7 Steps to Building an Enduring Business – Even During a Pandemic
Dennis Fois, CEO @ Copper CRM
Sales & Marketing Stage
Ascent Conference 2020
[00:00:03] Welcome, everyone. I’m Dennis Fois and the CEO of Copper and Copper is a CRM that’s designed for teams that manage relationships and really want to build their businesses around them. So we set out to build a different type of CRM, one that just doesn’t focus on sales process. And pipelines were, frankly, horrible prospecting techniques, but instead helped YouTube and your team to connect all their work around their relationships that you’re building as a business. This is also what has inspired this presentation today. It’s my third time as CEO of a company at various sizes. And I guess what I’d like to focus on is scaling the industry labels people like me as an operator or a professional CEO. I personally don’t really know what that means, but I just really enjoy building things and working with amazing teams. So I tend to get involved with companies to try to figure out how to scale. I’ve started to observe a few patterns there that are related to growth and scaling or sometimes when things or frankly, some of this is unfortunately created by a mindset that is pervasive as related to funding and associated metrics that you kind of have to hit. And these methods have become targets that people are trying to hit. And essentially what happens over time is that the company meaning erodes and I start to see a slowdown of the company performance. And I started to see that I’m reverting to a set of things that I’d like to focus on when I see these sort of situations almost immediately. And I’d like to share some of those with you. And I guess, interestingly, they come out to a number of seven initiatives that I’m that I look at. But actually the pandemic is essentially made it probably even more important rather than less. I let it get stuck into those. The first one is this idea that most of you would have read in blogs and attend these conferences. We’ve actually heard it in this conference. And you would have heard the term about product market fit. Some of you will also have heard about the term about go to market fit, although you don’t hear that one as often the most terrible terms that invented by the investment community to simplify hugely complicated set of operations into some sort of a single proxy for scale. In other words, if you have product market fit, you can start to scale, right?
[00:02:25] Simple. But the question you should be asking yourself is, can you really disconnect the fact that you’re solving a problem that the world is interested in with your products and how you’re taking that market? No account.
[00:02:39] And and it’s absolute nonsense. So you can’t disconnect your product markets from your go to market fits the how you taking something to market is as important as the product itself. And so the sort of mistakes that I’m seeing, the first mistake is actually this belief that you have a product market fit just because you have customers. A lot of leaders assume that you have achieved that when you have a number of paying customers, we hear 10, 20 customers.
[00:03:06] But is that really true? Are they the right ones? Are they staying? Have they renewed that they expand? What do we really know about this customers behavior over time? Is it really a simple saying we have 20 customers and therefore we have product market fit?
[00:03:22] And an immediate mistake associated with that is to basically raise too much capital way too soon based on, frankly, false indicators. And so if the product market fit could determine that a number of customers and then we raised perfectly right from a siege to a series A to prove it out, it is the I would point you that the data is actually showing there was a very good study from the start of Genom that actually looks at how long it takes for organizations to validate. And they’ve discovered that actually takes two to three times longer than the current market founders expect, two to three times. That’s an order of magnitude greater and and words. It’s much more difficult than we think. The third big mistake, and it’s all associated with this seesaw between product market fit and go to market faith is moving of market without division very fast. I’ve seen many CEOs make the mistake of pouring money into sales and marketing channels and the thinking that automatically they will pull them off market. And when you start to sell to bigger customers too soon, you’ll immediately destabilize the market. The product market fit that your hat and that will result in logo churn and very often revenue too. So now all of a sudden your product market fit isn’t there anymore.
[00:04:37] So the net net over this, I don’t think the product market fit is something you ever have. In fact, you should be all over it and make sure that your product market fit that you go to market fit. Are Enciso the second? I guess this is probably my biggest bugbear area. What I tend to get into is people processes. I think most companies have just really terrible people processes and I don’t mean HRR. Sees your veto and expense policies and so forth, I really mean the policies and the process and the mechanism that helps to manage people there, tailbacks, exercises, surveys and scores, we try to rationalize very complex things. There’s a question that I’m asking and you should ask yourself is can you really say from your company that the way you make people successful is a much better than any other company out there? In other words, the chances of a of an employee succeeding your company are greater than anywhere else. Can you say that? And have you built a competitive advantage in how you run the company? So three areas that I look into hiring, success, leadership and planning. And if I look at the first one is proving the most important one. Hiring success is really all about the success component and not the hiring. It’s about moving away from this idea that we’re seeing. Hiring is filling a quota, celebrating that we are hiring more people as we are growing or in fact, as a startup, we should probably celebrate the need that we have fewer need for people as we scale. If there is one definition that is probably a good one to adopt, who is? How do you prove yourself out? The difference between growing and scaling? If you need fewer resources to achieve your goal, you’re scaling. If you constantly need more resources, you’re probably just growing. And so this idea of you celebrating after the Rays, how many people you have hired, is that really a great proxy for quality? How do you track hiring success? Which actually really brings me to the second point, which is leadership. If you ask managers at your company if they could manage the success of the new hires on the team in the past three months, what would they say? So if somebody like me would walk into a team meeting and ask, hey, Jessie, how did your last three highest workout in the last three months? Would they have a very crisp articulation of their measures, their metrics, how they thought, how they find success, or would it be some sort of a long dreaded waffle? And so what you see the most companies and most individuals draw blank stares and they struggle to basically explain what success looks like if it’s not a sales hire that is rambling on some sort of talk, if it’s an engineer, if it’s a customer success or if it’s a finance person, if it’s a leader. And so as a leader, as a leader or leader in particular, your goal should really be to change this manager’s mindset and help them to understand exactly how to track the process of these new hires. And the first step towards that is to really creating a system to bring these people into your company, but really have understood how they’re going to be successful about some ideas that we’ve implemented successfully in the past. This things like a weekly management meeting where you check in on progress of these new hires with all these leads. But you really look at up to the three months of the new hire. We want to understand every week how these groups of new hires up to the three months point are working out. And over time, will you refine? You’ll understand that actually there are some commonalities and things that you should be manager. When I hire leaders, I ask them what their track record is of successful hires. And I really want to understand what do they see as their number one job? Well, we’re hiring for culture. You should really be thinking about hiring for missionaries, not mercenaries, really. We look at demystifying the whole idea of culture. We adopted the framework from Patrick Lynch, Jonie. He wrote a book as quite as the title as the ideal team player. And he suggests that actually when we talk about culture, there’s a much simpler way of looking at it. What we’re looking about teamwork. We suggest that if you look at high for the ideal team, players should really be looking at three traits humble, hungry and smart and smartest people, smart in this context. So in a startup, I want to hire those types of people. And actually what we see, there’s plenty of frameworks to kind of help us there. The final piece of the people process part is really the planning for me. That planning, here’s an example, is read about visualizing it irrespective of your planning cycle, whether it’s in quarters or months or even years. What I like to see is an org chart and an orchard of basically where the leader describes what’s happening. In this case, a CEO is planning to make a few hires immediately. When I see this, I’m invited into a discussion. I don’t see this on a table. It’s not I need to hire so many people. It invokes questions. I immediately started thinking, oh, we’re going to here. We’ve got to see a CEO that is basically consolidating a lot of functions on the S.R.O. At the same time, we’re hiring a CEO and a VP of engineering in a quarter. That’s a lot of leaders. That’s a lot of change. Should we be putting marketing under the CFO? Is it a good idea to have the six reporting in the S.R.O. as we are looking to scope out what is going on here? What is going on here is actually very typical as a company is looking to grow their hiring leaders, doing it too fast, the driving too much change. You can probably only really hire one leader in a quarter and making them successful properly. And so the simple tactic is to visualize the change and get the the leader of the of the team to really talk that through in detail so you can have conversations about where the priorities are. Right. And that’s what I mean with real people processes. The third point is really about a mindset we’ve been talking for, I mean, decades now, really about the fact that everybody should be in sales. Nothing could be further from the truth. If you’re running a fast technology company, everybody should really be in customer success. If there ever was a time to focus on customers, this now is a good time. We can absolutely see that those businesses that are focused on customers are doing much, much better from businesses that are basically just be focusing on growth that are key to building an enduring business is really to adopt that mindset. But that mindset is not your words, is really about what you do. And a couple of questions here, really. You say you have customer success. You’re say that it’s important, but what do you celebrate when you’re looking at your channel, when you’re looking at your emails? When we used to ring a bell, how are you celebrating deals? Are you celebrating bookings? Or are you celebrating renewals, upgrades, high end PSA scores, great customer comments? What do you do is really what matters here, what we do as leaders, what we celebrate, what we highlight as success, as a couple of things that we do here at copper. The first thing is we want to understand the difference between churn and a failed sale. This is immediately where I see a lot of people go wrong. Is this it’s very controversial. Right. But let’s think about it. How do you measure the quality of a sale? Do you assume that sales can never fail because there is a booking they can fail and this is not about selling a sale can fail. You sold something two months ago to a customer and the go dark. There’s a misunderstanding changes in the company. How do you treat that you treated this churn? Well, the 60 never had the opportunity to renew it. It was never part of the renewal or base that never had a shot. Why is that churn? That’s a deep book. That’s a dybbuk, and so sales can fail. Same thing with onboarding if a customer doesn’t activate on board, is that a failing on the customer organization or is that a problem in the sales hands of. I guess what I want to illustrate here is that when you start to change your mindset to customers and not bookings, that you will very quickly start to see a very different set of questions about those metrics that you were tracking. Now we track every piece of feedback. We tag each other, we contact each other, we contact the customer. And all the information kind of lifts in copper in our activity stream so we can see what the experience has been for that customer. And then we hold each other to account on this. I get tagged, I tag team until we get it right. The fourth piece for me is now we’ve set the basic principles of how you run the company, how can we create an operating rhythm? The first thing is the goal setting. I cannot tell you how often this is wrong. I’m going to say you should set goals. You should measure them, you should execute them. You’ll say create them. As we do this, we totally do this. And then I look at the goals. I’m thinking really strange only language, incredibly impossibly formulated goals. No owners timeframe is as loose. The list goes on and on and on. But outside of the goal formulation, what’s probably the most important thing is this idea of accountability at the team level, not to the leadership team, but at a team level. It’s really what we want to do here is build transparency and accountability to each other. Here’s how we do it at Colpeper. It’s probably some of you are already implemented something like this. For others, it might be useful. It’s an objective and key result. Simple table. We do that and confluence. So we templating that. And what we do is every quarter we said company level objectives. We only go down to team level. We don’t go out go down to the individual level because we want to make it about a team objectives and company objectives. We set the objective, which is lofty. The key results are very specific and every key results has an owner and there is an overall objective owner. We measure the results core based on the key, our results and then the overall objective is basically a roll up of that and then there is a status on that. Then every week, every Friday, the whole company goes through the hours together. It takes us less than 15 minutes. And what it does, it obviously creates an immense amount of context, but more importantly, accountability to one another. I’m talking about my objectives that is interdependent with so many colleagues objectives. And I’m starting to see that what my role is in a company, how it can drive success in the company the same at the same time, that same accountability principle alongside the objectives also needs to be late into business as usual objectives. Often what you’ll find is there some tensions and conflicts between the big company initiatives and improving what we already do. That last part is really a leadership responsibility. And what I want to do that is I want to make sure that the leadership team is accountable to each other and the amount of businesses that I still see or get involved in that. The finance team is reporting on bookings and return and everybody comes into the meeting and looking at that number, those numbers is ridiculous. That’s not what we want. What we want is the individual that runs the area, the report to the team, not as a CEO or to the team. The way we do that copper is like this, so we basically use a pretty simple scorecard, pretty simple, right, that we’re looking at on a weekly basis. We’re looking at a monthly basis. We’re looking at the quarter. We want to know what we did last year. It’s eight fundamental metrics from trial. Lead generation for us is very much trials and demos throughout our daily active use. And then there’s an owner that owns the metrics and reports. Pretty simple, right, until you start to do it, because when we first started doing, it was horrific. We basically no, no, we’re stable. It was very clear that leaders for the first time there was thinking of those numbers was actually during the meeting that we had as a team. And so therefore, the commitments weren’t to each other. It was unclear what the definitions were stable. You know, last year we had an M Kyril that was actually up to this point. This year it’s different. So you can’t really compare them, can you? Forecast gross margin? Well, do you have your costs under control and your forecast, your churn? Well, who is responsible for pipeline for us? That’s the marketing team. So what you see here is these things should be locked and more often than not locked. And if you don’t let the leadership team commit to each other and let that run as a basic operating discipline, you probably have a huge amount of areas for errors. And these things should just be a run and form part of your operating rhythm, your goal setting and your key performance indicators should just run and make fun part of your operating rhythm today. This is a nonevent. This sheet is discussed every staff meeting every Monday. It takes us fifteen to twenty minutes tops. So what we have is control and visibility. And I encourage you to implement this at the I guess when it comes to communicate, Dennis, you’re not kicking up in an open door. But I do feel that this is a most companies still extremely bad. I’m not talking about where that wonderful all hands where everybody felt better and it feels like a show and a great production and get this endorphin high. So we all feel great when I’m talking about is is a great communication framework that provides context, is transparent and is reliable, like clockwork and I mean like clockwork. And so this is a machine, a communication machine that informs all your stakeholders. And so if you don’t have a plan, you know exactly what you’re going to do on Friday, the sounds of October into November. You don’t deliver this like clockwork. You never move to meetings. They always happen irrespective of who’s there. Then you probably have work to do here, especially as you’re skating. And I want to give you some practical examples, because there’s actually more that goes into this than meets the eye to give you a strip of what we do at Colpeper. Essentially, we have a weekly staff meeting where we discuss the scorecard and the metrics. When you get bigger, it’s helpful to have an extended leadership team. These are the direct reports of the leadership team and get them involved to drive the opposite and really have the discussion with them about us. Every week we have a playback and all complete playback. The whole company comes into the room deals and we have thirty minutes. It’s no longer than that. We go through the chaos, the score cards, and this is including cash. This is fully transparent. It’s the same set of information that goes to the board to travel through the organization. Every week I write an email. This could be somebody else in your company, but it is important that the leadership writes and provides long form perspectives on how things are going. And we have a monthly deep dove. We dove into the issues that we felt we have with not really achieving leverage on usually kind of things about lifting our productivity and so forth. And then quarterly, we have a Cuba where we really go deep with the whole team and celebrate successes, highlight highlights, customs stories. Often we invite the story and then there is the board cadence that we start to think of all of this. You sort of put it together, say, that’s a lot. How do you organize this? And here’s how we’ve done it. That Kopra, there’s a lot on this slide, but it’s very simple. You take an average quarter and what you do is you actually theme and you basically say, what have I got here that determines my operating rhythm? And what you’ve got here is basically usually for most companies, the board sets the cadence. The board meetings was a good way to start. So we have five board meetings once for every quarter and a fifth one around the planning cycle to make sure that financial planners usually signed off in November. And so what we do is we basically plan that out for a year for 2021 and we go back. So we basically say, what have we got? We got board meetings, then we have a board call in the middle. Let’s plan those in. We also plan the prep meetings. This is probably the most fundamental part to plan the prep meetings. And then what we do is we plan everything around. So Kubi needs to happen before the board meeting. Why? Because it’s helpful to have the robust internal discussions first before you go to the meeting and to I’m lazy, I don’t like to make a lot of slides, so it’s helpful for me once I travel information walks through the organization. Hopefully you can see that once you start to do this, it becomes second nature. And so running your company, creating an operating rhythm, KPIs objectives, communication framework becomes really low calorie activity so you can focus on the big things. Speaking of big things, that brings me to kind of like my final big point, which is on culture. A lot has been said about this, even at this conference. But I would say the only thing that matters what you do, your words, your pretty values from the wall are utterly irrelevant. The only thing that counts is your actions. If you say that you value accountability, the need to hold yourself to account and publicly demonstrate if you haven’t achieved that and as a leader, this is basically what you need to lead and write a weekly blog nowadays. And the topics change. But if I made a mistake somewhere or if I see something that wasn’t right, I call it out in a blog or otherwise, I talk about it in the playback. To give you one idea, we’re going through a review cycle. Last year when I went through the employee reviews, I reviewed myself, I reviewed myself. A CEO went through the exact same criteria and I rated myself publicly and I gave myself, if you want to know a seven out of 10, if you know anything about me that didn’t feel too good. But it’s important that I think we do that if we talk about accountability and leadership. And I guess if there’s one thing that we can learn from the pandemic is how thin some of our lives have become, how superfluous and shallow some of our connections are, and at home with friends and at work. And I think this is a wonderful opportunity that we had to really focus on the stuff that matters to us. And for us that is relationships. So I going to close that out, but basically saying what you really need to do here is focus on the leading indicators and not the like lagging indicator. Do not focus on those metrics as targets. They should never really become targets. Your work is what happens behind the metrics. Adopt the customer first mentality. Sales can fail and that’s OK. This is not about mis selling, but be understand what good faith is that puts you exactly what you want to be between product market fit and go to market fit and lead with vulnerability. Be open and play the long game and do things the right way. Don’t take shortcuts here. So I want to thank you. It’s been a pleasure to be able to talk to you, even though I can’t see you. Goodbye.
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