EDDIE0:04Welcome to Go to Market Science. In this podcast, we share tangible, actionable playbooks from the trenches working as go to market strategy and rev ops consultants for our clients here at Union Square Consulting and candid conversations with revenue leaders in the market that have been there. Now let's get into it. So today we're going to dive into how and why I won't fix a broken go to market engine.
EDDIE0:27And our special guest today is Sonja Vaziri, the co-founder and CEO of Go to Market Partners. He was previously the CMO at Pardot before and slightly after the acquisition by Salesforce, and then a co-founder, CMO and chief evangelist at terminus. Sangram, thanks for joining us today.
VAJRE0:45Eddie, this is going to be fun. Conversation, man. I think we've crossed paths. Seems like a Salesforce as we're talking about. So we've been all benefited from the SaaS world and the world that we, you and I know and grew up in is rapidly changing. So let's talk about it.
EDDIE0:59I'm excited to dive into it. You know, my experience at Salesforce has formed a lot of what I say on this podcast. What we write about in our content. And it was the impetus for me starting this company. But it's also been ten years since I work there. So a lot of all we're going to talk about, I there's there's some new things out there.
EDDIE1:16And so I try not to to rest on that either. But today what I want to talk about with you, and some things I've heard you say publicly, is that every go to market team is implementing AI. I think I saw a post and I just just thought of this just now where you had said that you're in front of a room full of revenue leaders, and you ask everybody to raise their hand if they're using AI.
EDDIE1:33Everybody raises their hand and then keep your hand up if you're seeing an impact from that. And I think if I got this right, every hand went down.
VAJRE1:41Yeah. You know, it's a it's like a fun thing. I was talking yesterday to a smaller group and I pretty much use that. I feel like I have a one trick pony like, opening starter for for me. If I were to if the go to market thing didn't work, maybe I should do late night comedy. I don't know, something like that.
VAJRE1:58But I would do the same thing where like, well, how many of you are doing AI? Everybody's so enthusiastic raising their hand. And then I would ask like, well, you know, how are you? How many of you are using AI for being productive? And everybody's like, yeah, you're doing like hundreds of hours of ChatGPT or Gemini. Like great.
VAJRE2:15Like, how many of you feel productive and then there is that silence and that weird laugh and nervous laugh off of like, well, I'm really not. I don't know if I'm making progress and that happens so often in a room, like I've been speaking at inbound for ten years in a row, so in a room of 15 other people, the same thing is happening in a room of 25 people.
VAJRE2:37And I do see your round tables as well, and it is just same story. And what was most interesting about it around I was last week, I was running, CEO roundtable. Everyone is about 20 million in revenue. And we were talking about AI and and everybody is talking about how they are using AI. So any this will probably resonate with you and your audience.
VAJRE2:59They were talking about. Well, we're using AI to do automate stuff. You're using AI to reduce headcount. We're using AI to just do, things that we, we don't want to do manually. And for a moment I was like, man, I've been hearing this for the last one year. Something doesn't feel right. So I asked this question to the to do this group.
VAJRE3:21And it's like, well, how many of you are using AI to grow your business? And I thought that was a dumb question to ask in a group of like 20 million plus, in revenue CEOs. And it was the same weird kind of quiet feel around it. I'm like, I don't understand. We are all supposed to create business.
VAJRE3:38I mean, the whole reason we are entrepreneurs or CEOs or all that is because we want to create value in the market and create more business and more customers. Why is it that the immediate inclination of everyone is to reduce cost to do? I think we're just looking at it wrong. I don't know what's your experience has been as you're talking to a lot of people?
EDDIE3:55Yeah. So I kind of I cut off my intro halfway through and when I was about to say, is that, like, we need to talk about building the foundation and that that's my answer to your question. And I want to dive into this. And I think, like my initial response to your question here is that, first of all, there's a lot of go to market organizations, especially at 20, 30, 40 million that don't have the foundation in place.
EDDIE4:19When we see companies that 50 million, 100 million, 200 million, sometimes they've got the foundation in place in certain areas of the business, you know, other areas they don't. Maybe they've got SMB dialed in, but enterprises is really struggling. Or maybe SMB was dialed in five years ago and now the market's evolved and that motion is no longer working.
EDDIE4:37And so we see a lot of this. And then everybody is feeling FOMO. I'm feeling FOMO. I spend half of my time talking to the same private equity and venture capital investors that are backing these companies and sitting in the boardrooms with these revenue leaders. And those guys are asking me, what are you guys doing with AI? I need some of the AI.
EDDIE4:54And I remember I made a comment to one of them and I won't name drop, but this is a major, major private equity firm that invests in extremely mature businesses. And the person I was talking to is deep in the go to market. This is not like an ex Goldman Sachs analyst. That's just learning about go to market.
EDDIE5:10And what did I say to them? I made some kind of comment like, you know, some of this is all B.S. and he's like, well, you know, even if it's B.S., like, I got the pressure from my senior people that we got to go implement this and I don't think I as B.S., but I do think that we are all feeling this massive amount of FOMO.
EDDIE5:26And I'll bounce this off for you to get your reaction. Let's take this back to Salesforce and part Otter HubSpot, and let's compare like and contrast this, right. So many organizations right now, their answer to AI and I was talking to a friend about this. And I'm like, what are you doing AI. And she's like, she runs a reasonably large company.
EDDIE5:44And she's like, yeah, we got AI down. And I'm like, what does that mean? What are you doing? She's like, oh yeah, we got copilot. I'm like, Grant, this is like a year ago, to be fair. But I'm like, she just bought everybody. Copilot license is like, okay, I'm not sure that that's the full answer here. And it's the same thing.
EDDIE5:58Like, we bought everybody HubSpot licenses. We got already Salesforce licenses as opposed to. And I think anybody who's ever spent any time using Salesforce understands like it's not that easy. You have to get the right people in the room. You've got to plan this out. You have to think about who's our ICP, what's our motion, how are we doing outbound?
EDDIE6:13How are we doing inbound? You map all this stuff out. There's an entire industry of rev ops people and crows that understand this. And you just try and put all this effort in, and you hire these implementation partners, and then you spend months and months on it, and then still, half the time it fails and somehow we've like jumped forward or like, but I like it's the magic easy button and it's not.
VAJRE6:36It, it is. It has been like that in the beginning. Right. You know, like six months ago or so. It was the easy button, of writing copy. The fact that you could just ask a question, you just said, even if your point was I is so brilliant on the part of all these Gemini ChatGPT and all the.
VAJRE6:55Yeah, the LMS is that they don't give you the text. They tied the text. Right. So you have this nostalgia of like, okay, it's thinking, but of course it has all the thought, it just slowing it down for us humans to understand that it's thinking. So it's it's creating this reverse psychology. It could have just given it to us, but it then it still doesn't.
VAJRE7:17It types one line at a time as if we because we it's making it slow for us. So we will have that not just instant vomit but instant gratification. Of sort of like, wow, this is seeing. So I think there's just so much thought that been put out there around it. But there was a moment, Eddie, I would say, and I would submit to you where even I felt like, oh, wow, this is this is incredible.
VAJRE7:40This is awesome, and I can do this. I can do this. And the agent started to pop in and people are starting to use agents now. So we've kind of graduated from copilots to agents. And now I think about is that I don't want that many agents in reality, what I really want and, and all of this is just getting to that, to that.
VAJRE8:01And I think you're still in the stone age of AI as we're looking at it. Like six months from now, we'll be looking back at this conversation because we just have this limited purview as like rudimentary. But I feel like what we really want is we want our business to be efficient and effective. AI we have been using and doing every single thing on the efficiency vector, if you will.
VAJRE8:26It's all about creating efficiency, but we're not really talking about effectiveness as much. And effectiveness would would be like, well, what is can we create more products now as a result of that, in order to based on the outcome that we're getting and what our customers want, could we get? And 20 more testimonials now around this issue that as opposed to physically going and asking the question and having the same five people talk about it.
VAJRE8:51So I think the effectiveness, the vectors changing so far, I would say 99% of the people are focused purely and this is purely because we are research company. We do so much research on this thing. We see their all thing. I want efficiency, efficiency, efficiency. And there's only a few percentage of people who are saying, wait a minute, there is no point in being more efficient in this area.
VAJRE9:15Any. We don't want to send more dumb emails like there's nothing going to come out of it. It's going to be negative. We want to be effective. So now we want to help make business decisions with this. That point, Eddie, I think is still yet to be seen how we we all do it. There are examples that I'm seeing, but I think that's what I'm excited about the most.
EDDIE9:34Yeah, I completely agree with that. And I think the reason for that, and I've got so much to say, it's like, where do I start on that? We did a podcast with Craig Rosenberg about their stuff.
VAJRE9:43Greg. Greg is awesome.
EDDIE9:45He's great. And they did an amazing study across their entire portfolio on how their portfolio was using AI. And this is exactly the distinction that they made in the study. I think they called, if I remember correctly, phase one and phase two. Have you read this study, by the way?
VAJRE9:58No, I have not. I need to reach out to to Craig and read it.
EDDIE10:01Yeah, yeah. And so he broke it down into or I shouldn't say he, I think it was his entire team that worked on it. They broke it down into stage one and stage two and stage one is that efficiency. Right. And stage two is like the actual impact on revenue. And the example that really jumped out at me are the two examples I'll share is like, we're going to do account research.
EDDIE10:19And so like the point I made earlier, that's super easy right? If I say I'm trying to sell into Pepsi, I need to go read Pepsi's annual report. I can pop into any limb and just say, Read Pepsi's annual report and give me a summary and how it relates to our product. It's not hard to do. Any sales rep can do that now.
EDDIE10:35Sure, there's ways we can make that better and we could build a gym or a custom GPT. We could build an agent to do that, but you can get like relative value out of that. But what you're doing is you're saving some time. A really, really good enterprise sales rep selling into Pepsi is not necessarily going to like double their clothes rate because they have AI reading tanks for them, and it's just going to take them less time to do that.
EDDIE11:00That's a phase one. But phase two in the report, the the use case that really jumped out was campaign analytics. Right. And you can't do campaign analytics in AI if you don't have that foundation in place, if you don't have accurate data, if, for example, we're trying to do campaign analytics to see which marketing campaigns generated the most leads, but we have no clear I mean, I'll share a concrete example from a company I was working with.
EDDIE11:27I was looking at their leads and I'm like, I can't figure out what's going on with your leads here. Like, like what's going on. And the definition of the lead was any form fill is an mql. But six months ago it was based on a lead score. And then six months before that, it was any lead that fills out of form.
EDDIE11:44So you look at a year and a half of history and you're like, this is just an absolute mess. Now you feed that into AI and say, okay, tell me which campaigns are most successful at generating leads, like, what are you going to get out of that?
VAJRE11:56Yeah, yeah, the context is incredibly, incredibly important. The this is why I think I love that example, because I think when you create agents, I think agents are going to be running on those campaigns and they're going to be independent, and they're going to almost compete with each other. Do you show value in it? Whereas the context of why you're trying to do the business, the effectiveness vector, I think that is the hardest thing to do.
VAJRE12:20And I feel like I feel like right now it's really the most exciting time to be in go to market first and foremost, right? Because we all get to do it. And especially especially if you're a big company, if you have been an executive for 20 years or more, you actually are able to have. So you have so many things that you have always wanted to do or hear or see in the data and ask or have somebody do it.
VAJRE12:46You actually can do those things, but you're going to need to have this contextual layer on top of it. This is the hardest part to do. I feel like most people are not even spending enough time. I'll give you another really interesting example on it. We have something called as the go to market operating system, which is an eight question operating system that we we have companies, we have over a thousand companies have gone through it.
VAJRE13:07They've run on Gitmo as, as they say it. And one of the questions is simply this. And again, this is this is this is the kind of stuff that really is really interesting. The question initially when we started the research four years ago when we wrote the book move, was where can you grab that was the question.
VAJRE13:25And we found out that's the worst possible question to ask. As an executive. You are a 30, 40, 50, $100 million company because at that time you're not looking to grow for the for just the growth reasons. You're actually trying to grow profitably. You're actually trying to show an RR outcome on it. You're actually trying to see which segments of our customer base are actually the right kind of customer.
VAJRE13:50So we need to grow in those segments or those industries or those verticals or those stages. So you're an answer to the where can you grow and can be it is not enough. So we added these two words to it and which has become the defining way. And the intentionality around all of the questions is with some of these, these really fine tuned changes, which is where can you grow the most?
VAJRE14:14We added the most to it, and as soon as we added the question the most to it and the CEO and the executive team as they go through this process, they're like, well, that changes everything. If you want to figure out how we want to grow the most, well, all of these five options, the three, this is where we can grow the most.
VAJRE14:34We have data forward, we have customers forward. We have a product for it. We have a market for it. We have a point of view for it. We have a go to market motion for it. All those things that require you to grow. And we have the most gross margin on it. So all executive level decisions can be done at that level.
VAJRE14:49But when you when you take away those words like the most, the contextual layer, the effectiveness layer to it, then it's anybody's game. Everybody can be running in 80 different directions. And that is what what I think I see a lot happening is people are people with AI can move so fast that you're moving. You could go in the wrong direction.
VAJRE15:07Really, really fast as opposed to taking a step back and asking bare minimum basic but very intentional questions like where can you grow the most in it? And I'll call for a really good debate in it, at an executive level, and then use data and then feed that intelligence back into your AI system to say, all right, this is the context.
VAJRE15:28Here is what it means to be successful. Here's what a successful campaign looks like. Like you gave that example as and now based on this look at the data and tell me what happened. That level of depth. Oh my gosh. Like I think I can do it, but it requires a lot of intentionality.
EDDIE15:43Yeah, I like that a lot. And I'd love to unpack that a little bit because we have sort of some content that takes it goes on a similar path. We call it the go to market ops decision tree and your go to market OS. I've looked at it and it's really great, and it has a little bit wider purview than ours because we're kind of a little bit more focused on just the operations.
EDDIE16:00Like we try not to like get on over our skis and say, like, this is like you're on the rebels shooting and and marketing. I don't know if you're in rev ops. I'm not sure what rev ops means anymore. Because so many people say rev ops and they just think like, okay, we're gonna, we're going to build out Salesforce and, and HubSpot and, and I think that's great.
EDDIE16:14We do a lot of that work. But for me it's more than that. For me, it's figuring out, answering your question, where can we grow the most? And I think your perspective on it is slightly wider than ours because we're not experts in like, positioning and, you know, market strategy and things like that. But within ops, one of the questions we ask in our go to market ops decision tree is where's the greatest opportunity to impact revenue?
EDDIE16:39Is it new business or is an Na. Unpack that next. Is it more pipeline or is it closing more of the deals that we're already generating. But one of the challenges that I have, and I want to bounce us off of you, is I feel like it's a very similar question to what you're asking. But then my problem is, is like when I'm on the phone with the CRO, nine times out of ten, the answer I get is we need to generate more pipeline.
EDDIE17:01Yeah, yeah. And so I'll say, okay, well let's talk about Na and one of the articles that I read that inspired this topic with you, on your newsletter, mentioned how expansion is 60% of net new revenue for companies, over 50 million are. And I've seen this statistic elsewhere. Okay. So expansion is this massive opportunity which is part of Na.
EDDIE17:23And my conversations with crows are nine times out of ten, I'm just skipping right past that. And I want to push back. Some of these heroes don't own CSS, so okay, cool. Like let's give them some forgiveness there. But then we skip over pipeline and then I ask, well, well what's your close rate? Well it's 12% right now okay.
EDDIE17:39So if you're close rate is 12% why would we spend all of our time, money and energy generating more pipeline instead of fixing the fundamental process that is causing you to have a 12% close rate and turning it into a 20% close rate, we had caller on our podcast a few weeks ago, and he talked about how his team used AI to improve their close rate from what was already 38% to 53%.
EDDIE18:01Now, I don't know how they set the bar for, an SQL in their organization, but like, I think the average B2B SAS company right now is looking at 10 to 20% close rates. And if you're just saying, like, let's generate more pipeline, let's generate more pipeline. And so what I want to actually do is come out with a benchmark report.
EDDIE18:16And I have like a really like mixed feelings about benchmarks. Because, you know, like every company is unique and different, but I kind of I struggle with this idea of just asking a revenue leader, like, where do you think you can grow the most? Where do you think is the best opportunity? Because how do you know if that answer is right?
VAJRE18:33Yeah. Did. Okay. This is so good. All right. So we have and I put this literally if you know if people are watching video they could they could see it. But I'm showing you a sticky note almost I right I have this in front of me every single day, Eddie. And this is part of our manifesto that we wrote.
VAJRE18:49As part of that, we build a go to market operating system that came out of the research. And so I'm going to rattle off the five things that came out of it. And then we can dig into any one of them that maybe more or less supports your your thesis on this. Number one, the CEO ones go to market.
VAJRE19:05We don't have any other. We asked so much. So just let me write it up and I can talk more about all how we went through that. So CEOs go to market. Number two go to market is a transformational process. Number three business transformation happens in teams. Number four you have to trust in the and near as your main metric.
VAJRE19:29And number five systems are better than goals. These are our systems are better than goals. Whatever goal they have like don't go double the revenue like our get. What's your system to get. There is the typical question. And then you you hear crickets. So so these five are the key part of our manifesto which really says the reason that question probably does not go well with the CRL is because the see, that question is really directed to the CEO.
VAJRE19:59See if you think about the corresponding that that's why we do business. Transformation happens in teams. We tell that, look, we're not a coaching business. We're not actually coming and trying to coach you, marketing to be a better marketer or a sales being a better sales. Like, as you said, we have a broader purview. We only do at a team level.
VAJRE20:16The CEO has to be in the room because there is no go to market decision that's going to happen. Ice, for example, ICP, they would delegate to marketing. We're like, no, no, no ICP. The business decisions go to market is the business. So we're going to go through this process together. And so in that room when we ask that question where can we grow the most that brings the debate already really, really well.
VAJRE20:39And that's what we're looking for. But you're absolutely right. If we individually would have gone to every single individual and say, hey, CMO, what is where can you grow the most CRO where can we grow the most? We'll get different answers. And and there is no reconciliation between them. But we mean we ask that as a group by setting the standard like, hey, there is no marketing sales here.
VAJRE20:59You all are our business leaders. You happen to know a lot about one specific area or the other. So we're not going to finger point. We're not here to talk about marketing, sales or anything like that. We're talking about business here. So we said that foundation very clear CEO you own go to market. That doesn't mean you execute it but you own it.
VAJRE21:16So you need to be in the room and then once that set up is there, then every one of these questions that we talk about, we ask that question open ended. And then we give them a framework to think about it. Sometimes you need a framework to like, well, what does that even mean? And what where how far can we go.
VAJRE21:31And, you know, so we just give them a framework to help them think through it. But it's so important that for that exact reason you mentioned, if we don't do this as a group, as a team, then this is the hardest thing, because the same scenario two months from now, when they haven't made their quota, they would he would have a different he or she would have a different answer because they are so focused on their own little silo, not go to market as a business.
VAJRE21:55But if you have CEO in the room, then we can challenge back like, well, is pipeline really the thing? And the CEO might say, well it is important, but what we really need this next three quarters is a, a pie, a profitable business. So we need more in our expansion. Okay. Well, that means are you okay not having a pipeline that decisions crow can have by themselves because they're number.
VAJRE22:18So in that way, we've been able to really bring this together like what's really important. And we can have 80 priorities. What are the top three. So but it has to be done as a team. If it's not done as a team, that's for a lot of companies fail at it.
EDDIE22:31I love that. I mean, there's so many challenges that happen when you don't have the CEO owning go to market. And one of the biggest challenges I have is that at least for a long time, I've been operating under the assumption that the CRO is supposed to own go to market, even though I'm aware that the percentage of crows out there that owns sales and marketing and CSS and whatever else you want to throw in to go to market like are, is the SDR team part of those three things that I mentioned?
EDDIE22:59Is that a separate thing? What about partners and channel? What about the sales, engineering team, etc., etc., etc. the amount of crows that own truly own that truly make the decision to say, okay, these are marketing's goals. The CMO reports to me. They don't report to the CEO, they report to me and I'm the one that determines whether I like how we measure their success.
EDDIE23:20I'm the one that owns the reports. That is a vast minority of crows out there. And so then you end up with this like gap where, you know, the most common example, obviously, is like the CMO that has an mql target in the Sierra that has a new business target, and then somebody else in Customer Success that has a net revenue retention target.
EDDIE23:39And they're all, it's not even like that. They're bad operators. They're incentivized in judging their job security relies on them fighting each other. You know, like the and so I struggle with this. You know, I'm not the CEO of $100 million company. I'm the CEO of a much smaller company. But like every time I wake up, I'm like, how I how am I supposed to not care about go to market?
EDDIE24:01And I love go to market. So that one's easy. And then for me, like, it's also like I have to care about product and like to like a technical CEO. I would say like, what would you think of me if I said, I don't care about products? Like what we do for our customers is not important to me.
EDDIE24:15I only think about go to market, like I, I can't process that statement.
VAJRE24:20Oh, and go to market includes product. I think the funniest thing we if you did a schedule or some time is it two years ago we did a video. I need to go find it. This video is really, really needed. A video of like the CEO, the CMO, the CRO, and the head of sales all sitting in a room and making go to market decisions on a whiteboard.
VAJRE24:40And the product guy walks by the the conference room looking like you're making decisions for me to deliver something that you're selling. Shouldn't I be in that room? And he just pacing outside that conference room trying to get in the room and and they're like, nah, I will talk to you later. And they all come out of the room after that.
VAJRE24:58And then Zelda. But all right, you need to deliver these three products because we need to sell this thing. And he's like, why am I not in that meeting? Well, you're not go to market. And he's like, I am part of the go to market. So and for every CEO and for for every heart beating, out there with that, that soul crushing scenario, it is literally that that no, the product, the the group, the sales, marketing product, rev ops if they have like these are important the people who are actually going to change or move your business is go to market.
VAJRE25:30So if I were to write my fourth book, I think the title of that book will be it. If it doesn't go to market, it literally will say go to market is the business. So there is no one that can escape if they have facing anything related to the customer. So with that being said, I want to tell you a quick story at it because you you made me think about it.
VAJRE25:50I made a note of it about must be about about six months ago, a friend of mine, really, really incredible CMO, you know, she posted on LinkedIn like, hey, we created, I think, 35 million pipeline or something like that, the largest ever created pipeline in the history of the company. And we are so excited and all that stuff.
VAJRE26:14And about three weeks later, she was fired or let go. And so I knew no her. So I called her up. And that's why I give the numbers a little bit broad. So, you know, people can can trace anything back to it. So I called her up and said, hey, what happened? You, you you just posted like a few weeks ago that you had the most amazing results and whatnot.
VAJRE26:35She's like, we were working on the wrong ICP, the the pipeline that was created for the type of customers where the highest churning customers in the history of the business. We were just getting that and the pipeline was racking up, and the CEO never said anything other than like, oh, great pipeline numbers. But then when we dug into not every dollar amount in the pipeline is the same.
VAJRE27:00So whatever 30, let's say it was 35 million pipeline. Really only 5 million pipeline was good. Pipeline rest 30 million. Pipeline wasn't good pipeline. It wasn't good business. They actually wanted to not have that kind of like you said, like it. You may not want super early stage companies to be your early, customers. So she was like, I just created even a bigger problem for the business now.
VAJRE27:21So. And she wasted so much sales some time and not just marketing campaign dollars because they doubled it, doubled the doubled it because they were getting leads and pipeline numbers are going up. And nobody looked at it until six months, six weeks into it. So that made me recognize that man. So many companies miss out on that. Imagine now if they would have sat in a room when she was going to run this campaign as an executive team, and the CEO was in the room and said, hey, this is our ICP would go through the GTM process and the CEO's in the room and, and we say, hey, this is the ICP, the sales, the
VAJRE27:55marketing, the CEOs, the product person, the ops person. The CEO has to agree that this is our most important ICP. If they would have done that, they would not have lost millions of dollars in campaign budget and all the money and time and effort. And now they were crawling back out of it because they had bad customers that they didn't want it.
VAJRE28:13All of this happened because they never work as a group, which is why the number three on this is business transformation. And go to market really leads to transformation. If you do it right, business transformation really, truly happens in teams. It has never happened in the history of anything that I've seen in a marketing team or a sales team or a CSR.
VAJRE28:36It doesn't happen in individual departments. It actually happens in teams as a as a go to market team. So that story was like again, heartbreaking story.
RACHAEL28:45From a quick note before we keep going, if you're listening to this and thinking, I want to do this stuff for my company, we've published the actual go to market ops frameworks that we use with our clients every day at Union Square consulting.com/frameworks. You can find our frameworks and diagnosing go to market ops, pipeline management, outbound and even our proprietary go to market Efficiency Pyramid framework.
RACHAEL29:10They're all free and UN gated freight on our website. Go to Union Square consulting.com/frameworks and the link will be in the show notes as well. All right. Let's get back to it.
EDDIE29:19I mentioned Scale Venture partners report on AI. We also recently released, something where we put together seven of those reports, including that one, and I don't remember which report it was, but these was from like Pavillion and Epstein, like, every, every leading organization in, might have been one of yours. I'm not sure, because I didn't put it together.
EDDIE29:41But every leading organization in go to market right now. And one of the stats that came out was that pipe ICP pipeline is eight times more likely to close, and yet only 28% of pipeline. I think this was $91 billion of pipeline across these seven studies. Well, maybe this statistic is only for one of the studies, but so we're talking about like massive data, right?
EDDIE30:0428% of pipeline is ICP. And what I see oftentimes is you ask the organization, like what's your ICP? Ignoring the idea that maybe you get five different answers from five different people. They're like, well, you know, actually, I'll give you a concrete example from a customer I was working with. It's a VA. They're literally showing you a PowerPoint slide.
EDDIE30:21It's these 14 industries and it's, you know, in their case it was headcount, but it could be revenue, you know, between 10 million and 1 billion. And you're like in North America and Europe. And it's like, oh, okay. So like, you know, that's 20 million companies, even if, even if you can sell and market and serve all of the companies in those 20 million profitably, there's still has to be a cohort that is more profitable.
EDDIE30:50And since you can't win 20 million customers, why wouldn't you want to narrow down? And then bringing the conversation back to AI is something I'm really excited about is the concept of like dynamic ICP agents. So what if we take our customers and we take all of our financial data and we look at how much money we are spending to acquire those customers and to serve those customers, and what we're making off of those customers.
EDDIE31:12And we couple that with our firm and graphic and techno graphic data and their intent signals and all the other a random stuff that makes true ICP. Like I'll, I'll share a couple examples like you might relate to this. When we were when I was trying to sell Pardot after, Salesforce acquired the company, they gave us all these, like, plug ins for Chrome, and it's like, go to the website and look, do they have a shitty website?
EDDIE31:36They spent $500 at selling in SMB and I and I think what would be considered mid-market as well, if they spent $500 on their website ten years ago, they're probably not going to buy a $20,000 marketing tool, right? Yeah. But how many organizations have their ICP defined with that level of granularity?
VAJRE31:53Yeah, yeah. This is the the most unsexy part of building a business is focus. And you and I can attest to that as CEOs and building companies is like, what do I focus on? And the bigger the company, the harder it is to focus. Because in the early days you just gotta find somebody with a pulse and try to sell something, right?
VAJRE32:22Like you literally are in a, in a very you're not looking at retention expansion like those. Those are for you're just right. But most folks that have graduated and built $5,000 companies, now you're thinking about like, who is the right customer for me? Who do who. I mean, and what's interesting is the more higher paying the customer, the less problems they give to you.
VAJRE32:43You start recognizing that they understand the value of it. They're using it for what it's needed. And as long as it helps them do that, they're not going to keep asking you for feature updates. Whereas the, the smaller, you know, deals that that companies closed and I've done that before were like, man, that person needs everything and they only paid 100 bucks.
VAJRE33:02Like, what do you what do you want. Right. Like so so there is a level of sophistication that comes with a higher paying customer, a bigger deal, a bigger account, partnership, strategic, all those things that are just not possible at as small companies that that we see. So, when I look at all of it, it reminds me of this, this one research we did, we we've been doing this for four years now.
VAJRE33:28And every year we ask this question at least 7 or 8 times a year because we have so many companies going through this process. And we ask, what are your top go to market problems? And we highlight 15 go to market problems. If you do this research and we have never found a 1601, I've always put out an open LinkedIn, bounty on this thing.
VAJRE33:48If you find the 16 problem, you know, I'll take you for drinks or lunch or dinner or whatever, right? Like, we just think that are only based on all the research five years in a row. We haven't found a 16th problem. So we instead of saying, what are your go to market problems, you literally show these 15 problems to them and say, how are you?
VAJRE34:06Top three added the top three typically are these still in last five years? Number one Mark go to market. Teams are not in sync. That's the number one. Number one thing that always happened. And we ask them, what are you trying to do? How often do you meet. Or we meet once a week. And what do you do in that meeting?
VAJRE34:25Oh, we look at pipeline. Well that's not how you run it. So we literally have to reset you change that process. Number two problem, that they would say is that, well, the that, we have to rely on heroic sales to get to the number every single quarter. That's the number two problem, which means that their ICP is not right.
VAJRE34:43They don't. They're just working with 1 or 2 reps who actually help them get to the quota. It's not a static process. And number three, and this is the part that's really interesting, is that they've they're the number three that comes up over and over again is simply does that their last in the deal which means they do not have enough brand equity in the marketplace to be in the deal.
VAJRE35:03So it's false positive. They will just get you on the call or get you to give you a proposal so they can price compare and go with whichever customer they want to go. So they also sell all of these at the end of the day. Really, those are the top three that people end up saying that these are the most important problems.
VAJRE35:19And if you help you solve them, they say, we would be so much further ahead we would actually hit the numbers will go the distance, we will launch new products will great get to the next number. But they don't. They just never able to get through those. And that's the difference between the best companies. They're able to just isolate and start working through it like Salesforce.
VAJRE35:39Is it the best run company in the world? You and I have been there and we know data is on them. It was a mess when I was there. There was all kinds of issues across the board, but they did a few things really, really well. And that's that's what I find with these companies. Like what is the 1 or 2 things you can do so well that all these other issues that you have, it's okay if they're not perfect, but you got to be able to get your ICP really, really good.
VAJRE36:03And if if they can take one thing from our conversation to then get their ICP right. Eddie, I think most companies will do far better than they're doing right now.
EDDIE36:11Well, it's interesting you say Salesforce data was a mess. Maybe, maybe from a marketing perspective, I don't know. I would say from my perspective in sales, some of the data was a mess. But when you looked at like, here are our existing customers accounts, I remember, like and for context, I was the first a in a startup that had been built on top of the Salesforce platform.
EDDIE36:32It was an ISV partner, like a solution for private equity firms. Prior to that. And I mean, like I just came into like just nothing. And then I go to Salesforce and I remember, like what blew me away. It's like they just I think it was so like in one of our essays or something that, you know, sent out an email and he was just like, here are the nine x code and six codes for all the industries that buy the most from Salesforce.
EDDIE36:53And oh, by the way, we have all of that in Salesforce. You can cross-reference your territory and it's like, surprise, surprise, B2B SaaS companies buy more Salesforce than, janitorial services. And and then they're like, okay, well, that's really helpful. Now, which of my customers are B2B SaaS companies? And then in like a second you have that. And I just remember being so blown away by that because so many organizations don't have that now.
EDDIE37:18Yes. When I log into the account, there were 17 duplicate contacts for John Doe. Yes, I'll give you that. But I was just happy that like, we had like the Baseline Foundation, like I had a place to start. I could see how healthy customers were. I could take my existing accounts. And Trish, who was healthy and who wasn't, so I guess it's all like a degree.
EDDIE37:37And maybe when you were trying to, like, build out marketing campaigns, you're like, I got 17 contacts in the same Oregon. So from your perspective as a mess, I don't know.
VAJRE37:44Yeah. I mean, what what was interesting, what's interesting about that is really perspective. I've been a CMO a couple of times by that time, so I had a very different level of expectations of like when I go in Salesforce, it will be like the clean data, the CRM will be the cleaner CRM, and then the marketing automation platform and all like, oh my gosh.
VAJRE38:03And then it was no different. By the way, you pull it back for of we are the worst marketing automation player. Like doing our stuff internally. Then what we were selling, it just happens where it's the expectation. The bar was very high, but in 100% of the companies I think you and I work. Data is like the high the biggest challenge for them is like where is your data?
VAJRE38:23How do you run campaign on all this data?
EDDIE38:25Well, in this brings us back to the conversation about AI. Like, you can't you can't make AI work, especially at scale. It's one thing to just pop in and ChatGPT or Claude and say, research this, this company, go research Pepsi and give me some insights that I can use in my meeting. It's another thing to do this at scale across an organization.
EDDIE38:42Need that data layer. But I want to take this back to what you said, and then I'm going to take it back to AI. So can you define you listed off three things and I'm not sure I remember them off the top of my head. Yeah. You had alignment and then what was the next one.
VAJRE38:56On what on on.
EDDIE38:57What. You just mentioned the three biggest problems and go to market alignment.
VAJRE39:00Oh yeah. Yeah. The three biggest problems right. Where that our go to market team is not in alignment. Heroic sales is really saving the day for them time and time again. And they are the last, to the deal. So it's almost false positive.
EDDIE39:14So I think the third one is pretty obvious. But could you define the first two?
VAJRE39:18Yeah. So the first one is really the fact that they have no clarity. They do not have the marketing is running their own campaigns like the CRM example I gave you. And then sales is focus. Like it's almost like marketing give me leaves sales give me deals. And you know, CSS, our product team just creates some thrills, you know, with product features and stuff.
VAJRE39:38I feel like that's the general market. And then honestly, Eddie, I, I've wondered about it, and I feel like I've led to this conclusion that it happens when the CEO is not not confident enough to manage them all together. He or she feels like they all just need to do their job well and we will get through it.
VAJRE39:57And they're just not educated in this part of it. And I had to go through it myself off of that for the run. A better organization I have to own go to market. That was our biggest research outcome, is that the companies in which the CEO owns go to market it's mind blowing. So, for example, Yamini Rangan is the CEO of, HubSpot now, and Brian Halligan, who was before they both get give a quote for the book and without even blinking, I they said I won't go to market.
VAJRE40:24It's publicly traded company. No. No questions. I go and ask you $10 million, $20 million company. Same thing this year. The yeah I own it. They just CEOs typically just know that they are on and nobody gives me credit for it or that's fine. But I own go to market. And and and and but if you go ask the CMO or the crew of that company, they might feel like they don't go to market.
VAJRE40:45And, and that's where the issue becomes, because their myopic view of go to market messes the business altogether. So so that's the number one is like that. The team is not aligned enough to do it. And Heroic sales is literally that which is man. Every quarter or every month we hit our numbers somehow. But it's only because Jim and Sally, they make their numbers.
VAJRE41:06And if they do, they don't somehow, and we don't know what process they follow, but somehow they crush it and we are over the hump. But if they didn't do what they do, we we just we can't. And so the quota attainment ratio is very, very low.
EDDIE41:20You know, that's exactly it for me. And I think this is a great tie. And back to AI and why you can't layer AI on top of a broken foundation. Because for me those two things are indicative of a broken foundation. Now I'm not a marketing expert like you, so I might ask you about the whole last and the deal thing.
EDDIE41:37I've heard other folks say that this is happening because you're just spending all your ad dollars trying to, like, capture demand instead of create it. And so what you're doing is you're just buying ads so that you can be vendor number 3 or 4 in the eval. Yeah, yeah. Do you agree with that?
VAJRE41:51Well, it's part of AD. It's also part of with AI like right now one of the greatest challenge I see is there are lots and lots of companies that are having an incredible swing at it where everybody's ready to test and you are like, we're in the Gold Rush era right now. All right. Oh, you do this thing.
VAJRE42:09Oh, that sounds cool. Let me go try it. And the people who just sign up all day long. But guess what? Nobody's paying for a lot of it. So these companies we have, I'm seeing at least 50 companies in our portfolio where we advise and we do certain things about, the 50 companies, about 35, I almost say 40 companies.
VAJRE42:29I can see they're going to go under. They're not going to see they they're not going to see 2027. Unless something miraculous happened. And the reason is because those are all high businesses. So they are just doing one little thing better. Like, for example, I use superhuman for my emails because it's just easier for me. I can keep everything possible.
VAJRE42:49Another company just raised 28 million. This was a few months ago to put, the ability to put in sync with your calendar and autographed emails. Just simple thing. Oh, that's a really cool feature. I would like that a week later. Eddie, I kid you not, superhuman. Release that. Hey, we we now do that too. We can you can connect to your, thing.
VAJRE43:09So it's like, I'm like, why would I switch? So also, the other company that just raised $28 million, I'm thinking about as like, that money is gone because they already have such a big market share. And if they are the third in the in the deal that is comparing between, let's say, superhuman in that company, they would go with superhuman because the better brand is it's the same price.
VAJRE43:29So the last in the deal is a race to the bottom. And it's AI is really the shiny object. Lots of people are getting into it, but the percentage of winners is going to be so few. I'm, I'm scared for, for a lot of that because they are all raising money and that's why the VC world is so upside down, right?
EDDIE43:48Well, and even superhuman. I tried it out myself and I dropped it. I might try it again because I want that calendar feature, by the way, I've actually been researching it. But okay, so let's take this back. So I think for me, what I'm seeing with AI, when you try to think about how do we implement AI in our go to market, across the go to market organization in an institutional or enterprise way that's going to drive revenue and impact.
EDDIE44:11And we're going to see like one of the metrics I've been seeing lately that I like is just like, what's the IRR per wrapper per headcount, right. Like if we double revenue per employee because we're using all these AI tools. Like I can make some arguments against that. But like that's a really strong rubric for thinking about whether or not this is actually driving impact.
EDDIE44:30And if you have let me focus in on hero sales first, hero sales to the point you made is just such an indicator that we don't have a process. Because like when I was at Salesforce, we had some salespeople that are crushing it. There were like two x quota. Now, part of that was the fact that even as as great as Salesforce is like, territories weren't great, especially I was in New York.
EDDIE44:50And so you have like one zip code that has like all the revenue. Whereas like, you know, I had a colleague that our first year we weren't just in New York and she like covered all of Ohio. And it's like, okay, cool. So if you're building territories on zip codes, that works. But then you get to Manhattan and there's like one zip code, Silicon Valley, where all the hot, you know, software companies are.
EDDIE45:09So that was an issue. And that contributed to whomever owned that territory outperforming. But the thing that I saw is there were fundamental steps in the process that, you know, save the absolute worst raps. They weren't skipping. And so then you wouldn't have a rap that's like ten x another rap. Like when I was at, I started my career with Wells Fargo.
EDDIE45:29And this might not be a fair comparison because it's really not a sales organization. And ironically, the CEO, the CEO got drunk in front of Congress and had to resign. I don't know if you remember all that stuff, because after my time there were salespeople that were creating fake accounts and the CEO was like, I didn't know about it.
EDDIE45:45Well, that's your job. And so he had to resign. This is pretty, pretty nasty. But I was at 504% of my quota, and it's not because I'm such a great salesperson. I'm really not. But, like, I was getting different reports and everybody, I was making cold calls. Nobody else was making cold calls. They were waiting for people to walk into the bank and then trying to see if they could do their 15,000 hour auto loan.
EDDIE46:08And I was like, what if I just call people that I have half $1 million home equity lines of credit because I was my limit? Was a half a million and just start closing half $1 million deals one at a time. Well, that's like a fundamentally different process, right? I had different tech, I had different prospects. I had a different thing I was selling.
EDDIE46:24And so I was at 504% of quota now because I was like the world's best banker ever. I just had a totally different process. And then when you think about like, well, how do we layer AI on top of an organization where we have these hero salespeople, you have to go back and say, like, what is our sales process?
EDDIE46:39What is a qualified lead? When do reps follow up on inbound leads? What type of prospect should we go after? Who's our ICP? What is that step by step process? Do we research the account before we reach out at cetera, etc. etc. you need all of these things mapped out before you can start to layer AI on top of that.
EDDIE46:56Otherwise you're just going to get like really abysmal results.
VAJRE47:01You know what I love about your story, Eddie? Is that what you did was you asked the question, where can he grow the most in a really interesting way? And you said, well, I can grow the most by selling a $110,000 deals or like one big hundred thousand or $1 million deal or like a combination of that. And then that's fundamentally it is that reframing of that.
VAJRE47:25In a way, it was the classic cannabis marketing technique is like you're you're looking at it and saying, well, where do I staying on on that note, I was just pulling up something here. I'm a, I'm going to do a keynote in two weeks from now. And I did a whole research around it. Here is what what came out of that research.
VAJRE47:44And you mentioned revenue per employee. Based on that research, almost every CEO like I left the data still running, but I could see a majority of the CEO. I should say, is looking at these two metrics, revenue per employee and are being the two metrics that they are, they're they're really doing well. Number two, what came out of that was that that service as a software business model is booming and doing better than software as a service model.
EDDIE48:14Which services a software model?
VAJRE48:16Okay, services, a software model is is like you're all over as a obviously software is, you know, SaaS model, right? We all understand that. But you flip it as well. What is a service as a software model is literally saying that instead of selling a software, you're actually selling a service, and the software is on the back end to produce whatever you need to do.
EDDIE48:39So far, different from tech enabled services.
VAJRE48:42You could no, I think tech enable, you could call it. But the problem is that when you call it a tech enabled services, people are still trying to sell tech. And in this case, you're not selling to dev. So for I'll give you a classic example of that. Today you will look at all the ABM companies, like even Micah, the company I started terminus.
VAJRE48:59They the idea of somebody would buy a $100,000 software, and then they would sign a three year contract with you, and then you have to hire somebody who needs to be really good at running terminus, or demand days or six months or whatever of those technologies. And then you're literally talking about a half 1 million to $1 million investment, even before you got anything like that.
VAJRE49:17Was the software as a service model, right? Service services, a software model is saying that, hey, I'm going to go to an agency who's going to run this for me? So in a way, it's tech enabled, but I'm going to go and I'm not going to worry about what they use. I don't need to be as a company B specialist in IT, demand base or a terminus or a sixth sense kind of thing.
VAJRE49:36I just need them to worry about it, let them have one of the licenses. The data changes from zoom in, photo sales, Intel to Apollo. I don't need to be an independent like I just don't want. I just want to run an ABM campaign that produces X kind of results. I don't want to see that really, really well.
VAJRE49:51And I will pay 10,000 and 20,030 thousand a month to do that. So we are seeing a massive boom in that kind of stuff versus somebody trying to buy companies that are trying to sell $1,000 or even a $10,000 software today per month is struggling. Is struggling big time. But service and but companies that are selling services that that says this is what I'm going to do for you and they're using software in the backend to do it.
VAJRE50:16Do they are they're booming. And I think I'll have some really good numbers to share in a couple of weeks, because I'm looking at the data right now. It's insane how well the services software market is doing that's so interesting.
EDDIE50:28I don't try to use this podcast. It's overtly pitch what we do, but like that's what we do. I mean, we started off as a Salesforce partner and I love Salesforce. But like there's some products in Salesforce that like we just don't believe in. And you know, it got to a point where we're like, I mean, I think even in the beginning, like we still don't have a choice.
EDDIE50:43I mean, people buy Salesforce and they've got other tools. And for us, it became really important. Like we want to be agnostic. Like, yes, we think for most mature companies, at least as of today, Salesforce is still the CRM of choice. But when you start to look at other options, we want to be able to say, you know, these are the tools that are going to help you get the job done.
EDDIE51:03And so I so much believe in that model. I just wasn't familiar with that terminology. When I think about tech enabled services, it just takes it a step further. And we're not just going to charge you for the physical labor of our consultants, even for like logging into Salesforce and building stuff. Let's go build technology so that we can do that better and faster, maybe charge less, also have higher margins and everybody wins.
VAJRE51:23Yeah, well, as a matter of fact, I think the the future is like just no interface. Like you need a new interface essentially what should happen for you. Your service would be saying that, hey, your service should literally be and I'm just again, we're just talking about it. You can you can delete this if it doesn't go in there I'm okay with that.
VAJRE51:41Is is like where they should be able to log into it, not log into. But yeah, get into a ChatGPT version into your software and ask questions. So as I've been.
EDDIE51:51Talking about this so much recently and like I'll ask you this question. Right. So I posted about this the other day. Like with AI, do we need Salesforce. And today as of the date of this recording, I think we do. But fast forward 5 or 10 years and I post this and I said, like, what do I want as a CEO?
EDDIE52:08Like using Salesforce and also somebody that like, I run a small business. So I'm still doing a lot of sales. I don't log in to Salesforce. I want the accounts created for me, the contacts created for me. I want the email sync, I want the calendar invite saying I want my call transcripts like added. I want somebody to go read the call transcripts and put that in there.
EDDIE52:24I like reporting. I want, you know, the report to just tell me what I want. And how do I know that I want this? I already have this. It's not all AI driven. I have employees, and, like, I'm just like, I have my assistant, like, hey, creates this new contact in Salesforce. I have our team that our consulting team.
EDDIE52:40And I'm like, go build me this, like report in Salesforce or HubSpot or whatever. I don't do any of this stuff myself. And I'm like, so wait. And like, and my dad said something to me a long time ago, he's like, you can do really well in life if you can just give everybody what rich people have.
EDDIE52:54And I was like, oh, that's an interesting and weird thing. And then Uber comes out and you're like, oh, everybody has a private limo driver now. I'm like, okay, I get it. I get it. It's like everybody like I used to work in, after Wells Fargo, I went and worked on Wall Street, and it's just like you couldn't get any of these guys to log in to Salesforce.
EDDIE53:10And they all had, like, their team of analysts doing it for them. And I used to fight that. I was like, this is so terrible. And now it's like, wait, that's what everybody wants. So I'm running out of time. I like ten minutes left. But like, if I can do that for you and I is like updating every record in Salesforce for you, every email, every call, every meeting, no, everything.
EDDIE53:28And then, you know, you can just go into slack or whatever. And just ask it questions. And then even when you want to report, it just tells you, here's your report. Like, show me all the opportunities from X day to Y date. And what was our close rate. And then I don't want to log in to Salesforce. Then what do I need Salesforce for?
EDDIE53:42Can I just move this to a database?
VAJRE53:45Yeah. Well, I mean the future belongs to where if you look at the stock prices, it's very indicative of all these companies today. Right. So I think and some of them will come out of it and do really well, but some of them are going to go to they're going to die. Some of these CRM companies, so, so I believe that you wouldn't need based on AI research and just pontificating.
VAJRE54:07It is like you wouldn't you, wouldn't you? It would be a world of one interface, which means you have one ChatGPT Gemini style interface where you have a conversation with that does everything on the back end for you. And the pro of that is like, anybody can do it. And that's the negative of it, because you may not want everybody else to do you and have access to everything that you want.
VAJRE54:34And that's where the problem is, is that can that happen? I think that can happen in like a month. If you really, really think and try to do it, the challenges that then everybody will have the same access. And you may not want everybody to have the same financial access or know about everybody's quotas and know about everybody's this and that.
VAJRE54:51So so you said there is a level of, you.
EDDIE54:54Can build that security in.
VAJRE54:56It that that is that honestly is one of the greatest challenges. I mean, if you listen to anthropic CEO, he was at the last, inbound conference, and I literally sat and just watch Yamini and, Dara's. What is his name? I forgot his diary diaries, I think. So they both were doing this interview and he was saying that man, the biggest challenge why he has not gone beyond engineering and that's how they build this multi-billion dollar company so quickly.
VAJRE55:22The reason he has not been able to get into any other field other than engineering, they're trying tech. They're trying to go to market. They're trying. But you would not hear about that in anthropic. Getting into it is because of security. You get the data layer. The security level has to be so deep. I was able to like you can find your way to get whatever data you wanted.
VAJRE55:43The data is there. It will get you that data. So layering on the security is a harder thing that than most people thought it to be.
EDDIE55:51So much to unpack, but we're at time. I want to be respectful of your time. Some more. Can people find you?
VAJRE55:57Oh, get find me on LinkedIn. And I get to write a lot of research. There are links due to a lot of the research we write. But, that's that's where you can find.
EDDIE56:07Awesome. Thank you so much for joining me today.
VAJRE56:10Yeah. Thanks so much. Man. That was a fun conversation, Eric.
EDDIE56:12I enjoyed it. Thanks for listening to the episode. If this resonated, please give us a five star rating and a follow up. It helps us reach more people, and you get our latest and greatest content without having to search for it. And if you're looking for hands on help and go to market strategy and or rev ops, please reach out to us.
EDDIE56:28We help our clients with everything from annual planning to improving processes and go to market, implementing systems to support those processes and go to market. AI. We're always happy to offer a free consultation to help you identify the best opportunities to improve your go to market engine, with or without our help. You can find us at Union Square consulting.com and the info will be in our show notes.