The $100M CRO Bubble: Why Anthropic Are Causing a Comp Crisis

Harry, it’s great to see you in person. I don’t think we’ve ever met in person, so super pumped to meet you in person and be here with my buddy here, Chad Peets.

There are not many people I would fly to London just to spend an hour and a half with. So it is an honor to be here and thank you for having us.

Yeah, I think Chad and I have been talking about this for years. and after I left Snowflake, I sit on a bunch of different boards and pretty much the number one pain point of any startup CEO is they need help building a sales team. And I started to try to work with other recruiters and never was I satisfied because I was spoiled because Chad co built the Snowflake sales team with me. And I’m like, man, I love to figure out a way to get Chad involved.

And that’s how the conversation started.

Yeah. We were somewhat precluded from working together because I had restrictions on who I could work with and Chris was working with separate companies. So he would ask me to help certain companies and I couldn’t because I had conflicts with my other companies. And so we kind figured out a way that we could get rid of those conflicts and join up, and I think it’s I think it’s the best of both worlds. There’s some overlap between things that he’s good at and I’m good at, but there’s a lot of things that I can do and a lot of things that he can do.

And when you put us together, it’s pretty fucking special.

Correct. He nailed it.

In this age, you’re seeing a lot of product led growth companies, and there’s a lot of order takers, you know, out there. I think the thing that Chad and I pretty consistently agree on is that if we can build outbound sales organizations, sale-led led growth engines, and then you can pile in PLG on top of it, you you have best of both worlds. So I think, you know, our perspective, and I don’t to speak, you know, you know, for you, Chad, but our perspective is build great go to market people that we built at Snowflake that he’s built, you know, a thousand times over that will differentiate the company.

Yeah. I mean, you still have to have folks that are willing to go do the heavy PG. I I think sometimes there’s this notion that, look, we have an incredible product and sales doesn’t really matter because our product is so good it’s to sell itself. You definitely run into some of that. It’s total bullshit. Even if you have the best product in the world, let’s say that’s the case, you’re still going leave money on the table if you have shitty salespeople. So to Chris’s point, you still have to have salespeople that are to go out there and find new business.

And that’s been our core beliefs for 30 years.

It’s a question that like every CEO asks me. and the simple answer is, give me an example of you opening up two to three new logos in the last 24 months. And then ask them next level questions like who was your champion? Who was the economic buyer? But if you start going down that avenue and they start faltering, it means they’re lying. And so you looking for those people that have that experience of opening up new logos.

Yeah, and it’s pretty simple. You can look at somebody’s resume. If a guy’s been at salesforce.com for the last five years, he’s never opened a new logo.

ServiceNow?

ServiceNow. Right? Let’s go hire people from ServiceNow. Why would you to hire people from ServiceNow? They don’t know how to do any pipeline generation.

Well, Salesforce has a monopoly. And so how much outbound are you doing if you work at Salesforce? ServiceNow? First First of all, everybody’s already a customer. So how many new customers are you going after? Like, you could talk to a guy at Salesforce. He’s like, yeah, I closed Wells Fargo. What? No, you didn’t. Wells Fargo has been a customer for 10 years. Like, you might be working on Wells Fargo, but you didn’t close Wells Fargo. And so if you talk to these sales guys and they work for a company that absolutely has a monopoly, how are they doing any pipeline generation?

What I’d rather find is somebody that works for a company that nobody’s ever heard of and actually has an inferior product and was actually able to go to the market with an inferior product and win deals.

Otherwise, it’s the brand.

I won’t name the name of the company that we were just talking about, but Chad helped me hire the head of sales, he was at a very mediocre company, but succeeded there for like seven years. And so that’s grit.

Yeah, I mean, first of all, everybody gets hung up on like, look, I’m in this particular space, so I to hire people from the same space I’m in. I never look at that stuff whether you’re looking for a regional VP or a chief revenue officer. To me, it’s the quality of the sales organization in which you’ve operated. Who have you worked for? What was the training methodology? What was the DNA? It’s not the company. There’s great companies with very shitty sales organizations, and there’s shitty companies with world class sales organizations.

So the first thing you look for is what quality of sales organization does the individual come from? Who trained them? Can I call somebody that I know and respect that this person worked for that says this person is world class? They have grit, they have determination, they have all the things you’re looking for. So it’s a it’s a different way of identifying talent.

I think that’s a problem too is like, a a lot of like, people in like, the security space, they want to hire people with security backgrounds. And for the most part, a lot of the security companies have historically been channel driven sales organizations. So I actually have an affinity of not hiring people out of the security space. There are some recent examples like the team at Wiz, certainly a very good sales organization, but the industry expertise does not matter as much as like you being successful selling an enterprise technology.

Yeah, I think it does. Like at xAI, for example, it was pretty important to us that we hire people. When you’re selling an API, that’s not an out of the box product. So you have to be more technically astute when selling something like that. So you not only find people that are at least slightly more technical or at least have sold more of a technical product, but you also change how you enable them. Like our sales guys at XAI actually do all of their own demos, which as you can attest to, that’s that’s not the norm.

So I think, yes, it changes the profile, but it also changes how you enable them.

If you have a company and the founder says, oh, I should give them million in quota. My question, first question is, do you have any evidence to show that they should be able to hit that quota? They’re like, no, but we’re an AI company. Well, who gives a fuck that you’re an AI company? Like, show me the data. So from my perspective, if you’re building a great organization, you have a fast growing sales org, and you have north of a million and a half dollars of productivity of a rep that can, you know, onboard and within six months to over a million and half dollars, keep hiring faster and faster and faster.

If they’re doing million don’t pat yourself on the back because that means you’re missing opportunities. You’re missing opportunity in the market because they’re just sitting there and they’re fat and happy. Like, they’re just like, yeah, it’s easy to make my number. So I think it’s like, look, make it hard for them to get to million and a half and find those hunters. And that’s the kind of organization that will make you a very differentiated organization.

been if you get 3x your OTE, you’re pretty happy. I I agree it’s probably going up because of just different things that are happening in terms of being able to have like a PLG lead source. I think when it comes back to quota setting, I always remind these CEOs, like, what are you optimizing for? Let’s talk about the risk. Okay, let’s talk about the risk of setting quotas too low. What happens? You’re probably to overpay. That’s a shitty thing to have happen, but can you live with overpaying a sales organization for one year?

Because understand if you’re overpaying and what happens, it means you’re blowing through whatever forecast you set. Now again, you’re spending too much, but you’re pretty happy because you’re blowing through the number. Let’s talk about the flip side of that. Set quotas too high. I’ve just brought in a world class sales organization. None of them are making any money. Morale is shit. What happens? The sales organization quits. And if you lose A players, you don’t replace A players with A players. As soon As the A players go, the rest of the A players know that they shouldn’t go there.

So now you’re to lose your sales org and you’re going replace an A player sales org with a B player sales org. So it’s about optimizing for the right type of risk. By the way, the other thing that we do now that we didn’t used to do is you put windfall clauses in there. Because there are certain situations like some of the companies we’re talking about where you could have a rep go out there and find a or million deal. I clearly don’t want pay that rep 3 or million in commission.

So one of the things we’ve been adding is a windfall clause that says, listen, we have the right as a company to look at a deal. And if you go do some massive deal, we get to talk about the comp plan and perhaps reset what you’re to make. So you might still make million, but you’re not going make 5.

At Snowflake, I had that windfall clause. I probably invoked it five times.

Exactly. Exactly.

I’m retiring.

First of all, have to remind them raising a round doesn’t mean shit. Okay? The fact that you were able to get, you know, three guys to write you a big check doesn’t mean you’ve accomplished anything. And you have to constantly remind them of that because there are definitely CEOs that will raise around and take a victory lap. It means nothing. And the right CEOs know that, but some CEOs don’t. So first of all, you have to remind them of that, like you haven’t done anything. then And you’ll get some of these CEOs that’ll say, well, look, I’m doing this.

I can get the best CRO in the world. No, you can’t. Okay, you’ve got good traction. Here’s what those CROs are looking for. By the way, there’s four or five guys in the world that are the best in the world, and they can go do anything they to do. Let me explain to you why you’re not ready to get that guy. And you have to sort of reset expectations. Like, look, you’ve got good traction. There’s good things happening here. You haven’t accomplished quite as much as you think you’ve accomplished.

The other thing is, is, your revenue sticky? Is your ARR sticky? So all this monthly recurring shit that you see, that can be a head fake, right? Because there’s no moat. He and I talk about this all the time, right? Go get booked contracts. So the first thing I say is they say, look, here’s my ARR. I say, well, is it ARR? Is it annual recurring? Let’s talk about how you define ARR. Because oftentimes they’ll take monthly recurring and they’ll lump it into annual recurring. You can’t do that.

And so you really have to dig into a lot of this stuff to really understand the health of the business.

you naive founders and naive sales leaders who are then saying, okay, yeah, let’s pay the sales team on monthly in arrears billing and and there’s no commitment. And at Snowflake, I didn’t pay the the sellers until they got a book contract, an annual contract. And so it’s silly to pay a sales team on something that’s just like an on demand contract. No way. We never you should never do that because it’s not durable revenue and there’s risk. And so these founders are like, oh, look at this.

Well, dude, what happens if XYZ company or Anthropic comes out and replaces you tomorrow? There’s no moat. There’s no contract. There’s no moat. It’s easy to move. Like, these are things that are that that are really concerning that that I get concerned about in working with these founders.

Some of these companies, you actually I I find myself having to explain to them the value of having booked contracts. Like, They’re paying monthly. I’m like, I know, but we need them to be booked. Why? That creates friction in the sales process.

Lower margin. They get upset. It’s lower margin. It’s lower margin. Yeah,

It creates friction in the sales process because I can understand the friction, right? If they just have to flip the switch and they can start doing it, but there’s no moat there. So there’s no loyalty, there’s no nothing. So if you have a competitor and a month later, the competitor comes out with a product or a feature that’s better than yours, these guys will just switch off of you. The point of having a book contract is, there’s lots of points, but one of the points is you have time.

So they can’t just switch off you the second something goes wrong.

I know man. I don’t agree with that at all. I think that’s just a, Is he a VC? Yeah. Yeah, that’s probably a typical VC saying. I think like you have to go in and you have to then sell, like in a consumption model, you have to get usage. So like talk about forward deployed engineers. Okay, Well, that’s an ideal situation to deploy a forward deployed engineer or professional services person, which I think that’s the right approach putting a professional service person in and then get to drive consumption of the contract.

And the sales team needs to be incentivized to drive the consumption, not just to book the deal, but to drive consumption.

Yeah, I mean, it it depends. I mean, I know a lot of people that think forward deployed engineers simply make up for a shitty product. And there’s something to that, right? I mean, like, look, you’re basically, I won’t mention companies here, but there’s big companies out there that just send hordes of forward deployed engineers into those companies that are basically just building the product that they don’t have site and then basically calling it all one big product. So I I think there’s a balance. I think there’s a world where they add a lot of value, but I think

you can get carried away with it. The forward deployed engineer is a glorified professional services person. Because if you’re a really good engineer, you do not want to be a forward deployed engineer. You want to work in the core product. And so then you go out in the field, you develop some product in the field that may never make it back into the core product. Then as a customer, you’re left holding that bag and you have to then support that product later on. There’s a lot of technical debt that forward deployed engineers are to leave and there’s a ton of risk.

Again, the forward deployed engineer is not as good as the core engineer that’s building the core product. That’s just fact.

You know, just had this conversation yesterday with a company that I’m involved in, and he had a segment of his business that missed the number. And I’m like, okay, let’s look at, did every rep in that organization miss? Did every manager miss? How’s the second line manager? And turns out that, like, the problem is probably the second line manager. You have to take action. People are apathetic. If people get lazy and I’ve gotten lazy. I was got, I got, lazy. I brought Chad back into Snowflake because I got lazy.

He fucking kicked my ass, man. He absolutely did. He called my baby ugly. But dude, that’s what you to do. You gotta You gotta How did you

I made too much money. I made too much money. I I didn’t do the the hard things. I wasn’t doing the performance management like I used to. And I just expected everyone else to do it. There There were Harry, There were people in my org that were not doing one on ones. They were not doing forecast calls. Like, that’s crazy. That’s crazy. I was not inspecting that. was my fault. 100% my fault. And Chad helped me light that fire again. So brought him back in.

I mean, but look. how many Chris and I had this conversation two or three weeks in, and I said, okay, I’m finding shit. I’m to go find a lot more shit. I’m to expose it.

Some of the things he’s talking about. People just weren’t in their businesses. You talk about like, okay, how many one on ones are you having? They’re not having one on ones. What are the leading indicators you’re looking at in your business? We’re not. How How many new meetings are reps expected to have? Eight. What happens if they don’t? We’re not monitoring it. Are you rolling out medic consistently? No, we’re not. How much time are you spending in the field with your team? Not very much.

Second line managers weren’t going on sales calls. I mean, there was a whole bunch of rot that was my fault.

Well, that was the other thing. Look, I mean, Snowflake had a massive IPO, and so we had a bunch of fucking people there that made a bunch of money and were just hanging out investing.

And oh, by the way, they don’t have a quota. Like, the hell? What kind of

It’s ludicrous. So think about

How do you hold anybody accountable? Like if I’m an A you’re a D. Okay? You don’t do shit. I work my ass off. I sell million, you sell million and we make the same amount of money. You feel fucking great because you’re hanging out making a bunch of money, not doing shit, and you’re a loser. No offense.

You’re golfing every Friday.

I’m busting my ass, kicking your ass, and I know I’m kicking your ass, and we get paid the same. There’s a word for that. It’s called socialism.

It does not work. It simply

does It not works until it doesn’t. These companies are, hey, look, it’s raining purchase orders right now at these companies, but that day will change.

Every week. And I think like, it’s actually a good way to use AI. I mean, because now you can have your, you know, you can get into Claude or whatever it is you’re going to do, and tell me about their calendar, tell me about their forecast. So then you as the manager coming super prepared and saying, okay, well, tell me about these sales calls. Tell me about these deals. And you’re way more informed. But dude, it’s not like, hey bro, how are things? Like that’s not a good one on one.

A one on one is the manager asking really hard questions about how their business is going. It’s really to hold the individual contributor, the frontline manager, the second line manager accountable. And that’s what was not happening when you’re not doing those one on ones. Those one on ones need to happen every single week consistently. Consistency matters. If showing up like, every month, they’re gonna be like, yeah, they don’t really ask me tough questions.

Yeah, well, dude, the reason that you go on eight face to face meetings a week is to Oh, eight face to face. Eight face to face.

That’s right. So a good way to find out if a second line manager is failing, just look at their travel schedule. If they are lowest on the totem pole on their travel reports, means they’re not working.

One of the things when when I came back into Snowflake, we pulled up T and E budgets, and it was like, dude, you run North America, you haven’t been on a plane in five weeks. It’s a problem.

Yes. 100%. That’s That’s why I don’t to go back being an operator, because I know I know how the the tax that that my body will pay.

I don’t think so. I mean, I think metrics matter. Someone said, I won’t name names, but I’m here in Europe. I did a dinner with a very successful company, and the head of Europe said, I don’t think MEDDIC matters anymore. And I’m like, well, dude, no pain, no deal. No champion, no deal. And the way that you develop a champion is metrics. You show them how to use those metrics to get the deal done. So medic doesn’t change, and people want to say AI makes it different.

I don’t believe that at all.

I mean, I live this this conversation I’m having quite literally every day because Anthropic in particular is offering sums of money the likes of which we’ve never seen. And I can’t say it’s wrong. They have endless amounts of money, and they just care about speed. And if I was in that situation, I would probably do the same thing. So how do I compete against Anthropic if I have rep, and I’m to offer that rep $600,000 in stock, and they’re to offer 1.2. We’re offer the same cash OTE, call it 400.

They’re offer 400. How do I compete against that? Number one, don’t you to go to a place that actually cares about performance, that actually cares about having a quality sales organization? Does that not matter to you? You can say that’s anthropic. I could say, no, it’s not. They have a group quota, okay? So you can be the best guy in the world of doing what you do, and you’re going get paid as the shittiest guy. What does that actually tell you? What it should tell you is they don’t actually value having quality salespeople.

They just actually value having a lot of salespeople. Is that an environment that you to go work in? There is some like, politics aside, salespeople are capitalists. They believe in meritocracy. They want to be rewarded for their performance and their hard work. If you go to Anthropic, that’s gone. If that doesn’t matter, you then go to Anthropic. I’m not quite certain then that I want you in my sales organization anyway. and so that’s how I compete against it. Talk about the upside of the OTE. You talk about going to a company that actually values the function in which you perform.

And a company like that, as well as they’re doing, do you think they really give a shit how good their sales organization is? I mean, they’ll say they do, but do, they? They probably don’t. Why should they?

And I think I think developing, Like, if you’re a go getter, you to learn. Like, what what did Chad say earlier? Like, who taught you sales? If you’re a salesperson, go to a place that someone’s to teach you sales. Like, if I’m going and hiring someone, you’re looking at, I want go hire someone from MongoDB or Wiz or one of these companies because those sales leaders, they develop their people. That’s who I want be my next VP of sales.

from MongoDB of Wiz? Because their sales leaders, although tough, are incredible, you know, medic disciples who develop the crap out of their people and hold them accountable. And that’s what I’m looking for.

Yeah, I think you can make that argument. It’s It’s harder to make as they offer more and more money. So the the pitch that we’re both making right now about come here, especially for development, is harder today than it’s ever been. Ten years ago, I would sell on coming to work for a John McMahon company because we’re to train you and we’re to do this and we’re to do that. that. pitch is harder to land today because they’re like, yeah, hear all that, but I can go to Anthropic and make five times as much money.

But, you know, Harry, like we talked about Factory. Like, so Chad and I are working together on Factory, and a lot of this factory salespeople are some of the earliest salespeople that I hired at Snowflake. And the the common theme is they want to build something. They want to build something. They’re They’re excited to go build something. They believe in the CEO. That’s a material thing. And so I think you want build something together versus just being, you know, as as Frank Slootman always used to say, passengers and and drivers.

These companies, pretty much everyone’s a passenger because there is no accountability. You’re not learning anything from a sales perspective. Eventually that will come to bite you in career.

Recruiting, Building sales teams. The number one pain point. This is why Chad and I are working together.

Well, there’s a lot of salespeople. Finding the good ones and building great organizations is hard. It’s really hard.

And it’s expensive. That’s the other thing too. First of all, we’re expensive. So the first conversation is, wait, you guys want what? That’s the first challenge that we face. So

We’re capitalists. We’re performance

Yes, are performance based, but we are not cheap.

We get equity. I mean, there’s cash that covers just the expenses of the recruiting because the guys on the recruiting team are the best recruiters in the world, bar none, but they’re not cheap. So we have to collect cash to cover their expenses. The way we make our money is we get an equity grant tied to four years. And they say the same thing to everybody. Like, look, we’re going to get in there and you’re quickly going to realize that we are going to change the outcome of your company.

You will see after a month exactly what you’re getting. By the way, if you don’t, no problem. You fire us.

I think Chad says this pretty much. I mean, he’s more blunt. He is.

Yeah, more blunt. He’ll tell you before you before you hire him that he’s going to replace the entire sales team.

What do founders say? Every CEO conversation is, can I work with this guy? Is he a killer? You’re kind of And he’s feeling me out too. I oftentimes will refer them to our interviews and say, you should watch this so you understand what you’re getting with me because I am not everybody’s cup of tea. A lot of people watch that and say, yeah, we shouldn’t work together. We’re good. I say say that. Oh, for sure. Oh, we no, man. you’re you’re fucking crazy. Like, listen. that’s why I told you to watch it.

The other ones will be like, this is exactly what we need in the organization. So that’s a good qualifier. And then I’ll go through their sales organization and say, look, I’ve gone through the sales organization, particularly your chief revenue officer. I can’t work with him or her. So in order for me to come in, you have to commit now that we’re to replace that person. If you’re not prepared to replace that person, we can’t work together. And it’s black and white.

I mean, I had the fortunate experience of working for some pretty ruthless guys, in particular Frank Slootman. Was he the most ruthless? Yes, 100. And I clearly remember this.

A lot. A lot.

Yeah, exactly. Exactly. But, you know, I clearly remember there was a very senior person that I had hired and he was not working out. He was not working out at all. And I tell Frank, I said, I think I have a problem with this person. And he goes, you know, Chris, I’m old and I’m to die soon, so you you to do it now. And he’s like, the problem you have, Chris, is you have too much empathy. He’s like, when you have doubt, there’s no doubt.

And really, learned that from Frank is making those hard decisions quickly, it does so many things. First of all, you get rid of the rot. Second of all, it makes other people better because you, all of a sudden, you are a performance based culture. You’re getting rid of someone who’s not performing and people look up to you. So I’ve had to make very hard decisions, multiple senior people that I’ve fired throughout my career. I hate firing people. It makes me sick to my stomach.

With this senior person, I said, listen, like, hey, man, it’s not working out, and I feel really bad, but this is not gonna work out. He goes, and his response to me was like, I can change. And I’m like, I’ve done enough research. You cannot change. It’s not going to make any difference. We are not gonna change our opinion. I am super sorry. You and I are good. We’re good people. I’m not to go talk smack about you out in the world, but this employment engagement is over.

And here’s my HR. And that’s it. You have to say say as little as possible, get out, in and out quick, but be kind. You don’t have to be an asshole about it.

No. I I have seen them work, but it’s like a rare occasion. It’s It’s a sign for you to leave.

It could be 300, could be 400. It’s super hard. Forecasts have always been data driven. You 90% You take a productivity model, and we can pretty much tell you with 90% certainty historically, where you’re to end the year based on what you’re getting per rep, how many reps you hire, what the attrition rate is, what the ramp rate is. And so you build those. The problem is, in this world today, first of all, doubling is not good enough. So going from 50 to 100 five years ago, everybody be super excited.

Today, go from 50 to 100 in a year, and you might go out of It’s just, it’s a different world. And so you have to have some balance between, you can’t throw out the old way of doing it, data driven, because I’ve seen companies try to do that. I’ve seen them raise off of numbers where they said, we did 50 last year, we’re going to do 300 this year. I’m like, great, back it up. How? How are you doing 300? Show me the numbers. We just feel like we can do 300.

Yeah, not quota, but each quota a function of compensation, productivity. Each rep is able to generate million in new ACV. We’re going have 100 of them, so we can do 200. So you still have to use that approach, but then you have outlier deals.

Snowflake was the first thing, first company we had ever seen where we couldn’t hire fast enough to bring the productivity number down. No matter how fast we hired, it kept going up, which is like, that’s when we knew What a lovely problem. We’ve got something.

I mean, we said it earlier and I said it on your last podcast, we should have kept hiring. slowed down. Because we optimized to be public. And that was a mistake, in my opinion. And by the way, my hand was on that wheel.

Look, there’s all sorts of rules you have to break to do that. For example, you never want a new manager to have less than five productive reps. You can’t scale the organization from 100 to 300 and not have that. What I mean is if I have a manager, he’s got five reps on his team, he or she, three of those reps should be productive, two can be new. But if you try to hold that, then you start running out of places to put reps. So now all a sudden, you have to do things like, I could have a manager that has six reps.

Each of those six reps has been with the company for less than ninety days. Shit starts to break when you do that. So your ratios get messed up. Your enablement could have issues. You start cutting territories too quickly. Hey, Rep, you came on with 50 accounts. Six months later, you have 10 accounts. So can it be done? It can, but if you’re going to scale that quickly, the market better be massive and you better have a product that everybody wants to buy. What

do you think most number of reps we hired in a year?

think one year we went from 100 to 300.

Yeah, that was pretty wild.

Six. Six

it? depends, At scaling, when you’re scaling. Yeah, when you’re scaling, it’s six. But at scale, if you’re not growing as fast and you’re not hiring as fast and you have a bunch of productive reps that have been in the seat for six months or longer, you have like eight or nine. And especially with AI, you can use AI to like give you a bunch of data, leading indicators on on what’s happening to those reps.

It’s hard. I I I think this is why I think the hardest job in in technology sales is the frontline manager. The frontline manager is the key to development of the reps. Because like, in all honesty, your enablement at a series B company is not that great. It’s not. You’re trying to do some stuff. You might have an enablement person. You’re to teach them on how to sell MEDDIC and everything like that, but it it happens at the frontline manager level. So developing your frontline managers, hiring good frontline managers is really, really, important.

There’s a company out there that I’ve brought into almost every one of my portfolio companies called Revlogic, and all they do is build enablement programs for early stage companies.

Early.

When you’re building a sales team. Early.

I don’t think you can pick a revenue number, but if you’re if have 10 or 15 reps, for example, if you have five reps, you don’t need it. But if gonna if you have 10 or 15 reps and you’re going to 50, you better have it.

It’s because you’re think about it, you’re spending a lot of money building out that sales team. You might as well invest in developing them.

Well, ramp is remember, there’s a couple of things that go into ramp. Number one is the sales cycle itself. So to to define a rep as productive, Right? A productive rep, if if the productivity per rep is a million per year, the first quarter they’re productive is the first quarter you can expect them to do two fifty. So first of all, you have to people get this definition wrong all the time. Like the second a guy does a deal, he’s productive. Incorrect. It’s the first quarter in which they hit their full productivity number.

And so if you have a sales cycle that’s six months, how do you get the ramp time less than six months? You can’t. So the two things that go into shortening ramp time are the sales cycle itself and then the enablement of the reps. So there’s two things that go into it. You can do a good job of getting the enablement to happen within ninety days, but if your sales cycle is six months, you’re still to have ramp time of six months.

Well, I think they arbitrarily come up with numbers. Like we were saying earlier, they’re like, oh, we should do million because we’re an AI company. We talked about another company where they were like, oh, we don’t need real salespeople. We can hire, I don’t even know what they call the salespeople. And it’s like, no, dude, you can do weird things until you don’t and things will end badly for you. So from my opinion is invest in a great sales organization as soon as you can.

This is what I deal with every time I come into a company. They’re like, we have to get to this number. I’m like, it doesn’t work like that. We have a bottoms up approach. We’ll tell you what you can do. You can’t say this is the number we have to get to get us there. It just it doesn’t work.

It sounds like the dot like I moved to San Francisco the the.com boom. sounds a lot like dotcom boom.

500.

And they do and that’s the issue.

The

the margin? How about you’re reselling a bunch of large language models at a negative margin? How does that go?

100%. In fact, I’ve threatened to walk away from companies because they said, we’re go raise at this number. This is the forecast we need to have to get to that valuation. So that’s what we’re to do. And I’m like, literally, I’ve said to companies, if you go do that, I will leave because we are not going to hit that number. I’m looking at the number of salespeople. I’m looking at the productivity plan. That number is not realistic. You might get lucky and get there. Forecasts are not supposed to be lucky.

You’re supposed to put a forecast out with some level of certainty that you can get to that number.

99% of them are not. Why? Because they’ve never been operators. So like, they’re just regurgitating something they heard in another board meeting that they think might be I was on a board call. I was on a board call of a seed stage company, and one of the VCs got in and said, when are we to do our first million dollar deal? I was like, dude, how about you shut the fuck up? I mean, it’s like, what value is that at all?

heard. Jeez. Thank you for that.

Yeah.

The best board members that I sit on boards with are the ones that know something in particular, product, for example, and add a lot of value in a particular area on that board and offer their input and are involved in the business enough to have a point of view, which means not just showing up at the board meetings, actually have conversations with people inside of the company in between board meetings. And so they combine the knowledge that they’ve gained with the expertise that they have, and they use that to actually add value.

But they also understand their swim lanes. The board members that drive me fucking nuts is like when I’m sitting in a board and I have some guy on the board that’s a VC that doesn’t know fuck all about sales that wants to chime in when we’re talking about sales and give us his suggestions and start asking questions. I’m just looking at the guy, can you just shut the fuck up?

I think the best board member that I’ve ever seen is is Mike Spicer. Spizer in building Snowflake. That guy was so he was a founder of the company. And then he was so involved in the product when he didn’t know about sales. That’s why he brought in John McMahon to be on the board of Snowflake. Like there’s like, he knows where he’s good at and he knows where he’s not, and he’s super valuable. So he literally probably the best board member I’ve seen.

Yeah, Mike’s amazing. And McMahon was the same way. Like John would come in. I sat on four or five boards with John. John opens his mouth when we’re talking about sales. honestly, that’s where I learned from. So when I’m sitting in a board meeting, when we’re talking about what I know, I’ll say what I have to say, and then I don’t say

shit. Yeah, John John doesn’t say a lot in the board meeting. He spends a lot of time with you, understanding the business and telling you that you’re fucking up one on one so that you don’t go into that board meeting and and you become an idiot. He’s really good at that.

show and I

World class.

I mean, this is new, right? The way we used to do it is you nail North America.

Get North America to like a million.

Yeah. Like, you get North America to the point where it’s it’s operating and you have some level of confidence and you have a good leader that can run North America that frees your CRO up, Chris, to go open other markets. You start with EMEA, then you go to APAC, but you do them sequentially so that you’re not spread too thin. I agree. That has changed. I’m seeing companies open up everywhere simultaneously. And I think it’s really challenging because it’s it also depends on the CRO. But say you have a CRO that’s not accustomed to doing that, which is the case with most most of them, it can really stretch them.

I think, like, we both like to hire young up and comers to be the first head of sales. And the problem now, like this is a new problem, the problem now with that is that they’ve never run an international sales team. And so I had time, like I was talking to one of the founders about this, is I had time to like ramp North America, hire a North American lead, ramp Europe, then ramp APJ. There is no time. And so like founders are now paying CROs who have that experience enormous amounts of money, enormous.

It’s crazy. because they know that they have to like get market share ASAP globally now. So people that are peers of mine that have experience like me are paid quite handsomely to do that.

Well, that’s a very low number.

That’s a low number.

You’re not even in the ballpark. You can see CROs today, and I’ll leave the companies out. I know CROs getting million packages. You know,

You should. You should give it serious serious thought.

Yes. You think about it.

That is not nuts. We a a series a company. You want You want in? Yeah. 100 million

No.

I don’t know.

It’s a bubble. This to me is a bubble. And honestly, Anthropic is inflating that bubble. Not that they’re doing anything wrong. They just have so much money they can spend. And so they are setting benchmarks that the rest of the market is trying to keep up with.

It’s crazy.

And more power to them. Right? It’s be better

a CRO of a startup than it is a CRO of a publicly traded company. Oh, 100%. You’ll get paid more. Yeah. Which is crazy.

Some SaaS is dead.

I don’t 100% buy it. Look, when I went to Snowflake, the enterprise was still in the data And, you know, IBM was still selling mainframes. IBM still sells mainframes. Legacy dies a slow death. People will People will still have Salesforce as you’re their CRM or their their source of record. But it’s changing.

It’s a really difficult thing. I’ve been on emergency calls literally to discuss this. And the problem is you can’t compete financially. What What they are paying people is so far above what everybody else is paying, you can’t sit there and just counter these people.

It depends on what you’re talking about, learning what. you’re If talking about learning how to be a great salesperson, I don’t think you’re gonna get that Anthropic. If you’re talking about learning how to sell the products of the future, you’re

It’s pretty tough. Like if Anthropic, for example, when they were at their $3.80 valuation, they were offering reps, call it a million two. I’m not an investor in Anthropic, but if I recruited for them, I would make the case all day that you can 10x that stock. I think Anthropic’s a 4 or trillion company. So if you’re a sales rep and they’re offering you a million two and you could look at that and say, I’m to have million in four years, How do you tell someone good conscience not to do that?

I think it’s hard. I think like, culturally, you have to be okay being in this organization where you said it, it’s a great product, unbelievable product organization, Look, world class, the best in the world. But like, you’re going be sitting next to some mediocre people that are going to make a lot of money. And maybe they came six months earlier, so they’re going make more than you. And you’re going be super pissed about it. but shit, million will make you do a lot of things.

That’s right.

Are they still just setting meetings? Has the function changed?

Well, let me ask, but are they doing more than setting meetings? Are you talking about actually closing transactions where they transform it into an inside rep? Are you saying the SDR function of just setting meetings is still the same, but their productivity is higher because of AI?

I think the one thing that you’re missing in all that is that’s the future of your sales organization. Are sales always to be smaller? Potentially. I don’t know. I mean, right now Right now it’s the opposite. It’s the opposite. So there’s no lack of demand for good salespeople. And if I’m a CRO, I want SDRs in my organization because they’re to be my future sellers. I to develop those people into my field sales organization over the next five years or two to five years.

I think if you’re an API company, for example, it absolutely changes because you’re you’re talking about customized solutions. And so it makes sense to have customized solutions specific for a vertical because you can go in there and repeat that motion. I think for out of the box products, it’s it’s less relevant, but we’re certainly seeing, I’m seeing it happen faster than it has in the past.

I think Snowflake did it probably a little bit too late because it’s a consumption model. You have to actually understand the use cases and then go win those use cases and get those use cases live and this stuff. So I think it’s super relevant to have a verticalized sales team, but you have to invest in having specialists and like, you know, it’s expensive to do it.

Yeah, every SaaS company that is a per seat is having the conversation right now of how do they introduce some sort of consumption into their pricing model. Because there’s risk that, you know, companies have less employees. And even though you might be gaining market share in terms of number of customers, you might be losing revenue if you’re a per seat license. And a lot of times like the reason that Snowflake was a consumption model is because our underlying cost of goods was also consumption. So, you CFOs didn’t like they tried to force us into a traditional licensing model, and we said no.

And so tough tough luck, Mr. CFO. This is the new world. This is how it is.

It definitely changes how you think about the sale too because in in the traditional world, it was go book a deal and walk away. And the sales guy didn’t have to care. As we experienced at Snowflake and I’m experienced at every company, you you can’t have that. The rep has to be invested in the long term relationship with the account because they have to ensure that the account is in fact consuming. Otherwise, they’ll go book a deal, walk away, and the account doesn’t consume, and the company’s got a gross retention problem.

So you have to tie some of their compensation, most of it’s still to the booking events, but you have to tie some of it to the consumption so that they are incented to make sure that they don’t overbook deals and at the same time that the customer is actually consuming what they bought.

I mean, I think there there was a time where these reps, there’s there’s this entitlement, this like generational issue. And I think COVID accentuated it and really started the three day work week. I think now, you know, you talk to any college grad and they’re struggling to get jobs, and that’s that’s changing their mindset. So a lot of these people who have these entitlements, they’re gonna to have a bunch of young kids come up and steal their lunch because they’re gonna go out and wanna work because they’re desperate to work.

I I do think it’s going change.

It’s a cultural issue, at least in the U.S. I mean, if I look at the US, we’re just as a country, we’re soft. People have forgotten that we actually have to work hard to achieve the things that we’ve achieved in the US. I won’t speak to Europe because you know how I feel about Europe. So I think it goes I think it’s far more broad than just salespeople. I I I think it’s an issue. But I will say, over the last year or two, I’m seeing it swing back.

Like some of the founders we’ve talked about that I’ve worked with I mean, personal situation. I’m working 70 hours a week. My wife talks to me not that often because she’s super pissed about the hours I’m working. I’m like, you don’t understand. Everybody I’m working with is working 70 hours a week. That was not the case a couple years ago.

I love to work, and I love to win, and I love to be around people that are smarter than me, and I love to build incredible companies. I love it.

The thing that’s like genuine about Chad is he’s relentless. And sometimes that can be taxing because you sometimes don’t want the feedback that he’s gonna give you, but he’s generally right and he will not let it go. He’s a dog that’s chasing that bone, and he will not let that bone bone go.

Come on.

There’s some carrot there. There’s on. some. Is some. Chad is really good for me because I will try to be nicer than I I need to be. And he’ll hold me accountable to, like, making sure that we, you know, there is more stick in my delivery. But I I think, you know, what I tried to do is build a sales organization that was not a bunch of assholes. And so Chad respected that. He helped me build that organization. There are sales leaders out there that are assholes.

They don’t care that they’re assholes, and they’ll build they’ll build an organization that is a bunch of assholes. That’s fine, but that’s not good long term to build a long term, sales organization.

I’m not

touching that. knew you’d ask that. Yeah. I got trouble last time I was on this podcast. I called someone a dick and a liar last time, so yeah. That went down so well. Yeah, Yeah, that was really good.

I just think it’s hard to find the types of people, harder, I should say, to find the types of people, particularly outside of the UK, in Europe, that are willing to put the effort in that I think is required to be successful. I just think it’s challenging. And I think it’s very difficult to fire people in Europe, as you know. I mean, you want to hire in Germany or France and Spain and decide you want to fire somebody, it’s next to impossible. And so having things like performance management and so on and so forth are challenging.

I think Europeans have a different expectation in terms of work life balance. I’m not saying it’s wrong, it’s just different. And I think that can make it challenging.

One of the I’ve made plenty of mistakes in Europe. One of the mistakes was putting the inside sales team and SDRs in Amsterdam. As soon as you put someone saying they’re not working out and they’re getting a PIP, the first thing you do is they go on sick leave. And then you’re negotiating with lawyers. It’s the worst. I mean, it’s the worst. And then they come back for like a day and then they go back out on sick leave. And then they’re like, well, how much are gonna pay me?

And if you’re in a company that the stock is worth a lot, they’re to be really painful to exit out of the organization. It’s just, it’s a pain.

Did it work?

The best The best European performance management story I have is the guy who was my German country manager had a underperforming rep. That rep decided he wanted to go part time, and German law allows him to go part time. And so what the country manager did is said, okay, good news to this sales rep. was trying to negotiate him to get him to leave. He wouldn’t leave. He wouldn’t leave. He said, great, great, news. We’re every Monday morning, the day that you’re in the office, you’re to drive two hours into Munich, and we’re to have a one on one four hour development session.

And I’m to develop you to be the best sales rep ever. And he just grilled him for four hours. At the end of that four hours, the rep said, I don’t think I want do this again. You’ll have my resignation tomorrow. He talked to his lawyer. His lawyer said, well, you shouldn’t do that. So then came back and said, okay, guess what? I’ll see you on Monday. Sunday night, the guy resigned because he just made it so difficult. I think you just have to performance manage the hell out of people and make it very difficult on them.

It’s also just a mentality. Like, nothing irritates me more when I get into these companies than when I see people whose mentality is, what can I get out of the company for giving the least? Drives me fucking insane. And I will tell you, when I got back into Snowflake, I saw it everywhere. And it just, it’s like, look, we are here. We are privileged to get to work for this company. You are here to fulfill a critical role. I can tell you that’s how I view my job.

Like, if I don’t think I’m adding as much value as I possibly can, I will leave because I can’t live with myself. And I think you have to try to find people that are like that. But there’s so many people that are just like, oh, it’s a big company. Let me take, take, take, take, and give as little in return as I can to get away with it.

I mean, I’ll tell you, at SpaceX and xAI, they have done an incredible job of having people that believe in the mission. Clearly, not 100%, but everybody there believes in what they are doing and wants to be there, of course, to make money, but because they believe in what they’re doing.

They hire for it. I mean, it’s a big part of it. I mean, they hire for it. You get a very quick feel when you’re interviewing for like, what this thing is all about. They talk about mission all the time and they believe in what they’re doing. They They believe, we believe that we literally are doing things to save the world. Now you can question that all day long, but that is the belief that we are doing things to change the world.

And you’re to make a lot of money because you can be work at a nonprofit and do the same thing, but you’re to make a lot of money at that space. Most likely.

I think we talked about it, from my perspective is the go global as fast as you’re going. Like, that that to me is is crazy. A year ago, would have said no way. Like, you’re don’t do that. Now you have no choice. It’s a sprint. It’s a hypercompetitive market. You know, I think the world of Matan at at Factory, and I think he’s got the right mindset. He He wants to go and win. So he’s just going as, you balls to the wall and and that’s what you have to do.

So that’s my biggest kind I have to kinda shut up when when my instincts are saying, don’t do this, don’t go to Europe, don’t go to APJ right away. I kind have to sit back and say, you have to do that now.

I think when it comes to developing forecasts and productivity plans, having some flexibility to say, yes, the productivity plan says we can do this, and recognizing that we likely can do more than that and having some flexibility between this astronomical number that they think they have to get to the data driven number says here, and being willing to find some middle ground. Because the reality is, like at Factory, we’re seeing things happen that we’ve never seen before. The size of the transactions, the speed in which they are closing these transactions, I’ve never seen it before.

I think, like we said earlier, there is a bubble to this thing, but I also think is life changing. I mean, AI is changing the way that you can interact with technology. So I I do think it’s important that you you build for speed and you go fast, but this this bubble will burst.

I don’t know, man. I get like three AI generated recruiting emails a day, and it’s embarrassing. These people put their names on it. And you know what? What has not changed is if you have the guts to pick up the phone, call me, leave a voicemail, text me, email me, call me again. There’s nothing nothing replacing that because dude, all these CIOs are getting inundated, inundated with AI prospecting. You can get rid of them or you can leverage AI and then, you know, invest in field marketing and get and do a lot of marketing events and do cold calling.

Like, this is still matters. I mean, Chad is the case in point. He does not send emails or LinkedIn emails. He picks up the phone and calls anyone.

Yeah, my guys are not allowed to send notes. They have to call because it’s the same thing. People get inundated with the. credit. They have to get the phone number and make the phone call. And so I I don’t think the day of the sales rep is changing. I I just don’t. As long As you’re selling something that’s critical to the business and if whatever it is you’re selling, if it fails, people lose their jobs, you have to develop a relationship with a human being to do that.

I think it’s, yeah, 100%. Well, think because there’s so much more intelligence you can get on usage of how the customer interacting with the product.

Yeah, it’s not this like kind of whatever. Like what customer success before was, who knows what it was? And now you have all these metrics that you can gather. You can actually, it can suggest like how you interact with the customer. It can suggest that you talk to them about these things. It can show you that the customer’s going to leave you. There’s a bunch of intelligence that it’s going to do. So I think like customer success towards could be completely automated to some extent once the customer’s in production.

So I think, you know, I think AI can definitely help.

I think we’re talking about, I mean, some of these compensation things we’re talking about. It’s not sustainable. What salespeople are currently being paid today is not sustainable. You cannot pay salespeople this amount of money and have a company that’s cash flow positive and so on and so forth. Right now, nobody cares because there’s so much funding out there and they’re just looking at the growth numbers. Nobody seems to care about how much your burn is or anything like that. That has to change. And when that changes, all of these comp models and all of this shit has to change along with it.

Yeah, likely. And I also just I don’t know what the world looks like, but there is a world where there is five or six super relevant technology companies and not a lot else. I hope that’s not where we land, but you could certainly see a world in which that is where we land. And in that world, there’s not a need for a bunch of salespeople because there’s only five or six companies.

For sure. I mean, working with X has been one of the or SpaceXi, which we now called, has been one of the great joys of my life. It’s been it’s been I have learned more. I actually learned quite a bit going back in with Chris Snowflake the second time, but I have learned more about technology and where I think things are going. So I think the answer What’s is

There’s just different ways of running a business. The way in which that company is run, I’ve never seen before. It’s just different structurally, organizationally, everything is different. And there are times when you’re like, how can this work? And then the next thing you know, it’s working. So it forces me to recognize that although I’ve seen something be successful in the past, it’s not the only way to be successful in terms of how you run business.

Chris, what about you? Yeah, I mean, you know, I’m thinking about, like, all these questions around people are saying the salesperson will be dead or SDRs will be dead. I just I don’t buy it, but it it makes me think about things a little bit differently. Like, you know, I talk to the people. I’m a year out of being at Snowflake, and things have changed so dramatically that makes me paranoid that I’m missing out on things, for sure.

I don’t know. When they start selling, you know, stuff at negative margin, I don’t know if they can, so.

there.

Well, I mean, it’s a fair question. Snowflake today is worth, what, billion. Yeah. So is somebody gonna make the argument to me that Databricks is worth two and a half times Snowflake? Nobody’s making that argument to me.

The public markets are quite different than the private markets

100%. Remember, private markets, you know, this takes three guys to set your market price. Public markets take millions of people to determine your price. So is the question, can they go out? Probably. Can they go out at 150,000,000,000, 10 above their last valuation? I’d like to

I think that’s why you’re seeing companies do things that we’ve never seen before, like offer tender offers, continuing to raise financing and offer secondaries because they’re effectively providing the same level of liquidity to their employees that they would get if they went public, because otherwise there is no liquidity and they have an issue. So that’s a new thing. Right? You’ll actually see CROs negotiate into their comp plans that they have the ability to sell annually up to 20% of their shares in a tender offer. I’d never heard of that five years ago.

Is that good? You know, I’m not sure. I think public markets are a good thing. I think I think markets are very efficient at telling us what a company should be worth.

When Snowflake was private, it was all about top line revenue. That was what it was about. When we went public, it was about free cash flow. And so the market still rewards Snowflake on generating free free cash flow. I think that’s a thing that you have to think about.

Yeah, I mean, I I had the opportunity. Since I was like, you know, employee 13 at Snowflake, I had plenty of liquidity options along the way, and I took some because it made sense. Now, I wish I could You do regret it. Yeah, a little bit. A little bit.

You know, look, it depends on where you are financially. But look, taking something off the table, because like there’s risk in everything, it made me less stressed when I took some money off the table. So it actually, when I say I regret it, I joke. I don’t regret it because it did allow my wife to be a little bit less stressed, me to be a little bit less stressed about our financial situation. I recommend everyone, whenever you can have some liquidity, take something up. Maybe it’s 5%, maybe it’s 10%, but do something.

No, because I don’t work as hard as Chad.

But that’s about to change. that’s about to change. That’s about to change, Chris. Yes.

He’s about to become a lot more intense. Yeah. No, in full transparency, need a little bit of intensity. working twenty hours a week isn’t all it’s cut up to be.

I can tell you, I think I think one of the challenges when when you go talk to a CEO about building an enterprise sales organization that that becomes controversial is the cost. When you say things like, for every five reps, I need a manager, that’s expensive. When you say, for every four managers, I need a second line manager, that’s expensive. When you say things like, it’s going to take six months before you get anything out of this investment, and you’re going to invest in a 100 of these people.

And for the first six months of buying these 100 people, you’re gonna get nothing for it. Companies look at this, and they’re like, you want me to spend a shit ton of money? And then you say things like, great. And at the end of the year, you’re gonna lop off 25% for attrition. We’re gonna attrit 25%, which means the forecast is to go down by 25%. They see these numbers and the first couple years of enterprise sales are very, very expensive. And in this day and age, that is very controversial.

Yeah, that’s normal. Are

you serious? That’s inclusive of promotion. Like, it’s promotion, it’s voluntary and involuntary attrition.

At least. Yeah, because think, look, every healthy sales organization should be attriting the bottom 10 every year. You should be getting rid of 10% of your sales every year.

you’re doing it No, it’s quarterly. Every quarter, you’re looking at the team. You should be able to get rid of 2.5% of your sales organization

Performance management is not an annual thing. And I think that’s a lesson that I learned, is you do have to continuously do it. You have to hold people accountable.

Look, at at Snowflake, we had a great culture, and early on, we were firing people for underperforming. And like I said, you don’t have to fire people and be an asshole about it. I think you can let them go, wish them the best, don’t be a negative reference on them. But good performers actually like to see that you get rid of bottom performers. because that means they’re special and and it’s meaningful.

If I’m an A player, is that gonna deter me? If you tell me, hey, look, every year we get rid of the bottom 10%, I’d be like, you fucking better. If you don’t, I don’t wanna come work there.

I’ll defer to chat on that.

The best private company at scale, they were They they were recently acquired. Wiz had a world class sales organization under Dolly Rodgeck.

Dolly. I mean, Dolly basically brought the entire team over that we built together at AppDynamics and Zscaler. And because Dolly’s Dolly, he brought all of them with him. They were operationally sound. He hires the right people.

Salesforce was like, like, MongoDB. MongoDB. Yeah, MongoDB for sure. Yeah, I mean, like, they’ve been pillaged because of that, but they developed their people and that a prime target.

It goes back to the controversial question that you asked is like, you know, hiring for industry expertise drives me nuts. Like, you hire the athlete, not the like, intelligence in a specific industry.

I would need more context. Do you mean they’re focused on the title?

Yeah. I mean, I I just had a situation where this came up last week. There There is some merit to wanting the title simply because it gives you a level of credibility both with with customers and when it comes to recruiting. So if you give somebody that is in fact the CRO a VP of sales title, you are sending some level of signal to the rest of the market that you don’t totally believe in this person. May not be intended, but that signal will be received when you’re trying to recruit people.

It made It harder. I was the VP of sales for the longest time at Snowflake and not the CRO, and it made it harder. It made It harder for him to convince people to come and talk to me. Eventually, you know, they promoted me to CRO.

That’s why I like, especially like if you’re the first head of sales, I like hiring them as a VP of sales because ideally, because if the company grows really fast and they can be VP of Americas, they don’t have to be the CRO and they can stay at the company.

I’ll take this one. Up until this point, for thirty years, it’s been me. So I have a team that handles the recruiting. I handle all the board work, all the consulting work. And And we’re I think I have seven companies in the portfolio I I can’t take on anymore. The reason I was so excited to bring Chris on, a, is because he adds value in so many places that I don’t. The reality is, operationally, I think I’m pretty good. I’ve sat a lot of boards. I was trained by Chris.

I was trained by John McMahon. I was trained by Mike Spicer to do the operational shit. But the reality is I’ve never sat in the seat. I’ve never been a CRO. Chris is the only CRO in the history of technology to go from zero to billion. And so I think the two of us combined are pretty special. The reason I brought Chris in is I can’t expand the business without Chris. We’re also making some other pretty critical hires. We’re hiring a guy by the name of Mike Hoss that’s to come help scale the recruiting side of the business and then two other people.

So to answer the question right now, it’s not scalable. Once we get these additional people in place, it is scalable. But will we ever be a company that’s got 30 companies in our portfolio? Never.

Fuck yeah, I’ve had a bunch.

Lacework.

Yeah, I mean, where do you to start? Yeah, look, I think the two things I’ve learned the most, if I meet with a CEO and CEO and he’s not a Matan, or, in my mind, a Winston type of guy, I can’t work with them Because if I go in there and say, we need to do this, this, this, and this, oh, well, geez, da da da, And I look for how often they reach out to me. Like, the killer CEOs I work with, I swear to God, Matan is reaching out to me at 10:00 at night, 06:00 in the morning, Sriramiswami the same way.

So it’s got be a killer CEO. And to the extent that I’m able to figure it out, which is not always good, product. It all comes down to product. If they don’t have world class product, you’re going to fucking lose. And so have I had some misses? Yeah, I’ve had a lot of misses. And And it’s either one of those two reasons or both at the same time.

I mean, like the Lacework sales team was a a world class sales team, just a crap product. I mean, that’s a great example.

I think it’s making companies like Factory be the next great sales organization. I think together, if we can walk away saying like, we helped, like we had a hand in building world class salespeople along with world class product, like multiple times over, that’s what I to do. That’s what I find joy in. it’s what like someone asked me to be on the board of a publicly traded company, and Frank Slootman quickly helped me put that to bed. It’s like, why would you do that? And he’s right.

He’s like, where I find joy is helping companies build. And that’s what we’re doing is we’re helping these companies build from sometimes nothing into these world class organizations. So if we can spike the football and say we’ve helped a bunch of companies go public, that’s what I want to help them do.

Completely agree. Like, if you look back ten years from now and you say over the last ten years, there’s been 15 or 20, whatever the number is, world class technology companies that changed the technology industry. And we can say for of those companies, we were instrumental in helping those companies get there. I can’t think of anything better than that.

And I believe we can do it.

Yeah, mean, look, Mike Spicer is still and he’s he’s at Sutter Hill and he’s doing his own thing. Mike is so unique. And Mike is unique to me for a number of reasons. One, Mike has the ability to see around corners. Mike sees shit that nobody else sees. Now, you could argue we’ve had some execution issues around his vision, which we’ve had, but Mike sees shit before anybody else sees it. Two, Mike is an operator, and he’s probably the only guy I’ve ever worked with that is both a stock picker and an operator.

And three, Mike Mike doesn’t give a shit. He just wants to win, and he will tell you whatever he has to tell you. He never holds back. The other guy, I’ve there’s probably two others. I just met him, Sean McGuire from Sequoia. I love Sean. I I spent some time with Sean McGuire.

I spent time with him. We went on a walk. Turns out we went to the same high school. We have a bunch of similarities.

Yeah. I’m like, oh, this is my guy. And then lastly, John Herring at VI Capital. And And he’s he’s a big Elon guy. And the reason I love John is John is a fucking in the weeds VC like I am. Like, I’ve never seen a guy put the hours in like like he does. And And I think that’s true of all three of them. They do the work. They care.

I’m to stay silent on this one.

Oh yeah, Chris Chris has got an issue here.

I’m I’m to stay silent on this one. Other than Mike Spicer, who I owe my career at Snowflake to, That’s that’s why I’m gonna say

Thank you, Harry.

Thank you.