56 min read
The best sales people understand the psychology of sales… and the best sales leaders understand the psychology of leading a successful GTM organization. Tomer Chernia, SVP Sales at Vercel has mastered both.
In this episode, he takes us through his sales and leadership strategy, which scaled Vercel to $100M ARR at breakneck speed.
- The key to sales outreach that unlocks every buyer profile and market segment
- Vercel’s unique mock pitch process uncovers what hiring managers really want to see
- Reconciling team morale with the board’s demands to conquer higher revenue targets
Time-coded show notes:
00:00 — Introducing Tomer Chernia, SVP Sales @ Vercel
04:00 — From selling MarTech to open source DevTools
07:04 — Selling and outreach to the open source community
13:42 — Splitting up territories and deal complexity
19:13 — Profile of salesperson that succeed in Mid-market and Enterprise
22:25 — Sales hiring in hypergrowth
27:54 — Remote vs In-person culture and performance
40:05 — Investing in the success of the sales team
44:36 — How to think about quotas and compensation
48:59 — Balanced and thoughtful growth plans
54:17 — Lightning round: sales as a super power, controversial advice, best fictional sales person
Full transcript:
00:00:00:01 - 00:00:19:04
Tomer Chernia: Every strategy comes with the trade off right? And every direction. You set goals that are too high and everyone's at 20 or 30% of their target. Guess what? You lose a lot of these fast growth comes at a cost. There's a lot of downside to growing really aggressively and like pushing your team to grow aggressively. I think the things that people miss is like, oh, we just set aggressive targets and then you get even if you get 70% of the way there, that's good.
00:00:19:04 - 00:00:36:06
Tomer Chernia: I'm like not sales is there's a psychology to it, right? Your team needs to feel empowered to charge the hell. They need to believe they've got the best technology in the market, and they're solving real problems for their customers that they've got a shot of success that's lost. Oftentimes in the boardroom, no one's like, oh yeah, I really want my salespeople to have confidence when they're going into their meetings.
00:00:36:06 - 00:00:44:19
Tomer Chernia: But I think it's an important detail for those of us who are people managers are.
00:00:44:21 - 00:01:06:12
Sahil Mansuri: Hi, and welcome to another episode of the Bravado Pod. Today I am so excited to have my dear friend and fellow wine natural wine connoisseur, foodie nerd Tomer Charney. The legendary SVP of sales, Adverse cell. Tomer, welcome to the Bravado Pod.
00:01:06:12 - 00:01:15:14
Tomer Chernia: Oh, I thank you very much. And legendary. Let me tell you, my wife saw, I think, your LinkedIn post. And she's like, legendary does even know you.
00:01:16:19 - 00:01:19:06
Tomer Chernia: Thank you for that. Yes. Glad to be here.
00:01:19:06 - 00:01:24:18
Sahil Mansuri: Excited. I mean, we certainly had a legendary bottle of wine. Is true.
00:01:24:19 - 00:01:25:12
Tomer Chernia: This is true.
00:01:27:00 - 00:01:34:20
Tomer Chernia: You did, you did. You plied me with, you know, some beautiful grilled octopus and some great wine. So, yeah. Excited to be able to to chat.
00:01:34:22 - 00:01:54:00
Sahil Mansuri: I'm so excited, man. And, you know, the context for this pod again, for those who are, listening in for the first time is that there are so many companies out there that are facing similar challenges where they've hit a certain milestone, a certain inflection point at their business, and now they're thinking, all right, how do I get to the next stage?
00:01:54:00 - 00:02:12:22
Sahil Mansuri: And, you know, with Tomer, the thing I really want to talk about is, you know, when you're at that 15, 20 million RR phase and you're trying to scale to the 100 mil plus phase, of the business, what do you need to do? What goes right, what goes wrong, what breaks? How do you fix it? What are the things to look out for.
00:02:12:22 - 00:02:30:17
Tomer Chernia: As we gear up? For public company readiness, material, financial disclosures. There's something that our team pays close to that to do. So, you know, responsible Tomer will kind of make sure that I share what I can hear. The team was roughly, you know, 20 something, I days when I joined. And now the team is just shy of 200 and slated to grow pretty aggressively in the coming year.
00:02:30:18 - 00:02:37:10
Sahil Mansuri: Got it. And roughly what RR were you at when you joined? And I know there was a public number that you shared a little while ago.
00:02:37:10 - 00:02:45:19
Tomer Chernia: Yeah. In May 2024, we crossed the 100 million, our, our mark and, growing, aggressively against that number even to this day.
00:02:45:21 - 00:03:07:10
Sahil Mansuri: Amazing. Got it. So, you know, you you you joined a team at a roughly 20. You grow that to roughly 100 and you've been there for about three years. And obviously that's a run that many companies would be really proud of and would want to, emulate. Yes. Off of. Yes. So maybe maybe start by telling me, you know, what is it that made you join Vercel in the first place?
00:03:07:10 - 00:03:15:05
Sahil Mansuri: I know you'd had a background at segment and a branch, so yeah, maybe. Tell me a little bit about about your decisioning process to join this specific company.
00:03:15:05 - 00:03:33:18
Tomer Chernia: Absolutely. So it was one of our board members, reached out to me and he's like, hey, tell me this is a great opportunity. It sounds like something that you really like up your alley. Plg looking to grow out their sales motion push into enterprise. It's a problem you're familiar with. And I think you should. You should take a look at this company's kind of growing like a weed and, like, hey, I'm pretty good.
00:03:33:18 - 00:03:53:04
Tomer Chernia: I'm happy where I am. And, they they pretty much twist my arm. Said, tell me, don't be an idiot. You should take a meeting. So I did, and the the stats, were through the roof. Like I'd never seen anything like it. And just that absolute energy and enthusiasm for what it is that is building, not just the product, but also our contribution to the open source community.
00:03:53:06 - 00:04:12:17
Tomer Chernia: So, that was it. And then I started, you know, naturally pinging all of the really intelligent engineering leaders that I know. And at every single turn, it was one person's like, disclosure. We use them. I'm an investor. We absolutely love Vercel. It's the best. And, like, it's every corner that I turned, I'm. I was hearing the same thing.
00:04:12:23 - 00:04:31:15
Tomer Chernia: And so I couldn't help but ignore the fact that there's a tremendous amount of traction and also just click with the team. I think we had a shared vision of what we wanted to do with the GTM Oregon. And, and I mean, listen, as a sales leader, one of the things that you get promised when you first start is you've got more inbound leads than we know what to do with, which is something as a sales leader, you always want to hear.
00:04:31:17 - 00:04:34:23
Tomer Chernia: And so that certainly helped, kind of sway the decision.
00:04:35:01 - 00:04:57:17
Sahil Mansuri: Amazing. So, you know, you and I started our careers in a similar, in a similar space, which was in kind of the martech space. You were at a company called wildfire. And, you know, selling a product like wildfire, you know, kind of top down enterprise is very different than selling a technical dev tools, open source product.
00:04:57:19 - 00:05:19:22
Sahil Mansuri: Can you talk about the distinction between those two things and how you did the evolution in your career? Because many sales reps struggle to go from one of those to the other, and there's this common sort of refrain that I've heard from VCs and from founders that like, oh, we don't want someone with that background because, you know, they don't know how to work in this space, in the plg space with, you know, huge install base and a technical product.
00:05:19:22 - 00:05:22:06
Sahil Mansuri: How have you been able to bridge the gaps in your career?
00:05:22:08 - 00:05:41:00
Tomer Chernia: Absolutely. And I'd say like even just shifting the buyer profile. Well, I think like marketers have a very different, set of criteria than looking for when they choose to buy a certain product. And certainly engineers do. I'd say engineers do not suffer fools. Well, and, they are very, principled, in terms of how they think about buying decisions.
00:05:41:00 - 00:06:13:22
Tomer Chernia: But they also, they, they're technologists, so they love to buy, but they hate to be sold to. And so I think kind of as I was thinking through kind of my transition, I personally always geeked out about the tech and how the product actually worked. And I found that, I had the most success when talking to people who were actively using the product and appreciated, like the craft of the products that I was building both at, wildfire and, and then and then branch and segment now Vercel and, and I think when you recognize that the person who's at the core of the decision making process is not the person who necessarily
00:06:13:22 - 00:06:38:04
Tomer Chernia: signs the check. That's that's the magic, right? It's the person who's in the product day to day who understands. And being able to translate that for the rest of the organization, I think, set me up well. Wildfire being able to talk about the business impact more broadly about how to sell a technology in the organization. And I think my own kind of geekiness, and desire to understand the products on a deeper level, I think makes me, has made me successful in the plg kind of sale.
00:06:38:06 - 00:06:49:19
Sahil Mansuri: Do you think that they are distinct profiles of sales people, like when you hire for your sales team, would you take on people who haven't sold to dev tools in the past, or do you think that that's a prerequisite?
00:06:49:22 - 00:07:11:06
Tomer Chernia: I think it's it really depends. So I think we look at candidates in two different ways. We we call them by candidates like the candidates who have all the right experience, and they have the right background and they've sold bottoms up. Plg ad a dev tools company like we love, to see those people. And then we have what we call the build candidates, candidates who might not have necessarily had that experience.
00:07:11:08 - 00:07:25:04
Tomer Chernia: And when it's a buyer's market and you're hiring a select number of people, you're going to buy the people with the appropriate level of experience. But when you're scaling as fast as we did at Vercel, you sometimes also have to think, how do you open up the talent pool? And that means investing in potential and slope and build candidates.
00:07:25:04 - 00:07:40:12
Tomer Chernia: And absolutely we we'd hire for people who might not necessarily have, the right, background, in terms of experience selling to developers, but have the kind of like raw profile that we think would make them a good fit for this type of motion. And, in those scenarios, we we make the bet.
00:07:40:12 - 00:08:00:20
Sahil Mansuri: I, you know, one of the things that I've heard whenever I've spoken to, founders and sales leaders who sell in the open source community is that, you know, there's there's such an advantage if you have a great product like Vercel, you know, the affinity from the market, the products in the users hands. But the big disadvantage, as you said, they don't suffer fools.
00:08:00:20 - 00:08:21:20
Sahil Mansuri: And I like that. But the big disadvantage is, like many of those people hate talking to salespeople with such a passion that it can be incredibly difficult to get them to actually engage with a go to market machine, especially when the products are already in their hands. And so, like, they're already using it. And so how do you actually create the momentum for them to engage with the sales motion out?
00:08:22:01 - 00:08:25:08
Sahil Mansuri: How do you overcome that challenge. But you've done it at a few different places.
00:08:25:08 - 00:08:50:12
Tomer Chernia: No, I think it's making sure that you equip the team to like like like I said, engineer people. I think this is generally true, but they love to buy, hate to be sold. And so I think kind of you have to shed some of the, the, pushy sales tactics of your to really, kind of get people engaged in, like, really kind of, get your team to care about the product and being able to solve a problem for customers.
00:08:50:12 - 00:09:11:10
Tomer Chernia: So having really thoughtful outreach, being really have a deep understanding of, like, what the software development lifecycle looks like, what it might look like for companies that are similar to the things that that we kind of, challenges that customers might run into that we might be able to help with. And I think if you if you focus on providing value to the person that you're talking to, you can overcome some of that stigma of, I never want to talk to salespeople.
00:09:11:12 - 00:09:30:01
Tomer Chernia: I think is, is key. And when you think about, like, the charter for salespeople and like what I, what I expect from them, it's like their job is to reduce friction in the process. Someone might be able to buy on the back of a credit card, and that's great. We want them to continue to give us their money and use the product and be advocates for us, but sometimes they run into some internal obstacle that makes that harder to do.
00:09:30:02 - 00:09:39:07
Tomer Chernia: They need to go through legal. There's a procurement process. They need access to certain security features. And that's kind of where you want your your sales team to kind of be able to step in as smooth that process for them.
00:09:39:09 - 00:09:45:01
Sahil Mansuri: Yeah. Makes a lot of sense. You mentioned thoughtful outreach. Can you elaborate a little bit more about that?
00:09:45:07 - 00:10:08:14
Tomer Chernia: Yeah. I mean everyone everyone has received, thoughtful outreach, cold outreach from, from salespeople and, and people have largely, received mediocre personalized outreach. And so, I think if you truly take the time to understand someone's business, and some of the challenges that they might be looking to face and, like, craft something that really resonates and is personalized to that individual in that organization.
00:10:08:18 - 00:10:26:04
Tomer Chernia: I think more often than not, you capture that attention so long as you do it earnestly. If you do the very generic personalization of like, hey Tomer, I saw you went to Berkeley. How go bears? I want to sell you insert, software XYZ. That doesn't quite work. Or even. Hey Tomer, I see you like natural wine.
00:10:26:04 - 00:10:44:17
Tomer Chernia: I mean, you might be able to bribe me with a nice bottle. Natural. And. But, Like, that's not enough, right? I want you to be able to shed some light on. On something about my business, that I might not know about. And I think if you take the time to actually do that and maybe even teach me something that I didn't know before, I'm more likely to take the meeting and kind of like, take, take you seriously.
00:10:44:22 - 00:10:52:02
Sahil Mansuri: Do you do that through an STR motion, or do you have your prospect, or how do you actually instrument that at first?
00:10:52:02 - 00:11:14:02
Tomer Chernia: Well, yeah. So we have we have videos of stars. We call them videos of our cell development reps. We have to throw the result branding. And we a is also source their own pipeline. So like a is have a pipeline expectation in terms about how much pipeline they're expected to source themselves. But we do have traditional ish kind of vendor motions.
00:11:14:04 - 00:11:22:21
Tomer Chernia: Do you sell into companies that don't have active or sell licenses and try to go just top down? You don't just rely on, places where you already have adoption.
00:11:22:21 - 00:11:44:22
Tomer Chernia: Bottoms up. No, I know, and I think that's like, if you think about our mid-market business, a good chunk of our revenue comes from customers who are looking to upgrade plans, but a good, a big chunk of kind of our enterprise motion is going after customers who might have adopted maybe Next.js, like our open source framework, or who might be in the process of going through some sort of migration, or that we think, web experience can benefit from vercel.
00:11:45:00 - 00:11:48:20
Tomer Chernia: And we, we try to convince them that we can solve the problems.
00:11:48:20 - 00:12:09:08
Sahil Mansuri: Have you found, tools that equip your team that help them do their job better? And I and I ask that question specifically through the lens of, there's all these AI companies out there that are promising to automate a lot of this research. Most of most of that outreach sounds a lot like Go Bears than it does, you know, deep business case.
00:12:09:08 - 00:12:27:22
Sahil Mansuri: And I wonder how you think about the balancing act between using automation, using triggers, using signals, using products, you know, whatever. Like again, it's it's it's obviously easier if you have active users that you can plug into and talk about the use case of what they're doing with it. But in the case where you're kind of going in cold, how how do you handle that?
00:12:27:22 - 00:12:45:01
Tomer Chernia: Today we have the benefit of, a large ecosystem of people who have touched Next.js or Vercel or have, thrown up some declared intent that we believe is worthy of an outreach. And I think that's a byproduct of the fact that we just we have a really large reach, and there's a really big open source footprint.
00:12:45:06 - 00:13:04:14
Tomer Chernia: So we use tools like, Koala and Common Room, to help us kind of like form for smarter signals from people who visit our site or who engage with the community or our posts on ECS. And like that gives us some good signal. We also have a lot of people who might work at really large organizations, but sign up for a job account for their own little side project.
00:13:04:14 - 00:13:25:02
Tomer Chernia: And so that's also a great opportunity for us to, to reach out to an organization that might be not not be using Vercel some CTO at, at Nike. But they have some side project for, you know, their, their daughter's school fundraiser on Vercel. And so how do we use that experience to kind of drive urgency? But long story short, I very promising.
00:13:25:02 - 00:13:44:20
Tomer Chernia: But I think when I look at what my, my, my readers do, I look at the things that are kind of dumb sucks of time, right? Where they're just sitting there, they're manually adding someone into a sequence. There's like steps in the process where they're conducting a Google search to pull up some, like basic research about a company.
00:13:44:20 - 00:13:59:16
Tomer Chernia: Like those are things that I think we can automate. But you always want to make sure that you have, someone who's kind of guiding the process and being a little bit thoughtful about what that outreach looks like for each individual customer, because it does look different. So we use a lot of tools to automate the signal collection.
00:13:59:18 - 00:14:16:07
Tomer Chernia: We, we use a lot of like non AI driven automation to kind of like kill the that just the time sucks. When they have things that can be done without a human having to take action, and then focus the human on the things that matter, which is like crafting a message that resonates.
00:14:16:09 - 00:14:41:16
Sahil Mansuri: One question along the same lines, which is, how you think about the the territory split of the team, obviously going from 20 to 200. You need to, you know, I'm sure you've you've, shifted the way that you, manage accounts. What have you learned as you've gone through this hyper scale phase in terms of how you instrument, the go to market motion relative to territories.
00:14:41:16 - 00:15:04:10
Tomer Chernia: And it's, yeah, it's it's it's going to change, I think, like at a certain point when you first start out, you don't necessarily you might not necessarily have the data or understanding to know what territories are actually rich patches. And so like the bigger you make the territory, the more opportunity you leave for like the right opportunities, the right accounts to make their hands in the reps, kind of a little bit of laissez faire, capitalism going on in, in the book of business.
00:15:04:12 - 00:15:23:08
Tomer Chernia: And I think that's probably like the, in early stages, probably the best thing you can do versus creating a bunch of micro zip codes or states, creating broad strokes, territories east, west, north, south, maybe having multiple teams in territories just allow you to kind of, ensure that you got coverage against the right types of accounts.
00:15:23:08 - 00:15:46:20
Tomer Chernia: And then as you get bigger and you get like a little bit more, robust understanding of the types of accounts that probably are the best fit for a company. Like for you can start getting a little bit more narrow and prescriptive about how you think about territories. We use employee count as the proxy for size. So our mid-market segment was like up to 200 employees and up to 1000 employees.
00:15:46:20 - 00:15:57:10
Tomer Chernia: Now it's up to 2000 employees. And then there's always the debate internally of his employees, the right way to actually, segregate the universe or is there something better? And there's pros and cons.
00:15:57:10 - 00:15:58:23
Sahil Mansuri: Yeah. What do you think about that?
00:15:59:03 - 00:16:16:08
Tomer Chernia: I think there's there's usually two ways that you think about slicing up the universe, like how do you first ask, how do you make money? What's the biggest signal of the customers that are most likely to spend the most amount of money? And so in the vercel kind of universe, that's probably sites that have either a lot of developers, or get a ton of site traffic.
00:16:16:10 - 00:16:40:03
Tomer Chernia: Now, you might have some really small companies with a ton of site traffic, especially hot new startups and in one principle, you want your most experienced salespeople working on your biggest deals. And so you're going to tell your universe, maybe for us it's based on site traffic. Is the is the meter. But I think what you lose in that is just because the deal is bigger, doesn't mean that the motion is complicated.
00:16:40:04 - 00:17:06:09
Tomer Chernia: Yeah. It means that your economic buyer might be sitting right next to your user in the same office of 30 people, versus you're selling to IBM, and there's tens of thousands. And so I much prefer employee count because it's a good proxy for the complexity of navigating the the sales process with the organization. And so I'd rather have my most experienced sellers, working on the accounts that have the most complexity in terms of penetration versus purely indexing on on where the big deals are going to be.
00:17:06:11 - 00:17:28:15
Sahil Mansuri: We face the same challenge, bravado because, you know, we for us, the more sales reps a company is hiring, the, the more revenue opportunity there is for us. And it can be really tricky because you can have a company that has 10,000 salespeople that isn't hiring nearly as quickly as a company that has 500 salespeople, but is on like some hypergrowth path.
00:17:28:17 - 00:17:50:20
Sahil Mansuri: And and so like the urgency and need can be shifted, distinctly between what you might traditionally call mid-market and enterprise. The other factor that tends to be challenging for us. I don't know if you experienced this, but what we find interesting is that when you actually go to smaller companies, you often end up talking to smarter, more senior people because there's just fewer people that are involved in the decision.
00:17:50:20 - 00:18:06:02
Sahil Mansuri: And so, like if I, if I want to sell to to, you know, Vercel, I'm talking to you, I'm talking to like your VP of recruiting. I'm talking to like, more senior folks. If I'm selling to a 10,000 person org, if we're selling to Salesforce, I'm talking to some like, you know, mid-market, go to market recruiter or whatever.
00:18:06:07 - 00:18:26:04
Sahil Mansuri: And like that person is just much easier to sell to because they're just not as fluent, with all the cutting edge of tech and whatnot. Do you find that sometimes it can actually be more difficult to sell to a smaller company because you're talking to, like, more senior folks? Or does it does it pan out to the complexity of the deal is the big picture.
00:18:26:06 - 00:18:52:04
Tomer Chernia: I actually think that the I mean, smaller companies, I wouldn't necessarily say that the people you're talking to are smarter, but they have a wider perspective on the business. And I think that makes it easier for a product like Vercel, because they can see the trade offs of various different strategies at altitude. When you're talking to someone senior, when you are selling to someone who's like, a front end, engineering manager at Mega Corp, like, they don't have purview.
00:18:52:04 - 00:19:18:07
Tomer Chernia: They've got their job in the thing they're responsible for and their roadmap and their engineers. And sometimes being able to connect the dots like, beyond their immediate problems to like, what benefits the organization, I think is harder, at large companies than at smaller companies. And that's why I think it's it's fun to have conversations with, with, you know, startups because the person you're talking to oversees the overall health and success of the business.
00:19:18:09 - 00:19:21:00
Tomer Chernia: And, and that allows for richer conversations.
00:19:21:05 - 00:19:33:18
Sahil Mansuri: I've never quite thought about it through the lens of aperture before, but that's a really good, proxy for it. It's not it's not intelligence or or even seniority. It is aperture, isn't it?
00:19:33:20 - 00:19:50:15
Tomer Chernia: Yeah. It it's up to perspective and small companies. Everyone acts like an owner, or at least if they're doing it right. And I think, at a large company, it's very easy to become just the person who represents your function, your division, your team. And that's just the nature of Megacorp.
00:19:50:17 - 00:20:04:03
Sahil Mansuri: What is the profile of salesperson that you think really succeeds in that mid-market? You know, division? And then how is it distinct from the person that's selling to Megacorp?
00:20:04:03 - 00:20:23:17
Tomer Chernia: I actually think that there's a lot of the same attributes, kind of like fall across both, but probably like a difference in maturity and experience and like they have less patterns to match against. The thing that I think we care about deeply, at Vercel, and probably like trade offs in skill sets is technical curiosity or technical drive.
00:20:23:18 - 00:20:50:23
Tomer Chernia: It's important when you're selling to engineers or to developers or to product people. I think it's more important for your mid-market sellers to be able to, to have that conversation, because the person who's buying the product is probably also the person who's using it, or very close to, value conversations about being able to justify the business impact are probably slightly less important, because in mid-market, mostly because a lot of our buyers are already primed to make a decision.
00:20:51:01 - 00:21:08:10
Tomer Chernia: And the goal is to kind of just, like make it easier for them to adopt the product. Whereas an enterprise, I might trade some technical document for value fluency. Just because when you think about like what truly drives really big deals at large enterprise corporations is people who can who can really connect the dots to business impact.
00:21:08:12 - 00:21:22:22
Tomer Chernia: Still, a certain baseline level of technical fluency. I would love them to have the same level of technical fluency as our, as our mid-market sellers, but you find that they're the thing that really spikes out those seven figure deals is being able to connect the dots back to value.
00:21:23:00 - 00:21:56:00
Sahil Mansuri: That's such a great answer. That's super thoughtful. It just is, because I think that most of us end up kind of, you know, without understanding what is the trade off that we're really looking to make, you know, and I think that your, your description of, mid-market, smaller company, everyone acts like an owner. They really just care about, like getting, you know, they care about, like they understand the business impact very, very fluently because they see a wider side of the business versus at a large company, you're just seeing your team, you're seeing your narrow set of problems.
00:21:56:00 - 00:22:09:06
Sahil Mansuri: And so it can be really difficult to actually pull up and say, well, how is this going to benefit all of IBM? As opposed to like, how am I going to sell to this one tiny division of IBM where the deal is very small and that that is its own skill set, isn't it?
00:22:09:11 - 00:22:31:12
Tomer Chernia: It is. And and you find yourself like dealing with more interpersonal and political landmines that you have to navigate and large corporations, how many times are you talking to someone who's, who's who's like, I don't want you talking to my boss. I don't want you talking to my boss's boss. I like there's some frontline, manager or director and and how do you navigate those conversations without ailing?
00:22:31:12 - 00:22:53:02
Tomer Chernia: The person that brought you into the organization is always a challenge. And I think, really good enterprise sellers are good at navigating, and you've got detractors, big companies, billion opinions. You got to be able to navigate the detractors who's got influence in the organization? Why do they have influence? Who's wasting your time? I think those are all, skills that you develop over your career as an enterprise seller.
00:22:53:02 - 00:22:59:14
Tomer Chernia: And I think, they help you in, in startups. But, those problems are less acute.
00:22:59:16 - 00:23:18:17
Sahil Mansuri: There's a lot of companies tangentially to that. There's a lot of companies that struggle with sales hiring. And they especially when they're trying to go fast, you know, it feels like, you know, a lot of it is in setting up the right process, the right questions, and being crystal clear on what are the criteria, jurisdiction that you're looking for.
00:23:18:19 - 00:23:27:07
Sahil Mansuri: Maybe talk me through. Have you gone through iterations of the interview process? I've. Yeah. Can you talk me through like what you did earlier and how it's changed? I think I want to hear more about that.
00:23:27:11 - 00:23:48:03
Tomer Chernia: I and I think it it's there's a few things. First you have to start with like the two very important things to just kind of like highlight what is your rubric, what are the things that you care about that you believe make for really successful salespeople? And making sure that your managers and your recruiters are highly calibrated on what that looks like and then decide, is this a build candidate or buy candidate?
00:23:48:05 - 00:24:02:06
Tomer Chernia: Are you looking for someone with the right amount of experience? Are you looking for someone with a certain level of potential? And I think as you're scaling, you start to think about, build candidates of being a little bit of a, of a source of, of talent for you because you just have to hire so many people.
00:24:02:08 - 00:24:32:00
Tomer Chernia: But iteration wise, how do you test things? Salespeople are really good at sounding really good in interviews with even bad salespeople. Somehow, miraculously, the one skill they've inherited is the ability to sound really good in interviews, that they've really honed. And so I think it's easy to get a lot of the right answers from salespeople. And so the key to really kind of like getting it bottom of they're really meeting your criteria is like, how do you test for the things that are harder to answer and just direct, kind of like, situational questions.
00:24:32:00 - 00:24:47:09
Tomer Chernia: And so for us this is various permutations of like pitching for sale or something like for sale or understanding how people think through their pitch process. In the early days when the talent market was tight, what we used to do is say, hey, it's a big ask to ask someone to come in and create a presentation and pitch for sale.
00:24:47:11 - 00:25:08:03
Tomer Chernia: What if we just asked them to pitch their current product as if they're sitting next to a new guy who's joining the team? Because teaching something is a good, proxy for mastery. And so being able to say, this is where I stop and I ask this question, this is what I follow up with that question. And we found that it was like a helpful tool for being able to understand, like, how thoughtful they are about their existing motion.
00:25:08:08 - 00:25:23:23
Tomer Chernia: But it didn't test for technical curiosity, did they take the time to understand the product they're about to sell? And so then we shifted into, okay, well, now we want people to come in and they're going to sell them or sell. We want them to do like kind of a mock or sell pitch. And that was great.
00:25:24:01 - 00:25:48:19
Tomer Chernia: For being able to test like, okay, are they willing to go deep and do the research and understand the product and like, be able to stand up to scrutiny against a product? We're experts. They're not in our own product. We can ask them questions, make them squirm. And, they they they do. Well, and those but what we found is sometimes what you end up seeing a signal is people who are just also really good showmen, and you overindex on kind of can they run the meeting?
00:25:48:19 - 00:26:22:06
Tomer Chernia: Can they elegantly navigate questions? Great skill, but it it doesn't test some critical thinking skills, which is the next iteration of what we wanted to test through this process. And so what we've done is we actually do a discovery session. We give them a prompt, they do discovery. They have the opportunity to ask us a bunch of questions, and then we give them a 15 minute break to go off camera, to go into another room and to come back and review the answers to those questions with, basically with like a sales leadership team, all the people who are in that like mock discovery session are now their sales leaders inspecting, the prospectus of
00:26:22:06 - 00:26:41:05
Tomer Chernia: this deal. And it really captures the people who are able to synthesize answers to discovery questions and how we would how they tailored their approach versus just, you know, knowing that every there's like a just moving on to the next question, what you typically tend to see happen in like pretty, basic discovery. Can they think on their feet.
00:26:41:05 - 00:26:43:22
Tomer Chernia: Can they like, synthesize information into something meaningful?
00:26:44:04 - 00:27:20:00
Sahil Mansuri: I think this is the first time I've ever heard of that being the interview process. I've heard of people doing discovery, mock discovery. I've heard of people doing mock demo. I've heard of people doing demo of their own product. I've heard of people doing demo, the product that you already sell. Yep. I have never heard of there being like a post discovery synthesis section is session where you basically are like presenting the deal to the sales leadership and explaining the value prop and what you heard to to try to like, hear what you know, it's it's the Sherlock Holmes quote, you know, and you know what I'm going to say?
00:27:20:00 - 00:27:45:02
Sahil Mansuri: It's the it's like the, you know, we all see the key here is basically is like, how did you know that? It's like we all see the same things. It's just you know, not what you see at it's. And I see that all the time where like you're reviewing gong calls with mediocre or like up and coming sales rep who hasn't had the chops yet, and you both hear the customer say the same thing, but you one person gets what they're really trying to say, and the other person just takes the answer for exactly you.
00:27:45:07 - 00:27:55:03
Sahil Mansuri: And I've never actually thought about doing that in an interview process in order to assess, do they know how to listen and synthesize information? That's really clever.
00:27:55:03 - 00:27:58:18
Tomer Chernia: And it's it's working for us now, but it makes it harder, right?
00:27:58:18 - 00:28:01:00
Sahil Mansuri: Yes. When you're growing,
00:28:01:01 - 00:28:23:04
Tomer Chernia: You do, you need to you need to add capacity. And so if you're thinking about like, capacity as one of your, one of your constraints to growth, introducing a process that's harder, it takes a lot of discipline and a lot of, conviction that if you get it right, you'll have the right people. And having the right people who can perform is better than having a lot of people who, maybe not everyone is the perfect fit.
00:28:23:06 - 00:28:37:07
Sahil Mansuri: Yeah, I want to I want to get to your rap process and your training and onboarding process in a segue. But before I do, I just just ending on this thread. There's one thing that I, you know, is kind of the third rail of sales these days, which is remote versus in person.
00:28:37:08 - 00:28:38:00
Tomer Chernia: Yes.
00:28:38:00 - 00:28:40:00
Sahil Mansuri: I would love to hear your perspective on that.
00:28:40:01 - 00:29:01:15
Tomer Chernia: Yeah. I mean, we grew up most of our growth happened during the Covid era, pre Covid era, post Covid era. I think you get access to a lot of great talent when you're able to cast a wide net, especially when you're running up against capacity constraints. Like, it's easier when I can go broader to find these, like, diamonds in the rough or these, like, gems of salespeople.
00:29:01:17 - 00:29:17:23
Tomer Chernia: But I think you miss out on a lot when you have a fully remote team, and so you miss out on the learnings. What, the younger reps can learn from some of the older reps? You miss out on just like the conversations that happen in the margins. And I was a great beneficiary having come up in in-person sales culture.
00:29:17:23 - 00:29:44:00
Tomer Chernia: I learned a ton from the people I was around. But I also recognize that, like, I don't want people coming to the office to sit in the phone booth for eight hours. And so what we've done is we have a distributed team. But I think as we think about hiring, it's concentrating, more of our hiring in, geos and investing in office space and kind of setting the expectation that we want people to be able to come into offices if they're near an office and key hubs.
00:29:44:02 - 00:29:57:11
Tomer Chernia: Part of that is setting, leading by example. So, like, our leadership comes into the office on a regular basis, and people nearby, we encourage them to you've got carrots and the like to get them to come into the office, but no one's going to come in an office if none of the people they collaborate with are there.
00:29:57:12 - 00:30:15:15
Tomer Chernia: And so it's kind of a bit of a chicken and the egg. But we're trying to move towards, providing an option for more in-person collaboration. And I think, the area where it's probably easiest to do or to kind of create, some density is with SDR hiring.
00:30:15:17 - 00:30:17:01
Sahil Mansuri: Tell me more about that.
00:30:17:03 - 00:30:36:04
Tomer Chernia: So when you think about, okay, I want to go, enterprise whale hunter, I want to find the best person on the planet, but who can also operate at a startup that's running really fast and doesn't have all the resources. That's a hard person to hire. So you want to cast as wide an ad as possible. You want to have the opportunity to be able to hire that person in Denver, Atlanta, or wherever they might be.
00:30:36:06 - 00:30:57:13
Tomer Chernia: But SDR is you're betting on potential and you're looking for less, experience in that person. And so you can probably get away with like, mandating or lowering, or requiring that those people be in one of our hubs just because there's more SDR candidates that you can recruit from, versus like really, kind of like upmarket, ease.
00:30:57:15 - 00:31:09:10
Tomer Chernia: And then it becomes kind of you futureproof your business, those stars matriculate into mid-market enterprises, and now you're starting to seeding the ground of, like, having, like, some truly dense in office, experiences.
00:31:09:10 - 00:31:14:10
Sahil Mansuri: Interesting. Have you were you, are you yourself coming into the office?
00:31:14:14 - 00:31:34:06
Tomer Chernia: I do, I do remember, I'd say probably like 3 to 4 times a week. But I come in when there's people here, like, I'm not just going to come in to sit in a conference room by myself on zoom all day. So, executives come in Mondays and Fridays. That's kind of like the expectation. So the rest of my peers in the executive team are all here on Mondays and Fridays.
00:31:34:06 - 00:31:49:21
Tomer Chernia: And so we set up a lot of our one on ones. Our meetings are collaboration time on those days. And there's always some team doing some offsite, whether it's the marketing team or whether it's a CSS team, or whether it's the DevOps team that come into the office on random days and that kind of if there's people here, I'll be here.
00:31:49:22 - 00:32:15:03
Sahil Mansuri: You're the fourth consecutive SVP of sales, CRO, who's come on to this podcast, who has said some version of what you just said, which is we used to be remote. We've started to move more in person. We're starting with the start team where like developing this, this, this culture of in person, you know, vent, owner like, we've I just continue to hear the same refrain, over and over again.
00:32:15:05 - 00:32:35:17
Sahil Mansuri: And one thing that it makes me wonder is, do we feel like the sales teams of the last couple years have relatively underperformed and thus we are course correcting, or does it feel like or do we feel like we're at a new age of growth and we want to lean into the momentum? I wonder how we're thinking about this.
00:32:35:18 - 00:32:55:04
Tomer Chernia: Yeah, I don't think it's it's lack of performance. And I could say this is probably true for me and lots of peers, like they've seen a lot of great performance from people who work remote. But I think you lose, the cultivating the next generation of talent when you're, when you're fully remote. And that's why I think stars are a great source.
00:32:55:04 - 00:33:16:02
Tomer Chernia: They've got the most upside. You hire these people who are full of potential. How do you make sure they they develop into that? And I think it's much harder to, to teach and to kind of transmit the wisdom, remotely than it is in person. And so I think we've we've got a lot of benefits in the remote world of being able to hire from anywhere and like, it opens up the talent pool.
00:33:16:02 - 00:33:24:23
Tomer Chernia: But I think we lose, we lose like the, the up leveling of the the more junior people in their career by not having access to to other humans in person.
00:33:24:23 - 00:33:44:05
Sahil Mansuri: Well said. And and I'm going to keep an eye out on this trend. I'll tell you what is interesting about the profile side of this. So, you know, we do a lot of survey. We obviously have a ton of salespeople on our site. And one of the things we track is percent to quota and, and benchmark that against willingness to work in office versus remote.
00:33:44:07 - 00:34:08:20
Sahil Mansuri: So the average so the average rep who is willing to come to the office if you committed, you know, 200,000 people or something. And you look at what percent to quota they hit in 2024. The average amount is 57%. So 57% of those people hit quota. So 5,070% of reps who hit quota. No. Sorry. And did that the wrong way.
00:34:09:00 - 00:34:33:18
Sahil Mansuri: Of all the reps who are willing to come into the office and work in person, 57% of them hit their number in 2024. If you look at the same pool of people, but now you look at only those people who are only willing to work remotely, 79% of them hit their quota. Oh, well. And so what we're finding is reps who aren't hitting their quota are more willing to come to the office.
00:34:33:18 - 00:34:55:03
Sahil Mansuri: Reps who are hitting their quota are less willing to come to the office, which kind of maps a little bit to the seniority thing. But actually we we did this. We actually cut it by seniority to see if it was just a seniority thing. And by excluding str where str, it is very clear that STR performance in office is is markedly better than STR performance outside of the office.
00:34:55:03 - 00:35:12:13
Sahil Mansuri: That is, that is empirically true, across all data sets, when it came to even like SMB, mid-market more junior roles, it turns out that remote those reps who are unwilling to come to the office disproportionately hit their quota at a higher pace than those who are willing to come to the office.
00:35:12:13 - 00:35:16:10
Tomer Chernia: Yeah, I think it's I think that's a it's an interesting causation.
00:35:16:10 - 00:35:18:06
Sahil Mansuri: Correlation. Correlation. Yeah. Yeah.
00:35:18:07 - 00:35:25:23
Tomer Chernia: But it's it's no different. Your best reps are also divas. They never fill out their Salesforce notes in a way that you kind of want them to. And it's not.
00:35:25:23 - 00:35:28:19
Sahil Mansuri: Because it's, you know, it's not because they don't fill out.
00:35:28:20 - 00:35:46:07
Tomer Chernia: They're they're not as good about Salesforce hygiene that they hit their number, but it's because they hit their number that they can get away with probably a little bit more lax. Salesforce hygiene. So I see it. I'm like, if you're if you're talented, if you're a talented, super successful rep, you probably have a little bit more latitude about like working on your terms.
00:35:46:09 - 00:36:21:04
Sahil Mansuri: And that's where I think there's some really interesting, like, trends to the future. So I think for junior folks, it makes sense. And I think for super senior enterprise folks, you're going to hire them anywhere. But it's this middle ground, right? It's the mid-market rep that we just spent some time talking about. If the best mid-market reps are being the pickiest about going back to the office, but the best companies, the as the vessels of the world are insisting that more people come to the office, that creates a really interesting tension in the market because, you know, does it mean that the best reps are going to say, okay, well, I'm only going to join a little bit of a riskier startup because I want to maintain my lifestyle, or is it going to be that you are going to be able to convince these people to come to the office, and eventually the pendulum's going to shift the other way? I don't know how it shakes out, but I think it's an interesting trend to watch in 2025 that those reps who are the least likely to want to come to the office, are actually the people who are the highest performing across the Bravado network.
00:36:44:16 - 00:36:45:12
Sahil Mansuri: It is interesting.
00:36:45:12 - 00:37:04:22
Tomer Chernia: I do I would I would posit it's it it's causation. It's correlation, not causation. But it is it does, it does. Is it does raise interesting questions. And I think at a certain point, like there's a culture as a company that you, you want to instill in people and that you want to build, it's easier to build a culture.
00:37:05:00 - 00:37:23:17
Tomer Chernia: And a shared set of values live. And as you scale the organization, like, it's very easy that, you know, next year, almost half of the people who will be at Versal will probably people who, you know, more than half of the company will have started in the last year, I think is the is the numbers that we've been throwing around internally.
00:37:23:19 - 00:37:38:11
Tomer Chernia: It's very easy to lose what makes that company special. And I think when you have people in person, it's much harder. It's much easier. A they opt into a certain working style, but like it's easier to kind of keep those, those that, that shared set of values amongst people.
00:37:38:13 - 00:38:00:07
Sahil Mansuri: The only challenge I'll have to that is that you began this podcast by saying that you had 20 reps and you started, and now you have 200, and yet it seems like you've been able to keep a really strong culture across that has responded to being remote. And so like I, you know, I, I actually tend to agree that in person cultures are much stronger than remote cultures.
00:38:00:07 - 00:38:17:12
Sahil Mansuri: As someone who operates a remote company but previously operated an in-person company, we went remote when it when we were moved to Covid. I would dare say that the friendships and the relationships that we had cultivated prior to going remote are still stronger than the ones that we built remotely. I think there's no doubt that that is true.
00:38:17:14 - 00:38:42:22
Sahil Mansuri: But if I look at the performance of the company, if I remove my own personal desire to like, be close to people, and I look at the quality of talent, how much we're paying for that talent and the overall performance in the company, I think there's no doubt that we have more talented, higher performing company folks who are delivering at a higher clip than we did prior to us going remote, and it's certainly been much easier to hire higher quality people by casting a wider net.
00:38:42:22 - 00:39:07:22
Sahil Mansuri: So it is something that I'm also conflicted about. And I don't mean to say that I agree or disagree with you. I just, I just, I just think I find this topic so interesting because Versal obviously is such, you know, it's one of the five, ten companies that anyone who's building anything in AI, open source dev tools looks up to, and your opinion and your practices are going to carry a lot of weight because there are so many companies that want to be in the same position that you guys are.
00:39:07:22 - 00:39:09:13
Sahil Mansuri: So I'm just super interested how you think about it.
00:39:09:13 - 00:39:31:11
Tomer Chernia: And I'm not an absolutist, right? There's trade offs in all of these different strategies. I do I do think that we are it's not just for the 200 people, it's for the next thousand, 2000 people, right? Right. And I do think that if you think about it on a longer time horizon, I think there's no doubt that we've been able to probably see a lot of efficiency gains and productivity gains by people working remotely, but like, at what cost?
00:39:31:11 - 00:39:50:09
Tomer Chernia: And do we pay that cost now? Maybe not, but are we going to pay that cost in two, three, 4 or 5, ten years from now? That's the real question. And I think as a sales leader, it's easy to think about one quarter, one year at a time. But like when you zoom out the horizon, you're like, oh, maybe, maybe I do want, more people in the office over the fullness of time.
00:39:50:09 - 00:39:57:08
Tomer Chernia: And I think there's some benefit to it. But I hear you, it's it's a, it's it's an interesting, trend to follow.
00:39:57:13 - 00:40:18:02
Sahil Mansuri: It's true. And, and I also, you know, have a lot of, conflicting thoughts on it, but I'm always excited to dive in to somebody who has had the type of success that you have had building a remote company and is now shifting to an in person culture, because I find that to be maybe the greatest harbinger of, of the future of of what?
00:40:18:02 - 00:40:25:04
Sahil Mansuri: Of what's going to come. Because if a company like Vercel is going to move to a more in person, that it's inevitable that everybody else will too.
00:40:25:04 - 00:40:32:02
Tomer Chernia: I also want to make sure that, like, you know, to all of my reps who are listening, no, it's going to force you to move to an area where you near an office. I just want.
00:40:32:03 - 00:40:34:15
Sahil Mansuri: Them to all know.
00:40:34:17 - 00:40:40:21
Tomer Chernia: You know, it's you got to create space for both options. But I think, like, you have to be intentional about the type of company that you want to build. Yeah.
00:40:40:21 - 00:41:00:05
Sahil Mansuri: That's right. Okay, let's, let's shift gears to once you got the people in-house. So people are here, let's talk about what sort of like, ramp training and especially I think what's interesting is around the build candidate that you're talking about, you know, how have you managed to, to make people successful, what have you invested in?
00:41:00:05 - 00:41:04:15
Sahil Mansuri: Or maybe what did you under invest in initially that you started putting more into? I'd love to hear more about, yeah.
00:41:04:17 - 00:41:28:15
Tomer Chernia: I think there were there's, there's a handful of things a like when you're growing really fast and you're adding a lot of people to the organization. It, enables, it is never going to be as robust, as good as you ever want it to be. And it's never going to be perfect. And so I think you have to, first in the hiring process, invest in super high agency people, who are also, like, genuinely curious and willing to open doors and find information even if it's not spoon fed to them.
00:41:28:20 - 00:41:47:15
Tomer Chernia: So, like, I think it starts with the hiring process, like when you're thinking about your build, the candidate part of the calculus is like, is this a person who, if I drop them in tomorrow with no training, will they eventually figure out how to get things done? Now, you want to make that easier for them and you want to reduce the amount of time they're spending on frivolous activities.
00:41:47:15 - 00:42:09:07
Tomer Chernia: But like, the bet that we're making on the build candidate is that they can figure out with with, can figure out the basics with minimal guidance. Now, what we did, I think in the very early days, of our enablement journey is I think we hired more traditional enablement profiles to run our enabling organization, people who would normally be part of, like, learning and development teams.
00:42:09:07 - 00:42:31:20
Tomer Chernia: They're really great instructional designers. And we found that what was actually changing in a great pace was like the way that we we sell it and the types of customers that we have in the business was changing month over month. And the instructional designers in the lab, people were always looking to the sales team for expertise. So like, how do we how do we actually translate into this, into something that we can kind of teach people about by the time we get it ready to be taught?
00:42:31:20 - 00:42:53:00
Tomer Chernia: It's already kind of out of date in some way, shape or form. And so one of the big pivots is like building actually like an enablement team that's relatively lean of like former practitioners, former sales engineers from resellers, former sales leaders, people who've been in markets, some of whom have been sellers and sales engineers for sale. And how do we get them, focusing full time on enabling and training the rest of the team.
00:42:53:05 - 00:43:25:18
Tomer Chernia: So I think there was like an organizational decision about how we wanted to staff like, an enablement, team of people who were responsible for helping support, our, our, our, our new hires, putting a lot of onus on the managers. Managers, like, it's very easy for your sales managers back. I need enablement and to assume that, like, something gets handed to them, but they're the closest to the problem, especially new managers when they come on board, they go through the onboarding process, and they, they find gaps, like, I don't know how to do this thing or that thing I didn't really understand.
00:43:25:18 - 00:43:49:03
Tomer Chernia: And so they're constantly iterating and I'm putting a lot of weight on the managers to ensure that their teams have what they need to be responsive, successful. And then there's other things that we've done, what we call like a baseline technical cert. So like I said, it's incredibly important. You're saying the technical customers, we ask, we have a training and an exercise where we ask all new hires to, build and launch their own app slash website.
00:43:49:05 - 00:44:04:10
Tomer Chernia: So, and that's like a core part of, like, the onboarding process, like you have to have an appreciation for how the product works, how a customer would use it. We got rave reviews, and I think we continue to add to like what we think are like the baseline technical competencies we want and people on the team.
00:44:04:12 - 00:44:31:14
Sahil Mansuri: Super thoughtful answer and a lot and a lot of unpacking to do there. Yeah, maybe maybe from maybe just like initially, I'd love to. I'd love to understand. Have you seen that when you hire someone and they go through this initial period, they go through their certs, etc., that it's highly predictive of future performance. Like how how closely have you seen that correlate versus people who come in, maybe don't pick it up as quickly, but then pick it up later on?
00:44:31:14 - 00:44:36:01
Sahil Mansuri: Like, I wonder how quickly you move on from candidates when you're uncertain that you made the right back. Yeah, I.
00:44:36:01 - 00:44:58:06
Tomer Chernia: Think you figured out pretty quickly from the people who are willing to put in the effort, to actually get it right and like it. It showcases an appreciation for understanding, the, the, the guts of our sales emotion. And if you can't get excited about the technology that you're selling, and if you can't go through the text process, then it's just never going to work out.
00:44:58:06 - 00:45:09:16
Tomer Chernia: And so, you see it, I'd like to say that we've done a pretty good job of selecting for, for, technical curiosity and drive, but, sometimes it, you know, sometimes you get it wrong.
00:45:09:16 - 00:45:30:06
Sahil Mansuri: Let's shift gears a little bit to a topic that I think many, AI companies, in particular, are struggling with, which is how do you think about quotas and compensation? I think I think this is a topic that's hard for a few different sectors. One is, you know, oftentimes it can be free or really cheap in order to get started.
00:45:30:10 - 00:45:48:11
Sahil Mansuri: And then secondly, it can be hard to predict how big the account is going to get over time. Thirdly, how much is the actually responsible for driving that adoption? Sometimes expansion happens much later on, but then they don't get credit like how have you managed all of the complexities around quotas and carbon? What iterations have you gone through?
00:45:48:12 - 00:46:06:02
Tomer Chernia: Yeah, I mean, we've, quotas have stayed. I mean, they go up. It's my teammates that especially when your team does. Well, I, I was I had to break it to our sales leaders. We had an epic year and like, oh, so tell us about my well, you know what's going to happen. They're going to go up.
00:46:06:04 - 00:46:07:12
Sahil Mansuri: Oh. Welcome.
00:46:07:12 - 00:46:28:04
Tomer Chernia: Congratulations. You're now victims of your own success. But I think of quotas and commissions as kind of like and another dimension is also profit, because some of these AI products aren't particularly high margin. And so like that factors into how you think about paying people. But I think about, quotas as they're their cost control mechanic.
00:46:28:04 - 00:46:52:10
Tomer Chernia: Right. It's really like you need to make sure that, like, your overall commission stack for everyone on your team is is below 20%. More or less. And so some of some ways you can tackle that is by having higher quotas. Some ways you can tackle that is by having we have various structures in our comp plans, whether it's a flat base commission rate versus an accelerating decelerating base commission rate.
00:46:52:12 - 00:47:22:19
Tomer Chernia: We pay for things that are not, quota. Right. Multiyear deals, are things that we kind of play around with. We used to not pay our reps on usage at all. And now we've introduced like, reps get a, a percentage of, like on demand usage for their products or things that are not committed. We're actually going to probably move to giving reps more credit for, usage just because we want to shift the way that the business thinks about committed dollars versus usage dollars and kind of like unlock more of a, of a flywheel in terms of how customers, use the product.
00:47:22:19 - 00:47:35:14
Tomer Chernia: And so we've gone through various incarnations, quotas started as a multiple of OT. There's still some of that math in terms of the way that we think of quotas, but they, you know, they go up and you play around with the comp plans to try to keep things under 20%.
00:47:35:16 - 00:47:54:02
Sahil Mansuri: Yeah. Makes makes a lot of sense. I how often are you re forecasting based on growth? Because I think one of the other challenges that a lot of these companies are facing is, you know, in January you say, okay, here's your number for 2025. You get to you get to May-June and you're like, okay, that number was either way too high or way too low.
00:47:54:02 - 00:47:57:18
Sahil Mansuri: And like, we need to like rethink about it. How often do you do. Yeah.
00:47:57:21 - 00:48:12:20
Tomer Chernia: I mean or our CFO does it with high level of frequency where he comes in. He's like, you know, we done well. We need to increase the number. Come in at the start of the year. Once you've done all your capacity planning, or halfway through the year and you're like, that's not how enterprise sales works. You can't just like a magic wand and the number goes up.
00:48:12:20 - 00:48:30:16
Tomer Chernia: But joke's on me because we've we've always had his numbers. So I guess he was right and I was wrong. But maybe you can, you know, adjust things. But the way that I think about it, we don't we we actually had the opposite problem in the early days. Capacity planning was much harder, especially when you're growing.
00:48:30:16 - 00:48:47:09
Tomer Chernia: And, like, how do you assign a quota to a manager who doesn't have a reppin seat? And so we had quarterly targets. And what ended up happening there is you saw people absolutely smashing through these quarterly targets, to the point that it was kind of a little absurd, the amount that you're paying them for like, quarterly performance.
00:48:47:11 - 00:49:05:19
Tomer Chernia: And so we shifted to annual targets, for all segments, including our mid-market segments. And the goal there was to give them more of a long term view of how they think about approaching accounts and like getting them to push up market. And it's largely worked for us. And we haven't changed quotas mid-year, mid quarter, like we've kept them pretty consistent against the annual number.
00:49:05:21 - 00:49:25:10
Tomer Chernia: And we we make the best guess about what we think that that is based on historicals. Sometimes it might be a little too low and then the next year you calibrate accordingly. But I'm you want, you want, you always want goals to be aggressive but attainable. And I'll always index on the on the on trying to find that balance where possible and not getting all worked up.
00:49:25:10 - 00:49:31:02
Tomer Chernia: But you can't have to raise quotas to make sure that, like, you know, you match what the what the company's growth rate is.
00:49:31:07 - 00:50:02:16
Sahil Mansuri: Yeah. Let's let's talk about that from the other side. Let's talk about your expectations relative to the board and the CFO, which you talked about a little bit. You know, this is another problem that a lot of these fast growing AI companies are facing is that, you know, you have gleaned that went from 1 to 103 years. You have, you know, some other company that goes from, you know, 2 to 50 in a year and all of a sudden you've got your board and your CEO and your CFO coming to your door and saying, hey, I know we're doing great relative to the historical SAS benchmark, but compared to these new AI companies, we're fucking slow. Like we need to grow faster. And they're being faced with these incredibly daunting, numbers based on how AI companies are able to grow. I'm sure you faced some of that across your career, and we do wonder. I wonder how you think about that.
00:50:18:06 - 00:50:37:07
Tomer Chernia: Yeah. But we what's interesting is we actually break out our AI revenue from our, our direct, coach and product V0, and it has different targets from the rest of the business. So it makes it a little bit easier, in terms of how we think about that part of our business and the growth rate of our, of our like, our products.
00:50:37:07 - 00:50:52:12
Tomer Chernia: Yes. Yeah. For so, core platform and so like that makes it a little bit easier. But I think it's we also we also do something a bit unusual. We have, we have one number. The board number is the company number. I think in most companies they have the there's the board number, which is a.
00:50:52:12 - 00:50:53:14
Sahil Mansuri: Little bit lower in the company.
00:50:53:14 - 00:51:07:23
Tomer Chernia: Number which is a little bit higher. And they hedge their bets. But we are because we've been so successful, I think constantly trying to push ourselves up to more aggressive targets. And we set one target. It's the boar target, it's the company target. And we all kind of align around it and try to do our best to get to it.
00:51:08:00 - 00:51:24:02
Tomer Chernia: And we we've, we've we've been fortunate enough to be successful there, but, like, the board's not coming in and saying you got to grow X, Y, and Z faster. I think they want to make sure that we're growing. We're we're fortunate enough to have a board that's thoughtful and wants to make sure that we're also growing in an efficient manner.
00:51:24:04 - 00:51:40:23
Tomer Chernia: And we're doing so thoughtfully and that we're not just. Tomer, you need to add another 200 million. Go hire a thousand salespeople. Like, is there pockets, to unlock efficiency with the team? And the board has been very good at, oftentimes being the ballast against aggressive growth for us and making sure that we're doing it thoughtfully.
00:51:41:01 - 00:51:56:05
Sahil Mansuri: So that's, that's, good to hear if you are in if you were in the situation where that went awry, or if you had advice for someone who is facing those challenges, what do you think you might suggest? If someone was was was not in the fortunate situation that you're describing?
00:51:56:05 - 00:52:11:21
Tomer Chernia: Yeah, I think it's it's yes, these AI companies are growing really quickly. But like, you don't, every strategy comes with the trade off, right? And every direction you set. Goals are too high and everyone's at 20 or 30% of their target. Guess what? You lose a lot of these and now becomes that much more expensive to add new ways.
00:52:11:23 - 00:52:31:16
Tomer Chernia: If you are if, if you've got, you know, a board that's, pressuring you to continue to, to juice, numbers from your team where, you know, you don't think the performance is actually there. I think you got to have, like, a first principles conversation of understanding, like why something's growing, why it's not growing, what are the trade offs?
00:52:31:16 - 00:52:47:11
Tomer Chernia: And, like, really highlight whether or not it's worth it for your business. Growth comes at a cost. Fast growth comes at a cost. There's a lot of, downside to growing really aggressively and, like, pushing your team to grow aggressively. And so, you know, you might hit a target for a year, but what does that do for you in the next year?
00:52:47:12 - 00:53:11:06
Tomer Chernia: Keeping an eye on for us were were very, very mindful of efficiency and not just top line growth because, as you grow and we, we, we gear up to, to, to the next chapter of growth in public company readiness and all the maturity that comes with it. Like you pay attention, I can grow really fast, but like, what does it cost me to do so?
00:53:11:06 - 00:53:13:00
Tomer Chernia: And is it worth that trade off?
00:53:13:01 - 00:53:42:13
Sahil Mansuri: Amazing. Makes a makes a ton of sense. You know, I think it's, it's hard for folks to, to push back when they feel this, this pressure from the market. And I think having a first principles reason, thinking around this, this kind of stuff makes a lot of sense. And I think the inverse is really expensive. You have a lot of companies who set unrealistic targets based on board pressure, and then end up churning out a bunch of their team or end up with, you know, morale going through, you know, sinking, and then all of a sudden you have to rebuild the machine.
00:53:42:13 - 00:53:44:05
Sahil Mansuri: And that's a lot harder and more expensive.
00:53:44:05 - 00:54:14:18
Tomer Chernia: And I think the things that people miss is like, oh, we just set aggressive targets. And then you get even if you get 70% of the way there, that's good. Like not sales is there's a psychology to it, right? Your team needs to feel empowered to charge the hell they need to believe they've got the best technology in the market, and they're solving real problems for their customers, that they've got a shot of success if they're always back foot in, they're like a team that's constantly a 5,060% of their number, is not a team that's going to hit 100% of their number, magically, because they're so far behind in some way, shape
00:54:14:18 - 00:54:30:09
Tomer Chernia: or form. And I think you need to be mindful of the psychology and the motivations of the people on your team. And I think, like, it's that's the lost oftentimes in the boardroom, no one's like, oh, yeah, I really want my salespeople to have confidence when they're going into their meetings that they're that they're they're going to you know, do well.
00:54:30:09 - 00:54:34:15
Tomer Chernia: But, I think it's an important detail for those of us who are people managers to be mindful of.
00:54:34:17 - 00:54:54:01
Sahil Mansuri: Dude, this has been such a dense, podcast. I, I could honestly spend another like six hours with you on this and, and in fact, I would I would love to have you back in a few months to, to do, part two. But before I let you go, I want to spend just a few minutes on, on some lightning round questions to end.
00:54:54:02 - 00:55:13:18
Sahil Mansuri: Let's do it now. My first question is maybe my favorite, which is that we often talk here at Provato about how sales is a superpower. And it extends far beyond your professional capacity. And so maybe give me an example of where you've used your sales superpower in your personal life in order to get some benefits.
00:55:13:20 - 00:55:41:05
Tomer Chernia: Oh, I think I mean, this is obvious for me as a foodie and and natural wine person is becoming friends and asking good discovery questions of people at restaurants and wineries that open up doors in ways that are, kind of, you know, not not easily accessible example. We were in Paris. We were at some wine bar I became friends with somehow, by taking, like, an active interest in the person who is managing this bar.
00:55:41:07 - 00:56:02:06
Tomer Chernia: And he's like, you know what? Tomorrow I'm going to this, like, industry, wine tasting event where there's going to be a bunch of great natural wine producers and introduces some of the makers of my friends. Why don't you come with me as my guest? You get that as a byproduct of, like, taking an active interest in people like, you know, really kind of, doing the things that as a salesperson, you do well and it opens up doors.
00:56:02:06 - 00:56:08:23
Tomer Chernia: And it was an absolutely amazing experience. And everyone says Parisians are very rude to Americans, but I experienced the complete opposite.
00:56:09:01 - 00:56:29:08
Sahil Mansuri: Yeah. It turns out that sales is the magical language that unlocks friendliness in everyone. The next question is, what is the best advice that somebody gave you earlier early in your career that these days we've gotten too woke, in order to be able to get this advice. But but that you think actually served you really well, in your career.
00:56:29:12 - 00:56:47:13
Tomer Chernia: Yeah. So there's a line that we don't use all the time, but just thrown around all over the sales pit when I first started selling, which is Buyers are Liars. And this is the thing is, like, your buyers are gonna lie to you, and I think it's it's wrong because I don't think there's actually, like, malicious intent from the people that you're buying from to, to mislead you.
00:56:47:18 - 00:57:02:13
Tomer Chernia: But I do think there's a lot of wisdom in the fact that, like, what you're being told, by your customers might not always be the complete story. And it might, you might they might not be trustworthy narrators. And so, like, how do you stress test your champions? How do you verify information that's being delivered from the people that you're talking to?
00:57:02:15 - 00:57:09:20
Tomer Chernia: So great feedback. But you'll never hear me tell my team that buyers are liars because it's it's just it's it's bad, albeit pithy.
00:57:09:20 - 00:57:23:18
Sahil Mansuri: It is pithy. And I like your description of it, which is unreliable. Narrator. You know, it's not it's not malicious. It's just. That is the world as they see it. Exactly. But perspective is itself, you know, misguided.
00:57:23:18 - 00:57:32:14
Tomer Chernia: And so they're it's their lived truth, or whatever the term is, and, and and there's benefit in understanding it, but you sometimes you gotta, you gotta think critically about it.
00:57:32:16 - 00:57:45:07
Sahil Mansuri: Amazing. And last question for you is if you could pick any fictional person to join your sales team that you think would do a phenomenal job of any, any sort of pop culture reference, whatever you want, who do you think would make a great salesperson?
00:57:45:12 - 00:57:48:13
Tomer Chernia: I mean, it's got to be like Charles Xavier. He's a mind reader.
00:57:48:15 - 00:57:50:17
Sahil Mansuri: Like it's his. It's not.
00:57:50:17 - 00:57:54:21
Tomer Chernia: It's like shooting fish in a barrel. It's it's he he would crush it.
00:57:54:23 - 00:57:57:03
Sahil Mansuri: Wow. I've never heard that answer.
00:57:57:05 - 00:57:59:01
Tomer Chernia: Really? Yeah.
00:57:59:03 - 00:58:03:18
Sahil Mansuri: Oh, I don't know. I mean, I mean, is that a common answer that, like everybody I've never heard.
00:58:03:18 - 00:58:06:16
Tomer Chernia: Of, you said fictional character. I'm going superpowers.
00:58:06:16 - 00:58:21:23
Sahil Mansuri: I mean, I've gotten a lot of, you know, I've gotten a lot of, like, Wolf of Wall Street kind of stuff, you know, like it sort of thing. I, you know, I don't know that I've, I've, I don't know that I've ever heard, somebody mentioned, you know, X-Men in this. That's pretty good.
00:58:22:02 - 00:58:41:08
Tomer Chernia: If not. And if you want like human without powers, you'd I would go you you mentioned earlier like Sherlock Holmes would be a great, a great, dev tool seller or has magic, but, kind of off kilter is like a Hermione from, Harry Potter, I also think would be a great, a great tech salesperson.
00:58:41:08 - 00:58:46:01
Sahil Mansuri: I have heard her mighty before. That's a good one. But I'm sticking with Charles Xavier, though. I think that's a pretty cool one.
00:58:46:01 - 00:58:48:04
Tomer Chernia: It's it's it feels like a cheat answer, though.
00:58:48:06 - 00:59:03:23
Sahil Mansuri: Of course. That's a great answer. I think it's actually. I think it's clever. All right, my friend, thank you so much for the time. It's 3 to 6 months from now. Let's do this again. And I wish you the best discovery of the best natural wines. We'll trade some notes and we'll have a good time.
00:59:04:01 - 00:59:05:07
Tomer Chernia: Likewise, my friend. Take care.
