The Science of Scaling · 4 Jul 2024
There Is No Post-Sales in SaaS w/ Sangeeta Chakraborty (CRO, Miro)
These are notes on the conversation, checked against its transcript. The episode itself has the full discussion.
In brief
Sangeeta Chakraborty, CRO of Miro, joins host Mark Roberge on The Science of Scaling. She started in customer success and previously worked at Okta and Checkr before Miro. The conversation covers how product-led companies should bring in sales without damaging their PLG motion, including hiring, compensation and the handoff to enterprise selling. The central argument is that a PLG company needs a clear enterprise value, such as protecting IP at Miro, and incentives tied to end-customer value before it adds sellers.
For founders
- Before adding sales to a PLG product, define the enterprise value clearly, because otherwise sellers will pitch prospects who are not ready for it.
- Hire sales leaders who share the company's shareholder-style value system, since the same risk of culture damage applies to any hire.
- Before product-market fit, sellers are better paid salary plus equity than on commission.
- Map the user and buyer journeys before a seller joins prospect calls, rather than having the founder tell the founding story and ask for the sale.
- Channel founder passion into fundraising and hiring, and keep it out of customer meetings where it can drown out what customers are saying.
For revenue leaders
- Tie variable pay to a leading indicator of retention in the first month rather than to a share of customer payments.
- Consider paying half of commission at contract signature and half when the retention indicator occurs.
- Keep CSM and expansion responsibilities together rather than in separate silos.
- In PLG-led sales, outreach to users should focus on showing them how to use the product, with the pitch aimed at the economic buyer.
- Sell enterprise value to the economic buyer rather than to the frontline users already on the product.
What was said 17, most useful first
Before product-market fit, sellers should be paid salary plus equity rather than commission Listen
Mark argues that while a small R&D team is still iterating toward product-market fit, a commission plan is unfair, because sellers would be paid half base and no commission while everyone else iterates on salary. He says to put sellers on salary with equity, and that if they care too much about making money and upside at this stage, you have hired the wrong person, because the role is about exploration and curiosity in finding PMF.
“Just put them on a salary with equity. Like if they care too much about like making money and upside, you hire the wrong person.”
Listen to the episode Sales team, hiring & comp Link to this Report a problem
A percentage of customer payments would reward sellers for collecting money, so variable pay should be tied to a leading indicator of retention Listen
Mark says paying a share of the monthly or annual customer payment would let sellers collect every month without doing anything. He argues sellers should feel the pain of a missed month or quarter and the upside of a strong one, so the plan should carry end-user value back to the point of sale. The leading indicator is the action a customer takes in the first month that predicts they will stay. He gives HubSpot's five or more features and Slack's 2,000 team messages a month as examples.
“we can't pay them like a percentage of the monthly payment from the customer or the annual payment from the customer, because then they'll just be like collecting money every month without doing anything.”
Listen to the episode Sales team, hiring & comp Link to this Report a problem
Pay half of commission at contract signature and half when the customer reaches the leading retention indicator Listen
Mark offers this as a comp plan structure. He says he does not know Miro's leading indicator, so the example is hypothetical. He frames the aim as short-term focus at the point of sale while aligning the plan with customer value.
“Hey, you get paid half your commission when you, they signed the contract and half the commission when the lead indicator of retention occurs.”
Listen to the episode Sales team, hiring & comp Link to this Report a problem
At Miro, the enterprise upgrade is justified by protecting the IP teams create in the product Listen
Sangeeta says Miro's large user base, which she puts at 75 million users, uses the product to bring products and services to market, so it creates valuable IP. The enterprise value is locking that IP down. Miro adds admin and security features that matter to large organisations, such as ones with 15,000 or 60,000 people, while a small team of 10 does not need them.
“But the value that you're getting is locking down that IP that you need to protect.”
Listen to the episode Pricing & packaging Link to this Report a problem
Without a clear enterprise value, a sales team added to a PLG product will pitch prospects who are not ready to buy it Listen
Sangeeta says the PLG magic is at risk if the business has not figured out its fundamentals: a PLG system that drives value, which the company then monetises. She says that without clear enterprise value, the sales team will go into prospects that are not ready for it, and that the incentive structure also has to be clear to drive the right behaviours.
“Then yes, the sales team is going to start going into prospects that are not ready for enterprise value.”
Listen to the episode Strategy & market Link to this Report a problem
Strong PLG sales leaders are curious about how the product works, come in as learners, and share the company's value system Listen
Sangeeta lists three attributes for sales leaders in a PLG company: deep curiosity about how the product works and the value it drives, which means thinking like a shareholder; coming in as a learner without fixed preconceptions; and understanding the company's value system and wanting to be a value-centric leader. She says the best PLG sales leaders bring what worked before when the time comes, but first learn what is needed. She says the value system is the foundation, and without it the other two are hard to deliver.
“the best PLG sales leaders are the ones that say, I know what has worked there. I wanna bring that when the time comes in, but let me first understand what is needed here and how I can be the best at learning fast.”
Listen to the episode Sales team, hiring & comp Link to this Report a problem
In PLG outreach, after discovery the next step is showing the user how to reach their goals in the product, not a tailored pitch Listen
Mark describes outreach to a user who has downloaded the product, where discovery asks what made them download it and what problems they are pursuing. In sales-led growth the next step is a tailored pitch for a contract, while in PLG the next step is showing the user how to use the product to achieve those goals. The follow-up hopes for a monetisation or enough usage to take the pitch to the economic buyer.
“In product led growth, you're showing them how to use the product to achieve those goals.”
Listen to the episode Sales process & deals Link to this Report a problem
Companies that bring sales into a PLG product often ask their sales leaders to keep the value in the free product, not the enterprise tier Listen
Mark says he received calls from the first sales leaders at Shopify, Zoom, Asana and Dropbox, and he knew what was coming because those companies did not want to put value into the enterprise product. He says they wanted everything kept in the free tier. He presents this as a common pattern in PLG companies.
“They don't wanna put any value in the enterprise product. They wanna keep everything in the free.”
Listen to the episode Pricing & packaging Link to this Report a problem
Go-to-market should be treated as a product that moves through alpha, beta and live stages Listen
Sangeeta says go-to-market could do better at taking a product lens and applying it, because the go-to-market function is itself a product. She describes it starting at an alpha stage, being tested, moving to beta, then going live, and trying a new place. She says that talking to product-founder CEOs through a product lens, even about go-to-market, fosters mutual understanding.
“That go-to-market function is a product that is going to start from some alpha stage. You're going to test it, you're going to go to beta, then you go to live.”
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Founders should keep their product passion out of customer meetings where it can drown out what customers say Listen
Sangeeta says founders' passion and evangelism are needed in fundraising and hiring, but in customer meetings that intensity can drown out the voice of the customer. She coaches founders to tone it down and focus on listening, to find the fastest route through the go-to-market journey.
“But if you bring that intensity into a customer meeting, sometimes you're actually drowning out the voice of the customer.”
Listen to the episode Sales process & deals Link to this Report a problem
Founders should map the user journey and the buyer journey before a seller joins prospect calls Listen
Sangeeta says the first step is for the product CEO to work out the journey and break it down in plain terms rather than in internal jargon. Buyers only buy when they see a problem that resonates, there is budget, and they understand how the outcomes will arrive. The team tests the journey, learns where the friction points are, and removes them.
“The way I've got about it is, the first understanding is for the product CEO to figure out what that journey is. If you tell them, here's a user journey. Similarly, here's a buyer journey.”
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The common early mistake is for the founder to tell the founding story on a seller's prospect call and then ask for the sale Listen
Mark describes a version 1.0 pattern in which a founder hires a seller, brings them onto a prospect call, tells the founding story and product vision, and asks whether the prospect wants to buy. He says founders expect sellers to do that, and that this is not how sales works.
“founder hires seller, seller brings them on to a prospect call, founder tells the founding story, tells the vision for the product and says, do you want to buy?”
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Customer success and expansion should not sit in separate silos, because that sets up conflict over who owns growth Listen
Sangeeta says the first step is getting CSMs to think about how the business grows. Keeping CSMs and sales in separate silos creates tension, because leaders want CSMs to help with expansion while CSMs say that is not what they are paid for. She adds that the wrong incentive structure can destroy culture.
“Putting them in very different silos creates a lot of tension within the system because he wants the CSM to help with expansion activities and the CSM says, hold on, that's not what I'm paid for.”
Listen to the episode Retention & customer success Link to this Report a problem
Sales leaders should be hired on the same shareholder value system as the rest of the company Listen
Sangeeta says a strong value system lets people think about the company first rather than their function, and that it should carry into sales hiring. She says the CEO must maintain it and every leader must keep building teams around it, because a wrong hire can damage culture in any function. She calls this the most important attribute she looks for.
“You're not hiring the bros that are buying for us. You're hiring people that are also shareholders.”
Listen to the episode Leadership & culture Link to this Report a problem
Enterprise selling starts by uncovering the pain more deeply than the customer first describes, then painting a vision of the outcome Listen
Sangeeta describes the enterprise method: uncover the pain more deeply than the customer first says, paint a positive vision with the implications of not acting, and show what the product needs to succeed. The result is a business case for the executive buyer, a timeline worked backwards from the outcomes, and metrics that show success. She calls it a tried and tested sales methodology.
“So the net result is you're painting a vision, you're helping the customer understand the exact characteristics of how this process would look like, you also help them understand the metrics that will show success.”
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In a PLG company adding sales, the salesperson should call the economic buyer rather than the frontline users Listen
Mark says there is no incentive for a salesperson to call the frontline user. Instead, they pitch the economic buyer on an issue such as 5,000 people using the product without it being secure or integrated. He says discovery is then needed to see whether that is a real pain point for the buyer.
“They're really calling the economic buyer and pitching that.”
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Keep PLG velocity, and supplement it with CSM and sales coverage to understand what customers are doing Listen
Sangeeta says an enterprise customer must be understood to grow and help it. She says the velocity of PLG should be kept and accelerated, but supplemented by traditional CSM coverage and the sales-led motion. She felt that at Miro's stage of growth the company should know much more about its customers than it did.
“there's a velocity that comes with the PLG motion that you want to then continue to accelerate, but that needs to be then supplemented by the traditional CSM and the SLG motion.”
Listen to the episode Retention & customer success Link to this Report a problem