Martin Gontovnikas

Co-Founder and GP

,

Hypergrowth Partners

   |    

May 21, 2021

In this episode of the Enterprise Monetization Podcast, our host Sandeep Jain sits down with Martin Gontovnikas to discuss how product lead growth led to the massive growth of auth0. In this episode they discuss how auth0’s monetization systems were able to scale with this growth and some advice for startups looking to follow a similar path.

Podcast Transcript:

Sandeep Jain:

Hi. Welcome to the 6th episode of “The Enterprise Monetization” podcast. And this is your host, Sandeep Jain. In this podcast, we invite thought leaders from monetization space that has CPQ and billing, so that you can learn about challenges, opportunities, and best practices in enterprise monetization. Today, I'm pleased to welcome our guest, Martin Gontovnikas, or short for Gonto. Gonto has a very unique profile that he is an engineer, turn market here, turn advisor and investor. Gonto was the sixth hire at auth0, with some of you when I was recently acquired by auth0 for a mere $6.5 billion. Gonto join them as a developer advocate. And eventually he became the leader of all the marketing and the growth team at auth0. Gonto left auth0 earlier this year to start Hypergrowth Partners, which is a sweat equity advisory firm that helps B2B startups to achieve hyper growth. With that, a very warm welcome to you, Gonto.

Martin Gontovnikas:

Thanks you for inviting.  

Sandeep Jain:

Awesome. So before we go further into the depths of the monetization, do you want to share some quick fun fact about you to the audience?

Martin Gontovnikas:

Yeah, one thing that I'm, it's kind of crazy for me is that I did stand-up comedy when I was younger, when I was 16 years old. I was very, very shy. I didn't talk to people. And I wanted to start going out with more women to be honest. So I didn't know how to crack being less shy. And I figured out that if I did stand-up comedy, and I expose myself to talk to others and to be funny, just do that I was gonna be like, learn how to do a lot better. So I did two years of stand-up comedy, did some actually presentations in a theater. And after that, I actually I am much less shy. So I'm very happy to have done that.

Sandeep Jain:

That’s amazing. And where was that gone to? Was it in back in Argentina, or was it here?

Martin Gontovnikas:

Yeah, it was back in Argentina when I was basically in high school.

Sandeep Jain:

That's amazing. So maybe you're a stand-up comedian turn, engineer turn.

Martin Gontovnikas:

Exactly. I don't know. It wasn't that goal, as a stand-up comedian though.

Sandeep Jain:

Why did you stop it, like, do you still do that or with your friends or something?

Martin Gontovnikas:

I don't do that anymore. Like stand-up comedy is too much preparation. I don't like learning as much. So I've done it for a lot of years, but then I stopped. And I don't know why I stopped, I actually should have come back to it.

Sandeep Jain:

Okay, maybe there's a match for you there to go and experiment.  

Martin Gontovnikas:

Exactly.

Sandeep Jain:

Cool. So here, we know that you started auth0 as a developer advocate. But I'm amazed by your journey there. And I think it's interesting for, I think people would love to know, like, why the shifts that happened in your career and why, and what's this backstory there?

Martin Gontovnikas:

Yeah, so I actually started programming and coding when I was very young. I was like 12, and I studied because my auntie was a Systems Engineer, and pick up like an ERP company here in Argentina. So I coded for a lot of years, I started with Visual Basic 6, which I feel a bit ashamed of. I then started Systems Engineering, and worked as an Engineer, Engineering Manager and architect for ten years maybe, like nine years, something like that. For the last few years, as I was doing that, I started to read more open source projects. Two of the open source projects that I built, became really, really popular. So I started to be invited to conferences around the world to speak about it and to companies to talk more about it. When that happened, I realized that it was more interesting and more fun to me to actually make the open-source repositories popular rather than them or building them myself. And that's what I always say that the dark side was calling me. From there, I actually remember that my ex-girlfriend, like finished a relationship with me. I had like a crisis of like, what the fuck do I want to do next? There was a guy and I really liked what he did. I actually Googled him. I found him on LinkedIn. He was doing developer evangelism. I didn't know what that was. So I went and Googled the term and I found the book by Chris Kaman. I stayed the entire night up, I've read the book, and I was like, Okay, this is what I want to do. So I started applying to companies then do the various interventions because he was a bit of what I was doing before like writing blog posts, speaking at conferences, but as a full time job. I interviewed in like Mozilla and a few others, and they ended up choosing to go to auth0 which was a very small company, that I was a sixth employee and the first marketing hire even though I was not a marketer, when I was there, I was basically writing the SDK’s, being the Sales Engineer in the call, writing the documentation, writing blog posts, speaking at conferences, and basically a bit of everything. And most of the signups because it was a product that developers could basically try out, most of the people who are registering and sign up or signing up in the product were developers. They eventually liked it, they contacted us, and they paid. So because I was bringing basically all of that through giving some of these talks, the CEO gave me the opportunity to lead the self-service team. Essentially, the theme was basically this idea of bringing signups. Signups will then use the platform-based service with a great card or sign up with enterprise, which now we call it as per the growth but because eight years ago, probably product led growth was not a thing, I think. So it was self-service. And from there that started, like, I started to try experimentation, it works. And eventually, I was given the opportunity to run out of the marketing and growth team at Atlassian. So when I left up to 7 years into the future, my team was 100 people. So it was a big, big team. I thought I like more, like smaller teams. I don't like the responsibilities of a 1000 company, People Company. So that's why now I'm working on Hypergrowth partners and doing advice on growth and marketing to other companies who are at a similar stage that I went through the entire journey with we don't see them.

Sandeep Jain:

I see. We'll go to your ARR’s journey in a second. But at Hypergrowth partners do you work with like startups, do you have any preference as to what kind of…?

Martin Gontovnikas:

Yeah, we usually look so we look for companies that have found product market fit. And what they want now is to scale their go to market efforts with a low CAC so we are low customer acquisition costs. There's no easy way to find product market fit. So what we usually do is we look for startups who are at least a 2 million of ARR, approximately up to something like 60 or 80 million. And we work closely together to do an audit first in the company, we talk to prospects, we talk to customers, we talk to the team, we look at their marketing technology stack, we then do better with them in the go to market strategy, set up what are the KPIs and the themes that we think that they should have, and then run experiments using our experimentation framework to drive that Hypergrowth within your customer acquisition cost. So usually, I would say they are CDSA or V Company, the minimum that we will look because see, that it’s a bit too early for us. Because we can advise, but we do not help with execution. So we expect a marketing team to be there to execute on some of the strategies and things that we talk about. What's different about us is that we do not charge cash, we charge equity to the companies that we help them, which is where we say you're like BC of time and knowledge. So we'll put money and will invest 5 to 10 hours a week in your startup, but you're gonna pay us equity in exchange. And that way we have steam the game to help you succeed.

Sandeep Jain:

That's amazing, Gonto. Besides your detailed explanation, I like the specificity of the things that you talked about to love this. So let's go back to auth0. So the first thing is, what is your thought about hiring, you said you're the 6th hire, but you're not writing third, but you're the developer evangelist. So what's your thoughts about that, like companies would think at that stage, I need to hire a Front End Engineer or a Back End Engineer? Nobody thinks about hiring a developer evangelist so early. So could you talk about that?

Martin Gontovnikas:

Yeah, I think that was actually a very good call from Matthias And Kenny are the two co-founders of auth0, like they already had the product, the first version of the product mostly built at that stage, because the other five hires were all engineers and one designer, basically. So he wants to continue hiring engineers. But at the same time, they didn't want to continue building the product without knowing if developers cared about it or not. And what it meant, when I showed him that there was only one local market strategy that was already made, which was that they were sure Kenny and Matthias that they wanted developers to be the users of the product to try it out and to sell to them if they enjoyed the product. And if that's the decision that I actually do think that hiring a developer relations as the first marketing hire makes sense, because I'm gonna be the one who are going to be creating the community and creating awareness through developers. And then in the beginning, we were getting a lot of feedback on things on the blog that didn't work out or what didn't great, etc. And that was sort of the conduit that was getting some of the feedback from the community and then feeding it back to the two founders and engineering team to fix it. So that also helped a lot with product development in the beginning as well.

Sandeep Jain:

I'm actually more interested in talking about the developer evangelism, and we'll talk about that later in the podcast. But let's put the focus on why we are here today, which is Quote-to-Cash. So can you talk about when you started the self-serve thing at auth0, and this was eight years ago. And if you can compare this with right now, like, what are the challenges companies will face when they're thinking about this? Could you help us with that?

Martin Gontovnikas:

Like we have so many challenges, I would say in the beginning. So the first thing was, we wanted to make sure that developers were aware and knew about, obviously, so our first challenge is we're about acquisition awareness, I would say. So our focus was on bringing value to developers, but writing good quality content on how to implement authentication. What is a refresh token, JSON web token, I have multiple terms that are very technical and authentication or security related? The other thing we do a lot in the beginning was, we bet a lot as well on it communities. So Angular JS, which is a front end framework was just starting, it was a 0.6 version. And I was personally pretty sure that I was going to explore MBB. So what we did, for example, was we went to every conference in the world about Angular JS. And it wasn't only because of providing value to the listeners, it was only because was also because we create the relationship with the speakers, because we sell them everywhere in the world, and we drink beers or wine with them, they then started to share our content, because it was good quality content. And then Angular community, we became the thought leaders, everybody was coming to us to ask us questions, all authentication. And what I found was important was being genuine. Meaning if somebody came and told me, Hey, I went out on authentication with Twitter, and Facebook, should I use auth0? And I was like only if that makes no sense. Like you should use it if you want multi-factor or this other thing, or whatever. And that started to create trust in the community. So in the beginning, that community was the one that was bringing us a lot of people to the content. And those that were intrigued afterwards, and then signing up to try auth0. So in the beginning, there were a lot of challenges more related to that than anything else, I would say. A challenge a bit later on was activation. So now we have developers who are coming to the product. But in the first day, we were dropping 95% of them, and only a few were staying. And that was because it was hard to understand the product. So we also focused a lot in the beginning on okay, how can we make the onboarding easier for developers? So they understand what's going on? How do we make it so that if the person who signed up it's not a developer, they follow another path? Because it doesn't make sense. And we also started to think about how do we sell to them, because at this point, the only way we're selling these developers liked it, they then click on talk to sales, and they were coming to us inbound, they was the founders closing the leads in the beginning. So we started that hiring our first inbound like sales account executives, who were basically closing deals, and we were getting through talk to sales. And we were not reaching out to developers at all. And we actually got to 20 million in ARR by doing this basically, we didn't do anything else. We didn't have any more sales rather than inbound sales, and waiting for people to raise their hands when they needed help for example.  

Sandeep Jain:

So this 20 million ARR, were people buying to credit cards, or was it all sales done through salespeople inside sales?

Martin Gontovnikas:

There were people buying with credit card, I would say, it was maybe 10% of the revenue, 90% was through sides. But the difference was that our sales team did not contact them, didn't contact any sign up. And we were basically just getting people to try the products, use it, setting it up in their app, and then clicking into to say, Hey, I've implemented this in a big project. I like it. We want to explore using it for our full use case, and we talk. So there was still a sales process where like, I'm the executive was demoing it for their use case, they said engineer was building a PLC or doing a whiteboard session to showing how they could implement it. But the sales side, he was really short. He was like, between usually was three months or under three months, because they already tried it. They already implemented it. And it was more about making sure the work for their specific use case at scale.

Sandeep Jain:

Understood, and, Gonto, right now, if somebody's thinking about that sales motion, are the tools in place where people can do that easily or do you think it's there is some friction that people can expect there, and why?

Martin Gontovnikas:

Yeah. Regarding the tooling, I think, for us what was hard in the beginning was one, like getting people to raise their hand and then come to us like was easy. Of course they were like this that just raising their hand. But in advance, we started to think about what if they don't raise their hand and they need a little bit like a small push, for example. So some of the things we did in the beginning was, okay, we have predictive scoring to know which of these people are using the product, and we can predict they're going to become an opportunity. So for that, for example, we ended up building it ourselves with an algorithm called Random Forests. So our data been built it. But there's a lot of tools like MadKudu or Infer that I think are amazing, actually building some of the scores for you, and then helping you who you want to reach out and why. We've got intercom, for example, for sending emails, but then we had Salesforce, our CRM, and it was very hard to set up like tasks in Salesforce or for people to do something for an SDR or the salesperson, if somebody had a high score or something similar. So we broke DB, and it was all manually in the beginning. And we ended up switching to Marketo, which I personally deeply hate. But he just had a really good integration with Salesforce and made it really easy to actually flow leads with a high score and similar to other places. We used to do that workouts a lot. And I actually think that was a really good decision when using redshift. But there's others like snowflake, but that was our source of truth. And that was actually John Casey's the CEOs decision. And I think he made a fantastic call there, where that has all of the information and you use that to send information to Marketo, to Salesforce to intercom to whatever it is, so that when we switch to someone, we share information between the tools, it made it so much easier to actually flow the information and flow that leads from one place to another.

Sandeep Jain:

Did I hear you sit down to that your source of truth for leads on the self-serve, and enterprise was one system, which was redshift? Is that what you said?

Martin Gontovnikas:

Yeah, all of the things were in redshift, like literally everything was going directly to Data Warehouse. And then from Data Warehouse, we were sending it to a Marketo or goes a Salesforce or something similar. Plus, you set the source of truth where we saved all of the leads, information was always in the Data Warehouse.

Sandeep Jain:

This is a very interesting, you mentioned that Gonto, because I've talked to several people who do this Seltzer and enterprise sales, and half of the things are sitting in Marketo and half of the things are in Salesforce. And slack there is Gonto sitting in in your Seltzer, and then Gonto in Salesforce is the same, Gonto is a different. And so there's a lead, they're trying to understand is that the same lead or not, versus figuring out is this lead going to convert into an account? So it's very interesting. You have the single source of truth, which most companies don't. So when you left auth0, what does your Quote-to-Cash stack look like? So which is your like, give several channels, I suppose. So you had self-serve, you have enterprise sales, I don't know if partners were selling auth0 or not.

Martin Gontovnikas:

We were in them, when I left, yes, we have partners selling auth0 as well.

Sandeep Jain:

Yeah. How does this whole system look like? So is it still redshift is your single source of truth?

Martin Gontovnikas:

So redshift was still a single source of truth. But we were migrating when I left to snowflake, which is another database, but still, it's a data warehouse. So it's similar. What do you think Marketo for marketing automation, who were using Salesforce for the CRM, we call outreach for the sequences that were being sent by the STRs on emails and phone calls and stuff like that, using 6sense for Account Based Marketing, understanding who was coming to our site, and when. We were using clear leads to do reverse GeoIP address on host coming even if they didn't enter their email. And we're also using it to enhance the information that we were getting from them as well to then see if we could reach out or do something similar. We were also doing using Optimizely for both AV testing on their website, as well as website personalization, where we were personalizing the content based on what they were using, who were using actually a custom made CMS because content folding didn't work well for us. And we didn't like, we ended up doing something ourselves, I would have loved to use something different. The website front end was also custom made, but before I left, I wanted to switch to workflow, which is like a no gold version for marketing websites. I'm a big fan of workflow. We weren't able to switch in the end. And then we had a lot of random tools that we use for specific things, like funnel beam to basically get information for ABM leads on specific categories of information. We wanted to see which companies we were going to target first and which ones later, for example, but I think that was our main stack. We also have heap for analytics, which we will be sending the data there from the website as well as from the data warehouse and I think that's it. Those were like their main things.

Sandeep Jain:

What was the function management? If I'm buying auth0 from the web, there are probably different flavors, so what system has the knowledge on, what flavor of subscription people are buying?  

Martin Gontovnikas:

So what subscription people have was all custom made, and it was save in the data warehouse, similarly, in the source of truth that I was saying. So it was all in redshift. For the payments with the credit card, we were using stripe. So that was just stripe, for your typical payments, it was something else. But our infrastructure for billing specifically was on custom built, and it was connected through our pricing page, as well as like the dashboard, the reading page, as well, and all of its data ended in the data warehouse.

Sandeep Jain:

Understood. And when people are connecting with you and say, I need a deal or give me a cord on auth0, I have like 1000 employees or whatever. Was there a system which is the CPQ that your salespeople were using, was it like Salesforce, or was it something else?

Martin Gontovnikas:

There was the CPQ, I honestly don't know which ones we were using.

Sandeep Jain:

Understood. Would you know, what sort of the invoicing thing that people were using internally at auth0? Like what is the system that was generating invoices?

Martin Gontovnikas:

No, I don't know, either. I know that before self-service it was stripe. So stripe was generating invoices as well. But then for the contracts, what actually do know, we were using intact for most of the accounting thing. So I probably guess we were using intact for invoices as well.

Sandeep Jain: Understood, and what are the currencies and number of SKU’s that auth0 was transacting in?

Martin Gontovnikas:

So the main value metric was active users. So how many of your users were logging in a given month that was the main metric. We then found the multiple plans that have different features like one has authentic factor or another one, enterprise Single Sign On or stuff like that? And what that changed is, what is the price of our value matrix, or what was the price of that active user? And then we have enterprise add-ons, where additional things that you would add on top of the plan. And we had like maybe six, I would say, additional SKU’s. So it was a bit complex doing all of that together for doing the quotes. We also have volume discounts. So it was a bit of a mess.

Sandeep Jain:

Understood. And what currencies were you transacting? Was it like multiple currencies, or was it few?

Martin Gontovnikas:

For currencies on self-service, it was always converted to dollars. And the same was what we did for enterprise contracts, like everything was eventually converted to dollars when we were getting it. But we have actually, we had like 45% of the customers in the US, but we kind of redistribution both in Europe and in APAC, compared to other startups. So we were like doing the quotes in a local currency. But then when we got into our bank basically was converted to US dollars.

Sandeep Jain:

Understood. In fact, a lot of companies that I speak with, they end up building their own billing system, which is what seems like you guys did, but it does not scale. And then they a big public company we have spoken with, they have roughly 140 engineers working just on that billing system. So it's not 10. It's not 14, it's 140. So what…?

Martin Gontovnikas:

For us, we actually had two teams working on their billing infrastructure, both on the pricing page on the other one, so between engineers, Product Managers and designers, they were maybe, I would say 18 people, or something like that working on it.

Sandeep Jain:

Interesting. And the company I'm talking about they have a revenue of 1.5, close to $1.5 billion in revenue. This is a scale thing. So if there is a city's a CEO, who is thinking about our CTO, thinking about monetization for their company, and they know their customers can come from self-serve, or this maybe direct sales motion? Do you have any recommendation on how should they think about their structuring, their monetization stack for like for good growth?

Martin Gontovnikas:

They do both bottoms up and top down, or they are the question if they, if you are, if they are trying to understand whether they should do bottoms up or top down first?

Sandeep Jain:

Actually, if they know that they have to do both. So it seems that if you're in one of the swim lanes, the choices of the systems are relatively clear. But the problem happens when you start thinking a blended. And you talked about one issue, which was lead management, in your case, it was one system of truth. But if your monetization is spread across two different systems of truth, it will be hard to move customers along that. So do you have any suggestions on how people should think about structuring this?

Martin Gontovnikas:

Yeah, like the main suggestion is related to what we talked about before, which is have a data warehouse which is the source of truth like that's literally what had that in there with every account, we can their subscription model like was it stripe or was it enterprise, as we called it. And they are, we also knew, what was the plan that they were using? So if they moved from stripe to enterprise, for example, we would change that in the data warehouse through an internal tool that we built, that the finance team was able to use, and that made things a lot more simpler for us. Otherwise, it would have been hell.  

Sandeep Jain:

Interesting. And Gonto, monetization today spans across different teams like engineering, you’re in marketing and growth. How should you think about structuring this monetization teams like considering it's a multi-function task?

Martin Gontovnikas:

Yeah, I'm personally a big fan of cross-functional teams. So I think at cross-functional teams for this is something that would make sense. So, when I would think about it is you have a team that has engineers, designers, and a product manager, who are basically responsible for not only implementing the UI on the backend and for how much to pay either self-service or enterprise as well. And as part of that team, I will have embracing the pricing spreadsheets, or the pricing manager, who's also thinking about what are their skills? How do we implement them? So I think that's coming one thing that as all of that makes sense, in our case, the people that were part of a team reporting in two different areas. So that team had some engineers from marketing, were working on the pricing page, some engineers from products who are working on the dashboard, we got designers from both marketing and the products were editing things, we had the pricing manager, who was the one who was looking at these tools, was looking at what's working, what's not working. I had someone starting in marketing in my team, and then eventually moved to product and report it to product. But I think having a cross functional team that works together, and their sole focus is that even if they are from multiple teams, but they are one unit is the best way to make sure that there are no silos and that everything is consistent.

Sandeep Jain:

Interesting, Gonto, shifting gears a little bit. What do you think about usage based billing? A lot of companies that we speak with, have are thinking about doing usage based like earlier, it was one time, then it was subscriptions. And then are people experimenting with how the usage thing looks like? Do you have any thoughts on how companies should think about it (a) and (b) from an implementation perspective, would they face some challenges there?

Martin Gontovnikas:

Yeah. So to me being has to be related to what your aha moment metric is. And what your north star metric is, and what I mean by that is, for example, for our CEO, we had to figure out okay, what is the aha moment? And for our CEO, the aha moment was when they had their first user logins through their application. So with the SDK implemented, and they were getting like an authenticated token in return, that was like, Oh, wow. And then retention for us was 14 users logging in through the app in the first, like every month basically. And what that meant is that they were doing that they were going to stay with us for 18 months. So that we did a study actually of looking for correlation between which metric in the platform correlated higher to both long term retention in the product, as well as to opportunity creation and closing. So from a sales perspective.

Sandeep Jain:

That's the Random Forest thing that you talked about earlier, that you guys pulled.  

Martin Gontovnikas:

That's the one?  

Sandeep Jain:

You talked about Random Forest algorithm, the prediction, was that the thing that did this correlation?

Martin Gontovnikas:

It wasn't. So the Random Forest was more of like exploring the, we were using for leads, it was just an easy correlation on looping again, like we first started with qualitative interviews. And they're telling, what was the aha moment? And why do they care? They gave us like eight options. For those eight options we saw, okay, how many people who got into that in the first seven days ended up staying with us for eight months, or ended up paying, and that was the correlation coefficient. So, once we looked for the highest correlation coefficient, which had to be higher than 80% for us, and for us, it was the active users. So, once we have that, I think pricing has to be correlated with that. So if you've got one metric, that is the metric that is basically driving both long term retention, as well as higher likelihood of creating an opportunity, that is a metric you should charge for, because that's basically is the way that you're adding value to your customer. In our case, it was active users, which again, what's important about it is when we built it, nobody was talking about active users like our competitor back then which was Octa was charging for registered users. So how many users in total, like signed up to your app, what we realize is that signing up makes no sense because it has no value to the customer. It's about what users are logging in every month to that app, if they don't log in, they don't get value. So once we decided that, that was like, Okay, this has to be our pricing metric, because it's about the value. And to me, that's the main thing I will always think about, it doesn't matter if its usage base, if it sits based, if it subscription base, it means, what is the one metric that the customer, the more value that they get, the bigger it will increase. And that's the metric I think you should pick for setting a pricing strategy.

Sandeep Jain:

That's very interesting that you talk about linking your monetization to the AHA metric. For the Product-Led Growth companies, it seems so simple, but then it's so complex, when you get into the details, you forget about that. So appreciate. But have you heard any challenges, let's say if that metric comes around to be usage, which is a very variable way of pricing. I mean, you could have bands like 1-50 users, it's that, 50-200 it's that, but if it is more of a real time usage. Do you have any thoughts on like any? Have you seen companies that are facing challenges doing usage based billing?

Martin Gontovnikas:

So for us on these, actually, the biggest challenge that we had was understanding, what was an active user, like how exactly we counted. So for example, somebody is trying to login. And they login directly with Facebook that is an active user. But let's say somebody is trying to login, and they click on Facebook, they login, and that works. But the second step is they need to do multi-factor. So they now get an SMS in their phone. They don't get it and they don't finish the login, that comes as an active user, because we lock them in and they didn't get through security or not. What does it mean? Why? So for us, the challenge was defining exactly what an active user is, how it works, and making sure that we were always counting it in the correct way in the data warehouse, because if we're using that to charge our customers, it has to be predictive, it has to be always the same and it has to be clearly defined. And to be honest, in the early days, it wasn't clearly defined. So it was a bit of a mess, because we weren't thinking about okay, we needed with a lot of manual work to make sure that we were charging customers always correctly. That was in the very, very early days. Eventually, of course, we fix that. And then it was automated. But that was something that was a big challenge for us on how do we do this usage based billing.

Sandeep Jain:

Understood. And Gonto, for implementing auth0, did you see any customer issues on billing and quoting? Do you remember if it was a big thing, or was it like…?

Martin Gontovnikas:

The main issue with other on being a biggest one we had was without self-service with credit cards. And when there credit card expired, Stripe was trying the credit card for like three or four times and eventually stopped trying. So we actually for a couple of years, we had people that were using the account for free for and we didn't know. And once we figured it out, of course, we're not gonna charge them all of the time that we didn't, because we fucked up. So we fixed it. And we started to automate, hey, your credit card is wrong, you need to fix it. But that was like a big challenge for us on how we do billing when credit card expired, or there was another issue with the credit card that didn't raise up to our concerns. That was one. And the other one was just in the beginning, we didn't have like an accounts receivable person that was focusing on collecting money from the contracts. And when we didn't have, that companies were taking a lot of time to send money, and it just took forever. So we need to actually people to focus on the accounts receivable part as well. So we made sure that people were paying.

Sandeep Jain:

This is when they are not paying through credit card. But there are paying through an invoice that is interesting. And related to that, is there an amount of money that people are comfortable putting on their credit card versus, you know, they want to put this and ACH or an invoice, is there a magic number or range?

Martin Gontovnikas:

I don't think there's a magic number. And for us, we actually packed it. But I can give you example of Twilio as well. So for us, what we wanted is when the customer was paying more than $20,000 a year, we wanted to build a relationship with them. So what that meant is we were not going to allow them to base and service more than $20,000 a year. Because in that case, we want to include an account manager in the accounts who can help them and do a bit of help and make sure that they are being happy. So we actually kept it but people wanted to pay more. And that's an example that to me is fascinating is Twilio. And they had customers who are paying 200K a year or 300K a year with just credit card and talking to literally nobody. And that worked for them. I was actually, I would be excited to try out if that would have happened in auth0 or not. But in the end, we can make that change. But it was very interesting how it worked for Twilio.

Sandeep Jain:

So what you're saying is that people and this is news to me, by the way, personally, that people aren't comfortable paying. And this is B2B customers we're talking about. So it's not like individual consumers that don't pay more than $20,000, $200,000 on their company credit cards for a transaction?

Martin Gontovnikas:

Yeah, it was crazy to me too. But at least in Twilio, that happened often.

Sandeep Jain:

Okay, because the most challenges that I've heard is that if the transaction is more than $5000 or $10,000, their companies don't allow to put that much amount on the company credit card. So there is a need to do self-service quote on the web. Like people don't want to talk to a salesperson. They say just give me a code. It's $50,000. And I need to raise an invoice and my company will pay you, but I want to talk to the salesperson because that's I know I want this.  

Martin Gontovnikas:

That might make sense. I think it depends on the company. For us again, we didn’t allow people to pay more than 20K. We did a bunch of people who were paying 20K with the credit card at least.

Sandeep Jain:

That's interesting. Shifting gears a bit Gonto. Do you see or hear about AI, ML, in this marketing Quote-to-Cash world? Do you have any opinions on that? How intelligence looks like, you were using intelligence in auth0, the Random Forests, the Correlation Coefficient? Any interesting things that you think are being done or should be done?

Martin Gontovnikas:

What's interesting about AI is personalization, like everyone is doing personalization. What's the next page that they should see? What is the next blog post they should reading? What is the next documentation page that they should read? So they don't have problems, or when do they reach out to them? I think all of that which is personalization, I think it's a table stakes. Now when most companies should start thinking about that are these Random Forests and a predictive scoring as well from AI and ML. But to me a lot of AI and ML is gonna come with like, to better act for people who you still don't have any money. So you don't have a lead yet. You don't know who they are. But still you can get lot of things of them based on where do they come from? What patiently see, how much time do they stay? So for example, we were guessing on their websites based on what they saw how much time they stay there, if they were a developer or not, we didn't even ask them, we didn't even know it locally work. But we use that information to then market them differently. So I think looking at behavior and getting stuff from people, before they enter your email is something that I'm gonna see, I think we're gonna see a lot more. And similarly getting intense data. So for example, you get data from G2, or other services, even before you have any information from you. And using that for personalization on the website. And what you are going to be able to do, I think is another thing that I think most companies are gonna start using sooner.

Sandeep Jain:

That's interesting. Related to that, do you have any suggestions on like, companies always have a variation of good, better, best, and there are customers and of course, each category. There is a lot of value in moving customers, who are existing customers from are upgrading them to the next level. And companies struggle with how do I figure out like, who are these users in the basic category who can be upgraded to the next one? Because these customers are already with you. Do you have any suggestions on figuring out these, I don't know, growth potential customers?

Martin Gontovnikas:

For those, I also believe in like predictive scoring, like we did the same thing that we did on who is going to become an opportunity on it, who is gonna expand from self-service to paying a balance, and who's gonna expand between that enterprise paying accounts. And we use that score, who also send to non-executives to account managers to reach out. So for example, when we collect high score from self-service, we started to call account executives or SDRs reach out to them like, hey, we're seeing that your usage is increasing in these units and more help on implementing these like, and stuff like that, just trying to become helpful. But I think that on that similarly, like predicting scoring on a specific metric is a very easy way to do the good, better grades. And as I said, you can use something like MadKudu or Infer who also support that as well.

Sandeep Jain:

Got it. And Gonto, I want to touch on a little bit of developer evangelism. I think we talked about initially that you went to different conferences and built relationships with the speakers. Any I thought that was very interesting insight, by the way. Any tricks that you want to share with the audience on the companies that are thinking about building developer communities? I'll tell you what I have heard, people think about should I go on Twitch? Do I create a Stack Overflow on my website? What's should I? Should I sponsor conferences? Like what's the way to do to do this smartly? What are the hacks there? Could you share some actions that work or that do not work? Could you share things that don’t work as well as work? I don't know if there is things that you can put in my bucket. But I would love to know.  

Martin Gontovnikas:

Yeah, so I think like, first of all, one thing to understand is like, not all developers are equal, like developers are different. And it will depend on who you're targeting. So I don't think there's one silver bullet or one thing that you should do Stack Overflow or slack or discord, or something like that. What I'm personally a big fan of is like, think about what is the service that you're reading? And then based off of that, start doing interviews to the target developer that you care about, and ask them about how do they learn in our case? How do they learn all indication? What do you want to learn on? Where do you go, what apps to use? And the strategy I think will come from that. So to give you an idea for us, when we interview developers, about whether they want to learn how to level authentication, everybody answered the same thing, which was, I don't give a shit about authentication, I don't want to learn about it, it's boring. I will only look for authentication, if I'm stuck when I need to implement it, and I will Google how to get unstuck. So based off of that our strategy was content marketing, and it was how to guides or how to implement authentication with React, or with other technologies or something like that. But that was the main thing for us, because of that insights. Our developers that were the front end developers, in our case for implementing litigation, were saying that they spent a lot of time in Twitter, following other people. So again, we tried to go to the conferences where the people, they were following what they actually do with a relationship, and they shared some of our contents. But it all came from some of this research. And everything that we tried, it was not part of this research was like didn't work at all. So for example, when we switched from developers to Product Managers, when we didn't switch, when we also targeted Product Managers, we felt like okay, let's do a same, let's write blog posts about like, How to Guides and stuff like that? And they were all like a complete failure. So we went back to interview Product Managers, and account managers we targeted was from global 2000 companies, and they have specific sizes of teams. So what we learned is that Product Managers from smaller startups were reading blog posts, these Product Managers were not reading blog posts, and they weren't growing to make their product confidence or product and media to learn or reading from analysts. So then, okay, that's our strategy. We need to work to product and we do sponsored events. But it all came from these interviews, I don't think there is a silver bullet, except for actually talking to your audience to understand what they do and how they learn about data. And why do they care, and then create a spreadsheet based off that.

Sandeep Jain:

I love the specificity of it again, Gonto. But tell me this thing, did you yourself were doing interviews? Was your team doing interviews? Did you hire somebody to do the interviews for you, because I see both models, I don't know if you have any opinion on that?

Martin Gontovnikas:

In the beginning, I was doing them because I was the only person in the team. So I was a solo person doing the interviews. When we targeted the Product Managers, we were much bigger back then, I didn't do any of the interviews. It was like people on my team in their growth team, doing the interviews and writing the insights based off of that, but it was always outside. I personally believe it's better to ask the questions ourselves. And it's only because of one reason. I only come three questions, like the three questions that I mentioned. But then when I start talking, when they say something, it gives me other questions and 100 ideas. And if somebody else does it for me, I cannot do that. And the biggest value came from the random questions that I asked when I was doing the interviews.

Sandeep Jain:

This is very fascinating. You mentioned that because I also from that same school of thought, interesting thing comes, you know, in a regular conversation, like I was not expecting us to talk about the leper evangelism in this podcast, but it just so happens to be talking about it right now.

Martin Gontovnikas:

Exactly. I'm a big believer in serendipity and randomness, because that's the world we live in for random.

Sandeep Jain:

Yeah. And I've seen the companies, you know, they somewhat struggle between you know, as I said, external agency, they have UX researchers. They have Product Managers, and their growth people and the trend of struggle, like who's going to talk to this person? And of course, this person cannot talk to the four of the entities. So that's interesting.  

Martin Gontovnikas:

I think it depends in that case on it, what are you trying to solve? If it's a go to market strategy is broad, if it's a specific feature, how it works is product management, but they're getting everybody to talk to one person. And usually what I've seen similarly to what you said is, the four people who want to talk to them, so then nobody talks to them, which is fantastic solution.

Sandeep Jain:

Interesting. Gonto, this was super interesting conversation. I don't know if you have any summary thoughts on this bottom up and top down sales motion, because this is something that's very close to the B2B startups right now, like everybody wants to do Product-Led Growth. And but there are some things where I think Product-Led Growth I personally think does not apply well. But any closing thoughts on that?  

Martin Gontovnikas:

Like, it's two main things to me about product led growth. One is the user, or two or three, the user must be willing to try things out, and to try a product. There are some users that are more likely to try things out others that do not. So if they do not try things out, of course, it's not gonna work. Second, that they should see value with a small implementation. So for example, with auth0, you could implement it for one small things, or for one more small team, and it worked, you didn't have to implement it to all of the applications to get value from it. If you need to implement something across the entire corporation to add value that is not like product growth, you're not gonna do Product-Led-Growth, you have to have a unit of value with 1 2 3 4, not more than that, if they do not get value there, I don't think it makes sense to do Product-Led Growth. And the other one is, you can use to do Product-Led Growth, if the person who is the user has enough power in the organization where they will be able to talk and try to convince the decision maker or the buyer, or if the user is the same as the buyer, usually user is not the buyer. And if that's the case, they should at least be able to influence the efficient, if they don't have influence power. Again, I don't think Product-Led Growth makes sense.

Sandeep Jain:

Awesome. This is a great way to sort of end our conversation Gonto, but before we let you go, would you have any recommendation on a resource like a book or a podcast or a blog that you'd like to recommend to the audience?

Martin Gontovnikas:

So I always recommend the same book. My favorite book is “Thinking Fast and Slow”. Like to me, it helps you understand how our brains think. And everything we do is related to that. So if you understand how the brain works, then you are much better at making sure what to say to people and why to get the message across. So by far at least for me, Thinking Fast and Slow has been one of the best books that I've read in my life.

Sandeep Jain:

Awesome. Hey, with that, thank you again, Gonto, for your time. This was a very fascinating conversation.

Martin Gontovnikas:

Thank you for inviting.

Sandeep Jain: Hi. Welcome to the 8th episode of “The Enterprise Monetization” podcast. And this is your host, Sandeep Jain. In this podcast, we invite thought leaders from monetization space that has CPQ and billing, so that you can learn about challenges, opportunities, and best practices in enterprise monetization. Today, I'm pleased to invite Navin Persaud. To this podcast, Navin has a deep expertise in running sales and marketing ops. He's currently the Head of Revenue Ops at a company called 1Password. I'm pretty sure all of you would know what that company is for. But for those of you who don't know, 1Password is a private company based out of Toronto, Canada, and they do password management for both businesses and for personal use. So they are like a Product-Led Growth company, if you're familiar with the term Product-Led Growth. Prior to that, Navin managed operations at several companies such as Fixed Software, Ceridian, Leader, Lenovo and IBM Canada. With that, I want to extend a very warm welcome to Navin. Navin, welcome to the show.
Navin Persaud: Thanks, Sandeep. Happy to be here.
Sandeep Jain:  Awesome. So, before we start, can you share a quick fun fact about yourself that you'd like to share with the audience of this podcast?
Navin Persaud: Sure, sure thing. I think people who know me know I love to fish fishing. I'm not exactly a great fisherman, but I love the analogies that that fishing offers me in my work life to my personal life. And really that persistence, the amount of effort preparedness, these are all things that work in both elements, whether, you're fishing or whether you're that sales rep trying to close that up order.
Sandeep Jain:  It's interesting. I don't fish but I could never call it that analogy. Well, we've all seen the fisherman just sitting and just waiting for the hook to be engaged. I don't know, what's the right phrase there? But I can imagine the patience and the diligence required to get this thing done, it's very interesting. Do you fish often, by the way?
Navin Persaud: Anytime I can get.
Sandeep Jain:  Wow. Okay. So I'm assuming you're close to a place which allows you to do what you want to do?
Navin Persaud: Proximity water doesn't stop me. If I have time, I'll go find it
Sandeep Jain:  How much is this, if you don't mind me asking this, the paying for this activity is like a few hours like what's the time commitment?
Navin Persaud: Yeah, usually, you have to know that you're gonna go a day before because then you have to pack the vehicle and make sure you have all your gear, have bade know that you're waking up early the next morning, and then you go.
Sandeep Jain:  Got it. And once again, my goodness, but is it kind of a solo sport, or is it?
Navin Persaud: It's either, but like, the great joy for me is taking my son. So my son is 18. And he loves fishing as much as I do. And sometimes he's pulling me to go fish when? No, I'm not thinking about it. So it's actually really great.
Sandeep Jain:  That's interesting. That's interesting. My son is eight years old, probably, that's a good dad and son bonding exercise, I guess. So thank you for sharing this, by the way. Let's come to some other fun stuff that we want to talk about today, which is monetization. So I give a quick summary to our audience. But Julie, just quickly share about your professional journey. You know, it seems that you started in marketing, sales, and then you're now into revenue operations, which is sort of an over encompassing thing?
Navin Persaud: Sure. I started my career as an IBM 15years, right at a university, I thought I was going to be a lawyer at IBM. Opportunity at IBM was amazing, as you know, entering the workforce, starting off as you know, an operations moving into sales roles, finding a home operations, and then eventually moving into SaaS organizations Rev Ops 2015. And then learning SaaS from there on in having never experienced Salesforce, didn't really know what SaaS was never sold software, moving from like a commodity based business to software and, you know, looking back, I wish I had done it sooner.
Sandeep Jain:  Go ahead and dial up one password. Can you talk more about the company and your role at 1Password?
Navin Persaud: Sure. I've been to 1Password for just over six months now. It's been an amazing journey, their Product-Led Growth Company, they serve as both individuals so like a B2C model, and companies as a B2B model. They're on an incredible growth curve at the moment. Product-Led, and my role here as leader of Rev Ops is to really just look at the internal processes and systems and sort of help the team remove obstacles, to just keep that efficiency rolling out, it's been a great journey. I've enjoyed the ride. And I look forward to more projects and initiatives that we're about to embark on here shortly.
Sandeep Jain:  Understood. And could you talk more about, like how your role is structured within is apart of the sales organization? Because revenue operations crosses the multiple boundaries of multiple functions. So that's why I'm curious about how it is organized at your company.
Navin Persaud: Yes, for sure. So I reported to our CRO, so we're part of the go to market organization, which is effectively sales, and that's typically what I've seen in my career. I think, once I've reached this particular level, I've always reported into either CRO or CMO. But generally in sales, because that's where the pain is felt. That's where they need someone to help them with the systems, and the process, and the reporting and the data. So it's a natural fit, and a natural home sales affords you the opportunity to be on the same team on the same page, so that you're working with each other as opposed to against each other, which is always great. In order to get things done, get buy in, and to generally just move initiatives forward.
Sandeep Jain:  Understood, and what companies have a separate revenue operations function, do they also have a Sales Ops as a function or is it kind of merged with the Revenue Ops?
Navin Persaud: I think Rev Ops is a new creature in the last few years, it's a buzzword. I think sales ops was more of a legacy term that companies are sort of just shifting away from. In the past, I've seen sales ops, I've been a sales ops leader, and it's really about, you have an MQL, you've created a customer, you have an MQL, you've created a customer like that was the journey. And your role was to operate within that. Whereas Rev Ops is a lot more encompassing is you have an MQL, you have a customer, then you have an upsell, you have a renewal, you have a churn, you start all over again, you have expansion. It's more of a full cycle. And it marries well into organizations where you have a CRO, who owns not only the new customer sales teams, but also the customer success and expansion teams as well. So it's a nice little wrapper.
Sandeep Jain:  Awesome. I think you explained this very well. And I mean, I've talked to quite a few people on that, but I think explanation hits the mark. So thank you for sharing that. And so look, we talked about a Product-Led Growth scenario. So can you talk about the challenges in this journey that you talked about, from a view point of a Product-Led Growth company?
Navin Persaud: Yeah. So first of all, it's great to be working in a Product-Led Growth company. Because here you have great virality in your product, great demand. And really what you're coming in, at least from my perspective, to fix are effectively the plumbing of all the systems and the billing and the process and the lead flow sand how all of that works in behind the scenes. And your hope is you're just trying to fix things and those processes to get out of the way of a product. So that the velocity people can you can acquire new customers that can move through your sales teams, and then into your customer success teams at great speed. Whereas the inverse is if you're not working in a Product-Led Growth company, you're really trying to fix those things to help drive velocity where it doesn't already exist, and that's where it's really challenging. In terms of challenges, I would say, having the ability for customers to self-serve is paramount. Lot of Product-Led Growth companies has the ability to acquire customers. So they would have like an Ecommerce solution where customers can sign up for a trial and then buy on their own. But not a lot of them have the ability for customers to move to different forms of payment. They have to get to a human in those instances. And that's where these bottlenecks start to appear and surface. And if not built and sort of planned appropriately. You run into scaling resourcing issues, because then all of a sudden, this, this big wave of customers who potentially needs to be upgraded or pay in a different way, needs a human to do it. And therefore you need more humans to kind of meet that demand.
Sandeep Jain:  So let's just focus on that. So this is the B2C workflow that you're talking about. And is there like the tools existing tools don't have that. They don't have an answer to that workflow that you're looking for. And you have to build these experiences yourself, or the experience is not great from the like, what's the problem there?
Navin Persaud: Well, this is actually B2B as well. But I find that a lot of Product-Led Growth companies, their product, and the way in which they bill is something that is inherent and built within their product from the get go. And over time, they extend the reach of the product to service billing and integrate with other systems. Sometimes it's not ideal, like it's not the best way or not really what the intentions of the product were solely there to solve for. And then you reach that period of limitation where it's either you, you scale back what the product is, and you buy something that just doesn't well in the market to solve for those pains, you just have to reach a certain amount of growth where you have to make that decision. And in the meantime, you have to make things work with the product you haven’t place, and the structure and a process that's already built into your platform, to scale allow for growth, and give that flexibility and upgrade paths etc.
Sandeep Jain:  Understood. And with respect to this particular like there are two workflows from B2C and B2B.And the tool that comes there is the CPQ, which is workhouses, the product catalogue, do you see any challenges there having a CPQ service these different channels, where your customers are coming from?
Navin Persaud: WithB2C, it's pretty simple. Like you try the product, you like it, you put down a credit card, you pick your tear away, you go, it's really not, from what I've seen, the CPQ use case there, where CPQ is most prevalent is on the B2B side, specifically, where you have a customer putting their hand up saying, you know, I hate pricing. CPQ is really your subscription engine, your ability to understand what the customer needs price of that quote, and then turn it into a customer with a subscription and a contract to be able to amend upsell down, sell churn renew over time. And it's really the management of that engine across 1000s of customers that makes it complex, if not done quickly. And in an efficient way, I've seen significant challenges with companies where they've waited. And then they decided, yeah, you know what, we need to go do this, and the work is just a lot longer, a lot longer. So because CPQ, and the systems I've dealt with are complex, it's that you have to translate or almost rinse everything that what was built into the CPQ framework, so that it can spit out what you need for it to go forward. And that's where all the challenge lies.
Sandeep Jain:  Understood. And then you'll experience Navin, for product like good companies, even for the customers coming from B2B. Is there a requirement for a self-serve CPQ that I don't want to put my credit card, but I'm gonna do a deal of several $1,000 or10s of 1000s of dollars. But I'd still want to talk to a salesperson, is that a valid scenario that companies should think about?
Navin Persaud: Absolutely. For the point that I raised earlier, if you're aren't building a fly wheel within yourself serve engine, your website's always on, and the ability flexibility for customers to buy what they need, without necessarily always having to talk to a human to get it done. You're hurting yourself, because then you're really relying on your ability to scale on the people that you have to service that demand in a timely fashion with the right price points, and all the other administrative actions that follow it. Companies who are Product-Led Growth and build that flexibility in from the start before them the ability to ramp sales teams over time to be extremely targeted, focused on a specific cohort of customers, whether it be in your enterprise or specific industries, or specific product types, etc. that’s really powerful. But if you're really requiring on the humans to service your demand, because you have a limitation of what someone can buy on their own, then you're sort of at the bit at the mercy of the people that you can hire and putting see.
Sandeep Jain:  Got it. And so one side of the CPQ may have been but the other side is a billing for that. Do you see any challenges with billing for both your B2C and B2Bcustomers?
Navin Persaud: Yeah, from personal experience, B2C is a new thing for me, so I won't go into that. I see. That's pretty straightforward. A lot of vendors out there I think Stripe was one of the most predominant ones. From a B2B standpoint, yes, because even if whatever CPQ you decide to choose and use, you then have to play nice with your billing system, a lot of companies that I've been with almost all of them, except for one, use NetSuite, which is typically your ideal stack. And you have to basically have the two systems play nice like you're going to do a set of calculations and understanding of ARR, and subscription and term and everything else and then basically tell the other system, here's what you need to go and do with that data. Here's how you need to create sales orders and invoices and renewals and billing schedules. And at any point, we may send you something else to upsell and down sell, etc. and your systems need to be handling that. I've never seen it. I've never joined a company where that process was great at the get go.
Sandeep Jain:  Understood. Well, from a NetSuite perspective, running subscription billing, do you find this, is this flexible? What do you think about the flexibility of the tools to support the amendments and renewal cases? That's something that is brought by all, every time I speak with somebody who say I have a very complex or unique renewal process or an amendment. And so what do you think about the complexity of the tools or ability of the tools to do service, this core requirement of SaaS businesses?
Navin Persaud: It's never really that can solution, do it. It's almost always do you have the skill in house to make it happen? I've seen this time and time again. So I mean, we just came off of a CPQ implementation, it was a huge lift. We're now sort of like cleaning up thereafter. But now we're focused on the next piece, which is like how do we integrate this data that we're getting on a CPQ, to our billing system, and what needs to change or what needs to be accommodated so that we can automatically send data back and forth. So it's not a capability issue, it's whether you have the skill and hours to turn on the feature functions that are necessary to accommodate. Quite often, I've seen that suite instances really just be stood up to generate invoices, and a lot of manual work being done by a finance team, just to accommodate that. You really don't want to be building like a massive building team, because that's just an administrative burden into GNA. What you want to be able to do is understand the areas whereby you can automate things, so that you can eliminate the time it takes for you to send out invoices, so you can improve the time it takes to collect cash, so that you can keep customers happy and renewing. So you can just be sort of pro active. And so like to recap, it's never the capabilities of the systems. It's the complexity and the resources of skill to actually make it happen.
Sandeep Jain:  Got it. And Navin, any thoughts on usage-based billing?
Navin Persaud: As a customer, I've seen it. So I've bought a lot of SaaS in my SaaS career. You have Salesforce and DocuSign, all these other solutions. And I'm constantly managing how many users do we have available today team, because we're hiring more people. And I need to make sure that I need to either go buy some or use what I have. And some companies do really well, they get you right when you need that license. You know, you can go into their self-serve like Sales force, the greatest example, I can go on self-serve my own licenses right now, whatever I need, I don't have to talk to anybody, will I get a deal? No, but I will get the licenses I need right now. If I'm thinking I'm going to need to make a bigger purchase off to call up my rep, and we'll have to talk through it that way. But night or day that's afforded to me, and that's available. Other companies have soft caps. I've dealt with a number of vendors whereby you can go over we'll catch you on a true up either at renewal or at some interval that you reach through their head. It's easier for me as a customer, because then you know, I can deal with it. It's more of like a deferred pain and it doesn't interrupt my business flow. I sort of liked that model being the vendor. I'm not sure how much I like that model, because I'm potentially leaving some error on the table, or I'm potentially hoping that my team has the right visibility to the reporting to understand where those trips scenarios exist. So they can go after that revenue at the right time.
Sandeep Jain:  Understood. So you're talking about mostly like a seat-based model where your number of seats are growing…
Navin Persaud: Unless you're also referring to like how much you use the product, DocuSign is a great example of that, I believe they have two models. I've used both where you have seat based or you have envelope based. An envelope base where they basically say, you get this many envelopes in a period. And you can just have as many different users in the system as you want doesn't matter, we're just going to charge you based on the number of envelopes you send out. And when you exceed that, we're automatically just going to bump you to the next year.
Sandeep Jain:  Got it. So I was asking more about that use case, which is, as a revenue offset, 1Password,that's if you decide to have usage billing for your own product. I don't know if you have it currently or not. But if it is based on I don't know, number of different sites, or number of different licenses that are stored in 1Password,and you charge your customers on the basis of that, does that add complexity to your own billing, like how you build your customers and how you do your operations for your customers?
Navin Persaud: On the self-serve side, companies like that, not really. I mean, every time you add a user, you get a charge. And when it's done through like systems like Stripe, or otherwise, the get you as soon as you add the user your credit cards on file, you get sent an invoice immediately. Where it becomes more challenging is when you have to move to invoicing as terms of payment, or something other than credit card. That's where you're having to understand that the change in usage, translate it into your billing process, and then issue an invoice. That's where it can be more complicated if you don't have the right systems talking to each other at the right times to actually automate that work. If that work is manual, it's not scalable.
Sandeep Jain:  Got it. I think the first use case which is more an advanced sort of billing, so pre-buy is what you need. So if I'm going from 5 seats to 10, I go and do the transaction on the website, which is going to be simple versus the scenario where somebody has to monitor how much I'm using. And then at the end of the quarter, month or year, generate an invoice based on how much I used; this requires a different billing scenario.
Navin Persaud: Great. Other companies are also adopting like packs or bundles, whereby you can pre buy, you know, like a bundle of 30or 40 seats. And then you can, you know, start using them and filling them upas you go for the company. You get the immediate purchase of that number of licenses straight up for the user, you have a threshold right away that you can fill and then figure out once you get past it.
Sandeep Jain:  Got it. So, Navin, when you look at this from now, let's say 100,000 foot view, B2CB2B,CPQ billing usage. And you look at this whole thing, is there one big challenge that sort of comes out for you saying, well, if somebody would have solved that actually will make sense or make your life easier as a RevOps person?
Navin Persaud: So I'll say this, the start, I love Salesforce. I'm like, I absolutely adore the platform, because it has made a different career for me. But the way that it's designed, unless you have the right skill in house, and your know what you're doing, and you have a plan, you can fall off the Yellow Brick Road in an instant, you can then decide to go and customize a bunch of things. And then realize, oh my god, I should have just configured some things because now it's so much complexity. You know, CPQ is a great product. I've implemented it three times now. And the biggest challenge each time that I've implemented, it was that we didn't start with it. We ended up with it. Because we realized the homegrown or existing process we had just wasn't going to cut it anymore, was creating downstream problems with our billing our ability to invoice, track renewals, understand churn, we needed something systematic programmatic. And moving to that system was the biggest pain every time that I've done it, not because the system is a pain, it's because you have a wealth of migrated data that you have to translate over. So there's advice that I could give to someone, it's don't wait. Don't try and build it on your own. Figure out a plan that's scalable for your business now, and portable life and when you need to move to something else. But if you don't allow for that, you're just deferring a whole lot of pain for your future ops team that's going to come in here and try and solve what you didn't plan for from the get go.
Sandeep Jain:  Got it, got it Navin. Anything about the interface between the CPQ and the billing systems. I think you alluded to that earlier. I think he talked about NetSuite versus and there could be other accounting systems as well, or billing systems, I should say?
Navin Persaud: You really need a partnership there with your ops team or whoever is going to manage your CPQ and your billing systems because you know, your hand in hand, you have one solution, generating quotes and renewals. Another solution highly dependent on that output to generate invoices and ensure payment. They have to be speaking the same language from like how you're recording revenue, if you have ramp deals, what are you going to invoice, is it staggered? What amendments look like? And then related to that is compensation, something that we're not even talking about here, but you have another team and finance needs to figure out how to pay your sellers, and how to incent them, and how to ensure that the revenue and the data they're getting is accurate and aligns to the plans and programs that are in place. So it's not just billing and solving that issue. There's another element of compensation that also has to play nice in this world.
Sandeep Jain:  Got it. And follow up on this. This the management of this accounting system of the billing system fall into the RevOps team or the finance team sort of owns that, I'm assuming it's a mixed responsibility, but I was just curious too?
Navin Persaud: It is definitely a mixed responsibility. One I'm continuing to learn and understand and grow through. And in my world today, if it's in Salesforce, my team owns it in terms of understanding untangling, making sure the data is accurate. We then partner with our finance teams to ensure that their invoices are accurate, and they go out the way they need to go. Finance owns everything, once it's passed it over to their system, invoice collections, all that thing. The ongoing management of subscription is where you really need to ensure that you have the right resources in place, regardless of which team so that you can understand those one offs, those nuances, you know, sales reps will always you know, apologize in advance to all my sales reps, they will always take the simplest path again. And because that's the nature of the beast and I applaud them for it. And I'm always trying to make them have that simplest path. The reality is, you got to make sure it's right, because then you have so many other things hinging off the accuracy of that an accurate invoice accurate comp, a renewal that needs to go out in a year's time, an amendment that could happen at any notice, a notice of churn expansion, etc. All these things hinge off accurate data and your system. And if you're billing if you're CPQ engine isn't accurately you know, keeping track of that data and managing contracts, you've just created a cycle of pain
Sandeep Jain:  Actually a good segue to this is how to structure the teams. Like you have done earlier talked about Sales Ops being more tactical, RevOps is now being more encompassing term. But now there is also this billing piece we were just talking about. So what's your recommendation, how to structure the teams to sort of minimize the friction and maximize your and go to market efficiency, I guess?
Navin Persaud: Yeah, I can talk a little bit about my team, we’re structured into three pillars, I have like a technical side of the team that handles our CRM and all the related integrations. They manage for of our projects and what we prioritize, I have a Reporting Analytics and soon to be managing the subscription or deal desk function. There did generally ensure that you know, the top of funnel is working, pipelines progressing, deals are getting closed accurately, rinse repeat, and then the analytics from that. The third function is a newer one, one that I'm starting up in sort of like the growth ops function. A resource or team of resources dedicated to understanding the customer success business, to ensure that there are renewals and amendments and upsells and growth. A repeated trend that I've seen in every SaaS company had been with, you grow through expansion, you may acquire logos on acquisition, but you grow on the backs of your customers. So ensuring that you have the right level of insight and data around how your customers are performing over time, their health, their metrics, etc. is absolutely vital for that engine to be, you know, firing on all cylinders.
Sandeep Jain:  That's very interesting. You describe that, Navin. And so companies have a customer support function, which is a post-sales support, but there's also customer success, which is post sales account management. Is your customer happy enough? Are we solving their pain points so that you know once the time comes to renewal, you see the flywheel effect at that point. Is this, How is your this third pillar correlated with a customer success team?
Navin Persaud: So shout out to all my customer success colleagues, customer success as a function, they're the quarterback in my mind. If you follow sports, specifically football, they're the quarterback. So sales makes a sale, they get the glory, then it's off to the customer success rep to make you successful. So speaking as a customer, I've worked with some amazing customer success reps that have increased my time to value with their software simply by being a knowledgeable and accessible resource around their product. And that's no different now, like with our customer success mission is ensuring that we have successful onboarding, that we have a single point of contact on all product related questions that were up to date on new feature functions, that we have our renewals on time. Like it's a super important function, because any subscription business cannot succeed if subscriptions aren't renewed. And your customer success function is the one that is totally armed at making sure that happens.
Sandeep Jain:  Got it. So what you're saying is, look, there is a place for customer success as a project manager or as a quarterback to make sure that the account is overall successful. But this third pillar that you talked about, how does that function relate with the overall customer success team?
Navin Persaud: Yeah, partner in crime almost like to help that team, understand their customers, segment them, help them understand renewal, help them coalesce all of the data that comes that companies like us collect to understand the health of that customer adoption usage, whether they're happy, generate a health score, which can then understand customers that are likely to renew customers are not likely to renew, what actions can we take to mitigate? What actions can we take to create advocates and promoters to grow and expand and create virality within your product, and more advocates, all of these things are data points that lives scattered in your CRM, or if you're lucky enough to have like a solution, like a gain site. They live there. But you need people to help pull it out and present it in a way that you can action it on a daily, monthly quarterly basis.
Sandeep Jain:  It's really interesting you're talking about this. Over the weekend, I was talking to a friend, he's a Sales Engineering Director at a security company, they are like the 5 billion in value that file. So they're a big company. And he's like Sandeep, I'm in sales engineering, I need visibility into what happens. It is what is happening with my existing customer accounts. And I think they're using gainsiteas well. It's like, well, I don't know, the visibility into the data that I can give to my team that they can make some sense out of it, and they can start helping them. So his particular ask was, look, I need to find out what features are being used by certain sort of customers like, what are the tickets that they're finding out? Are there about feature requests, which means that you're engaged with the product, or is it about more complaining that, hey, this thing doesn't work? So he's like, I'm flying blind. So can just somebody provide me the data? And so I can kind of relate that comment with what you were talking about, is there's a separate customer success team, but your team is in the middle that can help provide that visibility.
Navin Persaud: Absolutely.
Sandeep Jain:  So very interesting. Another related question, when you look at this whole B2B and B2Cworkflows for a product, lead growth company, is there like one of the minimum number of tools that you think teams off such as yours have to deal with to get things done? Now there's a CRM going to be there, there is a billing system CPQ. Like for usage, would you think about another system? Like how many systems do you think people shouldn’t?
Navin Persaud: Generally, SaaS companies have what I call like the SaaS spinal cord, you've got your marketing automation, that passes through your CRM, and then you have your billing system, and then connected to all of those things should be your product or way to provision it. Those are like the four core things that should be standard in every SaaS company. How are you marketing acquiring customers? Are you managing pipeline? How are you billing them? And then where are you provisioning them? Every SaaS companies should have those elements, it could be all one element. And then you have another element for your product, but they've got them all represented in some way or another. Each of those pieces of tech though, require ownership. So that you understand both the process and the data as your workflow moves through them. Without like naming any names, but I feel like companies tend to focus in one area and not so much in the other and they leave these bottlenecks. For example, great acquiring leads, but don't really think about how to make sure they get to the right humans at the right time so that they can make the right impactful connections to create pipeline, where they have a great CRM and don't think about, how are we going to sell a product? How are we going to price it quoted, renew it, etc. We're having an invoicing system that just does invoices and leads you to hire so many people in finance, because it's all manual. And lastly, don't have a means to provision the product in a timely manner. That's probably one of the things that I've seen in a lot of other companies and that it's super manual, it's not connected, there's no connective tissue when you close the deal, it says it starts here, when does it actually available to the customer for use? Those are all like, I say that the four key areas that you need to have structure and teams around and specific ownership to those systems, and then they all need to be sort of working together collaboratively. So if there's an operational function across those departments, they should all be talking to each other.
Sandeep Jain:  Got it. And Navin, if there's one or two things that you think can solve your biggest pain, what would those be assuming Gods are smiling at you today?
Navin Persaud: Let's play this fictitious example. Let's say in year two, I landed another SaaS company. And I get in there, I'll be like, okay, day one, I wouldn’t know how I'm doing it today, if you're selling anything, if you're just starting out, or if you have at least some inertia, we need to standardize this now. Because the pain, it's a road of pain, to get to CPQ once you have a lot of customers, because then you have this massive amount of history to crawl through to accurately understand all of your customers, their commitments, what they're worth, when they renew, etc, that the project that could be simple, becomes quite extensive. And I think a big barrier for a lot of companies is that, yes, Salesforce is a great product out there. But they feel as though they have to reach to a certain size before it makes like financial sense to get there. Totally get it, they got to figure it out somewhere in between, because like waiting, makes what could be simple, really difficult. CPQ like the Salesforce product, it's not hard to implement. What makes this hard is the time that you've waited, before you actually decide to go and do it. That was that's what makes it difficult. So they need a bridge, that there's definitely a market for companies that are atX to X size, that needs something to just manage that within their CRM in a more structured function. Format, don't do custom will try and build something, find something that's successful in the marketplace, it's compatible, and run with it.
Sandeep Jain:  One thing that's a great piece of advice, Navin, and one thing that I was thought about while you're speaking is if I'm a customer, and I will self-serve experience. Now if I'm dealing with two separate products, one with a CPQ and billing. So I need to self-service experience for buying. So that's brought by the CPQ. But I also need a sales of experience for invoicing. Now, if those are two traditionally separate systems, what happens to me as a customer? Am I looking at two different universes then, or how does that work? Actually, I'm just thinking aloud here.
Navin Persaud: Yeah, from a self-service standpoint, if it's a credit card transaction, it's typically one system. You buy you transact, you get invoice it all in one, sort of stripe is making a killing. It's when you get to limitations in your product, because your product is sort of like an extension or a legacy billing system that is maybe reaching a little further. And you didn't build a way for customers to move from tier one to tier two. And you then say, well, you've got to talk to a human. So there's a little problem, you have to go to a human. And you add, like inadvertently, you're adding friction to that.
Sandeep Jain:  Yeah, got it, Navin. Actually, I was referring to that particular workflow because what I've heard from folks is, look, credit card payments is easy schmoozing. You know, that's everybody gets it. But the problem is when the deal size goes up, your number I've heard is more than $2,000, some companies have limits on how much money you can put on the corporate credit card. So they say well, I need an upgrade for $3,000. I know what I want to buy as a sale person, so could you give me a quote, a self-serve quote that I can give it to my team. And I want to get an invoice as well there, but without talking to anybody. So that's where the self-serve CPQ self-serve billing, and bank to bank transfers and all that thing sort of comes up, which is I think what you're saying is a human has to get involved. As the consumer doesn't want it, the vendor does want it. But it just so happens that that you have to deal with.
Navin Persaud: Huge pain point, think of government entities, nonprofits, companies with you know, certain invoice requirements, like a lot of companies would love to buy self-serve, but can't because they have rules and policies that requires a paper invoice or a digital invoice, or they have a VAT ID or they have some kind of requirement that prevents them from transacting through a credit card. And that almost always in what I've seen remains talking to human.
Sandeep Jain:  Got it. So how do we get human out of the quote of the cash?
Navin Persaud: It's not always how you get out, its how do you ensure that you're deploying your humans in the most effective way as possible. Like, if you're you know, I love sports,so it's a great time loving sports right now with football and hockey and basketball and baseball going on. And you think of yourself as a manager, how do you deploy your players so that they can be efficient and lead you to winning outcomes, and deploying sellers to small transactions that are high volume, that's not success? That's employee churn. That's difficult to manage, it's difficult for your reps to get to quota, your response time suffer. So those are the things that you've got to look for to understand, okay, you've got great volume and velocity here. But you don't have an automated means to. It's all for it. And what you really want to do is put your humans on these larger customers to expand them and grow them. And that's what maybe takes more time. This smaller flywheel stuff that opens and closes quickly, you need a system to do that quickly. You know, there's a stat out there today that says, most buying decisions are 60% made before even talking to a human. And I agree, any SaaS that I've looked to buy, I've already done my research, I've taken as much of my demo, I've gone into G2 crowd or Trust Radius. I've looked at their support documentation. I've done everything that I think I need to do. Then at the last point, I'll be like, Okay, let me see your demo and send me a quote, that's when I'll engage as human.
Sandeep Jain:  That's a good way of putting in. And it's not about taking people out of the equation, but figuring out where they are most useful. And I think that's the big, big challenge in quote to cash today. Awesome. I did hear that calendar bell, a few seconds back. So I know the clock is ticking. So before we let you go Navin, do you have any recommendation on a resource, like a book, or a podcast, or maybe a blog that you want to share with our audience, that something that you identified with, and you want to share why as well?
Navin Persaud: Two things. One, I'm a huge Ted Lasso fan. Anyone who knows me probably knows the character that I fit in really well there. So I won't say it. The book that I've really enjoyed, as I've worked through it, as it's called “The subtle art of not giving enough”. And it's a great book, it really just summarizes that. There's only so many things in your life that really requires all of your attention, and effort to actually like, throw your passion behind it. And really be upset when you don't have the outcome. Everything else just work through it, it happen. Because if you don't, you're just going to stress yourself out. You're gonna have these outcomes, you're gonna have this all around you where people are not going to want to approach you, you're going to be combative, you're just never going to be happy. And once you realize that there's this inflection point in your life where so many so many things that I can manage within my control, to really, really care about and the rest, I still care about them. And if it's out of my control, it's out of my control. And it's a super resource. Mark Manson is the author, the subtle art of not giving a f$%^, basically the counterintuitive approach to living a good life. I recommend for anyone in a high stress situation.
Sandeep Jain:  So between fishing and this book that's how you manage your time, I guess.
Navin Persaud: I do. I try and get away from the screens as much as possible connecting with nature. And it's really for me, it's not about fishing. It's about being somewhere, some quiet some nature, focusing on just a single thing that bobber in the water and letting everything else just kind of like leave my mind. It's amazing. It's refreshing. It allows you to recharge and come back. Focus on the 30 things that enter my mind, the minute Monday 8am rolls around.
Sandeep Jain:  I love this, Navin, and I'll actually read this thing. The book that you suggested is just makes so much sense. While I hear you say that. So hey, look, it's been a fascinating conversation. I wish you the very best of luck at 1Password. The company is doing awesome. That applies for a lot of growth, which means a lot of work. Good work for you and your team. So best wishes there and thank you for your time today.
Navin Persaud: Great, thank you. Take care.