Episode Summary
Startups are built for fast and consistent growth, and everything you do must be planned.
But sometimes, it’s hard to adapt to the changes that happen pretty quickly in a startup. For example, it happens that you need to hire 50 people at once and adding so many people to your team can lead to chaos.
Kristen Habacht, President and COO of Shogun, points out that sometimes it just looks like you need more people; so, she advises a detailed analysis to ensure that you have a solid foundation for acceleration.
In this episode of Taking the Lead, Kristen describes her journey from an office manager to becoming a female president and COO of a tech company. Kristen and our host Christina Brady get into constant changes in startups and how to adapt to them, employment in a fast-growing startup, and the relationship between PLG and sales. They also discuss how to properly incentivize a new business rep and the importance of looking at your mix of the comp to base.
Guest Profile
- Name: Kristen Habacht
- What she does: Kristen is the President and COO of Shogun.
- Company: Shogun
- Noteworthy: Kristen was the VP of Sales at Trello. She went on to run the AMER/APAC sales team at Atlassian and later built out and managed their Global Enterprise Development Sales team. Today, she is the President and COO of Shogun. Most recently, Kristen has joined the board of GuideCX and Passion.io, and she has become an advisor for various startups around PLG go-to-market motions and enterprise sales.
Key Insights
- As a startup, you move very fast. Any change within the company requires quick adaptation to the new situation. If your company grows, you will certainly increase the number of employees, and vice versa. As someone with a lot of experience, Kristen talks about adapting to change in a startup. "It is a business that constantly changes — every six to 12 months, fundraising or no fundraising. It is fundamentally a different place, constantly reinventing itself because at that kind of scale — going from 25 employees to 50 or from 50 to 100 employees — you hit these break points along the way where you're like, 'Oh man, we're never going to make it through this.' And then you push through that, and then you hit another break point where you're like, 'Ah, what's this thing we're doing,' and you hit another one, and it just constantly happens."
- Make sure you have a solid foundation for acceleration. If you are a small company that’s still growing, you will probably make mistakes while hiring. Kristen points out that you need to consider the number of people you employ and whether it is really necessary. "I have watched peers in that space, I've watched my own teams and things like that, and you think that sometimes you're at that foundation. But if you start to accelerate, if you say, 'Let's bring ten salespeople on,' and you don't have an enablement plan to make those people successful, or if you're not ready from a territory perspective or whatever it is, how are those ten people going to hit their quota? […] It's a mistake that’s really easy for people to make when they suddenly get all the resources because there is this sentiment a lot of times, 'Oh, there's just too much work to get done with the team that I have. If only I had more people.' And then you put more people on, and then those people are like, 'Oh, we don't have enough people to do this. We need more.' And it can very easily spiral out of control."
- Sales assist PLG. Even though product-led growth is great for growing your customer base, a sales-led approach focuses on the value of a customer. So there are companies that sit squarely in PLG and don't have to hire salespeople, but there are those who do have to hire them. More often, companies combine the two. "Really successful PLG companies end up ultimately having some sales-assisted motion, even if it's not always a salesperson. But it's somebody who will get on the phone with a subset of your base to talk to them. […] Some will have a lot of that cohort covered by sales-assisted motion; some will have a very small part of that cohort covered by sales assisted motion. And that kind of defines the level of PLG that that motion is growing by."
Episode Highlights
Who Is the Right Person to Hire for Supplement PLG?
“I think it depends on the product. If you have really strong product-led growth, it means that you can discover the product, play around with the product, and buy the product without having to talk to a salesperson. If you can do all of that, you should have a good bit of data that is informing you where you should be hiring those people.
If you have this PLG motion and you have sales coming from it, you should be able to actually look at bringing in somebody who’s maybe RevOps or somebody who can start to look at that data.
If you’re not quite at that level, and you’re like, ‘Hey, we’ve got a little bit of traction.
We think we’re mostly going to be a sales-led organization and somebody has to talk to the customers.’ Then, maybe, the best first couple of hires are like three SDRs or two AEs. And you just throw some numbers against the wall and see what kind of traction you get. I, very rarely, would suggest that you bring in a VP of sales to figure out the motion.”
Kristen’s Comp Philosophy
“I actually try to avoid accelerators, decelerators, or anything like that. What I say is, ‘I have given a reasonable quota for you to hit. If you miss this quota, we have failed in our quota setting for you,’ which means that you shouldn’t be able to miss it by very much; you probably also shouldn’t be able to over attain it by very much. But if you do over attain, that’s great.
If you make a game for somebody, they will look to game a system. What I say is, ‘Your quota is a million, you get 10% of a million, and if you somehow sell 2 million, that’s awesome. You’ll get 10% of 2 million; that’s your accelerator.’ And for me, it comes back to that cultural aspect of me saying, ‘I have set a reasonable number for you.
I feel very firmly that I have set a reasonable number for you. That reasonable number doesn’t exist in a land where you have to go into stuff you shouldn’t be touching to be able to hit it. So don’t go there because I’d set you a number based on what was reasonable for you to do.’ That’s my comp philosophy.”
Looking at Your Mix of Comp to Base Is Really Important
“If people are doing one-year comp plans, my general guidance is to stop doing that. I like the six-month comp plan. That’s what we’ve always had, and last year, too, because I think it gives you the chance to set things right either way. Maybe I set your quota entirely wrong, do you want to wait until the end of the year for me to resolve that? Or maybe we need, especially in startups where things move so fast, to change your territory; maybe I need to reset this; maybe you’ve changed your pricing model. A six-month plan allows for a lot of flexibility for both parties in a lot of ways. And again, if you’re not doing an accelerator, it does help make things easy to change that.”