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a16z Podcast | Getting Sales Right
21 segments available
It may seem like good apps or services sell themselves. That's what the whole viral thing is all about, right? Wrong, says Daniel Shapero, who helped build LinkedIn's enterprise sales team from a small core group to more than 1,200 people all over the globe. Shapero joins a16z General Partner Peter Levine (an engineer who jumped into sales before taking on his first CEO gig, and who now also teaches a class on the topic at Stanford) to discuss the right way to build a sales organization -- from answering the basic question of why sales?, to hiring, compensation ... and the inevitable culture clash that occurs when salespeople and engineers meet.
Segments Timeline
Introduction to Sales at LinkedIn
Daniel Shapero introduces himself and his role at LinkedIn, where he built the talent solutions go-to-market organization. He shares insights on how LinkedIn generates significant revenue through enterprise services, highlighting the importance of sales in a company often perceived as purely viral.
"hello I'm Peter Levine from andreessen horowitz and I'm here with Dan Shapiro from LinkedIn Dan welcome and Experion here yeah maybe maybe just for you know for folks listening a little bit about your..."
The Growth of LinkedIn's Sales Team
Shapero discusses the impressive growth of LinkedIn's sales team from a small group to over 1,200 employees, emphasizing the scale of operations across 27 offices worldwide. He reflects on the journey of transforming a $40 million business into a billion-dollar enterprise within four years.
"happy to and thanks thanks for having me here sure so I've been on LinkedIn for about six and a half years and for the majority of my time there I was responsible for building out the talent solutions..."
Why Build a Sales Organization?
In response to Peter Levine's question, Shapero explains the rationale behind establishing a sales organization at LinkedIn. He emphasizes the need to serve end-users rather than just decision-makers, highlighting the importance of educating the market on the value of LinkedIn's products.
"about twelve hundred people spread around in 27 offices on most continents so amazing ride and in the last three months I've done a complete pivot now and I'm I'm actually on the product side of the o..."
Understanding Customer Value
Shapero elaborates on how LinkedIn's sales team helps customers understand the value of their products. He discusses the challenges organizations face when adopting disruptive technologies and the necessity of having a partner to guide them through the transition.
"a it's a it's a very fair question and from my perspective it is true that in fact the people that use LinkedIn the recruiters that use LinkedIn taught us about the value of the product before we unde..."
Measuring Sales Impact
Shapero shares insights on measuring the return on investment from a sales organization. He discusses how customers often prefer guidance when making purchasing decisions, which can significantly influence the perceived value of LinkedIn's offerings.
"we've we've talked quite you and I outside of this we've talked quite a bit about the value of a sales organization and you kind of express it as this organization that teaches a customer about the pr..."
A Day in the Life of a VP of Sales
Shapero describes his daily responsibilities as VP of Sales at LinkedIn, emphasizing the importance of client interactions and team engagement. He highlights the need to stay connected with both clients and employees to foster a strong organizational culture.
"could say if Salesforce or Oracle or success factors basically slash prices by 70 percent could they sell their products online like maybe but it would be a lot easier to have a you know an organizati..."
Navigating Leadership Challenges
Shapero discusses the evolving challenges faced by sales leaders, from market communication to scaling operations. He emphasizes the importance of understanding the current problems and preparing for future growth, advocating for a long-term vision in leadership.
"what's the gun in the life of Dan Shapiro as VP of VP of Sales at LinkedIn yeah you know the funny thing is it's changed over the differences of the business and so I think there's like a lot of commo..."
Hiring for Sales Success
In this segment, Shapero shares his philosophy on hiring for sales roles, emphasizing the importance of over-hiring and ensuring cultural fit. He advises entrepreneurs on how to select the right candidates who can define success and culture within a new sales organization.
"first person yeah first couple of people maybe just you know what's your philosophy on hiring you mentioned that like you know it's a really important ingredient hiring and then and then you know firi..."
Assessing Sales Talent Effectively
Shapero reveals his approach to evaluating sales candidates through mock sales calls. He explains how this method can effectively differentiate between strong and weak salespeople, providing insights into what makes a successful salesperson.
"over the long term I think beyond that I think probably the biggest lesson I learned about hiring salespeople is the easiest way to assess a salesperson is to get them to sell to you and so like we di..."
When to Let Go of Underperformers
This segment addresses the difficult topic of firing salespeople. Shapero discusses the criteria for making these tough decisions, including performance expectations and the potential for improvement. He shares strategies for setting timelines to evaluate underperformers.
"culture maybe on the the other side so you know we I certainly have you have it's inevitable we're in these situations you go hire people and some don't work out yeah and so how do you think about sor..."
Understanding Hiring Success Rates
Shapero explores the concept of hiring success rates in sales organizations. He reflects on the typical outcomes of hiring decisions, discussing what constitutes a successful hire and how entrepreneurs can measure their effectiveness in building a sales team.
"think that those people because the job gets even harder as you're talking about more and more capable people yeah Barger and larger jobs with more scope and right the difference between there's no li..."
Understanding Hiring Success Rates
Shapero explores the concept of a 'hiring batting average' and reflects on the variability of success among new hires in sales roles. He questions how to measure hiring effectiveness and discusses the differences in success rates between hunting roles and account management positions, highlighting the challenges entrepreneurs face in building effective sales teams.
"based on your your experience and just industry-wide do you think there's sort of a hiring batting average that one might take away like you know of 10 people I hire how many are gonna work out and ho..."
The Challenge of Sales Leadership
In this segment, Shapero addresses the difficulties of hiring effective sales leadership in startups. He notes that leaders who have managed larger organizations may struggle with the ambiguity and fast-paced nature of smaller teams, emphasizing the need for adaptability in leadership roles within sales.
"that might be sufficient for the business yeah so I think the variability of the performance of the job kind of plays okay I find leadership the hardest thing though I think leadership batting average..."
The Importance of Accurate Forecasting
Shapero discusses the significance of forecasting in sales organizations, explaining how accurate forecasts can lead to better resource allocation and strategic planning. He shares insights on how forecasting serves as a tool for clarity and understanding within the management team, rather than just a numerical goal.
"always I and and we've discussed this perhaps in the past a little bit on forecasting accuracy versus not and like is it okay to be you know is it okay to forecast low but then come in high how do you..."
Leveraging Forecasting for Growth
This segment delves into how effective forecasting can enable businesses to invest in growth opportunities. Shapero illustrates the impact of accurate sales predictions on hiring and product development, stressing that good forecasting can help avoid resource starvation and support business expansion.
"that being said we're incredibly good at forecasting within the sales team at LinkedIn to sort of mind-blowing capacity and it is allowed the business to invest more aggressively on the front end arou..."
Navigating New Business Forecasting
Shapero explains the complexities of forecasting for new business ventures compared to existing accounts. He highlights the challenges of predicting outcomes in newly launched products and the importance of understanding the context behind forecasting discrepancies, advocating for a focus on learning rather than just metrics.
"part of my goal you could think of if you want to take a super Silicon Valley view of sales our goal is to fund engineering and my ability to do that successfully requires me to be a good forecaster y..."
Sales Compensation Structures
In this segment, Shapero addresses the differences in compensation structures between sales and engineering roles. He discusses the rationale behind commission-based pay for salespeople and the challenges of aligning compensation strategies across different departments, emphasizing the unique motivations and performance metrics in sales.
"good but but yeah we're we do a good job on this great that's great one of the other conversation points always with entrepreneurs is sales compensation yeah and let me let me characterize it as engin..."
Measuring Sales Performance
In this segment, Shapero explores the differences in measuring performance between sales and engineering roles. He emphasizes that sales outputs are easily quantifiable, while engineering contributions are more subjective, making it challenging to assess individual performance in tech roles.
"that work yeah and maybe it can work I mean it's a very interesting question yeah and I know a lot of organizations that try to change it to say okay I'm just gonna hire salespeople who believe in our..."
The Emotional Fuel of Sales
Shapero discusses the emotional aspects of sales, explaining how salespeople thrive on the highs of winning and the need for recognition. He contrasts this with the nature of engineering roles, which often lack the same level of individual visibility and emotional engagement.
"the second thing is to recognize that sales people get to here know all day long and so the need for emotional fuel is a big part of being a salesperson they need to have a rush the high of have Winn ..."
Culture vs. Compensation in Sales
Shapero shares insights from his experience at LinkedIn, arguing that compensation structures do not dictate company culture. He explains how a focus on teamwork and long-term cultural values can lead to success in sales without compromising the integrity of the organization.
"former yeah I'm um can I make one more yeah absolutely I think the biggest concern people tend their voice around this is like does this Brewis breed a sales culture that is the heart of evil in most ..."
Bridging Sales and Product Management
In this segment, Shapero reflects on his unique career path from sales to product management. He discusses the transferable skills between the two roles, such as empathy and leadership, and how understanding both perspectives can enhance collaboration and innovation within a company.
"yep interesting you're a very you have a very interesting career in that you're you've moved from sales now into product but I'm exactly the opposite I I move from you know most people move from produ..."