Kyle: Adriel, thanks for being on the Kaizen Podcast. I'm excited to be on your Gong Podcast. This is the first one I've done with a co-host where we're going to kind of split it 50-50, but I'm excited to talk a little bit about a lot of the scrappiness and a lot of the kind of unique way that you sell. So I think what would be good for folks that are listening to the Kaizen Podcast who haven't heard of you before, give him a little sense of your background and, and what you're doing today.
Adriel: Sure. Well Kyle, welcome to the Gong Podcast and I'm so excited to be on Kaizen. Basically, since I was a little kid, I'll sell in something or another. I started my first, you know, this chocolate is door to door for the Hebrew school back in middle school. I actually lost an envelope full of money. So that was my first lesson about being protective of other people's money cause I had to pay all that out of my piggy bank. But from there I started my first real company in ninth grade and that grew into a fairly large eCommerce business doing organic superfoods that went through numerous entrepreneurial ventures throughout college and thereafter, all of which has been incredibly fun. Some would be to see predominantly from a B2B perspective. So that's what I really love and, and right now that's led me to leading sales that you dealt with, which is a self-driving delivery vehicle company. And our vehicles have been out there doing deliveries for companies like Walmart, HEB, which is the largest grocery in Texas XL Parts, which is the largest auto parts distributor down in the Southwest and a number of other large enterprises. So career's taken me through a bunch of different avenues as a founder and as a head of sales and been loving the early stage ever since.
Kyle: Yeah. And that's the concept of how to even sell self-driving cars. I'm sure when the first copier came on the market, the first and selling copiers was having a hard time pitching that to people who didn't understand it.
Adriel: Yeah. I'm so glad you brought up that copier perspective because that's actually one of the things I've been thinking about a lot over the last six months or so saying sure, self-driving cars are cool now, but 20 to 30 years from now they'll, they'll maybe be out of fashion. Like there'll be just a, and there'll be just sort of a standard on lives. And so selling self-driving cars today are in many ways exactly like selling copiers and the late sixties right after Xerox has invented the technology or convincing people to get sewing machines, which were, which caused huge riots in the 18 hundreds that whether or not the level of work. And so there's a lot of things about just a new technology that translates well from the past, specifically about identifying what customer set goes after. I think that's the most interesting part.
So anybody founding a company, especially in an incredibly high tech environment such as self-driving cars, virtual reality, anything crypto-related, I mean threw around a buzzword at any point in its life cycle. You know, genomic sciences and the late nineties early two thousand anybody doing that needs to find the balance between the readiness of the technology, the readiness of the market, because you could have a technology that's ready, but a market that's not willing to adopt. And the example I love there, web banner in the 90s came out and released this incredible technology that allows you to order groceries online. They had robotic warehouses, they had these, this immensely beautifully planned internet-connected value chain. And the technology was remarkable to order groceries online, but the market wasn't ready. The market didn't have high-speed internet, and most people in America didn't have internet.
Most people were wary about getting anything online, let alone groceries. So that's a case where technology was ready while the market was not sure. Then you've got other examples where the market is very, very ready and they really want what you're selling. But the technology's not ready. Perhaps the most recent relevance example is Theranos where the margin love Walgreens and Safeway and consumers loved what it would mean to get their blood samples done with just a prick of a finger. But the technology simply wasn't there yet. So that one craps as well. So any new technologies, self-driving cars included need to find where the technology on market means.
So that's what we really spent the last, the time doing is finding the markets that we can focus on. For example, delivery is something that we decided a much better market than passenger vehicles for autonomous vehicles and then even within delivery sub-segments in that sub-segments and that further, we did deliveries for pharmacies, for grocers, for auto parts companies, for restaurants. We did it for all of them. Just understand it now bit by bit by bit we'd guess better understand where our technology is already on the one hand and where the market wants us the most.
Kyle: Yeah. The thing Crossing the Chasm. Have you read that or heard of that book before?
Adriel: I actually just re-read it as my second time this year cause I love it so much.
Kyle: Yeah. I think I've read it 12 years ago in college and haven't read it since. But the idea being that you know you want to go after your innovators and early adopters before you go after your late majority, et cetera. So like it sounds like you're going after some of these, these types of companies because you're seeing them as innovators or early adopters. But how are you going to them with a pitch because they're not sitting around thinking about self-driving cars and how that could improve their business. So how do you even identify who should I sell to? What's my message? Most companies like starting my own company, I'm solving a problem that I personally have. No one's got a problem with self-driving cars cause no one's even got them yet.
Adriel: Well that, that's, that's a great question. And when anybody thinks about, well what kind of proposition are they coming with? The proposition is not, you don't have my products. Like you don't have my thing, you need to get my thing. Nobody cares about your thing.
They can't run the thing that they already have. So yes, in our case, no one's got self-driving cars, but everybody's got delivery drivers and delivery drivers are an enormous SGNA expense. That's unfortunate. One hundred, top $2 billion a year. Just on delivery drivers. And so when we think about what the value is of a self-driving car and deliberate marketing, it's not just the fact that it's self-driving. It's one of the problems that we're solving. Well, in the current model, what people do have, because they have drivers that are often expensive, sometimes unreliable, and the very, very best ones of these drivers aren't doing what really fulfills them.
It's unscalable as well. You know, when you look at the website of a company in our target market for example, I look all the time at the job boards of companies like advanced auto parts or auto zone, and you look at their job boards and you see that they have something like 10,000 open positions for delivery drivers. Well now you found a problem that self-driving cars are solving. It's not just who would have a self-driving car. It's A cheaper and B have 10,000 open positions that you can't feel because we're at the point of the lowest unemployment in history, 10,000 open driver jobs. If every driver costs you $40,000 a year, it must be bringing in at least to X that amount. So you do some quick math and you're losing something like $800 million a year on potential sales off not having ads. So that's the solution.
Kyle: Yeah. How do you deal with the fact that I'm guessing you're AutoZone and some companies like that or you're going to have some folks who are maybe not so technically inclined. Of course, if you've got your Instacarts, those are obviously folks that are leaning into technology, but a lot of the companies that are relying on people because that's how they've done it for 150 years. How do you overcome that process in the sales process? Like, of course you're looking for the innovators and early adopters, but to some extent it's, it's hard to force people to adopt new technologies.
Adriel: Of course, and the answer there probably is quite simply that you can never convince anyone at anything. I think in sales generally your job is not to figure out a way to trick your clients or your prospect into understanding something that's definitely not to convince them something, it's just to cover what it is that they believe and how your product fits into their belief statement. That goes in two ways. Sometimes we'll find a client, which is an absolute visionary. Gee is that innovator that Jeff Moore writes about on Crossing the Chasm and he or she wants your solution or your type of solution no matter what. There'll be first we'll deal with the problems. Make sure to recognize that self-driving cars fit into what their business needs to be over the next 10 years.
They will absolutely lead the charge and that's fantastic because they're already convinced, all you got to do is understand the story that they want to tell themselves. Then you help them craft it. There are high-level stakeholder out there to convince, perhaps it's the board perhaps is there other colleagues and things like that.
On the other hand, you give a great point. You know, a lot of times we're selling it to old dry industries, let alone self-driving or not. Some of them just aren't as techie. We were down the block from you, come check them out. No problem at all. If you go after a company on the other hand, like AutoZone, which is based in Memphis or Advance Autoparts, base in North Carolina or any massive regional grocery based in New Jersey or in Iowa or whatever it is, technology isn't at the forefront there. So then to what they're looking for is reliability, right?
They don't want to be the massive risk-taker. They didn't build their business off of doing things in the craziest possible way. It built his business off of being reliable and being trustworthy. So then we need to come across as a reliable and trustworthy vendor to them. So we need to tell them-- hey, yes you are doing something cutting edge but not bleeding edge and yes it is going to be difficult. Well our experience allows us to do a little bit of hand holding through that process so that if you, all you need to say is self-driving cars will be a part of your solution for your customers 10 years from now. And if we can agree on that base statement then it's our company's job to find a way to walk you through that chasm of your own. That technology chasm you have over the next year.
Kyle: More people are being more aware of the product and technology and the concept as well. But how do you even get your first customer? Cause what you said, reliability is pretty critical. And if you don't have any customers, you're in a technology that no one's used, you don't have any customers and you're trying to get your very first ones. How are you getting through to the first folks who don't have any social proof for you to point to? They're gonna trust that you're reliable and can actually add value to them.
Adriel: Yeah, that's a great question. When we launched the company, it was January 30th, 2018 and we did a big launch where we did a real autonomous delivery in San Mateo, California, and there's a big whole press event and we drove two miles fully self-driving, dropped off a couple of groceries, went home, all this press came out. The next day I come into the office, I've gotten missed calls from a senior vice president at some of the biggest retailers in the world. This calls from some clients worth tens of billions of dollars, they're all like, how can we get this into our campus, our system, cities are calling me for the next week. I would bring this to Los Angeles or Miami or whatever else it is. We thought it was game over a piece of cake. All of that next month spent time together, these fancy proposals and figuring out, hey, can we charge them a million or 2 million and what can we do here?
And then we passed two these fast a month past and we realized we learned actually nothing over the last month about our products. We weren't able to grow it at all. We weren't able to get smarter, we weren't able to have better conversations around the clients. We weren't able to give examples. And not only that, but to close any deal of value in new technology or not, it can take many, many, many months. So our options are either A sit around and wait until a client loves our smooth talking salesperson enough or we really magically got something right on the first try or B go build that credibility.
So when I actually did was after a little bit of frustration after five or six weeks of kind of just sitting around and nothing happening dreaming that one day I might, I went for a walk, just kind of frustrated to clear my head and I started walking past all these restaurants.
So I just walked into one small business at a time. So I told them what we did. I told them we would love to do some deliveries for them. It's our first few clients. We're not Walmart or HEB or XL Parts because they didn't want to take a bet on somebody who was never done anything before. Our first few clients and big shout out to them was Yangon Burmese restaurants in Burlington California. And it was LaGuna florists on the corner of Broadway and LaGuna in Burlingame and it was all these little restaurants and cafes, those Tessera Sera, the vegan cookie shop. It was all these little businesses that we got to do over a thousand deliveries for that paid us, you know, low amounts, three Backhause Bread, hate us $3 to do deliveries around all their customers delivering bread around every Thursday afternoon.
And it wasn't about the money, it was about two things. The first thing, it was about building our products matters. So some of our core features that our larger enterprise customers really love came from real on the ground experience selling to these tiny little businesses for a couple of bucks. But the second most important thing is no, Walmart's coming at our offices are having a call with us every other week for a six, eight month period. However long that sales cycle was. Well, every single time they came we were allowed to show them something we learned, show them the product we built, tell them that, hey, we actually signed up a new customer. It's just a little grocery store, so it's kind of in your industry. It's our credibility got to build and build and build so that by the time Walmart signed up, we had already done a couple thousand deliveries by the time. Now what we've done for all these deliveries for the small businesses, we've done them for Walmart as well. So credibility begins to build throughout that process.
Kyle: Yeah, like doing things that don't scale. Right. What Airbnb did there, Obama O's and Cap'n McCain's or something like that for cereal boxes, right? That's like a big urban legend, but a historical story of how they kind of got started as they didn't a lot of things that wouldn't scale to build some awareness. And then from there, it's like crawl, walk, run into getting into the bigger, bigger deals.
Adriel: Absolutely. Sometimes you gotta elbow you away into the room. The other example I like, there is a Patrick Collison, the CEO of Stripe literally went around to all the other founders at Y Combinator and put stripes code onto their platforms. So not only was it, hey, do you like Stripe when you try it? All right, call me when you, what you think you would go do it in front of them, grabbed their laptops, put the code on there, make them try it and then basically forced pet himself beta customers. Yeah. It's, it's not the necessarily smoothest way of doing things, but it's the one that works, the one that allows you to do those two things, which is A improve your product B, roll your credibility.
Kyle: Yeah. And I think that that is something that a lot of people really underestimate is like scrappiness or like shrewdness-- how much you're willing to be kind of uncomfortable and not uncomfortable as in I'm uncomfortable asking person for a business, but it's like I'm going to do things that others willing to do. And I grew up as a person who wasn't super affluent. So like the only way I got money, I didn't get an allowance. I had carried cans to the grocery store. That's the only way I got money. And a lot of kids probably they got cash handed to them, probably wouldn't have been willing to do those things. And I think that that's something that people don't optimize for is like your willingness to be uncomfortable and do things that others aren't willing to do.
Adriel: Yeah, scrappiness comes out in a lot of different ways and you just in the very early stages, you know, and this changes over time. Once you've got a sort of a process established, once you sort of know your target market and you're able to really focus on a certain customer set, when you begin to build out a script, you want some originality from your salespeople, you don't want too much scrappiness, but now it's bad for the brand or whatever. It was really, really fun about the early stages is that nobody cares about you. Nobody knows your name, you have no real brand reputation to defend and if you can break down that ego, you can really go far. My favorite strangest story is a company called Romr. We were basically trying to be Airbnb for the outdoors so you can reserve private property-- no hiking, fishing, camping, off-leash dog walking, whatever, all these incredible things on private property that you can't do in other places.
And so we were thinking about, well, who's our best customer? Should we go after the fishermen who just want this private pond? We can go sit with his grandson and fish at of upon stopped a hundred years ago and he paid 20 bucks a person to do that. What do we want to go after? A group dog walkers, you know a whole team of moms wants to take their kids and their dogs and go out on a walk and a private trail where it's. One group that we found that was particularly interesting was a group on Meetup, and I don't know if you have ever met an activist, but they like to do, they'll have to do activities and they prefer to do them naked and so I found this group, I was like, Oh my God, all these people on Meetup, they had thousands of people in our region, they're in our private market and they were going on hikes naked.
They were doing yoga naked and they're doing painting classes naked. We're just a group of folks who like to do these activities naked. And so we thought what an amazing customer segment for activities on private property.
Land owners who are trying to make money because farming is really hard business or because their land is an asset that's just sitting there and just costing them money. On the other hand, you've got these people who are begging for privacy and right now we found out as we kind of interviewed a couple of them, we found out that they were actually just going to public state parks. They don't take their clothes off it, hike a bit now stay here, see anyone around, they go put their clothes back on. And that's not ideal. It's bad user experience on both sides. So I was sending messages through Meetup, trying to get in touch with them, just cut and figure out how to get this amazing group of, they're all relatively affluent people and all in our target market.
So what I ended up doing was I just joined their Meetup was accepted and I found it an event that the head of the Meetup was going to. His name is Kurt and I saw that Kurt was going to an event called naked yoga. You know, I guess I gotta go. So I show up to this studio in Durham, North Carolina. We'd solid our sun salutations. All of a sudden, everybody's naked. We do naked yoga. It's kind of fun. Afterward I stopped by, Hey Kurt, my name's Adriel. I sent you a couple of messages. This is what we do. Can we talk? We sat down and got a cup of coffee and that Kyle actually became a client so big. They did something like 15% of our revenue for the next few years. Just his little group. Landowners loved it. They thought it was a little weird, but a lot of hilarious.
The activist paid a lot of money for our product and it all came about through this strange, scrappy sort of story where we didn't have a brand to protect.
Kyle: Yeah, that's a great story. It's a fantastic like tying value to need like in such a perfect way. And it's funny how much those land owners, they may have like kind of scoffed at those naked folks, but they love to cash in their check. So at the same time, it's like no matter how they felt about it, they're more than happy to take their money. So it's a great example of being able to tie those two parties together that never would have found each other, something that they wouldn't do. And you help bring them together in a way to add value to everybody.
Adriel: I think actually if you'd like, that's a really great point I think to turn the table and turn this into a Gong Podcast, I'll ask you a couple of questions because one of the things you and I were talking about before this started is about doing something for your clients that others won't do.
Adriel: In our version of the world, I can tell you as a fact. Airbnb is going to get into our space and start doing outdoor events. I can tell you almost for a fact Brian Chesky was not doing naked yoga to get this client. It's just not happening.
Kyle: There's a story I've used and it's not mine. It's one I've lifted from a friend that'll keep anonymous. He's been in tech for a while and he ended up starting a rehab facility for people that have addictions in the Bay area. What he found that he was able to do was oftentimes family therapists will refer their patients to these rehab facilities because they want their patients to get better. And they're doing this every day. What this person I know did is they started keeping the therapist up to date with the progress of the patient. And what they found was that no other rehab facilities were willing to take that tiny little step. The therapists were so grateful to get literally any information back that they started sending every single one of their patients to this one rehab facility.
Kyle: So he was just inundated with work because he'd done something that was so small that required almost no effort that completely moved the needle for the therapist. So it was the idea is that you need to figure out if people are going to refer your business or you've got some channel that can help, you know, doing something that's not scalable, which is letting the therapist know that could actually be scaled out with technology. And I think this person with a background in technology, you realize that like these people are dying for information and if I could just do a little bit, that's going to mean a lot to them and it's one compared to zero isn't that much, but one compared to zero if no other person out there is even trying is huge. So you can actually do a little bit and get a ton out of it if you're competing in a place where no one is competing.
Adriel: And how did that change across time? You know, you're definitely able to do that in the earliest stages and you and your experience have grown a team from seven SDRs to 70. The company itself changes over that period of time.
Kyle: Yeah, I think that people who are leaders in businesses tend to get there because they're hard workers. They're, you know, they're good at what they do. To an extent, people aren't good at what they do. But you get there because you're pretty good at it. And so your natural inclination is to take on more and more and more. But if you've got a team of 25 and then that takes up 40 hours a week, you can't just spend 80 hours a week to get to a team of 50 and then you know, 160 hours a week to get to T-Mobile 150 like that just doesn't work. That doesn't scale. So you have to empower people below you in your team and teach them to do those things, right? Like you are a lever. As a leader, you've got to instill that concept into the people that work for you.
And so, you know, as I was building the team, I was looking for people that had that, that kind of skill set. But to be honest, I was taxed with doing a lot of other things. So I relied on my team to identify those people who are going to be good fits. So the way I scaled the team and identified the people, I kind of set the broad direction for what I wanted in the people we were hiring. And then I empowered my team to identify them. So one of the things that we did that really helped, this is kind of an unscalable, but when you're trying to hire 10 people a week, you kinda got to do it.
There's this concept of a sheepdog my dad had taught me. So when you have an old sheepdog and you have a puppy, you tie their callers together. So the old one is they're doing their job just naturally teaches the young one what to do. Even though the young one has no idea why they're making a left turn right now. They just know that they need to make a left turn. And so that comes from watching and mirroring the older sheepdog. And so what we do is we take experienced SDRs, take new SDRs and we'd have them interview in a panel because what I found was the new SDRs would go interview a person to be like, they were cool, they're really nice, I really liked them. We don't care about that. We care about could they do the job. And so they needed to sit next to a senior person who had interviewed and seen good and bad people and then they would understand what are the good questions to be asking. It kinda really helped to share that knowledge throughout the team. So having that, the new SDR is tied to the older ones, kind of like sheepdog mentality really helped quite a bit.
Kyle: Yeah, so there are three things that I tended to look for when I was hiring folks, so I hope I don't bundle it. One is I wanted to look for the capacity to do the job. In this job, do you have the bare minimum requirements to at least complete the task? Not like have you done it a million times? To be fair, I was hiring entry-level folks, so it's different than hiring like a VP of X, but do you have the broad capacity to do this and how are we suss that out? I was like, could they write well, were they responsive? You know, when they interviewed were they prepared and like asked good questions and were thoughtful like it was very easy to suss that out. The second was did they have a track record of success? And our thought on that when, I guess my thought on that was if you are a person who's just great at everything that you do, I could probably put you in another role and you'll probably be pretty good at it too.
So like we would look for people who are consistently going above and beyond their peers. Right? Like one of the questions we would ask people is like, what is one of your biggest, most proud accomplishments of your life? Some people would be like, I was an Eagle scout or one guy was unlike the LA galaxy who's a soccer professional soccer player. These people went above and beyond in certain ways. And some people would say, I graduated from college and that could be an accomplishment within your family if you're the first person to go. Me being that, like, I understand how it goes, but like all of the people applying to this job save a couple have graduated from college. So I'm looking for ways that you stood out from your peers that did exactly the same thing as you did. And then the third thing was, are they a cultural fit? And the real question came down to like if I had to sit next to this person for eight hours on an airplane, what I want to like vomit or what, I'd be pretty happy to continue this conversation after we got off the plane. And I think with four people all having the same interaction with the candidate you walk away. Cause if all four people are like yes on all three, there's no question, let's just hire this person and move on rather than dragging that type of a thing out.
Adriel: So if I got it right, you kind of started when the team was seven, SDR as you grew into a little over 70, what were you looking for at people? 10 through 20 and then what were you looking for? People 60 through 80 and it might help just to add some context. If you could tell us a little about kind of the company and perhaps that can get context kind of individual you're looking for.
Kyle: Yeah, for sure. So this was a B2B enterprise company selling deals worth of a 100K to companies that made at least a hundred million or more in revenue. That was when I left. So that was like kind of the 60 to 80 SDRs early on we were, you know, selling to companies that had at least 5 million in funding. We're doing 25K deal. So it grew over those few years. We definitely matured early on. We're looking for someone that met those three criteria. At the later stages, we were starting to look for people that could do specific roles and other teams in the company because what we found is that, my SDR team ended up becoming the farm league for the rest of the company. No one wanted to take a risk on a new kid out of college, but if they'd been an SDR for six months and had been a top performer and maybe had a marketing degree, maybe they were a good person to move into a marketing associate role, or if they were spending time interacting with clients or maybe doing some extra demos or pitching to channel providers because they never worked out, might be fast track towards sales.
So we would identify those types of people that had maybe a capacity in a specific role that we were deficient in, which in a growing company is sales, marketing, customer success, finance, and operations, right? Like that's we, we're looking for any of those people. So early on we just wanted people with talent. Later stages, we wanted people talent, but kind of a focus as well that we wanted them to have a direction and we wanted to encourage and create that path for them. Because you know, when a company's only 50 people or 30 people, you might go anywhere. The role you'll move into out of this one may not exist in the company when we're 400 people. The role you want will probably exist. We just need to figure out which one of the ones that exist will be right for you.
Adriel: Just because what an SDR means or what a salesperson means changed over the life cycle of the company and the you even, and that line right there, you gave a nice story where at first you started off selling to anybody who had raised 5 million and the check size was about 25,000 and then you grew it to being considerably larger kind of individual. You're looking for changes, the number of individuals, what they're doing, how they're speaking, how you're communicating or everything changed over the course of the company, but to take it all the way back to the early stage.
Adriel: For example, Ken, a CEO who's technical hire an SDR before hiring a true VP of sales. Does that change if the CEO has a business background or is a seller of themselves does that change if they sold a couple of contracts already or if they're really in the early stages? How does a founder or CEO think about hiring their very first SDRs?
Kyle: Yeah, so there are two angles that we got to take care of. One is if you're a bootstrap company and one is if you're a venture-backed company, right? I'm gonna I'll talk about both. If you're a venture-backed company, second, you should hire an SDR as like the minute you get money, right? Like you have got to get on that horse as quickly as possible. That said, I kind of have this belief that you really shouldn't pass something off until you kind of understand it. I think that if you hire someone and you don't even have a sense of how should meetings be set up, who's our target market, who are the personas and the messaging we should use? Just hiring an SDR and sitting them down and saying start setting meetings without really a lot of clarities of what they should be doing is going to set them up for failure.
When I started my company, which was bootstrapped, I had couldn't really hire an SDR cause I couldn't afford them. So I had to make sure that I had customers that had bought. So by that point I understood the process completely. I could coach someone and hand that off. And so I've really been thinking a lot about as a founder or any executive in a business, you get too bogged down in the details and too much doing. And as an executive, you can either be doing, delegating, deciding, or really deleting tasks and at all times you need to be like delegating to other people and let them be empowered to make those types of decisions.
So as early as possible, pass off some of that decision making to somebody else. Do it, like get it off your plate so you can focus on the more critical roles. Because a CEO shouldn't be like setting meetings for very long. There are plenty of companies you could outsource that to or hire someone right away because there are so much opportunity costs with your time because like early on, as you probably know, having been an early, very early stage startups, there's so much to do that don't necessarily add value in a lot of ways. I was talking to someone about this the other day of when you start a business, you gotta buy a domain, you got to host a website, you've got to set up email, you've got to admin accounts. Like there's this, all these little things that take up all your time and SDR and yourself is just one more of those things. So as quickly as you can get that off, I recommend you do it.
Adriel: I had two points there. First of all, I love your breakdown of you can always be doing, delegating, deciding or deleting tasks. I haven't heard that before. And that probably applies for anybody trying to figure out how to manage their time. The second one was sorta just to add a counter perspective there. You mentioned that once you raise money you should hire SDR right away cause you really got to go, go, go. And in some places, that's absolutely true. I think sometimes depending on how fortunate you've been about raising money or how the market's evolving, sometimes going too fast has its own challenges. Yes. So for example, if you were able to raise money really early and you go, go, go, you might be selling the wrong thing or perhaps worse, you might be selling it to the wrong kinds of people. So maybe you're finding a lot of growth for the first little bit cause you go go, go and you are able to cut costs and cut prices, but you never really either A understood the true problems or B understood who has them the most. You might be selling to the wrong industry and then your growth stops all of a sudden because you didn't think about it. Sometimes going to fast has its own challenges and it's really perhaps in the beginning and SDR to cope with that can help you get more interviews, help you get more calls, help you ask more questions. Especially if they've had a little bit of experience. They can help you understand what product features matter the most. And there is a flip side to going too fast, too early.
Kyle: Yeah. We went through that as well where we had hired very quickly, we'd expanded into a new office cause we couldn't hire SDRs fast enough and then we had to shut down that office cause we'd overhired we overestimated what we were capable of doing. So we probably burned a couple of million bucks of the funding that we got. So there's risk there and I don't want people to be hazardly jumping into hiring people like it's gotta be an intelligent decision there.
But there was this kind of study that I'd heard on some podcasts where basically they took two groups of people that were taking an art class. And for one group they said at the end of the class you will have the chance to attempt one item like ceramics and the other half of the class I said you're gauged only on the volume of or the quantity of items that you produce, like the weight or something like that. So it's completely fundamentally different methods of grading the students. So one girl in grade was quality and one was quantity and that was literally the only metric. And at the end of the class, the people with the quantity, they ended up making higher quality things and the people who only focused on one because having it bats is super critical. Like having a bunch of shitty conversations actually makes you better at having good conversations too. I think, you know, having done podcasts, I'm probably better at it now than on my very first one. And I think that that's kind of intuitive.
So there is an advantage too, you know, you are going to burn some time and money with SDRs if you hire too soon, but you're also going to get some critical practice, right? Like you're just practicing doing these things and it's not like it's, it's not like you can't undo that. It's not like you can't make changes. It's not like you're stuck with this one way of doing SDR like you've got opportunity to make change. It's not permanent. It's not like you picked your company name and now we gotta unwind that. That's a much harder process than maybe shifting some SDR focus.
Adriel: Point taken. Let me ask you a question about the experience. You mentioned where you guys grew too fast, open another office and had to shut it down when that decision was made. Can you tell a little about perhaps the context of that decision.
Kyle: Awful. So one, letting people know or leading teams and being a leader of a team or a company or whatever, and then having to, you know, you've pulled people in this one direction and then you have to tell them that you are wrong and your life is going to be impacted. But mine's really not is an awful, awful situation. Like these people had quit their jobs to come work for us and we told them that it's really important to try to do the right thing for folks. So we tried to move folks into a mountain viewer headquarters was and try to help them out as much as we could, but there's a limit to what we can do. So first of all, it was awful. You know, your initial question of was the question, how did we decide to start expand? Or how do we decide to shut down? Or why did we do it in general?
Adriel: Yeah. What, what causes sat down? You said you grew too fast. Why? Why is that? Just so other people can learn from example and not to grow too fast.
Kyle: Yeah, don't do this. So we had we'd grown quickly in the Bay Area. All of our SDRs were in one office. We are doing is going great, but we wanted to grow faster. I mean we'd taken on over the time that I was there, $100 million in funding. So we're growing like crazy and we needed more opportunities. We needed more SDRs and more sales people. We had a different ratio where we had two SDRs to one sales rep and these are for enterprise deals. So they were inundated with meetings. So to keep that volume up, we needed more people and we couldn't hire quickly enough in the Bay Area because it's very competitive, right? Like all of these companies use SDRs. They all pay a lot of money. We saw people were jumping ship quite a bit.
We expanded into Phoenix and we thought that because there's not quite as many, there are fewer tech companies there. We might be able to be kinda like the sexy company that everyone wants to work for. What's a way for us to stand out? This is before a lot of companies that expanded down into there. So we took that shot and we ended up getting a big grant from the state of Arizona for training and all kinds of things like that. So it made a lot of sense financially for us to try there because we thought that our costs for hiring would be lower. We had this big subsidy for training, so travel would be subsidizing quite a bit. Office space was cheaper than, I mean we're in mountain view in the middle of Google, so we are really competing for office space and having a hard time there. So everything pointed towards that. And then once we got it started, the failure was we didn't move anybody down there.
We should have had a significant portion of the team there because what ended up happening was this Phoenix team just got kinda like left off to the side and they, they weren't really tied into our culture and our way of doing things. They were kind of like, Oh, the Phoenix folks do this, but headquarters does this. And so it was kind of unfair to them, but we didn't really put the full resources of the company. You are equal to us, you are part of us and we're gonna invest in having people there with you. So that was probably a mistake on our end that prevented us from really seeing a lot of success. So if you're gonna do that, really commit to moving people over there. Cause it's, you know, you learn so much just from being around people, hearing them talk, hearing them pitch. But when everybody's brand new and no one knows what to do, you're kind of going to get the short end of the stick on that.
Adriel: Yeah. That last one is part of it's, cause I think you also learn as being a salesperson, a startup. You learn a lot, not just by being tied to the collar of the sheepdog of another sales person, but by being in the same pen as all your engineers or product people or ops people. There's a ton to learn just by being around the other people out of their facets of the company so that you can better, you can tell the story better, you can warn your customers earlier, something's going to be challenging. You could be more trustworthy, knowledgeable, things like that.
Kyle: Yeah, and not having sales engineers in house in Phoenix meant that they didn't have any resources right there that they could lean over and say, hey Steve, how should I handle this situation? Technically they had to call up our sales engineers and hope that they weren't on another call and it's just, it wasn't as well thought out as we could have done it and it failed and it was totally unfair to them for sure.
Adriel: Yeah. Kyle, I love ending Gong interviews on a few rapid fire questions you have for it. Let's do it.
Kyle: Yeah, that a delegating, deleting one, I think I butchered it, but there's a book called Clockwork, which is really I think applicable to any person that really wants to be an executive, start their own company. Basically the guy talks about how you'd need to get things off your plate so you can focus on the most important functions of your role or of the company. So that's Clockwork is good one that I really recommend.
Kyle: Oh yeah. The first one I had for my company SifData. I don't want to give away names, but I've been building the product and I had my first customer lined up, they'd heard about me and I was at the point where they wanted to buy, but I didn't even have a bank account yet. I was like essentially a week ahead of them. The whole tie or like a day ahead of them. It's kinda like the kid. You could teach a class if you just read one chapter ahead. That's basically how the sale when I was just constantly five minutes ahead of them. So I was trying to delay install as much as I could. But it's pretty satisfying when you've taken something from an idea to coding a product to someone actually be paying you money for it is one of the most satisfying things I've ever done.
Kyle: Oh man. It would have been Yelp cause they had so many people in that was, that sounds pretty awful.
Adriel: The company Yelp?
Kyle: Not Yelp. I would have said not yet. I would have said the company that I was at a Gigya, I'm so fortunate to have been in exactly the position I was in. I wouldn't have changed anything. I think that that I was very lucky to get in when I did and to be at the inflection point that I was like, I could not have timed that any better. And my skill set just ended up aligning with where with the rest of my career went. So I think I hit a grand slam on that.
Adriel: Oh good for you. And I agree, Yelp sounds like an absolute monster. A couple of last questions here.
Kyle: One of my early sales mentors was a guy named Todd Lathrop, he ended up starting a consulting business and worked at a company called Checkr. He was the head of North America sales and he and I was the head of SDR. So we're working super closely together and I was fortunate to, you know, he'd actually sold copiers. He told me a lot of stories and funny things about that. And so I just, I got a lot of good direction and guidance from him. About the concept of doing enterprise sales cause I didn't have any experience to that prior to becoming an SDR and managing a team. So he was someone that I leaned on heavily.
Kyle: Yeah, so I have a podcast called the Kaizen Podcast, which we're hopefully listening to right now as well. That's where I put a lot of content and then I'm on LinkedIn posting on there quite a bit. So Kicksaw and SifData are two companies I run. I'd love to talk to anyone that wants to talk about them. What about yourself?
Adriel: Awesome. Well, you can certainly find me on LinkedIn. I'm all over the internet. It's @alubarsky2. And shoot me an email, firstname.lastname@example.org I would love to talk sales, self-driving cars, or whatever.
Kyle: Adriel, thanks so much for the time.
Adriel: Kyle. I love it and talk soon. Bye.