a dear friend at this stage.
And I want your feedback on the show.
Let me know what you think.
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Chad, dude, it is such a pleasure to make this happen.
I loved our first one.
And it's the most actually popular.
You don't know this.
It's the most popular 20 sale show we've ever done.
And it's because you're not afraid to say the truth when everyone else clearly very much is.
So thank you so much for joining me again today, dude.
Dude, you know, I love to be back here.
Literally I was like okay, I'm going to start this off by asking him how much trouble do we think we're going to get in today?
Which is really the fun of it.
Let's see if we can get ourselves in some trouble.
A lot.
Yes.
I do interviews now and I'm just like, as long as it's not live TV where you really are fucked, then I'm fine.
It'll be okay.
Thank you for getting the first F-bomb out of the way, because the likelihood of me getting through a 90 minute interview without saying fuck is zero.
My job is to make you feel comfortable.
Okay.
If I can say fuck, I'll feel a lot more comfortable.
Dude, how do you spend your time today?
Because last time you said, I'm not sure I fit into the world anymore.
I might retire if the world doesn't operate the way I do.
So how do you spend your time today?
Because you're not retired, dude.
No, as you and I were talking about offline, I can't retire.
I just like to work and I will continue to like to work so long as I think two things, three things are true.
One, I have to feel like I'm adding value with whoever I'm working with.
I simply cannot be the guy that sits in the room and is sitting back and kind of hanging out.
I'm just not capable of doing that.
Number two I have to find people that I want to work with.
That value not only what I bring to the table, but they got to be able to put up with my approach.
And you either love my approach or you hate it.
And I would say more people hate it than love it.
And then number three, I have to feel like I'm continuing to learn.
It's so critical for me to work with people that I respect and can learn from.
And I found a group of companies and people to work with where I think and hope that all three of those things are true.
So which companies are you working across now, my friend?
Sigma Computing, which I've been involved with, gosh, since the company's inception.
I sit on the board of Sigma Computing.
I love the CEO, Mike Palmer.
Perfect example, right?
Mike Palmer and I, five years ago, had it out.
I mean, we tell this story.
I mean screaming fucking F-bombs at each other.
Couldn't get along.
Had it out, said everything both of us had to say.
And we have not had an argument since because he gives me direct feedback.
I gave him direct feedback.
And what we recognize is we both want the same thing.
We want things to be done correctly and we want to drive the value of the company.
It's not about his feelings.
It's not about my feelings.
It's not about the individual.
It's about the objective and the mission.
And so Mike and I are, I love the guy.
I love the company.
I love the board.
You know, you talk about other people, come back to the other companies.
But like I work closely with Brad Gershner at Altimeter.
Love Brad.
I learn a ton from Brad.
He's got a guy that works with him, Apoorov.
I do a bunch of work with Apoorov.
I learned different things.
I learned things from Apoorv.
I learned things from Brad.
And so I love getting to work with them.
Mike Spizer, obviously, is one of my mentors.
Mike has taught me more than probably anybody in my career, taken thousands of hours out of his precious time to teach me, which I will never be able to repay him for.
John McMahon is right there with Mike in terms of mentoring me over the years.
So there's Sigma.
There's a company called Augment Code, another Sutter Hill company.
Kind of think cursor competitor.
I sit on the board there.
Fascinating space.
Like with a lot of companies, it's difficult to know where that space is going.
You don't know.
It's just difficult to know where it's going, but I love the company.
Parloa is another one, European-based, and actually Apoora from Altimeter brought me in.
AI for customer service, best use case I've seen for AI right now.
I mean, the ROI is real there, right?
You can go into companies that are spending a billion dollars a year on customer support, customer service, and literally we can take out half of that cost.
It's amazing.
So I love my time with Parloa.
XAI is incredible.
It's the most unique experience I've ever had.
I love the team.
And I think we are doing and talk about learning.
I'm learning a ton.
And I think at XAI we are doing things that are both meaningful to the business world, but also to the planet.
Why is it the most unique experience?
That's an interesting word.
The model is just unique.
I mean, the way in which Elon builds companies is particularly unique.
He has a group of investors that have been with him for a very long time. that are amazing people.
You know, I'm a very, very hands-on guy.
I would say I have more of a private equity approach to companies I invest in.
I'm in the weeds, which by the way, a lot of people don't want me to be around.
If you don't want that, you don't want me.
But I work.
I put the hours in.
I talk to my CEOs every day, my CROs every day.
I'm designing comp plans.
I'm in there, man.
And I want to be in there.
And the guys that are associated with XAI from an investor standpoint are the exact same way.
Hardest working bunch of individuals I've ever seen.
It's not about money.
It's about mission.
It's about purpose.
It's about doing shit correctly.
And I love that.
Love it.
So you need to build out the sales team there.
You need to bluntly hire absolute machines because this is not an eight hour a day thing.
How do you think about that and how's that been?
I personally will do the recruiting for the CRO or head of sales or whatever you want to call them.
And then my team will do the other stuff, you know, the salespeople and so on and so forth.
But you have to just tell people up front like, look first of all, from a pitch perspective, you have an opportunity to work for and partner with the greatest entrepreneur I would say ever in what is probably the most important technology space ever.
And so you have the biggest, most impactful technology with the greatest entrepreneur in the world, and you get to be a part of building that with him.
By the way, this is how I got bought in.
Right.
I mean, I kind of knew what I was signing up for.
It required a lengthy conversation with my wife because I knew what I was signing up for.
And I'm like, how can you say no to this?
And so when you're talking to candidates about coming in, you describe that to them.
But then you also say but by the way, you know, if you're the individual that's been at a big company and you're super pumped on working an eight hour day and you like to hide and this, that and the other, this ain't the place.
And I promise you either I'm going to find you or somebody else is going to find you.
I'm going to find you quickly and you are not going to make it and you're going to hate it.
When we spoke last time, you said that recruiting was harder than ever because reps just don't care anymore.
Has something changed from that moment where now No, these people are much harder to find than they've ever been?
Much harder to find.
You can find them, but it's challenging.
No offense, but particularly in Europe.
Unpack that.
What is that?
The culture over there is a little different, man.
Again, I'm going to try not to get myself in trouble, but this fucking hey.
By the way, I'm going to take the next three weeks off.
You're going to do what?
I'm going to take the next three weeks off.
That's how we do shit in Europe.
Well, the rest of the company is going to continue to function.
We're not taking three weeks off.
Yeah, I know, but that's how we do shit over here.
All right.
Thanks.
Are there common traits in what you find works with them?
Because we hire for the same type of people.
Me and you, I think, are pretty similar.
That's why I look fucking old.
You don't, to be fair.
You just sound it.
But like the thing that I found successful is immigrants and very young.
So I hire bluntly Asians or Eastern Europeans and very young, sub 23, 24.
That is a sweet spot for us.
Have you found commonalities in the people?
Those people that group that you just described don't get into sales.
You're not going to find those people in sales.
They don't want to sell.
Honestly, they just don't want to sell.
That's not what the passion lies.
So you have to find people to your point.
Look, I need people just to be blunt that are a little fucked in the head like I am.
That's what I need.
When I wake up at three o'clock in the morning and I may have said this in the last show and it remains true
When I wake up at three o'clock in the morning, At the moment I become conscious of being awake.
I'm thinking about work.
I can't help it.
I'm obsessed.
And I wake up at 3 o'clock in the morning, 6 o'clock in the morning, 10 o'clock at night, and I can't help it.
I'm obsessed with making sure we are doing things correctly.
And I need people that are a little bit fucked in the head like that.
How do you measure fucked in the head?
I know this sounds weird.
Well, so it's easy.
I mean, look, if they're being honest in the interview questions, it's kind of easy.
So you ask questions like, what's your passion?
And it's a setup for sure, right?
And anybody seeing this will know it's a setup, but like, what's your passion?
And you just let them go.
And if they're like, look, man, my passion is I want to be the world's greatest artist.
I love to paint.
That is my passion.
Okay, well, why do you work?
Well, I work because I got to pay my bills.
You know, I got to put food on the table.
Hey listen, that probably makes you a better person than me, a more interesting person than me, a more well-rounded person than me.
But you work to basically fund your passion, which is painting.
That's fine.
Good for you.
I work because I want to be the best in the world at what I want to do and I want to be a part of important things and fucking amen, I want to win.
And so you ask people questions like that, right?
And I've asked them, like, what drives you?
Oh, I want to make money.
No shit.
Not a good answer.
You're in sales and you want to make money, obvious.
What actually drives you?
What gets you up in the morning?
And you get lots of different answers, right?
But I want people to say, look, man, I want to learn every day.
I want to be the best in the world at my craft.
I want to have an impact.
I want to change the way my customers buy.
Again, you want that obsession about what they're doing for a living.
So that was first layer.
And a lot of salespeople can do that pretty well.
Is there any way that you can actually stress test that beneath the surface?
Well, again this goes back to it's not exactly stress testing now, but the other thing you want to just measure for is grit.
And John McMahon taught me that a long time ago.
Ask them what they've been through in their life.
Like, you wouldn't want to hire me.
I grew up in an upper middle class family and I went to USC.
Coming out of college, I would have looked at me and said, nope, I don't think so.
I want somebody that's faced, now ask me about some challenges I faced.
I've been through some serious shit since then and come through the other side of it.
But you want somebody that's faced some challenges, right?
So that when they are in a sales cycle, or they're not generating enough pipeline, or I'm hammering them or somebody's hammering them about stuff this isn't the hardest thing they've ever done.
Give me a military person, for example.
I love that.
Somebody that put themselves through college.
You don't want to hear sad stories because you feel bad, but I want to know what you've been through.
Like I said, I've been through some shit.
I graduated In 2000, I think, the bubble burst.
I left the firm I was working for.
LinkedIn did not exist at the time.
I had a phone, a pad of paper, a computer, two kids, a mortgage, and no way of making money.
And I sat in office going, oh, shit.
And I kind of want somebody that's been through that life.
To me, startups are life and death.
And if you've not been through something like that, you don't really know.
That's the other thing.
I want somebody that's been at a small company.
If you've been at nothing but large companies, you just don't know.
Do you mind telling people who've never been anywhere before?
I'm 22.
I'm straight out of college.
I'm fucking hungry.
I'm here to work.
I'll devote, but I haven't had a job before.
You okay with that?
Well, there's a certain Remember we filled field sales positions right inside sales position, so on and so forth.
So there is a certain level of experience.
We can teach you a lot, but there's too much risk in that person.
I got to know whether or not you can sell.
And in order to know that, you have to have had some sales experience.
Otherwise there's just too much risk.
Okay, some sales experience, dude.
Again, so many founders take notes and listen religiously to this.
Some sales experience.
Everyone says that they were the number one seller and they closed big deals.
What do you look for?
What is the, yep, Harry's a good dude.
We want to have him.
Well again.
So if a guy's got a track record of exceeding his quota, first of all, I always pull that string.
Okay.
So for example, you were 103% of your quota last year.
Yes.
Okay.
What was your quota?
Okay.
What did you sell against that quota?
Okay.
How many deals did it take?
What was the biggest deal?
Walk me through the biggest deal.
Somebody that's passionate about their career will know every single one of these details.
They're proud of it.
They hang their hat on it.
If somebody that's not is like, think I was 104% last year, I'd have to check.
You'd have to check.
Tell me, where do you rank amongst your peers?
How many sales reps are in the company?
102.
Where do you rank?
Yeah, I don't know.
How do you not know?
Like, I'd know.
Fuck.
And if I wasn't number one, I'd have a whiteboard in front of me that shows me where I ranked and I'd keep track of it every day, because it would drive me insane that I wasn't number one.
Okay.
And so we learned that.
But actually, dude, that was in a different category to what we're in customer service.
And that was in compliance management, whatever we want to call it, healthcare records, whatever.
How important is it that they've sold in the same category that we have versus the same contract size?
I mean look, the most important thing is like what?
There's selling software?
Fine, but there's lots of different ways of selling software.
So what's the job I'm hiring for at any one of my companies?
The number one thing is pipeline generation and landing new accounts.
So when I say, tell me about the deals that you've closed.
I don't care if you said, well, look, I inherited this customer and I went and upsold them.
Don't give a shit.
Okay, that's not a value to me at a startup, because at a startup, I'm gonna give you 50 accounts that have never heard of us.
So I wanna know how many net new logos did you bring in?
And if you can't tell me that you brought in net new logos, the interview's over super, super quickly, right?
So that's the one thing that you have to have, first and foremost, is a demonstrated track record of closing new accounts.
So then let's talk about, and this is where it gets challenging, let's talk about deal size.
And I'm getting to your domain question, but let's talk about deal size for a moment.
Say well listen, we're closing 5 million deals over here which, for a startup, is very unique.
Which is the problem, because if you want to hire people that have startup experience, they're not going to have really big deal experience because most startups aren't doing really big deals.
So oftentimes what I'll get is somebody will say listen, this guy or gal doesn't have enough experience closing 5 million deals.
I said, okay, listen, I can go get you somebody that's been closing a bunch of $5 million deals.
They're not going to have startup experience.
Well, why not?
What startups do you know that are closing $5 million transactions?
You have to give on something.
If you're not able and capable of doing pipeline generation and closing new logos, I cannot teach you that.
I can teach you with proper leadership how to go from closing $200,000 to $2 million deals.
I can teach you that.
And, by the way, the sales leader that sits on top of you and the system that we build is oftentimes like a super rep.
The gaps have to be gaps that I can solve for.
I can solve for that gap.
When you talk about domain expertise, again, what can't I teach you?
I can't teach you how to have integrity.
I can't teach you how to have grit.
I can't teach you to be fucked in the head.
I can't teach you how to go close new logos, but I can teach you my technology.
I can.
With proper enablement, I can teach you.
So again, lots of CEOs will be like, look, Here's my three competitors.
Go recruit from them.
And my first thing back to them is, tell me about the quality of their sales organization.
Well, what do you mean?
Well, you want me to go take their people?
Are their people any good?
I don't know.
They know my space.
Who gives a shit?
Your competitors likely have a bunch of C players.
So you want to go hire C players simply because they know the space?
Okay, that's a short-term solve.
Basically, what you're solving for is you want to reduce ramp time.
You want them to be able to get enabled faster because they know the domain.
Fine.
Problem is, nine months from now, I got a bunch of shitty fucking salespeople versus let me go hire for talent and things I can't train.
Fine, maybe my ramp time takes longer, but a year from now I've got a world-class sales organization.
You've got a bunch of B players that know your space.
Do you think founders are good at hiring CROs and heads of sales?
No, no.
And I'm not trying to be critical, but like I mentioned, we were offline.
If I talk to 50 CEOs, 48 of them, I'm going to very quickly determine, are probably not right for me to work with.
Doesn't mean they're not great just for me.
And usually what will happen is by the first or second conversation.
I will have looked up his or her CRO.
I'll go into the conversation and say listen, if we're going to partner together, you're firing your CRO.
What?
Listen, the CRO you hired is the wrong one.
You've never talked to him.
I don't have to talk to him.
I know where he's worked.
I know the quality of sales organizations he's worked for.
He's only worked for large companies.
You have the wrong CRO.
By the way, prior to this call, I went through LinkedIn and looked at every one of your sales reps.
Not only are we going to get rid of the CRO, I'm going to hire the right CRO that's going to go fire half your sales reps.
You prepared for that.
Most of them are like, fuck, no, I'm not prepared for that.
I say, great.
Nice to meet you.
Have a great day.
Literally.
And they'll hire for the stupidest shit, man.
What do they get wrong?
Imagine you're a founder listening.
What do they get wrong?
Here's the most common one, right?
Listen.
I'm going to be a $500 million company in three years.
Wonderful.
I hope that's the case.
So I need a guy or gal that's managing a $500 million business.
Or you do.
What does a guy that's only managed a 500 million business know about building a company from zero to 500 million?
So what they do is they hire for tomorrow, not today.
And if you do that, you'll never get to tomorrow.
So you hire a guy for the job that you have today.
Like again, I'm not trying to rip Salesforce.
I see people from Salesforce that have been there for 20 years at these startups.
And I'm like, the fuck?
They had a monopoly.
They haven't built anything.
That you know.
If they were at Salesforce 25 years ago maybe, but the problem is, where are they at in their career if they were there 25 years ago and now?
I don't want them for other reasons.
That's the thing, right?
They love these big resumes.
Do you see duration as a negative?
I know that sounds strange, but you said that like, oh, if they've been there for 20 years.
Yes, 100%.
If you've been at the same large company for 20 years, 100%.
But then you don't want bouncers either.
Someone who's been there for a year.
I'll take a couple of bounces, but you got to be able to explain to me, A why you made the move and, B what did you fuck up in the process.
Oh, and don't tell me they lied to you.
I thought, well, listen, they explained it this way, this, that, and the other.
Bullshit, you made the decision.
You made the decision to go there.
I'm not looking for you to be perfect in your career decisions, but I'm looking for the accountability.
I want to understand the logic and process you used in making a particular career decision.
And if that's sound and you went to someplace that looked good and ultimately hey, the product failed or something like that look, I'll accept that.
I'm okay with it.
Now you can't have five of those in a row.
You have to have some stop where you've demonstrated some level of success.
But if you've got a couple of short stints in there where you failed, I can live with that.
At least you took the chance.
How has your time at XAI changed how you think about sales talent?
I'll tell you, it's made me think about me.
First and foremost, I have a reasonable level of confidence that I'm pretty good at what I do.
And I will tell you that I have going in there has made me think that there are areas I can improve, and made me recognize the world is changing and we have to change with it.
I don't know exactly yet how it's changing for enterprise sales, but it's changing.
Totally get that.
On talent-wise.
When you look at the team that you're building with XAI, has your views on sales talent changed?
No.
It's the intangibles, man.
It's that grit.
And it's, again, having the track record to do the things that we need to do.
Well, one slight caveat.
What we are seeing with AI companies.
Back to your earlier point some of them, XAI being one, are closing very large transactions very early.
We've never seen this before.
Like that company I mentioned, Parloa.
Harlow is closing really, really big deals at a stage of the company where you would not typically see that.
And so I am having to rethink a little bit that big deal experience.
And when I say big deals, 5, 10, 15, $20 million deals, right?
And there's a level of complexity there that I, at least, have to be cognizant of when I'm looking at the salespeople we're going to bring into these companies.
How does that actually change it in reality?
It means you've got to have more senior people?
It does.
And so it makes it harder because again, I need more senior people.
But I can't give up that ability and willingness to do the hard grunt work, the PG pipeline generation.
So it makes it harder.
The spec has gotten more narrow.
With the AI-ification of sales.
There are so many AI tools to enhance, increase our ability as sales teams.
Are you seeing them have impact within your sales teams or do you find most of them a lot of hot air?
I think there are certain ones that are being built today that aren't yet quite finished, that I'm aware of that are going to help a lot.
I think this notion and of course I'm biased, but this notion that the enterprise salesperson is going away, I heard that 20 years ago when the internet came out.
I heard it 10 years ago when SaaS came out, like, oh, you're fucked.
Enterprise sales is going away.
I'm hearing much of the same today.
I just don't subscribe to that theory.
If I'm going to sell a CIO, a CTO, some C-level executive, a solution for millions of dollars and if that solution fails, he's going to lose his job and so are a bunch of other people, and it's going to have a very serious negative impact to their business.
They want to buy from a human being.
And that human being cannot... And again, there's some... friction around this, right?
It can't be an engineer.
It needs to be somebody that understands how to navigate a sales process.
The role of the sales engineer is definitely changing because you have four deployed engineers now.
And so these companies are wanting to buy outcomes.
They're wanting to know, in fact, that we're going to get the outcome from this solution, which means, when they want to try the product, you actually have to let them maybe even try the product, have it fully integrated into their shit, their workflows, so on and so forth, so that they can actually see that it's working.
We haven't seen that before.
Obviously, you've heard about forward-deployed engineers.
Everybody's talking about them.
That's a real need.
I honestly think the biggest lie in enterprise is that you're going to see implementation and adoption without FDs.
You will need FDs and you will need implementation if you want to sell into the largest companies in the world, of course.
I think so too.
You know, the world of APIs is different.
You're not selling an out of the box product with an API, right?
You're giving them effectively the tool set, the foundation, if you will, to go build a product with your APIs.
That's super different, super different.
And most of the companies today don't have the technical chops internally to do that.
So you have to have four deployed engineers in there to help them build what it is they want to build with your APIs.
You mentioned it's challenging to hire these minded people in Europe.
You mentioned obviously Polo as your experience in Europe.
Does that mean that you've changed your mindset around remote work and remote sales teams?
No, I mean, I'm very much an in-office guy for everybody but a distributed sales organization.
So, like coming out of COVID, Chris Degnan, who you know is one of my dear, dear friends, He and Sridhar Ramaswamy, the CEO of Soflake, asked me to come in 18 months ago to help find inefficiencies within the go-to-market function and maybe to drive a higher level of performance than we were getting.
The first thing I identified when I got there was we had inside salespeople that were distributed.
And I said, well, what's going on here?
You have an inside sales manager in Denver.
You have another one in pick a state, Chicago, Illinois, rather.
You have them all over the place, and that person's manager is in Seattle.
That's not the way inside sales works.
Inside sales is.
Your sales leader is in the office five days a week and the inside sales reps have to be sitting.
There, have to be.
So inside sales is an in-office deal, and there can be no exceptions in my opinion.
Field salespeople still have to be where their accounts are.
I don't want a field sales organization based in New York, for example.
And you say, well, how are you covering accounts in California?
Oh, my reps in New York.
Dude, you got to get in front of customers.
You need to be in front of your customers.
And so consequently, nothing has changed.
I need field salespeople to be distributed, to live in the area where their accounts are.
And by the way, in Europe, it's no different.
Germans want to buy from Germans.
French people want to buy from French people, right?
Like you can kind of get away with the UK sales force for a period of time.
But usually if you want to go sell it I'm dealing with one of the companies now like France Germany Italy, they want people in their country that speak their language, that know them.
You mentioned being brought into Snowflake just to maybe increase efficiency and performance.
What are the number one ways that you see sales teams lose performance and efficiency?
Well, first of all, you have to define what is good.
What am I expecting of you?
So you have to define, here's what I'm expecting from a sales organization.
And so sometimes you go, how are you measuring your salespeople?
I measure them by quota.
Okay.
How else are you measuring salespeople?
I get that you have a quota.
Fine.
By the way, you can miss set quotas.
That's also possible.
So I could set them too high or too low, but I could have somebody 130 of their quota because they got lucky and did a deal that I want to fire.
So you can't stop with quota.
I want to understand what they do.
I want to understand how many new customer meetings that they're having.
I'm going to hold them accountable to that number of new customer meetings.
I want to look at steps in the sales process.
I want to look at things like conversion ratios.
I want to look at travel.
Like, are they in front of customers?
Are they doing things?
So there's a long list of things that you have to be measuring.
And what I see is companies get away from that.
They stop measuring people.
They stop holding people accountable.
Look at attrition rates, for example.
Tell me what your involuntary attrition is, which means people that you fired.
We're so proud of this company.
We only had to fire 2% of our sales organization last year.
Such a great place to work.
And I'm like all you're telling me is you will let anybody work there and you don't hold anybody accountable.
You should be shooting the bottom 10% of your sales organization every year.
What's yours?
Is yours 10%?
Total attrition.
There's context for scaling company.
Total attrition should be about 25%.
People hear that and they're like, oh my God.
Because, by the way, it's super expensive to have that type of attrition, especially when I build you a productivity model.
And I tell you what your forecast is going to be.
And at the end of it, I chop off 25% because I say you're going to lose 25% of your reps.
And they're like, oh my God, it's 25%.
Because think, I want to shoot 10% for sure.
Minimum, I'm getting rid of 10%.
And then I got promotions.
That's considered a type of attrition, right?
Because I'm taking reps out of the field and bumping them up.
And then I got people are going to quit.
And so every scaling company that I've ever been a part of, we will model 25% attrition.
And we're typically right there.
Now, if you start to get above that 30, 35%, you got a problem.
If you're too low, you have a different kind of problem.
As a company reaches more stable state, which means they're hiring less right scaling slower 20 attrition is pretty good.
What do people respond to that?
They say that's bullshit, the ramp.
Because my response to you would be, dude, we're constantly slowing down the organization.
If we have a six-month ramp time and a three-month hire period, I'm consistently nine months behind on the three and six month.
You're playing for it with over-hire.
What does that mean?
You plan for it with overhiring.
You hire too many at the same time.
You plan the highest.
You keep hiring.
You don't stop hiring.
Okay.
So I have to.
When I'm building a productivity plan or a hiring plan for a company, I have to bake into the fact that I'm going to have 6 turnover every quarter.
I have to hire ahead of that turnover.
Very blunt.
How would you feel if I said 10% you fire and 10% quit?
Maybe your hiring process isn't good enough.
If 10% are quitting, that's quite a lot.
And if you're firing 10, maybe you're not actually being stringent enough with meeting your criteria.
No, I mean, look, man, in what world are you not getting rid of the bottom 10% of your performers?
So bifurcate it, okay?
Let's take that 10%.
5%, 4%, 3%.
Come on, man.
Everybody's going to have poor performers.
You can't hire perfectly, especially when you're scaling.
So if I'm going to go from 50 reps to 300 reps, you're going to hire fast.
And when you hire fast, you're going to make some mistakes.
The consequence is you over-scrutinize every hire, you slow down the hiring process and now you're not going to hit your recruiting numbers.
You can't have that either.
How do you respond to people that say that creates a culture of fear.
That's not a good culture to work in.
Bullshit.
It's the opposite of that.
If you have A players in your company and they're surrounded by a bunch of B players and you're not holding those B players accountable, your A players will quit.
I'm busting my ass.
I'm an A player.
I'm killing myself, I'm a shareholder in the company and I got three reps next to me that don't work hard, don't do the shit I do and you do nothing to them.
Fuck that.
I'm not gonna put up with it.
I'll quit.
Will you fire Faust?
When you see someone not working, how fast?
Because I think the trouble is, you often know honestly, I think way quicker than we give ourselves credit, sometimes 10 days to two weeks in the worst of cases.
Will you fire fast or do you give time?
Listen, we are all going to make hiring mistakes.
As I just said to somebody yesterday and it was a bit of a tense conversation we're all going to fuck up.
The difference between you and me is when I fuck up, I own my fuck ups and I fix them quickly.
You like to pretend like you didn't fuck up and you want to give it more time and claim that you didn't make a mistake, which allows the problem to fester and get bigger.
So will I fire fast?
Fucking A. Yes, I will fire fast.
I think it's easier to fire people.
No, try firing somebody in Europe.
You can't fire people in Europe.
Go to Germany and France.
I can't fire people.
You can't.
They'll be on the books for a year after you want to get rid of them.
Does your model actually work in Europe?
Does it work in Europe?
Absolutely.
Most European teams I work with don't care for me.
I'll be honest, because the other thing you hear from Europeans is you Americans don't understand.
You don't understand what it's like to sell in Europe.
Fuck off.
80% of it is the exact same.
Hard work, pipeline generation all of that stuff is applicable in Europe just like it is in the US.
But they want to say, you don't understand, it's different.
The greatest European sales leader I've ever worked with is a guy by the name of Jeremy Duggan.
You might know who he is.
Okay.
So listen, man, I form opinions and then I go talk to people that know better than I do.
And I'm super lucky that I've worked with some of the best people in the world, right?
So if I don't have a ton of experience with something, the first thing I do I form an opinion and then I call people that know better than I do.
I said, here's how I'm thinking about this.
What do you think?
Am I crazy?
Am I wrong?
Tell me I'm wrong.
Tell me how I'm wrong, right?
So that's what I've done.
Like in Europe, I've never lived in Europe.
So I talked to the greatest leaders that have ever been in Europe.
And I'm like, look, this is what I'm finding inside my companies.
And they validate everything I think.
They're like, no, it's bullshit.
It's the same.
Don't listen to that shit.
Dude, who do you call who's run an enterprise sales team in Europe?
Jeremy Doggin's amazing.
You can also call one of the best.
I don't want to offend any of my other friends.
One of the best operators I've ever worked with I've known him for 15 years is Dali Rajic.
He's the chief operating officer at Wiz.
Agree.
There's like three, though.
There's like three who are like fucking great enterprise sales leaders in Europe.
But I can call guys like Dolly that have managed Europe.
So, even if I'm not calling a VP of EMEA, I will call guys like Dolly Chris Degnan, John McMahon, a bunch of guys like that that I know and trust.
And again, I bounce everything off of them, right?
Because I don't ever want to come in with a strong opinion that's not based off of data.
I just interviewed the CRO or the head of sales of Eleven Labs.
Obviously, Eleven Labs, incredibly fast-scaling company.
And he said, we have a simple thing, which is we expect you to hit 20 times your cost.
So 20 times your salary is your target.
That's how I set quota.
So if your salary is 100K, you're expected to bring in 2 million bucks.
So I'm not saying he's wrong.
Historically, how you benchmark it is three times your OTE.
So if your OTE is 300, the absolute, And again we're talking about productivity, which is new ACV per rep, right.
So, across the board, if you're not hitting three times your OTE, if your reps aren't at minimum three times your OTE, the unit economics don't work.
Now you can give... some grace if it's an emerging market, so on and so forth.
You can give them a couple of years to get there.
But if it's an established business and you're not, at least at three times your OTE, you've got too many salespeople.
The unit economics don't work.
Think if you're paying a guy $350,000 and he's bringing in $700,000 a year, a new ACV.
You can't make that work.
Does that still work in an FD enterprise sales world?
So far.
So far, but I'm open to the fact that that number is likely going to have to go higher.
Yeah, because your margin is going to be hit with that implementation cost.
So if you was advising me today setting realistic comp plans, what would you advise me, knowing all that you know now and doing it today?
So keep in mind, right people and I'm not saying you're doing this, but people interchange productivity with comp.
Two very different things, okay?
Productivity is how I measure the health of my business.
It's my output per rep.
Comp is simply a function of cash flow and compensation.
So oftentimes people will say to me, I'll say, what's your productivity per rep?
And they'll say, well, my quota per rep.
And I'm like, dude, different, okay?
Like totally different.
One productivity should be used to establish quota, for sure, but quota is simply a measure of compensation and cash flow.
So make sure that you bifurcate those two things because they're very different.
So when I'm setting quotas, what I want to do is I want to look at let's assume the business has some data
When you have no data, it's very challenging to set it because yeah, it's one of these.
Set quote is too low, not too high, okay?
Because if you have to err on one side, what's the downside to setting them too low?
Okay, I blew out my number as a company.
Okay, I expected to do 10 million.
I did 15 million and I paid more commissions.
Okay, probably spent more money than I wanted.
I got a happy sales force and I exceeded my numbers.
I can fix that next year.
I can pull quotas down.
Flip side.
I set quotas too high.
I built this great sales organization.
Nobody made any money and they quit.
Which of those two is more expensive?
Clearly the latter, right?
And not only that if you build an A sales organization and they all quit, you will replace it with a B sales organization.
Once all the A players said bye-bye, you're not going to go.
Then commit other A players to come, because they're going to look at all the A players that split.
They're going to call them.
Hey, why'd you quit?
Oh, you can't make any fucking money there.
Don't go there.
So always err on the side of setting too low, and then you can adjust accordingly, so that you're not bleeding the company dry with commissions.
Back to your question about quota setting, figure out what the productivity per rep is.
Okay, so let's say this year, 2025, my reps produced on average $1 million in new ACV per rep.
Next year, I expect them to produce 1.2%.
By the way, that's another thing that CEOs and CFOs get real excited about when they're raising around.
They'll say, listen, I got to go raise at this valuation.
To raise this valuation, here's the forecast I need next year to raise.
And so I'm going to do 100 million.
And I'll be like, hmm, how are you getting to 100 million next year?
You have 20 reps right now.
And right now, each one of those reps is producing a million dollars per.
And you're going to do 20 million this year.
And you're telling me you're going to get to 100 next year.
Can you explain to me how that's going to work?
Yeah, I'm going to hire 80 more reps.
Right.
And how long is it going to take to hire those reps?
Six months.
What's the ramp time for those reps?
Six months.
You're fucked.
Don't tell me you're going to do 100 million next year.
You're not going to- And it's also assuming the same efficiency level at scale.
And you will do.
It's a great point.
As you scale, you would expect productivity to come down.
The only place I did not see that was Snowflake.
We could not hire fast enough to bring the productivity down, which tells you you have got lightning in a bottle.
So I take my productivity, expected productivity in last year.
Let's assume it's a reasonable number.
And then I tack on 20% to set the quota.
I expect my average rep to sell 1.2.
I don't want everybody hitting quota.
So then I'll take the 1.2, tack on 20%, and then that's my quota for the following year.
Do I get comped on upsells as well?
100%.
I do.
And CS doesn't.
There's so many different ways to skin that cat.
But look, new ACV is new ACV.
Now again with comp plans.
The wonderful thing about sales and comp plans is there's a thousand tweaks I can make.
Every tweak will drive a different behavior.
So let's say and I had this happen with one of my companies and I don't know how in the weeds you want to go with this shit.
As much in the weeds as possible.
Okay, let's say that my new logo ACV, right?
So let's break new ACV into two buckets, new logo and expansion.
My new logo ACV is through the roof, which is a great problem to have, okay?
My expansion ACV, my net dollar retention is not where I want it to be.
I need my NDR up.
So what does that tell me?
My reps are focusing on new logo.
And by the way, this is the opposite of the normal problem.
Usually what you have is my expansion is high, new logo is lower because new logo is harder, right?
But stick with this example.
New logo ACV through the roof.
Expansion ACV, not where I need it to be.
Right now I'm paying 15% on both of those.
Well, now I need my guys to go focus on expansion.
No problem.
I'll take the pay rate on the new logo ACV, drop it from 15 to 12.
On the expansion ACV, I'll raise it from 15 to 17.
So if you're a rep, you're getting 17 on expansion ACV, 12 on new logo ACV.
Where are you going to spend your time?
Yeah.
That's not the usual problem.
The usual problem is my new logo ACV is not where I want it to be.
All my reps are doing is focusing on expansion.
Why?
Because expansion is easier than opening a new account.
So usually you have the opposite problem.
And then you can do things like listen, I'm not going to let you get into accelerators until you hit your new logo gate.
What's that mean?
You have to close eight new logos a year.
And if you don't close eight new logos a year, you can't get to your accelerators over quota.
It's very common.
Does that not make it harder for you to hire great talent?
Because I'm with you, but if I'm a great talent, I get you and I understand that.
I completely understand that.
But dude, I can make much more money elsewhere, where the looseness of the comp bands means I can take advantage of it.
Honestly man, in most interview processes you're not getting into this level of detail around the comp way.
Do you find the best reps are incredibly financially motivated?
Again, getting back to that interview question, what motivates you?
Money, wrong answer, right?
So like, of course, like we all get, why did I get into recruiting?
Why did I get into sales?
Because there's a direct correlation between my skillset, my work, and how much money I make.
All salespeople are wired that way.
But you want to be careful not to have people that are exclusively focused on that.
Because again, why do I want you to come work for my company?
I want you to come work for my company if you just say well, I think I can make more money working there than other places.
Not fucking good enough.
I want you to want to come here, number one, for development, right?
That's the thing we sell at our companies.
Man, I'm going to make you better.
I'm going to train you.
I'm going to make you better.
So I need reps that care about that as much as they do about money.
And we can sell that, because if you look at the ecosystem that John McMahon and myself and some others have built dude, you come spend four years with us.
We're going to make you a rock star. you are going to be an expert in your craft.
And by the way, if you come out of one of our companies, everybody's going to want to hire you.
So yes, financially motivated, but it can't just be financially motivated.
What would you say to people who say often people say to me well, you know, I work very hard and I espouse the importance of working very hard at 996, 9am to 9pm, six days a week.
Chinese kind of style.
It's not literal.
People take it too literally.
What do you say to people who say that yours excludes parents?
I have four kids.
Figure out a way to balance it.
I mean, my kids would... Listen, man, did I miss some shit with my kids?
Sure.
Yeah.
I mean, we talk about it all the time.
I've got a lot of companies which allow slash.
Don't mind people leaving at three, four in the afternoon to go pick up kids from school.
Is it possible to have that culture and also an efficient sales org?
What are they doing after they pick their kids up from school?
Getting back online pre-dinner, post-dinner.
I mean, look, it depends like to what frequency, right?
Like one day a week, you're picking your kid up from school, whatever.
If you tell me five days a week you got to leave the office at 230 to pick your kid up from school.
That is not going to work.
Unless you're going to go pick your kid up from 2.30, bring them home and come back to the office.
All right, I can live with that.
Have you changed at all as a salesman?
I probably become more set in my ways, to be honest, and less tolerant.
Why is that?
Because you don't need to.
Because I just don't have patience for it anymore.
Unfortunately I don't have to work, but I've just learned so quickly that if I'm working with a set of people where we're not philosophically aligned, it drives me insane.
I will end up having a ton of conflict and ultimately they are who they are and I am who I am.
And what I figured out is I got to come to that conclusion really fast.
Like we can either work together or we can't.
And if we can't, that's okay.
Is it okay to be disliked as a sales leader?
We have a lot of sales leaders who will listen and they'll go, dude, I'm going to be hated.
He's so unpopular.
Listen, you can be disliked.
You need to be respected.
Like if your sales leader is beloved by everybody, you got the wrong guy.
I mean, there's a couple of sales leaders and I won't bring their names up.
Oh my God.
And I'll, I'll screen for this.
In an interview process, I loved my CRO.
He was the best.
Good guy.
Why'd you like him so much?
Oh, dude, just, you know, man, he never really gave me shit.
He always had nice things to say.
Loved to get a beer with him.
Just a fucking good dude, you know?
Just really liked him.
That's not the guy that I want to work for.
I want to work for a guy that's going to call me on my shit, that's going to make me better, and it wants to win as badly as I want to win.
And if you want to win as badly as I want to win, you must have conflict.
You cannot win without conflict.
And when you have conflict, you are not always going to be liked.
And by the way, that's the biggest shortcoming I see of a lot of leaders.
They cannot stand not to be popular with the people that are beneath them.
They avoid conflict, which means they avoid making the right decision.
So, like, there's leaders I've worked with.
I'm like, look, this guy's got to go, man.
Like, it's time.
Oh, you know, but he's got a wife.
And I know this is controversial.
I just don't give a shit.
He's got a wife.
He's got kids.
He's been here for three years.
He's a great guy.
I just can't see firing him.
Well, let me ask you something.
Do the rest of the employees have wives and kids?
Do our shareholders have wives and kids?
Because I think they do.
So you're protecting the individual because you feel bad for him.
I'm protecting everybody else because he's failing us.
He's not doing his job.
And so his presence here hurts the company.
And when it hurts the company, it hurts the employees and it hurts the shareholders.
Get them the fuck out.
To what extent do you criticize in public, where the lessons are then transferable to everyone in the room?
They can hear, they can understand, they get the feedback.
Versus the modern day, you can't say anything negative in public because it might cause embarrassment, humiliation lessons there.
So when Treadar Chris asked me to come back in, I got on stage August of last year.
Entire, I don't know thousands of Snowflake employees, executive leadership was there, the entire sales organization was there.
And I got on stage and I just walked out and said look, I'm just going to let you all know, the fucking country club days of working at Snowflake are over.
You guys have all been resting on your laurels.
There's exceptions in this crowd.
Many of you don't work hard.
So what's going to happen in the coming days is you're going to find out what we expect from you.
And you're either going to step up and meet those expectations or you should self-select out.
By the way, if you know you're not going to meet those expectations and you think you're going to cruise, I promise you we're going to fucking find you.
And if you're not up for this, that's okay.
And there's people in this room that are not capable of doing what we're going to ask you to do.
Be honest with yourself.
Say I'm not capable of it and then step the fuck out.
This was half the room called me and said, oh my God, thank you.
We needed this.
We need the shot in the arm.
We've lost our way.
The other half, I think I got like five HR complaints.
Who is this guy we've brought into the company?
Holy shit, what is he saying?
So I think you can do it like that.
What I need to get better at is if I'm gonna call with six or seven or eight people And I'm hearing things I don't want to hear.
I tend to be reactive and emotional because it's the most effective.
To me, it's about being effective.
And me, effective is direct and to say things when I want to say them.
It's not to focus on, well, let me think how I can say this and not hurt the person's feelings.
And I need to get better at that.
So to answer your question yes, it's not great to give critical feedback in front of others, because you humiliate the person.
And honestly, that's never my intent.
My intent is to be effective and to get the problem fixed fast.
But it's hard when the lessons that are being espoused are transferable and the team can learn from them.
If you're doing pipe review and actually you're following up on why someone's not multithreading and actually the channels with which they were pursuing the second and third relationships.
That is a really beneficial way for other people to be reminded.
Ah yeah, actually get off email and get onto WhatsApp or get onto going to their customer event.
It's a very beneficial thing for other people to be surrounded by.
That's why I think it's so important to be in person and why I think a lot of this business is apprenticeship businesses.
And so if I take those lessons and I go oh Chad, I'm worried about your feelings, so let's come in a room.
Well, now I'm actually sacrificing the lessons of other people who will benefit from it.
Yeah, I mean, and I agree with you.
So it's about, and again, this is not my strength.
It's about the way in which you deliver the feedback.
I bet you crush that.
Because I've just direct like, oh, I'm not going to do this.
I'm not going to do this.
What?
What are you talking?
You know, I'm not very good at it.
Do you find it difficult to context switch with your marriage, if you don't mind me asking?
I really struggle with this where, like you're quite direct and dictatorial in how you lead and you come home and you can't be like the same to your wife.
Yes.
So we have a saying in my house, which is I go from hero to zero in a five mile drive every day.
And that's not to suggest I'm a hero at work.
I don't mean to say that.
But at work, I am one way.
And when I get home, and I hope at work, people respect me and listen to what I have to say.
When I get home, I have three daughters and I have a wife.
And if they even sense that and this goes down to my nine-year-old daughter they will simply call me out on that shit.
Hey, dad, you're not at work.
We don't give a shit what people think about you at work.
And I have to make a lot of decisions at work.
I have to be a certain way at work.
I would prefer not to be that way at home.
I cannot in my personal life not to get too much into it.
I have so much conflict at work.
I can't have it at home.
I can't have conflict everywhere in my life.
And so home is the place where I can't have it, which means, to your point, I cannot be that same person.
Do I struggle with it?
Yeah, I struggle with it a bit.
My wife will sometimes be like, we're not on a fucking work call.
I don't work for you.
You know, it's not my intent to talk to her that way.
It's just to your point, sometimes you're still locked in that mode.
So yeah, it's hard.
I find it really hard.
Often like my family will be, like my mother will be around my office and she'll be like hey, can I stop for a coffee?
And I'm like, no, because I can't just stop for a coffee and just like switch that mind.
I'm going to be a dick and I don't want to be to you.
So like, get on with your day.
I mean, again, not to get in the marriage that I respect the shit out of my wife.
I have no issue saying, I think for the most part, I make good decisions at work.
Outside of work, you know, my decision-making sucks.
And so honestly, most of the decisions in my life outside of work are made by my wife.
And I'm perfectly content with that because she makes better decisions than I do.
Could you have done what you've done career-wise and building sales team-wise without her being a full-time mom?
No chance.
None.
Zero.
And my kids are well-rounded.
I say this because other people tell me.
Everybody thinks this about their kids, I guess.
But I have four amazing children.
I'd like to think that I contributed some because I really do try to have balance and be present.
I go to games and this, that, and the other.
So you try.
But 98% of that goes to my wife.
You said you don't work for money now, obviously.
Bringing kids up with money is a very difficult thing.
You're a brilliant leader.
How have you thought about that transition?
Because it is a difficult one, which many billionaires and multimillionaires struggle with.
It's so hard.
I was just talking to somebody we've already talked about in this call yesterday about this exact thing.
And it's like, how do you teach them grit?
Again, back to when I started Pizza & Associates, I either put food on the table or we didn't eat.
And my kids will not experience that.
And so how do you give them that same level of grit and fight without ever having to face those kind of difficult challenges?
Certainly they have other challenges.
You know I've got.
Some of my kids have been through some serious shit, but not that particular challenge.
So do I struggle with that?
Yeah, a lot.
I had one of my kids yesterday call me and she's not happy with her grades and she thought I was going to get mad at her.
And she's in college.
And it was like a 3-3 or 3-4, but she wanted a 4-0.
And she expected me to get mad at her.
I said, listen, the world is now going to hold you accountable, not me.
So you are now responsible for the results in which you end.
By the way, the world doesn't give a fuck.
You're used to coming to me and asking me to fix shit.
The world doesn't care.
So if you want to get a 3.3 versus a 4.0, you will live with the consequences of those actions.
So if you're disappointed and you feel like I want to get into law school and I can't get into law school, that shit's on you.
I'm not mad at you anymore.
But you have a stark reality, which is the world doesn't give a fuck and nobody is coming to save you.
And so I'm constantly trying to reinforce that message, but is that difficult?
You know, yeah, it's hard.
I was once told by Scott Dietzen.
He taught me the best thing ever about parenting.
He won't remember it.
I'm sure it was very slipshot for him, but I remember it always.
He said, if you want the secret to parenting, It's watching National Geographic and the Discovery Channel.
And you'll see elephants.
And what do baby elephants do?
They just follow their parents.
So if you want your kids to work really hard, work really hard.
If you want them to be kind to waiters, be kind to waiters.
They follow you.
Really good advice.
I mean, look, my kids have seen me work very, very, very, very, very hard.
And so I hope that they follow that.
My son works for me, actually, and he gets no breaks.
And I am for sure harder on him than any of my other employees, for sure.
My brother works for me too.
And I am too.
I think poor dude goes home stressed every night being like everyone else gets a free ride.
Yeah.
Right.
But number one, look, you came to work for your dad.
So there's that, right?
You want to be able to go home.
If I'm my son, I do it for him.
He needs to be able to go home and recognize that everything he's got and he's earned.
I've let him in, so I open the door, but anything he does while he's here, he's earned it.
What's the hardest lesson that you've learned as a sales leader that you're quite pleased to have learned?
Again when you've asked me about people that I work with.
It's identifying people quickly that are like-minded, that value the same things that I value, and learning that there's not many of them in the world the Mike Spizers of the world, the John McMahons, the Sridhar Ramaswamis.
And when you find those people, treasure them and recognize just how rare they are.
Can we hire the people that we want to with the values that we have at scale?
Sure, there might be 10, there might be 20, there might be 30.
But when you get to Snowflake size, I hate to say this Chad, not everyone today in Snowflake is the mindset that you and I have.
I'm not dissing Snowflake.
I'm saying any company of that size.
I'm a winner.
I'm aware.
Look, Elon's figured out how to do it.
I mean, look at Elon's companies, man.
Like I'm at XAI.
Every person is wired like this.
Are they?
Dude, you have to be.
You can't survive in that environment if you're not.
And so, you know, people say what they say, hardcore, this, that, and the other.
But man, there are a bunch of like it is the most mission focused group of people I've ever been around.
All of which I'm sure there's some exceptions somewhere but all of which are prepared to sacrifice and do what they have to do to help accomplish the mission.
So yeah, I think you can do it at scale.
I think it's extremely difficult.
Can you do it with 50, 100,000 employees to it?
No, I don't see how you can do that.
I just don't see how that's possible.
Totally agree with you.
Can I ask, what is no one talking about that everyone should be talking about when it comes to the state of enterprise sales today?
I would probably answer it slightly differently.
I think it's, and it's not so much about sales, it's about the where are we going?
Is AI going to remove the SaaS industry, for example?
What happens to SaaS?
Does AI eat it all?
Are there companies in that space?
Like you know companies I'm involved with code customer service.
Are the LLMs going to eat that space?
Or are there going to be independent companies that are in the AI space?
Are there going to be SaaS companies that don't get killed and actually benefit from AI?
Where does all this land in five years?
And I don't think anybody knows.
And you can look in the public markets and look at, for example, the multiples that you see for SaaS companies.
They're compressing.
Why are they compressing?
Because people are questioning the future of SaaS.
Is it going to exist?
Whereas AI the multiples could palantir, they're through the roof because they think it's never ending upside.
And so I think maybe it gets enough.
I don't know.
Maybe people are talking about it and I just don't know it.
But I think it's going to be wildly fascinating in five years to see where we sit.
And I don't think anybody knows.
And does that impact sales?
It does.
But again I read articles from like engineers and things like that that have never been in enterprise sales talking about it's the end of enterprise sales.
The fuck do you know about enterprise sales?
I just don't buy into that.
And I think that people need to understand that enterprise sales people have been predicting the extinction of enterprise sales for 25 years.
And yet here we sit.
I think it changes the structure of sales teams themselves.
Will SDRs go away?
Will BDRs go away?
100%.
I think SDRs and BDRs are five years gone because I think AI replaces them.
I think that's the one function that to me is most obvious.
I don't think we're there yet, but yes, I think it, does it completely go away?
I don't know, but it gets a lot smaller because there's so many efficiencies you can.
You will be able to drive in that segment of the sale by way of AI.
I think the other structural changes again, this relationship between the pre-sales engineer and the forward deployed engineer.
Where does one stop and the other start?
And I don't know the answer.
And I promise every company I'm involved with, we are discussing this.
There are certain companies that don't think you need pre-sales engineers at all anymore.
How does that work? don't have a pre-sales engine.
You just have a sales engine.
You have a forward deployed.
So again, by way of AI, what I am seeing is we are able to enable salespeople in a way that we could not do so before.
So five years ago, if you said, look, your reps have to do their own demos, be like, oh, what?
Salespeople can't do their own demos.
We need SEs for that.
Now I expect reps to do their own demos.
Why?
Because you can go into Grok.
And of course I'm going to go with Grok.
But you can go into one of the LLMs and we can enable these salespeople from a technical perspective in a way that wasn't really possible before.
And so the pre-sales part of the sales process.
I think much more of that load will be given to the sales person.
And then, as you think about post-sales, that's really going to fall into the world of the forward-deployed engineer.
So I'm not saying pre-sales is going away, but I think it's going to change.
And I don't know how yet.
It's too early.
Alternative LLM provider has the enterprise sales chops you most respect.
None.
I mean look, you're gonna put me in a position where I'm gonna say things that's gonna make even more people hate me.
I mean, look, when I build a sales organization, what do I focus on?
I focus on the quality of the sales organizations in which you've worked for, okay?
So people will say, focus on domain, focus on this, focus on scale, bullshit.
All I care about is where has this person worked?
Who trained them?
Do they come from a world-class go-to-market function?
If you look at the guy that we brought in to run enterprise sales, Graham over at XAI, where does he come from?
MongoDB.
MongoDB at scale has the best training and development of any at-scale sales organization I've ever seen.
It's a world-class place.
That's why I brought him in.
If I look at some of the other places and the people that they have hired to run sales and look at the companies they've come from, do I think they come from places that had world-class sales organizations?
No, I do not.
Did you contemplate joining OpenAI?
I've had conversations.
There was a high-level individual that I spoke to at the company maybe a year ago, before I decided to go to XAI.
Yes, I didn't feel it was a good fit.
And I'm not saying they offered anything.
I'm saying we had an introductory conversation that they initiated.
You would know this person's name.
I'm not going to mention it.
He probably doesn't even remember the call.
But absolutely, we had that conversation.
It was 30 minute conversation.
And at the end of it, it was clear to me it was not a good fit.
It was a personality clash.
That's very surprising.
It wasn't even a personality clash.
It was just.
There was a little bit of like we understand enterprise sales and I get this a lot right.
Like if I'm talking to a founder or a CEO or a high level person that's making this decision, and I sort of get this and I look at their current sales organization and I ask questions about how they're doing things.
And they tell me, and I think, boy, there's a lot of things I could improve upon here.
And then you start to tell them some of those things.
They're like, no, no, no, no, no.
We kind of know what we're doing.
Well, it's like, well, if you know what you're doing, why are we on the phone?
You got it.
Nothing I can add value to.
You know what you're doing.
I don't think you know what you're doing, but...
But you do.
Is the lead that Anthropic have built in Enterprise catch-up-able?
Look, where do I think AI is going?
Look, I mean, XAI is going to have Optimus, right?
Where is this going?
We're going to have Optimus.
Whatever the relationship looks like, I can't speak to any of that.
But where I think ultimately all this is going is there's going to be AI-driven robots.
And I think that will be enterprise.
And Jensen talks about this.
Everybody talks about it.
That's where this is going.
So at some point in time, to be competitive in the enterprise, you will have to be able to scale robots.
That's my view of the world.
You can challenge that view.
But if you have that view... who's going to compete with xai and i recognize my bias but anthropic to your point has a big league for sure but i think you can actually unbundle that to like consumer and chat gpt goes to open ai enterprise software goes to anthropic and enterprise hardware robotics frontier goes to xai But I think those two things intersect.
When you say enterprise and robotics, I think they intersect.
I mean, look, again, I'm biased.
Look at the rate of change of the XAI model.
We didn't exist two years ago.
And look how good the model is today.
Ultimately, this is going to come down to compute.
And there's nobody going to compete with us in compute.
Can I ask, when you look at that speed of execution now sitting internally, what is it that drives XAI's speed of execution so viscerally differently?
How many people have done hardware at scale successfully and at scale is key successfully, and you could say NVIDIA hardware at scale successfully in the last two decades.
You got cars and robots.
There is no close competitor to doing hardware at scale than Elon.
And so, when you can do that and ultimately this business is, why do you think you see all these trillion dollar deals and this, that and the other?
If these guys are all right, and I don't know, I'm not smart enough to know, but everybody seems to say this is going to come down to compute.
You can't compete with these guys.
You can't compete with us and compute.
And why can't you compete with us and compute?
Who knows hardware at scale and is better, is even close to us and hardware at scale?
Nobody.
Internally, is that the feeling?
You know, I'm careful not to speak for a bunch of people.
I don't like to do that.
I can tell you internally, the feeling is it's not a question of if we win, it's when and how big.
Is that great?
And is that sales morale different to what you've dealt with in the past?
The sales morale at XAI is incredible.
I mean, all are so thrilled to be a part of this.
It's not about making money.
It's not about this.
Like they all think they're going to make a bunch of money and they will but man, they just want to be a part of it.
Why is XAI not in the conversation for enterprise so far?
Everyone like crowns Anthropic.
Oh, they're the kings of enterprise.
Oh, they're the kings.
And I respect Anthropic greatly.
I don't mean it.
But why is XAI not in the conversation?
Our APIs, our enterprise APIs have been around for about six months.
Again, remember, Anthropix API has been around for a long time.
They have just simply been at it longer, right?
This is brand new to us.
We are just getting going.
I think you'll be floored when you see the numbers that come out of our business on the enterprise side in 2026.
I think people will be shocked.
I'm going to do a quick fire with you, where I give you a series of short questions and you give me some incredibly blunt answers because you've been so fluffy for the last hour.
Biggest new hiring red flag that you've added in 2025.
It's a new one.
Let's assume it's a leader because I'm most close to leaders.
Cadence.
So I like to find out what have you been doing?
You've been here for a month, two months, three months.
What's the cadence with your direct reports?
How often are you speaking with your direct reports?
What are you doing to understand our business and understand the people that report to you?
And if you haven't immediately started having one-on-ones on a consistent and frequent basis with your direct reports, it's a concern.
What's the right cadence?
You need to be having one-on-ones with your directs every week.
I talk to them all the time.
It's different.
A one-on-one is different.
If you talk to them ad hoc, they're calling for something specific and you're covering that specific subject.
That is different than a one-on-one where we're going to focus on what's going on in your business.
What do you know now that you wish you'd known when you started advising at XAI?
I knew it was going to be a lot of work.
It wouldn't have changed my decision.
I would never change this decision.
I'm loving it.
But it's as much work as I knew it was going to be, it's probably more.
Is it the hardest working?
Oh, sure.
Yeah.
No, no, no.
I mean, snowflake was a lot when we were scaling, but this is, it's a lot, but it's, it's a choice.
I'm choosing to put the hours in that I'm I'm, I'm choosing to put in because I absolutely love what we're doing.
What's one thing you've become even more extreme about?
You touched on it earlier.
Are you afraid to fire fast?
I'm more extreme about firing fast than probably ever before.
If I were to ask your wife, what's your biggest weakness?
What would she say?
At home or at work?
Either.
You choose.
At home, she would tell you it is my lack of being present.
Even if I'm physically there, I'm not mentally there.
That's tough.
It's a consistent conversation.
And my problem is I can't.
It's very difficult.
This thing does gift or a curse, whatever.
It goes 100 miles an hour all the time.
And fortunately, unfortunately, the thing it's usually focused on is work.
Penultimate one, what belief do you have today that you're starting to doubt?
I think that 10 years ago I would have told you that you can get away with a shitty product in a world-class sales organization.
I would tell you today I think sales execution is just as important, but ultimately, if you have a shitty product, you can't win.
Some hard lessons there.
Final one.
What are you most excited about?
You're sitting at the center of some of the most exciting teams in technology.
What are you most excited for?
I'm just excited to see where this thing goes.
I don't know.
I mean, I'm not like the super smart guy in the room that understands where AI is going.
I don't, but I am fascinated to find out where we are going to be in two, three, four, five years.
And I love that I get to be some small part of it.
Love it.
Chad, it's always my favorite sitting down with you.
You are always the best.
As I said, no one is quite as direct as you are, which makes my conversations with you the most entertaining.
I appreciate it, man.
This was great.
Thank you so much.
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