# Rippling's CRO on Why Founders Should Not Create Sales Playbooks

Why Discounting is BS and How to Create Urgency in Deals · The Biggest Lessons on Pricing and How to Win the Pricing Game with Matt Plank

20Sales · Dec 20, 2024 · 72 min · 15,482 words
Speakers: Matt Plank, Harry Stebbings
Source: https://www.996.fm/episodes/20vc--ep-6480da8b/

## Cold open

**Matt Plank** [0:00]:

Founders definitely should not create the playbook, but I think founders wait too long to hire a go to market. And I think they do that because they feel like they can't hire a good salesperson potentially without a bunch of traction. The big mistake that people make as they transition to the next phase is people don't increase price into a point where they find friction.

**Harry Stebbings** [0:22]:

This is 20 sales

## Intro

**Harry Stebbings** [0:23]:

with me, Harry Stebbings. Now 20 sales is the monthly show where we sit down with the best sales leaders in the world to discuss how they built a sales machine. And today, we're joined by one of the best, Rippling's CRO, Matt Plank. Matt joined Parker Conrad, Rippling's founder, when Rippling was just a V1 idea in a basement and had $0 in revenue. Today, the company has hundreds of millions of dollars in ARR and is a market leader. Prior to Rippling, Matt was a sales director at Zenefits, where he helped scale the company to million in ARR. But before we dive into the show today,

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## Conversation

**Harry Stebbings** [2:30]:

Matt, I'm excited for this, dude. I've heard so many good things both from Ashley and from Parker. So thank you so much for joining me, man.

**Matt Plank** [2:37]:

Yeah, absolutely. Thanks for having me. I, likewise, have heard a lot of great things and watched a lot of great episodes on the podcast. So excited to join you.

**Harry Stebbings** [2:44]:

Yeah, bribery goes a long way, dude. Listen, I think there's a moment when people fall in love with sales. Can you take me to when did you fall in love with sales and realize that this was the career for you?

**Matt Plank** [2:55]:

Candidly, I've been in love with sales since I was, you know, selling wrapping paper in fifth grade and elementary school. And I think for me, it's always come from probably some part of competition, you know, wanting to to sell stuff and kind be number one on whatever leaderboard it was. And believe it or not, that's they get you primed for that in elementary school when you're selling wrapping paper or discount codes to your local stores or whatever. But then all the way through college, I was selling hot tubs and appliances at Sears and Cutco knives and really anything you could you could think of. with was a commission job. I was doing it from a pretty young age. Do you think that people are born salespeople or do you think it's something that can be learned? I think there's a lot of people that are born that could be salespeople, you know, just given the the kind of the attitude that you have. And I think there are certainly some people who are born who probably don't, you know, would like, commission the opposite direction from any sales job. But I think it comes from, you know, wanting to be competitive and being okay when you lose because in sales, like, yes, of course you win, but you lose the majority of the time, really. And so I think there's a there's a lot of dynamics that I think are that you have to I have the the right ingredients. But I think from there, you can certainly, you know, teach a lot of the skills that, you know, that that make a good salesperson good. Do you think it's okay to be good

**Harry Stebbings** [4:12]:

with losing? Like, I fucking hate losing. I would I would kill my kids if they ever said that they were okay to lose. It should hurt every time in every way, and you should remember it so you never feel it again.

**Matt Plank** [4:22]:

Yeah, well, I think look. like loving, winning, and having like a deep hatred when you lose are kind of one the same, in my opinion. And so as long as you know, losing stings and motivates you and all of that. But I mean, if you think about in sales, I mean, even the best sales reps I know, depending on whatever segment you're in, you know, their win rates are anywhere from 20%, maybe 40% of the absolute highest end, and so regardless, like every month, every quarter, you're losing the majority of the opportunities that you're in, so you to be able to know how to, you know, lose an opportunity and come back and bounce back and, you know, focus on the wins and all that. So, yeah, you gotta be gotta be okay with accepting a lot of rejection if you're in sales.

**Harry Stebbings** [5:01]:

Why are win rates so low, Matt? I'm an amateur. This show is brilliantly successful because I know very little. Why are win rates 15 to 20%, and you're just losing to competitors?

**Matt Plank** [5:12]:

You know, the the number one reason why you lose a deal, in most cases, at least at Rippling, is indecision. People that are basically end up staying with whatever solution they have today. At least in our case, you know, we are ripping and replacing something pretty much every time, you know, we bring on a new customer. And so the overwhelming majority, I mean, if you look at the pie chart of closed loss reasons, you know, almost half of them are basically, like, unresponsive. Right? Or maybe a third of them are unresponsive. Like, literally, you do a few calls and it's going well and they just completely ghost you. Some other big chunk of them are people who get back to you and are like, hey, we decided to hold off for now, you know, whatever, something in the company changed, priorities, budget, someone left, and so there's a lot, like if, I think win rates are different if you think about a decision decisioned deal. Right? Like a deal where they decided to go with you or a competitor, then I think you'd look at win rates that are that are much higher in those cases.

**Harry Stebbings** [6:04]:

Indecision. Is that not just a sign that you haven't articulated the solution articulately enough?

**Matt Plank** [6:11]:

For sure, I think someone not deciding in many cases mean that you didn't, you know, you didn't prove enough value in in the solution you're selling or whatever it may be. But there are also just a lot of good reasons why, you know, someone's not ready for whatever reason or really, like, dynamics change in the company. A lot of time, the person that you're evaluating with might leave the company or so they might hire someone new who now owns that decision. And so there's plenty of good reasons. And I actually think the way that you deal with that is really, really, critical. And like the best reps over their time and their tenure, they grow and they build a pool of those types of people. And as long as you have really good engagements with both the people that you win and also the people that you lose, they start to come back around. Like, once you've been in a role for even a year, eighteen months, like, you just get this this circle back loop of all these people that you've spoken with in the past eighteen months. And a lot of times when they come in the second time, they're immediately ready. The deal cycle moves way faster. It's a lot easier. And so sometimes I think people, they get a no from somebody, and they just like abandon. Sometimes in the worst cases, like they won't even respond. You know, hey, thank you so much for your time. Thank you for evaluating all that good stuff. But I'm like over the top, like kill them with kindness when they say no. and that really just builds you this like big circle back on a loopback pipeline that will help you, you, know, in years down the road.

**Harry Stebbings** [7:25]:

Matt, is it easier to sell a product where you are replacing an existing line in a financial model or in an expenses page or budget, or is it easier when you are a net new line item?

**Matt Plank** [7:38]:

I think it's way easier when you're replacing something, in my opinion. When you're trying to create a category or create budget for a thing that doesn't exist, there's just a whole bunch of different things that you have to go through. I have always, for the most part, sold a product where you're I mean, I think early on, I guess, in the early days back with Sam Blond when we were at EchoSign, you were selling an e signature solution that was like net new. And it was hard because you go down an evaluation and someone at the very end would be like, no, we're just going keep doing this on paper. You'd be like, how is that even, you know, a consideration? It's so crazy. I think today at Rippling, we're replacing another system every time, and I find that to be a lot easier to know that, like, there's a deal to be had here. They're cases. pick somebody, and you really just need to beat the competition, you know, to win the deal. I think I think that's much easier.

**Harry Stebbings** [8:25]:

You said about, like, often it's, like, indecision and just of ghosting. When we think about that, that often comes from outbound, an effective outbound that's got To those few calls. Everyone says today, outbound, dead. 20 24, no. Outbound, a la la poubelle bell to the trash in Europe. Do you agree or not?

**Matt Plank** [8:46]:

I think people that say outbound is dead are are either one of two things. Like, they're either engagement baiting, you know, looking for a reaction on LinkedIn or whatever. They know that there's a whole army of people out there where that's their profession and they're trying to kind of create, you know, whatever, some conversation around it, or they're generally not good or having grown something of large scale. I mean, to even claim that Outbound is dead, it's just absurd. It's like, what else? How else would you build a business if you think you can rely on, you know, marketing form fills or marketing programmatic email or whatever? It just means that you've never scaled something. In fact, I'll tell you that in the early days of Rippling, one of the great mistakes is that I didn't push outbound harder. Like, marketing team at Rippling was absolutely one of a kind. They generated thousands of inbound demos every month. And we got to a kind of crisis point throughout our journey where we looked at the plan for next year and we looked at what the growth growth rate needed to be in marketing was of like, hey, we can't grow form fills by that percentage. Like, there's no way. And we had to, like, very, very, quickly build an outbound org from scratch overnight. It was super stressful, and I wish we would have done it much earlier, but there's no way to grow and scale a big company without doing outbound. So it's harder and it's different. But to say that it's dead, I think, is insane. mean, we book 50% of our outbound demos, we book over the phone. So we schedule like a thousand outbound demos a month in our SDR org, and literally half of them are booked over the phone. And so anyone who says it's dead, I think, just doesn't know how to do it effectively.

**Harry Stebbings** [10:17]:

I'm fascinated. Before we drill down into them, categories, you said that they don't know how to do it effectively. Teach me. You did it too late and you regret it. What are your biggest lessons in how to build an outbound function effectively?

**Matt Plank** [10:29]:

There's really two things that are important. I think the first is you have to have, like, a very deep partnership with marketing where you don't care about, like, credit. So for example, when marketing shows up and they generate 100% of the pipeline and it's all inbound demand gen, you know, form fills, hand raisers and they're flowing to your inbound team, When you start to spin up outbound, you're trying to create a new like, incremental, you know, pipeline, right? Like, if you obviously hire 100 SDRs and you end up with the same demos you had when you had inbound, like, that's obviously a bad equation, right? Way more costs and like, no more pipeline. And so marketing, you have to like have such a partnership with them where a lot of the stuff that marketing does, it drives outbound success, right? And so when you schedule outbound demos, like you've gotta also give marketing credit where credit's due. And I think a lot of companies, they break that. And a lot of times they'll have marketing in you know, different orgs and sales, which is true at Rippling as well. Marketing does not roll into me. But we just have this like, incredible cross functional partnership. And so what marketing's goal in Outbound is they are telling us essentially like, who should we reach out to and when. And they're doing that by capturing all this like, intent over the Internet. right? Who's on our website? Who's on our review sites? Who just recently changed the job on LinkedIn? And so they're curating, like, intent across all of our, you know, accounts, right, that we would want go after, and they're teeing it up for us. Hey. This person, you should reach out to right now. And then they, of course, help with, like, the messaging. Right? Like, here's the most effective sequences. Like, they help us with the cold call scripts. And so the SDR work has an opinion on all of those things, and we're responsible for ruthless execution of a very daily driven, KPI business. But marketing is absolutely critical like making it work. And And if you don't have a really strong partnership

**Harry Stebbings** [12:14]:

How do you do that effectively? Yeah, you need marketing and sales to be like super tight so that marketing get part of your comms when you get new customers and marketing financially incentivize that. How do you literally do that?

**Matt Plank** [12:25]:

First, it comes from like the the culture of the org and generally from like the CEO, right? Like if I show up to a meeting with Parker and I'm like, hey, we're to massively whiff revenue this month, But like it's all marketing's fault. You know? Like, they didn't generate the demos. They said they were I giggle to giggle at, like, the idea of that, right? Like, that would absolutely never fly, right? Like, that conversation wouldn't be able to happen. And so you can't you can't, like, blame marketing when you miss the plan because it's like, so what? Like, we have a plan. What are you gonna do about it? And you and you can't take all the credit for yourself when you build an outbound orgs all of sudden the pipeline splits and you've got fifty or whatever, you have to acknowledge and give marketing credit. And while they're not incentivized from, like, a comp perspective, it's, like, deeply built into the culture that our marketing team has a pipeline plan that they sign up for. They don't have like a, you know, how many, you know, webinars did you do and how many content downloads did you get? Like, those things are important, but like, their goals are are how much pipeline do you generate? Like, that's all we talk about in our forecast meetings. Like, that's what they're geared around. And so I think culturally you have to have it be that way from the top down.

**Harry Stebbings** [13:29]:

So we have like a top pipeline number and that is revenue. Who sets that? How is it distilled

**Matt Plank** [13:36]:

down to the org? There's two different ways that I think you think about a plan. And for us, historically, we start with usually something that Parker is like, hey, like, if we wanna continue to be in the top, you know, 1% of SaaS companies out there, this is the number that we need to go get next year. This is the growth rate that we need. Like, this is what we need to hit to continue to be like, you know, an outlier in the market. And you look at that number and you're generally like, wow, that's, you know, that's definitely not an easy number to go hit, otherwise, like, of course, why would it be an outlier? But then you go through like a ruthless detailed planning process. For us at Rippling, we have 50 different segments, Right? So you have, you know, SMB and mid market and enterprise and channel sales and product sales and all the different products. And so if you think about, there's 50 capacity plans in a spreadsheet, and it's like, how many demos are we gonna generate? How many reps are we gonna hire? Like, what are their quota? And you go through that in great detail through all of the different teams, and you basically ladder and you kind of ignore the number. Like, you're not focused on the number that someone asked you to get to You start from a place of, if I just make reasonable assumptions about growth and all these different things, like what does that get me to? And then generally, there's like the plan that you believe is attainable, and then there's like the plan that you want get to and there's a gap there. And then you go through this exercise of how are we gonna plug that gap? Like, what are the 10 or 15 different, you know, levers that we could pull this year to be able to close that gap? And for us pipeline. So

**Harry Stebbings** [15:00]:

I So I understand. So you set the pipeline number of, let's say, fuck, I don't know, million in ARR. We wanna add million in ARR. I could add 21 enterprise contracts or I could add, you know, 200, 100,000 contracts. Do you just leave it to your team to determine where it comes from? How do you think about that breakup, that segment breakup?

**Matt Plank** [15:23]:

I mean, it really depends on, like, the stage. Right? So when you're early on, you actually start from a place of, like, who are we getting demos from, right? Like we're getting demos today, you know, like, what do they look like and you know, and your of, in many ways, like that is your segmentation, you kinda build around that. I mean, we had one sales team when we started, right? And we branched off from there. As you start to go up market a little bit, a bunch of things happening, you branch off. And so, you know, I always tell people, like, by the time you get to be maybe, I don't know, million or something, like, your job as the CRO completely changes to essentially like, head of sales operations. you have a great sales operations team, but at some point, it transitions completely from like, can you close the deals and you know, are you the best salesperson or whatever, to, like operational planning. And so you you take the demos that exist, what did we do last year in all these different segments? And you kind figure out like, where do I think we can do a little bit better? And you just kinda start to slot in all of the humans against those different segments. So Parker doesn't care. He's not like, hey, we need this much revenue from all these different segments. He's like, we need this revenue, like, you go figure out how to do it, and then we build like a tops down plan from there based off of how many demos are we to get in what segment and you know, how many people do we to staff against us and so on and so forth.

**Harry Stebbings** [16:33]:

Okay. So when we think about the different segments, we've got like SMB, mid market, and enterprise. When we think about like demos booked, what does the different close rates look

**Matt Plank** [16:43]:

like across the different segments? I mean, we we sell the companies as small as three, four employee founders running payroll for the first time, Right? And so on the very low end of that market, you know, we win 60% of all the opportunities. And honestly, the majority of the ones we don't win, they're just like, you know, funding fell through or whatever. Like they don't need to run payroll anymore for some reason. And on the high end of the market, we're selling to companies that are up to about 5,000 employees. It It really has like a wide range of the different segmentations. Now for us, we have segments that are based off of employee size, like any traditional company. But then we also have a bunch of products that like our core new logo reps sell. But then we have too many products. We've got like, 30 different products at Rippling. And so as we started to spin off different product suites, like launched a finance suite to compete with your Brexes and your ramps of the world. We launched a global payroll suite to compete with your deals and remotes buy global. And so at some point we had to carve off like a separate, what we call product account executive team. So you have like a core rep that bring you know, sells the majority of the HR stuff. Then you've got like a different finance suite rep. You've got a global suite rep. And so that's how you end up with like 50 segments when kind when you end up with a product suite that's you know, 30 plus products.

**Harry Stebbings** [17:55]:

I get you totally. So we have like a 60% on SMB. What does mid market and enterprise look like?

**Matt Plank** [18:00]:

Sorry. Yeah. So mid market is probably around, you know, like 20 ish percent. And then I think enterprise is maybe closer to like 15%. And I think the way you think the way I think about this is it really depends on what you measure, right? And so for us, like if you schedule a demo and somebody like takes the call and basically says like, yes, I would like a follow-up email. Like, you know, we don't go through like, do you have a budget and you know, what's your timeline? Mean, we we do that in a sense in the evaluation, but we're not incredibly strict about like, who do we bring into the pipeline. And so when we, you know, convert a demo, we call it stage two and S2 We measure win rate like, from S2, two, you know, all the way to the a one deal, but that's going be like a penalizing kind of win rate. If you've converted something to stage three, that means like they've engaged in like scheduling a second call, right? Like they actually have some commitment to like do a proper valuation. And if you measure win rates from like stage three to win, then like you actually have a much higher win rate. And I think companies do this in very different ways. Dude,

**Harry Stebbings** [18:59]:

what's ACV size? What average contract value size is enough to justify outbound? Because if you're three to four people and you're doing like, I don't know the ACVs on the three to four people, but they're not to be huge. You can't afford an expansive model.

**Matt Plank** [19:14]:

What is it now? So it's a good point. So when we don't do outbound for those type of companies, like that team is an 100% an inbound team. We do outbound in our mid market segment, which is essentially 50 to call it 250 employees. And then we do you know, enterprise air quotes from like going fifty to a thousand, and then we have a team that works from a thousand to 5,000 person companies. Now one of the benefits of Rippling is when you buy Rippling, you're buying a seat for like every single person in the company. So like a lot of products, if you're buying, you know, Confluence or something, right, you get a seat for everybody, but it's like $10 Pepin, right? If you're selling Salesforce, it might be ten $100 PEPM, but like you're only getting you know, five seats in a 50 fifty company, right? We are fortunate that you everybody at Rippling, you know, you're getting a seat for everybody, and our average PEPM is like $70 PEPM across the customer base. So for our mid market segment, selling the company's 50 to two 250 employees, the average deal size is like 45k and And so at 45k k, you can easily build outbound, right? And then going up from there, it it just gets easier.

**Harry Stebbings** [20:14]:

You can easily build outbound. What do the sales cycles look like?

**Matt Plank** [20:17]:

In our mid market segment where we have a $45,000 average deal size, it's probably At days, like you'll get deals that come in and, know, a month at the right time of year and then you'll get deals that take, you know, three, four, five months on the longest end. But on average, it's probably fifty, sixty days in our mid market segment. There's not a lot of companies closing $45,000 deals in sixty days. Like, that's a very uncommon kind of, you know, funnel.

**Harry Stebbings** [20:42]:

At 45k outbound is justified. At 45k k, is customer success justified?

**Matt Plank** [20:49]:

So in terms of customer success, like at Rippling, in the very early days, we had customer success, which I think of as like their, you know, charter is make customers successful, renew them, but like it's not to, you know, it's generally not to like sell new products. And so, you know, early on at Rippling, again, we had three products when the company first launched and now we have over 30. And so at Rippling, early on, we had customer success. And when somebody signed up for Rippling and then they came back six months later to add a product, like we would bring it back to the original sales rep. And like over time, that was just like clearly a terrible model. And so we converted ours. Why was

**Harry Stebbings** [21:26]:

that clearly a terrible model? Because that's the purity of the customer success and sales relationship.

**Matt Plank** [21:31]:

Because our sales reps are very high velocity. They're doing a lot of calls and they're focused on, know, if a new logo deal is $45,000 like an add on contract for some one that signed up six months ago might be $5,000 or something. And so when, know, when their calendar is stacked up with deals that are 40, 60K, and then all a sudden you throw this meeting on their calendar for a $5,000 deal, they're just not going be able to give it the attention that it needs. And so we we split the team and we or we changed the function. We said, look, we need like, account management. We need people who you know, have had sales, carried a quota, want to be held accountable to quota and all that kind of stuff. And so at Rippling, we have new logo sales reps, you know, pass the deal over the fence, and then they have account managers who own the commercial relationship renewals. They still own like, success. like unsuccessful companies will not buy anything new from you, obviously. And so they they do have to make them successful, but they are much more, much closer to like a sales team than a support team for us.

**Harry Stebbings** [22:32]:

I had Chad Peets on the show, a very famous CRO who works with Sutter Hill has been in some of the most awesome enterprise companies. And he was like, no, actually it wasn't him, it was Dagnon. It was Chris Dagnon at Snowflake. And he was like, CS is bullshit. You have like professional services, you pay for it. It's a stellar service or customer support. But customer success is BS. Do you agree?

**Matt Plank** [22:56]:

It's a good question. For multiproduct companies, yes. Because the reality is you can't have both. You can't have like a customer success manager and an account manager. Now at Rippling, we do have account managers that own the commercial relationship and kind of expanding their usage within our product suite. But then we do have what we call technical account managers whose sole focus is like adoption of the product, success, retention, whatever. And then we have like a phenomenal support team who can respond urgently, jump on chat, jump on calls, whatever, right? But I do believe that you have to pick one or the other, and at Rippling, like, you know, for me, account management and like sales DNA at the core, you can get those people to have, like, empathy for the customer and, like understand and care about making them successful. But I don't think you can take a CSN and make them like a quota carrying rep.

**Harry Stebbings** [23:45]:

For the account managers, how are they incentivized, and is that aligned to the upsell that they you want them to drive?

**Matt Plank** [23:53]:

You You also have to do both. So when we first launched account managers, they only had a new revenue quota. So the 100% of their focus in comp plan was tied to selling new products. You know, they they were they cared about retention, but like they didn't own a retention number. And you know, when you're high velocity, a little bit more down market, there was just a belief that like, you know, they would care and do the right things, but like you didn't need to incentivize them. And then we did that for like, you know, nine, months and we quickly realized, okay, this doesn't make sense. And this year actually, we changed the comp plan. So I think like 70% of it is tied to selling new business and 30% roughly is tied to retention, specifically like dollar retention. And it completely changed everything and like have just like completely outlier, like, off the charts, low churn metrics. And so they an own new revenue and churn. Absolutely has to happen. Can't do it any other way.

**Harry Stebbings** [24:43]:

When we think about getting deals over the line, a lot of people discount today. It's an incredibly competitive landscape. Respectfully, you have many competitors across many different segments. How do you think about discounting?

**Matt Plank** [24:56]:

So first of all, discounting is a completely like made up thing. Like at the end of the day, the only thing that matters is net price, right? And so discounting is simply a factor of where do you set your list price? list price doesn't matter, net price. So if discount 50% off or you discount 25% off, it's all relative to whatever your list price is, which for most people is like a fake price. Like nobody cares about list price, they care about net price. And so I'm a big believer.

**Harry Stebbings** [25:25]:

those that don't know, which is including me on this one, what do you mean by list price and net price?

**Matt Plank** [25:29]:

So so let's say that your list price, meaning when you show up and you send I mean, look, starting all the way with some companies have a price on their website. Right? If you're very SMB and down market and you have a bunch of like, self serve signups and trials and all that, you basically need to have like a price on your website where someone can see it and sign up, whatever. That's not our business. Like for us, we are generally, you know, getting somebody on a call, understanding, you know, what their pain points are, what products are they interested in because we have 30. And so for us, we have a list price, meaning there's a book price for every SKU that we have. So let's say it's $10 Pepin for a random SKU, But like the actual price point that we're trying to target might be, $8 or $7 or $6 Like it depends on the size of the company. If you come in and you're 50 employees and you want sign up in one week, like, I've got a little bit more room to make that happen. If you're, you know, if you're 50 employees and you want evaluate for three months, then like, it might be a different price, but it might depend on the different, you know, amount of products that you buy.

**Harry Stebbings** [26:28]:

Do you worry about different customers talking about different prices? Hey, I got Rippling for 20 Pepin. Oh, you got it for 30? Wow, they overcharged you.

**Matt Plank** [26:37]:

Yeah, well, think a couple things. So one is we have like an extremely consistent and firm discount policy. so it's not like a rep can just make up whatever they want do. And so we'll tell a customer when they come in, hey, here's what pricing looks like on a one year deal versus a three year deal, or like depending on your timeline, or depending on the amount of products that you buy. right? And so for us, you could come in and buy three products in a week, or you could come in and buy 10 products and take six months. And so there's a bunch of different, like, there's probably five different levels of how big are you? What are you buying? what's the timeline look like, you know, all these different things. And this happens. Like, people definitely talk in the market and, you know, we've got 20,000 plus customers. And so for sure, people are talking and comparing invoices and whatever. But if somebody were to come back to us, which has happened before, and been like, Hey, this is bullshit. like that someone's quoted Rippling, and I got a different price than you. And when I walk them through like, hey, look, here's Like, you might think these things are the same, but they're a little bit different. As you as long as you can, like, walk through the policy and stand behind it, then I think you're good. But you can't have like Wild Wild west where people just make up whatever price they want or else that it can get out of control pretty quickly.

**Harry Stebbings** [27:41]:

Early on, people are often told that logos are so important. Get the you know, you go to the startup pages and it's like, retool the customers, stripe the customers. Like, you name your companies that look sexy at customers, and that's so important. To what extent do you think logos are super important in driving sales versus just get early wins on the board?

**Matt Plank** [28:02]:

Yeah, I think there's like an evolution in a a few different phases. I think the first one is when you're a zero to one company, whatever, you're a billion bucks, like early, early, stage, like nothing matters. The only thing that matters is winning customers. It doesn't matter what they pay, it doesn't matter what their logo is. like you need customers to validate that like you can charge something for your product and that they'll buy it. If you look at what we charged at Rippling in the early days versus now, like it's it's not even on the same chart. And so you need customers. and I think founders make a mistake. They're trying to like maximize the revenue of one specific deal, which is crazy. It's like never, ever walk away from any deal, any price that's not free. like you sign them up, right? The big mistake that people make as they transition to the next phase where they're at maybe 50 they're going to million, is people don't increase price into a point where they find friction. Right? And so you you need like friction around price is good. And so to your question earlier, like, I get this all the time. I'll talk to, you know, an early stage founder who's often a technical founder who's a referral from one of our, you know, VCs or something. And they're like, hey, we have win rates that are like 70%. We have an incredible go to market fit. Like, it's so great. My first thing I always tell them is I'm like, that's not good. You don't want win rates that are 70%. You're either not in enough deals, right? Like you're just way too narrow or your price is way too low. Like if you win 70% of deals, then like that's not good. It's a bad or at least you could go much bigger, right? And so I think people don't raise price up until they get to a point where you're about to lose deals because like people think you're overpriced and there's like,

**Harry Stebbings** [29:32]:

How do you know when that point is, Matt? Is it when people go, oh, I'm not doing it and then you walk them back? When is that moment of realization that you've gone as high as you can go?

**Matt Plank** [29:42]:

First of all, I think the main thing here is you gotta you should continue to inch it up over time until that friction of like, hey, this is more expensive than I thought it would be. This is outside of our budget. This is 100% more than our competitor, 2x the price of a competitor whatever. Until you get people that are like, you know, walking away, then you haven't found the right amount of friction. right when you get to that point, and again, you got go up gradually because you never ever, ever, ever, want go back, right? You don't want raise them and then be like, oh, never mind. We're want lower our prices. That's bad. And we don't do this, by the way, on existing customers. As we inch price up over time, our existing customers bought early on, like, we lock them in pretty much forever. But you and you have to find that friction. And I think it's you'll squeak out a lot more revenue by finding if you raise your prices 20% and like you know, you keep winning, maybe win rates go down a tiny bit. Like that's okay over time.

**Harry Stebbings** [30:36]:

How do you think about like multiyear contracts? Often today, it's like, hey, As as much as possible, a lot of people into multiyear contracts. It does mean that you're stuck on price. It means there's more rigidity in their minds. Maybe they won't upsell as much because they've got a contract with you. It's kind of a pain like multiyear to kind of change that multiyear. How do you think about that and advise founders?

**Matt Plank** [30:55]:

Multiyear is is is really important and we we have multiyear deals we incentivize our sales team to sell multiyear deals. So if you sell a one year deal versus a three year deal, like we'll give you like a kicker in the comp comp plan to sell a multiyear deal.

**Harry Stebbings** [31:08]:

What difference is the kicker? I just have so many people who will ask me like, what is the difference?

**Matt Plank** [31:13]:

The way I think about it is like, you know, what is your, you know, commission rate on a on a new logo? And like that could range anywhere from 10% to 30% depending on like, are you outbound? Are you inbound? Like, you know, what's what deal size, whatever. And so you want make sure that the kicker you're paying on a deal isn't much more than like 15% of the deal. Right? So maybe if your if your commission rate is 20%, then maybe you're giving them an extra 2% to 3% kicker for a multiyear deal, but you can't make it that your commission rate is 20% and then you sell a multiyear deal and you get paid 40%. Right? that math doesn't work. And so it's generally, I'd say maybe 10, 15, 20% of the original contract, like year one contract, like or or thinking of the commission rate. Like, that's the right way to think about it.

**Harry Stebbings** [31:55]:

So discounting in price is a way to instill urgency in deals. Hey, let me get Matt. You know what? It's the end of the quarter. I need to hit my number. I'll give you a 10% discount if you sign with us today. Any other big lessons on how to instill a sense of urgency in deals and sales cycles?

**Matt Plank** [32:12]:

The first big mistake that people make around, you know, discounting is they're they offer time based discounts before they even understand if somebody can possibly move that fast, which is like a terrible experience both for like you because you have no leverage once you've like thrown it out there, and then for the for the customer, it just like it feels awkward, it doesn't make sense. So the first thing you have to do is understand from somebody front, like in the first call, what is your ideal timeline? And the way we talk about that is like, look, you're obviously evaluating Rippling, You've described these pain points front. Just assuming that you wave a magic wand and Rippling literally solves every single one of those pain points that you have, what is your ideal timeline of when you'd like to be up and running in a new system? Just like if you could have everything, every box checked, your perfect scenario, what does that look like? And then when they tell you that, and like, look, a lot of buyers are honest about that. Some buyers don't. Some buyers know that when they're upfront, they're like, I don't to tell the salesperson that I to move quickly, right? Like then I lose some leverage in the negotiation. And so they'll be like, ah, this is, you know, like next year, you know, Q1 or whatever. But you got find out from people what are they looking to do and like build some trust front. And then before you get to pricing, you have to like make a little bit of pokes out there like, hey, if we can get, you know, some competitive pricing that's kind of based on a timeline, this timeline, we talked about, does that seem like something that you'd be interested in and like get some buy in from them? Because people do not sign contracts on the last day of the month because they're worried that their discount's gonna go away. Like, that's absolute bullshit. Like if you ever bought software and it's the 31st of the month and someone's like, you have this quarter end discount, it's extremely unlikely that if you come back on the third or the fourth, they're to be like, no, I won't give you that price. Like, certainly there might be a different price. You might have to go through a whole cycle, whatever. But the reason that the majority of people sign that contract on the 31st, the end of the quarter, whatever, is because you've built a relationship throughout the entire valuation of some trust. Like they feel they've agreed to do some things and they to meet their part. But without that, then time based discounts don't work for anybody. And they're actually anti, you know, they're like they really are counterproductive.

**Harry Stebbings** [34:22]:

How do you do deal reviews and how's that changed over time?

**Matt Plank** [34:25]:

I'll pick like our, you know, call it our middle, you know, mid market team who's kind of like in the middle. The main thing that you're looking for in a deal review is like salespeople by almost like definition are like optimistic. Oftentimes they like, they get happy years and they hear things that they want to be true, they might be true, but they don't sometimes ask like the second, third layer question to figure out if it is true. And so for me, deal reviews are all about asking your rep, who are we talking to? Who does that person report to? Were they there when they bought this system? Like, you know, a bunch of questions around who are they talking to? How do these decisions get made? What do they think the timeline is? Like, you're trying to basically poke a hole in this perf If you're just sitting there and your rep is like, hey, here's the next step and here's who I'm talking to, and, you know, it's all good. And you're like, okay, great. Sounds good. Like, let's go to the next one, which is what a lot of pipeline reviews look like. That's like zero helpful. You got create a relationship with your rep where you can poke holes at them, and they're trying to like prove to you why this is a solid deal and there's no friction there. They're like, hey, this is what my manager shows up to do. How often do we do deal reviews first? I mean, we have pipeline reviews every week at Rippling Recruiting. Okay, So

**Harry Stebbings** [35:35]:

pipeline reviews every week. Who's invited? Everyone from sales?

**Matt Plank** [35:39]:

I mean, generally, we're doing pipeline reviews with managers and rep in a one on one setting usually. There are times where we do a pipeline review. They might be with a manager and their team, but you can't sit around a 40 person segment and do deal reviews. Right? Like it won't be it won't be time effective.

**Harry Stebbings** [35:56]:

So we do it manager and rep, say so to speak. Okay, when we think about like an acceptable versus a nonacceptable reason for a deal to slip, what is an acceptable versus a nonacceptable If you're sitting down with me, a rep?

**Matt Plank** [36:10]:

The first thing I think about is like, what is the the historical tendency of like this rep? Because deals do push in sales all the time. As Parker would say, did it push or did it poof? You know, when I show up at the end of the month and I'm like, hey, like, you know, had a rough month, like, but we had some really good deals push. He's like, you know, I don't believe like every time you say that, they poof and they don't push, they never come back and blah, blah, blah, which is generally not true, but he's deep skepticism of that. And so, but you to look at a rep. Like, does this rep normally close deals in this timeline and this deal did push? Then like, that's very different than someone who's a perennial, like, my deals always push. And I think the thing you gotta you gotta help reps understand is deals that put like, a lot of times reps will think that a deal that pushed because of this person left the company or a new person joined or a budget, you know, dried up or whatever, they convince themselves that, like, hey, this is delayed. You know, Like, this is just delayed. Like, this new person joined and, like, they need they wanna make sure that they get a demo. And it's like, there's no such thing as like delaying a deal for like, those types of reasons. Like, you're starting over from scratch. You might not know it, but you're starting over from scratch. And so time kills all deals. And so you really want try to like, get them in not to like hit your quota so that you don't go on a pip or whatever. Like, you to get them in because over time, like, if we push as a company 25 deals in a month, like, for sure we're not closing those 25 deals in the next month. Right? Like, some percentage of them just do poof and evaporate. So, you know, there are good reasons, but like, I'll tell you the worst reason. The legal team didn't get the review done. Nothing, Nothing, is more frustrating than somebody being like the legal, their legal team, right? They didn't get the red lines done on time.

**Harry Stebbings** [37:47]:

Why is that so frustrating? Because that seems like it's out of the hands of the rep. They didn't control the legal team. That seems like a very bizarre negative externality.

**Matt Plank** [37:56]:

Well, I think it depends on so when when you well, first of all, for me, when a deal pushes, what that fundamentally means is that like you forecasted it to come in. Like, you said it was to come in and it didn't come in. And so if you if telling us and rolling a deal up that, hey, this deal is definitely coming in, like they just need to get red line signed. And a lot of times when you pro back in there, it's like, look, when did you send them the red lines? You know, they're like, yeah, they told me yes, you know, two days ago, and I got them the red lines the next day. And it's like, well, hold on, there's your problem, right? at the end of an evaluation, you should be asking somebody like, hey, what does the contract processing look like within your company? who's involved in that process? Who signs off on contracts? Does your legal team do a review for contracts of this size, whatever? And you to like parallel track those things so that someone's reviewing the terms of service. Like a lot of times you'll get the like vendor of choice designation before someone gives you the like, yes, send me the contract, I'm ready to sign. So you have to parallel track those, like, legal things, budget review. You can't just like, get a yes and then start all those processes over. And that's the number one reason why people push a deal, a committed deal, because of legal review is like, they just didn't run this in, like you know, they didn't run these parallel tracks.

**Harry Stebbings** [39:09]:

There's a lot of deals today, Matt, sadly, which are poof, which are gone silent, gone dead, budgets have gone. What's been your biggest lesson as a sales leader on how to maintain morale in volatile times?

**Matt Plank** [39:23]:

I think two part question. I think the first thing is I really believe very deeply in like a core thing that I had to learn over time. And one of the things going back to the beginning of our conversation, when you're like a deeply competitive person and you do expect to win and you really, hate losing, I can definitely tell you of examples in the past where I reacted poorly to someone that said no, right, or someone that or it was just like, it made no sense to me, and like my initial reaction was just like the wrong reaction, right? And it's very easy for even the best salespeople, because they're generally like the most competitive, can get like pissed off and react poorly on a deal. And I had to learn over time that, like, you have to literally, like, kill them with kindness. Like, you you have to make them when someone tells you no, it's like, hey. Like, thank you so much for your time, you know, evaluating Rippling. I know how busy you are. I'm sure doing all these evaluations was a total time suck for you. Thank you. so much for, taking the time. I would greatly appreciate any feedback you could give me. I'm always looking to learn. by the way, if anything ever changes, I hope that you're successful with XYZ vendor, but if anything ever changes, please just know that I'm here for you, blah blah blah blah, If you leave every single interaction with that type of mindset, I promise you, you'll get stuff that bounces back that you never expected to bounce back. They'll come back in two months, and they'll be like, hey, this competitor, like, lied to us. The implementation's terrible. There's a bunch of shit that they don't do that they said they did, but you have to leave it like that. And so I think on one hand, you to, like, make sure that you're not sour when you miss, and you, morale, it's like you're moping your head around and you're all frustrated and upset. like, that doesn't do you any good. It's a waste of time. And I think as a sales leader, you've got like, own the miss. Like, you can't play point you point fingers at people and that's the MO that you have as a leader, like, sounds very cliche, but it's like you gotta walk up there and be like, we like, we the sales org lost. I didn't set the team up successfully. Like, I screwed this up. Like, you gotta own it with the CEO. You gotta own it with the people down below you. And I think weak or like, insecure sales leaders will try to deflect blame to some other leader or the team or you train. It's like Parker told me once a long time ago, and I think something that really stuck with me, he's like, you don't get any credit for knowing how to do something yourself. Like, credit that you know how to do X, y, and Z. but your job as a sales leader is to get everybody else to do that. And so, like, you can't stand there and have like, my team didn't execute and be feeling like, dude, I told them exactly what to do and, like, they didn't execute. You know what I mean? Like, it's not me. I gotta get a new team or something. It's like your job is to make them execute. It's not to know what to do. You're the head of sales. Obviously, you should know what to do. That's table stakes.

**Harry Stebbings** [41:59]:

Matt, when you evaluate your go to market team today, we're sitting here, They got a fire beside us, a whiskey and a cigar. We're just like, shooting the shit now. Where are you like, oh, that bit is the weakest part of the go to market, and what are some lessons for you from that?

**Matt Plank** [42:14]:

Up until literally 18 months ago, I'd say up until two years ago. Up until two years ago, like, the sales org, myself and everyone that reported to me, literally never once thought about generating an outbound demo. Or even it was 100% demos pop up on your calendar. marketing does a bunch of stuff, inbound sdr, schedule them, and you just sit on, go up and you do four or five calls a day, and like that's all you do. Over time, we got to this, I mentioned this pinnacle point like two years ago, where AKA Ashley Kelly, we were like, oh my God, we have to do Outbound. We hired her. We like, you know, grew it from zero to 100, whatever. And, like, we started to weave into the culture, hey, Like, as a sales rep, like, you should care about where your pipeline comes from, but they still don't own it. Like, outbound SDRs own the quota. Like, they schedule the demos. If you're a rep at Rippling, you have zero actual prospecting targets. And so over time, it was like the whole sales which is

**Harry Stebbings** [43:08]:

because, like, actually, every guest that I have on the show says that a rep should be also responsible for leads and that you can't just be like, outbounds, feed me.

**Matt Plank** [43:16]:

Yeah.

**Harry Stebbings** [43:16]:

It's almost presumptuous.

**Matt Plank** [43:18]:

I understand that belief, and I think that Rippling definitely will, of course, get to some scale and, like, saturation of the market where that's kind true. But I believe that it is, like, critical to, like, avoid that as long as you possibly can. And the reason why is, like, we've done outbound in in different like segments. And every single time there's a funnel of like number of accounts you work, dials, emails, your call to connect rate, your connect the demo rate. Like there's this funnel that just, if you put all the things in the top, it just spits out demos. Every single time we look at a new SDR team, somewhere in that funnel is broken. They're not doing enough of this, enough of that. They're like called to connect. Like, there's always some part of it, and then you hammer it and you go fix it and you train on it, and then it turns green, and like all of a sudden they spit out demos. And in my opinion, you can get an SDR org to do that way, way, way more effectively than you'll ever be able to get sales reps to do it. So sales reps, what they want is they're like, give me a book of accounts that I can like control my own destiny, right, where I'm not like told I can't prospect, but, like, let me do something. But then when you give them accounts, like, without a whole bunch of structure and focus, like, they're not ever going show up and do the, like, the way the way that you manage a rep doing outbound is not the same as the way you manage an SDR doing outbound.

**Harry Stebbings** [44:29]:

You said that not doing outbound was a big mistake. What did you do that you wish you hadn't done?

**Matt Plank** [44:34]:

For the longest time up until maybe two years ago, like, I did the pitch decks with our CMO. Like, we'd be, you know, cranking away in the in the in the middle of the night, like, working on the slides. And then we roll out the pitch deck, and I do the trainings, and I do the script. And like, when you're an early stage company, that makes a lot of sense. And then all of a sudden, you get five segments, 10 segments, 20 segments, and, like, you're no longer the expert about all of them. And so I definitely held on to that, like, way too long, kind of being the, like, the number one person in the org who like, knew the script and the pitch and the competitors. And two years ago, I hired, like, my first kind of like, layer of just, like, really kind of successful VPs underneath me. And then over time, now it's like I literally don't even think about those things. Like, I was completely owned by the VP of SMB or the VP of in-market market or whatever. And I should have done that, like, a lot sooner because what happened was we would be doing deals or we'd have we'd have a deck that sucked, and I'd go look at it, I'd be like, this deck is terrible. Like, this is This feels so stale. Like, how does how does the SMB org stand up and, like, give this deck every day? Like, it's so bad. You know? This is 18 months old. And there was just a general thinking of like, well, you made the deck. Like, you authored this thing, and I'm like, no. Like, you guys are better than me at all of this stuff. Like, you're doing it all day long. Like, everybody should feel empowered to be like, this thing that you're telling us to do is dumb. It doesn't make sense. It doesn't work. And I don't think I, like, inflicted that, like, early enough in enough places. And today, you know, my team is a lot more useful than I am in terms of actually winning business and bringing customers on board.

**Harry Stebbings** [46:03]:

When we look at revenue, what's the revenue makeup between SMB, mid market, and enterprise?

**Matt Plank** [46:08]:

It's a tough question to ask because we have like direct segments, channel segments, product segments, like there's literally 50 segments, and so but like at the end of next year, my SMB, market, and enterprise teams will all be like roughly the same size, probably like SMBs maybe 60 reps, mid markets maybe 90 reps, and enterprises maybe you know, 40ish reps or something. But that's 150 reps and there's probably 300 reps across the board that are at different types of places. So it's kind of a mixed bag.

**Harry Stebbings** [46:38]:

Okay. But is it like 30, How do you think

**Matt Plank** [46:42]:

about that? The fastest growing segment for sure is our upmarket segment. We were moving that market very quickly and used to not compete with the Workday's of the world, and now that's weren't a lot of deals with them. And so that piece of the business is, and if you're to grow 60, 70, 90% year over year at hundreds of millions of dollars, like you have to be able to have some things that are growing 200, 300%. That's the only way you'll maintain the growth rate. And so I'd say our upmarket teams are growing a lot faster. What's not growing fast enough today? I'm thinking about Parker would probably say everything, but I think probably international, to be honest. In international, we teams now, go to market teams in Dublin selling into Europe. We've got a team in Sydney selling into kind of Australian market. There's a bunch of international teams in place where we feel like we have incredible product market fit. We're trying to crack the code of like, you can't just land in these places and run all the same playbooks and do all the same stuff. And so I think our growth internationally is like there could be explosive growth and there will be soon, but we're still kind of tweaking the ingredients a little bit. Why do you think that hasn't gone to plan? When you enter a new market, everything is way more expensive. Is big like, when you're an early stage company, efficiency doesn't really matter. Like, you don't even have a business. right? Like, it's not about how efficient are you. It's like you're just trying to win any way possible and you're losing money and all that good stuff. As you get to be larger and you're our size, all of a sudden efficiency is like the number one constraint. Like, there are things that we could go do to win more business in places that we don't do because we couldn't do it efficiently and we're not trying to light money on fire. And so in The US market, there's all these other things. There's organic. There's brand. There's all this like free, you know, like accrued benefit over time. And so you can afford to go pay money and do different things to acquire leads in more expensive ways. When you go internationally, all you can do on day one, right, you can go put money in the LinkedIn machine or the Facebook machine or the review sites or whatever, and you can get demos, but like you don't have all of the like, easier, more free stuff to like blend the portfolio into something that works. And so your growth is just like it's a little bit stunted if you want to grow efficiently. Like we don't get to grow in these markets the same way that early stage companies do who don't really care that much about being efficient. Like we do care about being efficient. And so there are kind of these, you know, guardrails that we have to operate within. And so that has made growth a little bit slower than it would have been.

**Harry Stebbings** [49:11]:

Why be there a tool? Let's have this thought exercise. You have a lot of markets still to get in the US. You've got a lot of products that you can, you know, bluntly expand penetration across. Why why bother with Australia?

**Matt Plank** [49:23]:

I think one, all of the non US markets, like starting with Canada and for sure in Europe and APAC, like their HR software landscape is at least a decade behind where the US is. Like in the US, you have 10 plus major public company payroll providers, right? Like there's just an enormous, you've got all these IT companies, like all the ramps and Brexes of the world. Like, it's a deeply competitive market. And internationally, pretty much in every country, whether it's, you know, the UK or or France or Germany or Australia, whatever, there's literally like two people at max that are in that space. And one of them is, like, a completely old, archaic, like, awful system, one of them is like a brand new startup that's modern and easy to use, but has enormous issues kind of supporting all the different various use cases, large companies, whatever. So there's just those markets are extremely ripe for disruption, and I think we have a really strong product market fit. And then there's a bunch of other things where, like, you know, we do really well with multinational companies in all those markets. But then

**Harry Stebbings** [50:28]:

it's like, why is it not working then? Because it's like I'm Matt, I say this, we're ideating here. Like, the efficiency side, I kinda get, but I kinda don't, dude. I'm an investor in early stage companies, and we compete with Rippling, it's like oh, fuck. These Americans have so much more cash than we do. Yeah. Like, you have so much more money than us.

**Matt Plank** [50:47]:

Efficiency. Well, so so a couple of things. One is it is working in the sense that like the win rates are really good, the ACVs are really good, all that kind of stuff. What what is scaling slower than you would like is pipeline generation and top of funnel, and that's because no matter how much money we have, we could be sitting on a billion dollars of cash. Like, we are not going to go invest in top of funnel that is inefficient just to grow faster. Like, that's just like our guardrails. There's a certain cat payback.

**Harry Stebbings** [51:16]:

Why not? Because that top of funnel that's inefficient can increase efficiency over time as you build word-of-mouth, local brand, network effect within nations. Is there not a time where actually you spend always inefficiently at the beginning as you did in the US to get more efficient over time?

**Matt Plank** [51:36]:

That's certainly a way to do it. I would say that we are pretty disciplined in the kind of finance function at Rippling to not get the cheap thrill and go sink a bunch of money into these markets. Because the reality, it's not just that it's inefficient, it's that we don't know exactly what works. right? It's not the same playbook, the growth playbook is not the same. And so, you could think that you could convince yourself that you could spend inefficiently and of course it'll work because it works in the US, but like you also might just light a ton of money on fire and like your whole strategy just might not work at all for a long time, whatever. And so I think really the answer for us as like outbound has been the thing that we've been able to scale the most because all of the growth demand gen stuff is expensive when you can't offset it with referrals and mouth, whatever. And so the outbound thing is working really well for us, but, like, you gotta hire 20, thirty, forty, fifty outbound SDRs. You got to ramp them. You to train them. Like, it just takes longer to ramp the engine when you can't just go spend a million dollars, you know, on kind of, you know, paid advertising and and get a bunch of demos that show up.

**Harry Stebbings** [52:38]:

I totally get you. you. mentioned the word playbook there. I'm constantly oscillating on this one. Should the founders be the one to create the playbook in the early days, or is it okay? This is where Chad Peets did say this. He was like, founders, they're not the ones to create the playbook. And you know, you were with Parker from like basements. You know, we talk about expanding in Australia now with, you know, the huge scale of Rippling. But you were there from the beginning. Should founders be the one to create the playbook, or should it be a

**Matt Plank** [53:04]:

revenue leader like you? Founders definitely should not create the playbook. And I would say that Parker is like exceptional, like go to market CEO. In fact, I think one of his strengths is like, that he really like is the main product kind of roadmap guy. Like, vision, you know, his product vision is is really strong. But on the go to market side, like, that guy can sniff out, you know, bullshit from anywhere. Like, he knows just like all the places to poke, all the weak spots, all the bruises. And so Parker is like involved in go to market. Is this really working or are you making it appear as though it is when it's not? Having said that, he would never want to like, You need to do it this way, pitch people this way. And I think the reality is Parker is the best at articulating like, why somebody should care about our product, like, why they should want our product, why did we build it this way, what is all where are all the benefits of building it this way. There's no one that does that better than Parker, but he's he doesn't think like our buyer. You know what I mean? Like, he doesn't he doesn't know how to transform his like, brilliant thought into like, a consistent, repeatable sales playbook. He doesn't not do that. Like, that's not his thing. And so he's involved in the direction. You know what I mean? Like, he gives a lot of feedback. He's he's kind of like, this is what I think. But if I push back on him, you know, there's friction and it's good. Like, friction is good and that kind of stuff. But eventually he'll get to a point where he's like, okay. Okay. Okay. that makes sense. He'll start from a place of extreme pessimistic view. Like, I think that's wrong. I think that's wrong. Here's why. Here's why. And then if you, like, defend the position and you convince him of why you think your way is the right way, eventually he'll just be like, okay, that makes sense. You, like, convinced me that that's better you should do it that way.

**Harry Stebbings** [54:41]:

Okay, so founders should not be the ones to create the playbooks. So as a founder of an early stage company, you should hire a salesperson from day one?

**Matt Plank** [54:48]:

When you're a founder from day one, I first of all, I think you should hire salespeople way sooner than conventional wisdom. And And there's a lot of salespeople that will tell you that that's not true. Like, hey, you're a founder. You got make sure that you can sign customers up and you have product market fit. Like, don't hire this poor VP of sales to come in here who will never be successful because your product blah, blah, blah, blah, right? I don't believe in any of that. Like, I believe that I mean, I started at Parker's house when there were four engineers literally in the basement of his house. Like there were no customers. There was no CRM. There was no anything. Granted, like me and Parker had a relationship. And so like, would I have done that with a stranger? Like, probably not. But I knew that Parker was gonna, like, build the right thing. And I knew that he needed me to, like, help him figure out, like, one, like, do the sales so that I could take that off his plate. But there was a trust there of like, as we're building stuff and you have constrained resources and engineering, like, what is the most important thing to build first? Like, how do you sequence the things we need to build? And a good go to market leader that you trust will help you figure that out. You know what mean? They're part of that journey. And so I think you should hire a sales leader very early on. You probably should have some customers that have paid you some money, but I think founders way too long to hire a go to market. And I think they do that because they feel like they can't hire a good salesperson potentially without a bunch of traction that maybe. believe

**Harry Stebbings** [56:07]:

Okay, we hire them a little bit earlier. Let's go with that, Matt. Should we hire juniors or like a senior sales leader who builds the team around them?

**Matt Plank** [56:16]:

You want hire for slope, right? Like, you to hire for how steep you think somebody is going to be able to kind of grow and scale. Like, the number one thing that I look for, I think if you're looking for an early stage sales leader, there's a bunch of things that we could get into. But I think one of the things that stands out is you want somebody who has been rapidly promoted at the same company two or more times. Like that ingredient And what I mean by that is if you're an account executive for a year and then you're a sales manager for like nine months and you're like a director of sales for like a year, when you look at high growth companies that are just like growing super fast, right, whatever all of the historical SaaS companies you might wanna go look at, back. where should I hire someone who worked at a high growth company? And you find somebody who was promoted multiple times. There are lots of people that get promoted once, and it's a mistake. Right? Like, they're not good at being a manager. They want be a manager whatever. But when you find someone that's been promoted two times at the same company, it's like an immediate signal that person is good. Right? Like, you don't get promoted twice at high growth companies if you're not good. And when they've done it in rapid succession, right? If it's like three years in this role, three years in that role, three years in this role, it's like, okay, that's good too. But there's nothing better than like one year, one year, one year, It's like that means you promoted them. They took on a bunch of new stuff. It was growing. Everything was broken. They didn't know how to do it, and boom, they solved it, and now they're onto the next role. And so I think you find people like that, then they may top out at like their experience has only been a director of sales of a 20 person team or something. And it's like you don't need more than that when you're building a company from scratch.

**Harry Stebbings** [57:48]:

Do you agree with Jason who says Lankin, that is, who says you'll never be able to get the all star VP of sales to join your little company? They've been through it once. They're not to go through it again. They'll join you at million ARR, maybe, maybe, a million ARR, but they're not to join your 1 or 2 or million ARR company.

**Matt Plank** [58:07]:

I think that's exactly right. I mean, in fact, I'll give you the perfect example. Like, when Parker started Rippling, who's the first person he wanted to hire? Like, it was Sam Blond. right? He's like, I want Sam. come work here with me. And Sam was like, no, man, Like, I can't, you know, I can't do it again. You know, And I started, you know, Sam hired me at Zenefits and I started there as the, you know, 25th and Plaza account executive. And so I had kind of grown up in the underneath kind of like Sam at the org. And so when Parker was like, okay, Like, Sam's not the guy who's to come start in the basement again for a second time four years later, he immediately went to like, the tree. right, Like, you know, what's Plank doing? What's Jameson doing, who, you know, built Gong for many years and now works at Rippling. So he picked like, both of us

**Harry Stebbings** [58:49]:

what's exceptional about you? And you know this as well, so this is probably me telling you You don't normally last. You normally fall out of this tree at million in ARR in Rippling's journey. I don't know what your ARR is and I'm not asking because it's private, but you guys have done unbelievably well. Normally your profile has fallen out five years ago. What have you done to scale with the company in a way that no one does?

**Matt Plank** [59:16]:

I mean, look, like the first thing is, generally speaking, if you are successful on the whole journey, then there's only like one reason that you don't make it. Like, if you're successful, it works. And Rippling has been fortunate to be successful. And like, yes, in some part, do I feel like I run sales and I own some of that? Yeah. But we've been successful for a million other reasons are not me, right? The product that we built, the marketing team we have, all these other things, right? But I think when you are winning, the reason that you top out and some companies, right, they're winning, they're doing pretty well by all metrics, but then they're like, but we gotta go hire a CRO because this person is like, we're doing great, but they're not gonna make it. 100% of the time it's because you can't hire people that are better than you or overqualified. Like, you can't hire people, and the biggest thing is you acknowledge the organic growth that you built. So for example, like when you grow early on, you're gonna promote a bunch of people. Managers become directors, like all this stuff. Right? mean, you look across your, you know, ten, fifteen leaders that you've built that are all homegrown and organic. Right? You're a 20 whatever. You haven't hired anybody from outside the company really. You know them so well and you like, yourself that there are not gaps and they're all gonna scale. And it's just they're not all going scale. And so you to be able to go to that person that you brought over from your previous company that's done really well and know when they're, like, hitting a breaking point where they can't scale, and you've to be able to, like, layer them in a way where hopefully they stay at the company.

**Harry Stebbings** [60:43]:

Final one for you before we do a quick fire. What is the biggest signs that someone is not scaling? How does that most often show itself?

**Matt Plank** [60:51]:

I think when someone is not scaling, there are two things. I think one is they end up becoming like they're leading from the back and not the front. And what I mean by that is they believe that their job now is to tell people what to do because they've done it, but they don't believe their job anymore is to do it for them, show them how to do it, be involved in leading the way and being like, Everybody follow me. And they just kind hit a point where they, like, they kind think that being a director or a VP or whatever means that, like, all of a sudden you don't have to do that stuff anymore. And usually when that happens, they start to lose the locker room. And, like, even if it's a winning team, their team starts to not really like them. It starts to fall apart and kind of flounder from there. And you can't come back from someone who loses like an organic promotion who was amazing all the way through, but then they lose the locker room because they think that that's not my job anymore. I think that's it.

**Harry Stebbings** [61:47]:

When was the closest time you felt to losing the locker room?

**Matt Plank** [61:51]:

It was around the time where kind of, know, speaking to this, it was it was at a point in time where there were people that reported into me, you know, who had maybe lost the locker room a little bit, or at least when anybody is questioning, like, is my manager or my director or whatever, are they scaling with me? right? Like when anybody starts to question that, they immediately look to the CRO and they're like, what's the CRO to do about Right? Like, is this person going to, kind of let that fly because they know the person, they've been here for a while, whatever. And a lot of companies, like that's what happens. And so I think for me, like you first see with your own eyes, like there's a problem here and I'm giving the feedback, but like it's not changing. But then you start to like feel that like other people like see that. And if you don't take action like very quickly when those things start to fester, then like that's how you can lose the locker room. Like people need to know that you're willing to like just like every rep, right, is like, if I don't hit my quota, then like, I'm gone. Everybody knows that, right? If you're a manager, your team doesn't hit your quota, it's like everybody feels that performance culture. But there can be a moment where you get so high up in an org chart that people start to feel like, you know, when things are failing, like, nobody blames the person that runs that thing, right? They blame everybody else. And like, that's a really bad place to be. Dude, I could talk to you all day.

**Harry Stebbings** [63:04]:

I've so enjoyed this. So I'm to do a quick fire with you. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Yeah. Which competitor do you most respect and

**Matt Plank** [63:13]:

why? I think maybe I would say probably like in the HTM space, maybe like Paylocity is, you know, of the legacy competitors. Like, they generally seem to be people we see in most of the deals. You know, they do a good job, I think, of selling around their their product gaps potentially. There's other players in, you know, our product suites. at one point. Is there

**Harry Stebbings** [63:33]:

a player where you're like, they're in here. We got this covered. We're to sweep the floor with them.

**Matt Plank** [63:38]:

You know, I guess maybe when I think about competitor I respect the most, I think of it mostly from a go to market team perspective. And so I think when we lose to a legacy payroll provider, I'm kind like, damn, we got outsold. I know our product is better than Paylocity or ADP or whatever. And so you know, when we're in a competitive deal and it's neck and neck and I'm just like, man, like, they must be doing something good on the go to market front to make up for like, all of the like, horrible blemishes that exist under the surface of that product when you actually use it. It's true, respectfully. that's all on you.

**Harry Stebbings** [64:09]:

you when Yeah. Agree. Like an ADP, it's like

**Matt Plank** [64:13]:

It's yeah. It's like you should really look in the mirror and you know, you should really take that one on the chin for sure. Tell me, what sales tactic has not changed over the last five years? I think more so now than ever, Like working your ass off and hustling is like has always been able to get you ahead, but there was a culture pre COVID where that was like table stakes and what everybody did and you were in the office all the time and you showed up at eight, and you left at six, and it was just like everybody did that, it was obvious. And I think over time now, the true, like I just like and it's not like I work on the weekends and I work all night. It's like when I'm like in the walls of like the arena, I am like million miles an hour grinding, just like working my ass off as fast as possible to just like do more output. I think that is, like less common than it used to be or is more of a, you know, is more of like an advantage than maybe it once was. When are you to go

**Harry Stebbings** [65:06]:

back to all in person?

**Matt Plank** [65:07]:

You know, candidly, like, I really miss the days of being like the vibe that's in a company when like you're all in there on the same days and whatever. I think having said that, I mean, we are. Like, we're If If you're in an office for us anywhere in the country, like, you have to be in the office three days a week. But we do have people that we've hired remote across the world, really, and, you know, we have access to better talent and all that. So I think the remote people are part of the company culture. But I mean, if I could wave my magic wand and keep the people I have and force them to come to an office, like, I would do it in a heartbeat. I believe that we've lost something over the years of, like, not having the same, you know, company culture of an office.

**Harry Stebbings** [65:46]:

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

**Matt Plank** [65:51]:

You really should work for a CEO whose ambition and expectations make you deeply, deeply, uncomfortable. The the best coaches in the world, right, like, your they're best friend. Like, they coach you, and they're like, you know, if you look at the whatever, all the different people, the Nick Sabans, the Bill Belichicks of the world, right, like, you have to want to work for someone that demands greatness every day, often is completely unreasonable, feels like is unfair and all this stuff. Like, you're gonna get more out of yourself by working for someone like that than you would ever possibly get by thinking you can push yourself that hard. And so for me, it's like, don't work for a company because you think it's It's chill or it's easy or like, the CEO gets it and they're not, you know, a huge, like, go to market, they're not to bust your, you know, ass all the time to go to market. It's like, work for someone who you kind walk out of there and they're like, man, that guy was intense. Like, I don't know. Or or woman was intense. Like, I don't know. You know mean? That might be uncomfortable, right? Like, you should feel that when you're gonna go work for a CEO.

**Harry Stebbings** [66:51]:

Final one for you, Matt. What company sales strategy have you most been impressed by recently where you've gone, that's good?

**Matt Plank** [66:59]:

I mean, honestly, I think for us, it's more of like a macro strategy of like breaking up our sales org, right? Like at one point we had reps who sold all of the products at Rippling, and when we finally got to a point where we launched our, you know, spend management suite and I had a rep who had like their 12th product that was competing against like a rep at Ramp or Brex, where like all they sold was that very specific thing and just asking my rep to like be able to compete with that rep when they had 12 other products they needed to sell, it just became clear that the cup is too full here. We can't put more knowledge in the sales rep cup. and we need to basically carve off this kind of product account executive model and then build this like, you know, culture of like partnership in those deals so that when you're a new logo and you want buy HCM stuff and spend stuff, like, you know, there's two people working together, and we kind of splintered that off now in a bunch of different places, and had we not done that, we never would have been able to compete in these kind of like hyper competitive, like vertical spaces like finance and global payroll. And you know, we've done a really good job in those spaces by being able to do that strategy, which is operationally very complex, but, like, my RevOps ops team kind makes it, know, takes it on and makes it happen.

**Harry Stebbings** [68:10]:

Matt, listen, I've so enjoyed this. I so appreciate you being flexible moving with the schedule and you've been a fantastic guest, dude.

**Matt Plank** [68:16]:

Awesome, man. I appreciate the time, Harry. Thanks for having me and hopefully we'll do it again sometime.

**Harry Stebbings** [68:22]:

I mean, what an incredible GTM motion Matt has built at Rippling. If you to see the video, then you can check it out by searching for 20VC on YouTube to see the full interview in video. Now before I leave you, one of the easiest investment decisions I have made over the last three years is investing in 11X. Their digital workers don't just automate tasks, they transform your business. With 24-7 7 operations, multilingual capabilities, and human like intelligence, they're revolutionizing how work gets done. From prospecting to closing, 11x is the all in one platform that allows you to reduce costs, increase pipeline, and boost conversion rates. And that's why companies like Pleo, Handshake, Sourcegraph, and more are customers and lovers of 11x. Check them out today at 11x.ai. You will not regret it. And speaking of incredible products, AppSumo started with one simple idea. The tools you need to grow your business shouldn't put you out of business. That's why they work directly with developers to get exclusive discounts of 80 to entrepreneurs half 80 to 90% off software, saving entrepreneurs over half billion since 2010. Some of the biggest names in tech like Mailchimp, Zapier, and Dropbox got their start on AppSumo. And with a rotating selection of hundreds of tools, you'll find all the software you need to make your life easier in 2025. Plus, with a 60-day day money back guarantee, you can try any tool risk free. Start the year off with savings. Get 10% off your first order with the code 20 lowercase v VC and a free tool exclusively for 20 VC listeners. That's code 20 lowercase VC for 10% off, plus a free tool at appsumo.com. As always, I so appreciate all your support, and we are taking a little bit of a break for the Christmas period, but we will be back on January 6th with a set of incredible episodes on 20 VC.