Help me understand as a founder, how do I create a comp plan for sales reps first?
And then second, how do I create a comp plan for sales reps to upsell efficiently?
I think like in reality is like pretty much exactly the same, in the sense that what we do at 11 Labs is like I set up like this threshold, which is like we ask everyone to bring 20 times their base salary.
That's your quota, right?
So if I pay you 100K a year, your quota is $2 million.
That's it.
If you don't achieve your quota, then you're going to be out, right?
And we're ruthless on that end.
So everyone actually smashes their quota at 11 apps.
I would rather have smaller teams that like smash their quotas and I pay them-.
What percent do you hit that quota?
Today is more than 80% hit their quota, right?
And they unlock accelerators and all of that stuff.
But the interesting piece on the upsell side is we compensate both the account manager sorry, the account exec and the CSM.
It's like if the contract is upsold, if we upsell a company within the first 12 months, the account exec continues to accrue like quarter retirement and also like commissions.
And the CSM is compensated in NRR, right?
So I'm paying double, but I don't care.
It makes perfect sense, because then I have these two people busting their ass to make sure that they actually can make more money, which is fantastic for me as a company.
Totally get that.
Again, I just want to pick on some things you said there.
You said that 80% is phenomenal given the ambitiousness of 20X.
If you're advising me as a founder, is that 20X a good rule of thumb or do you think that's specific to the margin profile of 11 Labs?
I think the reality is every business will be slightly different depending on the industry you're selling.
So what I always tell everyone is let's start with 20X.
And then you can adjust, right?
Like what I told everyone in the company, like the first account execs that I hired was like guys, I have absolutely no clue if 28 is going to be the right number or not.
The standard in SaaS is that, like you have like, somewhere like six to seven, maybe eight, maybe 10, right?
That is the standard.
I know this is what you are expecting.
This is not how we're gonna be building a company at Level Apps.
If you're thinking about doing the same that you'd be doing at Notion or all of these places like Salesforce and so on, then you're in the wrong place.
So we'll experiment.
If we get it wrong, Absolutely fine.
We'll compensate you correctly.
And then essentially, we will change the entire compensation structure.
But if we get it right, which I think it is the right number, this is what we're going to keep.
And we've kept this since day one.
We've been running with this for the past two and a half years.
The 20% that don't, what did they get wrong?
When you look at that cohort, what do you learn when you're looking at the next hires?
So one is, so there's two buckets within this 20%, right?
One is like people that truly don't fit in the company, right?
That's one.
And that what they get wrong is fundamentally like they're not product experts.
Like they haven't actually dive deeper enough in the product that actually can understand that they have the aggressivity to actually go into the market outbound and so on, right.
Those guys, unfortunately, we terminate the contracts.
We give them a compensation.
So we usually pay anywhere between like two to three months of base salary.
So that like we tell them like, hey guys, it didn't work out.
We do believe that like you are very strong.
It didn't work out 11 labs because the way we do things, but you're gonna go somewhere else.
And when I help you get somewhere else.
That's why we give you this two or three months compensation severance package and you can do super well.
So it's us, it is not you, it is us fundamentally, right?
The other percentage of people that don't get into that 80 is people that are building long-term pipelines.
So I have a guy, for instance and there's been plenty of them over the past two years, but there's this guy that we hired from AWS mega smart guy.
Mega smart guy, like super good.
And you look at the core numbers and you're like thinking, shit, I should be fighting this guy.
He's not hitting the quota.
He's like less than 50% quota, right?
And then like any other person will have like, look at the numbers and be like, this is not a fit.
Like I cannot keep this person.
Talk to any investors and we'll tell you like, fire this person, like it's just not a fit.
You dive into the numbers and you realize like oh, it's because he went to the proper enterprise cycle and then he's building the most amazing companies you can have in the entire UK region, right?
Like, wait a second.
Why would I fire this person when he actually needs a lot more ramp?
Fundamental, because he's tackling the difficult, challenging industries.
We kept that person, and this person absolutely smashed it this year.
200 plus percent quota.
So you need to actually differentiate.
What is it actually?
Someone that doesn't fit in the company for a variety of reason and who is actually building a proper pipeline over the long term, and they need a little bit more help.
I completely disagree with the notion that because someone's selling to a large enterprise, you can't tell whether they're good or not for a much longer period of time.
I think, like you did, that you look under the hood, you look at the relationships, you look at the conversations, you look at the interactions, you look where they're at.
You get a good enough feel of how close it is.
Yeah, I completely agree.
And what I do is like with the team, and we do like we have quite a lot of people in the go to market side, like globally we have about 90 people or something like that.
But what I do is I have sessions every single month with my account execs and my CSMs where we go deep into the pipeline.
It's pipeline review sessions, and I drill them on absolutely every single detail.
And we do it in front of everyone, right?
So if someone hasn't been building the proper pipeline and I do see the numbers and I do see it I will tell it in front of them, like you have not done a good job.
You're actually slacking, you're doing this, this, this.
Or I will tell them, you're actually lucky.
In the past month, you've been just pure, pure, you hit your numbers because of pure luck.
Next month, you're not gonna hit them, so you're not in the good spot right now.
And if they improve, which the majority of them do the following month, I'm like.
I know I gave you a lot of crap last month.
You've done fantastically well now right.
But you need to have that honesty with your team, because otherwise, what are we doing here?
If we're trying to build a generational company, you cannot do things like the traditional way.
You need to do it in a completely different way.
You said there about those meetings with execs and CSMs.
Can you actually just take me to them?
You do them monthly, correct?
We do them monthly.
Do you do them separately with CSMs and execs altogether?
Yes.
CSMs have their own meeting, and then account execs have a different one.
And then in the account execs, I split it by region.
And they're in-person or remote?
All remote.
There's an interesting thing.
I know how some people are about being in an office and all of that stuff.
And when I see my sales team in the office multiple days, I start getting worried.
Because if you're a salesperson, you need to be on the road.
I travel 75% of my time.
In the past three weeks I was in San Francisco, I was in Mexico City, in Tokyo, in Seoul, in Singapore, in London and I'm heading to Dubai right.
That is the standard thing.
Salespeople need to be on the road talking to their customers, whether that is in the UK, that is across Europe or that is like in Cancun.
I do not care.
If you're constantly in the office doing virtual meetings only with your customers, you're doing it wrong.
Fascinating.
How do you build a sales culture remotely?
By being ruthless.
You need to be on top of it.
It requires extra time and it requires people to be forced to actually be on the road.
We will have multiple touchpoints, but I don't hire people that are junior.
I hire people that are actually autonomous, very energetic, very passionate, will accept a million no's, fundamentally because building sales is tough.
Building sales remotely is even tougher, and you just need to be on top of it.
We're going to get to actually the people, but I do want to stay on these meetings.
We have them separate.
We have them remote.
We have them monthly.
Let's start on the sales team side before we move to the CSMs.
What are you expecting them to bring?
Should they send pipeline ahead of time with notes?
What's that prep phase pre-meeting?
They will essentially tell me how much they've closed, how much it's in the pipeline, how much they're expecting to close in the next 30 days.
Essentially, we start going to the deals.
We talk about the biggest deals and all of that stuff.
And then I always look while they're talking.
I look at their pipeline and I pull up some random deals so that to understand whether they have a full grasp of what they're talking about.
Because sometimes sales teams they can end up cheating and then having a bigger pipeline that is inflated but it's not moving right.
So like, I want to understand and catch them.
But for me, the key item that I always tell them is like at the end when they present.
I keep interacting them and giving them feedback and asking questions.
But at the end of it I'm like the question is always the same what are the blockers that you have and how can I help you?
And for me, what I do is I build a list of the blockers for each one of them, summarize them later on and then post it across the entire organization, being like hey, if we solve all of these blockers in Europe, we could be making a lot more money.
In India, these are the blockers.
In Spanish LATAM, these are the blockers.
In Middle East, these are the blockers, right?
And then everyone understands what are we, what are we in each one of the regions.
Got you.
Okay, and so we have that.
And when they come to you and they say something, because I'm on a lot of boards and very often it's like
That one, that slipped to next quarter.
What do you say when you get reps who say that?
And what's the right way to deal with that?
I mean, there's always like deals that will end up like moving towards the next quarter.
That's inevitable, right?
And you do this, by the way, in front of everyone.
You don't do it one by one.
No.
No one has enough time to do it one by one.
And I think everyone can benefit from doing it in front of other people.
It's the pressure.
It's the fact that you can give them bad feedback.
People learn from it, right?
So the learning components, I think it's important, specifically from a sales perspective.
How do you do that?
I'm genuinely asking you because how do you do that without shaming people?
I don't know.
You need to shame them.
Like if someone hasn't done their job, they haven't done their job.
And you need to actually publicly tell them so that like they understand they haven't done their job and everyone else knows that, like they're getting shit for it.
So you don't agree with the praise in public, criticize in private?
No.
I don't agree.
I think, like, I need to tell you, like, what is right and what is wrong.
Of course I'm not going to tell you like this is like full shit, like you're going to get fired.
I'm not going to say that.
But at the same time, I'm not going to hold back on saying if you haven't done a good job.
And, for instance, there was like a case earlier this year for one of my account execs that I told the person like you just were lucky.
And you've closed these deals just for pure, pure luck, but you haven't done any good job.
And then like the next one, like there was like, it was so funny.
Like there was exactly two people, the same case.
And then the next one that came in presenting was.
I told him, like you have done exactly the same thing, but you have not been lucky as the previous person.
And that's why you haven't actually closed anything.
Both of them, the following month, absolutely smashed it.
It's like salespeople need to be on their toes all the time, and they need to be told.
And if they're good at their job, they're going to accept the criticism, learn from it and then improve.
How long are those meetings?
We end up putting usually an hour and a half and then people have about seven, eight minutes to present and then it's very, very quick in general.
Absolutely love that.
What happens, and this is a hard one because 11Laps, seemingly just such rocket ship revenue growth.
What would you advise if you would put on a hypothetical hat for it not working so well?
What would you advise a sales leader or a CEO?
Who's taking this, who's going to run with this?
But the numbers are not up and to the right.
How do I have a meeting like this without feeling like dejected demoralized, when numbers aren't up and to the right?
I think it just depends on why the number's not on the right place, right?
I think you need to do the back work first to understand what's happening.
Is it because the sales team is not good enough?
Is it because the product is not good enough?
Is it because we're not being aggressive enough?
What is essentially happening here?
Because if you don't have a full understanding, then you might be shaming people for the wrong reasons, right?
And the best way of understanding is like roll up your sleeves and actually pitch customers.
I am the like, like sdr in chief in the company right, like i absolutely love it.
I actually love outbounding people.
I love it like we were like matty and i were like in singapore like uh, talking to, talking to Razer, the laptops company.
Absolutely love the brand.
And then that came out because I outbounded the CEO and I messaged him like, Mati and I are going to be in Singapore in a few days.
We'd love to actually meet and figure out how we can talk. how we can figure out like a partnership.
And he replied saying like, yes, let's do it.
So we ended up spending like a good hour in their offices, which is fantastic.
But like I do it all the time and then I pass it to the team because I do believe like a good leader needs to be a good outbounder.
It's interesting that, like I have this narrative also with VCs, right.
Like for me, a VC is just a glorified SDR or BDR.
What is your advice to me, a sales leader or CEO who's not as experienced and brilliant as you, on the right way to forecast?
Is it like be optimistic, be realistic, be negative?
How do you advise on that?
Be as negative as possible, I think.
So I always like advice theme on if we are now setting a deal that is going to be half a million dollars fantastic.
Just put me that like you're going to be signing it at $24,000.
I don't want to put like an unrealistic number because like, if you think it's going to be half a million dollars, the most likelihood is going to be 100K.
So let's just not inflate the pipeline, because then essentially account execs are incentivized to inflate as much as possible so that it looks like better.
I don't like that.
So let's put the lowest possible number.
That's fine.
We'll fix it later.
But at least we're underestimating what it's going to look like.
But we do it also for the board.
When we put the board eggs and we tell them hey, these are the pipelines, these are the contracts, all of that stuff, we put the lowest possible number because otherwise it inflates.
And if it inflates the numbers also, investors will ask more questions and be like hey, by the way, you put me this account over here that it was going to be a 2 million account, but it seems you sign it at like 100K.
What?
And it just raises such a number of awkward questions that it doesn't make sense.
One of the fastest ways, I think, to create distrust, obviously when you have investors at your company.
Obviously you share a pipe often of what you expect it to be.
When we do reference calls, as all investors do, with friends who are CEOs of those companies, they're like dude.
We'd never spend more than 25K on this.
And they've got it in for 250.
Fastest way to lose credit.
Correct.
Correct.
And there is another item in there.
It's like if you always underestimate or undervalue your pipeline.
It means that to reach the numbers that you had, you need to have a higher pipeline.
So there is a lot of consequences of all of this.
You'll end up working twice as hard because your pipeline is not big enough for the year-end number or the quota-end number that you needed.
So it's a forcing mechanism to have the right culture in place.
We went through this cultural change earlier this year because I actually got obsessed.
We were doing the majority of deals, like 90% of the deals were mostly inbounds, right?
And as the team keeps growing, I was getting extremely worried that we were not building the right mentality in the team.
It's like, if at some point the pipeline dries up, then you essentially end up dying, right?
So I put a goal saying like, we need to migrate to 50% outbound, 50% inbound by the end of the year.
So it kept happening, absolutely everyone.
I still put together a report every single week with every single account, exec and SDR in the team, telling them like you've achieved your target on a weekly basis.
You haven't achieved it.
And if people don't achieve it, then I call them out.
Like I did it so often that I ended up like getting like people make jokes about outbound outbound, outbound.
Like, I'm the outbound king.
Yes, I love it.
And people like Know that.
Like, if you are on that list of people that are not doing their outbound, I'm going to call you out.
And if at some point, like I call you out too many times, then we're going to have a problem, right?
It's a cultural thing.
And we end up like migrating from, like this, 10 outbound sales that we're doing to 40 that we do today.
