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EP 9: Scott Leese, 6x Sales Leader - 3x Founder - 3x Author - Sales Consultant - Strategic Advisor - Angel Investor

Podcast Transcript

James Mackey  0:12  

Hello, and welcome to Scale by Design. I'm your host, James Mackay. And today we are joined by Scott Leese. Scott, thanks for coming on the show!


Scott Leese  0:19  

What's up, James, good to see you again!


James Mackey  0:22  

Thank you for coming on today. I'm really, really excited about this. And before we jump into the topics we want to talk through, I was hoping you could just provide some insight to the audience on your background, and what perspective you're coming from.


Scott Leese  0:35  

I was always in tech, always in SaaS, started off my career in San Francisco and moved to Austin about 11 years ago, as a sixth-time, VP of Sales, SVP of Sales, and really just kind of focused on taking companies from zero to 20 25 million in that range, three to 500 employees, typically, by the time I'd be done, did that successfully, really successfully, I'd say five out of the six times. One, nice shank in there, like we all deserve. 


And then really just started branching out and started doing consulting specifically for startups trying to do that same sprint, wrote a couple of books, built an event business called Surf and Sales. Sales, created another event business during COVID, called Thursday night's sales, run to another community through my Patreon group. And now I got my hands and lots of cookie jars, do a little bit of angel investing, do a little bit of private coaching for VPs of sales? And the list goes on.


James Mackey  1:49  

Yeah, well, that's a lot of incredible experience. And, I'm really pumped to learn from you today. And, to go ahead and jump into it. 


And one of the initial topics we kind of talked about diving into today was just doing a review of what are the things that when people want to scale companies, right, when CEOs want to scale companies or GTM? Leaders? When they're thinking about scale? What are some of the biggest mistakes you're seeing out there, the holes that leaders are kind of falling into? When it comes to scaling? You know, product companies at this point in time?


Scott Leese  2:25  

Yeah. Well, a couple of things come to mind. The first one is they don't sell the product themselves, they don't take the time to learn.  So you know, people have heard of the phrase founder selling, you might be surprised to learn how many founders don't do any selling at all, or even try, you know, whether it's a personality thing, it's not their skill set or something they enjoy doing. Or, you know, they just are lazy or don't have an interest in it doesn't matter. 


To me, it's very important for the founder to at least try to sell and close a few deals. And now you want to close 100 deals. But like, James, did you try to, you know, prospect people? Did you try to do a demo of your product? Did you talk to people about the price? And were you able to close a few deals, and that's really validating, like, some real initial product market fit? And if you can't articulate that as the creator of the company, I think that's a problem. You know, and you sold? You still sell, right?


James Mackey  3:32  

Yes, I mean, I definitely maybe even held on to it a little bit too long. Honestly.


Scott Leese  3:38  

Yeah. Okay, so founder selling would be the first one. The second thing I was gonna say, ironically, was not to let it go. And handing it over to you know, other people, they kind of become a bottleneck, like, you know, this probably from growing your own company. 


You're working on all these different things. Meanwhile, your leads are kind of sitting there, it's very difficult to follow up with people consistently, it's very difficult to find time to prospect every single day, right, all that kind of stuff. So that's a scaling challenge that a lot of people struggle with. 


Another thing is they don't document anything. So if you hired me right now, James, to take over your sales org. Do you have the stuff to hand me? Do you have a cold call script? Do you have something written down? How would you demo your product? What does the competitive landscape look like in your, in your industry? How are you going to train me? How are you going to onboard me, like most early-stage startups in particular, even some mid-stage startups, they haven't documented anything. They've all just kept things in a silo in their own mind and be like, Hey, this is what works. I tried this. I tried but they don't really have good data to even know what works. It's very anecdotal. 


So that's a big problem is not documenting what works and creating a real kind of framework. And what I would call a sales playbook that they can pass on in order to help other people new to the organization, come in, and figure out how to sell this thing. Right. So that's one. Another one would be, and this one is really painful. They just hire one person. Well, let me explain why I feel like that's a bad idea. 


The one person has nobody to bounce ideas off of, they go kind of sit in the corner alone, at least if you're in-office, or you used to work in-office, you probably remember this scene. It's like the first salesperson that's hired. And there are like 10 engineers and the founder. And it's, you could hear a fucking pin drop in the office. 


Do you know how much pressure that is to like, pick up the phone and be the one person to start selling? It's very lonely. They have nobody to compete against. At all. It's very difficult to tell what's good, what's average, and what's bad, right? You don't learn enough because you're only collecting one person's kind of call metrics and one person's feedback. And it's very, very hard to hire salespeople. In general, I don't care how long you've been doing this, you know this, you run a recruiting company. I've hired 1000s, literally 1000s of salespeople. And I promise you, if I went to go hire more, I would still get it wrong. Every now and then. 


So you hire one person, you're sort of saying I can hit the bull's eye on the dartboard. Now you can, I don't care how long you've been doing this, you might get it right. But the odds are also you're gonna get it wrong. So I always say you should hire three people. Because one person is going to be good, one person is going to be okay. And one person is probably going to suck. And you don't yet know how to optimize for backgrounds, experience level, all this kind of thing. 


So I try to hire a couple of people from different backgrounds and experiences, like let me hire somebody straight out of college, let me hire an enterprise person, let me hire an SMB person, maybe let me hire someone with industry expertise. And I see how that initial thing sorts itself out. I learned a lot faster. what works and what doesn't. So those are a few things. Those are like I think I gave you like four, maybe five? You know, bullets there on like, scaling mistakes that people make.


James Mackey  7:34  

Yes, for sure. That's, there's a lot to dive into there. And just to kind of go back to the initial point with founder-led sales initially, is when you're starting the company. 


Is there an ARR number where, okay, when you get up to 1 million ARR or 500,000 ARR, that's when you need to start thinking about handing off that responsibility? Now, obviously, it varies from company to company. But is there some kind of metric you can look at to know how long the founder should be doing sales?


Scott Leese  8:06  

I personally don't think so. I think it's just a little bit of a grey area. I mean, if you sell $10,000 deals, that's a lot of deals to get to a million. If you sell million-dollar deals, it's just one. So there's so much nuance, depending on what your product or service is. 


So to me, it's more about, have you gone through this whole process of prospecting, demoing, negotiating, and following up and closing a couple of deals? So to me, it's just more of like, have you gone through this, what you're about to ask other people to go through? Have you proven that you can sell this? So it's more about maybe the number of deals to me. But even that's tricky because of the sales cycle. Like, if you got to an 18-month sales cycle for a million-dollar deal, you close one deal. You've proven that you don't need to close two or three others to me. You prove it. 


But if you're selling, you know, $3,000 annual, you know, product or service, like I probably want to see you close a dozen or so you know and really kind of prove it out and just prove that you didn't get lucky and run through a full cycle is where you win some things, you lose some things. What did we learn as a sales org as a company? Why did we lose those deals? What happened in the process? What did we not build? What were some of the features that were lacking that I can go back to the product team and say, Oh, hey, I couldn't sell this deal as a founder because they told me we needed this integration? And I heard that four times this week. That one's got to be legit. 


So I don't have a great answer for you. It certainly depends a little bit on me. It's like you've got to run through a full cycle of selling and hopefully, you know close a few deals, not just one,


James Mackey  10:03  

for sure, for sure, as you said, right, if it's like a shorter sales cycle or more in the SMB space, then you have the opportunity to close more deals, and you should take advantage of that. 


Versus it's like an 18 months enterprise, you can't just sit around for five years to close a few deals like this, right? You know, so you do as much as you can, but you also don't, I guess, let it hold you back is the, you know, that's where it gets a little. 


Scott Leese  10:27  

And don't just draw, like, you know, don't draw this arbitrary number that's like, we have to be at a million Arr, we have to be at 500 Arr. No, it's like, it's a little bit of a feeling and experience. A  lived experience of what you've gone through in trying to sell this thing, and what you've learned.


Because again, remember, if you're applying to sales, you're hiring somebody, or somebody's multiple people, what I would want to do like I said. You gotta have some information to hand off to them, and tell them like, this is what I found, this is what works, I wrote down what I was saying, on the phones for you all, we're going to improve upon this, obviously, but like, here's what was working for me, here's what you're liable to run into, right? And arm those people for success. 


Otherwise, you're just hiring people and setting them up for failure. Those first salespeople will not succeed, and you'll not only burn money in time, but you'll be like, Oh, shit, I don't know if you know, this is a sellable product when in reality, you didn't set them up for success.


James Mackey  11:31  

Right. That's one of my biggest fears. Right? And that's actually why I reached out to you for help. Was because you want to kind of build up the repeatable process and have the data prior to building out a sales order. Because you want to know when you hire somebody, is it? Is it you know, are they not potentially not doing well? Because they don't have the right process and tech and data? 


Or is it because of a performance issue where they're just not able to do it? Right? I mean, if you don't have that type of information, then how can you really tell if it's, if it's your solution, if it's, you know, a lack of process attack, or if it's a performance problem, it just, you don't have enough to go off of to really understand what's happening. 


Scott Leese  12:13  

That's right, it's impossible. And you might end up going through a salesperson or two or three unnecessarily? Well, when you do that, again, you're burning time and money, but you're also potentially burning relationships and burning your brand name a little bit, right? 


You run through three or four sales reps, in the very beginning of your company, word gets out on the street nowadays, quick, like, you don't want to go to Securevision like they don't set you up for success at all, right? It's a big, small world now. 


That little ripple of, you know, a bad experience travels far and wide, you know, from the business that you're in, right? Or if I'm a founder, and I partner with you, and I churn out your reps, you don't want to work with me. You don't want to place people there. So you're doing harm to the brand, potentially as well.


James Mackey  13:07  

For sure. And one other thing, just as it correlates to like when, when founders and start thinking about handing over sales, I think, you know, one thing that we're doing is, you know, obviously bringing you on as an advisor, which is just surrounding, like, having an advisor is a really helpful emotion to go through that it'll help you to uncover when to do the handoff. 


Because a good advisor is going to come in and basically say, alright, what's your current customer profile? What's your ideal customer profile? How well do you understand it? Why are you winning deals? Why are you losing deals, and all the metrics around that? 


And so you, for instance, you may think, okay, I know my customers inside or out, or I know what works and what doesn't work inside or out. And then you bring in an experienced revenue advisor, and, and you realize how many gaps there are in your data and how you're doing things. And that can be really insightful, too.


So, I think just doing that motion where you have somebody that's really senior level and experienced, like, it's gone through it several times for several different companies, environments is also a really important way to determine when you're going to be ready to kind of handover sales to somebody else. That's, that's how I see it.


Scott Leese  14:16  

Yeah. And, you know, biased opinion, obviously, but people often worry about the cost of that kind of thing. It's like, well, what's the fucking cost of getting it wrong while trying to do it on your own? Probably a lot more expensive.


James Mackey  14:33  

That's kind of a short-sighted way of thinking. Like when you think about bringing on a high-level adviser. It's like, who cares? It's worth the investment. 


Because you're the way you have to think about is you're leveraging that person's entire career and a very high impact, you know, a few hours. That's highly, you know, kind of catered to your specific environment. Like that's just where it's worth its weight in gold, right? And you're right, ultimately it saves you so much time and so much money in the long run. And not only that, just like your upside potential as a company,


Scott Leese  15:08  

That's the thing that it's like if you, if you do this on your own without advice, and you get it wrong, like, you could fume and burn, the whole company can be dead. And it's cost you however much money you've raised. And all the time that you spent on it, or whatever. 


If you get somebody who's been there and done that, and they can help you think through these things and establish these processes, you're talking about millions of dollars and upside, hundreds of millions of dollars, potentially, depending on what type of business you're in. 


So to avoid the spend of X, because it's a little bit spooky, and you're like, oh my gosh, that person's most expensive person in the company all of a sudden, like, Well, yeah, like, they're going to help you become the most wealthy person in the room if we get this right. So I don't know, it's just a funny, funny exchange sometimes.


James Mackey  16:09  

But I just don't get it. Like, there are just so many CEOs that just aren't willing to make that investment. And I just, I really just don't understand it. 


Because to me, it just, it just makes so much sense. I guess it's you know, particulars, particularly if your goal is scale. Like if your job as a CEO is to scale the organization to several million ARR and beyond, like, you need people. Why are you going to bang your head against the wall, trying to solve an equation that somebody already has the answer to?


Scott Leese  16:40  

Well, you know, part of the jams is that so much of the ecosystem is like, predicated upon how much funding people got, and trying to hold on to that cash because they don't have, you know, some sustainable business plan or they haven't done deals themselves. And they're not running like a profitable, you know, kind of business, and what have you, right? 


Like, if I was going to try to scale my business, I have insane margins. And I know, very clearly like, Okay, if I add X person into this particular role, that will bring in the pipeline that'll close deals for me like it's going to the work and I don't have to worry about overspending because I've done it in this responsible way. 


But if I just raised like, a million bucks today, okay. And you and I are building a product? Well, we got to hire a couple of engineers. So that's 300k. So now we're left with 700k. Right? And how long do we want to last on this journey? 


Well, if I'm going to spend 100, 200k, on an advisor, or a consultant, or a sales leader, or whatever, founders, I think, look at it and be like, I am fucking broke already, like, all of my money for 2022 is now spent, it's booked. And unless we close deals and produce revenue, I'm not going to be able to raise money again. And so I think they live in fear of that a little bit. 


But the reality is, so many of these companies die on the vine. Because they try to do this stuff on their own. They don't know how they don't have a network of people to even ask advice for even if it's not a formal engagement, right? They can't just text James randomly and be like, Hey, man, quick question for you. And get a response. They don't even know who to text because they don't have that kind of network. Right?


James Mackey  18:46  

Yeah. Well, you know, here's the thing, though, right? Like, maybe, and maybe this is one lesson, right? It's like when you're raising, particularly at an early stage, consider what advisors you're going to need and kind of think about how much money you're raising. Yeah, you know, that should be part of the consideration.


Scott Leese  19:05  

That's a really good point, and one that I've never heard somebody specifically call out before, you know. People maybe are out there doing that. I've never heard somebody specifically say, You know what, while I'm raising, I gotta create a line item for this technology advisor, this product advisor, this sales advisor, or this marketing advisor, or whatever, you know, some founders' weaknesses are blind spots, right? 


If I was gonna to build a software company, I don't need a sales advisor. But I don't know shit about a lot of other departments. So I definitely need a product or engineering advisor, a marketing advisor, right? I need those things. So that's a good point that you make. 


James Mackey  19:52  

Well, yeah, and the other aspect too is and to be clear, like, this is the first company I'm scaling so I might have Well, of course, I have blinds, I'm aware of that. But, from my perspective, in my experience, I like the idea of investing more in advisors than trying to hire a very high-level kind of VP full-time out the gate as an early-stage company. 


Because typically, as an earlier stage company, you're not you may not have the brand or the budget to hire like the best VP of sales, or the vet the best VP of product, like, why are they going to come to your org versus maybe like a Series C, or like a larger company that's more established that already has product market fit or whatever it might be? You're probably going to have better luck finding the best advisor than finding the best, highly experienced multiple exit VP of whatever, right? 


Scott Leese  20:50  

Yeah, a perfect example of that is I'll leave the name out. But they're, they're basically like in engineering, they run, they run engineering teams. You can hire this person, as an advisor to your company, for let's call it 100k A year, okay? In order for you to try to hire them full-time, you'd have to match their north of $1 million income base plus a bonus at their current organization, you can't do that. 


Unless you're from, you know, Facebook, Google, Apple, Netflix, whatever the way they call that Fang or whatever, you can't do that. You can't, you can't match that. But you can get them on board as an advisor, somehow equity cash combination of the two, whatever. And like you said, leverage their entire careers, wealth of information, right, for a fraction of the cost of what it would be to get them full time if you could even get them. 


Because let's face it, even, you know, seed stage through even Series C is incredibly risky. And these businesses fail and go out, you know, go out of business all the time, the options become worthless, and everything, especially if you're looking at somebody who's coming from like a big, established corporate kind of place, like a Salesforce place or something like that, like that company's not going anywhere. But you want me to come work for you, for you and your early stage thing, I don't know, little spooky, and you can't, you can't catch me the right way. So, but you can leverage them.


James Mackey  22:36  

For sure. And you know, the other aspect too, is like if you get like the high-level advisors first, then when you are ready to make the Senior VP hire, you can say, alright, this is all the process playbooks we built out, here's all the data. And in addition to that, we have these high-level advisors, driving the strategy. And that's, that's going to help like, like the best VP of whatever. Feel confident in joining your business.


Scott Leese  23:00  

Yeah, that's a that's the recruiting bump of recruiting lift that you get, like, if you're trying to recruit me now as a VP of sales, and you're like, hey, for, you know, the last couple years we've been working with, you know, Brendan Cassidy, or Jocko or John or Richard Harris, or like some people I know, built and scaled teams before Kevin Dorsey, right? 


I'm like, okay, and then you come to me and say, we got this playbook, here's our process, here are all of our data that we've been tracking, I'm like, damn, this is a way fucking easier job than if I was trying to go here. And you're like, we really don't have anything Scott. We need you to, like, build everything from scratch, right? I mean, it's still doable, but not as many people are into it. That is a lot riskier, and a lot more work.

James Mackey  23:51  

Right. And it's just also like, who are you? Like, who do you like, who's in your, like, I don't, you're an unknown quantity, right? And the more that you can kind of have that association, I think, also drives confidence in people's minds. 


Because, you can be kind of associated with the advisors that you, you know, have on your team. So it's, it's okay, like, I have confidence in the advisors, they I know that they're probably getting, you know, an advisor that's going to maximize this company's opportunity to, to scale so long as the executive team or the CEO is committed to actually implementing that advice, right?   Which then becomes, you know, the VPS decisions, like how much do I trust, they're going to be able to implement the advice that's being provided to them. Are they coachable themselves, right?


Scott Leese  24:39  

You're finding ways to de-risk the moves that you make de-risk, the higher and all that kind of stuff. And another bonus is it allows you to take a chance on some folks. 


So for example, you can hire a stretch VP, if the advisor sitting alongside them is somebody who's, you know, well established and can coach that person up. Like, that's fantastic. Like, that's great and for me at least it's like a moral like that's a killer thing to do like you reach down you help this stretch VP get their first shot at the, at the title so to speak, right? 


Maybe you have better opportunities to hire people with different unique backgrounds and diverse candidates and all these kinds of things, right? It's like people who don't otherwise get a shot for certain reasons. Maybe we'll get their shot if you de-risked it, because they're surrounded by people in the advisory group there to help them. And they've helped put all these things in place. It's like, Listen, you know, stretch VP hire, I'm right here to help you, this is what we're gonna do. That person might not know those things, right? You like you don't know what you don't know, that type of thing. 


So, I mean, I'm biased, obviously, because it's like, what I do, but if I had that, when I was a VP of sales, man, I'm telling you, the first three times that I was a VP of sales, I made so many different mistakes along the way, I wouldn't have done that. And those first three companies, I would have probably had a lot more success and a little better, you know, exit opportunities and all that kind of thing. Instead, I made it through. I did, okay. But I had to figure all that stuff out on my own. 


This is before podcasts, LinkedIn, and all this kind of thing. It was easy to connect with people and find advisors and, and whatnot to work with. It was only the last three companies that I felt competent enough and only the last one company. The last company that I was an operator at was the only time I've felt like I'm going to just make my own personal board of advisors. 


Because my network had got so big that I could just text and message like all these other sales leaders. Hey, how do you do this? What do you think about that? I might do this over here. Is this stupid? What am I not thinking about?


Imagine I was a head of sales, you know, for almost 20 years and all that like three of those years? No company? Well, no, no, no time ever in my career? Did somebody give me a formal advisor? And only in the last three years? Did I take it upon myself to create a little board of advisors for myself, and what a difference it made? Coincidentally, the last company where I was an SVP of sales was the biggest success story.


James Mackey  27:35  

For sure. I mean, I like just to share my own kind of experience as well. I mean, the first five years running SecureVision, I was just banging my head against the wall, I had, you know, maybe a couple of advisors, but quite honestly, they weren't the right people.  I don't think I was really thinking about it the right way. I mean, they were smart individuals, but they didn't achieve the level of scale or been through the motions that ultimately I wanted to accomplish for the business. 


So they were really good at, you know, maybe operating, like small companies or whatever it might be, but they just didn't they weren't aligned in terms of what I ultimately wanted to accomplish. And I think I was also stuck in that mindset of like, oh, you know, it's really expensive. This is stuff that I can figure out if I just sit down and really focus. 


And the past two years, I really shifted my mindset around that. And it's been a lot more focused on like, the concept of like, proximity is power. Like, if I can be around the, you know, people that have been there done that, like it's going to accelerate the results. Every once in a while, I fall into the hole of trying to figure out things myself. And no matter how much I tell myself not to do that, like it'll happen once a quarter where I'll just start going down a rabbit hole. And I'll be like, Wait, why am I doing this? 


There's somebody that's been solving this exact problem for the past, you know, 20 years, or whatever it might be like 1020, whatever years, why am I not just leveraging their experience? Because the opportunity cost is not only like my salary, but you know, my time, versus just getting somebody who can do this 10 times better than me. 


That was one of the probably biggest growth levers that enabled us to actually start scaling because we were pretty much stuck for the first like three to five years, just like around a million in revenue. And then we just kind of it again, it's just the mindset really started to shift. And I started to bring in people that could really provide that expertise. And that was one of the reasons why we've now been able to start scaling to where we are today. For sure.


Scott Leese  29:39  

Yeah, I mean, learning how to leverage, like you said, some expertise, and even just learning how to delegate some of the work rather than going down the rabbit hole, it's like, no, I'm not gonna do that. I have so and so over here that I can leverage that cuts the time To get that done tenfold. 


And you then can go work on all sorts of other things that have to do with scaling like, like your prospecting, how are you scaling that? Your ops and data that you're collecting? How are you scaling that you're recruiting? How are you trying to scale your recruiting process? All these different pieces of everything? How do you scale onboarding? 


So you know how much time people spend onboarding initially until they figure out how to do it at scale. It's like a man-made process at the beginning. I'll tell you a quick story about onboarding, in the very beginning of Qualia, the last camp as an operator, we flew out to every new customer that we met with that we closed, too, in person do onboarding, you know, unscalable? That is?


James Mackey  30:51  

It's unscalable. I kind of like it in a sense, relationship-based, like,


Scott Leese  30:55  

Totally, totally. And there were reasons to do it and all that, that kind of stuff, learn as much as you can to hold their hand a little bit. But it's like that is untenable. Right? 


So we had to spend time being like, Okay, how can we recreate that kind of experience without actually having to get on a plane, and sacrificing employee's time and all that kind of stuff, all of these different pieces of your business, you have to find ways to scale them. And a lot of people just wait until something is broken, before they start deciding to scale. When I was hired at these orgs, I started straight away with a mindset like, I need to build for scale. Now. I need to build this thing now as if I'm going to have a team of 200 salespeople now.


James Mackey  31:39  

Yeah, I mean, that's the power of process playbooks. Like, I don't think enough people understand that your process playbooks that are an asset of the company are a very valuable asset, and you should start developing them as soon as possible. Because otherwise you are going to hit scale ceilings, where you grow to a certain stage and then you just can't figure out what's wrong, and you have no process playbooks. 


The other thing is that if you are going to bring in an advisor, and, you know, ideally, you have some playbooks that you can share with them, versus just starting completely from scratch. So they can understand, okay, what are you doing today, step by step? What is the exact, you know, what are you doing, and then they can come in and say, here are the highest leverage opportunities to make this better versus coming in. And there's nothing, it's just going to take a lot of time. 


So yeah, I mean, it's like, as you're growing from the very beginning, I'm, I really do believe and process playbooks being incredibly important, and it's not something you ever want to wait for. Because if you wait, you're just gonna, you're at some point, it's, you're not going to be able to grow anymore. And then you're going to have this massive lift, and it's just going to extend the amount of time.


Scott Leese  32:48  

You're accruing a version of technical debt, if you know that, that term. So you're just putting this thing off, and it's just getting the whole you got to dig yourself out, it was just getting bigger and bigger and bigger, you're gonna have to do it at some point. I always just thought, well, let's just do it at the beginning. 


James Mackey  33:06  

Yeah, cuz it's like, it's so much easier to do incrementally, versus like, you don't want to write like 300 pages of process playbooks across your entire business, like in one month.


Scott Leese  33:15  

Let's pause right now, everything that we're doing, and spend the next four weeks just writing all this stuff out. You can't do that. That's so painful. Due to the beginning. Do it at the beginning.


James Mackey  33:29  

Yeah, for sure. And like, even when you do it, but like I've been, we've been writing process playbooks for like the last two years. And even still, it's like, we bring somebody you know, we bring in Scott Leese, and then we're like, there's still just so many gaps, right? Even though we were doing what we thought was very thorough, and then you realize it, there's still so much more to do. 


So I can't even imagine if like, we didn't have any playbooks and we brought you in, like, it's already a very heavy lift, optimizing them from where they are today would have been just an incredible lift, like, Nick, that would be like Nick would have to do that full time. We'd have to have an ops person doing it full-time and Nick doing it full time. I mean, and then it's like, you're not doing other things that you need to be doing and balancing your time properly.


Scott Leese  34:13  

Yeah, yeah. Well, you know, we're hitting upon all of the reasons and, and things that cause companies to sputter and, and fail, right, and I hope people are paying attention because these are really the things that are like the death rattle of so many companies. You know, so get this stuff, right, that James and I are talking about to give yourself the best chance for long-term success.


James Mackey  34:40  

Yeah, for sure. For sure. And I guess like one of the things you had mentioned too,  was you know, we got a few minutes left here and I wanted to just touch on this it's ideal to hire the three reps at once. And, I think the obvious change without one of my, you know, is also like just having that budget initially for those first three hires.


What do you think about, salaries and compensation structures for early-stage companies bringing on reps? And thinking about just that kind of allocating that budget? And how much should be going toward that towards sales ops towards a sales leader? Like, what do you do there?


Scott Leese  35:28  

Well, number one, I don't think that you should spend money hiring people until you can afford to hire three reps or higher, a Head of Sales. 


So doing some math, gymnastics, so you can eke out one sales higher, to me is like, bad, bad, bad sign, bad decision? Like you shouldn't, you might as well keep doing all the selling yourself as a founder, in my opinion, rather than do that, I wouldn't do that. 


What do I think about the salary? I mean, there are two ways to do it, I think you could start with hiring three reps, see what shakes out there, and you're the de facto kind of sales leader. And when you get to a place where those reps, let's say, two of them have done really well, that's a pretty good confidence level that you've hit upon a system that's going to work here, maybe you try to hire two, three more again. 


So you've got a steady state of like, three to five reps when those people are hitting quota and target. Unless you really want to be the de facto Head of Sales for a long time, it's time to get out of the way. At that point, in time you go get a Head of Sales, a VP of sales, or whatever you bring them in, they start by learning the product and process and they sell a few deals, while also still kind of coaching the reps, but it's very important that they sell and learn how to do this. 


Once they're able to figure that stuff out, my very first hire becomes sales ops, Rev ops, and builds all these systems straightaway. So there's that route. That route is the more common route that people think is a little less scary, and a little more de-risked. 


The alternative route is, you start with the VP of Sales or Head of Sales, you make sure it's one who's willing to get their hands dirty and build out this process. And these playbooks and all that stuff, do the initial selling themselves, close a few deals, hire the sales reps, after you've had some success yourself, get the sales reps, Rockin' and rollin. And then you hire the ops person. Those are the two different paths that I see most, most often.


James Mackey  37:52  

So the first path, it just seems to make more sense to me personally, because just being in the recruiter seat, there's like so many early stage VP of Sales that are incredibly skeptical of companies that are going to say, hey, come in, build the process, sell a few deals, when we hit, you know, XYZ level, then you'll build out your team. 


Because there's like, so many situations where, okay, they think they're told that they're gonna be able to build out a team in three to six months, were then like, a year and a half pass, right, yeah. And they still don't have the budget that they thought they would scale their team. So maybe I'm wrong, because again, like I, you know, we're not an executive search firm. 


Scott Leese  38:32  

I don't think you're wrong. And there's also the phenomenon of like, how much runway and for how long is that VP of sales, willing to operate as an individual contributor? Like, not that long? Most people?


James Mackey  38:46  

I wouldn't want it. If I was an experienced VP, I wouldn't want to. 


Scott Leese  38:52  

Well, I'll tell you why I would do it and why I didn't do it. It was important to me to really understand how to sell whatever it is I'm selling and to have some credibility. Right? 


You undermine your authority if you're just the VP of Sales, and you're telling everybody to follow this pitch, follow this process, like, this is how we're going to close deals. And your team is like, Well, did you do it? Did it work for you? And you're like, Well, no, I'm the VP of Sales. I didn't sell it. Selling gas, like, right? It's like no, no authority there. 


So you got to be willing to do some of it. But that carrot thing that you're talking about where people are like, get to a million, then you can hire people or get to a million, and then we'll make you a VP. I'm not fucking with that. 


James Mackey  39:33  

Okay, so that's the difference because that would be my concern, right? If I was coming in as a VP would be like, how long is this really going to last and there's just stuff that's out of my control, then I don't want to be stuck in like this icy capacity for


Scott Leese  39:46  

I wouldn't either, and I wouldn't do it. What I would do is somebody brings me in and says, Listen, you come in, you're the VP of Sales. Like when you're ready, start hiring reps. And I had that authority because then I would say to the founder, okay, well, what I'm going to do is I'm going to build some shit out here. I'm gonna test it myself, after I've proven that it works, then I'm gonna go hire people. That sounds like a good plan. They're like, yeah, that works. I do that. I do that every day. Right? 


But not the other one, not the one where it's like, well come in James. And when you get to a million Arr, we'll give you a big raise. And then you can start hiring people like, no, not doing that. Not doing that one.


James Mackey  40:33  

Right? All right, because things change too. It's like, even if you hit that number, it's like, at that point, it's you, you know, the founder could change their mind, or maybe they don't understand sales very well, right? Like, there's, they may not even understand the bottleneck, so they don't want to learn more.


Scott Leese  40:48  

Correct or they learn a little more and they're like, you know, what, I know, I told you that you were gonna be able to hire people and be the VP. But what I've realized in the last year is we need somebody who's done this a few times before and who's pretty senior. So we're gonna hire a CRO, and you get topped off. That happens all the time, man, that sales leader gets topped off and you're like, What? You got it? You know,


James Mackey  41:15  

It's always a bad thing. Like, if somebody genuinely has more experience, it can help you grow in your career. Like if you're a first-time VP, for instance?


Scott Leese  41:26  

No, I think it is not always bad, as long as it's clear what the plan is, and that that's likely going to happen if you don't discuss it. Right. And you're and you hire me. And you're like, I want to make this a billion dollar company, Scott, like, come in, and be our sales leader, and there's no conversation about, listen, you've never taken a company public before. You've never taken a company to 100 million before. It's likely that by the time we get to 50 million, I'm going to need to hire a CRO who's like, gone that extra distance. You could stick around, you'd probably stand a lot to learn from them. Or I would totally understand if, at that point, you wanted to move on and try to do like, that's an honest, candid, frank, refreshing dialogue, that almost never happens.


James Mackey  42:22  

Right. It's a whole just expectation-setting thing. And that's just effective leadership like that is going to yield the best results for the company as well.


Scott Leese  42:31  

And if you've successfully done this early stage thing, it actually behooves you, and it's very smart, to get out of the way to let somebody who's topping you off, succeed and take the company. 


Because here's the scenario, I'm an early-stage VP, my first time through the gauntlet, let's say, I got 1% of the company. I take the company to 10 million in two and a half years. CEO says you know what, I really think we need somebody more experienced, some of the processes are starting to break, you're stressed, you don't have like, the strategy from here going forward, I think it's time for us to find someone who's gone from 10 to 50 million before, you could stay and learn from that person. And that would be okay. But it would also be okay. If you exited stage left. 


And you were like, You know what, I learned a lot here, this is a success on my resume. Rather than being a VP with 1%. Next time, I'm gonna get one and a quarter or next time I'm going to be a Senior VP, or next time my salary is going to be higher or next time, I'm going to work at a bigger, better, sexier company. But I'm going to hand it off to this other person over here. Because if they take that company from 10 million to 50 million to 100 million, my 1% becomes worth a lot more. And they're working for me. While I'm away, they're making me money while I'm not even there. 


So if you can reframe that, and get your ego out of the way a little bit, there are times when it makes sense. Now, to be fair, there are also times when it's totally fucked and makes no sense. If I'm hitting every metric under the sun, and all of our business economics look great. And I'm showing no signs of slowing down. And you come and be like, Hey, we're going to talk you off with somebody. You're getting a big middle finger for me, for sure.


James Mackey  44:25  

And that's why, like you have to be careful of, just taking generic VC advice, I think, yeah, it's like you need that repeatable. I feel like part of being a wise business leader is knowing when to what, knowing when, okay, I know my business better than anybody else, like the nuance of it, and knowing when to make your own decision versus when to leverage the advice of somebody else. And you have to know you have to develop the judgment of knowing when you need to make the decision versus when you need to leverage somebody else's insight. like one last thing, I think, you know, we're running up on time. 


But I think that what's interesting about this market correction is that VCs are giving generic advice like, okay, tighten up, pull back, like lower demand budget, do all these things. And I think for some companies, they're not thinking independently about their own metrics and, and they're just kind of doing this motion because everybody else does. And I think to some extent that can turn into a self-fulfilling prophecy, like, yeah, if you cut the demand-side budget, you're going to hurt everything from lead gen to the qualified pipe. 


So I'm not saying don't do it. But I think CEOs need to do a better job of evaluating their own business and making their own decisions versus just saying, you know, oh, this is this generic advice plastered out to everybody. 


Scott Leese  45:47  

You know, at the end of the day, it's your job as the CEO, your job is not to take the advice and implement the advice, every piece of advice that you get. 


Your job is to get information, take it into consideration, and then make what you feel is the best decision for your business. Right? It's like, I'm gonna take that comment of Scott's advice. I'm gonna think about it. You know, I've talked to 10 Different people and took all their feedback in, you know what, I think they're wrong. I'm going to do it this particular way. That's your job is to make those kinds of tough decisions. 


James Mackey  46:28  

For sure, yeah. It was Scott, this was a tonne of fun. I would, you know, I could probably stay on this podcast with you for another couple of hours. I'm just having so much fun learning from you and riffing on some of these things. But I know we're coming up on time here. 


So I just wanted to say thank you for contributing and joining us today and for sharing all your wisdom of what you know, and everything that you've developed and learned over your career. Thank you so much.


Scott Leese  46:51  

You're welcome, man. Enjoyed it.


James Mackey  46:54  

Sounds good. And for everybody tuning in. Thank you for joining us, and we'll see you next time.

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