The Ruthless Sales Culture Behind ElevenLabs Growth | Carles Reina

Help me understand, as a founder, how do I create a comp plan for sales reps first and then, second, how do I create a comp plan for sales reps to sell upsell efficiently?

In reality, it's pretty much exactly the same. What we do at ElevenLabs is set up this threshold: we ask everyone to bring 20 times their base salary. That's your quota. If I pay you $100,000 a year, your quota is $2 million. That's it. If you don't achieve your quota, then you're going to be out. We're ruthless on that end.

Everyone actually smashes their quota at ElevenLabs. I would rather have smaller teams that smash their quotas.

Do you hit their quota?

Today, more than 80% hit their quota.

Wow.

They unlock accelerators and all of that stuff. The interesting piece on the upsell side is that we compensate both the account manager—sorry, the account exec—and the CSM. The account exec continues to accrue quota retirement and commissions, and the CSM is compensated on NRR.

I'm paying double, but I don't care. It makes perfect sense because then I have these 2 people busting their ass to make sure that they can actually make more money, which is fantastic for me as a company.

Totally get that. Again, I just want to pick on some things you said. You said that 80% is phenomenal, given the ambitiousness of 20x. If you were advising me as a founder, is 20x a good rule of thumb, or do you think that's specific to the margin profile of ElevenLabs?

1. The 20x Quota

The reality is that every business will be slightly different depending on the industry you're selling into. What I always tell everyone is, let's start with 20x, and then you can adjust.

What I told everyone in the company—the first account execs that I hired—was, “Guys, I have absolutely no clue if 20x is going to be the right number or not. The standard in SaaS is somewhere around 6 to 7, maybe 8, maybe 10. That is the standard. I know this is what you are expecting, but this is not how we're going to be building a company at ElevenLabs.”

If you're thinking about doing the same thing that you'll be doing at Notion or all of these places, in sales and so on, then you're in the wrong place. We'll experiment. If we get it wrong, absolutely fine. We'll compensate you correctly, and then essentially we will change the entire compensation structure.

But if we get it right, which I think it is the right number, this is what we're going to keep. We've kept it since day 1. We've been running with this for the past 2.5 years.

The 20% who don't hit quota—what did they get wrong? When you look at that cohort, what do you learn when you're looking at the next hires?

2. Why Reps Miss Quota

There are 2 buckets within this 20%. One is people who truly don't fit in the company. What they get wrong, fundamentally, is that they're not product experts. They haven't actually dived deeply enough into the product to understand it. They don't have the aggressiveness to go into the market outbound and so on.

Those guys, unfortunately, we terminate the contracts. We give them compensation, so we usually pay anywhere between 2 and 3 months of base salary. We tell them, “Hey, guys, it didn't work out at ElevenLabs because of the way we do things, but you're going to go somewhere else, and we're going to help you get somewhere else. That's why we give you this 2- or 3-month severance package, and you can do super well.”

So, it's us. It is not you. It is us, fundamentally.

The other percentage of people who don't get into that 80% are people who are building long-term pipelines. I have a guy, for instance—and there have been plenty of them over the past 2 years—but this guy we hired from AWS is a megasmart guy, super good.

You look at the core numbers and you're thinking, “I should be firing this guy. He's not hitting quota. He's at less than 50% of quota.” Any other person would have looked at the numbers and said, “This is not a fit. I cannot keep this person.” Talk to any investor and they would tell you, “Fire this person. Just not a fit.”

You dive into the numbers and realize, “Oh, it's because he went through the proper enterprise cycle, and he's building the most amazing coverage you can have in the entire UK region.” Wait a second. Why would I fire this person when he needs a lot more ramp, fundamentally, because he's tackling difficult, challenging industries?

We kept that person, and he absolutely smashed it this year—at 200-plus percent of quota. You need to differentiate between someone who doesn't fit in the company for a variety of reasons and someone who is building a proper pipeline over the long term. That person may need a little bit more help.

I completely disagree with the notion that because someone's selling to large enterprise, you can't tell whether they're good or not for a much longer period of time. I think, as you did there, you look under the hood. You look at the relationships, the conversations, and the interactions. You look where they're at, and you get a good enough feel of how close it is.

3. Monthly Pipeline Reviews

What I do with the team is—we have quite a lot of people on the go-to-market side; globally, we have about 90 people or something like that—I have sessions every single month with my account execs and my CSMs where we go deep into the pipeline.

They're pipeline review sessions, and I drill them on absolutely every single detail. We do it in front of everyone. If someone hasn't been building the proper pipeline and I see it in the numbers, I will tell them in front of everyone, “You have not done a good job. You're actually slacking. You're doing this, this, and this.”

Or I will tell them, “You're actually lucky. In the past month, you've hit your numbers because of pure luck. Next month, you're not going to hit them, so you're not in a good spot right now.”

If they improve, which the majority of them do, the following month I'm like, “I know I gave you a lot of crap last month. You've done fantastically well now.”

You need to have that honesty with your team, because otherwise, what are we doing here? If we're trying to build a generational company, you cannot do things the traditional way. You need to do it in a completely different way.

You said there about those meetings with account execs and CSMs. Can you actually just take me through them? You do them monthly, correct?

Monthly.

Do you do them separately with CSMs and account execs, or all together?

CSMs have their own meeting, and account execs have a different one. For account execs, I split it by region.

And they're in person or remote?

4. Salespeople Need The Road

All remote. There's an interesting thing. I know how some people feel about being in an office and all of that stuff, and when I see my sales team in the office multiple days, I start getting worried. If you're a salesperson, you need to be on the road.

I travel 75% of my time. In the past 3 weeks, I was in San Francisco, Mexico City, Tokyo, Seoul, Singapore, and London, and I'm heading to Dubai. That is the standard thing. Salespeople need to be on the road, talking to their customers.

Whether that is in the UK, across Europe, or in Cancun, I do not care. If you're constantly in the office doing virtual meetings only with your customers, you're doing it wrong.

Fascinating. How do you build a sales culture remotely?

By being ruthless. You need to be on top of it. It requires extra time, and it requires people to be forced to be on the road. We'll have multiple touchpoints, but I don't hire people who are junior.

I hire people who are autonomous, very energetic, very passionate, and will accept a million nos, fundamentally, because building sales is tough. Building sales remotely is even tougher, and you just need to be on top of it.

We're going to get to the people, but I do just want to stay on these meetings. We have them separate, remote, and monthly. Let's start on the sales team side before we move to the CSMs. What are you expecting them to bring? Should they send pipeline ahead of time with notes? What's that prep phase pre-meeting?

5. Inside The Pipeline Review

They will essentially tell me how much they've closed, how much is in the pipeline, and how much they're expecting to close in the next 30 days. Essentially, we start going through the deals. We talk about the biggest deals and all of that stuff.

While they're talking, I always look at their pipeline and pull up random deals to understand whether they have a full grasp of what they're talking about, because sometimes sales teams can end up cheating and having a bigger pipeline that's inflated but isn't moving. I want to catch them.

For me, the key item that I always tell them is that, at the end, when they present, I keep interacting with them, giving them feedback, and asking questions. But at the end of it, the question is always the same.

What are the blockers that you have, and how can I help you? For me, what I do is build a list of the blockers for each person, condense and summarize them later on, and then post them across the entire organization. I’ll say, “If we solve all of these blockers in Europe, we could be making a lot more money. In India, these are the blockers. In Spanish LatAm, these are the blockers. In the Middle East, these are the blockers.”

Then everyone understands where we are in each of the regions.

Got you. Okay, and so we have that. When they come to you and say something—because I’m on a lot of boards, and very often it’s that one that slipped to next quarter—what do you say when you get reps who say that, and what’s the right way to deal with that?

There are always deals that will end up moving toward the next quarter. That’s inevitable, right?

And you do this, by the way, in front of everyone. You don’t do it one by one.

No, no one has enough time to do it one by one. I think everyone can benefit from doing it in front of other people. It’s the pressure, and it’s the fact that you can give them good feedback. Through feedback, people learn from it, right? The learning component is important, specifically from a sales perspective.

How do you do that? I’m genuinely asking, because how do you do that without shaming people?

I don’t know. You need to shame them. If someone hasn’t done their job, they haven’t done their job, and you need to publicly tell them so that they understand they haven’t done their job and everyone else knows that they’re being held accountable for it.

You don’t agree with “praise in public, criticize in private”?

No. I don’t agree. I think I need to tell you what is right and what is wrong. Of course, I’m not going to tell you, “You’re going to get fired.” I’m not going to say that. But at the same time, I’m not going to hold back from saying if you haven’t done a good job.

For instance, there was a case earlier this year involving one of my account executives. I told the person, “You were just lucky, and you closed these deals through pure luck, but you haven’t done a good job.” There were 2 people in exactly the same situation. The next person who came in presenting, I told him, “You have done exactly the same thing, but you have not been as lucky as the previous person, and that’s why you haven’t actually closed anything.”

Both of them absolutely smashed it the following month. Salespeople need to be on their toes all the time, and they need to be told. If they’re good at their job, they’re going to accept the criticism, learn from it, and improve.

How long are those meetings?

We usually have an hour and a half. People have about 7 or 8 minutes to present, and then it’s very, very quick in general.

I absolutely love that. What happens—and this is a hard one, because ElevenLabs is seemingly such a rocket ship of revenue growth—if you put on a hypothetical hat for it not working so well? What would you advise a sales leader or a CEO who’s going to run with this, but the numbers are not up and to the right? How do I have a meeting like this without feeling dejected or demoralized when the numbers aren’t up and to the right?

6. Diagnosing Sales Performance

I think it depends on why the numbers aren’t in the right place. You need to do the back work first to understand what’s happening. Is it because the sales team isn’t good enough? Is it because the product isn’t good enough? Is it because we’re not being aggressive enough? What is essentially happening here?

If you don’t have a full understanding, you might be shaming people for the wrong reasons. The best way of understanding is to roll up your sleeves and actually pitch to customers. I am the SDR-in-chief at the company. I absolutely love it. I love outbounding people.

Mati and I were in Singapore talking to Razer, the laptop company. I absolutely love the brand. That came about because I outbounded the CEO and messaged him, “Mati and I are going to be in Singapore in a few days. We’d love to meet and figure out how we can talk and how we can figure out a partnership.”

He replied, “Yes, let’s do it.” We ended up spending a good hour in their offices, which was fantastic. I do it all the time, and then I pass it to the team because I believe a good leader needs to be a good outbounder.

It’s interesting that I have this narrative with VCs as well, right? For me, a VC is just a glorified SDR or BDR. What is your advice to me as a sales leader or CEO who’s not as experienced and brilliant as you on the right way to forecast? Is it to be optimistic, realistic, or negative? How do you advise on that?

Be as negative as possible, I think. If we’re now setting a deal that is going to be $500,000, fantastic—just put down that you’re going to be signing it at $24,000. I don’t want to put an unrealistic number, because if you think it’s going to be $500,000, the most likely outcome is going to be $100,000, right?

Let’s just put the lowest possible number. That’s fine. We’ll fix it later, but at least we’re underestimating what it’s going to look like. Account executives are incentivized to inflate the pipeline as much as possible so that it looks better. I don’t like that.

We do it for the board as well. When we put the board decks together and tell them, “Hey, this is the pipeline, these are the contracts,” all that stuff, we put the lowest possible number. Otherwise, it inflates, and if it inflates, investors will ask more questions. They’ll say, “Hey, by the way, you put this account over here that was going to be a $2 million account, but it seems you signed it at $100,000. What?”

It just raises a number of awkward questions that don’t make sense.

One of the fastest ways, I think, to create distrust is when investors look at your company and you share the pipeline of what you expect it to be. When we do reference calls, as all investors do, with friends who are CEOs of those companies, they’re like, “Dude, we’d never spend more than $25,000 on this,” and the company has it in for $250,000. It’s the fastest way to lose credibility.

Correct. There’s another element to it: if you always underestimate or undervalue your pipeline, it means that to reach the numbers you had, you need to have a higher pipeline. There are a lot of consequences to all of this. You’ll end up working twice as hard because your pipeline isn’t big enough for the year-end number or the quarter-end number that you need.

It’s a forcing mechanism to have the right culture in place. We went through this cultural change early this year because I got obsessed. We were doing the majority of deals—90% of the deals were mostly inbound—and as the team kept growing, I was getting extremely worried that we weren’t building the right mentality in the team.

If, at some point, the pipeline dries up, you essentially end up dying, right? So I set a goal saying, “We need to migrate to 50% outbound and 50% inbound by the end of the year.” I kept hammering everyone.

I still put together a report every single week with every account executive and SDR on the team, telling them, “You’ve achieved your target on a weekly basis; you haven’t achieved it.” If people don’t achieve it, I call them out. I did it so often that I ended up having people make jokes about “outbound, outbound, outbound.” I’m the outbound king.

People know that if you’re on that list of people who aren’t doing their outbound, I’m going to call you out. If at some point I call you out too many times, then we’re going to have a problem. It’s a cultural thing. We ended up migrating from the 10% outbound sales that we were doing to 40%.