YouSaid · the spoken record

Peter Reinhardt

lines on the record: 66
first: 2021-05-20
most recent: 2021-05-20
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I guess it'd be kind of a tough love moment. I don't think my dad remembers this, but when I was about 13 or so, I was picking up like a new project every two weeks and I would never finish the previous one. I was like, oh, I'm going to go the go-kart. Oh, I'm going to build a supersonic weed whacker. Yeah, just like, you know, crazy project, crazy card. And I would never finish any of them. It's just like an offhand comment as he walked by one day. He's like, well, you know, eventually you're going to have to learn to finish something passed by. I was totally floored at the time and yeah, 20 years later it still like stuck with me as like finishing things matters a lot anyway those kind of like tough love lessons i think in retrospect are probably some of the kindest things that that can happen to one”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's actually what I'm still trying to get better at getting better at explaining to why and why it matters and why we should go do it.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“The hardest one came from that first two years where I was very used to being right. I was a star student, I was an A-plus student, paced everything all the way through MIT. And then I got destroyed. I got destroyed in a year and a half. Like I was just wrong. No way around it. And it was very eye-opening, very humbling, I would say. I think that you don't know the right answer. You got to go find the right answer and you'll be rewarded for getting the right answer fast, but like you do not know the right answer until you go ask someone else. That's just not how school works, but that is how the real world works. So that, I think, was the very tough and good lesson from the first two years. Another hard lesson, I think, as someone who studied academically very hard is you do the work yourself. That's the wrong lesson for leading a company. Like your work is to inspire other people to do the work and then explain why it's important, which is a fundamentally different skill than doing the work yourself.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not going to take no. It might take a while, but it's not going to take no. And the same is actually true inside too. And it has its trade-offs, but it's effective. And the last is just like the level of energy that he brings to, this is a cultural piece, I guess, but the level of energy that he brings to all hands, the level of energy that he brings to like everything that he does, and how much momentum that imparts to a large team is very impressive. There's a lot to learn there. I started out as a very, very quiet nerd, would not get up and present in front of 15 people. Got a lot to learn there from Chaffin.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Three observations that I am trying to learn from, specifically from Jeff. One, deeply, deeply cares about the culture. It is the top topic. And that level of dedication over however many years, 12 years, like it shows. People love to work there. The second is it doesn't take no for an answer. Like if something needs to get done, it needs to get done. And like it is what it is. You can kind of try to avoid something for a little while, but it's going to wear you down. Ultimately, that's what happened with our acquisition too. Like he and I chatted once a quarter for 18 months. And like at the end, I was like, yeah, RHF, I buy the vision. It's exciting.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a very deep and compelling roadmap for Twelio and Seguin combined, spending a bunch of my time on, as you can imagine, over the last six months since the acquisition closed. It's like crazy stuff that we can go build there. I also spent a reasonable amount of time in climate tech and both charm and on the philanthropic side. And there are good things happening there after a bit of a dark period over the last decade. So I'm really excited about that as well.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end of the day. Wouldn't have a company if we hadn't raised prices a thousand X, so not everyone is happy with our pricing for the record, but there's problems there for us to fix. But yeah.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think so. And actually, Justin Kahn, who found it at Twitch, was like first time founders care about product or spend all their time on product and second time founders spend all their time on go to market. One, I think that's true. Two, it's maybe slightly misleading that it's not that they're necessarily spending their time on sales for sales just to generate revenue. It's spending time on go to market because it's actually the best signal about whether your product is really the right thing because you're actually spending time with the customer and actually getting down to what is the real value that you're delivering with them. So I think it's pithy, but it's also, as he worded it, but I think it is indicative of this go out into the world and understand what the world really wants and really needs as opposed to like your vision of the product and that outside in perspective I think is super critical by far the most important thing.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“We were right. All right. For every like 10,000 segments out there, there will be an Airbnb, but like do not bank on that. If you just like hang on for dear life on how you think the world should work, you're going to get one shot on goal and it's almost certainly not going to be. I don't know. I think the Airbnb story is maybe one of the, I don't know if it's advice. If taken as advice, their story is the wrong takeaway.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hate the Airbnp story. The Airbnb story is we had this idea that people could sleep on couches. We just thought that that is the way the world should be. It's literally the opposite of my experience. We thought that this is just like makes sense for how the world should work. We just hung on for like years until it took off and we did all this crazy stuff like Cap and Crunch cereal and this, that, and the other thing. And eventually these hacks got it going and like”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“It does. It increases the cost to acquire slightly. It's harder to target. If you sort of play through with the ramifications of that, it probably means that if your cost to a buyer goes up, it probably means your lifetime value needs to go up in equal measure, which means you actually need to spend more time making sure your customers are happy. I'm not sure that it's a net negative for the end consumer in that sense. Okay, now my bank actually needs to make sure that I'm happy with me. The airline actually needs to make sure that I'm happy as opposed to just going and inquiring the next person to go to Google search. The externalities are a little complicated to play out, but I think there's actually a pretty good world on the other end of it. But it does involve customer or companies going and properly engaging post-equity.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Unique data on a person or a company because that person wants to be a part of that platform benefits from this. The people or companies who are really hurt by it are the companies that exist in the middle purely for the purpose of connecting third-party data sets. Gazillions of ad networks that have existed in Sleazy Sketchy ad data deals in the background for a long time. Those are the companies that are inverting. But yeah, it will cause a centralization of ads revenue on the Googles and the Facebooks and LinkedIns and Twitters and Pinterest and Snapchats of the world. The people who have their own consumer network effects that lock in their audience and give them unique data about their audience.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Add that it's good by choice. But yes, it is good for segment now, having made that choice many years ago, seemingly at the time kind of suffered for it. It's great for Google, it's great for Facebook, it's great for Twitter, it's great for any company that has their own consumer, probably great for LinkedIn.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“That the last three years basically saw the complete demise of DMPs, like their worthless assets, the one the Salesforce acquired is now being sued like a $10 billion class action lawsuit or something, and it's a mess. And you are starting to see things like CCPA and California. You're starting to see GDPR in Europe, some hints maybe that something will happen in the US federal and U.S. federal level, things, interesting things are happening in Brazil and India and so on. Of course, Apple is making moves of killing off third-party cookies along with Google. So there's a lot of really like awesome things. I think happening now in focusing people on first party data and helping companies just do first party data stuff to engage better with their customers. And that's where we've been pointed for a long time. So it's actually really awesome seeing a lot of the other noise kind of get trimmed off by these changes.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Guarantee you it's a 0% hit rate. No one thinks that that's what's happening, or maybe they do, but they're pissed off about it. And to me, it was like, or to all of us at Segment, it was like, okay, great. There's like some companies that are pretty sleazy and they're going to capture some arbitrage window here where like, this is legal. This is going to close. First of all, it's horrible. It's not what people actually expect. And like eventually that will end up in regulation. So one is the wrong thing to do. And two, in the long arc of time, it's not going to pay off. That was right around the time that data management platforms or DMPs were exploding, which are literally giant warehouses of data trading for third-party sales. There was a lot of like investor confusion that were like, well, I don't understand. You have so much data flowing through like, shouldn't you just be a DMP too? And we were like, nope. At the time, it was a very contrarian bet, I guess. It would be the hip term to use. And so it's actually very vindicating now in 2021.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I'm actually super stoked about how the privacy landscape has changed over the last three years. Back in 2013, I think right after we launched Analyx.js and we're getting all these requests for integrations, I think the only integrations that we turned down or started rejecting, because remember, we were very customer-led at this point. We were like, no vision, we're just going to do what customers ask. That wasn't quite true. There was one exception to that. And that's when customers would ask us to integrate a tool that was about sharing third-party data. We integrated them. You can find it in our blog. Two weeks later, we were like, that was a terrible idea. And we booted them off the platform. Like in many ways, they were legal at the time. Now it's probably illegal to do what they did. But it just didn't feel right. Like it didn't feel like the end customer was going to expect that their data was being shared in this fashion regardless of whether they clicked through some legal document. We robbed a random person on the street and asked them, are you aware that your credit card data is connected to cookies in your online browsing history?”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Your advertising tool for your advertising, so role specific, I do think machine learning is going to make the blending amongst these different engagement layers and tools very confusing actually for the next like 10, 20 years. I don't know how long it'll take to like come to full fruition of like machine learning during most of it. It's going to be confusing though because you already have the blending of support and sales in a lot of business models and how that then interacts with like, oh, well, we're tweeting at customers. That whole sort of pipeline, I think, is going to get very messy and those applications are going to blend, especially as machine learning starts to make more recommendations for what should happen where it's going to be super interesting to see how that plays out.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Communicating with customers, enabling these communication channels, SMS, voice, video, email with sim grid, push notifications, et cetera. So I've always been very interested in enabling those communications, but never had the customer data to then improve who should you be sending those to at what time? Why? With what message? And segment does like literally the inverse of all the data, which should inform what message you send to who when. And none of the communication channels to actually send that. I think what we're really excited about is bringing these two things together. And all of a sudden, you have both the world's best customer data platform and the world's best APIs for communication. That opens a lot of very interesting possibilities. I also think that there's a future where today you have these applications that are very role specific. You have a support desk for your support team. You have a CRM for your salespeople and you have the marketing tool for your email marketing tool for your email marketer.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“We do see how data flows to these hundreds of different integrations and different each of those integrations is really a whole company that does something interesting with customer data. The trends are interesting. There are basically five categories of tools that people really depend on. One of them is basic analytics. So what's happening on the website, what's happening on mobile app. The second is email marketing. The third is pushing notification and SMS marketing. The fourth is advertising, so think Facebook or Twitter or LinkedIn. And the fifth is an advancing of what its use case, which is data warehousing. After that, it falls off traumatically. Some people use customer data for to like improve support experiences and stuff like that, but it's pretty a little bit rare, although I think probably growing very quickly. But those are the top use cases. I think one of the things that we are excited about at Twilio is Twilio has always been very focused on”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're like seven levels deep now, 40 seconds in. This like unpacking of one, an intuition for where the bottleneck is likely to be. Two, being very crisp about whether we really have solved that bottleneck or not. So I guess part of it is kind of the concept of like a bottleneck theory business, which is like there's always one bottleneck somewhere that's constraining growth. And so isolating what those bottlenecks are and making sure that we're executing against changing them is super important. Trying to build this intuition and inspection model of how do you go and verify that all these levels, it's actually going to close, but the plan is in the pipe dream, but it actually goes all the way to ground truth of like, yeah, all right, we can hire those recruiters in time to do all these things and like stage it out timeline-wise. And like, yeah, it's actually going to work. That, I think, is probably my number one.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“One lesson that's really interesting is this concept of hierarchical unpacking. For example, George will ask, like, what's your plan for next year? Okay, well, like our plan is to do X amount of revenue. Like, okay, what's new bookings on that? Like, all right, well, new bookings is X. It's like, okay, how many reps do you need to go do that in each quarter? Like, okay, well, X, Y, Z. And he's like, okay, how many regional directors do you have to support those AEs today? And how many regional directors are you going to need to hire? When are you going to need to hire them? Like, well, yeah, we need to hire a whole bunch in Q1. And then like it's like, okay, do you have the recruiting resources to hire those in Q1? Is you just like...”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“In terms of isolating what the actual business problem is and driving accountability, I think for me, one of the things that I've been really trying to learn over the last year that I think has been accelerated is how to drive accountability in a larger organization. It's one thing when you're like working with your friends or working with a small team, but the segment organization is now 600 people, quite a bit bigger than that by the end of the year because we're hiring very aggressively. I think we have like a few hundred open rec right now. How do you hold accountable and like operate at the right level of altitude in that kind of organization is something that I'm really excited to be learning from George and Ke.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think from the chapter that was basically scaling from 10 on up to million or on up was probably what we talked about around RevOps. Frankly, I think I missed the boat there. I actually still kept spending most of my time focused on product. That's what had gotten me there or gotten us there. I think that was probably actually the wrong choice. I think it probably should have spent a lot of that time focused on revenue operations and figuring out how do we actually build for scale in terms of going out and winning these customers and understanding our target audience and everything. That was the big lesson for me from that period. In terms of post-two, oh man, there's a lot. There's a lot for people to learn. That's actually one of the things I'm most excited about personally being at Twilio now is George Hu, the chief operating officer, unbelievable. He was COO at Salesforce before this and just like incredible depth of operating experience. It is next level getting inspected by George or getting inspected by Kozema, the CFO at Toyo. Those just wicked sharp.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think there may be limits to those economies of scale. First, just like the sheer number of products that you can ask a sales team to cross-sell. The second is in what is the actual customer experience of using those products? And so I think when you look at a lot of these big suites, the products that they've purchased that they've acquired in, this is not integrated. They're basically separate products that have like a OAuth layer and branding slapped on top. In the end, that's not that compelling to customers. I think there is a little bit of an embedded lifetime in there of at some point someone comes along with a solution that's more integrated or solves a problem in a different way, restructures it such that it gets disrupted. I do think for a lot of these big suites that is likely to eventually happen and maybe a deeper force that undercuts the kind of sales modes. The biggest complaint about these marketing and sales suites is that they're not integrated and customer drives customers nuts.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Account walks on all those big customers, but that transition, I think, is from the most efficient sales model to one that has that moat established.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think rather than thinking about it as the cost to manufacture the product in a SaaS context, you have to think about it as the cost to acquire the customer. You need to start with the customers that have the lowest cost to acquire. Like if your sales price is kind of constant, the way you get that biggest premium is by minimizing your cost to acquire, which means that the business models that have or the companies that have inbound flow of deals are going to have the most efficient sales cycles. And that's what's going to allow you to build out a sales team efficiently and kind of achieve scale over time. Actually, venture capitalists look for this. Venture capitalists specifically go and look for the most promising companies being the ones that have a lot of inbound interest that have a fairly passive high quota sales team that can plug and chrug on inbound interest coming in, knowing full well that at scale it will of course have to transition to an outbound sales model, maybe the next sales force, that actually has sort of”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“As a large sales team, I think they've achieved this sort of like customer account lock in effects where they have great relationships in all the big accounts that matter. Companies like to buy from someone they already know and understand a single throat to choke too well. And I do wonder in SaaS if actually the scale economy or moat that gets created is actually the sales team.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think people think of Tesla as a car company, which is why everyone was so upset. The world is literally not producing enough batteries for them, and so they are pushing the envelope battery production. So the question that I think Elon and team figured out, which is really impressive, is they were like, well, we need a way to sell a car that's super premium because the batteries are expensive to start with. And so we're going to start with the Roadster, and then we'll go to the Model S and X and then the Model 3, and then so on down into utility goods scale storage. But like this concept of premium markets, I think is very interesting and is something that I think pretty much every hardware company should copy. What's your roadster market? Because if you are in the hardware business, you are in an economies of scale market. Interestingly, in SaaS, it may be that that's actually sales. I think to a very significant degree, it may be that you're trying to achieve economies of scale and sales. And I think that's why you end up with these big conglomerates, honestly, of like Adobe Salesforce, other big software companies that purchase and acquire their way into large product suites and the key to their success.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interest coming in actually makes it all the way through to being a closed one successful customer that's going to renew next year. And that is not a 10% improvement. That's like a 2x or 5x potential improvement. Because as you start getting that stuff right, it also shows you how you should deploy the capital that you've just raised and keeps your growth rate high.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Customer success managers to AEs. Like it's one thing when you have just kind of scrappy team that's getting it done in the early days, but when you break through 20, 30, 40, 50 million RR, it's a big team. And these ratios matter a lot for the overall economics and overall accountability structure and so on. It's very complicated to design. And there are people who are absolute wizards at this. And what I think is also interesting is it's not like a question of it's not like RevOps earns their keep or whatever by like extracting more from a sales team. In many cases, it's actually smoothing the entire sales pipeline so that everyone is actually happier, maybe even doing less work, but actually getting more results. It's not like RevOps comes in and squeezes 10% and squeezes 10% and squeezes 10%. It's like they come in and they make sure that at all points in the year, we're going to have the right ratio of all these people so that flow of customers invalid.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Revenue operations, I think, is deeply underappreciated. If you're going to build a large sales team, which you're going to do if you're doing an enterprise software, then the question is, how do you design that, a commission plan or quota is like one aspect of a very complex machine of like territories, who companies do you put in those territories? How do you classify those? Like, are there tier one territories that they should really be outbounding into and then different territories that they'll accept inbound leads from, but they're less likely to close unless they have the inbound energy? How do you think about which industry verticals to target? Those are all the targeting questions. There's a question of ratios. For every account executive, how many sales engineers should there be? Does one sales engineer support two or four or six AEs, for example? What about sales development representatives? Inbound and outbound, are they the same? And how many SDRs should there be for how many AEs? So all these ratios, what about?”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Growing and our market penetration within that group was growing. So you just had like three growing things stacked on top of each other. And so you just saw this explosive growth. In one year, we went from two and a half million RR to 10 and so on. The thing just took off. Something weird did start happening around 2016, and I've seen these charts from a few different companies. But the number of properly funded startups seems to have flatlined or slightly started declining around like 2016, 2017. And so that same triple expansionary market force in startups, something changed in like 2016, 2017. And that was around the time that we transitioned up market or started going more market into the enterprise. So it kind of didn't affect our ability to grow. But I wonder if it affects new startups' ability to grow because there isn't like a cohort of peers that they can sell their SaaS into each other, basically. But yeah, there's a few different companies where I've seen.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“2012, it felt like a Cambrian explosion, which is when we got started with segment. It felt like every week there was at least one interesting new SaaS company launching on Hacker News just constantly. It doesn't quite feel that way to anymore. It feels more like derivatives or like in between concepts launching on Hacker News. So I do kind of feel like a Camberne explosion of SaaS might be behind us. I don't know if investors would disagree with that, but certainly on Hacker News, it feels like a lot of the V1s of everything are out there. So one other interesting thing to me was that when we launched in 2012, the number of startups was also exploding. So our initial go-to-market was startups. They understood the value proposition and they were just building and so on and so on. What we noticed is that it was a great starting market for us. Our growth was extremely fast because we were selling into a cohort of companies who were growing in their own right and the number of them was”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, if you have normal software margins of 80% or whatever, then that's kind of where you end up in terms of once you pay for all the other marketing acquisition costs and pay your gross margin costs of goods sold in terms of processing and data processing and stuff like that. And then once you pay commissions, not only for the AE, but for the sales development rep and for the sales engineer and for a couple other people along the way, once you pay for the customer success manager, like all these things, those economics close at 1.5 to 2 million. If your margin starts coming down 70%, 60%, 50%, 40%, your quota fundamentally has to go higher because you've got less contribution margin, the 80% or whatever you're getting out. You've got less to play with there in terms of paying out all the commission and so on along the way. So therefore, you need to drive more volume per sales rep. But those are sort of the fundamental constraints that you're playing with.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Twilio today has a very different buying process, which is that customers love to self-serve. It's developers. They love to come in. They love to start sending their first SMS. They love to do this, that, and the other thing. And then eventually they get to significant volume and then a sales person has a conversation with them. That's how those customers want to buy. So again, it's almost like flipping the mentality of how do I want to go to market with this thing to like nobody cares how do your customers want to buy. That is what matters here. But most of our market is companies that want to turn the crank on the same SaaS buying process that everyone else has and run a proper sales process with multiple vendors and salespeople and sales engineers and so on. That's how they want to buy. We got to show up.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to be able to get to a quota per salesperson of 1.5 to 2 million a year very quickly. If you look at a salesperson's time allocation, the only way they're going to get there on the enterprise side at least is if the deals are easily in the six figures. So you pretty quickly back into like what the price point has to be. And then the question is, do you deliver enough value to be at that price point? The other sales models, right, are like super high velocity tiny sales with very junior reps who are just closing inbound interest. We have some of that too, but by and large over time, we've discovered that most of our market is in the enterprise where honestly it has more to do with the buying cycle, which is you can't make it through the buying cycle unless you put in enough resources such that you will then have to charge six figures because you need to be able to pay a sales rep and a sales engineer and so on. So I think you end up being more constrained by the buying process that your customers want to go through. If your customers say like”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Got very lucky in the structure of the product and the structure of the business and the structure of the whole value proposition that the open source library, an engineer could look at it and be like, it's well designed, it's well written, it's well architected, it's the appropriate abstraction, I like it. And then they're like, okay, but I'm not going to deploy this open source library because that doesn't solve the problem. Where's the hosted version? Go to segment, buy the hosted version. So the structure of the thing, I think, was pure luck that we never really had to compete with open source. And all of the value that we added on later was fundamental nature had to be inside the core data processing pipeline, which we host. We never faced the sort of tension between those two.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we got lucky in this regard, actually, that the open source product, quote unquote, never really competed with the hosted product. And the reason is that the open source product by nature of being open source doesn't solve the problem. And that's because you would have to deploy it yourself as a customer. But the entire point is to get the engineer out of the loop and empower a marketer or some business person to turn on an integration to send data there.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Any great enterprise sales organization actually knows this, but it was completely mind bending and mind altering for me as a 22 year old or whatever coming out of engineering school.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“What's hard about it is that it's awkward. I remember we were in this one media company in New York. The person was like, well, we're having some challenges with our data. So that's why we want to do here to walk through your pitch. And Serdi was like, well, why do you have problems with your data? And then the person was like responded like, oh, well, we have trouble integrating this, that, and the other thing. It's like, well, but why do you have trouble integrating those things? And it's like, dude, you're supposed to be telling me that it's hard. Why are you asking me? And the customer was like so baffled by this, but then just kind of like kept answering his questions. And we're articulating the pitch. We're self-articulating the pitch back to Certy. And all he was asking was why and every other segment person in the room, they were like four of us. Every time he asked why we're like cringing with the awkwardness of just, can't you believe he asked that? Like, we're supposed to be explaining that. And it was extremely effective. You just get the customer to articulate it. Terrifying for them, it's clarifying for you. The whole thing moves faster, but it's very awkward.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“From the customer about what the value was to them. In many cases, I think clarified their own understanding in the process. And so by clarifying what the value was going to be, then he could walk back to, well, and here's how the product is going to solve that value. It's very simple, very clear, exceptionally methodical, and customers love him for it. That last piece of like what makes a great sale, yeah, sure, relationship building, being a smooth talker, maybe, but like what actually matters is, can you get the customer to actually tell you what the value is that they get out of the product? And then can you connect that to what the product does?”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Value is what you should sell on, and value is what matters to the customer. They couldn't care less what your cost basis is. So that was a huge learning. Later on, we were starting to scale the sales team. We had amazing first salesperson into RAF. I sort of gave him free reign to go build a team. And the first person that he brought in, I was like, there's no way. There's no way that this guy is going to be successful in selling to VPs of engineering. He was from Jersey, slicked back hair, not the vibe that you expect an engineer to be like really excited to work with, kind of heavy sales intense vibe. And so I actually said no. And then RAF overrode me. He said, no, you're wrong and I'm going to hire him. You're going to see. I was wrong. He was our most successful sales rep for the entirety of Segment's history, and his customers loved him. What I learned from going out in the field with him over the years was that he was extremely intense about extracting information.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Literally our first thing. I was like, okay, I guess I'll last for 120k. So we go into this. He's like, just trust me. That's the base rate for any enterprise contract, which in retrospect is true. So we go into this thing and that's like, okay, well, what's the price? And I was like, well, and I turned beat red. And I was like, Matt, the price is $120,000. And I was like, not believable in any fashion, right? And he looks at me and he's like, how about 12K a year? And I was like, how about 18? So he agrees to 18K and became our first contract, I think, or second contract once we finally got around to signing. So he was like victorious. He saved 85%. I was completely mind blown because here we were charging 150x, literally 150x. That was a second big awakening moment for me that the value that we were attaching in our mind's eye was on a cost basis rather than a value basis and that we had no understanding of the value that we were actually providing to customers.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll never forget the first sales meeting that I had with him. Our first sales meeting, this is with Nat, who's the CEO of Xamarin, now CEO of GitHub. They were existing using us on the pre plan and everything, walking over to this sales meeting in the financial district in San Francisco with Mitch. Mitch sort of stops and says, Peter, in this meeting, you need to ask for $120,000 contract. And I was like, Mitch. Is a thousand times more expensive than our.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that this was a thing and people were adopting it, we had just like a very steady growth curve, despite not really marketing beyond kind of the launch on Hacker News and a few blog posts here and there. The real challenge became sales. And that's because we were all college students. We'd never been exposed to how companies operated before. We'd certainly never sold anything in our life, aside from equity in the company. And we were really scared to ask for money. We sent out this apologetic email to like the top 15 customers or something by volume and we basically said like, hey, like we're thinking we need to raise the price to about like $15 a month. Would that be okay with you? And bless his heart. This guy Eduardo from Brazil wrote back. And he said, guys, this price is so low that I may have to stop using your product because there is no way you're going to be around in a year. So don't charge me more, but you better raise your prices. And that was like obviously a wake-up call. Then we got a sales advisor.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe I'll actually add one thing also, which is the most challenging aspect of the first chapter, I think, was actually keeping the team together. I think most teams actually would have split in that first chapter. I mean, it was a year and a half of misery. I ended that year and a half with, went to the hospital multiple times for panic attacks. I lost like 10 pounds in two weeks. By any health measure, like we were not doing well. And we were fighting. It was bad. But ultimately what kind of kept us together was that we'd been roommates for a long time. We were great friends for years beforehand. We were not particularly interested in working anywhere else. At the end of the day, knew that we wanted to work with each other. The idea mattered less than the people around the table. And I suspect that many other companies kind of die without that going through the same struggles, but they just die and split up. Before they maybe get to their breakthrough, if you will. So that was the first big challenge. The second challenge after we had product market fit and it was like,”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Data and we started to get a sense that that problem was actually pretty deep. And so after six months of exposure to just solving adjacent problems and solving these requests and getting more contact with customers, then we started to write down kind of what the vision might be, that like, hey, maybe we could sort of back our way into being the customer record that a business has internally.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“Adjustment for us, we kind of overcorrected on it actually because we were like, this is new, and it's really working, and so let's lean into that mentality. And so for six months until we fundraised again, we literally just said we are not going to drop a vision. We've discovered this open source library that seems to solve people's problems. We're going to spend the next six months just trying to solve their adjacent problems. We're not going to drop what we think this could be in the future. We built tons of adjacencies. actually killed a lot of those initial directions because we just we knew how to build at that point as a team and so we built stuff killed stuff again and again and again and again and then after six months we kind of looked back at what we had built what was working what wasn't and what people had wanted was more integrations more destinations to send data they wanted more sources like more places to pull data from and that was pretty much it and so we started to get a sense though that it was all centric on customers”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say it was very explosive interest. And I think the same is true of a lot of other B2B companies and their founding stories. Dropbox is another great example. They blew up on Reddit. I think the feeling, it was like every metric was going haywire. We'd had like a trickle of like 10 visitors per day or whatever to our website before that offer our analytics tool. And then all of a sudden it was like tons of people submitting issues, tweeting about it on Hacker News, emailing us, LinkedIning us, like just everything. People were just trying to get the thing. Part of it actually felt like loss of control. We were going from this mindset, okay, we know what's right. Actually, we don't know what's right. People are going to tell us what's right. And there was this like big letting go of, whoa, this thing is going to move on its own. We'll try to clear the ground in front of it, but it's just going to go. And that loss of control that like actually we're handing the roadmap in many ways to our customers and their needs was a big.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it describes most B2B businesses, and I'm the last person on earth that you should ask about B2C, self-admitted deep nerd. In B2B, you're under contract to solve a business problem. I think in B2B, it's pretty cut and dry. B2C might be different. The Steve Jobs of the World's may be attracted to that market where maybe there's a little more room for that kind of creative here's what you should want.”
2021-05-20 · Invest Like the Best · Peter Reinhardt - Learning How to Sell – [Founder’s Field Guide, EP. 34] · IDENTIFIED FROM THE TRANSCRIPT · source