Carlos Delatorre, CRO @Harness: Why Every Sales Rep Should Do Pipeline Generation | E1251

I think for an early-stage company, the CEO really has to develop the plays and figure out the message—at least that initial message. I don't believe salespeople sell; buyers buy. All salespeople can do is create an environment that is conducive to that purchase decision.

Carlos, I've wanted to do this one for a while. I'd heard so many things about you from prior guests, so thank you so much for joining me today.

It's a pleasure, Harry. Thank you for having me. I have arrived. It's great to do it in person as well; it makes it so much more special.

I love to start with context, though. When did you first realize that you had this love of sales?

Probably first as a teenager. My cousin, Taes[?], was dating a guy who was a manager of a clothing store, and I think I was 14 or 15 at the time. I had worked for several years mowing lawns, raking leaves, and doing odd jobs, paid by the hour. He decided to give me a shot at the store. He would let me come in on the weekends and sell men's suits, and the commission rate was 10%.

The suits were $800 to $1,000, and over the course of a weekend, I could usually sell 1 suit, maybe 2, maybe 3. To make $100 in the air conditioning in the mall was pretty amazing, and I thought, “Hmm, there's something to this.”

Do you think people are born salespeople, or do you think it can be learned?

I think it absolutely can be learned. When people say that someone is born a salesperson, usually what they're referring to is charisma and a big personality. I don't know that those things are necessarily what makes a great salesperson. They don't hurt, but they're not the core of it.

Having more empathy and being genuinely curious help. Those are innate attributes that make people better salespeople, but I think most of it is learned.

1. The Art and Science of Sales

EQ, empathy, and that pain tolerance all feel a little bit like a game of art. Then we see the world today, and it feels a lot more scientific. How do you think about sales being art or science?

I think art is what we call something when we don't understand it yet. People could say, “Picasso—that's art. How does he do it?” Then you have students studying for years, and they break it down: it's the colors and the shapes, or whatever it is. That's the basis of Picasso's art.

2. How to Hire Sales Talent

I think, like anything, there are people who are savants, who are gifted, and who can connect dots that others don't see. But others can follow, learn, and replicate those things. I think it's more science than art, candidly.

It all starts with, bluntly, bringing reps on. I spoke to Manny, and I spoke to Dave at MongoDB before, and they both said that you're amazing when it comes to hiring sales talent. What are the single biggest lessons for you when it comes to effectively recruiting sales reps?

I think it's important to think about the job that needs to be done and arrive at a conclusion—a well-formed opinion—around whether a candidate is capable of doing that job. A trap and a mistake that people make is over-rotating on what someone has done in the past and assuming that success in the past predicts success in the future.

Certainly, a track record of failures is something to be thoughtful about and to avoid. But with success in the past, you have to be able to break down what needs to happen in the future, identify what skills or attributes are required to accomplish that outcome, and then figure out—almost like taking a battery of what this person brings—how much of what they'll need in the future they already bring.

You investigate or interrogate what they've accomplished in the past, what their life journey is like, and form an opinion around their innate attributes so that you can start to have an opinion around the likelihood of their success in the job that you're trying to fill.

3. How to Build a Sales Team

Okay, you're going to advise me today. I'm one of your angel investments, and you're the OG. Do I bring on board a sales leader who's got incredible experience and an incredible network and builds out the sales team themselves, or do I bring on young, hungry reps and AEs to go hunt and really go off on their own and be aggressive?

Are you a brand-new company?

We're a brand-new company. The first 2 or 3 years.

Don't hire a leader yet. Hire individual contributors first. Just hire SDRs, and you be the rep.

I think for an early-stage company, the CEO really has to develop the plays and figure out the message—at least that initial message. Once you have conviction around whom you sell to, what the personas are, and what the message is, then I think you can build an organization around that.

Until that exists, I would advise the founder to hire some individual contributors around them. Colocate them, sit in the same room, so you can hear each other, duke it out, and refine the message and the plays. Once you've got some conviction that it's repeatable, then go and hire a team around it.

Should I hire those young people before I actually have the messaging and playbook refined?

Sure, you should. They're going to be super-junior because they're going to be happy to be at a tech company; it's probably the first tech company they've ever worked at. You're going to have to do a lot of the heavy lifting. You're going to have to train them, and you may have to remind them that they should wear a shirt to a meeting, along with all kinds of things.

But that's a beautiful part of the journey that I think only a founder can really do well.

When we're looking for these reps, would we rather they have experience in the domain that we're in, whatever that domain is, or experience selling the size of contracts that we're selling? Which is more preferable?

I'll answer the question, but then I'll answer the question that I would have preferred you ask. I would prefer experience with the type of deal over domain, unless the domain is so specific that it's going to take a lifetime.

If I'm selling molecular-modeling technology and you have to be a biologist to understand it, that's different. But outside of that, it's better to teach the domain and hire as many of the sales skills as you can.

What question would you rather I had asked when you're hiring?

The thing you can't change is the innate attributes—the DNA of the person. That's where you should spend the most amount of time: getting to understand who that person is in the areas that they can't change.

Then you should hopefully have a pretty good idea of what skills they'll need to be successful. Once you figure out, “Okay, this is the type of human being that I need,” ask how many of the skills they'll need to be successful they already possess.

Then, for the skills they don't possess, how difficult is it going to be, and how long is it going to take for them to acquire them? That's the formula. You can't change the DNA, and if they don't have any of the skills, it's going to take a very long time for them to ramp.

First, the DNA, then the skills. There's always going to be a gap, so you need to have negotiables and non-negotiables in terms of the skills.

I love this as granularly as possible, but I'm also asking because I don't know the answer. You would advise me to make a list of the skills that I need, test which skills they have, and see which skills they don't have. How do you test what skills they have?

It depends on the skill. In enterprise software, in selling technology, some of the skills that you would look for are experience and skills. I would look for experience at a challenger company. It's so much harder to operate at a company where you don't have a big logo that sells for you or carries for you.

That would be 1 thing that I would definitely look for: has this person been successful in that kind of environment? Have they had to do their own pipeline generation, or have they always relied on SDRs, marketing, partners, or what have you?

I would look for a history of self-sourcing pipeline generation. Have they sold a product that is of comparable complexity? Have they sold into accounts of comparable size? Have they sold a solution of comparable price, which means it would have multiple stakeholders, would require a business case, and would involve more politics from the customer perspective?

Have they sold a solution that involves a comparable number of personas or stakeholders? Have they sold a solution in the same general domain? Meaning, am I selling into IT and they've only ever sold business applications, or vice versa?

Some of those, for me, are non-negotiable. Some of those are negotiable. But if we have a lot of gaps, it just means my ramp time is going to be long.

Which would you say are more often non-negotiable for you? I know it's situation-dependent, but more often than not, what is non-negotiable?

I've spent almost my entire career at challenger companies. If you're going to disrupt a marketplace, the risk associated with hiring someone who hasn't been at a challenger company is really, really high. That one is a near non-negotiable.

Pipeline generation is another one. Hiring AEs that have not built their own pipeline is non-negotiable, because if they say they will, they just don't know how hard it is—or they don't remember. Maybe they did it as SDRs a long, long time ago. That's a really big risk. That's a non-negotiable.

Maybe they've only sold into mid-market accounts and only sold deals in the $50K to $150K range. We're going to put them in enterprise, selling $500K deals with many more stakeholders. But if we think they're really smart and their drive is really high, that's more negotiable. Those are some of the things that I'd negotiate on.

When we're testing out these skills, the non-negotiables, and the negotiables—we're going to get into pipeline generation in a moment—are we doing case studies? Are we doing take-home assignments? Are we doing anything physically active to determine these skills?

We're reaching a conclusion or developing an opinion on where they are in terms of maturity on the skill through interviews and backchannels. I'm a big advocate for, at the end of the process, what we call a challenge. We have an event where they have a couple of days to think about some questions, prepare a presentation, and come back and present it.

But that's more of a validation of the decision at the end. It wouldn't be fair to a candidate to do that early on because it does take work. Once, as a hiring team, we develop conviction around a candidate, we'll do the challenge just to make sure we didn't miss anything.

When you think about questions around a hire from the approval board or the people involved in the process, what are the most common reasons why there is conflict in a hiring decision for sales reps?

I think it's human nature that we tend to index around our own strengths. When we see pieces of ourselves in someone else, it's very tempting to become enamored with that and then miss other gaps.

If, in a hiring chain of command, you've got people who are quite different—1 person who's super-charismatic with super-high EQ and another person who's super-process-oriented—the process-oriented person might miss that this person is a little awkward. The high-EQ person might miss that this person isn't very tight on process.

That would be 1 area where you have disagreements.

Do you agree with likely Jason Lemkin, who says that you should always hire 2 reps at the same time and subtly enforce this element of competition?

Yes, but for a different reason. I do think that having multiple reps colocated is far better. At MongoDB, you mentioned that you talked to Dave at MongoDB. We hired a lot of people, and our attrition was higher than we wanted it to be. We did a lot of analysis on attrition, and what we found was that Lone Rangers—meaning when we had a single employee in a city and no one else at MongoDB lived in that city—had an attrition rate that was about 4 times higher.

It's so hard to ramp when you're all by yourself. That little, tiny, quick question that would have taken 10 seconds to lean over and ask the person next to you now requires you to schedule time with someone. Forget it. The likelihood of failure is so much higher.

4. Why Every Sales Rep Should do Pipeline Generation

Sure, the competitive aspect is part of it, but I think the bigger part is just helping each other. I'm a big advocate of hubs. At minimum, if it's a company or a product where you have a sales engineer, you want 2 AEs and a sales engineer. That's the minimum profile for a hub.

Got you. I want to get to the pipeline generation. Manny was like, “Pipeline generation Tuesdays are famed with Carlos,” and it was so central to how you operated at MongoDB and how you executed so well.

First, I just want to ask: we have SDRs and we have demand gen. Why do we need to have this extreme focus on pipeline generation for reps?

There are a few reasons. Reason number 1: more pipeline. Great. It's like cowbell—the more, the better.

Reason number 2: think about when a salesperson gets stuck in a deal. Why are they stuck? They're stuck because maybe they're too low and they can't get high, or they're in 1 division and they can't get over to the other division. How do you get unstuck? You pipeline-generate into the person that you need to be in front of. You pipeline-generate into the more senior person. You pipeline-generate into the other division.

The ability to generate pipeline will lead to a higher win rate on existing business.

What else? If you have an organization where pipeline generation is outsourced to another role, it's a natural tendency for salespeople to get more and more finicky around which inbounds or leads are worth their time and worth working.

If you take that to its logical conclusion, I've seen a company where the AEs said, “The definition of a lead worthy of me working is that the customer is ready to see a demo, they've agreed with the SDR that if the demo goes well they want a quote, and they're ready to buy after that.” That's 80% of the sales cycle done.

In that kind of scenario, you need such a huge investment in marketing and such a huge investment in SDRs just to meet the expectations of the sales reps. Whereas, if sales reps are doing the work to generate their own meetings and their own pipeline, when they get pipeline from their SDRs, from marketing, or from partners, they'll treat it like gold because they know how much work and how hard it is to get it.

Your conversion rate on your other, non-AE sources is a lot higher.

I love that. I do have to say, I think it means you don't have the loss of accountability. It's so easy to be like, “If I didn't hit my number—yeah, but demand gen gave me shit leads.”

That's right.

So, your leads?

That's right. I think the way to orient it is that the AEs are responsible for generating the pipeline that will support them being successful and hitting quota. Anything they get from the other sources is a gift, a cherry on top, or extra.

Does that not take all the weight off SDRs and demand gen? How do you prevent them from going, “We're just the cherry on top, so it doesn't really matter”?

That's the environment under which the AEs operate. Of course, the SDRs have expectations on them. You need to have a system where there's accountability at every level, along with expectations and performance management.

5. Biggest challenges of Pipeline Generation

We had Chris Degnan on the show from Snowflake. I love Chris.

Love Chris. Great dude.

He's like, “You can really only take 6 to 8 meetings a week as a rep if you really want to come prepared and really smash it.” Your time is going to be so conflicted or changed by suddenly having pipeline generation as a core part of the role and an expectation. How do you advise reps on time allocation now that pipeline generation is a core part of that expectation?

First, you have to agree that pipeline generation is good. You can also say that, roughly, excellence in pipeline generation equals excellence in sales.

Someone who's got a massive pipeline and misses some things in the sales cycles is probably still going to do very well. Someone who executes beautifully but doesn't have enough pipeline is going to miss their number.

That's the first thing: let's agree that pipeline generation by the AE is worthwhile. If they agree with that—and I feel very strongly that that's the case—then roughly 1/3 of your time, maybe 20% of your time or 1 day a week, is dedicated to outbound, cold calling.

There's another probably 10% to 15% of your time devoted to preparation for the cold calling and follow-up from the cold calling. That's how I get to 30% or 35%.

When you're hiring these reps and they haven't had pipeline generation as such a big part of their role before, how do you teach them to be good at pipeline generation?

Remember, I'm not hiring people who haven't had to do it and been successful doing it.

Is that a complete non-negotiable for you?

It is. The likelihood that, if they've been successful without having done pipeline generation, they'll get into that dark, lonely room—and what I mean by the dark, lonely room is making the phone calls and saying, “That is the 19th phone call where no one has picked up, and I've left the same shit voicemail 19 times now”—if they haven't done that and haven't been in that lonely place, the likelihood that they're willing to make that 20th call is low.

Even if they thought they were willing up front, when they actually get into it, you have to have been through that journey and seen the other side. The other side means the joy of landing that big meeting, the joy and fulfillment of creating an opportunity and closing a deal, and knowing that deal exists because I pipeline-generated it.

That company solved this problem and generated this value because I invested in them. There's a pride that comes with that. If you haven't had it, you're probably going to give up on the journey toward pipeline-generation excellence.

Everyone says to me on the show that the change in sales is that outbound in 2025 is dead. That's crazy talk.

That's crazy talk.

You strongly disagree?

I strongly disagree. Cold calling still works.

Absolutely?

Absolutely. I'm really glad that other companies don't, and I hope a lot of those companies are our competitors.

6. Hiring Mistakes and Sales Rep Evolution

Does AI change the effectiveness of outbound? When you think about scale, I can now send infinite emails, beautifully personalized with effective AI agents, tooling, and data. Does that change outbound?

I don't know that you can yet, but you will. I will grant you that you will. But really, the most effective means of pipeline generation is outbound cold calling—the human, voice-based interaction over the phone.

The emailing, you do it, softens the feel and creates some familiarity so that when they pick up the phone, they're like, “Oh, Harry, why does that sound familiar?” Maybe they don't even know why it sounds familiar, but it sounds familiar because they've received a bunch of emails, and those emails had your name on them. They landed with some sort of positive aura around them.

I'll give you an anecdote. There was a sales rep whom I love named Dave Bole, and he was an epic pipeline generator. We were at a company called Oblix, and the pinnacle person to talk to at Oblix was the chief security officer, the chief information security officer.

We had a meeting with the CISO at Dun & Bradstreet, and we were in the lobby. The CISO had a little lobby just for the CISO's office. This was a few years ago. As we were waiting for the CISO, Dave was in the hall doing pipeline generation, leaving voicemails and pacing up and down the hall. Every once in a while, he looked over to see if his assistant had called us in.

We go in and meet the guy, and before we even start the meeting, he says, “It must be nice to be able to just call a CISO like that and have him bring you in.”

“You're welcome.”

“Tell me about your product.”

We go through the meeting and tell him about the product. On the way out, I said, “Dave, really? Just 1 call?”

He opens up his book and shows me that he had sent him 11 emails and made 8 phone calls. He had become friendly with his executive assistant. He convinced the assistant to write a Post-it note and put it on his screen that said, “Dave from Oblix wants to meet with you because of XYZ.”

The guy was on another call, read that, nodded, and that's how we got the meeting. He had no idea about the 18 other touches that had preceded that. That's what happens: you have to break through the noise. People are getting lots and lots of emails, so that's where email, social media, and all the other things are useful.

But most meetings are set—about 2/3 are set—as a cold call.

I think you're always underestimating the familiarity of naming. What I mean by that is, you post 10 times a month on LinkedIn, and I respond to 5 of them saying, “Carlos, so awesome to see you.” After 5, you're like, “Oh, the name rings a bell.” We have it with fans of the show, where I'm like, “I don't know what they do or who they are, but the name rings a bell.”

So true. That really works.

How are we talking about unicorn reps here? He sounds fantastic—I love him—but how many are actually good at pipeline generation? Half of the world's sales reps?

Yeah—oh, no. Less than 10%. It's elite. It's highly, highly correlated with elite salespeople who have the ability, tenacity, and willingness. It's hard work.

Do you have people, then, on your teams who are not good at pipeline generation?

No.

How do we form structure around it? Can you take me to Pipeline Generation Tuesdays? What is that? How do you structure it?

Before I get into the weekly cadence, let's say for the quarter I'm an enterprise salesperson. I might select 20 top targets from my territory for the quarter, and I'll sit down with my manager on the 1st or 2nd day of the quarter and validate them. “Are these good?” “Yeah.” “Did you miss this one?” “This one's not very good.” Great. Now I've got 20 accounts that I'm going to go after over the next 3 months.

On a given week, I'm going to focus on 1 or 2 accounts, maybe 3 if they're on the smaller side—let's say an average of 2. I declare those on Thursday. Those are my focus accounts for the following week. On Thursday night, I declare them, which is just clicking a couple of things in Salesforce.

Over the course of Friday and the weekend, as a salesperson, I do some research. I look at what the executives are saying on social media. I read the 10-K. Now you can use AI to make a lot of this stuff so much better. I research the company, look at their job postings, and you might even go on Blind and see what their engineers are saying and what people are griping about.

I try to get a sense for what's really going on inside the company. Then I develop a hypothesis about something that I think they care about that we can impact. Maybe I develop 2 or 3 hypotheses. That's for the account.

Then I say, “Okay, let me come up with—let's say it's 2 accounts—let me identify 25 human beings in that account who, based on their title and LinkedIn profile, I think are relevant to what I sell.” I capture those 25 names, their email addresses, their LinkedIn profiles, and check to see if I can find them on social media. Then I go into some database and find their phone numbers, so I've got their mobile numbers.

I do that for 2 accounts, so I've got 50 names. For the 10 most important people on that list, I'm also going to investigate the person. Have they been on a podcast? Have they written a book or a blog? What do they care about? I'm going to develop a hypothesis or a conversation starter for the top 10 of those people.

I can get some help in my preparation. Where do I get help? Marketing, on Friday at noon, is going to send out a PG Passport—the news of the week, curated for use or reuse in the pipeline-generation setting. We had this new release; let me boil that release down into 2 or 3 sentences that can be read or included in a pipeline-generation email. There was a new case study; here's the case study, but here's 2 or 3 sentences.

Marketing sends out this PG Passport on Fridays at noon. Then the manager knows what the focus accounts were because they were declared on Thursday, takes that PG Passport, and forwards it back to the team with some advice.

“Harry, I see you're going after this account. This would really resonate with them.”

“Jill, my neighbor works in HR at this account. I asked her, and she said she'd be willing to take a call from you to validate your contacts and make sure those are the right people.”

Now the manager's involved in pipeline-generation preparation.

Is that scalable? The manager is having to look through 10 different target accounts. There's too many people for them to be going, “Jill's my neighbor,” or, “I know that this piece of the report is perfect for them.” Is it possible to ask them to do that across the board?

It takes 1 or 2 hours. Remember, the manager is in the role because they know what they're doing and have some experience. It's not to say that the manager is going to have a great insight for every single focus account, but as they scan the 10 accounts, there will be 2, 3, or 4 accounts where they have an idea.

“Oh, I read an article 2 years ago. Let me find it.”

Or, “I heard something on Bloomberg Radio. Let me go find it for you.”

That's the pipeline-generation preparation. The rep's got help from marketing and help from their manager. You might even have a team of data analysts that helps with the pipeline-generation preparation. I'll talk about that in a moment.

Then, Monday morning, there's a one-on-one conversation between the manager and the AE to review their pipeline-generation preparation. This is where the manager really digs in to make it better. Obviously, it's an accountability event to make sure the preparation was done, but more importantly, it's about making the preparation even better.

“I don't think you're aiming sufficiently high. You don't have the CIO in here. You don't have any senior people.”

Or, “They're too high. Jamie Diamond is not going to respond to an email about cloud-cost management.”

Adjust the pipeline-generation preparation.

Monday afternoons are a great time to do training, especially training that's related to pipeline-generation skills. “Let's role-play how to talk to this persona.” Or, “Let's role-play how to describe this product's value proposition.” Or, “Let's role-play whatever.”

We'll meet up together on a Monday afternoon, do some role-plays with feedback, and have the opportunity to role-play again.

Then Tuesday morning, when the butts hit the chairs, people are ready. We do a quick round-robin just to get everyone excited and ready for the day, but remember, they've prepared and trained yesterday. Tuesday is a really important day.

We'll bring catered meals into the office. There's real camaraderie. We laugh when somebody gets hung up on, we applaud when somebody scores a meeting, and we hear each other. This is where the Lone Ranger becomes terrible. They're all by themselves, and all they hear is themselves.

You've got a room full of people:

“Don, that was really great. Can you say that again? Let me write it down because I'm going to use that.”

“Jimmy, I would have said this a little bit differently.”

They help each other. At the end of the day, “Let's all go get a beer at the pub next door.” Let's celebrate the day, laugh together, and really develop pride, because we know that most salespeople on the planet are not doing what we do.

Just so I know how we structure the week, it starts on Thursday with the planning, progresses through to action day on Tuesday, and Tuesday is when we're actually hitting the accounts and the targets. For the rest of the week, we're harvesting.

There are a couple of other things. Thursday we declare, Friday and over the weekend we prepare, Monday morning we review the preparation, Monday afternoon we train, Tuesday we do pipeline generation all day, and throughout the week there's follow-up and harvesting.

I love to do a wrap-up on Friday. I typically run that myself, and it's the whole sales team. We celebrate the pipeline-generation success of the week and tell stories of success. We tell stories about successful meetings, and we also tell stories about opportunities that have been created from previous weeks' pipeline generation.

It builds enthusiasm and belief, and it reinforces this thing we do that's so important but also so hard. That's the circle of life, if you will.

How has the way that you do pipeline-generation week structuring changed over time?

In the early days, the first time I was ever exposed to it was at Parametric Technology early in my career. We called them Power Hours: “Hey, whatever, Thursday at 9:00 a.m.”

Everybody be in the office. So Thursday at 9:00 a.m., you'd pull up a list—this is before Salesforce—and just start making cold calls. It wasn't very structured, and the problem with doing just an hour is you can easily go for an hour and never talk to anyone. You need that positive reinforcement of a conversation, even if it's a conversation that doesn't land a meeting, because you learn from that. You think, "If I had handled it differently, I could have gotten the meeting." But if you do a bunch of cold calling and zero comes from it, it's really hard to bring your A game for the next Power Hour.

How do you think about effective goal setting around pipeline generation? Every number can be gamified.

I think there's a risk of over-obsessing about the number of meetings booked. Obviously, that's the easiest thing to track. Typically, if someone is doing good PG, they should be able to get, on average, 2 meetings in a given week. Sometimes people will get more, sometimes people will get less, and they might get 1 or they might get 0 and still have done a good job. It was just an unlucky week or a particularly tough account.

7. Sales Metrics and Conversion Rates

Sometimes people hit a hot streak and they'll get 4 or 5, but 2 to 2.5 is the sweet spot for really good PG with the process that I just told you about. The thing to really obsess about is a little bit further down the line: Is qualified pipeline coming out of it?

I just don't understand how this is a good business. Let me pause. So, you have 8 meetings a month if you think 2 meetings a week is good. They say 25% of those convert into paying customers, and the customers are $100,000 a year. Let's just say that's $1.2 million a year, correct?

Correct.

Okay, and the rep is on fully baked, everything in, $200,000 to $250,000. Well, then they're at like 4:1 or 5:1. That's pretty good. But that's if everyone is fully ramped, everyone is effective like that, and that's a good one.

Yeah, but the numbers that you just shared don't take into account that you had a paying customer and did some expansions in that paying customer, or that you had a partner bring you a lead that was 70% sold. That is purely just the rep going cold into a completely green territory.

There is going to be some good stuff, some low-hanging fruit. So you're right, I get it: it's 3:1 on your economics, Harry, but when you add in partner demand gen and SDR luck, you can be at 5:1. Or maybe it's 4:1 on yours and you can be at 6:1.

What is okay in terms of those numbers? A lot of founders are like, "Is it okay to be at 3:1?"

It depends where you are in the journey. Early on, when product-market fit isn't really good, it might be 3:1. I think the rule of thumb, once you're scaling, is that you want to be at 5:1 or better, for sure.

What level of contract size warrants outbound in this way?

Certainly down to $50,000. Maybe below $50,000 it starts to break down, because down to $50,000, your reps are going to be earlier in their careers, and so their OTE is not as high. When you're up into the enterprise level, your average deal is probably more in the $200,000 to $400,000 range. It certainly works there.

Everyone today feels like they're suffering with just not enough pipe. People aren't buying the way they used to. Everything's gone back to the CIO in terms of buying power. What do you say to sales leaders today who go, "Carlos, that just isn't the pipe. We are not lacking for pipeline. The thing we're lacking is ramped salespeople that can go pursue it"?

I think what you're asking is: When do you declare failure and part ways? Ideally, what you have is a series of milestones over the course of someone's journey that start in the first few weeks. They go to training, they prepare for training, and they go to training. How did they do in the entrance exam? How did they do in their role play? How did they do in the final exam? Were they able to get meetings coming out of their first boot camp? Were some of those early meetings converting? Were they able to get to an economic buyer in their third month?

There are all sorts of milestones along the way. If you decompose a salesperson's ramp to productivity, you can identify at any moment—hopefully very, very early—if they're going off course, and you can figure out why.

A lot of companies start to worry about someone who hasn't sold at 9, 10, 11, or 12 months, and then they'll make a decision to part ways at 18 months. That's so expensive.

8. Evaluating Sales Performance

Not just in terms of money. How would you do it differently? Are you able to let go of someone after 6 months if enterprise sales cycles are generally a year?

Just like I said, because you've got milestones along the way. If they're not achieving the leading indicators to success, then we figure out why and try to fix it. If it's fixable, great—they're back on track. If it's not fixable, then that means they're in the wrong role or at the wrong company.

I've let go of people at boot camp. It was clear in their first month that we'd made a mistake. We apologize for that because we hired them, but why wait 9 months and waste their time, waste our time, and waste opportunity cost? It's not a happy day, but we've parted ways with people at boot camp.

I totally get you. Ramp time is often determined by the quality of training. When we think about skill development, what have been your biggest lessons on how to train reps effectively, especially in this real-time environment?

The mental model that we used is that we started with this hypothetical fully ramped salesperson: an individual who has every single skill and all the knowledge needed to be successful across the full gamut of selling our solution. Then we said, "Okay, let's break down all those skills and areas of knowledge into competencies that we think can be learned in 3 hours or less."

Then let's group them by the ideal modality to learn them. Is it something they can learn on their own? Is it something they can learn on a Zoom call? Is it something they really need to be in a classroom to learn? Great. Now let's look at the ideal sequence. What's the right sequence so that we can get them to land a good, healthy new logo as early as possible?

What we're doing is creating a learning journey that spans almost 9 months. It has 3 week-long trainings: a boot camp, an intermediate, and an advanced. Coming out of boot camp, there's a roughly half-day, 3-hour remote session that they attend with the same cohort they went to boot camp with, which goes deep on 1 competency.

What we end up with is people coming out of boot camp able to do pipeline generation. They're able to have a conversation, start conversations, and set meetings. They're able to do discovery and have a good first meeting. By the time they get through intermediate, they can land a new logo with our core product. That's really the key. Once somebody can land a new logo with the core product, the likelihood that they're going to be successful is very high, even though they don't have some of the advanced knowledge or advanced skills.

That's what we're doing.

What is the average time it takes for someone to land a core logo?

You mean just the sales cycle? The sales cycles are not that long. It's about 4 months, about 120 days.

How fast do we let someone get on a customer call? Obviously, customers and pipeline are very precious. In the first week, with a young rep, you don't want to just throw someone on there who doesn't know that [__]. When do you let them?

Soon—early. We have a messaging framework that we've built, and a lot of times salespeople get it even before they start. They're able to read and understand our value proposition. It's got sample questions, proof points, and so on.

9. Effective Sales Training

They can be on the phone in the first couple of days of onboarding, even before they go to boot camp. They typically go to boot camp around week 3, 4, or 5, but they're on the phone even before then. Certainly at boot camp, they're doing pipeline generation, and they will typically have set their first meeting before the end of boot camp.

With respect, boot camp sounds like quite a resource-heavy, institutional-grade training program. As you say, Enablement 3.0 is great if you're an early-stage founder. How do you think about rep training and being as effective as possible?

You wouldn't be able to afford it, from a financial perspective, but also just in terms of bandwidth. You wouldn't be able to afford to build that, and frankly, you wouldn't know what to build at an early stage.

That's why I go back to what I said before. For a founder at, let's say, a Series A company, I would get some really smart, hardworking, enthusiastic individual contributors and go build it. You'll be able to build your enablement after you've closed 10 or 20 customers.

10. Pipeline Generation and Deal Reviews

Once you've closed, let's say, 20 customers—which means you've probably failed to close another 60 customers—you've got 80 sales cycles of experience. Now you can identify the things to do and the things not to do, and you can build version 1 of your training based on that. Maybe that's just 2 or 3 days.

I want to go back to pipeline generation, because all the skills really come back to that in a lot of ways. When we review the output of that, we have deal reviews. How do you approach deal reviews, and what makes a good one versus a bad one? When do you do them in the week as well?

I'm a big fan of the MEDDPICC methodology. I know you had Mark Goldberg on here, and I think he talked about it. That is the soundest framework that I'm familiar with for deal qualification. I think Dan might have talked about it as well.

When to do it? You do it when you need it. What do I mean by that? It's great to do it early in a sales cycle when it's messy, there are so many different strings to pull on, and you're trying to come up with a strategy. It's also great to do it late in the sales cycle when we're forecasting this deal and we better not miss something. Let's make sure we didn't miss something.

I wouldn't say there's a key moment to do it. The beauty of operationalizing a qualification framework like MEDDPICC is that any given sales rep who is going through a deal review is learning the concept in the context of that one deal. Now they know that concept, and they will apply it to other deals.

You know that MEDDPICC is working when you see salespeople talking to each other without a manager involved and using MEDDPICC terminology. Or you see a sales rep grab an SE and say, "Can I run this deal by you?" and try to poke holes in it, with the conversation happening in that MEDDPICC framework.

When qualification just becomes part of the culture and it happens all by itself, all the time, that's where you want to be. Then the manager is just spot-checking or double-clicking.

11. Maintaining Sales Team Morale

When you have pipeline generation day and it's just a bit off—whatever it is, team morale is low, pipeline isn't hitting, conversions aren't coming—what are your biggest lessons as a sales leader on how to maintain morale when it's just harder?

I've definitely seen that happen. A team can get in a funk. I think the best thing to do is just to stop, get in a room, and talk about it. Let's talk about how we're feeling.

Typically, as a manager, one of your responsibilities—and I think one of the responsibilities of a great manager—is to maintain intimacy with the team: intimacy with how they're feeling and intimacy with where their skills are. Hopefully, the manager can get ahead of that, see it before it happens, and intervene and course-correct.

Let's say it gets to a point where the team is in a funk and you can just smell it in the air. Let's stop, get in a room, and all talk about it. Maybe the conclusion is that they're not bought in and don't believe this even works. Let's talk about that. Maybe they're right. Maybe this whole thing is crazy. I don't think so, but let's talk about why PG is important.

Maybe they believe it's important, but they don't believe they can do it. Okay, maybe it's a training issue. You have to get to the bottom of what is driving them to feel the way they're feeling and fix that.

12. Verticalized Sales Playbooks

How do you feel about verticalized sales playbooks? If we take likely Navan as an example, where you're at, you could have a playbook for financial services companies, media companies, and healthcare companies, with reps specifically allocated to those verticals who can have incredibly granular, detailed use cases and insights about those industries. How do you feel about very verticalized playbooks?

I have a different opinion about the playbook versus verticalized teams. Let me caveat this: if you have a solution where it's just radically different in one vertical—like ERP—how you implement ERP at a paint company versus a software company is completely different, so much so that it would be unreasonable to ask a sales rep to be able to do both.

Centralizing knowledge around what's going on in an industry so that salespeople can be more relevant more quickly with accounts in that industry is absolutely a thing to do. Even if you have a horizontal solution, like an infrastructure technology solution, the challenges and things that customers in a particular vertical care about are very different. Empowering salespeople with that is really valuable.

Verticalizing the sales force when you have a horizontal solution cuts against meritocracy, because there are typically going to be some verticals that are better than others. Maybe financial services is the cat's meow—what a great fit. The team in New York: are they amazing, or do they have all the banks?

13. Addressing SaaS Churn Rates

Mixing up the territories, I think, is really good for meritocracy and for having a fair distribution of opportunity. The exception would be if the solution is so different that you have to do it. But if you can avoid it, I'd rather have salespeople who have a mix of the really great ICP and the ICP—or the customers—that are a little bit harder to sell to.

The big problem I think I'm seeing with every SaaS company today is churn rates. Everyone realized they bought too many seats and aren't actually using them. They bought 50 seats and are only using 12 of them, and the churn rates are incredibly high. Do you share the concern of many that the SaaS business we've had was so overpaid on a seat basis that we're really moving into a tough period?

You mean that we've oversold customers? I do think that a lot of that has worked through the system already. Companies that I'm a little closer to, I think most of that trough is behind us.

I do think that the future—whether it's a consumption business or even if it's traditional SaaS—is having sales reps truly involved in driving customer outcomes and creating customer value. I think that's really healthy for the long-term viability of a company.

14. Discounting and Deal Slippage

The days of the big sales rep with the fancy suit who comes in and does the big deal and then walks off to another account, I don't think that's healthy. I think those days are long gone.

What do you feel about discounting? Often we want to get deals done in a quarter, and discounting is used as this panacea: "We'll give you an extra 15% off." Carlos, how do you feel?

I think using discount to close a deal that was not otherwise going to close rarely works. If it's a considered purchase, there is either a champion who is willing to advocate for this purchase with the economic buyer, versus all the other things on the economic buyer's plate, or that champion doesn't exist. Whether that costs $250,000 or $200,000 is not going to make the difference. It's binary.

Once you get a decision to buy, there could be budget constraints. Maybe because it's $250,000, they can't do it until next fiscal year, but if we make it $180,000, they can do it now. Or we let them ramp in.

I'm not against discounting, but to use it as a lever to manufacture a deal, I don't think really works—not in considered purchases. Maybe with a commodity that I'm going to need anyway, where I could buy it now or buy it later, sure, you could discount your way into that.

Okay, so we don't use discounting, and the deal slips. The deal slips into next quarter, and you're my boss and the sales leader. I say, "Carlos, I'm sorry. The deal just slipped." What do you say to me?

Having a deal slip is a painful thing, and to have pain without extracting the learning is just to squander an opportunity. Pain is a great teacher, or failures are a great teacher. If we revel in that pain and really analyze it, we have to figure out why the deal slipped.

The answer has to be something we failed to do or something we did that we shouldn't have done. Therefore, what must we learn or should we learn, and what must we do differently in the future? That's the key thing.

Of course deals are going to slip. We're going to lose deals. Shit happens. Let's figure out why it happened, what we learned, and let's get better as a result.

15. Transitioning to CEO Role

When we think about the ambitions of a lot of sales leaders, a lot of sales leaders want to move into the role of CEO. You did move into the role of CEO. With the perspective you have from moving into that role, what do you know now that you would advise other go-to-market leaders about becoming a CEO?

I would say, make sure you know what you're walking into. If a company is looking for a new CEO, that means there's a problem or a set of problems that need to be solved. Do whatever diligence you need to do to gain a high conviction that you understand what those problems are, and then honestly map your abilities and experience against those problems.

If you're a go-to-market leader and you assess that the problems are largely in go-to-market, it could be a great fit. If the problems are outside of go-to-market, then look in the mirror and ask yourself, "Am I the best person? Am I able to solve these problems?"

That was the challenge I encountered in my CEO journey. I thought I was walking into a situation where the primary problems were mostly go-to-market. There were opportunities for improvement in the go-to-market realm, but the company needed to mature and refine its product to really land on the proper product-market fit.

The reality is that I didn't have a toolkit or the skills to guide the company through that period. I wasn't particularly effective at guiding the company through the period of refining product-market fit, and it took me a while to figure that out. Unfortunately, it was a painful experience.

I brought people I care about—Keith Butler came over to be the head of sales—and through that journey we did make go-to-market better. But we found that there was a more fundamental problem around the product, and I wasn't the right person to solve that problem.

When you reflect on your biggest hiring mistakes, what are the ones where you look back now and go, "That's one I've made time and time again"?

Hopefully, you don't make the same mistake over and over. But one that I made, which was particularly painful, was hiring someone based on relationships.

It was early in my career, and I was at a startup. This person was very successful at EMC, and the numbers they had posted and the relationships they had were so senior that I thought, "This guy is just going to light it up."

I brought him on, and I spent the first 3 months going on fancy lunches at steakhouses in New Jersey with very senior people who were completely irrelevant to the product we sold. The conclusion of the fancy lunch was, "I'll ask so-and-so, who's the person you need to get to, and see if they're interested." The vast majority were not, and nothing came of it.

What I realized was that this individual lacked the skills to build pipeline. He just didn't know how to call a stranger, deliver a value proposition, have it resonate, secure a meeting, and then come in and do a great meeting. He was a relationship seller—a competent guy, a hardworking guy—but he didn't have those skills.

That was painful because he was expensive, I had advocated for him, and we'd had to go outside of the standard hiring parameters to get him. That was one that was painful.

How will the role of a sales rep change in the next 5 years?

I think AI will automate a lot of the research and prep work. I think AI will also—

What does that mean, then? Do we do double the accounts because we have so much more time available?

Yeah, I think they're more productive. I think we'll see sales productivity trend upwards. I think we'll also see attrition rates come down because we'll be able to use AI to supplement onboarding.

We'll probably see better and better AI tools to help companies and candidates match, so that the fit is better. I think we'll see higher productivity across the board.

What does everyone think they know about sales that they most often get wrong?

Probably, they over-index on the value of relationship building and charisma and being the big personality. That doesn't hurt, but it's not really that impactful.

16. In-Person vs. Remote Sales Teams

You've mentioned the lone wolf and the dangers of it. How do you feel about in-person versus remote working, especially given the rise we've seen in the last few years of remote companies?

Obviously, during COVID, remote working was the only way to operate. I think the trend is moving back in the other direction, and I'm glad to see that sales teams in person are much more productive—100%, no question about it.

They learn faster, and their morale is higher. If I'm having a bad day but the person next to me is having a great day, that gives me hope and gets me through the trough.

Managers are there to solve problems and course-correct. Maybe somebody's doing it wrong and doesn't know they're doing it wrong, but the manager can see it and help them. They're much, much more productive in person.

17. Account Management Strategies

I will never forget Dave Kellogg telling me, "Do you ever want your farmer against someone else's hunter?" How do you structure account management between customer success and reps to ensure that your farmer is never being fought by someone else's hunter?

When you say "farmer," what you're referring to is an account manager who owns one or multiple paying customers, whose job it is to maintain and maybe grow those customers, but who isn't out there hunting for new business.

By the way, what's baked into your question is an acknowledgment of the power of PG: that hunter is able to do PG, and that's why that hunter is the more effective sales rep.

First of all, I don't like the term farmer. I prefer account manager. Your account managers should also be excellent at pipeline generation, because they're trying to get into other divisions and so on. But if your account manager is driving real value with the account, that account becomes very difficult for a hunter to crack.

You want your account manager hunting inside the account, but you also want your account manager to care deeply about customer value. With that customer value comes trust. If there's a question about a new technology, they'll probably bring it to the account manager and give the account manager the opportunity to fix something in our current offering.

You're basically saying that reps need to shift earlier to embrace PG, and customer success needs to shift earlier and embrace PG as well. If you think about the spectrum, you can't have a rep who's now embracing PG and equally embracing customer success. You can't have both embracements. Do you see what I mean?

No. Say it again.

If you have a rep in the middle whose core goal is hunting, you're saying, "Great, you need to embrace PG much more actively on this side of it," which is the post-hunt side. You can't say to them, "As well as PG, you also need to really embrace customer success," because a lot of sales leaders today are saying, "No, we really like reps to be engaged post-sale, to hand off effectively, and to keep that relationship going." You can't do that if you're embracing PG.

It's hard, but I think you can. I think a salesperson in a mature territory is probably going to spend a third of their time generating pipeline, maybe 20% to 30% of their time taking care of their customers, and what's in the middle is prosecuting deals.

Of course, maybe you've got a sales rep with 25 greenfield accounts and 2 paying customers. They're going to be more on the PG and hunting side. Or you have an account manager with just 2 paying customers, and for them pipeline generation is going to be easier because they're doing PG into an account that they know super well and they've got plenty of contacts.

18. Quick-Fire Round

For that person, PG might be only 20% of the time. You want to move the dials across, but to be really effective, you want a salesperson generating pipeline, pursuing and prosecuting that pipeline, and taking care of customers. The weighting of each of those things is going to be determined by the type of territory they have.

Okay, I'm going to do a quick-fire with you. Are you ready?

What sales tactic has died a death?

We've all poo-pooed outbound, which is still alive and well.

What has died a death?

Closing. "I'm a closer. I know how to just convince someone." The idea that you can coerce a customer or do some psychological gymnastics to get someone to sign a piece of paper when they weren't actually intending to—first of all, if you do that, it's probably a deal that's going to churn later, or they're going to find a way to rescind the order.

I don't believe salespeople sell. Buyers buy. All salespeople can do is create an environment that is conducive to that purchase decision. How do you create that environment? By doing good discovery, finding challenges, and educating on how your solution meets those challenges. Once you do that, they want to buy.

The art of closing is baloney. Sellers don't sell; buyers buy.

I love that. Is brand not more important than ever?

Sure. I don't know. I think it's probably always been important. Brand is highly important. That's why, when you are a challenger, you need a higher caliber of salesperson, because you don't have the brand. As your brand gets bigger and bigger, either great salespeople become more productive, or you're able to get more junior or less talented salespeople.

What's the most creative thing you've done to get a deal over the line?

The story I have to tell you goes way back to the beginning of my career, when I was selling medical equipment before I even got into software. Is that okay if I go back that far?

I love this.

I was selling this blood analyzer called what was likely a Coulter Counter. I PG'd into an account, into a doctor's office, and the office manager told me they had just bought my competitor's product, Becton Dickinson.

I said, "But you've got to talk to me. Mine is better," and rattled off all the reasons. She said, "No, the deal is done."

I asked, "Is it installed yet?"

"No. It arrives next Tuesday."

"You've got to talk to me."

"No."

Then I thought, "Shit, I just upgraded an account that had one of those Becton Dickinsons. I still haven't sent it back to corporate. It's still in my closet."

I said, "I'll tell you what. You tell the doctor she's got to see me, and if she sees me and still thinks the Becton Dickinson is the better machine, I'll bring one with me and she can have it for free, and she can cancel the order for the other machine."

"Well, you've got to be here before the in-service on Monday."

"Great. I'll drive."

I had to drive all night through a snowstorm to Jackson, California. I demoed it for this doctor on Friday. I brought the competitor's machine with me, and I was able to close the deal.

You did it live, and she saw the difference between the 2 machines?

Yeah.

I love that. That's amazing.

That's a creative one.

What 1 piece of advice would you give to a sales leader starting a new role today?

You're going to have pressure to build the team quickly. Better to be late than to hire mediocre people.

What would you most like to change about the world of sales?

Maybe the reputation that salespeople are slimy or greedy, or anything like that. I think it prevents some capable people from pursuing a job that could be the best job they've ever had.

Final one for you: when you look at sales strategies over the last few years, what company's sales strategy have you been most impressed by?

I was at likely Navan. We were a travel solution, and COVID hit, and nobody was buying travel.

You were there when that happened?

Absolutely. I joined in January of 2020, and the world locked down in March.

What do you do? Your numbers must have just gone to zero.

Yeah, close to it. We had about a 90% drop in revenues.

I'm almost amazed that 10% remained in a travel ban.

There were just some large enterprise accounts that were still traveling a little bit. We had companies in the category they called essential workers—government, some manufacturing, and so on.

We made 2 key pivots during that period that saved the company. Ariel, the founder, came back from a vacation and said, "By God, we've got to build an expense management solution, and we've got to do it fast." Burn the ships.

What he meant by that was that he pivoted the whole engineering organization from one day to the next. Candidly, the executive team thought, "This is a bit dramatic. You're betting the whole company." Remember, at the beginning of COVID, we thought it was going to be 2 weeks. Maybe it would be 4 weeks, maybe 6 weeks. Nobody thought it was going to take as long as it did.

The idea of putting 90% of the engineers on building a brand-new product when we had this pretty hot company was really scary. He was single-minded about doing it, and that was the right decision.

The other thing we did was go upmarket. The large enterprises believed there was going to be a day after. They might not know when the day after was going to be, but we were able to pivot the company way upmarket and go to people and say, "Listen, were you happy with your travel program before COVID? No. What better time to overhaul it than now, when no one's traveling, and you can have a great program when the world resumes?"

By going upmarket and building a second product, that company didn't die—and it would have. I'd say that was a pretty good strategy.

Carlos, I've loved doing this. I wanted to do it for a long time. As I said, I heard so many good things for a long time, so thank you so much for joining me today.

Thank you for having me, Harry. I love what you're doing. You bring a curiosity and a passion to highlighting the journey that founders and executives are on. Thank you for having me.