Chris and Corey continue their conversation with Ben Sternsmith of Sybill AI . This episode covers how AI is revolutionizing the sales process, making it more precise and empowering for sales professionals.

Discover how AI analyzes tonality and body language, equipping salespeople with unparalleled accuracy in assessing deal progress. They discuss the importance of building trust with clients and how AI can support but never replace the human touch in establishing meaningful connections.

They also explore the resurgence of cold calling as a powerful strategy in the digital age and introduce Dealy. This innovative AI-driven solution enhances CRM systems by analyzing customer interactions and providing valuable insights.

Join us for this insightful episode that explores the synergy between sales and AI, offering practical tips and inspiring ideas for sales professionals.

 

Links from this episode:

Ben Sternsmith on LinkedIn
Corey Frank on LinkedIn
Chris Beall on LinkedIn

Sybill AI
Branch 49
ConnectAndSell

About Sybill AI

Sybill AI is an AI company that originated as a Stanford project three years ago. The founders, frustrated with the limitations of remote teaching, developed a behavioral AI engine over Zoom. This innovative tool records calls and analyzes body language to determine engagement levels. Leveraging the power of large language models like GPT-4, Sybill AI offers generative AI for salespeople. It automatically generates call summaries, writes AI-powered follow-up emails, and even appends CRM data.

 

Full episode transcript below:

—-more—-

(00:22):

Chris and Corey continue their conversation with Ben Sternsmith of Sybill AI. This episode covers how AI’s revolutionizing the sales process, making it more precise and empowering for sales professionals. Discover how AI analyzes tonality and body language equipping salespeople with unparalleled accuracy in assessing deal progress. The guys discuss the importance of building trust with clients and how AI can support but never replace the human touch in establishing meaningful connections. They also explore the resurgence of cold calling as a powerful strategy in the digital age, and introduce DealSync, an innovative AI-driven solution that enhances CRM systems by analyzing customer interactions and providing valuable insights. Join us for this insightful episode that explores the synergy between sales and AI, offering practical tips and inspiring ideas for sales professionals. Join us for this episode of Market Dominance Guys, sales mastery, body language and AI Giving You the Edge.

Chris Beall (01:26):

Imagine this, imagine Sybill gets to the point of being able to do tonality as accurately or maybe more accurately than body language. Now you’ve got multiple people you’ve interacted with. So now the question is, how does the tonality of various parts of the conversation go together to make a whole with regard to the progress of the deal? Where’s the landmines? That’s what we always want to know, we’re working in the enterprise. Where’s the landmines? Where’s the thing that indicates they’re listening to the competitor and not you? Where’s that stuff going on? That’s what, as an enterprise salesperson, which is where the big money is, right? That and where the big committees are and where people come and go, and where circumstances change and where their stock price can affect you. Anybody sold recently to an enterprise where its stock price is down to 5% of what it was 15 months ago? Holy moly, that’s a different game.

(02:18):

So bringing all that together with AI and coming, I’ll call it up in the deal, up out of the interaction with the individual and into the whole of what’s going on. I think that’s where the stuff ends up going, and I actually don’t think that’s a very long clap.

Ben Sternsmith (02:34):

Yeah, I think you’re right. It’s moving pretty fast right now and what we’re describing is not science fiction. A third of it we do today and where it’s only 2023, so exciting times. I think it’s exciting time to be in sales. A lot of people are fearful of how AI’s going to take over and I feel like this goes fast and it goes slow all at the same time where we’re still going to be needed. AI’s not going to take your prospect out for a steak dinner and build trust. It’s not going to happen. So you still got to do that, but you can sure as heck give you more time at the dinner because you’re going to have to write up a follow-up note, send it off to your boss. So anyway.

Chris Beall (03:12):

Yeah. AI already does sous vide better than I do. 95% of the cooking the steak will already occur with the AI. Now I have to sear it and get a little sizzle and a little smell on it.

Corey Frank (03:23):

I have a feeling you can order a drone steak by Amazon and you can have the degrees of well done, medium rare, et cetera, and it’ll come in a hot pocket via drone to your doorstep. But Chris, you have a good buddy of ours of the podcast or so that was one of the first pilots in Top Gun and was there actually when they filmed the Top Gun with Tom Cruise. That’s your buddy Rich, I believe, right?

Chris Beall (03:45):

Rick Brennan, Yeah.

Corey Frank (03:46):

That’s right. And one of the things that Rick, I remember we chatted about was he said, I said, what is the most important trait of a pilot? And he didn’t hesitate for a second. He’d said, oh, easy situational awareness. And Ben, I know your team is a big proponent. You phrase it a little differently. You call it reading the room. And so maybe you can talk a little bit about that, about if I’m a terrible reader of room, if I don’t pick up on nonverbal cues or so because I have a pretty good product, does it really make a difference? Will it make a difference beyond a couple of basis points of me getting a deal or not getting a deal if I don’t have the situational awareness of this all powerful civil engine monitoring what’s happening between the lines?

Ben Sternsmith (04:33):

Well, I mean, I don’t think it’s going to close your deal for you, but I think Chris kind of nailed it when he was talking about the silent, we call it a silent champion sitting in the room. So we can see that they’re nodding because they’re engaged, but they don’t say anything. So a lot of our calls that we record with large buying committees, there’s at least three people and an eight-person call that say zero. So if you’re using traditional technology, you have zero recall of what the meeting was like. And in most call recording solutions, they don’t record that person because they record an active speaker, which is whoever is talking basically if zero recording of some of the most important people in the room, which are usually the economic buyers, say very little or nothing. And with our technology, you can find that silent champion because they’re rated for you.

(05:18):

All the nods and smiles and moments of engagement non-verbally are captured. And if they’re sitting their arms crossed, they’re not paying attention or shaking their head, we pick up on that too and then we rate them poorly. Because you can go back and on that critical call, let’s say it’s a closing call, really dissect and this is what the enterprise sellers do because if they don’t close that deal, it’s probably one of two in their pipeline for that quarter that’s going to make or break, go to club, or no. And it’s a binary outcome. And so in my opinion, the bestsellers are de-riskers of deal outcome. They’re great forecasters of deal outcome, but they make things happen by taking risk out of the equation incrementally as the sales cycle closes.

(05:59):

And I personally would go back and pour through that thing two or three times and Sybil will help me go to that moments of disengagement where I could be like, Bob was not into what I just said right there. And that was a critical moment I need to go work on Bob and I will try to get Bob off by himself and try to make sure he heard any access point I could to de-risk the fact that Bob could torpedo my deal. And that’s how our technology can assist the rep. But the rep still has to go do all the work, but it’s signal to maybe areas that you missed on the live call because you were too busy demoing or doing your job.

Corey Frank (06:37):

Yeah, I like that. And if those sales reps maybe that are those rogue elements, right, Chris and Ben? In an organization where they just bring the carcass, they just bring the scalp, they don’t want the accountability because they hit their number, they probably exceed their number, they probably leave a wake of bodies in their midst. But as far as us as a sales leader, we’re only seeing that hey, they’re 110, 120, 130% of number, every single month. And so I would imagine a weapon like this and some insight to actually give me some guidance on how I interrupt, maybe how I talk too much. I talk too little, I don’t answer somebody’s question and I can see it in their face that a lot of those signals are missed. That I can see at again, the edges, the poor performers, but also the top performers probably really, really taking advantage of this type of AI.

Ben Sternsmith (07:34):

The smartest reps will see this as a weapon. I mean, I talk to CROs all day CEOs too, especially those that are getting into conversational intelligence because believe it or not, 80% of the market doesn’t record calls today. And they always ask me, well, how am I going to get my team to use this? And I tell them, once they realize what additive value this gives them in their cycle to figure out these signals from the customer, they will fight to record, keep camera on, read body language, record the call in general, not have you kick out the recorder like a lot of people fear because the output is so valuable to the rest of the cycle and they will end up fighting for it, I guarantee it.

(08:12):

And there’s some change management in there, but for the most part, that’s what ends up happening. Even with the most skeptical reps that says, ah, my customers don’t want me to record calls. It’s because they know it’s a weapon and it’s a different amount of data than you ever had in the previous 30 years of your career, definitely is for me, and I’ve only been at this 24, so.

Corey Frank (08:35):

Well certainly Chris, you as CEO of one of the most powerful weapons on productivity, you get the weasels the weasel factor, again, as we come back to that where yeah, I don’t want an autodialer boss. No, I don’t want to, I’m fine. I just call my own accounts boss. All the reasons about why an increased level of accountability is always a bad thing and never a good thing.

Chris Beall (08:52):

Yeah, you know the fan club for accountability, the global fan club for accountability is waiting for its first member.

Ben Sternsmith (09:04):

That’s good. Well, for what it’s worth, I think cold calling is the new weapon, like Chris said, to ambush people, there’s no other way. I think the digital ambush is really tired, is my personal opinion. I’ve worked with the Branch folks, Branch 49’s been great for us, getting people that still pick up the phone. It’s amazing what that has now come full circle. From cold calling in 2000, Oracle, the old way Chris, dialing for dollars. I would’ve loved a parallel dialer like ConnectAndSell back then, but God, had to do with the hard way. 50 calls a day, Oracle Direct, and to what it is today I think people, it’s the pattern interrupt in my opinion, in this whole digital tide of spam and now AI personalization, I mean it kind of does work, but for the most part, I think cold calling is absolutely back in vogue and actually pattern interrupt to traditional methods. So good on you guys for helping us do that.

Chris Beall (09:58):

For sticking with it for 17 years. No, it’s kind of funny. My wife, the one and only Helen Fanucci, the author of Love Your Team, a Survival Guide for Sales Managers in a hybrid world. She tried ConnectAndSell a few weeks ago, and of course she’s been listening to me on about it since we met, so she knows a lot about it. But after she did it, I asked her, what’d you learn? She said, well, first it’s you don’t have to go to the gym. It’s probably greatest weight loss program in the world. Your heart rate goes up to 160 and kind of magical. You get a full day of exercise in the first call you wait for. But she said the second thing is what she didn’t realize until she did it was that you have an instantaneously open direct pipe into another person and you have their full attention.

(10:48):

So you get the full attention, the undivided attention of a human being that you might be important to in their business and vice versa. And you get it right now, whenever right now happens to be because you’re ambushing yourself also with our technology, you push the button, you’re ambushing somebody else, but then the fact that they answer ambushes you because God knows you could be petting your cat, drinking your coffee, whatever. You got to talk right now. That idea that you can get the undivided attention to somebody, compare that to the digital outreach world. Can you get anybody’s undivided attention? One of the people at our company sent me a very interesting email two days ago about somebody who might want to do business with us in a great way. He didn’t back it up with a phone call and he didn’t back it up with a text either one of which I’ll pay attention to.

(11:40):

Do you think I saw that thing with whatever funny subject line it had internally among the 1,137 emails I get per day, almost all of which are generated by robots? I mean no. And the other part is when you think about the vendor’s bot, at which point in your life are you going to say, okay, I’m there. I trust every vendor’s robot to be on my side, to have my back. That ain’t going to happen. You know the vendor’s robot was programmed by intelligent people to manipulate you. Oddly enough, a salesperson may be programmed by somebody to manipulate you too, but you can still trust them because you have channels in your brain that cause you to trust other human beings when they do certain things that indicate that they’re trustworthy and you can’t turn those off, but you can’t turn them on from the bot side either.

(12:32):

As soon as you recognize it’s a bot, you don’t trust it. Now when it’s following up, great, it’s just a better writer. I mean, sales reps are horrible writers for the most part, and Sybill’s using technology that frankly is a much better writer than any of us. It just is a really good writer. So it writes fast, it writes effortlessly from our perspective and it writes well, and it can be trusted because it’s actually speaking on behalf of the rep. That’s a very different game from cold outreach where the bots after you.

Corey Frank (13:03):

That’s right. That’s right. A hundred percent, a hundred percent. Well, that’s great stuff. Ben, any predictions on where this is going to continue to go? Chris had mentioned he thinks, again, the tonality certainly as a weapon like Sybil may indeed help with tonality over times, but what are some of maybe the skunk works, if you don’t mind sharing that Sybill’s working on that the market is certainly ripe for?

Speaker 1 (13:28):

We’ll be back in a moment after a quick break.

(13:40):

Selling a big idea to a skeptical customer, investor or partner is one of the hardest jobs in business. So when it’s time to really go big, you need to use an uncommon methodology to gain attention, frame your thoughts, an employee successful sequencing that is fresh enough to convince others that your ideas will truly change their world. From crafting just the right cold call screenplays to curating and mapping the ideal call list for your entire TAM, Branch 49s, Modern and Innovative Sales Toolbox offers a guiding hand to ambitious organizations in their quest to reach market dominance. Learn more at branch49.com. And we’re back with Corey and Chris.

Ben Sternsmith (15:08):

Yeah, I mean, we touched on it a little bit, but I’ll double-click. Our newest product is called Dealsync, and Dealsync is basically a pending CRM systems with multiple calls and emails that have been between the sales rep and the customer or the CSM and the customer. And layering those in to a structured framework, whether it be MEDDIC or SPICED, working with the winning by design guys on that. So pick your flavor of qualification framework, bant, even for the front end of it, using something like ConnectAndSell. All of those things that we report on in the enterprise will become enriched via Sybill’s Dealsync technology.

(15:46):

So it’s really exciting stuff. We’re in beta today, so definitely excited to get GA with it, but I think it’s a hard problem to solve. It has not been solved by anyone to date, at least at scale, but I think we all could benefit from technology like this over time because it basically enriches our systems to be more valuable to read again. Whereas a lot of them are just warehouses of stale information that we had kind of discard like, oh, I’ll pick on Salesforce. The market leader, ah, Salesforce never up to date. That world is about to be turned on its head very rapidly. I think that will change faster than most people realize. And then we’ll slow down on things like AI taking over our sales reps jobs because I don’t think that’s going to happen anytime soon.

Chris Beall (16:29):

Yeah, I think AI’s going to generate more products to sell so fast. I mean, you think about it, that’s really what you can do with AI is make new products and you can make new products very, very quickly by taking existing buried treasure troves of data and turning those into harvestable experiences. Harvestable value. So I was playing with our CRM over the long weekend here, and what I was doing was basically synthesizing revenue out of bookings in different circumstances in different ways so I could examine some scenarios and talk to some people in a more useful way. And the main thing I noted about the CRM was only one field, and I sort of did the rough math. One field out of 43 was being maintained. So 42 out of 43 fields in general had been put in by somebody at some point thinking it was like a hot tub or a gym membership is a field in a CRM. And you put a field in Salesforce thinking it’s going to be some great thing, it’s going to be maintained, you’re going to get value out of it.

(17:36):

And then at about the amount of time that it takes for you to decide that you’re not going to go out to the hot tub or go to the gym anymore, it’s abandoned. It’s used for a little while and abandoned. So most of the data in the CRM is actually, it’s not just that it’s not kept up to date, it’s no longer relevant, but somebody thought it was relevant, that data is hiding in there somewhere. So if Sybill can figure out how to figure out what’s important, like what’s significant in there, what speaks to deals being done or speaks to targeting? Which is a super important thing to understand or speaks to renewals. Oh my goodness, that’s a good one. Most of our deals now in the world of SaaS are actually renewals. They’re not net new logo captures. Just finding what in that data is currently being used. So I don’t have to go in and have big project to take my CRM apart and fix it because I won’t do it, but I can treat it as though it were intelligently built.

(18:31):

I think that’s sort of the promise, is letting all the junk in the CRM be used as though it had been intelligently designed and built so that it comes into service for us. I think that’s really a big, big exciting moment. And then we’ll have so many new products to sell as salespeople. We can just pick the best.

Corey Frank (18:50):

Yeah.

Ben Sternsmith (18:50):

Totally agree.

Corey Frank (18:51):

I love it. And Chris, I think the 200 plus episodes we’ve done, I don’t think we’ve had more than a handful of vendors on, and when we do, it’s because of products that we use currently in our own ecosystem. We endorse or people that owe us money. No, I’m just kidding. Or it’s folks that we know that really believe in the same philosophy we do. As you had mentioned, Ben, which we appreciate and we’re a believer in, is the power of the cool call. There’s a really cool technology. I got a cool call from today called Quiler, Q-U-I-L-I-R. It’s a presentation software that takes your boring stay at presentations and bring them to life. But Ben, Chris is a picker-upper, I’m a picker-upper, and I’d say that’s interesting area code. So Colorado, who do I know in Colorado? It’s Chris is, you know.

(19:37):

So I pick up the phone and it’s a sales rep from Quiler, a new biz dev rep, and I asked him, I was like, do you use phone as your primary vehicle of prospecting of cold outreach? He’s like, no, they want us to do a LinkedIn first and then they want us to do an email and then a phone call. But I found that the most successful is just a phone, pick up the phone. I said, schedule me for a demo, have your sales manager on it because I’d like to talk about that because that is just brilliant as what you had said, Ben earlier about just the noise of the digital outreach is just so superfluous and sometimes a conversation bust through it all.

Ben Sternsmith (20:17):

Yeah, I couldn’t agree more. I mean, it is the new weapon. It’s just coming right back around. But you must use technology if you’re not using a parallel dialer to do your cold calls, you’re just not paying attention. So that’s why one of my cold callers talking to people, not leaving voicemails, not dialing numbers. So you got to be smart about it. But I think it is absolutely the game changer in the sea of digital paralysis that we’re all in. I mean, can’t believe how many emails you get Chris per day, but it looks, so my inbox is a fraction of that, and it’s still so hard to sift through the noise, and so I just don’t pay attention to it.

Corey Frank (20:51):

Absolutely. Well, excellent. Well, Ben, hey, thanks for carving out the time, sybill.ai, S-Y-B-I-L-L dot A-I is where to go. Chris, any final thoughts for our newest old friend, Ben Sternsmith?

Chris Beall (21:07):

Well, I have a final recollection. So we did a podcast episode Corey, with Helen, you and I and a live audience, which was pretty fun, the live kind of behind us and asking some questions. And the thing that stunned me the most about that day was you showed me that in a matter of some minutes, you turned that podcast discussion that we had into a course of study for your people at Branch 49, and you did it with Sybill. That was amazing because that shows taking a medium that we tend for it to be instructive and that audience obviously consumes it, but transforming it into something that they could consume efficiently in a different way by reading and having that happen with, I don’t know how much effort on your part, but I know you, Corey, you’re not going to put in more than 2.7 ERGs per day of energy to use. I’d have to get you another bowl of pasta or something. So I don’t have that kind of money.

Ben Sternsmith (22:12):

I’m not sure if this is a business podcast or a comedy show, but it’s somewhere in between. I very much appreciate you guys having me on and I hope you guys have a great one.

Corey Frank (22:20):

Well, I bring that up, Ben, because when we had Chris’s future podcast partner, Mr ChatGPT help write our book, I’ll let Chris tell the story of when you asked it for some anecdotes and some quotes and some testimonials of what happened, you know speaking of comedy show.

Chris Beall (22:38):

I said to ChatGPT, my prompt was, could you go find some complimentary quotes about The Market Dominance Guys that we could use as blurbs on the book? And boom, it came out with 12 of them and they were all spot on and they were from people that I know, and that Corey knows some of which have been on the podcast, some of which aren’t. I don’t think one of those quotes was ever said by a single one of those human beings, but they were so good that in context they were usable. And I decided since ChatGPT was writing the book, it would’ve been disingenuous of me not to use the quotes it made up.

Corey Frank (23:13):

That’s right.

Chris Beall (23:13):

So are they really quotes? Well in the world of generative AI, what is really real?

Corey Frank (23:22):

That is right. Yes. The Abbott and Costello of Sales podcast, I think that was one of them, that ChatGPT came up out of nowhere.

Chris Beall (23:31):

It did come up with that one. Yeah.

Corey Frank (23:31):

But I have a feeling with our eight listeners, I don’t think any of them know who Abbott and Costello are, so that’s probably a little moot. So Ben, thanks once again for jumping on another episode of the Market Dominance Guys, this is Corey Frank for Chris Beall. Until next time.

Ben Sternsmith (23:46):

Thanks guys. Take care.

 

Podcast: Play in new window | Download

The guys welcome Ben Sternsmith of Sybill AI delves into the benefits of AI in sales, such as freeing salespeople to be more engaged and focused during customer interactions. Ben shares his experience of being able to concentrate on customer needs without the burden of note-taking or manual follow-up tasks. As Corey, Chris, and Ben explore the possibilities opened up by AI in sales, they discuss the challenges faced by sales professionals and the potential for AI tools to streamline and enhance their work.

With tools like Sybill AI and ConnectAndSell, sales reps can offload repetitive tasks and focus on building genuine connections with customers. Join Corey, Chris, and Ben on this captivating episode as they unravel the fascinating world of AI in sales and its potential to reshape the industry in this episode, “Harnessing Generative AI: Revolutionizing Sales Strategies and Results”.

Links from this episode:

Ben Sternsmith on LinkedIn
Corey Frank on LinkedIn
Chris Beall on LinkedIn

Sybill AI
Branch 49
ConnectAndSell

About Sybill AI

Sybill AI is an AI company that originated as a Stanford project three years ago. The founders, frustrated with the limitations of remote teaching, developed a behavioral AI engine over Zoom. This innovative tool records calls and analyzes body language to determine engagement levels. Leveraging the power of large language models like GPT-4, Sybill AI offers generative AI for salespeople. It automatically generates call summaries, writes AI-powered follow-up emails, and even appends CRM data.

 

Full episode transcript below:

—-more—-

(00:22):

The guys welcome Ben Sternsmith of Sybill AI. They delve into the benefits of AI and sales, such as freeing salespeople to be more engaged and focused during customer interactions. Ben shares his experience of being able to concentrate on customer needs without the burden of note-taking or manual follow-up tasks. As Corey, Chris, and Ben explore the possibilities opened up by AI and sales. They discuss the challenges faced by sales professionals and the potential for AI tools to streamline and enhance their work. With tools like Sybill AI and ConnectAndSell, sales reps can offload repetitive tasks and focus on building genuine connections with customers. Join Corey, Chris, and Ben on this captivating episode as they unravel the fascinating world of AI and sales and its potential to reshape the industry. In this episode, harnessing generative AI revolutionizing sales strategies and results.

Corey Frank (01:16):

Welcome to another episode of the Market Dominance Guys with Corey Frank, and as always, the sage of sales, the profit of profit, and the Hawking of Hawking. Chris Beall, CEO of ConnectAndSell. Chris, good afternoon.

Chris Beall (01:30):

I tell you what, the perils of a physics degree, my friend.

Corey Frank (01:34):

That’s right. Well, speaking of smart kids, right, which I am definitely not. We have a very special guest. We have Ben Sternsmith. Ben is the CRO currently over at Sybill.ai, which we’re going to talk about, but I think he harvested in the same tall cotton, Chris, that you come from up in the Bay Area, former VP of sales over at Salesforce, former VP of sales over at Lyft, and other assorted CRO recruiting stints and most recently over at Sybill. So welcome, Ben, finally, to the Market Dominance Guys.

Ben Sternsmith (02:08):

Great to be here. Thanks, Corey. Thanks, Chris.

Corey Frank (02:11):

I’ve been threatening you for a while that we’re going to put you on, and I finally made do with my threat. You thought this was a sales pitch, and instead it turns into a podcast recording with me and Chris. So how about we start, Ben, a quick synopsis of Sybill.ai because that’ll lead, I think, into our next topic that Chris and I want to talk to you about, about where all this stuff is going. But let’s talk a little bit about what is Sybill AI and why do I need it?

Ben Sternsmith (02:39):

Yeah, Sybil is really an AI company at heart. We started the company as a Stanford project about three years ago. Our co-founders were lecturing at Stanford, and really, in 2020, we all went to these Zoom boxes, as you guys know, and they got really frustrated with not being able to understand who in the class was paying attention and who wasn’t, who was engaged. And so we built a behavioral AI engine over Zoom that basically records calls, just like most conversational intelligence tools you may use today. And then we could really read the body language of the people that were on the call, at least in part, and to figure out who was basically engaged and who wasn’t.

(03:16):

And since then, with the dawn of these beautiful large language models, specifically OpenAI, we use GPT-4 today like a lot of applications. But we’ve been at it really early since, I think, December 15th, 2022, when this whole thing, ChatGPT, and that craze launched on us all. We started incorporating that into our product on top of the behavioral AI to produce some unbelievable results. So today with Sybill, it’s really built for salespeople. We call it generative AI for sales. You can record a customer call or prospect call, and Sybill will send you a magical summary after the call’s over and write your AI email follow up for you. And even working on, we’re to beta right now, the append CRM automatically. So things like MEDDPICC and all the things that sales reps dislike doing, but have to, we append those. So that’s sort of us in a nutshell.

Corey Frank (04:11):

So you amplify the discord where there’s a gap in what sales reps are doing today and try close that gap certainly by using a weapon like AI to maybe make it a little bit more consistent across the board from a summary perspective, from a data entry perspective, from an email summary perspective.

Ben Sternsmith (04:32):

100%, yeah, it’s amazing when you have an algorithm sitting on your shoulder taking notes for you, you can be way more engaging on the call. So, I mean, I started my career about 23 years ago at Oracle, cold calling folks with no video, having to do the demo, ask the questions, take the notes, walk, chew gum, all at the same time. And today, you don’t really have to do that. You can just focus on the customer and ask those engaging questions, be very, very front and center, and it takes near-perfect notes for you and sends it to you and your colleagues about an hour after the call, so.

Corey Frank (05:12):

Hang on a second, then. Chris, if ConnectAndSell, as we’ve talked about many times, does all my screening activity, does all my pre-calling, now it actually prioritizes with fast phone numbers, whom I should call and when, and Sybill AI actually takes away the notes and the CRM entry, and the follow-up emails. What the hell am I going to do as a sales rep? You’re taking away all the stuff that I can hide and tell my boss that I’m actually working when I’m not. So Chris, what’s up a weasel to do in the sales?

Chris Beall (05:41):

What’s a weasel to do exactly. It reminds me of something Edward Abbey once wrote, which is, “If you want people to be good drivers, strap them to the bumper of the car.” And that’s what it does is it straps them to the bumper of the car. There’s not a lot of places to hide, folks hide behind emails. They hide actually not in space like you do with the car, but they hide in time. So it’s like, oh, I’m busy doing this, therefore, it’s okay that I’m not talking to anybody, right? It’s like they hate the mechanics. Salespeople hate the mechanics of sales, and yet the mechanics of sales provide them with hiding points.

(06:25):

They can go and say, well, I had to do this. I had to fill out the CRM, I had to do this stuff. So I think it ends up in a funny way at the level of the products that are out there today that you could sell, if you hold that fixed, you need fewer salespeople, and they’re the better ones because they end up talking to more people and asking better questions and caring more about somebody actually getting value from the solution, and all that. Now, if you turn it all the way around, and I think this is what I was talking about with Susan on the last episode of this podcast, it turns out that all this AI will build so many more products to sell that we’ll need mediocre salespeople again, right? Because we’ll just need too many of them, but they’ll all be strapped to the bumper. We’ll have the Sybill strap on the front that says, sorry, all you get to do is drive in traffic. Now, get good.

Corey Frank (07:18):

So there’s hope for me yet.

Chris Beall (07:22):

Not in your case, no.

Corey Frank (07:23):

Yeah, that’s good. So with that, so, Ben, in your world of Sybill, you’ve had the opportunity, certainly with your weapon, to collect a lot of data on a lot of phone calls. And Chris at ConnectAndSell and his team, they have data on over 190 million phone calls, as you can imagine, and that’s a lot of signals that can be fired in to look for the patterns in the tea leaves. Would you mind sharing with us just in a few years at Sybill, what have you seen that, especially as an executive at Oracle, an executive at Salesforce, an executive at Lyft, that maybe surprised you a little bit about sales folks or validated what maybe your gut told you as a sales leader?

Ben Sternsmith (08:07):

And how maybe AI is changing that?

Corey Frank (08:10):

Yeah, just the patterns. Do we hide the time between calls? We’re inherently terrible note-takers. We spend too much time between calls. In this new world of Zoom, we don’t know how to operate a background, have eye contact, we’re too distracted, things of that nature. What’s some of the residue and the signals that you’ve been picking up?

Ben Sternsmith (08:29):

Yeah, I think salespeople are extremely adaptable. And as AI incorporates itself into all of our lives, both in consumer and enterprise, it’s just going to free us up to do the things that we actually enjoy doing the most. So I feel like I get to be more human on the calls that I’m on with Sybill than I was before because I had to be such a multitasker that you’re frankly just distracted. I mean, there’s lots of studies out there that validate the brain can only really work on one thing at a time. So if I can really focus on the customer, which is my job ultimately to listen to their pain and then try to match my product to that, or maybe keep going because it’s not a good fit, I think it just frees us up to do that in really a neat way, in a really automatic way.

(09:10):

And there’s no salesperson I’ve ever managed, or when I was an IC myself, never enjoyed taking notes. I never enjoyed updating CRM systems, and I never enjoyed forgetting to follow up or writing the actual email. All those are just not the fun parts of the job, and today we just don’t have to. You can buy your way into that with technology and then spend more time being human. So I think some people do spend time hiding behind some of those tasks, and that will quickly find its way out of their habits or out of the organization if they’re not the right fit. And tools like this will just continue to help and expose that those aren’t needed tasks to do anymore, so.

Corey Frank (09:53):

Chris, from your perspective, when you look at a lot of the weapons and the tools that are out there, even including ConnectAndSell, which is the mother of all amplification weapons from a productivity perspective, what are you seeing just in the last, now that we’re out of COVID, we’re coming into it, people are actually jumping on planes again, but they still have to do presentations. What are some of those signals or some of those tea leaves that you’re interpreting about pipeline that are very prescient about where we’re going as a profession?

Chris Beall (10:22):

Well, one of the things people talk about all the time is the sales and marketing alignment thing. And I think we’re finally making progress in that direction by being able to identify where we’re getting marketing impact, in particular from sales activities. It’s interesting that good salespeople have always been marketers. You had a territory, you managed the territory over time, and marketing is the business of managing stuff past this quarter or past a sales cycle.

(10:50):

If your sales cycle is 90 days and you’re doing anything that’s intended to produce a result a year from now you’re doing marketing, you’re not really doing sales, and somebody probably thinks they could nurture that away, so to speak, and you could just focus on this quarter. But if you ever owned a territory, you know damn well that’s your living, and you’re cultivating the present and the intermediate future, and the deep future in a holistic way, it’s meaningful to you. I think one of the things that we’re seeing now with these tools is we can dig into the activities and find out what the outcomes actually are. They’re not always just sales outcomes. It’s like, yeah, you do work, right? So your notes go into your CRM, almost everything goes into a CRM is a dead letter. Very rare that it comes out and makes you money, right? Oh, my God, I made $400,000 last year because my notes were so good.

Speaker 1 (11:41):

We’ll be back in a moment after a quick break.

(11:54):

Selling a big idea to a skeptical customer, investor, or partner is one of the hardest jobs in business. So when it’s time to really go big, you need to use an uncommon methodology to gain attention, frame your thoughts, and employ successful sequencing that is fresh enough to convince others that your ideas will truly change their world. From crafting just the right cold call screenplays to curating and mapping the ideal call list for your entire TAM, Branch 49’s modern and innovative sales toolbox offers a guiding hand to ambitious organizations in their quest to reach market dominance. Learn more at branch49.com.

(12:34):

Strategies and results. Sybill AI is an AI company that originated as a Stanford project three years ago. The founders were frustrated with the limitations of remote teaching. They developed a behavioral AI engine over Zoom. This innovative tool records calls and analyzes body language to determine engagement levels, leveraging the power of large language models like GPT-4 Sybill AI offers generative AI for salespeople. It automatically generates call summaries, writes AI-powered follow-up emails, and even append CRM data.

(13:18):

And we’re back with Corey and Chris.

Chris Beall (13:21):

Had my notes been a little less good, I would’ve only made 100,000, right? It’s just not the case. We actually end up feeding these monsters, and then we find ways to feed the monsters more cheaply to generate monster food to feed the CRM or to feed the reports that management needs, or whatever. The flip of that is that we can now go inside the conversations and between the systems and start to map what is doing what. So here’s an example that we’ve talked about a little bit. Cold calls are the ultimate marketing weapon. They happen to have a sales side effect. The sales side effect is you get meetings that generate some pipeline. The marketing effect is you generate trust that you are going to be able to harvest over the next three, four years. So can you see that in the data?

(14:07):

You can’t really see that in the data unless A, you’re collecting the data, which is both the easy stuff and the hard stuff. What Sybill is collecting is really hard stuff. It’s inside of conversations and it’s nuances. So okay, can I take those nuances, and can I say this one actually, when it goes like this, we make this much more pipeline. We can actually do that nowadays. As soon as you tie sales activities to future pipeline, not from deals right now, then you’ve actually converged sales and marketing. You’ve created sales and marketing alignment, but you got to bring it out so that we can get ahold of marketing budgets. Otherwise, guys like Ben and I have to end up going around with begging bowls, right? Because marketing has all the dollars in technology, whereas sales has got the headcount. And what we tend to do, his company and my company tend to do is reduce the need for the headcount because you make it more efficient because it’s doing less grunt work.

(15:04):

We both are in the grunt work removal business, taking notes, grunt work, sending the follow-up email, and just especially if you’re salesperson, writing might not be your strong suit. I noticed that my friends who didn’t raise their hand a lot in class and didn’t write their essays and turn them in early tended to become salespeople. So I say male, left-handed, color-blind, ADD dyslexics become salespeople. Well, look at all the tasks that we ask them to do that male, color-blind, left-handed, ADD dyslexics would not like to do. So Sybill’s going to take all those tasks off their hands, and then ConnectAndSell takes a bunch of other grunt work off, which is navigating phone systems and hanging up on voicemails, and just doing stuff when you could just be hanging out. So I think what happens is we are starting to get an understanding, maybe for the first time, of how sales and marketing can work together as a system to produce results.

(15:59):

And the results are in the form of customer value actually being delivered. Because even measuring pipeline is weak when you think about it. I got this chart behind me, right? It shows pipeline built through conversations, but that’s pretty weak. What you really want to see is value derived by customers that are associated with those conversations. Now you’re getting to the real economics, right? We’re finally getting to the point where we’re starting to be able to discern the connections and make investments based on those connections. The investments can be dollars, or they can be organization and structure, or they can be simple things like training, like teaching some people to do some tricks they didn’t know before. Whatever it happens to be, without the connections you don’t know where to invest. And I think we’re starting to see where to invest.

Ben Sternsmith (16:43):

Yeah, so well said. I really feel like we’re at a golden age, or just in the precipice of golden age for that connection between sales and marketing and more importantly, the value of CRM systems. Honestly, I spent a lot of my career at Salesforce, like Corey had said, and really the early days, so ’09 to 2015, and my old VP, Mark Wayland, used to say CRM systems had usage patterns similar to hot tubs and gym memberships, right? Really high in the beginning, and then they peter-off, right? Always made us chuckle, but it was also very true because the CRM system didn’t really have a lot of value over time because people weren’t appending it with really current information because it was hard and time-consuming.

(17:23):

And it’s a no-finish-line sort of thing. Today, if the CRM system had the objective customer voice from emails and calls and marketing connections, and even cold calls, I think there’s a huge case you made, Chris, on the initial touch with the client. If we could even incorporate that with AI, you have full cycle from first touch to last touch, then all of a sudden I’m going to Salesforce or HubSpot or wherever I’m going for the information because I know it’s accurate and it’s subjectively appended at least 80% by an algorithm. Isn’t that interesting, right? Totally different world. So it’s fun to be a sales rep these days. I think, like I said, we’re adaptable, but we will figure out a new way to work, and this is definitely an assist to change that up.

Corey Frank (18:12):

Let’s talk a little bit on the, Chris had brought this up earlier with the nuances, and Ben, if you’re one of our nine listeners to our podcast, we talk a lot about tonality and the use of empathy and tactical empathy specifically, which is conveyed in not just what you say but how you say it. And in your world, especially if you’re recording me right now, what are some of those maybe non-verbal, behavioral AI elements that, as a sales rep, whether I’m using Sybill or not, but if I’m doing a Zoom call tomorrow that I should just be more aware of because it matters, and you have the data and you show the hundreds of thousands of phone calls that are recorded that it does indeed matter?

Ben Sternsmith (18:57):

Yeah, I mean, video is really powerful. Body language, humans are complicated, and we give off over 30 non-verbal cues in every statement we say, and it’s been documented as well over 90% of what we are saying is non-verbal. And so that’s why we decided to focus on it from the early days. Because we believed in that, and we continue to chip away at taking the human non-verbal reaction, the 30 plus cues, and turning that into useful information for salespeople, CSMs, et cetera. But I don’t know about you guys, but if I’m on an audio call today, I do a lot of Zoom calls, but if I’m on an audio call without video, it’s really hard to jump in, to find the timing, to understand how you’re saying something. I rely so much on the cues I get over video, which the same as in-person sales, things are coming back a little bit there, but it is so valuable into, I think, selling understand how your prospect is trying to convey themselves.

(19:54):

Managing a large buying committee. All those are so important over video, and I’m inherently reading those non-verbals live with my eyes. Now, let’s just say I wasn’t on the call. Let’s say I say something like, “Oh, it sounds great,” and I crossed my arms. What am I saying? I’m being sarcastic. I’m not happy about it. And if you’re not picking up on that either live or on the recording, or with hopefully a behavioral AI engine we have, I don’t know. It’s something to be desired. So I don’t know. That’s the way I view the world it is today over VC. I think video is so important. Body language is so important because that’s how we communicate as humans when we’re in front of each other, and when we can’t be, this is the second-best thing.

Corey Frank (20:37):

Chris, what are your thoughts on that? You obviously-

Chris Beall (20:41):

Yeah, it’s true. The only use I know of for audio, really just pure audio is in handling a situation where you can’t have video. So you can’t ambush somebody with video because what if they’re in the hot tub? And that could be a problem. So not as big a problem when they’re at the gym, but it’s a problem at the gym. But it’s a real problem if you ambush them that one time they ever use the hot tub in that first week. And there turns out to be this issue around forming relationships with strangers. That as far as we can tell, there’s probably a million ways to do it that nobody’s found yet. Somebody came up to me the other day with a really good one, but at scale, it’s really hard to avoid the ambush. It’s just like trying to fix somebody’s blown Achilles tendon without cutting into their leg.

(21:27):

It’s like you’d love to do it, and maybe some people think they can do it, but I’m glad that somebody was willing to endure the sight of blood and cut into my leg when I blew mine, right? So the ambush is a place where all we get is audio, and we want to keep it short as a result, and we want to control the emotional tone. We’re not going to get to read much or we’re going to be able to provide a fair amount, and we have to rely on an algorithm and the algorithm as a framework associated with it. Like where’s the other party starting emotionally? Where could I get them to emotionally that’s a useful next place for them and for me? From there, where can we go, and where should we not go? Where is it dangerous? Where is it safe? And maybe in 30 seconds, we get to the point where we agree to have a meeting on video.

(22:12):

To me, that’s about it for pure audio. And I don’t hold very many audio meetings anymore that are pure audio. I occasionally do, but only with people I know well. And if I know you well, then I really don’t need to be reading your body language that much. Corey, you and I have known each other for, I actually looked up on a calendar the other days, for 371 years, two months, four days, and five hours. And so since the first time that we ever spoke to each other, and this will surprise some of our audience because, I think, can’t those guys make more than a couple of hundred podcasts in that many years? But now, whatever, never hardworking. So when I speak with you on the phone, I’m good because I have learned, like any good AI engine or eye engine, or human intelligence. I’ve learned your patterns, and I can see you when you’re not there.

(23:07):

But with strangers, it’s harder. And I think where we’re going to go with AI is actually into the buying committee. I think we’re going to go in a different place than people are talking about. Getting the individual who’s talking is nice and all. But one of my favorite things in the world of buying committees is I used to sell big stuff, big tech that I invented to big companies. So you’re in that presentation, and there’s usually 13 people in the room. You’re one of them, and there’s 12 more. I don’t know why there’s always 12 more. Maybe they’re apostles or something. I don’t really know. And there’s always one of whom who doesn’t talk, and it’s usually male. He sits at, from your perspective, in the back left corner, always, back left corner. And that person’s job, according to themselves, is to wait until you’re done and you think you’re doing fine.

(23:57):

And then to ask that one question that chucks a sharp, poisonous spear into the center of your chest right in front of everybody, that’s their job. They’re called the technical objector. And their job is to raise the single technical objection that blows your entire thesis out of the water, puts you on your back foot, and even if you’re going to do a deal with them, you’re not going to get as good a price. That’s what they do. Your ability to read that fact that that person is that person, that’s something we don’t do very much of today. Zoom actually makes that really hard to find that person because they’re not in the room anymore in a specific spot, and we don’t get to watch them as well, oddly enough, we’re distracted with the other people. I used to have a sharp eye on that person.

(24:43):

And getting the timing of asking the question before they ask the question is really, really hard. And I think AI’s going to help us in that. I mean, I’ve got a situation we’ve been working on recently where we got a superstar CEO who loves our product, but it’s a family business. And I know that at some point, and I believe it’s about happening, somebody is going to bring in somebody and put them in a position to reign in the CEO. And CEOs are really hard to fire, as we all know. They’re not like CROs, man, like Ben, they get bounced out. They’re there to take a bullet. That’s their job, right? CEO gets to put two bends out there for every time he or she gets shot. That’s like, look, I got a really good one. Oh, we didn’t make the number. Shoot that one.

(25:30):

Okay, we got another one, right? Well, being able to read those situations, the politics, within organizations and see those patterns and help a sales rep navigate, not just here they all are. You figure it out. It’s like, look, here’s probably going on here. Here’s what’s probably going on. Have you thought about this interaction? I think that’s where we’re going to take some of this AI. And you know what? ChatGPT is really good at this kind of stuff. You just have to know how to ask it the right prompts, and it’ll actually tell you about potential interactions because it’s super imaginative. It has an advanced degree from MSU, right? Make shit up. So it will hallucinate things that you need to be thinking about where your hallucination capabilities have come to their edge. And it’s like, what if Mary over there, what if the real issue is her professional relationship over here with Joe?

(26:25):

What if they hate each other? Have you thought about that, right? You might not have defined it. Well, maybe your AI can tell you. So I think companies like Sybill are going to start to take us not just down into the nuances of voice, which is where you were going. And I do think we’ll get into the nuances of voice because voice is mostly gestures, very little of voice is words. What we do with our hands, we’re also doing with our voice, and we can see our hands, but we can actually hear our voice do the same. Whatever that thing is, it’s going on in the inflection, in the tone. You can’t gesture with your hands without changing your voice.

(26:59):

You can’t. And the text captures such a tiny, tiny amount of what’s important in the conversation. The big part is in the tonality. But yes, Sybill will go down into the tonality eventually and annotate the notes. Some letters will be bigger. When we read the transcript, they’ll be bigger and they’ll have colors, and we’ll be able to interpret them without having to listen to them and go, Ooh, there was where he was off. That’s Corey in red ink. Big, pulsing, right?

Corey Frank (27:27):

Well, Chris, you’re a musician, and we’ve talked about this as a musician. What is the, and I’m ignorant in the language of music, but when you have fortissimo and you have the little dot over one of the half notes, is that what you’re talking about where I can not only hear it, but I can actually see the emphasis of the tonality? Or I can see as, Ben, as your example is, yeah, that sounds like a good idea, versus, I’ve read the transcript, I’d be like, Hey, Sybill is a great idea, but the tonality of it maybe is not necessarily certain.

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Chris Beall is on the road in Seattle, attending the annual Microsoft Build conference. Amidst thousands of software developers learning about the latest advancements, Chris and Susan discuss the impact of AI on sales and address common concerns about its effects on job security. Drawing an analogy of material science advancements to the evolution of building materials, Chris explains how new technology creates opportunities for salespeople rather than making them obsolete. He predicts an explosion of new products and businesses as companies leverage the power of AI to enhance their offerings. With an optimistic outlook, Chris emphasizes that salespeople should embrace the possibilities brought by material science advancements and look forward to a world of new products and increased sales opportunities. Join them as they explore the exciting potential of AI in sales on this episode, “Unleash the Sales Kraken: Fearless, Innovative, and AI-slaying!”

 

Full episode transcript below:

—-more—-

Susan Finch:

Welcome to another session with the Market Dominance Guys, a program exploring all the high-stakes, speed bumps and off ramps of driving to the top of your market. With our host Chris Beall from ConnectAndSell, and Corey Frank from Branch 49.

Chris is on the road in Seattle, attending the annual Microsoft Build Conference. Amidst thousands of software developers learning about the latest advancements, Chris and I discuss the impact of AI on sales and address common concerns about its effect on job security. Drawing an analogy of material science advancements to the evolution of building materials, Chris explains how new technology creates opportunities for salespeople rather than making them obsolete. He predicts an explosion of new products and businesses as companies leverage the power of AI to enhance their offerings. With an optimistic outlook, Chris emphasizes that salespeople should embrace the possibilities brought by material science advancements, and look forward to a world of new products and increase sales opportunities. Join us as we explore the exciting potential of AI in sales on this episode of Market Dominance Guys. Unleash the Sales Kraken: Fearless, Innovative, and AI-slaying.

Hey, Chris, you are on the road with a whole bunch of people. Can you tell us where you are and what’s going on?

Chris Beall:

Yeah, so I’m in Seattle, not very far from my wife’s condo. Everybody knows Helen, the author of Love Your Team, A Survival Guide for Sales Managers in a Hybrid world. A Amazon bestseller, by the way, in four categories. Anyway, she has a condo here. Now, she has been known to call it our condo now that we’re married. But I always say, “Helen, read the prenup.” Right? I’m kind of a stickler for these things. And so anyway, we came over here to Seattle to go to Microsoft Build. Build is their big annual conference for developers. Now, you might wonder…

Susan Finch:

You froze.

Chris Beall:

And that Helen Fanucci doing here at this conference. Well, that’s what I wanted to talk about today, is why would a couple of senior people who don’t write a bunch of code… Now I used to, but I don’t anymore. Why would we come and hang out with thousands of software developers learning about the latest and greatest that Microsoft has to offer for building software?

That’s where we are. So we’re at the Summit Center. It’s a big beautiful convention center. And one of my favorite things about it is, it has not only escalators and elevators, but it has stairs going all the way up to the top level. And of course, the young people, they take the escalators and the elevators. But us older folk, we’re wise enough to take the stairs. So that’s been part of the day so far. It was a brilliant kickoff this morning. Satya Nadella started it off and kind of took us through a little bit of the history of all the stuff that’s going on with AI. I myself built my first AI system in 1992, which is going back a little ways, so I’m kind of familiar with it. Basically laid out sort of a revolution in two hours, with a number of very senior speakers and topics, many of which are important to our company.

And it made me think about something. Because I’ve been reading tons of articles about sales and AI, especially ChatGPT. And some of them say, ChatGPT will make sales go away, or salespeople unneeded. And some of them say it makes your job easier. And some say, “Well, you could just send spam like five times faster than you could before. And it’s even personalized spam.” And, “Wow, that’ll work really well.” Which I think everybody knows my opinion on that. But what struck me was, this is very natural for human beings. And I’m not criticizing, I’m just pointing it out, that when people think about AI, they think, “What’s it going to do to me? What’s it going to do to my job?”

Susan Finch:

Right.

Chris Beall:

Right? And they think about it, I’ll call it first order. So they think, “Well, I do X, Y, and Z. I send emails and I talk to people. What if some AI could send emails and talk to people? Oh my God, they won’t need me anymore.” That’s sort of the first reaction.

And one can go down some very deep rabbit holes by following that reaction. Because now you’re in the world of, frankly, I’ll call it abject speculation. What’s going to happen? Who knows? Whenever there are new capabilities, jobs change. If you were a milkman at one point, and you had a horse, and you had a nice cart with four wheels. Maybe a wagon. And you went, took the milk from the farm, and you went around and delivered it to people’s houses. And then this internal combustion thing happened. And somebody else said, “Well, I’m going to deliver milk in something that doesn’t involve a horse.” If you said, “Oh well, that doesn’t affect me, I’m just going to keep using the horse.” At some point, the horsepower is going to overwhelm your horse, because the other person’s going to deliver faster, cheaper, whatever. And you can complain about it all you want. But you’re going to have to adapt, or you’re going to have to go into another line of work.

Susan Finch:

Exactly.

Chris Beall:

So this is kind of the obsession, but what I’d like to talk about is exactly the opposite. Precisely the opposite. Having nothing to do with how you do your job, but having to do with why you do your job.

Susan Finch:

Oh, okay. I love it.

Chris Beall:

Yeah, so like, hold forth, Chris. Go for it, dude.

Susan Finch:

Well, I’m curious because I’m constantly defending AI to friends that are paranoid. To friends that are scared. To people that don’t really try and think of the better applications, and “Oh, no, no, no, this makes me way more effective. This makes me way more necessary.” So I want to hear what you’re going to say, because this is a conversation I have all week long.

Chris Beall:

Well, I’m going to throw out an analogy here, and it’s one that I’ve used many times in other contexts. So for anybody who feels like it’s worn out, I’m telling you it’s not. It’s a great analogy. This may be the best analogy of all time. So here’s my analogy. You know, one point in the history of the world, in cities, we built big buildings with bricks. They can only be so big. You can only go so high with bricks. First, they can only go so high because how many flights of stairs can you go up? And then this guy, Otis or whatever, invented the break on the elevator. So the passive break, that meant that you could have a little room that goes up and down on a rope. Or cable as the case may be. And if the rope breaks, it won’t take you all the way to the ground at an ever-accelerating rate.

It’ll act with a passive mechanism that goes “cunk”, and stops it where it is. Now, you still need to be rescued and stuff. But much better than being a little crumpled mass, oozing blood out the doors and stuff like that at the bottom of the elevator, with a plume of smoke coming off your ashes, so to speak. So that was great. We could make some bigger buildings, but at some point you kind of get to the limit of brick. Brick building are made by stacking bricks on top of bricks. And then somebody came up with a really clever idea, “Let’s use steel in order to make buildings.” Now, there were a lot of arguments against steel. “Oh, it’s horrible. It rusts after all. Do you know it has iron in it? You ever seen it after a while? We don’t want rusty buildings. We got all the brick buildings. They stand forever and they’re fireproof.”

Hey, steel is pretty fireproof too. Yes, you can light steel on fire, but you kind of have to powder it first and get yourself a lot of oxygen around each little, tiny, tiny bit of powdered steel. And don’t ever do this at home, by the way. Don’t anybody take and say, “Oh, Chris said I should go powder some steel and light it on fire.” Do not do that in your house. Thank you. So steel changed everything. Cities look like they look. The building I’ve been in all day today is not a buildable building without steel. And so when you think about that, it’s like, well, what changed? Everything. So if you were a bricklayer, you might say, “Oh, they’ve invented a way of making buildings with steel. What’s going to happen to us bricklayers?” Well, you’re probably going to either become more decorative in what you do.

So now your bricks are to make things look like bricks, not to be bricks. Or for smaller buildings, hey, they need them too, right. But your five-story brick walkup kind of became a thing of the past because you could make it out of a steel skeleton and hang some glass off of it. And it looks like all the condos over in West Seattle. That’s what they make them out of. They pile bricks up, make them things. So this is my point is, when material science changes, when we can make new things, two things happen. One of them turns out always to be alarming and small in retrospect. Who sits around and talks about, “Oh, and the bricklaying jobs to make the big buildings, they just aren’t around anymore.”

What they do instead is go, “Oh, look at the vibrant cities we’ve created with these big buildings that can have 20 times as many people and businesses in them. And allow a greater concentration of value. And it’s hyperefficient.” Yes, they come with their little problems. Every once in a while you’ll have a global pandemic and nobody can work together in them. But, if you wait a few years, you kind of get that back together. The people do adapt. But it’s not about bricklayers, it’s about the city. It’s about everything else. It’s about all the other businesses that thrived. Because we used material science, there was an advance that led us work with steel. And we could make buildings primarily out of steel and glass. And that’s pretty stunning. Concrete, by the way, played a certain role as well.

Susan Finch:

Right.

Chris Beall:

That’s an old Roman invention. And their concrete’s better than our concrete, and we have them figured out why. But we think it has to do with, I don’t know, volcano. So here we have the same thing. So here you’re a salesperson and you’re going, “Oh, well, I’m so scared. I might not have a job sending emails that nobody answers. I mean its activity. They pay me for it. It’s good. And sometimes they do answer. And I think I’m a pretty good salesperson. And when I get somebody to answer, I’m great. I have a conversation with them. Or maybe I’m crazy and I use ConnectAndSell, and I push a button and talk to people. And what if some bot can talk to them or whatever?” Well, first of all, trust me, don’t worry about the bot thing. But I’m not going down that rabbit hole. If a bot could talk as well as you, it would have to fess up that it’s a bot.

It’s something that, actually, the nice Microsoft people have figured it out. They call them watermarks. So audio watermarks that are put in the generated content. Isn’t that great? So you can actually have another piece of code, look at it and go, “This was made by a bot.” And then John, the gatekeeper, who’s protecting Mary, the executive, can have it pop up on the phone and say, “Bot calling. Bot calling.” Because we’ll look at the watermark, listen to it and know it’s a bot. That’s not what I’m talking about. Here’s what’s going to really happen with salespeople. Here’s my confident prediction. I’m in a confident predictive mood. I’ve been hanging out with very confident people this morning. And I think they’re right in their confidence. And that is this. There will be an explosion of what? New products. How many new products? Well, I can tell you, they’re introducing 50 of them, today, in the morning, at this conference. This is just Microsoft. And they don’t make this stuff for themselves. They make it for others to build. Microsoft’s business has always been, “Here’s some code you use to build other code.”

Well, now they got some code. And a bunch of data. And a bunch of whatever it’s done in order to learn its tricks. Including its hallucinations, and its issues around security, and all the other stuff that comes with it. But all of that goes together so that this thousands and thousands of people I’m sitting with today can be unleashed to make tens of thousands, hundreds of thousands of new products for you to sell. So in a market dominant sense, if you were already out there with the product and you’re not taking advantage of the latest material science to build a better version of your product. And that doesn’t mean just like, “Oh, here’s steel. Let’s just put a steel flagpole on the top of our brick building and call it AI.” No. It’s like you actually got to figure out how to use the new material AI to make something useful for your actual customers. Or hey, better yet, even for new customers you couldn’t reach otherwise, because they had no interest in your product.

Maybe now you can put some cool stuff in there that will make it more valuable for those customers that you don’t have. Or that you do have. In any case, as a salesperson, you should be going, “This is the best of all possible worlds.” Not only does my job get easier, but there’s new stuff to sell. And salespeople not only [inaudible 00:13:01] new stuff to sell, they also thrive on new businesses. And here’s the other thing that happens. With every advanced material science. I’m using material science loosely here, right?

Susan Finch:

Right. Right.

Chris Beall:

I mean something new you can use to build new stuff. That’s why it’s material science, not just like science science, right? Science is new that you can go, “Wow, that’s really interesting.” Material science is like something that’s used as a material to build new stuff. So for instance, a browser in the 90s was material you could use to build new stuff called applications that didn’t run on your computer. But they ran in a browser that ran on your computer, and therefore were more ubiquitous. Did that lead to more or less opportunity for salespeople? Well, I would say the entire internet economy’s been really good for salespeople. Because while there’s hundreds of thousands of millions of products out there that have been sold, and guess what else comes with products, the best thing of all? Money.

Susan Finch:

We’ll be back in a moment after a quick break.

ConnectAndSell. Welcome to the end of dialing as you know it. ConnectAndSell’s patented technology loads your best sales folks up with 8 to 10 times more live qualified conversations every day. And when we say qualified, we’re talking about really qualified. Like knowing what kind of cheese they like on their impossible Whopper kind of qualified. Learn more at connectandsell.com.

And we’re back.

Chris Beall:

Money’s the juice that goes around and goes, “Well, where’s their opportunity to make more money?” There’s nothing funny about money. Money is kind of biological in that sense. It’s always looking for an opportunity to make more of itself. But it uses a funny approach. We, human animals use one approach, which we kind of like. And build some, I don’t know, poetry, and industry, and art around, and sort of seek it out. Well, money seeks out the opportunity to turn money into money by being a more advantaged investment with a little bit of risk, or a lot of risk, and with no risk. That’s what people do with money. That’s what money does with money. Money says, “I’ll take a little risk if you will make me, more of me.” Right? That’s the money thing. And occasionally the risk gets into an overhang and you get a Silicon Valley bank or whatever.

That’s just natural. Risks pile up, and then risks fall down. But overall, money goes up and up and up. And what drives up and up over time? It’s actually material science. It’s actually always material science. It’s very rarely brilliance. It’s very rare that somebody’s so smart, they figure out something that nobody’d ever thought of before with the current materials. That happens for a brief period after a new material shows up. So here’s a new material, ChatGPT and it’s friends. So you get all of this large language model stuff. And you get all these wonderful tools that people can use to make new stuff that they couldn’t make before. And they never like to say that. It always sounds like improvements. But truly, you can’t make a hundred-story building out of bricks. It will lean and fall over.

Susan Finch:

Right.

Chris Beall:

You have to use steel that flexes and that you can anchor deeply in the ground, if that’s the way you do it. Unless you’re in Chicago, in which case you float your buildings. But let’s not talk about that. Because it makes people nervous when the building is floating. Who wants to know that kind of crap, right? So new material science drives investment at the margin, risk investment. And we’re not talking about a little bit of money. We’re talking about trillions of dollars, that sit there, on the sidelines or near the sidelines. The biggest change in the last 20 years, which is generative AI. Where you can make your own models, you can train your own models. Our company, for instance, one of the senior people over at Microsoft said to me, “Your company has the biggest and the best, as far as we can tell here at Microsoft, training set for business to business contact data. Because yours must be closed loop.”

After all, it’s used for calling people. And those people to actually either answer or don’t answer. And then they have things that provide more data. And then they have outcomes that provide more data. And then they’re linked to each other. Because you could have follow up conversations or other conversations at the same company. Then they’re tied to commerce. That’s more, “Oh my goodness, that’s a lot of data.” And yes, mind you, we know you only do it 200,000 times a day. But that’s still a lot of data. It builds up, right? Well, that’s a good point. But without the material science of all this AI, you can do something with it. But you can’t do something as cool as say, make an application where you can say to it as a human being, “Tell me, which of my sales reps would do best calling on a market that consists entirely of the CEOs of companies in industrial kind of sectors, that the company’s making more than a $100 million a year.”

That’s a cool thing to be able to ask. Imagine being able to ask that of a community of thousands of sales reps. You could say, “Who’s the best at this?” Well, that’s coming. How long’s it going to take?

Susan Finch:

Oh, I can’t wait.

Chris Beall:

Yeah, that’s like a week or so. Because this new material science, I’ll call it. Which is this ChatGPT and it’s friends. It lets you do stuff like that. And the folks over at Microsoft just dropped 10 billion with a B, dollars into OpenAI and then basically pivoted their whole company around it. And they’re pretty big. Think hundreds of thousands of people who are now organized around making this new material available to folks who develop products. Now, I don’t develop products anymore. Okay, maybe I do, but don’t tell anybody. So I reach out and look out the window and pontificate about sales. But these products are going to be built, they’re going to be built fast and money is going to chase them. Already this is the hottest new area for investment. It is the hottest sector for venture capital right now.

And so when venture capital comes into the marketplace, it does it for one, and only one reason. Or purpose. And the purpose is to buy salespeople. To buy go to market. Nobody invests in companies to build anything anymore. The stuff’s already built in the garage. It’s built in minutes. It’s built from whatever was there, but this is the new material science. It’s like, “I’m not going to pay you to glue this to that. You got super glue. You do that on your own time. Then you come to me as an investor.” I’m not an investor, so everybody, I’m playacting here. “So come to me as an investor and I’m going to go, ‘Ooh, you’re going to take that cool thing you built to market.’ That’s fabulous. I’ll give you your million, your 5 million, your 10 million, your 20 million, to go take that to market.” Well, where does that money go? Guess what? It goes to salespeople.

That’s where it goes. Yes. It also goes to marketing. So it goes to marketing people. Yes. It also goes to marketing companies. So that’s all I have to say on this. And I actually have to run right now, because some money wants to talk to me.

Susan Finch:

I love it. Thanks so much, Chris, for popping in and catching us up. Talk to you soon.

Chris Beall:

You bet, Susan. Thank you.

Podcast: Play in new window | Download

In this episode of the Market Dominance Guys, Chris Beall reviews how artificial intelligence and machine learning will impact the future of sales. Beall shares his thoughts on how decision support using AI can make it easier and faster to figure out what to do. He gives an example of a prospective customer who wanted to talk to CEOs of companies using the entrepreneurial operating system popularized in the book “Traction.” He was able to use ChatGPT to find the names of CEOs running companies that were probably following EOS. In just a few minutes, he had a list of CEOs, company names, and phone numbers. Chris believes that AI and machine learning will help sales teams be more efficient at finding the folks they want to talk to. They will be able to understand their sales teams better, which will help sales run better. In addition to AI, he covers inbound and outbound marketing strategies and which one is more effective. Finally, he explores the power of negative conversations in driving pipeline and how they can be more effective than positive conversations. Join us for this episode, “Sales Success in the Age of AI and Emotional Intelligence.”

Here are 12 provocative questions answered in this episode:

  1.  How do you think the rise of artificial intelligence and machine learning will impact the future of sales?
  2.  What’s your take on the debate between inbound and outbound marketing strategies? Which one do you think is more effective?
  3. Can you share a story about a time when you failed at something in your professional life? How did you bounce back from it?
  4. How do you stay motivated and focused when faced with challenges or setbacks?
  5. What’s the biggest mistake you see salespeople make, and how can they avoid it?
  6. How do you think technology changes how sales teams work and collaborate?
  7. What’s your opinion on the role of emotional intelligence in sales, and how can salespeople develop this skill?
  8. How do you measure the success of your sales team, and what metrics do you use?
  9. In your experience, what are the most effective strategies for building strong relationships with clients and customers?
  10. How do you ensure that your sales messaging resonates with your target audience?
  11. What advice would you give to someone who is just starting a career in sales?
  12. What are the biggest challenges facing sales leaders today, and how can they overcome them?

Full episode transcript below:

—-more—-

Chris Beall  (00:11):

Hey everybody. Chris Beal here, co-host of Market Dominance Guys with another episode of Market Dominance. Guys, I find myself today all alone. I’m here in West Seattle looking out at the water, watching ferries go by water taxis, an occasional harbor seal, hoping for a cruise ship, but haven’t seen one yet. And my co-host, Corey Frank, is super busy right now building Branch 49 and servicing customers, and I’ve got a little time this afternoon, so I thought I’d just do something with, instead of Corey, I’d do something with our friend chat, G p T. So I asked chat G p T to provide 12 provocative questions that a podcast host might ask. Chris Beal, c e o of connect and sell and co-host of the Market Dominance Guys podcast. So chat G P t’s going to be kind of our host interviewers so to speak, and I’m going to answer these questions as best I can. 

Chris Beall  (01:09):

Now, one thing that I thought was pretty impressive was the speed with which chat g p T came up with these 12 questions. Sometimes it takes a little bit of time and it thinks things over might take 10 seconds, 20 seconds. This was like there is your 12, so I thought that was very interesting and we’ll just jump right in. So this is Chris Beal, a glass of wine, a beautiful afternoon here in West Seattle and chat G P T asking provocative questions. So provocative question number one, how do you think the rise of artificial intelligence and machine learning is going to impact the future of sales? Now that’s what we call a big, big question. So I’ve got some ideas. I know some of these things are going to seem a little short term and some are kind of long term. The short term ones I’m pretty certain of mostly because I’m already doing them, the long term ones we’ll see. 

Chris Beall  (02:10):

So the short term ones have to do with just making it easier and faster to figure out what to do. I’ll call it decision support. So I have an example, I have a prospective customer who would like to talk to CEOs of companies that are using the entrepreneurial operating system as popularized in the book traction. That’s a really hard problem to solve with something like ZoomInfo or Apollo or whatever and it’s not really solvable with Google. Now you could find folks that had attended an online event or physical event who are into the traction concept, the e o s as it’s called. But hey, how about asking chat G P T for the names of CEOs who are running companies that are probably following e o s? Well, I tried it and I’d actually tried it during the time that my prospective customer asked the question and in about, oh, I don’t know, three, four minutes, I had first name, last name, I knew the title c e o of a bunch of companies and I had the company names. 

Chris Beall  (03:19):

I ran them through our list enrich process and voila, I had a list of folks that could be called on the best phone number known for them from actual experience and it was really, really straightforward. So artificial intelligence in this case with a whole bunch of knowledge built in because chat g p T’s got this immense amount of knowledge, mind you only up to September, 2021, but still things don’t change that fast gave me a great answer and so it did something that I’ll say was not practical to do some other way and it got us into a calling state and in a calling state, as soon as you’re calling the list you learn an awful lot and you learn it really fast. In the long run, I think a bunch of other things are going to happen and I think mostly they’re going to be around being able to be more efficient at finding the folks you want to talk with. 

Chris Beall  (04:15):

So there’s the whole idea of intent. Now I’m a little, I don’t know, I’m not a hundred percent bullish on what most people call high intent. I think it’s a little strange competitively to choose to dive into a red ocean, highly competitive red ocean with everybody else who has the same intent signals and think that you’re getting an advantage. I think sometimes folks forget that it’s always competitive in sales and I’m thinking B2B sales, but it could be any sales, but B2B especially, it’s a zero sum game. Nobody’s choosing you and your competitor to solve the same problem. Why would you want to be late? I don’t know. Artificial intelligence and machine learning is going to help us be earlier. I also think it’s going to help us understand our sales teams better. It’s very, very difficult and it’s kind of subtle to figure out what’s really going on with your sales team before you’ve spent an awful lot of money finding out what’s going on with your sales team, being able to understand what’s actually happening, ask questions of your data in a way that you can understand as a sales leader or a business leader, I think is going to be a big, big impact or have a big impact on sales that as sales will run better because you’ll have teams that consist of folks who are doing better because you can ask questions to find out who’s really doing better and it’s not just who made their number last quarter or last year. 

Chris Beall  (05:42):

Okay, number two, what’s your take on the debate between inbound and outbound marketing strategies? Which one do you think is more effective? This podcast is called Market Dominance Guys and anything could 

Chris Beall  (05:56):

Be used to dominate markets, but I think it’s a question of timing. So in most markets, at least as a market hypothesis, you have an idea of who you’d like to talk to. Well, it’s a lot easier and faster just to go talk to people that you’d like to talk to and get information back from them as to what they think of your offering, of your concept, of your product of you than it is to wait for people to come to your website because you did some advertising. So by the way, outbound is also very powerful. Marketing is not just an outbound sales. When you talk to somebody, they’re very likely to go to your website on the spot that makes your outbound calling into inbound response. And so you get a response of somebody coming inbound and then by the way, they answer the phone because you called them to get them to come inbound and then you go back outbound. 

Chris Beall  (06:53):

One thing that’s not obvious to most of us until we look at the numbers and we have to look at them back from backwards, from the opportunities back to the conversations that preceded them is negative conversations or negative outcome. Conversations are actually more powerful in driving pipeline and positive conversations. Positive conversations are great, you get a meeting or you get a follow up and you move forward. But interestingly, once somebody’s within that safety, that zone of it’s okay, I’m not on that call anymore to do what they want to do. Often what they want to do since you interrupted them is they want to complete looking at your website, which you got them to go take a look at. So which is more effective? It’s really a question to me of which goes first. You want to do outbound first because you can make a list, which is your market hypothesis, go talk to the subset of that list that answers the phone, get information back sooner, adjust your hypothesis, adjust your message, which is your product at that point and tune faster and more cheaply than you can in AB testing a bunch of messaging on inbound. 

Chris Beall  (08:06):

So at some point, however you get to the folks who don’t answer the phone, fortunately if you use a conversation first strategy, you’ve already dominated that market and the inbounds come to you because you’re the standard. All right, number three, can you share a story about a time where you failed at something in your professional life? How did you bounce back from it? Oh my goodness, I have so many of these. So there’s one that comes to mind. I don’t know if I bounced back exactly, I suppose I did. I went off into another industry once and tried to run a software style, I’ll call it business in a services business that was heavier. It involved floor finishing. It was high tech but not as high tech as software and it was, it’s not as light software software businesses are very, very lightweight and you’re not carrying equipment, you’re not carrying leases, you’re not carrying offices. 

Chris Beall  (09:03):

This particular story, we got up to 22 offices open around the country in nine months. We were growing at 30% a month and we had a product failure across our entire portfolio and I had not raised enough money to buffer ourselves against that product failure. We managed to resolve it in a few days, but a few days wasn’t fast enough. We ended up selling the company and how did I bounce back from it? I wasn’t feeling very good. It wasn’t feeling very good about myself. A dear friend of mine said, reach out to somebody that you know can help and once they accept your help, you’ll feel better. So I did that. Somebody happened to be a very dear friend of mine who’s a venture capitalist in Silicon Valley, and what do you know, a few days later I was in Silicon Valley talking to some folks at a company about their product. 

Chris Beall  (09:55):

I kind of gave a very firm criticism of the product. I think I said it was a fake and next thing I was running product at that company. I was the E V P of product and I went from being deep in the hole personally and probably feeling that way professionally to having a job, didn’t have a car, rode the bicycle to in the dark in the mornings over to light rail and that was all great adventure actually and just kind of grounded out and came back out of that hole and that company actually, we ended up kind of spinning another company off and then the VC in question, they decided to shut it down. I just bounced back from that by going to do some things for some of their other companies and just kind of keeping on how do you stay motivated and focused when faced with challenges or setbacks? 

Chris Beall  (10:54):

Now this is an interesting question. I’ve never had a motivation problem. I don’t know why. I don’t know if I have a focus problem or not. I probably do a lot of different things interest me, but I’ve never had a motivation problem. So to me, I actually like having the wolf at the doors. I call it, I don’t know why. I’ve always felt more comfortable when I felt like I was under some kind of either time pressure or financial pressure. Both, thank goodness, those things just naturally show up. You don’t have to work very hard to bring time, pressure and financial pressure into your life. They will show up. So your life is like a racehorse that eats while you sleep and the wolf will come to your door. The wolf has an incredibly good nose for where there’s things that need to be paid attention to. 

Chris Beall  (11:47):

But I don’t know, I’ve just always been the kind of person who goes, Hey, there’s people to help and problems to solve and I’m still alive. So give it a whirl. What is the biggest mistake you see salespeople make? This is question number five and how can they avoid it? Now I’m reading a very good book right now that I highly recommend called the Jolt Effect, I think is what it’s called, or Jolt Impact or something like that. It’s by the challenger sales folks. And I think it points out this huge mistake that salespeople make and we all make it, which is when somebody is indecisive, when the prospect of inde is indecisive, there’s an assumption that they just need to hear more from you. You need to make it more obvious that your solution has value that they’re going to miss out. If they don’t take that value, maybe throw a little fear, uncertainty and doubt in there. 

Chris Beall  (12:38):

And I think not recognizing that what you need to do is recognize that this person has a hard time making a decision right now, de-risk the decision for them in some way. Can you take some of that pressure off in order to let them stop backing away from you into an indecisive mode? And that’s difficult to do because as salespeople, we all want the deal. So how do we stay sincere and on the other person’s side when we want the deal? And then how do we not waste our time? If sales was easy, everybody would be doing it well, but most people don’t do it well. But the big mistake I see is exactly that. I call a version of this. I have a whole episode on it called the Dog and the Bone and the Chainlink Fence. And it salespeople often act like a dog who’s trying to get to a juicy bone on the other side of a chainlink fence and instead of recognizing that the path to the bone is to go 10 feet to the right and through the gate, they just keep pushing their nose into the fence. 

Chris Beall  (13:45):

They get so close to what feels like success that they can’t back up and see that there might be another path. And that path often has to do with the emotions of the other person. So it’s something to think about. Okay, so number six. How do you think technology is changing the way sales teams work and collaborate? Two different questions. There’s work and there’s collaborate. I think collaborate technology is doing a little better at than work. I think technology often makes sales teams do more work because much technology, software technology, CRMs a good example, says like Audrey, the mediating plant at Little Shop of Horrors feed me. And you feel like you’re feeding the technology data all the time. And then the question is, what’s it doing for you? And yo lafa notice when management is frustrated with their view of what’s going on in sales, they demand that more data be put in the C R M. 

Chris Beall  (14:54):

So how does it work for you? Not quite so obvious. So I actually don’t think technology tends to change the way sales teams work in a way that reduces work would be, which would be great. I think it is useful for collaboration mostly in ways that we don’t recognize the ability to share a document with somebody else, send it to them, have them make some comments on it and bring it back. In particular, collaborating with buyers I think is easier now with technology. And imagine if you had to go to somebody’s shop and take that big binder out or that folder, remembrance, I don’t know. Most of you probably don’t, when slides were something you put up on an overhead and you drew on. I know technology has just made it a lot easier to have conversations now using whatever support you need in terms of images and in terms of data than you could have before. 

Chris Beall  (15:50):

Now, does this always make sales go faster? Probably not, but sometimes it does. And I think in a collaboration sense with the potential customer, I think we collaborate a little better or easier I guess with technology seven, what’s your opinion on the role of emotional intelligence in sales and how can salespeople develop the skill? Read Jeb Blunt’s book Sales eq. That’s my recommend recommendation. Anybody listening to this, he wrote a whole book on the subject, emotional intelligence is the number one thing you need in sales. It’s probably number two and probably number three also, again, I’ll go back to this jolt effect or jolt impact. If I remember the name of the book, I wouldn’t be, well maybe I’ll ask chat g p t what the name of the book has. Anyway, when I go to look at that, well, the first thing in jolt is J, which is judging whether the difficulty somebody’s having making a decision is because they love the status quo or because they’re indecisive. 

Chris Beall  (16:55):

Well, this requires a lot of emotional intelligence to read the cues, to read those T leaves. And it requires a lot of emotional intelligence to tell if somebody is concerned that you’re not going to deliver or concerned that you’re not on their side or worried that perhaps they’re going to look bad by making a decision with you because you’re not the preferred number one. Everybody goes with that kind of stuff, requires emotional intelligence. And the sooner you can detect what’s going on with the other person emotionally, the better reading the room is another situation. I’ve been in lots and lots of meetings in my life where it took a fair amount of emotional intelligence to recognize that person. Almost always a guy in that back left corner who didn’t say anything. That’s the one who’s going to ask at the end of this presentation that’s going to feel like a spear being chucked into my chest, right? 

Chris Beall  (17:54):

They’ve got something that they’re going to try to kill me with. And having the emotional intelligence to recognize that and then kind of arrange so that the room is on your side before that happens or so that person realizes it’s a bad idea to expose themselves through that question, that those are high skills. That’s where the deals are made or not made, failed in the big enterprises. So developing the skill, mostly it requires that you look at yourself, you look at your own behavior probably with somebody else helping you and figure out where is it that you get bound up inside yourself that you can’t feel free about noticing how somebody else feels and being able to label those feelings. Learning to label your own feelings, which is something Chris Vo talks about and label the situation and the feelings of somebody else is really key. 

Chris Beall  (18:55):

Until you can label emotions, you probably can’t reason about them. And if you can’t reason about ’em, you’re not going to be able to use emotional intelligence. Number eight, how do you measure the success of your sales team and what metrics do you use? Well, the most obvious one is are they making the number? But I mean you didn’t need chat G p T to ask this question to me, right? Everybody wants to know are you making the number? What I’m particularly interested in from a metrics perspective are flow rates. So I’m interested in the flow rate of conversations with relevant people and those are first conversations, they’re follow up conversations and then they’re scheduled meetings. If those flow rates are not continuing for at least smoothly or growing because your business plan calls for them to growth, you got problems. And so right now, for instance, I am thrilled that the flow rate of test drives at connect and sell. 

Chris Beall  (19:53):

We do a thing called intensive test drive. It’s a full day of production of our system. It’s mind blowing. People love it. It’s not a demo, it’s like full production. They’re talking to real people, they’re setting meetings, they’re learning stuff from the feedback from prospects, and they’re building pipeline. So you know what? What’s not to like? Well, I don’t know, everything’s got friction and getting somebody to like it enough to do it. And we took some friction out of our way of selling these free test drives and voila, we suddenly had twice as many coming in per day or at least being signed. So that’s a good thing and that’s one of the ways I measured. I like to look at sales as though it’s manufacturing. That is you’re moving something through a system and you’re processing it along the way at different stations, just like manufacturing workstations. 

Chris Beall  (20:47):

So I want to know where is the bottleneck right now? So one of the metrics I use is where’s inventory building up? We increase the flow rates of test drives that have been signed. Well, does that mean there’s now a bottleneck right in front of test drives that are being delivered? Probably. I mean, after all, why would we have had twice the capacity for delivery in advance? It’s normally the case that if you increase the flow rate of something upstream in a process, you’ll move the bottleneck downstream. So the metrics I’m using, there are the backlog of test drives pretty simple, but then you’ve got to really dig into the data and make sure you’re not just accepting glibly what some report says. You’ve got to make sure that whatever the distinctions are that are made in the report, they’re actually correct that they’re distinctions based on real data. 

Chris Beall  (21:38):

And you’ve got to make sure you don’t fall into what I call the counting problem where it’s like, oh, I have five of these, but are they all equal sized? So you have counting and then you have measuring, and they’re two different things and it’s easy to get them kind of confused with each other. So those are some metrics and the others are productivity metrics that I expect and want to have running pretty smoothly. And if they don’t run smoothly, then something’s up. So for instance, how many meetings are being set per hour per rep when they’re prospecting? So our S D R team prospects at just about 0.51 hours per rep per or meetings per rep hour. And I look at that every day and in fact, I’m going to look at it right now, you can’t see this, but hey, take my word for it. 

Chris Beall  (22:30):

So here we are on the 10th of May, 2023, and I can go into my connect and sell system and I can click a couple of buttons and I can get an answer to that question. So the team has set 25 meetings today on 403 conversations, and those conversations took a total of 55 hours and four minutes and 18 seconds, and in order to get those conversations, it took 7,562 dials, which by the way, the team didn’t do. So what are the meetings per rep hour today? They’re at 0.45. That’s a little bit off. So then I ask myself the question, what is it off due to? Is it off? Because the conversations per rep hour is low, it’s 7.32 today. That seems reasonable to me. Is it the conversion rate? Now the conversion rate is down a tiny bit today it’s 6.20. This team tends to convert in sort of the mid seven range, seven plus percent. 

Chris Beall  (23:30):

It could be that we’ve unleashed some new lists on them and they’re very cold or cold, less convert at a lower level than less efficiently than follow up lists. It could be that their wait times are a little, and in fact they are, they’re four minutes today. So then I can look into, well, who is that true? For one of the reps, it’s 11 minutes and 12 seconds. For the rest it’s around three. What’s going on with that rep? You see where this goes, right? The metric leads you toward root causes if you have the data. I like data that tells me how many units of something are being produced per hour because all we have at the end of the day is the day and the day only has so many hours. So that’s what I prefer and kind of what I look at every day. 

Chris Beall  (24:21):

I frankly don’t know how CEOs run companies who don’t have access to this kind of information, but apparently they do. But I think they’re kind of stuck looking at trailing indicators. I like looking at leading indicators. In your experience, what are the most effective strategies for building strong relationships with clients and customers? Number one, be on their side. It’s so easy in customer situations, client situations to say, well, I represent my company so I’ve got to be on our side, and everything’s got to be very transactional. Get all this kind of talk when you come right down to it, to me anyway, if you want to have a strong relationship with somebody and you’re the expert in what they’re buying and they’re the expert in what they’re doing, you need to be generous with your expertise. And so it means going that extra mile, that little bit farther with regard to providing help and you always can provide more help. 

Chris Beall  (25:26):

It’s one of the reasons I prefer not to have lots of paid professional services in my company. Some people love that, but I think kind of it gets you in a position of saying, well, you’re transacting for every hour of our time and we’re not going to give you anything at the margin. The fact is there’s a lot of unknown in any complex relationship. You’re trying to accomplish difficult things together. You’re going to run into unknowns. Who’s going to step up and try to learn what that unknown is and how to resolve it first? I think that as the seller, it’s smart to be first to step up, first to go toward the problem rather than conserving or hours in your resources. Now obviously you have to make money and you have to figure out what is okay to give. And if somebody’s using you and I’ll use that word, then you’ve got to stop letting them use you. 

Chris Beall  (26:28):

But that’s not the normal problem that we run into. The normal problem is clients and customers over time start to feel transacted. They start to feel used, and if they’re feeling used, they’re going to look around for somebody who’s going to help them without using them. Alright, so here’s an easy one for me. We have episodes on this in market dominance guys. Number 10. How do you ensure that your sales messaging is resonating with your target audience? It’s actually pretty simple. Your sales messaging, first and foremost, as got to set meetings, it needs to compel the best and repel the rest. A meeting setting rate of about 5% on cold calls tells you that for that particular audience, for that particular target audience, you’re doing okay, you’re above threshold. You can run 5% on cold calls and eight, nine, 10% on follow-up calls and make sure you have rescheduled meeting calls because meetings get blown and you’re doing all right. 

Chris Beall  (27:33):

Now your conversion rate of downstream activities is a little bit different. And at every level you’ve got to check, one of the things you should be looking for I look for is across the team, are the conversion rates similar? If they’re highly variable, then we have a hidden variable somewhere. There’s something we need to go in and figure out. It’s not the messaging obviously, maybe it’s how it’s being delivered. Maybe there’s a subtlety in somebody’s voice or in how they respond to questions or how they ask questions in discovery. So that’s where you’re getting down to using performance issues around what’s not messaging, because the messaging is locked. Using those performance issues to find out where you could be doing better. Because wherever you have those gaps, those are opportunities to learn to do better. Number 11, what advice would you give to somebody who’s just starting their career in sales? 

Chris Beall  (28:31):

If you can sell something you believe in, because when you don’t believe in something, you acquire very, very bad habits. In sales. I mean, sales is not a profession that should best be built, unprofessional, lying or tricks or manipulation. What you’re really doing is you’re becoming an expert in something so that you can help somebody else understand whether the solution that your company offers is the one that you would recommend as an expert. So it’s very difficult to get yourself in the position, the strong position of simply saying, Hey, based on what you’ve said so far, what we’ve discovered together, my strong recommendation is that you do X. That’s the ultimate thing to be able to say in sales. You want to be able to say that frankly every single time. By the way, X could be that you don’t do anything at this time or that you don’t work with us. 

Chris Beall  (29:30):

But if you’re representing something that you believe in and your qualification process has any chops at all, you’re going to more often than not be able to honestly recommend that they take a next step that makes sense, that includes working with you and your company and moving forward. So choose carefully because if you choose to represent a product that you don’t believe in or that you anti believe in, you’ll acquire acquire very quickly. All of the worst habits of a salesperson and your career in sales will end up struggling as you’re dealing with two things. One is the ineffectiveness of tricks. Sales is not a bag of tricks. Two is your own feelings about your profession. You may rightly or wrongly start to feel like you’re not being straight up with people. And so pick carefully. And by the way, one of the reasons that buyers in B2B especially tend to go with who they think is the best salesperson is they believe that the best salesperson has their pick of the products and therefore they pick the best product. 

Chris Beall  (30:41):

So it works the other way around. Pick a product you believe in and then don’t worry so much at the very beginning about how much you’re being paid. Be concerned with how you can learn to be an expert on something that allows you to be helpful. Well, as Anthony Ior Reno says, staying one up, that is knowing more than the other party. Number 12, what are the biggest challenges facing sales leaders today and how can they overcome them? Well, Helen Fucci has been on this podcast a couple of times, and she wrote a book called Love Your Team, A Survival Guide for Sales Managers in a Hybrid World. So I’m going to map this question about leaders on the managers, and here’s the issue, it’s today, it’s tomorrow, and it’s forever. Your success depends on your team’s performance and your team’s performance actually depends mostly on whether you support them, whether you support them, and by the way, as a team. 

Chris Beall  (31:43):

So if you have somebody on the team that’s underperforming, you owe the team really, really good performance management of that person and you owe that person and yourself an open mind with regard to what’s going to happen as a result of that performance management. So becoming a great performance manager is a huge challenge. Very few sales leaders are capable of doing great performance management, but if you don’t do it, the rest of your team will feel like, Hey, apparently we don’t hold ourselves to high standards here. Somebody is able to do whatever and kind of get away with it. And so it’s stuff like that. It is, how can you get to the point quickly where your team, which is now going to be hybrid and quite capable of moving on, your best performers can move to another company and sell another product in a heartbeat. 

Chris Beall  (32:37):

So how can you keep your team intact? How can you keep them being effective? And how can you do it without manipulating them? Well, I advise that you read Helen’s book and it doesn’t matter what kind of manager you are, and think about this, that love your team is the answer to the big challenge. And the challenge is these days the talent can walk out the door without taking a single step. And always as a sales leader or a sales manager, the performance of the team determines your success. So those are my 12 questions. I thank chat g p t for so quickly writing them up. I hope that my answers are of some value to the audience here. And had we had Corey Frank around on this, he would’ve done a much better job than I did of asking these questions. But on the other hand, hey, Corey, coming up with great questions is one of the things that you do and chat g p t, not as subtle as you, not as many fantastic historical and literary references, and I know your poetry is much better, but hey, not bad. Not bad. So until next time, for Corey Frank, this is Chris Beal, market dominance. Guys, go out and dominate.

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In this episode Chris Beall discusses the common mistakes made by CEOs when seeking funding and how venture capitalists (VCs) make their decisions. Chris explains that VCs are in the business of pattern matching, meaning they compare the characteristics of a company seeking funding to those of successful companies they have previously funded. However, this approach can lead to the exclusion of companies that do not fit the pattern. He uses his own company, ConnectAndSell, as an example, explaining that his company’s reputation and the age of its founders did not match the pattern favored by VCs, but the company was still successful. He also notes that VCs often encourage companies to spend their funding on headcount, specifically sales development representatives (SDRs), who set meetings for account executives. Beall calls this a “comfort” for VCs, but emphasizes that it may not always be the most effective use of funding. Join Susan Finch as she takes the host’s chair with Chris as her guest for this episode, “Conversations Over Headcount: What VCs Should be Counting.”

 

Full episode transcript below:

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Susan Finch (02:35):

Okay. Well, Chris, I know this is near and dear to you, and you have a lot of experience in this, and you’ve had many successes and maybe a couple failures along the way, but that makes your successes all the more sweet. I’m wondering, what would your advice be for CEOs as they’re seeking to get funding, and what are the biggest mistakes that they make thinking that it’s an obvious, oh, that’s obvious. You need to do that, or that’s obvious you need to do that. What are those assumptions that they make that it’s like, no, no, no, no, no, no. How can you guide them with a small checklist, what they need to be aware of, where the common pitfalls are and how to avoid them? 

Chris Beall (03:18):

That’s a fantastic question. When you take money as a founder from VCs, especially venture capitalists, you’re taking money from folks whose business is pattern matching. So what they do is they match your company as you describe it, and as their due diligence reveals it to other companies that they have seen that are in the same categories or similar categories to yours. And if the patterns match enough with previous success, then they might be inclined to fund you. So I’ll give a counter example. A few years ago, about three or four years ago, the head of strategy of Google Cloud called me out of the blue. Now this is somebody I actually had met at a conference. We’d become friends. I’d actually sold connect and sell to Kaizer Compressors before his eyes at the conference as kind of a demo. What do you do? I said, I won’t tell you what we do, point to somebody at lunch and I’ll sell it to them and you’ll learn what we do. 

Chris Beall (04:16):

So we became friends. And a little while later, a couple months later, he called me and he said, we’re Google As, and I said, yes, I’m fully aware of your goos. And he said, well, so we know everything. And I said, yeah, yeah, yeah, I got it. And he said, I mean literally everything. And I said, yes, you are creeping me out now lj. So get on with it. And he says, well, I just want to tell you, we’ve come to the conclusion that Connect and Sell is the most interesting company in Silicon Valley. And I said, well, that’s a very weird word to apply. Interesting. If my children use it, I say, try another adjective. So you’re going to get away with it because as you say, you’re a Google, but what do you mean? I said, well, for one thing, your reputation is just bizarre. 

Chris Beall (05:05):

It’s like off the charts strange five Sigma to the right of everybody else. I said, that’s not very interesting to me. He said, okay, well, here’s something that might be interesting. You’re very, very old. I said, no, we’re not. We’re like a 13 year old company. He said, not your company, human beings who run, connect, and sell are so old. And this is the pattern matching part. So old, there is no chance that you’ve ever been properly funded in Silicon Valley because you don’t match the pattern for founders. Founders are predominantly these young-ish thirties males who that’s kind of it, who went to Stanford or whatever it was, and they’ve got an idea, but they look like each other. And this is why women I think, have such a hard time getting funded as they’re sort of like human beings have got some real skills at telling people from people according to their perception of somebody’s gender. 

Chris Beall (06:09):

So my point is, here’s a pattern matcher. In fact, there’s a whole cadre of ’em. They go up and down Sandhill Road, and what they’re doing is they’re matching patterns of companies they’ve seen and they believe, everybody believes that whatever works for step A of A process must work for step B. Step A is deciding who to invest in Step v B is helping them along the way. As a helpful board member, you’re a vc, you’re on their board, and now you’re going to say, here’s how you help them. I want to see X, whatever X is. What’s your plan? How are you going to use our money? Well, the pattern of using venture money is to spend it on headcount early in the cycle. You spend it on headcount. And headcount is therefore a good thing to a vc always has been. And it’s a comfort. 

Chris Beall (07:04):

If you’re a venture capitalist, it’s a comfort when one of your portfolio companies buys heads, they buy people. Why? Because you can count why they’re called head count. Otherwise they’d be called human beings. But nobody calls ’em. Human beings call ’em head count. Okay, I count ’em. And then if you can claim you’re getting leverage, because everybody in the financial world loves leverage. I get a two for one. What’s that? Well, I hire them and I hire them as sales development representatives, SDRs, and they set meetings for my current crop of account executives and thereby give them more work to do, so to speak, more companies to sell to that have been selected by our SDRs through their research and their outreach. And that sounds great. I wrote a book about it called Predictable Revenue. It’s got to be good. It’s like, here’s the reasoning pattern. 

Chris Beall (08:01):

Salesforce successful salesforce.com. How was it done? According to this book, it was done by this specialization thing. Let’s do more of that. So VCs love to measure what can easily be seen because they don’t have very much time is their constrained resource, not money. I was just talking to somebody yesterday. I said, oh, and therefore, and he said something about what a VC we’d want, assuming that what they’re trying to do is to have a higher proportion of their investments, of their portfolio succeed. And I said, you don’t get VCs. VCs want that one in 10. They want the others to go away relatively quickly to free up their time so they can go get another 10 of which one will be a unicorn. That’s their model. These are not, they’re not nurturing. What they’re doing is pruning like any good gardeners do, right? Oh, it 

Susan Finch (08:56):

Sounds so dark and evil. 

Chris Beall (08:59):

Well, it is it, and it isn’t actually a legit way of thinking about how to make a whole bunch of money at the edge of innovation as you get the mega innovations and then you salvage the rest. And by salvage being over dramatic but not much. Right? Read the financing documents from any VC sometime and ask about each word. Who’s this word for and what’s it for? And most of the words are for what happens when things don’t work and when things don’t work, these words protect the VC so they can salvage value out of the company, and then they recycle the people. So if they’re all suicide missions, some of which fail that is they don’t reach suicide, they reach unicorn status, and then you recycle the people. And so everybody’s working for, I’ll call it VC Inc, right? Well, here’s your problem as a founder, if you go down this path, you are going to get advised or we’re going to get advised until very recently to lay on headcount in the form of sales development reps who will become account executives. 

Chris Beall (10:01):

That’s your two for one. Not only some meetings, but hey, look, I get free recruiting. I got ’em already, right? The problem that you’re going to have as a founder is for your own good, the good of your company, which you have a fiduciary responsibility too, for your own good. That capital efficiency is fantastic. That is, if you had a choice between 10 reps having four conversations a day and one rep having 40 conversations a day, you would do the math and you’d take the one rep every time the VC does the pattern matching, takes the 10 reps every time. And so the 10 reps are going to have four conversations a day. And that, by the way, is pretty standard, right? Okay. And now your scaling mechanism, say they always talk about scaling as a substitute for growth, scaling sounds great and multiplying numbers together. 

Chris Beall (11:00):

That’s so much better than adding. So let’s scale. So let’s go from 10 to 20. Let’s go from 20 to 40. I had this conversation once with the head of business development company called Zenefits. I think they’re still around. They got in some trouble at one point. His job was to hire and train onboard, et cetera, et cetera, 250 SDRs in Phoenix. From scratch. From scratch. And I asked, I was alone with them at lunch. And I said, well, that’s a lot why? And he said, well, it’s what the VCs want because we’re, we do the math, you put it in a spreadsheet and each one of these people produces so much output per day, and some of them become AEs, and that provides us with our flow of future account executives, blah, blah, blah, blah, blah. And I asked him flat out, I said, I could show you how to do that job with 25 people instead of 250. 

Chris Beall (11:58):

What would you say? And he said, I’d say no. Why would you say no? He said, well, the VCs want us to hire to show we can hire 250 people to scale the business. This sounds to what I’ll call a normal business person in say, middle American. Say you’re running any kind of a thing like running casser compressors and your name’s Matt McCorkle and somebody says, your job is just to hire lots of people in order to scale the business. You’d brawl your eyes and say, not here in Milwaukee. We don’t do that right across our country, but in Silicon Valley land, this is regur. And yet just, I just want to say for you, the founders, the money wants you to do what the money is comfortable watching you do. So they want it to match the pattern that they’re comfortable with, and they want it to be visible, easy to count. So here’s something that’s easy to count, head count, but you know what else is easy to count? And it’s on this picture right behind me here is actually conversations, relevant conversations. Now, weaning your VCs from headcount conversations is probably really hard. But before you take on the headcount, think about establishing the conversation flow of the business as the replacement for the headcount. How many conversations per day are we having with potentially relevant targets? 

Susan Finch (13:29):

So I want to make sure I’m understanding this correctly. Then when I’m seeking I’m A C E O, I’m seeking funding, I’m seeking VCs. They are not going to see that logic. They only want it done their way. Even though the way that you’re proposing would be way more profitable, the company would be stronger and more stable, and it would grow at a very realistic, manageable pace. But I’m going to have to fight for that with the VC to actually get them to understand this concept. Or they don’t care. 

Chris Beall (14:02):

Yeah, they’re not, you’re going to do worse than fight with them. You’re going to be, you’re not going to get funded. That’s all there is to, I mean, the now times are changing. So we’ve entered a period of, I’ll call it a desire for capital efficient go to market even among venture finance companies, because now they’re all looking at what they call runway extension. So think about these terms, right? Runway is the amount of distance an airplane has to get in the air. So they’re saying their companies are not in the air, they’re not flying. They’re just trundling along the ground, bouncing along, trying to gain enough air speed to lift off. Well, what keeps you from lifting off? Well, weighing too much. There’s a reason that I just saw hummingbird go by. It can fly. SPI can’t. I can flap really, really fast. I could put some wings on, but you know what? 

Chris Beall (15:00):

225 pounds going that way? That’s all there is to it. There’s no heaven above and hell below, but I’m staying right here because I can flap until every bit of flapping is done. But they have this notion of runway. So what they’re doing now is saying to their companies, Hey, funding is going to be tight for the next round. Probably won’t happen. You guys need to become capital efficient and extend your runway. So now is the time actually when as a founder ceo, E O or just a plain old c e o, because they got rid of the founder and you’re now on a series C or D or whatever, and it’s like, well, how are you going to extend your runway? Well, one thing you can do is radically shrink your top of funnel team. In fact, I was just talking to Sean C who was talking about big company, and they completely eliminated their SD R T, and now the AEs are expected to prospect. 

Chris Beall (15:55):

Well, that’s actually a good thing, but only if the AEs are given the means to prospect. Because here’s another problem, folks add all these tools to their stack. So that’s the other thing that the VCs will tell you. Tools in the stack, tools in the stack, you got to have a sales stack. You’d think that this stack goes out and sells for you. But what they like about it is you can see it. You can name it like, oh, there’s an outreach or a SalesLoft. There’s a sales force, there’s a sixth sense, there’s, there’s that. They’re names. People are comforted by this kind of stuff. So the stack is going to go do the work. Well, here’s a rule to apply as a C E O to every single element of your stack. Does it allow somebody to do something valuable, somebody in my sales team or marketing team or whatever to do something that has measurable value that otherwise they would not have done? 

Chris Beall (16:45):

Notice I didn’t say, does it reduce the time that it takes to do something of value? As we all know, when you free up time, every leader of every company knows this. When you free up time at the individual level, you generate what we call used to call water cooler time. That is now there’s what is this law? Law, right? Work expands to fill the time allocated. Well, it works the other way around too. If you shrink the time required, the work will, the amount of work will just stay the same. You’ll just shift the time into idle time, which is interesting. But if you have technologies that enable something to happen that literally would not have otherwise happened, and that thing’s of value, that’s a valuable part of your stack because then you can measure what it does and say, I have this. I wouldn’t have had it at all. 

Chris Beall (17:37):

Right? So that’s immune to Parkinson’s law. It’s in and it’s inverse. So it’s kind of funny. Think about conversations. So if you were to take your average AE team and say, sorry, no more sales development or business developed BDRs or whatever, nobody’s feeding you. So unlike bears at the zoo, having meatballs popped into your mouth, you now have to go out and do some foraging. You’re going to have to turn over some logs and lick some ants up, and you’re going to have to go stand on a river with your mouth open and hope a salmon jumps into it, whatever it is, you’re going to have to start doing that stuff like you did back when you know, can barely remember, right? Well, if you do that, your issue isn’t that they will do more or a less conversational word calling, for instance, ambushing people than they did before. 

Chris Beall (18:30):

They’ll have to go from zero to something, right? Because they’re doing zero right now. So if they’re doing zero and you want to have to do something, then providing a means to do that something easily will actually move the needle because they’ll do it rather than not doing it. That’s the key. When you think about your sales stack or whatever, any of these stack things, just categorize ’em like this, does this, let one identifiable person over here do something of value for our company that I can measure that they would not have done before at all. That’s how you think about your sales stack in a safe way 

Susan Finch (19:13):

That really thins out the list. 

Chris Beall (19:15):

It thins out the list, 

Susan Finch (19:16):

Holy cow. Because if we, as soon as you take out the, does it just save time? No, no, no, no, no. Is it something new of value only, 

Chris Beall (19:26):

Something that wouldn’t have done? 

Susan Finch (19:28):

Oh my gosh. 

Chris Beall (19:30):

And that. So if you apply that rule and now you think about capital efficiency and say, well, what do I need? What is the one thing I need? I need conversations. I don’t think anybody actually disagrees with this. This is not a Chris Beal controversial statement like, oh my God, that guy bee, he’s saying it again. What is this? With the conversations already, what about just like having closed one business walk in the door? Well closed one business doesn’t walk in the door. Very many places. I mean, we went out to sirens last night here in Port Townson and had a nice margarita and looked out at the water and watched the river rotters, which we don’t have sea otters here. We walked in the door, but they had to pay the rent in advance, right? Well, in regular innovation economy businesses, ain’t nobody walking in the door. 

Chris Beall (20:16):

You got to go out and get ’em. And you have to introduce them to an idea. So now the question is, what is the most capital efficient way to do this? And the reason I have this little thing behind me, which people not watching this on video, can’t see, it’s called an attribution report, is it shows something shocking about capital efficiency. And it says, if you enable your people to just have conversations with targets who are probably in your target market, they’re good hypotheses, right? Something magical happens that you’re completely unaware of in advance. And that is not only do you have conversations, do your people have conversations that lead to meetings that lead to net new business? No one’s obvious conversation leads to meetings, leads to business. That’s what you were trying to get with your SDRs. So say you say no, everybody’s going to be their own SD R, but I’m going to provision with them with the means of effortlessly having conversations with relevant people in a way that the boss can actually see happened. 

Chris Beall (21:18):

I can listen to them, I can think about them. I can analyze the targeting, and I can do it all without a lot of help. I can use some primitive product, I don’t know, Microsoft Excel or something to do this. So say I do that, here’s what I’m going to find, the positive conversations, the ones that, so super conversations that set meetings actually are, the least benefit that I’m going to get is a company from net new conversations. Most of the benefit is going to come from the advertising impact of talking to people. So for every meeting that’s said, and if you look at these people can’t see these numbers here, but I could probably arrange to see them. Just 

Susan Finch (22:01):

Give us an example. Give us a 

Chris Beall (22:03):

Few. So our, so I’m looking at ConnectAndSell’s own numbers here over a period of time of I think three years. So during this time, we generated, our team generated 128 million. So pipeline, by having conversations, that means conversations that led to meetings, and those meetings led to opportunities in the pipeline. And those opportunities turn into all sorts of stuff. Some expire, some are lost and all that. They got to get in the pipeline before you have a chance. So 128 million in the pipeline based on 5,671 opportunities generated from 220,000 conversations. Okay? That’s our team. So that sounds pretty good. Those pipeline dollars are being generated and get this number, $4,152 per rep, hour per hour that a rep spends in just one conversation after another, including taking notes, wrapping up, waiting for the conversations. On average, about three minutes and 20 seconds each. It’s about $4,000 an hour. 

Chris Beall (23:16):

When I look at what, but what about the negative conversations? What if I throw those in the mix? So I have the ones that set meetings, and then I have the ones where they said, Hey, they’re interested or whatever, but they don’t take a meeting. But what about all of them? Well, I go from 128 million to 177. Where does that extra, roughly speaking, 50 million of pipeline come from, by the way, that came with an additional four point something million of closed one business. Where did it come from? Came from talking to people who then went to our website. Did they love the website or hate the website? We don’t know. All we know is it was better than a Google ad because we were talking with them and they went to the website. Why is it better than a Google ad one targeting? They were on our target list. 

Chris Beall (24:11):

We’re not idiots. We put people on our target list that we’re targeting. That’s why it’s called targeting. So it’s better targeting than you get from advertising. Conversations are better targeted than advertisements because they can be, right? It’s just like they can be. Secondly, there is trust influence. When you have a conversation with somebody and you hold it with any amount of skill and its purpose is to build trust. Now you have a person who trusts somebody at your company actually looking at your website. Now, there’s a third thing that happens. If you send them an email, they open it. Why? Because the email says, thank you for our conversation today. Or the really powerful email comes from the boss and says, thank you for speaking with my colleague today. Yes, it’s very personal. It’s actual gratitude. You talk to one of my peeps, I love you. 

Chris Beall (25:05):

And guess what? That comes with a link to the website. And so now you have a new relationship that’s formed. You have an extension of trust over time. Those mature, we all know from all of us market dominance. Guys know, right? That only one 12 of your market is in market right now. 11 twelves is out there in the future. So now how are you going to get ’em in the future to become the present? When the present rolls around, well have a relationship with them, but it’s not an abstract relationship. It’s concrete. It starts the conversation. And it’s not a vacuous relationship. It actually has content because they went to your website. In fact, think about this. When you speak with somebody, the biggest mistake you can make other than blowing the trust part of the conversation, the first seven seconds, seconds is telling them what you’re all about. 

Chris Beall (25:59):

Why? Because they’ll say, we’re all set. Well, when they go to your website during the conversation, your website says what you’re all about. So when they say, we’re all set, it might not be because they listened to you. You might not have blown it. Your website blew it. Your website was obliged to say what you do. And they look at that and they go, it looks like with connect and saw, they go, oh, it looks like a dial. I don’t need no stinking. I already got a dial of some kind. What do I want? This thing? But then, well, then this information comes to them in the form of an email. It says, thank you for the conversation today. It’s like, that’s different. They actually followed up with, then you talked to them a quarter later. Did they take a meeting? Not necessarily, but they’re reminded now. So the ultimate drip advertising campaign doesn’t drip content onto somebody in a Chinese water torture fashion. And that was not anything about people. Chinese, it’s just a phrase. We’ll just say water torture, which is drip, drip, drip. I don’t know why we use Drip to say that we’re doing something to somebody That’s good because it’s not good. 

Susan Finch (27:16):

Does not sound good 

Chris Beall (27:18):

In our house. The toilet is dripping on the floor. Oh, so great. I don’t know. Why did marketing people choose the word drip? I have no idea. But if we really want to drip some love on somebody and talk to ’em once a quarter, that’s the consideration cycle. The replacement cycle for products is three years. The consideration cycle is a quarter. Therefore, we talk to ’em once a quarter. Every time we talk to them, they’re not going to just jump in a meeting. We’re going to go from 5% to 10% taking meetings. But more and more often they end up visiting our website more and more often. They sign up for our podcast. So that’s a kind I wanted to talk about. The money will drive you to do something dumb, do something smart, have fewer people, lots more conversations, and take advantage of the fact that negative conversations drive more pipeline even than meetings. 

Susan Finch (28:18):

I think that’s great advice. Getting back to one wrap up point though, I’m going to ask the question again. How, or rephrase it. How do people seeking funding, CEOs seeking funding, help find the VCs that are actually interested in this type of logic rather than just headcounts? 

Chris Beall (28:38):

Oh, it’s a tough one right now here, here’s the key to funding. Don’t need it. 

Susan Finch (28:42):

Yeah. 

Chris Beall (28:43):

The key to funding, really the key to funding is turn on capital efficiency at a very high level early. Except that your growth is not going to be instantaneous. You don’t need to pattern match either, unless that’s your biz right. Now, the other thing you can do is you can kind of do it like this. This is what I call the slow roll. So you take the money, but you turn on the efficiency immediately anyway. Nobody’s going to tell you not to do that. And then it turns out you’re generating the conversation. So mix the conversation flow into your board package. This quarter we had this many conversations with decision makers, right? So don’t leave it out. Don’t let the head count and the stack be what somehow magically did the work, right? Provide that little link in between. That said, we had this many conversations and here’s our efficiency metric around them. 

Chris Beall (29:40):

And even better go with an attribution capability that looks at your pipeline starting from day one and point back at the conversations and say, pipeline influenced by conversations that set meetings pipeline influenced by conversations that had positive outcomes. Pipeline influenced by any conversation. Put that in front of your board every quarter or however often you meet six times a year or whatever, and get them accustomed to thinking about capital efficiency and go to market in concrete terms. And after a while, they’ll start to get a little okay with the fact that you didn’t hire 30 SDRs that you only ended up hiring. Fa. 

Susan Finch (30:25):

Love it. That’s great, Chris. Well, we’re going to wrap up this conversation because I think we can do a part two at another point. Cause I would like to tackle a few more questions and give some action items to people because a lot of people are new. But I love the way to actually way it’s easy for you to say don’t need it, but to be able to give a checklist of you might need it if you might need it. If I think that’d be a great follow up episode. 

Chris Beall (30:56):

It would be. And there is an actual program. We have the folks at Partner Tap doing it. So Partner Tap was introduced to me by Helen and it’s, this is Cassandra who’s at the heart of the Fem Empire, which is the thing that Helen has been doing now. You must have seen it, right? She does these dinners and she gets invited to them by Cassandra. Well, she, intro Helen introduced me to Cassandra. Cassandra said, I’m going to hire 10 reps. I asked her, how many do you have? She said, none. I said, you’re seven years in and you’re succeeding in this business and you have no reps, 

Susan Finch (31:33):

Right? 

Chris Beall (31:34):

Why are you going to hire 10 reps? Well, I’ve got to scale the business. I said, okay, so do me a favor. Instead of hiring 10 reps, let’s take an intermediate step. You are the rep, right? Yes. Let’s get you more meetings. I’m going to introduce you to Cheryl Turner. Cheryl Turner will work with you where you can learn to get more meetings on your own, but she will also set meetings for you, I believe. Feel free to go do a deal with her that where she’ll help you. And then you’ll have a pattern that you can use for the behavior of the first rep you hire. Then you have a success pattern. So it’s not like hire a rep and hope it’s hire a rep who is going to do specifically what Cheryl is doing, which is hold conversations, get meetings, and they’ll bring you in in order to be the closer. Then you’ll wean them over time from being the closer and they’ll set meetings for themselves. And then you can hire a second rep. That’s great that that’s a success program and you can’t sort of can’t fail. And she said, whoa. I said, you do realize you’ll destroy your company if you hire 10 reps. We’re going to learn that you don’t know how to hire 10 reps. And guess what? I already know that. 

Susan Finch (32:55):

Yep, 

Chris Beall (32:56):

Great. Can’t be done. 

Susan Finch (32:58):

Yeah. Scaling up. People think it only means one thing. So of reframe it to the ultimate goals times. You do have to step back and just throw that old plan away. And like you said, all the patterns. 

Chris Beall (33:10):

Yeah, yeah. If you substitute conversations for headcount and you make that your focus every day, how many conversations are we having with whom? And then you start asking what’s happening as a result, but not what are we forcing to happen as a result. Exactly. So it’s that relaxation in between that says, let’s see what’s happening from these conversations. 

Susan Finch (33:33):

That’s hard for people to do. It is can kind of sit and watch. They just want to keep making it happen. Making it happen. Yeah. 

Chris Beall (33:39):

Yeah. All the forcing. All the forcing only forces one thing to happen. Anxiety. Anyway. Well, thanks so much. It was really fun. 

 

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In this episode, Chris and Corey discuss the collapse of Silicon Valley Bank and its potential impact on the startup ecosystem and the broader economy. Chris explains that the venture capital industry is important for occasionally making an important company, but most of what Silicon Valley funds is R&D for unnamed corporate investors. He thinks debt will become more popular in the future because it has advantages for both parties, and he expects debt to be democratized more. They guys also discuss how the innovation economy depends on innovations that diffuse through the economy through various means and how the VC industry operates as a salvage yard for VCs in advance of failure. Finally, Corey and Chris predict that debt will become more popular and democratized in the future as more debt players come in to help companies and the pure equity games become trickier to play. Join us for this episode, “The Salvage Yard: A Hidden Gem of Silicon Valley.”

 

Full episode transcript below:

—-more—-

Chris Beall (00:00):

We knew one thing for sure. The first time interest rates were raised by the Fed, the tech economy was going to lose a big chunk of its value. And when you lose a big chunk of value fast, more value goes out immediately because of the fear that all the value is going to go out, it’s going to zero. So as soon as the Fed raised interest rates, the entire world of tech, which is predicated on zero interest rates, the valuations as a multiple of revenue went down, how far should it have gone down? Who knows, right? But it went down 70% or something. So Silicon Valley Bank as an example, it’s customers suddenly lost 70% of their value in 24 hours. And that was predictable. That was completely predictable. So that effect had nothing to do with inflation, because what Silicon Valley companies charge for their products is not relevant in the economy. 

Chris Beall (00:58):

Trust. It doesn’t cause anybody to have to pay more for a grapefruit. It just doesn’t. So there’s this tight coupling within Silicon Valley of the companies and how they’re correlated. There’s this centrality of mechanism. It’s kind of like, why have two banks when you can have one? Sure, sure. PCs don’t like variety. So who wants variety? Let’s just, then there was even more correlation and coupling. Oh, wealth management. We’ll do that for you, right? We’ll give you your line of credit. We’ll, all this good stuff, right? We’ll value your company. One of the big deals in the world of tech is a 4 0 9 a valuation. That’s right. That thing’s used, done once a year, probably takes some amount of time and they charge some large amount of money for it. It’s become an industrial process and it allows you to set the most important thing about a company’s compensation in Silicon Valley. 

Chris Beall (01:54):

The strike price of your employee’s stock options. That’s right. That’s right. Okay. So with Silicon Valley bag involved in that, sure. Bought a company that does that, put the brand on it and the way they went. So they’re doing all this stuff. So I look at it like this. There was a center of correlation in tech called Silicon Valley Bank because the money from the checks that were written to these, I still think younger and less experienced than might have been ideal as cash managers, since that’s not their job. Their main job is growth at all costs, right? Your job, Corey, grow as fast as you can, by the way. Manage the cash really well. Yeah. What does that mean? Let’s get the highest interest rate for it. Why? Well, it sounds good, right? I don’t know. My mom said to do that or something like that. 

Chris Beall (02:43):

Is it really a great idea to get the highest interest rate? Yeah, probably not. Probably not. Interest rates and risk always go in the opposite direction. And if your upside is in your growth, you shouldn’t be trying to get more upside from this little bit of money kind of nutty. If that was a great thing to do with money, they shouldn’t have given it to you in the first place. I mean, that’s crazy, right? Let’s invest in a company so they can put the money in the bank and see how fast they can grow it as kind of a weird idea. Put the money in the bank yourself if you wanted to do it. So we have a centrality of correlation in a part of the economy that is non-linearly hypersensitive to interest rate changes. And in specific the change from zero to some other number that’s positive. It doesn’t matter what that number is. Quarter point, half point doesn’t really make any difference because the valuations are predicated on not being able to make any money with your money. So at least these things in a portfolio will make you something and they’ll make you lot actually. So suddenly there’s a hurdle that shows up. That’s right. And the hurdle runs now forever and it cuts the legs out from the entire evaluation system, which happened in a day. 

Corey Frank (04:02):

Maybe we should ask our friend chat GPT how this all ends and what is her opinion on it. 

Chris Beall (04:09):

I asked it this question today. Oh, 

Corey Frank (04:11):

There you go. 

Chris Beall (04:13):

Well, let’s ask it right now. Okay. So what are the probable consequences for the, let’s ask about the broader economy. Economy of the collapse of svb. Okay, let’s see what we get. You could do episode after episodes, just reading what says, okay, so it talks about S V B and it says, well, SVP plays an important role in the startup ecosystem. Its collapse would not necessarily have widespread consequences for the broader economy. However, there are a few potential ways in which the collapse of S V B could impact the economy. By the way, anybody who doesn’t think that chat, G P t, writes like an angel doesn’t know anything about writing. So one loss of financing for startups if SVB were to collapse. By the way, chat, G P T doesn’t know that S VB has collapsed even though Very 

Corey Frank (05:16):

True. Very true. That’s right. 

Chris Beall (05:18):

Cause that’s 

Corey Frank (05:19):

2021, 

Chris Beall (05:19):

September, 2021. If S V B were to collapse, it would likely result in a loss of financing for startups and other high growth companies that rely on the bank services. This could make it more difficult for these companies to grow and innovate, which could have a negative effect, effect on the overall economy over the long term. That’s worth paying attention to, right? Two, disruption to the startup ecosystem. SVB is an important player in the startup ecosystem providing not just financing, but also mentorship and other services to help startups succeed. That’s interesting. If SVB were to collapse, it could lead to a disruption in the startup ecosystem, potentially causing a ripple effect that could impact other players in the industry. Three potential loss of jobs. If SVB were to collapse, you could result in the loss of jobs for the bank’s employees as well as for the employees of the startups and other companies that rely on the bank’s financing and services. While this would not necessarily have a significant impact on the broader economy, it could be devastating for the individuals and communities affected. So that’s what CH G P T has to say on that subject. 

Corey Frank (06:23):

Very sage prognostication there. I would say 

Chris Beall (06:27):

It’s pretty good. And that doesn’t 

Corey Frank (06:29):

Even matter. And that’s after one prompt, right? Imagine if we kept drilling it down to a couple, it would say. So 

Chris Beall (06:36):

These are interesting times. I’ll give you a personal view. I have always, not always, ever since my first funded startup, I have felt that the venture world, how venture capital works is incredibly important for occasionally making an important company. The flow rate of important companies that come out of that system is pretty low. Maybe, I don’t know, three a year, two a year. 

Corey Frank (07:09):

I 

Chris Beall (07:09):

Run it for 30 years and you get 60 important companies and then you get a bunch of other stuff that’s going on. What is the other stuff? The other stuff is actually, and I’ve always made this claim and I’ll make it right now, most of what Silicon Valley funds is r and d for unnamed corporate investors. That’s just what it is. Because if you look at the innovators dilemma, the problem is that if you are a successful large corporate, you are structurally no longer able to innovate. And it has to do with the fact that whoever controls the p and l of your most successful product will psychologically, they can’t resist it. They will crush all attempts to innovate in ways that cause that product to be less relevant in the marketplace. They will not sacrifice their bonus for the company’s future. 

Chris Beall (08:05):

It never happens. It will never happen. And people who think it should happen should probably pay attention to the fact that it won’t happen. Just get over it. The late great professor Clayton Christensen wrote a book that everybody in business should read and understand, and it basically says you’re kind of toast when it comes to innovating once you get successful. Okay, so now what are you going to do? Well, he recommends that you spin off stuff to start things and so forth. But actually what really happens, what really happens is you go to the supermarket called they didn’t quite make it Silicon Valley companies. And you take comfort in the fact that the documents that govern those companies read like salvage plans for the VCs. Read one sometime and ask yourself of each word in that document, who is this for? And what does it anticipate? Who it’s for? The guy’s writing the checks, what does it anticipate? Failure. Got it. Beautiful. 

Corey Frank (09:18):

I think that’s almost chapter one. I think it was one of our first episodes, I believe. Right? They’re written on the seller stack, the conversations, right? 

Chris Beall (09:27):

So this is exactly there. Yes. So even though the book’s watered down a little bit, because chapter wasn’t given us a chance, but this is the key, is that the innovation economy itself doesn’t depend on successful Silicon Valley companies. Yeah. 

Chris Beall (09:45):

It depends on innovations that diffuse through the economy through various means. So if you think about it, why should an innovation result in the company? It actually makes no sense. Everything worth making should be a company. It’s a non-sequitur. It makes no sense. Every worth making should get in the market in a way that allows it to be used in useful ways to reach its potential, but should be a company that’s just craziness. And the VCs recognize this by setting up their businesses as salvage yards in advance of failure, and they push the companies to go big because the 60 or so that you’re going to get out of 20 to 30 years of this all went big or go away, give us our time back. Because being on the board of a company, that’s the living dead. 

Corey Frank (10:51):

Yep. 

Chris Beall (10:51):

Yep. Want that. Right? So that’s really going on. So it’s really valuable what was happening. It’s just people we’re not comfortable with the idea that jobs could go away because a company goes away. And we probably shouldn’t be comfortable with that idea cause it’s very discontinuous. We probably shouldn’t write checks. I don’t care if they’re 35 years old. If I’m running a company, why do I need a 10 million check to be written to me? I just need the money to run the company. 

Corey Frank (11:20):

Yeah. 

Chris Beall (11:21):

So why do I have to do the cash management? How am I adding value by taking that check? Well, it’s because we use this system called equity in order for somebody to have interest in a company that includes upside. Otherwise, we wouldn’t do it like this. We haven’t thought of a better way to do so. Anyway, these are my thoughts on this subject as I 

Corey Frank (11:47):

Do. No, this has been a great episode, a very timely episode. Chris, it’s great that we had Ryan on there. We’re going to get Ryan on there again. And we’d also love to have Robert Vera from the Center for Innovation and Entrepreneurship on his opinion too, since he’s on the front lines of working with a lot of these startup companies that are at the nacient stage of funding. And they’re at these multiple crossroads here, again, of revenue and debt and equity in which path indeed should they choose. So great stuff as always. Chris, I think we have our naus series is continuing of our market dominance guys, collateral a book. And any final thoughts here on this? We’re going to listen to this episode like we did in our COVID episodes a couple years from now. So if I crack this episode a few years from now, what is the landscape does it look like after this little ripple in the markets? 

Chris Beall (12:40):

Well, I think the very next thing that’s going to happen, and it’s already happening today, we’re only five days into this or whatever, is that debt is going to become popular because there’s a lot more folks who play a debt role to help companies then can sensibly play an equity role. Debt has huge advantages for both parties if done, and I think you’re going to see, I’ll call it non venture debt or debt as venture. I really like what Ryan’s company is doing. I’ve spoken with them about maybe working with them. So smaller chunk sizes, they get you to be a little bit more cautious. Cycle time being shorter. I mean, equity has a cycle time on it. You want to see those T-bills as long equity is forever. 

Corey Frank (13:28):

Right? 

Chris Beall (13:29):

Then that’s what we found. So it’s like we have this sandwich, we have a risk sandwich, which the T-bills are long and the risk is in their length, not in anything else about 

Corey Frank (13:39):

Oh my gosh. Yeah. 

Chris Beall (13:40):

Yeah. And I mean there’s been a leapfrogging by that. So I expect debt will become popular. Debt is something that will happen in a much more, I’ll call it be democratized more. You’re going to have a lot more debt Players are going to come in and try to help companies and it’s going to be a little trickier to play the pure equity games that are played with the pedal to the metal stuff. It’ll come back, but it’s a little bit trickier. It’s not like Silicon Valley VCs, they’re not going to run out of money. I mean, good god, right? Pension funds and others have got to put their risk money somewhere. Sure. Sure. But I think that’s one of the things that’s going to happen. I don’t think you’re going to see a big change. In a way, it’s one of these things that if you’re running a company and you’re highly tied up with svb, then thank goodness for you, you didn’t have to leave your money behind. At least you get your cash back. But it creates opportunities for all the other places that cash could go. And some of that cash actually could go to servicing modest amounts of debt. 

Corey Frank (14:42):

Yeah, I think that that’s stead on. And you and I and our teams we’re bigoted towards the revenue side and some of those metrics to track, especially comparison to what both connected cell and Branch 49 could do to organizations versus what we saw from the great Trish Peruzzi on what the landscape looks like. You do have to innovate or die because those numbers in the traditional S D R world just do not sustain any long-term growth. And your attrition alone will cost you because no one’s going to want to do anything except put a gun in their mouth with those type of activity numbers. So I see it. Well, Chris, another great episode for the market dominant guys and Chris Beal. This is Corey Frank at Till Next Time. 

Chris Beall (15:27):

Yeah, so it is funny when you think about it, it’s like those numbers tell you no company that is living in that world. They might have been Financable, but they should not have been Financal. 

Corey Frank (15:38):

Oh, it’s a train wreck. And they’re, you can see why these companies lay off hundreds or thousands of folks with minimal impact except to the p and l. They don’t suffer from sales. They don’t have, besides meta who does a one-time drawdown of 2.4 billion. But I don’t think a sales force necessarily is going to suffer proportionate to how many people they cut their sales are, they’re going to decrease, their sales are still going to be relatively strong. And they just had a hiring bloat and productivity point here, 

Chris Beall (16:11):

Right? Well, they were speculating that people were capital. That was the speculation is that you could pile up people in the same way that you can pile up money in a bank. It’s like meta, apparently they hire, this is the word on the street anyway, is they hired a lot of people who then just said, I don’t have a job, but I have no work to do, but I have a job, I guess is the point. And when you look at that, and we’ve seen that before. I got hired by Martin Marietta back in 1980, and they didn’t have any work for me to do. They just hired me because they needed engineers. Corey and I are just having a chat after the podcast. Hi, Helen, Sean. Oh, I want to hear about this before I have my next copy. Oh, I do too. Yeah. 

Corey Frank (17:00):

Well, Chris, all these good stuff. Yeah, book looks good. Are you sending these? I just ordered a bunch of ’em and I’ve been sending them to clients just with a little hello, et cetera. So I know it’s an expensive thing to do. 

Corey Frank (17:18):

Yeah, I prefer the stop, but still, I think it’s something that, and we’ve been promoting it. I just think it’s a great credibility thing. It’s long overdue. And I really think that every few months there should be another one released market dominance. And we could have whatever the theme is, it could be on go to market, it could be on metrics, it could be on whatever. And if we edit these here as they go forth and have a little compendium, a little series. So when we’re on Jeb Blunt next time, you can have your stack of books next to Jeb Stack of books, and 

Chris Beall (17:56):

I can make ’em faster than him now. That’s right. I’m like, I once saw a fascinating show on TV very late one night. It was, I don’t know what, probably an e s, ESPN N. This is a long time ago. It’s like 1985. And it was illuminating. And I think that’s just, we could get that situation with the book. So here it was, they put a family sedan, it’s like a Ford Taurus on a Formula one course, and they gave it a headstart. And when it was halfway around the course, they unleashed this Porsche sports car, right? Very fast sports car. These all had professional drivers, all top champion drivers. And then when that car had caught the first car, which is now three quarters of the way around the course, they unleashed a McLaren Turbo Formula one car, and it beat ’em both. 

Corey Frank (18:53):

Really? 

Chris Beall (18:54):

Yeah, it was. And they’re doing this whole thing from a helicopter. So you’re watching it just going, and I quote, no fucking way. Right? It’s like, come on, they’re almost done. And then this Formula one car goes, 

Corey Frank (19:09):

Wow. 

Chris Beall (19:10):

And it wasn’t even a contest screaming 

Corey Frank (19:11):

Around the corner. 

Chris Beall (19:12):

So I believe we now have the Formula One car of book publishing, because we spent on this almost all the time in formatting and in dealing with the experimental nature of the first summarizations. I can have all of that done by people who literally, I could have Galen write one of these a week. Wow. 

Corey Frank (19:36):

Well, there’s certainly enough content that’s pretty damn sure. So 

Chris Beall (19:39):

There is enough content and there’s enough themes, and we could make it better. Galen’s become a very good prompt engineer. So he’s, he’s got stuff like, give me a chart of blah, blah, blah, whatever it is. What are all the titles that are used by these companies when they’re selling? What are the Yeah, 

Corey Frank (19:55):

No, I love that we’re using that on the data side. That was a great tip for Josh, by the way, if you talk with James in the near future, just give him a little nudge that we’re trying to get some time with him. So 

Chris Beall (20:10):

He’s on vacation. There you go. 

Corey Frank (20:12):

That’s what I needed to know. 

Chris Beall (20:13):

Another question. Are you around next Wednesday? We’re coming up for another Fmre thing that Helen’s speaking at. Of 

Corey Frank (20:19):

Course. 

Chris Beall (20:20):

Okay, so I’ll tag a log. Yeah, 

Corey Frank (20:22):

We’ll get you a conference, whatever. You can work here everything you need now 

Chris Beall (20:27):

And we can digest. 

Corey Frank (20:30):

Yeah. 

Chris Beall (20:30):

Conversation she just had and some other things. It’ll be quite interesting. There’s the solution to many interesting problems. These solutions may be coming together. 

Corey Frank (20:42):

Nice. 

Chris Beall (20:43):

Getting the, let’s face it. Connect and sell has been waiting for a downturn for a long time. We were built for one, we never knew it would come attractively packaged first as a global pandemic, and then as a banking crisis in tech. This is the ideal for us. You could not have written this book better for us. This, 

Corey Frank (21:09):

So you, Ty and Sean are the three of the four horsemen of the apocalypse. That’s what I hear you saying. 

Chris Beall (21:17):

So yeah, Manny would probably give him some weird, oh, Manny, 

Corey Frank (21:19):

There you go. Okay, so you got all four of you guys. All right. Well, maybe it’s you. Perfect. Maybe it’s you. Yeah, I’m writing the, the burrow, the borough just behind me trying to keep trying to keep up. 

Chris Beall (21:30):

Oh, it’s such an interesting situation because let’s face it, what we do, you only would do if you can do or must do the math and very few must do the math. And of those very few can do the math. 

Corey Frank (21:52):

Yeah. 

Chris Beall (21:53):

So why do we have so few great customers? Well, we have the desperate s a p Concur, totally desperate. They were like, how are you going to grow from 400 million to 1,000,000,004 years when it took you 22 years to get to 400 million? Right. One desperate person, crystal Beamon. And we’re still there. I just did an $865,000 deal with them yesterday. 

Corey Frank (22:21):

Come on. 

Chris Beall (22:22):

I did. I got That’s wonderful. Right here somewhere. Yeah. 

Corey Frank (22:26):

That’s beautiful. 

Chris Beall (22:27):

Yeah, I mean that, I did the deal a while ago. It’s actually a million dollar deal, but they had some credits coming into the year, so it’s $865,000 dealer. So they’re desperate. I don’t mean they’re not smart, by the way. They are smart. But they were smart enough to take their desperation and took a flyer on my first offer to them, which was, Hey, why don’t we do this instead of you hiring 400 people. So when you put it like that, it’s less absurd. It’s like you can’t hire 400 people. Right? Then you have the really smart fisher, and Fisher is so smart. They’re one of the smartest companies. I’ve never seen people like this organized into a company. Smart, disciplined, determined, amazing. And so the, there’s that. But that’s kind of all we got is those kinds. And we have a few, Intuit, super smart Intuit set, 772 meetings yesterday. I mean, that’s smart. These are smart. 

Corey Frank (23:24):

And what’s the third category? The occasionally curious the 

Chris Beall (23:28):

Well then we have the flow through. We have those that want try it, and some of them are super smart. They’ll come out of connect and sell RingCentral. Kyle Green used to be an sdr, now he’s a vp. We should have him on, by the way, how many SDRs become vice presidents public companies in a short period of time? He was an sdr. We hired him after I became c e O. He now is the vice President of Global Sales Development over at RingCentral. Wow. 

Corey Frank (23:59):

It’s impressive. 

Chris Beall (24:00):

Janie. Janie Wall, one of our customer success people is now off as vice president of Defense Storm. So I mean, these people are like, they come up through the process and they get it cause they’re inside of it. But it’s not like this is a tough business for a bunch of reasons. And the main reason is nobody can do the math. They can’t make the math stick. Even if you do the math form like Ryan does all the time, it doesn’t make the math stick. Right. It’s much easier to believe in almost anything to believe that there’s noms out in my yard that make the waterfall go. It’s easier to believe that than to believe this math. 

Corey Frank (24:43):

Robert just popped in here too, just by the way. So say hello. 

Chris Beall (24:46):

Oh, Robert. 

Speaker 3 (24:49):

But the problem with Chris is that the math, they’re doing the math wrong. So let me explain to you. Oh, 

Chris Beall (24:53):

You, wait, wait, wait. I’ve got to talk to Paul Whit at the Alliance of CEOs, and I’m three minutes later. Well, 

Corey Frank (25:00):

We’ll, we’ll, we’ll get Robert on next Wednesday as a guest. Okay. 

Chris Beall (25:03):

Yeah. So I’m coming to see you next Wednesday. 

Corey Frank (25:06):

Okay. Yeah. 

Chris Beall (25:07):

And I look forward to having my math corrected. 

Speaker 3 (25:10):

No, your math is right. It’s the discount future value of the company that people don’t add in. 

Chris Beall (25:15):

Oh, yeah. I don’t ever add 

Speaker 3 (25:17):

That more now or in seven years from now. Yeah. 

Chris Beall (25:19):

Yeah. They don’t right 

Speaker 3 (25:20):

Now. Doesn’t really matter that much, right? 

Chris Beall (25:22):

Oh, nobody does that. 

Corey Frank (25:23):

All right. Best to Helen. We’ll sign next. 

Chris Beall (25:25):

Okay. Okay. Time value of wisdom. That’s all we’re doing. Value of wisdom. Okay.

 

Podcast: Play in new window | Download

Chris and Corey discuss the dangers of correlation in the tech industry and the impact it can have on valuations. Chris explains how the venture capital industry is focused on headcount as a metric for success, leading to inefficient practices among funded companies. This correlation can create a house of cards effect, where the collapse of one company can trigger a chain reaction that affects the entire ecosystem. They also touch on the pre-chasm state of companies and the importance of finding visionary buyers who can provide the necessary funding without relying on rounds of financing. As a sales professional, it’s important to understand the broader industry trends that can affect your company’s success and plan accordingly. Chris and Corey’s insights offer valuable perspectives on the challenges facing tech companies and how to navigate them. Listen to this episode of Market Dominance Guys, “The Problem with Correlation in VC-Funded Companies.”

Corey Frank on LinkedIn
Chris Beall on LinkedIn

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ConnectAndSell

Full episode transcript below:

—-more—-

(00:21):

Chris and Corey discuss the dangers of correlation in the tech industry and the impact it can have on valuations. Chris explains how the venture capital industry is focused on headcount as a metric for success leading to inefficient practices among funded companies. This correlation can create a house of cards effect where the collapse of one company can trigger a chain reaction that affects the entire ecosystem.

(00:46):

They also touch on the pre-chasm state of companies and the importance of finding visionary buyers who can provide the necessary funding without relying on rounds of financing.

(00:57):

As a sales professional, it’s important to understand the broader industry trends that can affect your company’s success and plan accordingly.

(01:04):

Chris and Corey’s insights offer valuable perspective on the challenges facing tech companies and how to navigate them.

(01:10):

Join us for this episode, the problem with correlation in VC funded companies.

Chris Beall (01:20):

That’s it. I mean, in our company, the flow rate that we shoot for meetings attended is about 30 a day, and we have a more precise number. And being precise doesn’t help you here by the way. It’s just 30 is as good as 29 when you come right down to it, but it’s not the same as 36. So, you’ve got a flow rate of meetings that are happening, and they’re happening somehow. So, the question is what’s the flow rate of meetings per dollar that you’re spending overall on sales and marketing? What is it?

(01:55):

Before you go for revenue and say, “Well, how much revenue am I getting?” First you got to know, “Am I getting in the neighborhood? Am I getting meetings?” Because meetings are that thing that must happen before you have business. And again, very rarely, can I ask somebody? So, hey, what’s your flow rate of meetings per day held? Held meetings per day, what is it? And they just go, “Uh. I don’t know. Sometimes we have five, sometimes we have sixes.” I’d say, “Flow rates aren’t about sometimes. Yes, there’s variation. It’s a flow rate, and you’ve got to know that that flow rate supports your business plan.

(02:32):

Or say you convert. We convert the fairly small portion of meetings. We have a high flow rate, 30 a day. We have a flow rate now of the next thing which we standardize at ConnectAndSell. It’s called the test drive, and it is the next thing, and it’s always the next thing. That is, you can have three meetings, but the next thing that’s a new kind of thing is always this thing called the test drive. And all test drives are the same. You actually use the product in production, and you have the experience and blah, blah, blah.

(03:05):

Well, we know what the close rate is on test drives. That percent that turn into something. 39% of ours turn into deals. That average $24,200. Got it. That’s easy. Okay. Do I know the step before that? What is the percentage conversion of my flow of meetings to my flow of next things?

(03:28):

Ryan talked about something really important which is knowing your cost of acquisition numbers. I think you’ve got to actually know in addition, the actual elements of acquisition-

Corey Frank (03:38):

Without a doubt.

Chris Beall (03:39):

… And know how that works in the real world. And then, you got to find the levers, and there’re probably only one. There’s probably one lever because the theory of constraints says there’s one constraint. So, you got to find the lever. What is it? More stuff at the top, higher conversion rate, what is it? That takes real thinking. A lot of experiments.

Corey Frank (03:56):

Well, I know our friend, Trish Bertuzzi for The Bridge Group. She just released the latest state of the SDR industry here. And the one on the screen right now, I’d like to get your opinion on, Chris, is what Trish and the folks call quality conversations per rep per day. You talk about going up the funnel and measuring some of the key factors here.

(04:20):

It used to be back in 2014, according to Trish’s cohort, that a team, a rep would average eight quality conversations per day. I guess, that’s when people seemingly thought that people picked up the phone. And now, today, in 2022 was down 55% to 3.6 per day.

(04:41):

Now, I imagine most of these folks have not heard of ConnectAndSell or Fast Phone numbers or Phone Ready Leads or any of the other optimizing weapons that are out on the market. So, unfortunately, the people who are conducting these type of phone calls and engaging in these type of efforts, man, say a quiet prayer for them every evening because they certainly need it. That is a tough gig, Chris, to do every day, to only talk with 3.6 people a day. Is it not?

Chris Beall (05:14):

Well, it’s actually worse than this, which is what’s interesting. So, let me read. You have this on the screen. It’s really super. I love this chart. This is my favorite chart in the entire world right now because I don’t experience it. I just love it.

Corey Frank (05:28):

That’s right. Do you know how the movie ends.

Chris Beall (05:30):

I know how another movie ends. So, let me read the paragraph. It says another useful metric is the number of quality conversations QCs per rep per day. We define a QC as… Listen very carefully here. A connect or response where at least one piece of qualifying or disqualifying information is learned. So, if I get an email back from somebody that says, “Hey, this makes no sense to me whatsoever,” or “Stop pestering me,” or whatever. Anything comes back, that’s a response.

(06:03):

So, the emails that come back that you’ve never spoken with the person, and you now think you have one piece of qualifying or disqualifying information, which is by the way, wholly unreliable because it comes from somebody whose purpose is unknown to you, but their purpose is probably to make you stop sending them emails. So, if you really think about it, am I disqualified for what Corey has to offer because I’m getting tired of being inundated with emails from Corey? Think about that for a moment. That’s a nonsense concept. It actually makes no sense. The fact that I respond to being flooded by everybody’s emails, including Corey’s, and maybe I have the hope that if I send it back an email that says, “Stop sending these,” that I can reduce the flood into my box here.

(06:55):

The idea that that’s a quality conversation within a sales context in which there’s qualifying or disqualifying information that’s learned is crazy, but it’s in the definition. So, the numbers vastly worse than people think. And if you go to… Let’s try this. A QC… I’m going to redefine it, is a connect with a potential customer. Somebody you think has potential where trust is increased as a result of that connect. Now, that number on this chart goes down to zero for most of these SDRs.

Corey Frank (07:31):

Yes.

Chris Beall (07:31):

So, it would have started at whatever the number would have been, and then, it goes to zero for almost all, which means almost all that investment is placed in. Because in the world of B2B, without trust, you don’t make any progress. And I’ll go back to what Chris Voss’s taught us. Seven seconds. So, how can a chart that shows these things happening, almost none of which actually engender trust. How can that talk about the future of your pipeline?

Corey Frank (08:05):

Well, Chris, but I’m sending out a whole bunch of emails in LinkedIn and SMSs. Those are activities as we send from the other chart here that the wonderful team at Bridge Group put together from Trish is we’re looking at the median number of activities per day per SDR by type, phone, email, LinkedIn, and SMS. And the total is 104 for all those activities, and only one of these… I think Chris, you would obviously I would lead the witness here, but probably validate kin and gender trust.

Chris Beall (08:38):

Certainly, an email is not a trust building thing. It might lead to a conversation. You can actually stimulate conversations on occasion through an email. I think they call us getting lucky, but I responded to one.

(08:51):

Right now, looking at some situations where if somebody sends me a particular kind of email, I will probably respond to it because I’ve got something I’m interested in right now. Okay, fine. I won’t say what it is. Otherwise, these podcasts last for a while and you’ll be sending me emails.

(09:08):

So, activities, it’s funny to add them up. It’s like saying, “I’m going to add up the following. The number of steps I take in a day, the number of cuts I make with a knife, the number of times I say hello to somebody, and the number of times I blink my eyes and I’m going to add those up and say there’s 372 of those things.”

Corey Frank (09:31):

Yeah.

Chris Beall (09:31):

There’s a rule in the world of adding, of stating what numbers mean which is you cannot add together non-commensurate items. You can’t add phone calls to emails, to LinkedIn’s, to SMS texts. There’s no such thing as an activity. There isn’t. I mean, when I run around in the morning, I go out. You know me, I get my 20,000 30,000 steps before breakfast. Is each step in activity? Is it professional? Well, in my brain it is because I’m thinking of things. Do we count those activities? Should I go to the board of directors and say, “Oh, I engaged in so many activities this morning because I was thinking, and I was also writing something down, and then, I typed it with a keystroke on my computer.” It doesn’t make sense. These things, literally adding them up, you can do it because we can do funny things with numbers. But look at this chart, I think it’s cool that the numbers are left justified. If we really think they’re real numbers, we write justify them, so the zeros add up, the ones place adds up, the tens place. Remember we were taught that as kids?

Announcer (10:39):

We’ll be back in a moment after a quick break.

(10:47):

ConnectAndSell, welcome to the end of dialing as you know it. ConnectAndSell patented technology loads your best sales folks up with eight to 10 times more live qualified conversations every day. And when we say qualified, we’re talking about really qualified knowing what kind of cheese they like on their impossible whopper kind of qualified. Learn more at connectandselldotcom.

(11:16):

And we’re back with Corey and Chris.

Chris Beall (11:20):

These are clearly names of things. They’re not really numbers, but there’s only one of them whereby getting lucky, you can succeed 100% of the time, and that’s getting somebody on the phone. I was talking to some very nice people who sell for IBM the other day, and we were out in Atlanta, and talking to a great group of people, very sincere, mostly young, but little bit farther along in their careers than you might run into it in a lot of SDRs. Very well-trained, big mission. I won’t say what the mission is, but it’s got big, big numbers they’re going after. Loved it.

(11:57):

And so, we were talking to them about ConnectAndSell. The LinkedIn people were talking about LinkedIn. ZoomInfo was talking about ZoomInfo and so forth and so on. And I said to them, because I was last up, “Hey, here’s the deal on B2B. B2B is built on trust, and it’s built on trust for a funny reason. Your buyer is afraid for their career. It’s not their money. And you should have seen looking around the room with these smart, sophisticated people, how many eyes got big.” And then I said, “And this is the shocking part. When you cold call, you succeed 100% of the time. If you’re skilled enough, as long as your goal is to get trust. If your goal is to get a sale, to get a meeting or something else, you may fail. But success builds on success, so why not succeed 100% of the time by setting your goal to getting trust and then become a master at getting trust.”

Corey Frank (12:54):

Yeah, for sure.

Chris Beall (12:54):

First you have to deserve it, and second, you have to do something skillful to get it, okay? Now, how many of those should you have per day? Now, let’s build our funnel from that. So, my view is that the number of trust building conversations a rep should have per day. If they’re an SDR is something around 30. Out of those 30 conversations per day, you’ll get a flow rate per day of about 10% of those that will flow downstream into meetings. So, that’s about three meetings a day. So, your flow rate of three meetings per day is going to run into a attendance rate, a net attendance rate of about two meetings per day for somebody. That immediately tells you what your ratio of SDRs to account executives should be.

(13:45):

If your account executives have got room in their calendar on average for two meetings a day, then, each one of them should be probably paired up with one SDR. The reason they should be paired up is then the SDR could say, “No. I can’t recall a single time when somebody told me that meeting with Corey was a waste of their time.” Never happened that I recall. So, it improves your ability to close for the meeting because the meeting product includes the person that they’re meeting with. So, okay. They’re meeting with an expert. The expert’s an important person. You want them to look up the expert on LinkedIn. “Oh, Corey is an expert on this,” that kind of thing.

(14:25):

So, that tells you immediately what your investment level in SDR should be if you’re having an SDR led approach to getting meetings. Now, if you expect your AEs to get one meeting a day, then, it’s different. Then your ratio changes. One SDR could serve as four reps-

Corey Frank (14:43):

That’s right. Yep.

Chris Beall (14:43):

… Not quite four. You have to be very careful when you do the math. So, it’s that kind of thing. You got to start with the number of trust building conversations. My issue… And I love The Bridge Group. You know that I love them. Trish Bertuzzi has always been very kind to me. She wrote a great book, the Sales Development Playbook. And she corrects me every time I golf with her. And she tells me how to park the cart, and how far away… The stuff that I suck at.

(15:12):

So, okay. [inaudible 00:15:14], right? But I see why The Bridge Group chose QC, that definition because it’s an extensive definition. You can point at one and say, “See, you got an email back, and you got this data and so forth.” And it corresponds to reality. But the reality that we miss is that to analyze correctly. We have to bifurcate the context into those who build trust and those that don’t build trust. That’s what we really have to do because the eye of the needle that we got to get this camel through is the trust needle. We’ve got to get that prospeq who’s big through the eye of the trust needle.

(15:54):

And sadly, or unsadly, or whatever it happens to be, when we talk with them, we have seven seconds to do that. This is according to Chris Voss not according to me. And he’s told us what those seven seconds have to have in them, and why they’re in there. And it makes a lot of sense. And we have hundreds of thousands of millions of data points that say, “Yeah. He’s probably right.”

(16:16):

So, that’s what I think is interesting about these times, and we tie it to the whole SVB thing. What’s happened is, venture capital likes to put money to work because they got more money than they have time. They prefer that their portfolio companies do things that are the other portfolio companies and all the other portfolio companies because variation doesn’t help. That’s crazy. You’re trying to make a machine-

Corey Frank (16:44):

My playbook, the Vista playbook, thou shall run your SAS model like this. Yep.

Chris Beall (16:48):

Exactly. You want to put money in one end and get something out the other end. So, variability is considered to be not a great thing if you’re a VC. So, what’s the simplest thing to count? The simplest metric is headcount. Money buys headcount. Headcount produces results. Therefore, things that happen per rep per day, or per rep, per whatever, since you can hire them, you can onboard them, train them, do all this stuff people talk about. And then, eventually, in six months they start actually producing something. You can figure it out then, “Oh, this is just a money problem.” And if you pour money in, keep track of the headcount, and then, what the production of the output is, you’re probably good. You’re probably good but you’re not necessarily efficient with regard to not needing as much money because that’s not the problem of EC solving. They’re solving the problem of what would you do if you had enough money like all the other VC funded companies. That’s what you’re being compared to.

(17:51):

So, if you want to be more efficient, you might have to choose to change some things, but you might get pushback from your VCs at least during good times because that become, “Well, you’re not helping me put money to work.”

(18:04):

Same thing by the way, this is not about this go-to market, but visionary deals are like this. So, when you’re in the pre-chasm state, which most companies and their founders will never admit that they’re in, ask Jeffrey Moore, “How many people you talk to that you know are pre-chasm will raise their hand and say, I’m a pre-chasm.”

Corey Frank (18:23):

That’s right.

Chris Beall (18:24):

Zero. “Oh, we’re post-chasm. We’re doing this.”

Corey Frank (18:27):

Oh, yeah. Yep.

Chris Beall (18:29):

Like a simple test. Do you sell by reference, or do you sell by persuasion? If it’s persuasion, you’re pre-chasm. If it’s for reference, you’re post-chasm. Got it. So, you’re usually selling by persuasion, or I’ll call it what would they call spray and prey luck. You’re getting these folks who are seeking whatever they’re seeking. They’re all buying for different reasons, and there you are pre chasm. It’s like, “Wow, what should I do here?” Well, the temptation is to treat it as post-chasm and to get across the chasm. Just for those of you who haven’t read the book. You essentially buy your way into your first true post-chasm market, and you do it by “pricing down,” which doesn’t mean you reduce your price by the way. It could, but it could mean you provide extra services, you help more, you’re nicer, whatever. You smile more and things like that. So, in that post-chasm state, you get all these flows, and you can pay attention to all that kind of stuff.

(19:27):

In the pre-chasm state, you should be paying attention to one thing. And that is, can I get so much money from a visionary buyer? Visionary customer who’s seeking competitive advantage that I actually don’t need a round of financing to cross the chasm. I just got it from my visionary. ell, no VC on earth is going to encourage you to do that deal. They’re going to talk to you about scale. “Oh, that doesn’t scale.” Well, of course, it doesn’t scale. By the way, nor does a single round of financing. It doesn’t scale. You pay. It’s a chunk of money that goes into a bank like Silicon Valley Bank was, and then, you’re burning it off hoping to get to the next round. That’s why it’s called a burn rate. It’s called a build rate. It’s called a burn rate because you’re burning.

Corey Frank (20:14):

That’s right.

Chris Beall (20:15):

This was the point I was making earlier with Ryan about correlation. So, now you’ve got all these companies doing stuff the same way. They’re all doing it inefficiently because that’s okay. It’s the way to do it is inefficiently, so it can all be done the same way, because to get efficiency, we have to tune to the circumstances.

(20:33):

And so, now, you have this high degree of correlation among these entities that created, and then, they’re buying and selling from each other. So, how much of their revenue is fake effectively, or how much of it is contained within the system? And if the answer is a lot, then, for purposes of understanding the fragility of that system, we have to take that revenue out. It’s like the Icelandic trade.

(21:01):

I have a dog. You have a cat. I tell you, my dog’s worth a billion. You told me, the cat’s worth a billion. We each take out loans for a billion dollars. I buy your cat. You buy my dog. Look at us now. We each have 2 billion. It’s fantastic, right? So, you get a version of the Icelandic trade that’s going on systematically among these companies, and it’s not bad. They’re not doing it for a bad reason. They’re just doing it because overfunded companies are easy to buy from, and tech companies make stuff other tech companies tend to like. So, it’s easy to sell to somebody who’s flush with money, who’s being encouraged by their venture board to spend that money on the stuff that could grow the company. They’re easy marks.

Corey Frank (21:43):

Yeah. That’s an echo chamber in a lot of ways.

Chris Beall (21:45):

It is. It is. So, now we have the problem of correlation. And correlation is what causes modest sized risks to turn into disasters, collapses, houses of cards. The house of cards, all of the cards are correlated with each other. Here’s how we can tell. Take one at the bottom out. That’s what correlation looks like from a risk perspective. And some people were talking in an interesting way out there on the internet, Twitter or whatever. It’s like, “How could this happen so fast?” Well, because these things always happen that fast. They always happen that fast because what you see is the culmination of something that was building up. It’s like an earthquake. You don’t see the earthquake for the… I was there in California for the Loma Prieta quake. How long do you think that pressure built up before that big monster went off?

Corey Frank (22:41):

Well, I think our friend, Robert Vera who runs the innovation center here, who cajoled our friend, Ryan Edwards to jump on our podcast. He was saying his thesis was that the Fed was terrified of a meltdown that was triggered by their interest rate increases that were triggered by unrestrained inflation that was triggered by near zero interest rates for years. So, did that happen overnight? It happened slowly at first and then all at once, I think is the phrase goes, right?

Chris Beall (23:12):

Yeah. And I think the situation was even worse in one way. We went through this pandemic thing that went both directions at the same time. So, it boosted some industries, like everything that helped people work at home and all that kind of stuff boosted. It hammered other industries like hospitality, and it really confused some other industries like commercial real estate where in the city centers it got worse, but out in the suburbs it got better. All of the stuff’s going on at once. And then, it also created mechanical supply chain disruption because moving stuff from one place to another requires that the people in both places can work. And they have to be able to work in the place where the things are moving from and too. We don’t yet have robots moving everything. So, these ships have got to move around, and containers have to be on them, and people have got to be involved in at least operating the equipment that gets the containers off and driving the trucks, and we were short of truck drivers, blah, blah, blah, blah, blah. It goes on and on.

(24:09):

Can you tell as a policy analyst, the inflation that’s due to the low-interest rates for a long time? And the inflation as though that’s what it is, that’s price increases in various things moving around in the economy due to supply chain disruption. I guarantee you nobody could tell the difference between those two. You can tell it conceptually, and then, they feed on each other, so you can’t tell which one’s being driven by which other one. There’s cascade effects. So, what happens? Well, I only have one thing to do with inflation interest rates. Treated as a monetary phenomenon and interest rates. So, okay, we knew one thing for sure. The first time interest rates were raised by the Fed, the tech economy was going to lose a big chunk of its value.

(25:01):

And when you lose a big chunk of value fast, more value goes out immediately because of the fear that all the value is going to go out. It’s going to zero. So, as soon as the Fed raised interest rates, the entire world of tech, which is predicated on zero interest rates for its, the valuations as a multiple of revenue went down. How far should it have gone down? Who knows? But it went down 70% or so. So, Silicon Valley Bank as an example, its customers suddenly lost 70% of their value in 24 hours, and that was predictable. That was completely predictable. So, that effect had nothing to do with inflation because what Silicon Valley companies charge for their products is not relevant in the economy. Trust me. It doesn’t cause anybody to have to pay more for a grapefruit.

 

Podcast: Play in new window | Download

In this episode Corey Frank and Chris Beall discuss the impact of recent market shifts on businesses and the advice they would give to CEOs and CROs to adapt to these changes. With tightening debt and equity markets, businesses must focus on efficiency and go-to-market strategies to maintain profitability. Chris emphasizes the importance of go-to-market efficiency and being disciplined in investing resources wisely. Their guest, Ryan Edwards, Managing Partner at Prospeq, shares his thoughts on the investment side, highlighting that businesses should prioritize investments that drive revenue growth, instead of focusing solely on product improvements. In the face of uncertainty, Chris advises companies to aim for profitability and avoid making hasty decisions.

They also cover key metrics that businesses should track to stay on top of their performance. Chris suggests focusing on meetings per rep hour, net meetings attended per hour, and the net show rate as essential indicators of a company’s go-to-market efficiency. Ryan emphasizes the importance of understanding client acquisition cost and lifetime value, especially for businesses with mixed revenue sources.

As businesses navigate these uncertain times, focusing on efficiency, profitability, and key metrics will help them maintain a strong footing and continue to grow. Join us for this episode, “Growth, Profitability, and Pivoting in Economic Turmoil.”

Links from this episode:

Ryan Edwards on LinkedIn
Corey Frank on LinkedIn
Chris Beall on LinkedIn

Prospeq
Branch 49
ConnectAndSell

 

Full episode transcript below:

—-more—-

(00:23):

In this episode, Corey Frank and Chris Beall discussed the impact of recent market shifts on businesses and the advice they would give to CEOs and CROs to adapt these changes. With tightening debt in equity markets, businesses must focus on efficiency and go-to-market strategies to maintain profitability. They are joined by Ryan Edwards, managing partner at Prospeq. He shares his thoughts on the investment side, highlighting the businesses should prioritize investments that drive revenue growth instead of focusing solely on product improvements.

(00:55):

In the face of uncertainty, Chris advises companies to aim for profitability and avoid making hasty decisions. They also cover key metrics that businesses should track to stay on top of their performance. Chris suggests focusing on meetings per rep hour, net meetings attended per hour, and the net show rate as essential indicators of a company’s go-to-market efficiency. Ryan emphasizes the importance of understanding client acquisition cost and lifetime value, especially for businesses with mixed revenue sources. As businesses navigate these uncertain times, join us for this episode, growth, profitability, and pivoting in economic turmoil.

Corey Frank (01:41):

Welcome to another episode of the Market Dominance Guys, with Corey Frank and the sage of sales, the profit of profit, the Tom Cruise of sales, that’s the new one, and the Hawking of Hawking, Chris Beall. Chris, how are you today?

Chris Beall (01:55):

If I were any better I wouldn’t have bothered to come on with you, I’d just do something else.

Corey Frank (01:59):

Well, the lighting is just perfect today. Very, very soft. Barbara Walters like lighting today. We have a special guest on his way. Welcome, Ryan Edwards. Ryan, good to have you. I’m going to edify you a little bit, Ryan, and embarrass you. In addition to Ryan being co-founder and the managing partner on the tech and venture side over at Prospeq, which is a venture lending bank, he spent almost 15 years at Silicon Valley Bank in the latter half dozen or so plus years in charge of the Southwest. And of course he’s very active in the community here in Arizona with his chairmanship and support for Invest Southwest. So welcome, Ryan, to the Market Dominance Guys.

Ryan Edwards (02:39):

Thank you. Appreciate it. I’m glad to be on here, Cory.

Corey Frank (02:42):

By the way, I see the swag on your left sleeve there, if I’m not mistaken, in the camera. So you are representing your former peers at the bank?

Ryan Edwards (02:50):

Yes, absolutely.

Corey Frank (02:51):

So I figured we could start. Chris, what do you think if we just a review of the basics of what happened at SVB because obviously you have some your colleagues over there, you have some folks that have been affected, and you have a lot of investments active in prior investments here in the Valley and across the US that still use SVB. So right from the horse’s mouth, what’s happened in as a tech investor and as a CEO or as a CRO for an organization? How should I take this series of events?

Ryan Edwards (03:21):

Well, I think that there’s a lot to unpack with that. How should you take that as a tech investor in this ecosystem is one thing like what happened over there is kind of whole other story. I obviously was not at Silicon Valley Bank for the past close to a year now, so I’m not necessarily in the weeds of all the things there, but I certainly felt like the dominoes that kind of fell as that thing transpired with the way that SVB communicated was pretty poorly on their investment strategy that I think was a bit flawed and problematic with the market, but I think that it was not necessarily a reason that they would’ve gone out of business or gone to the point at least where they are.

(03:56):

I know they’re not technically out yet, but I think that the more important point there, I think, is around how this is going to impact things because SVB is the largest lender in the venture space, they’re also the largest company working with venture capital as well as venture funded companies. So the biggest impact and the biggest concern I have as kind of someone who’s involved in that ecosystem is around, does that get replaced and who comes in to replace that? And at this point I would say if SVB completely goes away at this point, which we’re still not sure if a buyer comes in or something else changes. If they were to completely disappear, I don’t think there’s anyone currently in the market that will come in and replace that capital when you talk about half of the deals in venture being done out of that location. So I think that creates a significant void right now over the next probably year, but I would say likely multiple years before even some of that can be replaced.

(04:58):

The banks that are kind of stepping in right now and taking the deposits, I would say almost none of them want to fill much of that void, if any of it. And so at this point you sort of end up in a situation where a lot of companies that were reliant on capital and follow on financing and things through debt has just gone by the wayside. Not to mention SVB did also do a lot of direct equity within venture funds in the market too, where they had fund to funds, investments and other things where they were directly involved with a lot of funds and capital going on that side too, which I don’t think that’s going to hinder the overall venture capital market, but I do think it’s notable that they were making a lot of those investments as well.

(05:42):

So to me, the biggest concern is around how many companies that are reliant on continuing to be funded, continuing to rely on some of the debt that they were getting through SVB, and if that disappears, I think that we see a shrinking of the market in the near term because of that lack of capital.

Corey Frank (06:00):

Before we went on, Chris, you were chatting about how… And Ryan, I think you can buttress this is that funded tech companies tend to sell to other funded tech companies, Chris. And so with that, what do you see as this reciprocal effect with sales cycles and impacting other business functions, et cetera, from your perspective?

Chris Beall (06:22):

Well, it’s interesting. I mean one of the phenomena I’ve seen, and I’ve been at this, I don’t know, the first tech company I did was in ’84. So I go back a little ways working with Kleiner Perkins, I don’t know who we were banking with, can’t even remember back then, but been with SVB a couple of times. Looking back, I’ve always been nervous with any of these companies when I felt like we were selling not just other tech companies but other kind of go-go companies. I’ve never been in one of these, put the pedal down sort of things except maybe requisite technology where we did it a different way anyway. We did this 120 million deal with SAP for a source code license that replaced a couple of rounds of financing and let us do what we wanted.

(07:06):

But even then, here’s an example, the B2B marketplaces went crazy as a concept in 1998, 1999, 2000, Ariba was suddenly worth 64 billion as the first of the companies to go out and go public to ascribe for 64 billion of value to Ariba when SAP was worth something like 10 billion was absurd. When you come right down to it, it was craziness. And the idea is, “Hey, this particular thing,” in this case marketplaces, but we have these over and over and over, “is going to take over the world. It’s going to be everything.” Those companies tend to get heavily funded, and as a result, the popular concept ones and as a result they become attractive to sell to. And the lesser tech companies that are making, I’ll call it the sort of tools, the tooling, the things that are more service like maybe they’re looking to get pulled up into these companies, they tend to sell to those heavily funded companies because it’s easier, they’re funded, they’re run by people who quite frankly have never done cash management in their life.

(08:09):

I mean if you were to ask me what’s the weirdest part about venture capital, the weirdest part is that we actually write checks to these companies. It’s like flipping the car keys to an 11-year-old having shown them… You keep them up three nights and you show them how hangover and hangover part two, and then if that doesn’t work, you show them fast and furious, then you flip them the car keys and you make a bet that they can get to New York them back from San Francisco before the other battle. That’s kind of what it’s like in a 28-year-old who’s founded a company, the odds of them being a great cash manager exactly zero. There’s no chance they’re even thinking cash management. Cash management starts and ends with, I put it in SVB, I’m done.

Ryan Edwards (08:53):

That it’s interesting you… I’m sorry to interrupt there, but I mean I think a lot of… if you look at the data on founders, that perception of the majority of founders being 20 something is kind of still out there, but I think if you look at the data, most founders now at this point are a lot older honestly, that are especially the ones getting funded. So the ones that are getting that capital and being told like, “Hey, let’s see if you can do it.” Most of them are kind of more in the late 30s and 40s age now if you start to look at some of the data, so that 20-year-old in a garage mentality where they just rate got $20 million from Sequoia just because they had a cool idea, I think is definitely a rarity compared to where it was when you looked back in the late 90s or early 2000s timeframe.

Chris Beall (09:42):

I mean there’s always been changes in this. I mean LJ went over at Google. Pete called me one day to say, “Hey, we’re Google, right?” And I said, “Yeah, LJ, I get it.” And says, “So we know everything.” And you know that I said, “God, what is… like some disclosure statement?” He’s such a good friend. It’s like I’m still listening. He says, “I just want to let you know that ConnectAndSell over at Google. We’ve assessed every company in Silicon Valley and you’re the most interesting company in Silicon Valley.” I said, “That’s most ridiculous thing I’ve ever heard. We’re not even funded by an EVCs.” And he says, “Well, that’s not what’s so interesting. What’s so interesting is that you’re old.” And I said, “The company not that old. It’s like 14 years old.” And he said, “No, no, not the company. You human beings are really, really old and therefore unfundable, nobody in the Valley would fund you because you’re like…” At the time I was like 64.

Announcer (10:34):

We’ll be back in a moment after a quick break.

(10:42):

ConnectAndSell. Welcome to the end of dialing as you know it. ConnectAndSell patented technology loads your best sales folks up with eight to 10 times more live qualified conversations every day. And when we say qualified, we’re talking about really qualified like knowing what kind of cheese they like on their impossible whopper kind of qualified. Learn more at connectandsell.com. And we’re back with Corey and Chris.

Chris Beall (11:16):

Great. This is of no value whatsoever, but it’s amusing. I’ll try to remember it. My age, it’s a little hard because memory goes… well, I wish I could remember where it goes. So I guess my point is though, it’s interesting when you look at Silicon Valley and you think about how it works, it’s much more of a highly correlated system than we tend to think when we’re creating investment portfolios that are robust against change.

(11:43):

So they’re selling and buying to each other. There is banking of all sorts, including a bank actually like Silicon Valley Bank investing directly in companies indirectly fund to fund through lending, doing wealth management for founders, all sorts of things. LOCs, we had our LOC there, all that kind of good stuff. And when you think about it, it’s like did anybody really know how correlated it all is for real? Really, how correlated it is? And then in doing that analysis, and I’m thinking regulators should do this kind of correlation analysis because it could be important with banks. Did they look ahead and say three years ago and say, “So, what’s the situation like if interest rates go from zero to some other number? What would happen?” I’m sure somebody was doing that, right? I mean they had to be, weren’t they?

Ryan Edwards (12:38):

You would think that most of the banks would look at that sort of thing that most of the banks were having those decisions of, “Okay, let’s run sensitivity on all these different types of scenarios, especially where rates were.” I know being at SUV for as long as I had been there that there was discussion constantly about when rates go back up. So it feels like that was certainly within the sector I was in, which is more focused around loans and how that impacts loan portfolio and everything, but that’s obviously the revenue generator for the bank in a lot of ways.

(13:10):

So how did that impact them on the other side and the balance sheet side and the deposits? So obviously you have to start paying more for deposits and the adjustments on that side. I think that… I know that discussion and that thought process is happening there and I’m sure it’s happening in all the banks, but I don’t know that clearly at SVB they were not doing a good job of, well, how do we manage the deposit book in investment side because they went out real long on some investments, and T-bills, and things that just didn’t make sense compared to what would happen in the market.

(13:44):

I mean I think it would’ve been understandable if they had done that with a small percentage of their assets that they were investing, but clearly they had 90 billion of investments into some T-bills that were not probably the smartest things to put in for the timeframes that they had them set up to. So I’m certainly confused at how that went through and I’d love to get the story as we continue forward over the next several months, or maybe it’s a year or longer before we get all the details. But I really want to understand how that decision making’s happening. And then I think why you’re seeing all the other bank stocks dropping is because people are realizing that nobody’s really involved in these banks right now. So all of them could be doing that.

(14:26):

And I’m guessing it’s similar to VC whereas you mentioned, VC sort of its groupthink, right? Where they go, “Oh, well, I like this sector, and well, I do too now.” And everybody sort of goes, “Well, that’s the cool sector, now, lets all invest in ChatGPT because that’s what’s out there.” And then you kind of go into with the banking side, I’m sure you have all the banks talking to each other about, “Well, what do you invest in and what should we be in? We’re in this T-bill thing and you have all those investment advisors having discussions with each other around a lot of the large banks too.” And so they end up going to similar assets as well.

(15:00):

So I think that’s why we’re seeing the fear-based stuff in the stock market now is because I would guess that a lot of them are having those similar conversations with each other because they want to feel like I’m doing what everybody else is doing. So how much of that was done that way and when are we going to find out about other banks that were also copycatting each other because of this mentality that, “Hey, rates are probably going to be going for a while, let’s get some money invested.”

Corey Frank (15:26):

What do you think as a CEO, Chris and Ryan, especially your perspective Ryan on investments, what should a founder CEO, CRO, what type of pivot should I be adjusting to? Should I double down on my tech stack investment to try to get more with less? Do you see additional headcount right sizing? Do you see, “Listen, we’ve got to diversified and we got to penetrate new markets”? What is some of the advice that you would give? Because I got the debt and I got the equity markets pretty locked down and tight and restricted for now. So all I have besides debt and equity is I have revenues. So what type of advice would, Chris, you and Ryan, give to these CEOs and CROs to pivot and adjust?

Chris Beall (16:10):

Wow. I mean I’ve always given the same advice to them, which is efficiency has unusually high yields over time and especially go-to-market efficiency. I mean it’s always shocking if you really work the numbers and you know me, I’m an old math guy, you work the numbers on go-to-market efficiency and you work them over four or five years. It’s generally you could avoid an entire round of financing just by paying attention to your go-to-market efficiency, which is not normally done in venture finance situations. There’s go-to- market speed, can we scale? I hear a lot of talk about scaling even before there’s traction. There’s pseudo traction that people get into. So pre chasm traction, which they think that means something. Every pre chasm dollar you get is a delightful ruse. It’s making you think you have a market that you don’t have and gulling you into investing in that market, you need to, I think, be very disciplined around those kinds of things.

(17:07):

But most of the money that goes into these companies is for go-to-market, and most of that go-to-market money in my opinion is wasted just because it’s go-to-market’s incredibly inefficient. And I think there’s also a question of speed with the company that I don’t want to name, but I chant that I ended up with at one point we didn’t have any money. The previous folks since had the spending rate up to a couple million a month and we had nothing. And it was considered by some people to be an impossible intractable problem. It’s actually a simple problem. We describe it in one of the episodes. It’s like figure out what’s coming in on a flow rate basis, figure out what your gross profit is from that and cut your company to that expense level.

(17:51):

Now you have infinite runway. Okay, take a deep breath and figure out what you’re going to do from there. But the dream that somehow you’re going to round that corner while your tires have lost traction. And if I just hang in there, I’m going to make it. I wouldn’t advise that, especially right now where your next funding of any kind is highly uncertain, both in terms of size and in terms of timing. I mean, my advice is get profitable now. Which by the way, pretty much any company can choose to do. It’s just a choice.

Corey Frank (18:24):

Ryan, what do you think?

Ryan Edwards (18:26):

I always think that, I mean, the investment side and what you’re going to push forwards is what’s going to drive the revenue piece the best, right? So you mentioned kind of basically product improvements, engineering stuff, things like that, proficiency. Of course there’s a desire to get more efficient, but is that going to drive more revenue and better revenue or things like that, what you’re doing? I think a lot of times people invest a lot in engineering and product changes and things that they’re not certain on what the improvement is going to be.

(18:54):

And that’s where I think the problem is. That’s an easy decision when you’re early and you have almost no revenue that people are like, “Oh, I want to improve the product or make it. I got to get your product ready to sell, of course.” But I think as people are growing and scaling, I think there is a lot of times that too much capital is spent within that pivot, changing the product, adding a new feature and things like that, and not enough in how do you be efficient in your sales, your ad spend, your what you’re going after to actually acquire the user and your customer base. So that’s I think where customers are not there.

(19:26):

And then to your point, Chris, as you kind of said, I think there’s been a significant shift to that profitability focus because capital is not feeling like they can just throw money everywhere and it won’t matter. So the growth rates are not as big of a focus as they were. I think people now want to see, “Well, I still want you to grow, but I want you to grow efficiently and prove to me that you can grow with less money and without having as big of a burn.” And I think that’s where the challenge is, is nobody’s done that for so long because we’ve been in this 10 plus year cycle of faster growth and grow because the outcome is going to be a higher, if you can worry about the growth and who cares how much you’re losing because as long as you’re growing fast, I’m going to pay you a 10, 12, 20 X multiple on that growth rate versus paying you on profitability.

(20:18):

There’s just so many businesses that are not built that way anymore where profitability is the focus because they’ve been taught that if you want the biggest outcome, nobody in that space cares about the profitability. They care about the growth rate and the size of revenue you’ve gotten to.

Corey Frank (20:33):

Well, I know you have to run here, Ryan, I’m sure your phone’s ringing off the hook with you and Philip over at Prospeq with a q.co, if you want to get ahold of Ryan and his team. But last question, are there any key metrics in this new world, in this new era that I should be tracking from my business, especially as you and Philip and the team are looking that maybe CEOs, CROs aren’t tracking today?

Ryan Edwards (20:57):

I don’t know about that they’re not tracking today, but I think that a lot of the stuff on the acquisition cost side is becoming even more important. Where I think the client acquisition cost has always been something people are focused on lifetime value, client acquisition cost, especially within SaaS companies. But I think that I run into a lot of companies that don’t have a great grasp on that, especially companies that don’t have 100% of their business in SaaS where they’re selling something else, or maybe they’re selling a product, or they’re have a service component, or other things. And I don’t think they always have a great grasp on what it’s actually costing them to bring on their clients.

(21:34):

So without that information, you really can’t determine what you should be selling for. Are you ever going to be able to be profitable? Are you able to scale with what you have? So those really digging into where you’re getting your clients and how much it’s costing you to bring them on, no matter the business that you have and what product or service or software that you’re selling, I think is really important that I’ve seen a lot of businesses that don’t have, I think, the best understanding that.

Corey Frank (22:03):

Well, when the dust settles, we’d love to have you back on again. We’re going to cut you loose. And, Chris, we’re going to continue the conversation here if we will. So thanks for joining the Market Dominance Guys, Ryan.

Ryan Edwards (22:14):

All right.

Chris Beall (22:14):

Yeah, thanks so much, Ryan. I think all that business is going to come to you actually.

Ryan Edwards (22:20):

Hopefully we’ll be able to scale quite a bit. It’d be nice.

Corey Frank (22:23):

That’s all right. Okay, we’ll let you go. Chris, same question for you. When you look, especially your very metric driven organization, certainly at ConnectAndSell, one of the new gold standards that we’ve adopted here that we got from you a few months ago was average demos, average meetings per hour per rep work, which is a good one. In this kind of a new potential tectonic shift that’s happening. What are some of those other metrics or keys that I should be tracking that I have the residue, I just don’t have the visibility or the KPI created that I should be watching this, my odometer, my speedometer, my oil pressure, my gas tank. What are some of those that you see?

Chris Beall (23:07):

Well, I mean I think meetings per rep hour is actually… Let’s dig into that one a little bit because I think almost nobody looks at it. I think it’s number one, maybe two and three when you’re really trying to figure out are you in control of your go-to market. And by the way, there’s two ways to look at it, there’s meetings per rep hour on a per rep basis, which is a rep performance indicator, and generally is determined by conversations per hour times conversion rate. And then you’ve got to net that out, so it’s actually net meetings attended per hour. And so now you’ve got to bring in what are you doing about your rescheduling? We have podcast episodes on this subject. Cheryl Turner was on saying, I Heart No Shows. Well, you only heart no shows because you think it’s a great opportunity to get back ahold of somebody that you’ve spoken with before, having advantages you didn’t have the first time when they accepted the meeting and now they didn’t attend.

(24:03):

So I would put that under the general heading of, are you processing your exhaust in a way that maximizes the return on all the hard work you did to get the exhaust? And I think a lot of times we look at exhaust like its exhaust, it’s gone. People who design cars with turbos in them, they don’t know it’s not. I remember as a kid, I might have mentioned this on an episode once, maybe I didn’t, but as a kid I read Harvey McKay Swim with the Sharks. And I still remember reading that and I was probably, I don’t know… Do you have it around somewhere?

Corey Frank (24:35):

I probably have it around here somewhere. Yeah.

Chris Beall (24:37):

Yeah. So it’s a very engaging book. Harvey’s incredible leader, and writer, communicator. And I remember reading as a kid, something that really shocked me and I thought about it a lot, which is the money to be made in the envelope, business is not in the envelopes, it’s in the non square or non-rectangular cuts that you have to make to make an envelope. It’s in the scrap paper. You’re going to have an immense amount of scrap paper in the envelope business because envelopes are not… they don’t come off a roll, right? You got to actually cut these funny shapes and fold them up and then you have scraps. So how much money do you make on the scrap paper? That was his point is that’s the differentiator in that business. Whoever sets that up the best makes a business out of their scrap paper, paper does really well.

(25:24):

Well, in the world of B2B, our scrap paper is what happens to the, let’s say 93% or 94% if you’re running a pretty good shop of conversations that did not lead to meetings. And the simplest metric to get off of that, the number one is, well, how about the ones that did lead to meetings that weren’t held? Okay, so what’s your processing rate on that? What’s your success rate? How many of those are being spoken with every day? And there’s a metric out there that is very rarely tracked, which is your net show rate. So almost everybody looks at growth show rate. I scheduled a meeting with Corey, did Corey show up to that meeting. This is all part of the wonderful shortsightedness of sales.

(26:09):

I mean, in the world of sales, we look at this quarter and then we look shorter than that. Now we’re down to this meeting and they didn’t show up and now I’m offended. Screw that. And they’re out of here. They’re disqualified. So that’s number one, because the value is so high. One of our guys, John T McLaren, when he calls personally, he makes the company about $240,000 an hour.

Corey Frank (26:34):

On his no show list?

Chris Beall (26:36):

His no show list.

Corey Frank (26:37):

On his net no-show list?

Chris Beall (26:39):

At his no-show list. So that exhaust is processed to the point where it’s actually very high value or, and it tends to be discarded by most organizations. I have actually never, in all the time I’ve been a ConnectAndSell, run into a company that already had a defined, and executed, and measured process for calling no shows. It was catches catch can. If the meetings with Corey, Corey takes care of it. If meetings with me, I take care of it.

Corey Frank (27:11):

Because we already know they picked up once. And so why wouldn’t you have yet another serendipitously powered conversation? Because they’re probably going to pick up again and you can have a deeper conversation because you already have the moral authority in that, as word from the-

Chris Beall (27:28):

The deeper conversation you can have is, “Hey, I see we had something on the calendar for yesterday at 9:00. Something important must have come up for you, when would be a better time to talk?” It’s like the ultimate sales conversation you cannot need. It has every dimension you’re looking for, including the call to action built right in because, well, there was already a decision to act together. You’re in a collaborative mindset at that point and you’re not offended, you’re just moving forward. Same thing with everything that happens other than an appointment set, are you reprocessing it?

(28:01):

So for instance, everybody who says simply no or hangs up, say one of your people calls somebody, it’s a two second non-conversation. The prospect hangs up or the prospect yells, “Don’t ever call me again.” And hangs up, but they didn’t really say, don’t ever call me again like don’t ever call this number again. They were pissed. What do you do? Well, it cost me a lobster dinner two, one night to convince one of our reps what you do, which is its just a conversation. You put them in your list, you put them out, I don’t know, two, three weeks, and then you talk to them and you say, “Hey, when we spoke on this date and we spoke back on the yards of March, you didn’t have time for a conversation, is now a better time?” It’s a very simple script. It gives them the benefit of the doubt. You’re not backing them into a corner. You’re not saying anything bad about them. They’ve forgotten you already. They forgot you a long time ago. And what’s going to happen as a result? You’d be surprised. I mean, you wouldn’t, but most people would be.

(29:04):

So fact of the matter is you can’t be efficient if you throw away most of your input on the first attempt to process it in sales because if you’re processing through ambushes, you have a pretty serious problem, which is most of what you’re going to get back is an ambush response, not a response to the potential value that you could provide. So you kind of have to keep going and work through that. So those are two things. The third thing that I would pay attention to is here’s your investment in sales or in sales and marketing. Stuff you are doing, proactive spending. So it’s all speculative by the way, anybody who thinks the spending on sales and spending on marketing is not speculative, doesn’t know what the word speculative means.

(29:51):

So you are speculating that this spend is going to turn into future business. You have some notion of what the cycle time is from any given sort of outbound motion, attempting to call somebody, or whatever it is, to finally getting some sort of a deal. Fact of the matter is all of those cycle times will be different. So what you end up with is what we call a flow rate. At some point you have a flow rate of meetings that are happening, so that’s an interesting thing that’s going on. Well, take that flow rate of meetings, which is just it’s a flow rate. I like it as meetings per day that are attended and then say, “Hey, am I measuring that flow rate?”

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In this episode of the Market Dominance Guys podcast, Chris, Corey and Helen Fanucci discuss the evolution of the internet, from its early days as a way for messages to move across networks to the democratization of global information through the browser and search engines. They also explore the capabilities of ChatGPT, including its ability to generate email responses and interact with customers using personalized prompts. They highlight the potential of ChatGPT to save time and improve the quality of communication for sales professionals. Join us for this idea-filled episode, “How ChatGPT Can Improve Sales Enablement.”

 

Four ideas on how sales professionals can benefit from using ChatGPT for follow-up:

  1. Personalized Follow-Up: ChatGPT can help sales professionals create personalized follow-up messages for each customer based on their preferences, interests, and past interactions with the sales team. ChatGPT can analyze the customer’s conversation history and provide personalized responses that feel like a human wrote them.

  2. Lead Nurturing: ChatGPT can help sales professionals nurture leads by sending automated follow-up messages to potential customers at regular intervals. These messages can be customized to meet the specific needs of each customer, making it easier to keep them engaged with the sales process.

  3. Schedule Meetings: ChatGPT can help sales professionals schedule meetings with potential customers by automating the process of finding a mutually convenient time to meet. This can save the sales team a lot of time and effort by eliminating the need to go back and forth with customers trying to find a suitable time.

  4. Provide Instant Customer Support: ChatGPT can be used to provide instant customer support to customers who have questions or concerns about a product or service. Sales professionals can use ChatGPT to respond to these inquiries in real-time, providing customers with the information they need to make a purchasing decision. This can help increase customer satisfaction and improve the chances of closing a sale.

The Evolution of the Internet and Digital Communications

1960s: The concept of hypertext is introduced by Ted Nelson.

1980: Tim Berners-Lee develops the idea of a “mesh” network of hyperlinked documents and begins working on the WorldWideWeb (WWW) project.

1990: The first web page is created by Tim Berners-Lee. It contains information about the WWW project and how to use a web browser.

1991: The first web browser, called WorldWideWeb, is developed by Tim Berners-Lee. It was a text-only browser and was only available on the NeXTSTEP operating system.

1993: The first graphical web browser, called Mosaic, is released by Marc Andreessen and Eric Bina. It was a huge success and helped to popularize the web.

1994: The first search engine, called WebCrawler, is launched by Brian Pinkerton. It was the first search engine to index entire web pages rather than just titles and headings.

1995: Netscape Navigator is released by Netscape Communications Corporation. It becomes the most popular web browser and sets the standard for web browsing features.

1996: The first version of Internet Explorer is released by Microsoft, marking the beginning of the “browser wars” between Microsoft and Netscape.

1998: Google is founded by Larry Page and Sergey Brin. Their search engine quickly becomes the most popular and sets a new standard for search technology.

2003: Skype is launched, becoming one of the first and most popular VoIP (Voice over Internet Protocol) services.

2004: Mozilla Firefox is released by the Mozilla Foundation as an open-source alternative to Internet Explorer.

2008: Google releases the first version of the Chrome browser, which quickly becomes popular due to its speed and simplicity.

2009: WhatsApp is launched, providing a new way for people to communicate via instant messaging and voice calls over the internet.

2010: Microsoft releases Internet Explorer 9, which is considered a major improvement over previous versions.

2013: Google’s Chrome becomes the most popular web browser, surpassing Internet Explorer for the first time.

2021: The current versions of popular web browsers include Google Chrome, Mozilla Firefox, Apple Safari, Microsoft Edge, and Opera. Popular search engines include Google, Bing, Yahoo, and DuckDuckGo. VOIP services like Skype, Zoom, and Teams have become critical tools for remote communication in response to the COVID-19 pandemic. The Worldwide Web continues to evolve and expand, with new technologies and innovations being introduced regularly.

2022: ChatGPT from OpenAI.com takes the world by storm and changes how we write and communicate forever.

 

Full episode transcript below:

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Chris Beall (00:00):

Internet is a funny thing because when it was being built by some people, I won’t mention any of them, back in the late, very late seventies and early eighties, it was really just a way for basically for messages to move across networks that were interconnected. That’s what it was called, the internet. It was sort of affected messages, and then there was this protocol, TCIP’s still around that allows these messages to move around and then get reassembled in the right order. And it made sense of, by the way, when you use voiceover internet or we do what we’re doing here, it’s shocking that this works because the internet doesn’t have a lot to do with packets being delivered in order, and so they’ve got to be reassembled and put in order. This is why when you’re using your VoIP phones here, do we have VoIP phones here? 

Chris Beall (00:46):

Ah, what kind do you have? Oh yeah, we have, yeah, there everything’s void, right? There are delays built into VOIP because voiceover IP requires that the receiving side, the part that’s going to play the sound in your ear, it’s receiving just data. It has to wait for the enough packets to show up to put them in order out of order. Packets are called jitter, and there is a buffer that’s built in to avoid phone or receiver. That’s called a jitter buffer, and that’s what its job is to do, is to wait long enough. Otherwise you have dropouts that are called chop and you’ll hear it, right? So when you’re using dialer using connection cell, you’re even just on a call. What’s going on is pretty complex and there’s actually delays that are built in from the technology itself. So big jitter, buffers give you very high-quality voice, but width, long delays, potentially long delays depending on how much jitter their system. 

Chris Beall (01:41):

That’s the internet. The thing that made the internet popular was actually the browser, and the browser was built on top of the worldwide web, which had nothing to do with browsers either. It was just a way for a bunch of scientists to talk to each other in Switzerland to get some stuff published. If you were there through all of this, it’s each part was big. The biggest thing that happened in the internet was the browser, because the browser democratized the access to global information. And then the next biggest thing that happened was big search engines because the search engines made that information actually available to us. This is the next big thing, which is the ability to interact with something that learns and to make your own environments in which it’s learned what you care about. So imagine the chat t p t like capability. 

Chris Beall (02:33):

You can take a knowledge base, the Market Dominance Guys podcast. You can put that together and somebody can come interact with it by asking questions That’s remarkable and different. I tried the other day, a very simple thing. I was, what was I looking for? Something really simple and I tried it. Oh, I was looking for ah, complimentary quotes about the Market Dominance Guys podcast, right? Cause I some quotes to go on the book and everything has to be written by chat. G P T and I stupidly went out and used Google to do it. 15 minutes later, I’m thinking, I’m not going to find any complimentary quotes about the market dominance, guys. It’s just not happening. Apparently, nobody feels good about this. They don’t say anything about it. We suck. So before I went down that road any further, I thought, wait a second, this book’s written by chat, G P T. I think I’ll give it a question, right? So are there any complimentary votes about the Market Dominance Skies podcast? And by then it learned it was ours dot Nathan Lotts. Oh yes. And it starts out with one quote after another. Then I started investigating, and some of them I’m thinking, why can’t I find this actual human being who said this? But after a while, I gave up and said, yeah, ChatGPT says it. Its job is to write the book. Quotes are going on, but you have to check it out. So 

Helen Fanucci (03:52):

There’s another use case that you guys might be interested in. We have a product called Viva Sales, and there’s a capability in chat G P T that we’re calling copilot at Microsoft. So let’s imagine you’re on the phone with somebody or somebody asks you for a product quote, quote me on, I want to buy 3000 widgets. What co-pilot will do is write the email, pulling data from c r M system, write an email response to the individual on behalf of the rep. The rep just has to review it and approve it or make whatever changes. Think about that. It’s so much easier to review something and approve it or tweak it than to have to generate it from scratch. So that’s capabilities going into all the Microsoft’s products into Bing search. So that’s all powered by the open AI track G P T capability. That’s another example of a use case. 

Chris Beall (04:51):

Yeah, this one’s really big for two reasons. One is getting access to all that information and the world of sales enablement. It’s all about providing the information you need is a sell it, right? The only problem is it all piles up if you can’t find it anymore and you don’t know what’s current and all that. To be able to ask chat, g B T to finish a sentence, so to speak, an answer a question, or have it look at what you’re already writing or what came in it. Anything could be a prompt. Anything. It’s not always a question. It’s just, it’s like pushing a sled off the top of a hill. It’s like, where’s it going to go? I don’t know. Let’s find out. Right down it goes. That’s the prompt. So it’s really, really interesting when you think about that. The other reason it’s so powerful is it’s a better writer than anybody in this room because it’s taken the entire history of writing and learn from it. 

Chris Beall (05:35):

So it’s a really, really good writer and you can ask it to write in different styles. So I know a lot of salespeople, as we’ve mentioned on the podcast, have, how to put this politely, are left-handed colorblind and, dyslexic? Those are their advantages. That is, their advantages are that in some parts of their not, this isn’t true of all salespeople, but I know a lot of really, really, really good salespeople who have 1, 2, 3 or four of these characteristics or more, and they learn to talk and they learn to listen. That’s how they got a through school. Well, these are the smartest people who have difficulty with how the modern world is constructed in terms of textual relationships. Well, but you got to have textual relationships. So lowering the cost of writing that email from 30 minutes to five seconds, that’s a lot of time. 

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Welcome to another episode of Market Dominance Guys! In this third installment of our Road Trip visit series, we join Helen Fanucci and the team at Branch 49 as they discuss trust-building, gratitude, and top-of-the-funnel strategies.

Helen Fanucci shares her experiences with cold calls while using ConnectAndSell, adjusting her approach to engage prospects effectively. Her customized calls-to-action cater to each prospect’s unique needs, leading to successful completions even when the prospect isn’t the right person or ready for a meeting.

The experts also explore the value of cold calls in generating website traffic, comparing it to targeted Google ads. The conversation emphasizes the power of trust in maintaining lasting relationships, highlighting that trust endures indefinitely, provided it’s not undermined by sales pressure. Join them for this episode, “Boosting Website Traffic with Cold Calls.”

Links from this episode:

Branch 49 
Sean Snyder on LinkedIn  
Corey Frank on LinkedIn 
Microsoft 
Helen Fanucci on LinkedIn 
Helen’s book, Love Your Team 
ConnectAndSell 
Chris Beall on LinkedIn 
Chris and Corey’s book, Market Dominance: A Conversation with ChatGPT

 

Full episode transcript below:

—-more—-

Announcer (00:06):

Welcome to another session with the Market Dominance Guys, a program exploring all the high stakes, speed bumps, and off ramps of driving to the top of your market. With our host, Chris Beall from ConnectAndSell, and Corey Frank from Branch 49. Welcome to another episode of Market Dominance Guys. In this third installment of our Road Trip Visit series, we join Helen Fanucci and the team at Branch 49 as they discuss trust-building, gratitude, and top-of-the-funnel strategies. Helen shares her experience with cold calls while using ConnectAndSell, adjusting her approach to engage prospect effectively. Her customized calls to action cater to each prospect’s unique needs, leading to successful completions, even when the prospect isn’t the right person or ready for a meeting. The experts also explore the value of cold calls in generating website traffic, comparing it to targeted Google Ads. The conversation emphasizes the power of trust in maintaining lasting relationships, highlighting that trust endures indefinitely, provided it’s not undermined by sales pressure. Join them for this episode, Boosting Website Traffic With Cold Calls.

Corey Frank (01:19):

I love the concepts of gratitude reciprocates. And were you thinking the same thing? The fact that part of the challenge that we have, and an agency model like us at Branch 49, but I think this is endemic to, if you were a qualifier or an SDR or a Microsoft and you took that lead from that person and you threw it over the fence to your AE, they have the notes to read. And maybe they’ll give you a call, “Helen, tell me about this one,” but most of the time that never happens. They’re just going off of the notes and maybe they’ll be intimidated by the title. Maybe they’ll be surprised that, “You actually got ahold of so-and-so? Oh my gosh, this is great.” And they’re going to go through their own emotional machinations about how I should prepare and relax because now I’m going to be under pressure in this discovery call.

(02:04):

And we always talked about, Chris, that the natural state of somebody in a cold call is fear. And the natural state, something they came up with a few months ago, the national state of somebody in a discovery call is that one of apprehension. Because I’m about to get sold something and I’m not quite sure if they’re going to use the Ivanov gambit opening move or they’re going to use the Belarusian gambit to come off from the … what are they going to do? But I know it’s coming. It’s interesting to diffuse that by saying, “I know I’m an interruption, [inaudible 00:02:40] thank you. First off, before we get started, I just wanted to thank you for talking with my colleague, Helen.” So is that a hot tub epiphany as well, because I really like that. I think that could be very powerful for starting a discovery.

Chris Beall (02:55):

Yeah, I think it’d be amazing in discovery. It’d be amazing for a follow-up call. It actually harmonizes follow-up calls and discovery calls, even though the follow-up call is always an ambush. Never forget on the other side of an ambushed, they’re always in the same emotional state. I want to get off this call with my self-image intact. You have an animal in that state 100% of the time. Unless you call me, in which case I answer cold calls by going, “Great, I have a cold call here. I get a chance to make a sales rep’s day.” Not very many people-

Corey Frank (03:31):

That’s empirical evidence of what your cold call picker-upper score is.

Chris Beall (03:34):

It’s pretty good. My best phone number scores 94 out of 100 and I’m pretty busy most of the time. That’s not pretty good.

Helen Fanucci (03:42):

But you also ambush everybody or you boomerang everybody.

Chris Beall (03:46):

I have been known to point out to cold callers that perhaps their job is harder than it used to be. Because, sincerely, I do think their job is harder than it used to be. I always ask, “So what did you use to call me today?” They call this a honeypot strategy. It sits right there, it’s my cell phone. But yeah, this is the kind of stuff, when it comes to the top of the funnel, understanding is continuously evolving. We were talking earlier about, here’s something you might not know about cold calls. When you cold call somebody, or follow up call them, it doesn’t make any difference, they will almost always go to the website of the company that you mentioned. Almost always. But what’s that the equivalent of, in the economy? Those are Google Ads, right? Companies buy Google Ads hoping somebody will click on them to go to their website.

(04:38):

Well, you just got a more targeted person, because they’re on a list, to go to the website. So you provided something of the equivalent value of a Google Ad click, or a highly targeted person, just by having the conversation. Even if it didn’t lead to a meeting. So when we measure looking at opportunities, and threading back to conversations that preceded them, we find that for every dollar that comes through setting meetings, a $1.80 comes through the website. Just from the conversations. This is just being learned in the world right now. This is an example of something that folks are just figuring out. We call it an attribution report or an attribution interaction. And we see cases where, for say, I don’t know, 250,000 conversations. And we have some customers who have that many. They might produce four or 500 million dollars of pipeline. But if you go back to what came through the meetings, it might only be 100 million dollars.

(05:40):

So you look at that combination, you go, “Well, where’d all that extra money come from?” Well, they come to the website. So can you amplify it further? Sure, send him an email that says, “Thank you for our conversation today.” The only subject line in history that will be opened every single time, other than, we’re holding Jimmy hostage over [inaudible 00:05:58]. That’s a bad one, don’t use that. I think people try to use that on me on occasion. There’s one about alligators, doesn’t work either. But think about that, you’ve done a targeted advertisement by simply having a conversation. Now what’s important about that advertisement? Trust. Trust. You have seven seconds to get trust. I was out with some IBM folks a couple weeks ago in Atlanta, and I think I shocked the group by saying, “You cannot actually fail in a cold call.” If you have skill, you cannot fail because your goal is to get trust. And you will get trust 100% of the time if you have skill and you’ll apply your skill.

(06:34):

That’s the bar. It’s trust. You win. Why? Because trust is durable. It’s durable. Chris Voss, Never Split the Difference guy, book’s right over there. I asked him at dinner one night, “How long do we have to get trust in cold call?” He said seven seconds. I said, “Really? Our research says eight seconds.” He said, “Your research is wrong. Seven seconds.” Okay, what do we need to do in those seven seconds? He said, “Oh, that’s easy. We just need to show the other person we see the world through their eyes and then we need to demonstrate to that person that we are competent,” Listen carefully, “competent to solve a problem they have right now.” When he said right now, starbursts went off in my tiny brain. I said, “Well, right now, I’m a literalist. It means right now. What problem do they have right now?” Me. Can I solve the problem that is me? Yes, I am competent to solve that problem. I can go away. Wow, I’m in a really good position. This is fantastic.

(07:31):

I do those two things, I get trust. How long does the trust last? That’s the next question I asked him. He said, “Forever, until you blow it.” How do you blow it? He said, “Try to sell to them. Start selling to them, you’ll blow the trust.” That’s that energy thing we’re talking about. Put too much tension on the line, you’ll break the line. So this stuff all goes together. Helen was experiencing it from the position of being a vastly experienced salesperson and sales manager. But in this funny arena, the seven-seconder, where the game is played very, very, very differently because the emotional stakes are so high for the other person. And it makes you nervous because you’re the ambush. Or you don’t like it, it feels bad. I don’t like doing this to somebody.

(08:21):

But you have to know why you’re doing it, by the way. I don’t know if you guys all think about this. You need to set your mind in one place, I am only pushing this button for one reason, in hopes of helping somebody. What am I going to help them with? I’m going to help them go from whatever state they’re in to a state of being more willing to learn about something that might possibly change their life. I know people think business-to-business products don’t change people’s lives, that is utter bologna. These are the products that change people’s lives even more than any consumer product. The only thing you can pitch that’ll change your life more than that is, “Hey, you want to get married?” That’s a pretty good one. I got the energy wrong on that, thank God I did it better the first time.

Corey Frank (09:09):

What questions for Chris and Helen?

Sean Snyder (09:12):

Okay, so when you’re on calls or [inaudible 00:09:18] did you get to the ending of your work script or your extreme clip?

Helen Fanucci (09:21):

Yeah, so my intent was to set up a 15-minute call next week to get their feedback on the future of work and employee engagement. And that did not happen, however, it got navigated differently. So one woman, “I’m not the right person.” And so she’s referencing me to other people. Another one was, “Well, I don’t really have time to do that.” And I said, “Well, would you be interested in participating in a HR round table with your peers in a form for us to talk about the feature of work challenges and get feedback?” Oh yes, I’d like to do that. Can you send me an invitation? Yes, I will. So it just kind of navigated that way.

Chris Beall (10:08):

I listened. She got-

Helen Fanucci (10:09):

I don’t know.

Chris Beall (10:10):

The person who was trying to push her off, she asked for the meeting, it was fantastic. He was on ice. He had no idea who he was dealing with. He could tell that … Because she didn’t even say anything about, “Hi, I’m Helen Fanucci from Microsoft.” I can almost feel his fingers clicking on LinkedIn. How do you spell Fanucci? Who is this person? Because he could tell, he just was, I don’t like this because I can’t tell. This isn’t somebody junior. But she didn’t say what her title was or anything and it put him in a fantastic place to stay engaged. It was that energy. He was going to tug, but he wasn’t going to run. And finally it was like, well, he wouldn’t take the meeting, not immediately. And so then the conversation went a little further, but it did go all the way through the screenplay. You just didn’t know it. I mean, I listened to it. You weren’t thinking about, in terms of where you were getting, because this is technical cold-calling stuff that weirdos like us think about. But you did get all the way through it.

Helen Fanucci (11:08):

Okay. Yeah. And he told me I should tell him my title after he gives me permission to tell him why I called. Okay, that I run Customer Success Organization. I didn’t think about that at the moment, but that was a learning … Yes, I had a couple different calls to action in mind, and so, one of them was to see if he would be interested in this HR Roundtable. Because we do these forms to build peer-to-peer connections and stuff. So I don’t know the screenplay thing, but yeah, I had some ideas about where to take it and got there.

Sean Snyder (11:41):

So it would be like, at Branch, we like to call those completions. If it’s a wrong person, it’s a completion because now they’re out of the list, right?

Helen Fanucci (11:49):

Yeah, right.

Sean Snyder (11:56):

They ask for an email, they’re going a booking. So every, time for us, we review those as wins, just like [inaudible 00:11:56].

Helen Fanucci (11:56):

Yeah. Yep. And then I have people on my team that actually follow up with the invitations and stuff like that. And then I include them on the follow-up email, it’s a brief, and I say, “If there’s anything Angela or I can do,” my person, “anything we can do to for you and your team, just let us know.”

Sean Snyder (12:57):

Any idea of your release date …

Chris Beall (13:00):

Oh yeah, we do have a new book. The book got released on Tuesday. Actually, Helen bought the first ebook copy of it on Kindle on Monday night, I think it was. Was that Monday night? Not from a hot test, that would’ve involved risk to electronic equipment. But the book is kind of unusual, anybody who wants to check out the book, the idea behind this book is that everybody’s talking about AI and ChatGPT in particular. And I just had a curious moment on a Friday two weeks ago where I said, “I wonder if the work that we’ve done together on Market Dominance Guys …” Which was supposed to be a book, it was never supposed to be a podcast.

(13:37):

So Corey just called me up once and said, “I’m going to drag a book out of you. And the way I’m going to do it is I’m going to interview you every Thursday morning for an hour and a half until we have enough material for a book. Then we’ll throw it to an editor and we’ll get a book.” And well, here we are, three plus years later, almost four years later, and hey, no book. So it’s like, okay, so what do they call that? Either delay or frank failure? He’s Frank, so we’ll just call it delay. And I’ve taken three runs at the book, by the way, and I will admit I’m not one of those people who get stuck writing. Go read my blog sometime, I wrote all that crap. And so, why wouldn’t the book come out? And I thought, hey, maybe ChatGPT would like to write the book.

(14:20):

So I just thought, well, let’s give this a whirl. Let’s take 25 episodes of the podcast and see what ChatGPT has to say about. So we’ll have ChatGPT summarize them. So we just fed it the text, the transcript, and said, you summarize. So it wrote it summaries. The summaries are a little soft, I would say. If you read them, you won’t quite hear the edge that some people say they hear in the podcast. And these are the early episodes so it’s just Corey and me. So this is the book writing episodes so they’re even edgier because we’re really getting into the stuff that other people don’t believe, much less care to talk about.

Corey Frank (15:02):

Don’t make the spiders angry.

Chris Beall (15:03):

Yeah, it’s that kind. So we’re getting into the edgy stuff. So ChatGPT gave it a whirl, wrote some summaries, and then about each summary I asked a single prompt. It’s called prompt response kind of thing. And ChatGPT’s job, actually, is just to keep putting one word after another based on probabilistically what makes sense. This is statistical AI package. If you want to read about it, Stephen Wolfram wrote a brilliant article that explains it in a way that, every once in a while you’re going to want to skip some of the math, but it’s still pretty compelling to read. So anyway, just gave it a whirl. My boundaries for the experiment were 6:00 AM Saturday morning until midnight Sunday night. That’s all the time. And I wanted it done in two days, end to end. And so, most of my effort was copying and pasting. Just getting the cover Art from Dall-E, which is ChatGPT’s artistic cousin, was not trivial. So I’m down to 11 credits. I’ve only got 11 prompts left before it cuts me off. And then I came up with the one-

Corey Frank (16:18):

And since it’s so obvious on the folks, tell them how many prompts it took to describe your co-host here.

Chris Beall (16:24):

Well, here’s the term we used. Here’s what I asked for, I said I would like a book cover for a six-inch by nine-inch book, done in a minimalist Madison Avenue advertising style, that shows a … Now this sounds pretty bad, guys, but I had to do this. A tall, brown-haired businessman and a stocky, dark-haired businessman. Sorry, Corey. And a futuristic robot. Actually, the robot was the hardest part, because it kept giving me robots that looked like they were out of the 50s with square heads and all this. I finally thought, how about a futuristic robot having a conversation around a table. And it gives you three images and one of them was just, boom, that’s it. It’s like, you know it when you see it. So I snagged that one, sent it over to Susan, Susan did all the summarization work, by the way.

(17:21):

And Austin, our podcast editor, was the one that got her started doing stuff with ChatGPT. And my conclusion from all of this is that, what’s really interesting is not what comes out of ChatGPT when you start, but what it will learn if you tell it new stuff. So when we started, it thought Market Dominance Guys was a podcast by Nathan Latka. Now Nathan Latka is a fantastic guy, he’s out there doing great things and we would love our podcast to be as popular as his. But in fact Market Dominance Guys is our podcast and so I simply said to ChatGPT, “Actually Market Dominance Guys is a podcast with co-hosts Corey Frank and Chris Beall that explores blah, blah, blah.”

(18:07):

And ChatGPT said, “Oh, I apologize for my error before.” And then it explained to me what I just explained to it. So it does tend to talk a little nice. It started adding a paragraph of caution now. That’s a new feature I’ve noticed, that no matter what you ask it, after it does the, I don’t really know very much about this, and then it tells you a bunch of stuff. And then it says, “But don’t be so certain of this, you should check it out to yourself.”

Corey Frank (18:37):

Ask Tennessee to embellish.

Chris Beall (18:40):

I have a degree from Stanford, apparently, which I have since corrected. I let it know that my degree’s actually from Arizona State University in physics and education. ChatGPT said, “I’m trying very hard not to be disappointed to find out that Chris Beall doesn’t have an electrical engineering degree from Stanford.” No, it didn’t say that. So anyway, the book is out in ebook form in Kindle, supposedly coming out in paperback and hardcover. It is not 1/100 as important as Helen Fanucci’s book, Love Your Team, which is eternal. But it was a good experiment and I learned a lot. I’m still learning about prompt engineering. Very senior Microsoft person, when I described what I was doing, said, “Don’t ever say that again. Use the phrase prompt engineering.” I said. “Aye, aye, sir.” Prompt engineering is the new software development.

(19:35):

And you might have noticed, Microsoft made a little bet on this, about 10 billion dollars, three weeks ago. I’m going to make a prediction right here on the podcast that that bet will turn out to be one of the smartest things anybody has ever done in the history of business. This is quite remarkable. I mean, folks are using this technology to write protein sequences for novel proteins that kill bacteria because they just used the ones you already have and use them like a book. A little story. I have three applications that are in my head right now for using it to write stories about things like, well, what kind of people buy what kind of products, for instance? Or who should you maybe talk to next?

(20:22):

There’s some stuff you can imagine. ChatGPT’s thing is next, next, next, next. There’s a lot of problems that you can solve by saying, “I know this much so far, what’s next?” And that’s how it works. So I highly recommend getting yourself one, buy the Pro edition because you can do more with it. It’s cheap. And open AI, you can thank me for it, you don’t need any help from me anymore. But yeah, try to read the book. The book will be like the podcast so you’ll keep going, “I thought those guys were a little harder-edged than that.” It’s like, thanks, ChatGPT, you made it sound like nice dudes.

Corey Frank (20:59):

We’ll have it like the [inaudible 00:21:00]. We’ll increasingly get more and more attention as the story …

Chris Beall (21:06):

As the lion gets more fangs and claws.

Corey Frank (21:10):

It’ll be the unabridged version.

Chris Beall (21:11):

Yeah, the unabridged version. Well, let’s see, we have 150 more episodes that we can do this. So there’s plenty material for us.

Corey Frank (21:20):

Yeah and about 200,000 words in the transcriptions thus far.

Chris Beall (21:23):

Is that all?

Corey Frank (21:24):

Yes. [inaudible 00:21:26] talk last time.

Chris Beall (21:28):

Yeah, there are more coming out right now.

Corey Frank (21:31):

Any other questions for our guests here this afternoon? Helen, where’s the best place to find [inaudible 00:21:40]?

Helen Fanucci (21:41):

Well, I have a box of books to give to everybody here. And I’m happy [inaudible 00:21:46]. But amazon.com is where people are buying the book. It’s also in audiobook format, but I’m happy to sign a book for all of you.

Chris Beall (21:58):

The audio book is awesome, by the way.

Helen Fanucci (22:00):

There’s auditions and we picked a great narrator. And coincidentally, she happens to live about five miles from my condo in West Seattle, so that was completely a coincidence.

Chris Beall (22:15):

And our book, by the way our book Corey, myself, Susan, and ChatGPT, the book is entitled Market Dominance: A Conversation with ChatGPT, and we will have it read by a robot on the ChatGPT side. And since I asked the questions, I’ll provide the voice of the prompts.

Corey Frank (22:35):

Fantastic. Well thanks again, Helen and Chris, for visiting-

Chris Beall (22:39):

Thank you, Helen, for using ConnectAndSell. It only took almost four years.

 

 

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