Insight Partners' Pablo Dominguez on this episode
Pablo Dominguez is an Operating Partner at VC firm Insight Partners, where he leads a team that coaches portfolio companies on Go To Market strategy. He and Matthew May recently authored "What a Unicorn Knows," a playbook distilled from their experience working with over 500 portfolio companies across various stages and industries. The book distills five core principles that distinguish billion-dollar companies from those that fail to scale.
The central thesis of the book is that the best companies combine strategic focus, constant experimentation, accelerated value delivery, lean process discipline, and strong organizational culture, rather than excelling at just one dimension. Dominguez emphasizes that strategy is not annual planning exercises, but rather the discipline of choosing what not to do. For Revenue Operations leaders specifically, sustainable growth means making hard choices about resource allocation, not just maximizing efficiency. The reframe here is critical: effective companies do the right things, not just do things right. A startup hiring 20 new sales reps without analyzing whether leads exist to feed them, whether territories can be carved out, or whether the support infrastructure is ready is pursuing growth at all costs, not sustainable growth.
The episode walks through each pillar: strategic speed means focusing like Formula One pit crews rather than spreading resources thin across multiple products, markets, and go-to-market motions simultaneously; constant experimentation is an iterative process built on hypothesis testing and rapid iteration, not one-off bets; accelerated value is delivered through lean process mapping that removes waste and puts practitioners in the room to design their own workflows; and esprit de corps reflects the leadership mindset required to execute all of the above. For RevOps leaders, the leverage point is process: mapping the lead-to-cash workflow end-to-end, identifying waste, and testing improvements quickly before rolling them company-wide.
What we cover in this episode
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2:15
What defines strategy for startups Strategy is choosing what not to do, not annual planning. Companies win by being laser-focused on specific bets.
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4:30
Sustainable growth versus growth at all costs Sustainable growth does the right things under resource constraints; growth at all costs assumes headcount math works without supporting infrastructure.
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8:45
Why hiring 20 sales reps can fail Requires mapped lead flow, territories, training, messaging, legal capacity, and marketing support to succeed, not just headcount budget.
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15:30
Experimentation flywheel and hypothesis testing Effective experiments set clear hypotheses, tolerate calculated failure, and iterate rapidly; companies that test before scaling avoid large waste.
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25:00
Lean process and Toyota production system Simulation exercises reveal that average work is only 25% value-added; removing waste can deliver 20%+ improvements in lead-to-cash metrics.
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35:15
Standard operating procedures and Kaizen sprints SOPs remove ambiguity from repetitive tasks; Kaizen sprints map existing process in three hours, design new process in three hours, then test as MVP.
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42:00
Formula One pit stops as process benchmark Fastest F1 pit stop is 1.82 seconds to change four tires; hospital operating rooms now copy F1 efficiency models for better surgical outcomes.
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48:30
RevOps as the critical revenue engine lever RevOps leaders sit closest to lead-to-cash workflows and can eliminate friction that keeps reps from customers, multiplying revenue impact.
The lines worth sharing
The essence of strategy is choosing what not to do. Strategy is being very laser focused on where you should focus and where you should not focus.
Pablo Dominguez · 2:45
Sustainable is about doing the right things. Efficiency is doing things right. You can go 0-16 and be very efficient at losing.
Pablo Dominguez · 5:15
It's not the small that beat the big, it's the fast that beat the slow. Companies that are fast and can execute need to be agile.
Pablo Dominguez · 16:45
On average, work that we do for customers is only 25% value-added. The rest is necessary non-value-add or pure waste. Removing waste is the objective.
Pablo Dominguez · 26:30
Common questions from this episode
What is the difference between strategy and strategic planning?
Strategic planning is the annual budget and scenario exercise all companies do. Strategy is choosing what not to do and where to laser-focus. Porter defines strategy as disciplined choice about where to play and where not to play to win.
How do you define sustainable growth in a VC-backed startup?
Sustainable growth means doing the right things with finite resources, not just chasing efficient execution. It's building a business that accelerates in good times and weathers crises without losing focus.
What is the Kaizen sprint and how does it work?
Map the current process in three hours with front-line doers only (no executives). Design the new streamlined process in three hours. Seek CEO approval same day. Go live with MVP the next week and test before full rollout.
How should early-stage startups run experiments without going all-in?
Set a clear hypothesis with calculated risk. Assign one existing person a small test (e.g., five accounts) rather than hiring a whole team. Iterate from learnings before scaling. Use the five whys framework to find root cause of failure.
What is the key role of RevOps in building a unicorn company?
RevOps sits closest to the lead-to-cash workflow and can eliminate friction that slows reps and delays customer outcomes. Removing one second of process friction across the sales org multiplies revenue impact company-wide.
Why do most companies fail to hire their next 20 sales reps effectively?
They assume headcount and revenue scale linearly without validating lead flow, territories, training, messaging accuracy, and support function capacity. Growth at all costs ignores the complete ecosystem required to absorb new headcount.
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Pablo Dominguez, Operating Partner at Insight Partners, shares the five pillars of unicorn companies from his book "What a Unicorn Knows": strategic focus, experimentation, process, and culture.
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Read the full transcript · 50 KB · Insight Partners' Pablo Dominguez
SPEAKER_00Welcome to RevOps Corner, where we talk about how B2B SaaS companies scale through revenue operations by interviewing amazing guests and sharing what we see in the trenches every day here at Union Square Consulting.
EDDIE REYNOLDSToday, I'm here with Pablo Dominguez, operating partner at VC firm Insight Partners. He and his team work with CEOs and their portfolio companies to drive sustainable growth. And he and Matthew May recently published a book, What a Unicorn Knows. It's a phenomenal book outlining a playbook to build billion-dollar companies. And we're going to dive into this book and walk away with some actionable steps we can take in revenue operations and go to market in general at the startups we work with or work at. Here's what I really love about this book. Most business books I read are 200 pages of fluff and maybe 5 or 10 pages of actual value. This book is chock full of actionable tips and frameworks and things that you can read again and again and again and then take back to your business and apply. So I'm very excited to dive into this. Thank you very much for joining me today, Pablo.
SPEAKER_03Thank you so much. Thanks for having me.
EDDIE REYNOLDSSo I think the place that I would love to start is by asking this simple question, what inspired you to write this book?
PABLO DOMINGUEZYeah, great question, Eddie. So Matt May and I met about 11 years ago when I was working at a public company and we had brought him in to do a workshop with our ops team because we were looking to simplify the sales process with the commercial teams and had very successful engagement where we reduced the sales process by about 25%, which is pretty significant. If you think you're a rep, you're wasting 25% of your time. And we had a couple of other engagements with Matt and then I went to a startup after that for five years, brought Matt along as well to streamline some strategic initiatives, again, some processes in sales and services. And then I've been at Insight now for about four and a half years. And when I joined, I was like, hey, I got to have Matt to help out. So Matt has been an integral part of our team working hand in hand with our operators and our portfolio companies. And so we've over 11 years have started observing what some of the best companies do to actually drive sustainable growth, right? And we had the idea six years ago that as operators, because we're not practitioners in lean, we're not PhDs in lean. This is not an academic exercise where people that have been in the trenches, right? With sales, with customer success, with operations, with marketing, wanted to put those principles together in a book that other operators in the world could leverage. And so that book is the culmination of those ideas.
SPEAKER_06That's awesome. So the book goes over five chapters and five core concepts.
EDDIE REYNOLDSYou have, you start off the book with strategic speed. You go into constant experimentation, then accelerated value in lean process. And finally, esprit de corps. We're going to dive into at least a few of these. But what I would really love to do is to start off with strategy. How do you define strategy specifically for a startup or a scale up?
PABLO DOMINGUEZYeah. So there's a misnomer that strategy is that process that people go through. Every company goes through this, right? At the end of Q3, early Q4, we need to put together a budget and there's a planning process and you bring the functions together and you run different scenarios. Are we going to grow X amount or Y amount, go into new markets, et cetera? And that happens at every company and it should. That is not strategy, right? That is what we refer to more as strategic planning. And people think that, hey, that one and done ordeal is what defines strategy. Strategy, and I'll quote Michael Porter, and I've said this multiple times, but Porter, who's sort of the grandfather of strategy, says the essence of strategy is choosing what not to do, right? So it's being very laser focused on where you should focus and where you should not focus. And we've leveraged the strategic framework from Roger Martin, the play to win framework, which basically builds out where should I play and where should I not play, right? And so that's what strategy is all about, is making very concerted choices to put you in a winning position, if you will, as a company. And I think in today's environment, we're in early 2023 right now. For those of you listening in 2025 or something, wondering what the environment was like, we are in a potential recession. Not sure if it started yet or we're in the middle of it, but there's a lot of headwinds facing the globe and companies that are laser focused on where they're going to focus for growth. I think they're the ones that are going to end up ahead versus those that are potentially trying to do too many things, go into markets, roll out too many products, hire too many people, expand internally, you know, different things. So at its core strategy is just knowing what you want to do and not to do.
EDDIE REYNOLDSI think that ties well with another question I want to ask. How do you define sustainable growth specifically in a VC backed startup or scale up environment?
PABLO DOMINGUEZYeah, no, that's a great question because there's this, there's been a concept of grow at all costs, right? Like you, you raise money and this is really more applicable for private companies that have, you know, that are venture backed or PE backed. And it's like, just grow at all costs. We at Insight Partners, and again, we're, you know, we've been investing in software for
PABLO DOMINGUEZover 25 years. We just focus on B2B software, have tried to, you know, provide guidance on sustainable. So what does that mean? Right? Because obviously early stage companies, you know, if you're not burning cash, you're not
PABLO DOMINGUEZgrowing, but you're supposed to do that in an effective way, not necessarily in an efficient way, because people also talk about efficient growth. Efficiency is important and it's about doing things right. If you think about with definition of efficient, it's about doing things right versus effective, which ties to sustainable is about doing the right things, which is very different. And I use the analogy of if you're into football or any sport, right? You can go 0-16 in football and be very efficient at losing and not win a game, but that's not effective, right? And so sustainable is about, can you build a business that can weather through the storm, that in good times accelerates higher than your peers, that in bad times, you're not sort of struggling to stay ahead, right? Like, have you made the right choices and right investments? Have you thought about where to allocate cash so you're not in a pinch? We quote Reshma Saljani, who's the former CEO of Girls Who Code and current CEO of Marshall Plan for Moms. She, I think, said it best that the best companies and the way she's always operated is like in a, she operates as if there's always a time of crisis. So what does that mean, right? A lot of companies wait for crisis to happen to then say, all right, we got to find out better ways to be effective and efficient. Let's streamline. Let's make better choices. The companies that you see do the best are always thinking that whether, you know, it's a boom economy or not. They're constantly thinking, should I be doing this or not? Not waiting for the, for the shoe to drop to make difficult decisions.
EDDIE REYNOLDSYeah. I see a lot of that too. Could you provide some examples of growth at all costs versus sustainable growth to kind of make this more tangible?
PABLO DOMINGUEZYeah. So let's make it very applicable in sales, right? So let's say you're like, we're going to hire 20 reps because we've got the money. We know every rep today generates anywhere from 500 K to a million dollars, depending on your business model. Right? So 20 more, it's got to be 20 million more bucks next year, assuming they're all ramped, right? Let's just pretend they magically ramp on day one. That would be grow at all costs. The math just says, bring people on and they will generate revenue.
PABLO DOMINGUEZSustainable would be, do you really need 20 reps, right?
PABLO DOMINGUEZOne, are there enough leads to feed 20 new reps? Do you have territories to build, to give those 20 reps? Have you made decisions on, well, what kind of reps? Should we be chasing new revenue or should we chase expansion revenue? Maybe they shouldn't be reps. Maybe we should hire more sales engineers because we have a very technical product, right? Or maybe we're short on BDRs. And so it's doing the analysis and understanding the market and how well your business is doing to really make that educated choice to say, you know what? We can probably do well enough with 10 reps because growth at all costs, you might not be able to sustain 20 reps. And then you have attrition and the reps you have today, you know, you've taken territories away from them to feed these other new 20 reps. So that's how I would sort of make it real, right? Is like really understanding, do you need that? Or are you just spending it because you're just doing, you know, Excel math, if you will.
EDDIE REYNOLDSI think that's really in line with a lot of what we see where ultimately you need to think about the step-by-step process. If we're going to hire a sales rep, what exactly are they going to do each and every day? And how is that going to result in hitting the target that we have for them? Who are they going to call? How many meetings are they going to set up? What is the conversion rate that we can expect from our historical numbers? Which is hard in an early stage startup. But at least having some idea of where that goes puts you really far ahead from what many other companies have been traditionally doing. And what's really interesting to see now is with funding tightening up, there's so much more focus on this effectiveness, as you say it, and not just efficiency, because efficiency could be seen as, well, we're cranking out 200 calls every day. Great. Well, what is that accomplishing, right?
SPEAKER_03Yeah, no, exactly.
PABLO DOMINGUEZAnd I'd also add, there's elements that, because again, we, you know, at Insight, we have over 500 portfolio companies. So we have the benefit of seeing a lot across different size companies, different industries,
PABLO DOMINGUEZdifferent geos, different leadership styles, different sales models, whether, whether it's PLG, sales led, you know, channel, et cetera. And what we don't see companies always doing is looking at the complete picture.
PABLO DOMINGUEZSo let's, let's say you did need 20 and you justified 20. Great. Or you didn't, let's say it's 10. It really doesn't matter. Have you then thought about, do I have the internal team and programs and processes to onboard 20 people effectively or 10 people? Like, do we have training? Do we have messaging? Do we have positioning that's accurate? Like, or we're just assuming like, oh, okay, we do need 20. But like, then what happens to those 20 when they get here? Right? Like, so there's, you know, you've hired 20, you had one commercial lawyer, let's say before handling all the contracts. Like, can that person now handle 20 more people's deals, assuming you needed that to begin with is marketing ready to provide more leads now that you've got double the number of sales people potentially. Right? So there's, there's a whole equation that you've got to really look at from start to finish. That isn't just your world. So we always advise is look at the complete picture of the company from engineering to product to marketing, to sales, to post sales, and then the support functions, HR, legal, finance, et cetera, to make sure, can you support what you're doing? Not just, oh yeah, we have 20 territories and we're good to go.
SPEAKER_18So it's like a lot of work, Pablo.
PABLO DOMINGUEZYeah, it is.
PABLO DOMINGUEZIt's, which is why having a very strong revenue operations leader in a company can be the difference maker in the success of the firm.
EDDIE REYNOLDSWell, I appreciate the easy layup plug there. Can we talk a little bit more about, in your book, you talk about the difference between, let me rephrase this. In the book, you talk about how scale-ups are in this middle ground between sort of a run and gun startup and slow and steady grownup mode. Could you expand on that?
PABLO DOMINGUEZYeah. So it goes back to, you know, and to define the scale-up versus startup, right? Startups are super early stage, right? They're, they're hyper growth, you know, growing 200%, 300% at times versus a scale-up is a, is a company that's, that's able to grow consistently above 20%, right? And typically we see these growing at 40%, 50, 60, they've, they're beyond product market fit. They have established good sales processes, marketing processes, et cetera. And they're starting to get more mature, right? And scale-ups for us go up until, I guess you become a public company and then you're sort of a grownup, which I think is also a misnomer because I've been in public companies and public companies always don't operate as grownups. Like there's just as many issues in public companies and there are as early companies, just
PABLO DOMINGUEZdifferent issues, right? People seem to think like, once you get to that, it's like the, the grass is greener. The grass is never greener.
PABLO DOMINGUEZIt's just in a different backyard, right? But that's where, that's where our sweet spot is as investors is those companies that have
PABLO DOMINGUEZachieved product market fit and are looking to scale to the next level.
EDDIE REYNOLDSOut of curiosity, do you have a revenue figure in mind as a rule of thumb where a company should start to be making that transition in general?
PABLO DOMINGUEZLike every answer, it depends just because some companies get product market fit early on, right? You've got a unique product and your users, your buyers see high value and that could happen at a million dollars. And they are, typically it should happen at about a million, right? Like that's the real answer. But I don't know. Sometimes we don't see it happen until 5 million, right? But you still got to five, which is a pretty monumental feat by the way. But I would argue, and here's something else to consider, a lot of companies get product market fit, let's say at a million, you know, then they get to 10 million, which is another huge hurdle. And then they start to roll out new products. And there's this belief that, well, hey, I rolled out an awesome product. We're growing. We've got product market fit. Product two is going to come out. And they think they're just magically going to get product market fit because it's attached to the name of the company, right? And you're basically starting all over, right? Not all over because you've built some brand equity and people know you, but your second product, your third product, you've also got to look to build product market fit, right? Just because you've hit 10 million or 50 million, we've seen some companies at 50 roll out new products where they assume like, oh, this is just going to take off. No, you've got to do the same, you know, work from a commercialization of a product to get your customers and your users to adopt it, want it, want more of it. So it's sort of a cycle, right? Just because you're mature as a company doesn't mean from a product release perspective that changes when new products come out.
SPEAKER_01So that's a great lead into a question I wanted to ask earlier.
EDDIE REYNOLDSCan you talk a little bit more about how companies should decide what to do versus what not to do?
PABLO DOMINGUEZYeah. So, and I'll make it real.
PABLO DOMINGUEZYou've got a company growing from, let's say 50 to 100 million. They're basically doubling and they're rolling three products out this year and they are U.S. based only. This is all hypothetical, but I'm making it real for you, for the audience. So they're rolling out three new products. They're at 50 million and they're looking to expand into Europe, right? And they're looking at the UK, you know, and France that has implications on sales, on marketing product, et cetera. And so the question is, given the headwinds we're facing, what should I do, right? So the question is, do I focus on the core, right? How much do we expect to go from the core? And so there's a decision-making process in terms of, well, what do we want to be, right? And do we have the money to roll out three new products? And how much impact will that have on our core business? Is it going to take resources away? Because the thing that people realize is resources are finite, right? Everybody says, well, you got to do less with more. Again, that's not very efficient, right? You're trying to be effective. And the only way to be effective is where do I allocate those resources to maximize my ability to get from 50 to 100? Or to say, we can't get to 100, we can only get to 75, right? So you have to make tough choices. Maybe we don't go into France. Maybe we don't go into the UK at all. Or as part of the strategy process, you realize instead of deploying resources in EMEA, let me leverage a third party, right? A channel, partner, et cetera. And that way I can focus my time and effort on the US. So I'll give the example of Netflix, which we call it in the book. Netflix, at the almost peak of their heyday, had the chance to go into Canada, right? And there was, you know, we got to capture the Canadian market before somebody else does. And it was going to add about 10 points of growth to their overall growth. And they made a concerted effort and said, by doing that, it's going to require pulling engineering and product resources off to make sure we can adjust the product for language. Whoever made the decision to stay in the US and double down on the US, their core market, they got double the growth by focusing on the US and staying focused. Obviously, they ultimately went into Canada. But it's that process of working with the leadership team, the CEO, head of product, head avenge, marketing, sales, et cetera, to make those tough decisions on what is realistic
SPEAKER_10versus what is just aspirational.
EDDIE REYNOLDSYeah, I always think about the story of Steve Jobs coming back to Apple. And I think that they had dozens and dozens of products and he stripped it down to 10. And one in particular that I'm thinking of is the printer, the laser printer. I don't remember if they invented it or pioneered it or if it was just a big product for them. But the fact that they abandoned that, despite it being a big profit center, just showed how important that focus is. And I think what I've seen is people are always debating like, will this channel work? If we hire more salespeople, will that work? If we try this marketing initiative, will it work? Maybe, maybe not. But what I see so often, especially in early stage startups, is it's 100 times more likely to work if you back it with the right resources. And instead, so many folks just, we need to be on TikTok. We need to be on Instagram. We need to have a product that does this or that. And it's not backed by the right resources. And it fails for that reason alone.
PABLO DOMINGUEZYeah, that's a great point. Like, I used to work for a president that ran all the GTM functions. And he used to say, it's not the small that beat the big. Like, we're all taught the story of David and Goliath, right? And it's like, well, hey, I want to be this startup and I'm going to take down Google or I'm going to take down Apple at some point or Salesforce. And yeah, that's aspirational and that makes sense. But he would always say, it's not the small that beat the big, it's the fast that beat the slow, right? And companies that are fast, that can execute, need to be agile, right? And that's why we call it strategic speed. And we reference the Formula One teams a lot throughout the book because of how efficient and effective they are. You can't move fast if you are all over the place, right? If you're trying to roll out everything at once, if you're trying to go into every market and you said it best, like, it all depends on the people. You've got to assume you've got the right people to roll out three new products, to go into different countries, to hire more people. And if you don't have that infrastructure, it's going to make it even harder. But that's why focus is absolutely key. Early stage companies struggle, I think, because, you know, I want to do PLG. I want to do sales led also. And I want to do enterprise and mid-market and SMB because you read all these things. It's like, well, if you're not doing enterprise, you're not closing big deals. You're not going to grow. We've got plenty of examples of companies that have gotten to, you know, a billion dollars in revenue, not necessarily focusing on enterprise. Few and far between, but it's possible, right? But you can get to 10, 20, 50 million in ARR without doing an enterprise deal and then focus, right? So, again, trade-offs.
EDDIE REYNOLDSYeah. I mean, enterprise is such an easy example where I think, I don't think I know, my ex-girlfriend for many years ago worked as the first enterprise AE at a VC-backed startup. And the founder's mentality was, we're going to hire an experienced salesperson and she'll just be able to close some deals. There was no thought to the product. There was no thought to like any level of support that she needed to be successful. I don't think they even thought through that how the sales cycle would be different. And so, and this is such a typical story as companies try to go from SMB to enterprise.
PABLO DOMINGUEZYeah, I totally agree. It's not that easy, right? Let's just hire some reps. Again, this goes back to strategy. If we're going to go in enterprise, like what is our strategy? Are we trying to capture 10% of the market? Do we want to be the market leader in five years? Is our product differentiated, right? Or are we just a commodity and we're going to buy because we're going to win on price, right? Are we ready to go? What I've seen people do and, you know, the second chapter talks about experimentation. Sometimes you might have really good SMB reps. All right, let's see if you can crack into an enterprise account and let's see like, can we get to the right persona? What does the process look like, et cetera? So it's a balance between like, well, because your listeners might be thinking like, well, what happened to being agile and experimenting and testing? Like, yes, you should experiment and test, right? But that's very different than being laser focused on this is what we're going to do to win. But yeah, we're going to experiment a little bit to see if there's an opportunity there in the future to potentially do that.
EDDIE REYNOLDSSo this is a great lead in, obviously. How do you go about doing that experimentation, especially in an earlier stage company where they may only have one viable go-to-market channel working and only one viable product and only one viable market? How do you think about experimenting with the next thing?
PABLO DOMINGUEZYeah, so I don't want to say it's an easy example, but like I sort of mentioned it a second ago. You've got three reps, let's say, like your early stage, you're just focusing on SMB mid-market, but one of your reps shows potential to go more upmarket, right? So does that mean I create a whole new segment, hire five people to go, you know, for larger companies? No. Experimentation would be, all right, Sally, you've got your normal job. We've got these five customers that we're going to target. Don't go after whatever you want. Like, let's see what happens, right? Can she figure it out? Did it take too much time with no training, with different, like, did the messaging work or not, right? Like, no, we're missing messaging. I couldn't get to the buyer. Like, this is a lot longer. This is like tough. Or she's really struggling. Well, of course she is, right? She's an SMB rep. She doesn't know how to handle a long sales process, but maybe she does, right? So then you learn from that and you realize, okay, let's change the messaging. Pricing has got to be a little bit different. Or she comes back and says, they love the product, but we don't have the features at an enterprise level for what they need. And we don't have the security and SOC2 compliance that, you know, selling to a Pfizer or a Cisco would require. So you learn, right? That's sort of the experimentation versus trying to go all in. If you were larger, you might want to experiment. So for example, let's go back into, you're going into Europe. You've landed successfully in the UK and now you're thinking about France. All right. That's a pretty big commitment. So you know what? Let's just have the people in the UK try to sell into France first and see what we think. Does it work or not? Before you go and commit, right? Give them an extra quota or a SPF to close a couple of deals, see what happens, and then iterate from there versus going all in and then having to pull back.
EDDIE REYNOLDSCan you talk about how that fits into your experimentation flywheel and Foursquare?
PABLO DOMINGUEZYeah, let me go back to clarify something. When you're experimenting, it's like the companies that experiment the best from a flywheel perspective
PABLO DOMINGUEZare, it's an iterative process, right? So you're setting a hypothesis necessarily that, and we talk a lot about this in terms of if you're not trying to do something that you know might have a high failure rate, then it's not really an experiment, right? You're just, you're just doing something. And so you want to make sure that, hey, there is some risk here, right? And I actually talked about this with John Barrows in a separate discussion around, have you built a culture where people are willing to take risks, right? And if they fail, can you iterate on that from a flywheel perspective so you can come back and try again, right? The flywheel is really all about setting the hypothesis, doing the work and iterating from there on a continual basis.
PABLO DOMINGUEZApple was notorious for that.
SPEAKER_01What I liked about it, if I understood it correctly, was it seemed like it was a relatively simple
EDDIE REYNOLDSand quick exercise. And I think for me and our team working in RevOps, when we're sitting down with founders, I have this deep fear of coming across like a McKinsey consultant and they're thinking we're doing some SWOT analysis or what have you. And it just feels like an exercise to burn time as opposed to something that really adds tangible value to the organization. But at the same time, you know, the flip side of this is just start throwing money at different ideas. And then you end up killing those initiatives. Let's say, for example, you launch a podcast like this and then six months go by and you say, well, we haven't seen enough revenue for the podcast, so we're going to kill it. Well, you probably shouldn't have made that investment in the first place with that mentality. But how would you go back and let's use the podcast as an example and think through how to conduct an efficient experiment without burning too much time so that you can make an objective decision whether to kill it or continue to invest in it six months later, for example.
PABLO DOMINGUEZYeah, no, it's a great question. And we leverage the framework called the five whys also to help. It's part of design thinking. So let's use the podcast one, right? So we're going to kill it. Well, why did it fail? Well, we thought we'd have a thousand listeners on a monthly basis and we only had 10. OK, well, why do we have it? So that's one one one one layer, right? So if you stop there, you'd kill the podcast and never know like what the root cause was, right? So second second level question might be, well, why did we only get a thousand listeners? Well, we only we only posted it on Apple, not on Spotify. And Spotify seems to have more users. OK, well, why did we do that? Well, I don't know. We have a junior person that just liked Apple and doesn't know how to use Spotify. OK, well, so now you start to realize maybe our marketing strategy wasn't accurate. We didn't go after the right audience, et cetera. OK, well, let's experiment again. Put it on Spotify and Apple. Maybe there's another medium. Let's market it on LinkedIn, on Twitter, on other social streams, because maybe we weren't doing that. Right. So it's it's getting to the root cause, really, to be able to experiment effectively, not just, well, I expected an outcome. It failed. Therefore, experiments over. Right. That's how some people might think of experiments or a CEO and be like, well, that seems pretty rudimentary. Like, no, it's it's iterating from what you had because you clearly made a good decision to roll something out. To your point, maybe we should have never rolled a podcast. Well, that's a bad strategic decision. But let's assume you made the right decision. Being able to iterate on the why it failed or, hey, why did it do so well? Maybe we should do something else or like, let's try a different medium to boost something because that actually helped us drive more revenue or, you know, whatever the metric is, et cetera.
EDDIE REYNOLDSYeah, that's really helpful. I and just anecdotally, I find this concept of constant experimentation to be absolutely fascinating because you think about being an agile organization. You want to try different things and have a framework to test the hypothesis and then determine do we double down on this or do we cut this as quickly as possible? And then that can give you a faster path to find things that are viable, whether they be markets or products or go to market strategies and just move faster and more efficiently and effectively to the point that you made in the very beginning of this podcast.
SPEAKER_13Yeah, that requires it requires a check on your ego, right?
PABLO DOMINGUEZBecause people in businesses or in the world get attached to their ideas, right? And so to be willing to say, hey, the experiment failed and it was my idea and to try something different, you know, you've got to sort of put your, we tell people like, check your ego at the door. Like we're not pointing fingers here, whether it worked or didn't. It's about experimentation and making things better. Who cares if your idea wasn't the best one? Move on to the next thing, right? Or, hey, it was a great idea, but it could be better. Awesome. Let's optimize it. So a lot of it also has to do with leadership and the type of people that are running the
SPEAKER_10experiments.
EDDIE REYNOLDSIt's hard to do when you're putting your heart and soul into something. Yeah. So you can feel that with firsthand experience, but having that objective view can be really helpful. Yeah.
PABLO DOMINGUEZWell, even going back to strategy, sorry, real quick, right?
PABLO DOMINGUEZLike making tough choices on what to do and not to do, not rolling out that second product or going into the UK back to my original example. Somebody's going to be upset about that because that was their job in the company to roll out that product, et cetera. And that's, I think sometimes why companies fail to grow at the pace they should is because they're not willing to say, hey, Eddie, guess what? This product is not a priority this year. We have to focus on the other stuff. So we're going to reallocate you. Instead, Eddie's going to push back and go, no, no, no, no, no. It's important. It's important. Trust me. All right, fine. And so you've got to balance the best needs for the business versus people's needs only.
EDDIE REYNOLDSYeah, that makes a lot of sense. Well, I want to be sensitive to time here and dive into your fourth chapter on process or specifically lean process. So you start the chapter with an example portfolio company offsite where you do a three hour simulation on the Toyota production system. And let me stop there and ask if you could just talk through that and share some more detail.
SPEAKER_13Yeah. So this is my favorite chapter because the ROI of streamlining the lead to cash process,
PABLO DOMINGUEZwhen we've done these engagements, have always, always, always, and I would put my salary on it on any engagement I do with any company, been over 20%. The company we referenced actually was about 66%, right? So tremendous, I would argue that's probably not viable for a lot of people, but the way we get people into the mindset is we put them through what Toyota did when they took over one of the worst performing GM plants in California and built their first plant to the United States. So it basically simulates how GM used to build cars in that plant, not to disparage GM. And people are literally building cars, right? You're at a table. I'm at a different table. So, you know, there's maybe 20 people playing the roles of what would actually happen on the factory floor. And these are like little toy cars that are plastics. And you run that exercise with people and it's amazing. Everything breaks. The cars aren't built correctly. I think you've got like negative gross margins of like 50%. And you're like, wow, you've got executives in here. You've got like really smart people from engineering, from sales, post-sales. And yet they couldn't figure it out, right? And then you show what happens when you apply lean principles, right? And you basically are able to become a very profitable company. Cars get built on time. People have standard operating procedures. They understand what to do in their station. What used to take, you know, realistically six different buildings in California to build cars is all done in one building, right? One manufacturing facility. And so people walk out of that. And the reason we do that exercise is so people can see the impact of lean on a process that they just did without lean, right? And it gets them in the mindset of what is basically possible, right? And the beauty of that exercise is you weren't allowed to spend a dollar, right? You didn't buy a new building. You didn't buy new manufacturing equipment. You didn't add people that were maybe more highly skilled. It was all about the removal of waste. And that's sort of what lean from a process perspective is, right? The work that we provide as individuals, as companies to customers, on average, is only 25% value-added work. That's work that I, as a customer, am willing to pay for, right? The rest is non-value-added work, stuff that has to get done, right? I need to charge you because I have compliance things to do or security things to do. And then the majority of things is waste, right? If you think about it, like the majority of the things that companies do adds no value to me as a customer and I do not want to pay for it. And so removing as much waste and adding more value, right, or necessary non-value-add is really the objective of that exercise. So that exercise sets the framework. Then we go into sessions where we help companies map out an existing process where they identify, wow, this is broken. And then those same people that actually do the work come back and propose a new process that, like I said before, on average, 20% improvement in the lead-to-cash process.
EDDIE REYNOLDSYeah, and I think that that's something we see a lot. I mean, if I go back many years to when I was an account executive at Salesforce and what inspired me to get into RevOps is that I would go out and do these whiteboarding exercises with executive teams at primarily VC-backed startups. And it was the simplest exercise in the world. I wasn't going nearly as deep as you were. I was literally just asking the executive team to map out their process for a given piece of their puzzle. And oftentimes they would say, well, step one is this and step two is this and step three is this. And just as I was writing it down on the board, they would acknowledge their own inefficiencies in that process and say, we really desperately need to fix these two pieces. Yeah, no, and it's, I love, I've done, I've done over 40 of these with Matt in my career and we never have executives in the room, right?
PABLO DOMINGUEZLike no executives, no C-level. It is only people like a sales rep, a BDR, somebody in legal, the people that are actually doing the activities. And what I love the most, Eddie, is people, when they start to map out the process, go, well, wait, Eddie, why did you do that? Because I don't need that when it comes to me. And you're like, I don't know, when I started, that's what I was told to do. And people are stuck in their silos, right? In terms of what work needs to be done for them. And they don't look at the bigger picture. So it's fascinating when they look at the complete life cycle of what a customer actually goes through to do business with us. They identify like, we shouldn't be doing that. Or why does that take four days? That should take two hours, right? And that's why it's awesome having those same people come up with the recommendation to then take back to the executives to say, going back to experimentation, we want to run a test. We think we can reduce the sales process or the post-sales process implementation process by X percent because we've just mapped it out and we realize there's a bunch of waste. Let us go do this for three months and show you before we roll it out to the rest of the company, right? And that's sort of what the ultimate end goal process is. Map it out, test it, and then implement it, and then iterate, right? Maybe next year you realize, well, why couldn't we have reduced it 30% instead of 20%, right?
PABLO DOMINGUEZLike there's always room to be more effective and efficient.
EDDIE REYNOLDSAnd that's what I love about, you know, you use Formula One pit stops as an example throughout the book and how it went from what was it? A minute, two minutes in the early days to less than two seconds today.
PABLO DOMINGUEZYeah, by the way, I encourage everybody to go to YouTube and look at the fastest pit stop in F1. I have watched it in slow motion and to make it real for everybody. If you're listening, take a pen, find some paper on your desk, and see how fast it takes you to write your initials on the pen. And I've done this with people. It takes anywhere from three to four seconds. The fastest pit stop is 1.82 seconds. Average is like two and a half, three seconds. So let's think about that. It takes you three seconds to write your initials on a piece of paper. All you're doing is picking up a pen and writing your initials. A pit stop crew can change four tires in under two seconds. Like, that is crazy. And they are so efficient and effective that hospital teams have brought F1 teams in to basically teach them how do we operate more effectively on an operating table, right? An operating room. Because if you think about it, it's almost the same thing. You've got the surgeon. You've got other doctors. You've got nurses all with different instruments around a human being, right? And you're sick. And time is everything, right? Because you're cut open. There's blood. There's oxygen issues. And so it's fascinating to see that the hospital system has looked to the most efficient and effective teams for best practices, which is also something we recommend, right? Sometimes companies say, well, I'm in the financial tech space or I'm in cybersecurity or healthcare. Who's the best in healthcare? What you should be looking at is, like, who is the best in the world at solving that process or a similar process? And how do you take that and then apply it to yourself, right? If you only focus on, like, your industry or companies your size, you're really limiting yourself to what is potentially a better solution that somebody else has discovered.
EDDIE REYNOLDSI really love that. And I think I've read somewhere that many of the biggest breakthroughs in science historically have come from people. People outside of that area of expertise, like major breakthroughs in physics coming from chemists or things like that, because they come and they bring a different perspective. And I've had the advantage of working in a number of different industries in my career, and I'll hear people in B2B SaaS talking about something, and I'm thinking, well, this is just standard operating procedure in finance, for example. Right. You know, it's like, we need to build better relationships, and we need to go deeper, and we really need to personalize our outreach. And I'm like, you'll never find an, at least I haven't ever found an investment banker that, like, goes into outreach and hits send all. And yeah, it's like this revolutionary concept for some folks. No, exactly. And it's just the advent of being so heads down into one industry.
SPEAKER_03Yeah. And I see it a lot in financial services firms where they're like, well, we're different because our financial people are dealing with, you know, wealth management, et cetera.
PABLO DOMINGUEZAnd I'm like, you know, sales teams all over the world have figured out how to qualify, diagnose, and build good sales process. And while your process may not be a traditional sales process, there's a lot of best practices in sales training that you can apply across different things. It's interesting, just-in-time inventory management for, you know, the auto industry came from the Japanese actually coming to America and observing, again, in the old days. This is none of us on this call are going to understand this, but when you used to get milk at your house, you wouldn't get it at the grocery store. Like, you'd have it delivered in bottles. And the way the person knew how much milk you needed is there'd be two empty bottles outside your door. So then they'd leave two bottles, right? It was just in time. I'm giving you what you're requesting. And that's sort of where the concept came from, right? It's not like they said, well, hey, who else in the auto industry is doing something like this?
PABLO DOMINGUEZYou incorporate the best from something else, which I think is fascinating.
EDDIE REYNOLDSI love that. One of my biggest takeaways from reading Sam Walton's book, I think it's called Made in America, is he basically just said, look, I just stole every single idea. He would even be on vacation in London and he would go pop into some store and just try to overanalyze like how they were doing things. And even down to like the greeter concept, that wasn't his idea. He saw that somewhere else and thought, this is really cool. I should bring that to Walmart.
PABLO DOMINGUEZYeah, that is such a best practice is like take the best from anyone, regardless of what they do and apply it to your business.
SPEAKER_00So I want to transition here and talk a little bit about the toolkit to create standard operating procedures.
EDDIE REYNOLDSCould you dive in deeper there or and forgive me if I'm asking this question incorrectly and you already covered it. The next thing I want to ask about is the Kaizen sprint.
PABLO DOMINGUEZYeah, so a standard operating procedure is basically do I know what job I need to do to accomplish a task, right? And so let's take let's keep it with sales from an onboarding perspective, right? Let's go back to our very early on in the podcast. We talked about like, hey, I'm hiring 20 reps. It's like, do I even have an enablement program to onboard them? A standard operating procedure would tell the hiring manager or whoever's doing the onboarding, hey, step one is we have a very rigorous interview process, right? A recruiter sources the person. We have a case study. They're going to interview five people. Here's the loop. Here's the questions we meet as a team. We make a decision. Here's how we stack, right? Cool. Person's hired, right? And then once they get here, week one, what is day one, day two, day three, day four, day five look like? What are they being trained on? How do we test them? What's day, you know, week two, week three? That's what a standard operating procedure is. So there is no room for, well, hey, what's happening on week three? Is Sally or Johnny doing what they're supposed to? Yeah, they know what they're supposed to, right? Because we've written SOPs similar to closing deals, right? Do you understand what to do with legal, how to do pricing, who has approvals to streamline that process versus, well, I'm waiting on legal. Well, did they know they were waiting? I don't know. Like their queue is really long. Well, if you set up the process correctly, it should operate quickly. The Kaizen sprint ties back to the exercise we talked about, right, earlier in terms of the car simulation and then mapping out an existing process and then mapping out the new process. The sprint for us is, all right, we're working very quickly, right? So in three hours, you map out an existing process. In another three hours, you are having those same people map out a new process that is streamlined. And then you go straight to approval that day with the CEO, with the executives, and that next morning, whatever, week later, you are live with your MVP, right? Your minimal viable product, right? You are testing the hypothesis and what the team came up with, and then you're iterating, right? So that's sort of what we mean when we think about sort of the Kaizen sprint is like moving quickly to test those work streams.
EDDIE REYNOLDSSo the way you talk about the Kaizen sprint, that goes back to my earlier question and me sharing this fear that when I'm talking to early stage founders, I don't want them to feel like we're doing this McKinsey-esque exercise. And so you're talking start to finish one day and then going and taking action on a new process. And I think that that's really brilliant because when we think of strategy, a lot of folks think of we're going to spend a quarter and map out this new company strategy as opposed to just getting something in place, going and taking action on it, and then going back to constant experimentation, figuring out if it's working or not working quickly.
PABLO DOMINGUEZYeah, no, it's a good point, right? Like people are afraid of like, oh my God, this is going to take forever. And again, we've done this, I've done this over 40 times in my career as a user too, right? I've done this maybe 10 times as an actual user participator versus now at Insight helping others. And the way, the reason CEOs love this or the executives are in charge is because it's not you necessarily coming and saying, let's go run this experiment. I don't really know your business. I mean, I do, but I don't, I don't work here, right? Your team came up with this. I facilitated the discussion. I brought the framework, right? I brought the Kaizen model, but your team is the one telling you, hey, Mr. Mrs. CEO, this is what we should be doing. We think, and by the way, I'm not asking for any money, right? Like I'm not coming to you saying, hey, for a million dollars, we can take out 20% of the waste in the sales process. I'm basically coming to you saying the employees in your company working with Eddie or whoever realize there's a lot of waste and we're basically doing it with no incremental cost. We're asking for people, we're not asking for tools, we're not asking for anything. We're just going to come back and tell you, did it work or not? And if it did, here's the ROI. And when they see the ROI and there's no expense and that it came within, that's the power. I think if you just showed up and said like, hey, I've got this stuff, let's go test it. Well, I don't know. Like, do I trust that it's going to work or not? Well, I trust it when the people that are actually doing the work today are the ones that are saying, this makes my life easier and it's going to make the company more money and make us much more effective.
PABLO DOMINGUEZThen it works.
EDDIE REYNOLDSAnd you can learn so much from talking to the front line. Like, I don't know if you watch Undercover Boss, but it's so interesting to see. Like, no offense against these folks, but they're just so clueless as to what's happening in the front line, which is understandable in such a big company, but still.
SPEAKER_35Yeah, I love Colin Powell.
PABLO DOMINGUEZColin Powell would always say, if I want to know what's going on in the military, right? When he was in charge of the entire military of the United States, he would say, I would just show up at the bases, unannounced to the generals and just talk to the troops.
PABLO DOMINGUEZBecause I wanted to hear exactly what was going on, because not that people are necessarily being nefarious, but, you know, your leaders are going to try and paint a certain picture. Their leaders are going to try and paint a picture. And the people on the front lines, maybe they'll paint something, but they're the ones doing the work, right? So we always say, talk to everybody, talk to the leaders, the next layer, and then talk to the people doing the work and then build your story because you'll have a complete picture of what's actually going on, whether it's good or bad.
EDDIE REYNOLDSThat makes a lot of sense. Well, we're almost at time. Is there anything you'd like to leave the audience with, specifically folks in RevOps, where they should focus on this book or in general, big takeaways from your experience writing this book that you think apply to RevOps?
PABLO DOMINGUEZYeah, as someone who's been in RevOps and managed it to public companies and then a startup and does a lot of advising on it, I would say you're in a very unique position to really impact a company, right?
PABLO DOMINGUEZI think it's currently the second most critical role or that's being hired for on LinkedIn, right? The companies, again, that we see in our portfolio that have a strong RevOps leader are the ones that are doing the best because that role is sort of the lieutenant to the revenue engine, right? As it relates to the concepts that we laid out, I think, you know, I would, again, people will ask, like, which one is the best one? Like, which one solves the most issues? And the reason it's called What a Unicorn Knows is because what a unicorn knows is that it's not one of these, right? That is, it is the culmination of all of them, not necessarily in any order that makes the best companies the best. But as it relates to RevOps, I'd start probably on the process one because you have the biggest ability to really impact the lead to cash process. You're closest to the reps and understanding what slows them down. Why can't they be more effective with customers? And there's a lot of internal crap that reps have to deal with, right? CRM, all these tools that have come out, getting approvals. And again, you want reps to be in front of customers as much as possible. So whatever you can do to get that one second, you know, one minute pit stop down to two seconds, like, imagine the impact that has on revenue to the firm and to your sales teams.
EDDIE REYNOLDSThank you for sharing that. This has been great. I've really enjoyed this podcast, Pablo.
SPEAKER_50Thanks, Eddie. Appreciate it. Thank you.
