Rick Management Show: How to sell into highly regulated markets

Chris was on Risk Management Show by GlobalRisk Community, hosted by Boris Agranovich.

In this interview they discussed the following questions:

• How GDPR, TCPA, and other regulations affect teams;
• How Chris has structured his IT team;
• Tips on how to sell into highly regulated markets;

Voicemail shows up as a ubiquitous feature in the business landscape around 2003. It becomes dominant by 2005 behaviorally to where pretty much I’ll say, everybody lets their calls go to voicemail as a means of screening. This results in a collapse of, I’ll call it the administrator economy, right? The number of admins plummets because voicemail takes over the number one role, which is screening calls and just screen them later. But the screening of calls changes to essentially reject all calls, unless it’s from somebody you know. So that’s what happened. So the phone, which is what we built the 20th-century economy on, the ability to talk to people remotely and have an emotionally rich conversation with the human voice, collapsed in 2005, unbeknownst to everybody.

Boris Agranovich (00:00):

Welcome to the Risk Management Show. I am Boris Agranovich, founder and CEO at Global Risk Community. Welcome to our interview with Chris Beall. Chris is a CEO at ConnectAndSell. The company is based in Silicon Valley and makes work from home for sales teams practical. ConnectAndSell gives managers perfect visibility control, real-time coaching and continuous improvement without violating anyone’s privacy. Today, we will talk about entrepreneurship and risk-related things like privacy regulation, facing sales and marketing professions. Chris, thanks for coming to our interview today.

Chris Beall (00:51):

Hey, Boris, great to be here.

Boris Agranovich (00:52):

Absolutely. My pleasure. Chris, tell us a short story about yourself, your entrepreneurial path and what you and your team at ConnectAndSell are up to these days.

Chris Beall (01:04):

Sure, absolutely. Well, I’m one of those guys that doesn’t make a great employee, and I figured that out fairly early in my career. My first entrepreneurial exercise was actually working at Martin Marietta, now Lockheed Martin. And I saw an opportunity to reduce risk actually, of losing contracts, of not winning contracts, by training all of our software engineers in the latest programming languages that were demanded by the US government, in particular, the Ada programming language and the Unix development environment, Unix operating system. And my approach to doing that was a little unusual. As a 27-year-old engineer, I started my own department and it was kind of like starting my own company. And we built the department up and it gave me my first taste of what it’s like to do something pretty big, ended up with a building of my own, and thousands of people going through the training and having lunch with Norman Augustine, the CEO, once a month.

Chris Beall (02:06):

And I got so interested in that, that sadly maybe for them and me, maybe not, probably they got lucky and they dodged the bullet, I went off and started doing software startup companies. And my view of all that is pretty simple, which is if you’re dissatisfied with almost everything, it’s easy to find problems to fix, and the easiest way to address a problem is to start a company to go after it. And what I’ve learned along the way, and ConnectAndSell is kind of the expression of this, is that we spend way too much time and we take on way too much risk building a product we don’t know will sell. And so the smart move, the low-risk move is to sell the product before you build it. And that’s really what I’ve learned along the way. And I teach that to everybody who’s willing to listen, but guys who can write programs, gals who can write programs, they like writing programs more than they like selling.

Chris Beall (02:59):

And so they tend to build the product before they sell it. So many things to me in entrepreneurship, and in business and in life have to do with the sequence of operations. One sequence of operations will be expensive and risky and the opposite might be low risk and low cost. And we often don’t ask our ourselves, what if we just did this in the opposite order, whatever it is? So instead of making a product, sell a product, what if we sold the product first, and then make the product that sold. That’s I think the big entrepreneurial question out there.

Boris Agranovich (03:31):

Absolutely. So, Chris, you are a sales guy and your product is mainly used by the sales team, but we live in a risky world of GDPR, TCPA and other regulations, so there is no shortage of risk to be managed. Could you perhaps tell us what is a major risk in your organization and how you are trying to manage and mitigate them?

Chris Beall (03:54):

Sure. Well, first I’ll speak to GDPR and TCPA in the opposite order, because TCPA is the older of the two, and ConnectAndSell is effectively a solution to a problem that TCPA put in place. So TCPA says among its many other things… Now I’m not a lawyer, so I’m not telling anybody how to interpret TCPA, mind you. See, I have to reduce risk by saying, “I’m not giving legal advice, but I’m describing something.” My understanding of TCPA is that it forbids parallel dialing by something that’s automated by a robo dialer. You can’t do 3, 4, 5, 6 dials at a time. But in the modern world, since it’s about 23 out of 24 phone calls after navigating a phone system, will go to voicemail. And voicemail is a dead letterbox in business. If you don’t know me and you leave me a voicemail, the chances of me listening to it and calling you back are so close to zero as to be not worth calculating.

Chris Beall (04:52):

So here, we have this problem, right? Voicemail shows up as a ubiquitous feature in the business landscape around 2003. It becomes dominant by 2005 behaviorally to where pretty much I’ll say, everybody lets their calls go to voicemail as a means of screening. This results in a collapse of, I’ll call it the administrator economy, right? The number of admins plummets because voicemail takes over the number one role, which is screening calls and just screen them later. But the screening of calls changes to essentially reject all calls, unless it’s from somebody you know. So that’s what happened. So the phone, which is what we built the 20th-century economy on, the ability to talk to people remotely and have an emotionally rich conversation with the human voice, collapsed in 2005, unbeknownst to everybody.

Chris Beall (05:43):

So ConnectAndSell was formed in 2007 to bring the human conversation, the emotionally rich conversation back to business, so we can build trust. Because without trust, all you have is risk. I mean, if you don’t trust somebody, your view is, they’re too risky to buy from. That’s all there is to it in business, because we risk our careers when we buy in business. So what ConnectAndSell is effectively, is a response to TCPA by putting humans in the loop on every single call. So now, instead of it being a robo dialer, it’s humans navigating phone systems on your behalf, but they’re specialists. All they do is navigate. They never talk to the target. They can listen to the target. Here, I’m on your list. I answer the phone. You’re using ConnectAndSell. “This is Chris.” Boom. The next voice I hear is yours. “Chris, Boris here.” I know I’m an interruption. “Can I have 27 seconds to tell you why I called?” I go, “Sure. Go ahead. Shoot, Boris.” Right?

Chris Beall (06:40):

So now, we’re TCPA compliant because we’ve taken the problem of the robo dialer, which is, it’s illegal. And by the way, it doesn’t navigate phone systems or talk to gatekeepers. We’ve enhanced it to navigate phone systems, talk to gatekeepers and be legal. So that’s a technical response to a risk situation, which we often have in business. There’s some technical response. The guys at Boeing know a lot about technical responses to risk situations in business. So you can’t buy an insurance policy against TCPA violations if you’re going to violate willy-nilly, right? You’ve got to do something about it. Your D&O insurance is only going to go so far, if you’re not mitigating. So we’re a mitigation. Think of us like anti-lock brakes. There is a point in the US car industry where if you didn’t have anti-lock brakes and you’re a manufacturer, you could have had them and therefore, you become accountable for the accidents that could have been prevented because the state of the art was there. So we play a similar role for companies that want to do outbound phone calling.

Chris Beall (07:45):

When it comes to GDPR, GDPR is fascinating. Because GDPR basically harnesses or attenuates our ability to use email, unless we have opt-in, unless somebody’s agreed to be emailed. It turns out it’s very easy to get opt-in, just talk to somebody. There’s nothing to it. Just give them a call on the phone and talk to them. Right? But if you can only talk to two people a day, you can’t get very much opt-in. So ConnectAndSell is super popular now in Europe because of GDPR, because it is an efficient way talking to 30, or 40, or 50 people a day to get opt-in almost every single time. Because you just say, “Hey, I know you’re not interested. Is it okay if I send you some information?” Boom. And you have the record of the opt-in with the human voice and you’re good.

Chris Beall (08:37):

So it’s kind of ironic that GDPR, which a lot of people said to us, “Man, this is going to hurt your business.” And I said, “Well, it’s only going to hurt my business if it becomes illegal just to call somebody on the phone.” And I think it’s okay as long as they say, “Take me off all list,” you do it. Right? So it’s ironic, I guess, is the view.

Boris Agranovich (09:01):

So you’re a GDPR enabling company, just by switching from email first to call first, right?

Chris Beall (09:09):

That’s it. And here’s the other irony, just to finish that. When you send an email, your chance of a reply is almost zero, but when you speak with somebody and you send them an email, the reply rate goes up by a factor of 14.

Boris Agranovich (09:26):

Interesting.

Chris Beall (09:27):

14 times better. So suddenly, your email actually not only is legal, it starts working.

Boris Agranovich (09:32):

Yeah. Yeah. I know this is kind of interesting, but what are your tips on selling into highly regulated industries, such as in insurance and banking? Because I know there are different stories to tell about selling to small shop, like five, 10 people, or bigger bank, or insurance company, which is regulated.

Chris Beall (10:00):

I don’t know if there’s a difference other than you need to start high. When you sell into regulated industries, is to start in your first conversation with somebody who is able to speak for the company. That is if you start at a manager level in regulated industries, the response will be, “I’m sorry. I can’t really do much for you. I can’t really explore this.” Because regulated industries tend to have more approval required for purchase actions. And so you’ve got to be able to start high.

Chris Beall (10:35):

So I have a friend right now who is with an insurance company and insurance brokerage, not yet free to say who they are, and they’re calling only chief financial officers and primarily in regulated industries. And so that’s a safe call because the CFO is free to speak with you about their business and what its relationship is to its regulatory environment and its regulatory stance. Whereas a manager on the business side, might not be, and they’re going to have to seek that approval. So my advice to folks selling into regulated industries is just making a first call and you’re going to have to endure a lot of dials. I mean, if you use ConnectAndSell, you don’t. You just push a button, but you’re going to endure a lot of dials because these people are not easy to get a hold of. But guess what? Nobody’s calling them. They’re very easy to talk with.

Boris Agranovich (11:28):

So how does it work? You have a list of people you want to talk and you just feel it in the system, and you wait in your headphones and people come to you?

Chris Beall (11:42):

You got it. You load up a list, you dial a single phone number and you pick the list, right? And that’s it. When you want to talk to somebody, there’s a big green go button. We made it green, because that’s the color of money. And when you want to talk to somebody, you click that button. It is identical to calling a Lyft, or an Uber, or whatever. There’s no difference. But you get a conversation instead of a car. So what’s more valuable, conversation with the CFO of a big company you’re trying to get a hold of or a car? Well nowadays, cars can’t take you anywhere anyway due to COVID. So the conversation has got to be worth more.

Boris Agranovich (12:18):

So tell me how is your team structured? How do you manage your IT structure? Are they outsourced partially in the United States? And what do you recommend for startups planning to create SAS tools that will dominate markets as your tool with regards to finding and managing IT teams?

Chris Beall (12:43):

Well, number one, I think everybody knows this, but go to a public cloud right at the beginning. I think everybody knows this. Go to Amazon, go to Google cloud, go somewhere. So their regulatory work, which is massive in yours to your benefit. With regard to physical access to the computers, how are the servers managed, blah, blah, blah. Number two is, this is hard if you are not technical. You’re technical. You have a technical background, right? I’ve written a million lines of code myself. So I actually know what the issues are. And it’s very, very tricky to take advice around this kind of thing. So my advice is do pen tests early, penetration tests early, because guys like Bugcrowd will come in on your very first product, and it seems expensive, it’s crazy. “Oh my God, I’m not going to spend that much money.” But what they’re telling you very early on are things that you can bake into the architecture and avoid entire classes of problems. Because frankly, it’s not just the appearance of risk. There’s real risk. Once you get interesting, there’s real risk.

Chris Beall (13:53):

And so, where the development is done, I don’t think is particularly important, except work with somebody who’s really reputable and does products, not support. So if you’re going to go outsource to overseas, we work with a company called, Coditas in Pune, India. Yeah. And we work with Coditas way back in the day, even before I was at ConnectAndSell. My CTO and I worked with these guys to set up leading edge product development in India. There’s IIT guys, and gals are really, really bright, but they needed to be brought together to focus just on product development.

Chris Beall (14:34):

So don’t try to repurpose an offshore support team of some kind or whatever. You need top hands. You had mentioned that you had taken the mathematics Olympiad when you were in Russia. My friend, Vlada Matena, a Czech guy, got the silver medal in that thing back in the day. Well, how hard was it for me to hire him, right? It was like a two-second interview. I look at his resume. Here’s this guy, silver medal in the mathematics and physics Olympiad. You’re in, unless you’re a murderer or something. And even then, I might just have you sit a little farther away.

Chris Beall (15:15):

So you want real, real top people. Software development should never be done for serious products, except by the very, very best, because one person is 10 people. And you keep the risk down oddly enough by keeping the size of the team down. And then the fourth thing is, if you’re not technical, make them explain it to you anyway. Have regular meetings where you get walked through the architecture and make them explain it to you like you’re six years old. Because frankly, anything can be explained to somebody like they’re six years old and it makes safer products.

Boris Agranovich (15:56):

Absolutely. So you’re saying that if you are trying to build a product, you are wasting your time, but you should be building a team instead, a team of talented developers, marketers, customer success agents, and salespeople. Can you explain? You just told me that you have an outsourced team in India. How your team has been built? How the product was built and how you sell it? So you first find some top guy like a CTO, and then he develops team in India, and then you start testing your software? Just to understand this process.

Chris Beall (16:44):

Yeah. I was lucky here. This product, the 1.0 was already built. And I joined the company five minutes after meeting Shawn McLaren, who’s the CEO at the time. And I joined just because I couldn’t believe that this existed and that I didn’t know about it. I was embarrassed. How could I not know about something in business to happen 10 times faster that’s important, which is talking to targets. How can that be? So I just joined. I just told Shawn, “Look, I’m working for you now.” He said, “What if I’m not hiring?” And I said, “It’s a personal problem. I’m working for you. It’s a free country.” Right? So I said, “It’s up to you if you pay me or not.” So he laughed. I said, “I recommend paying me. It stabilizes the employer-employee relationship I’ve heard.” So it’s a good thing.

Chris Beall (17:35):

So I had a team. We ended up shifting that team out and getting a US team that I happen to already have. Hiring experienced people like myself, is a cheat. It’s a good cheat because we come with all this talent that we know about. So I had somebody from my previous two companies before that was ready to come on board as VP of engineering. And so we did a 2.0 and its purpose was scale and to get to the web. This was like a desktop product and it needed to become browser-based, which was very hard for this product, by the way. So those problems, and then we made a 3.0 almost from scratch. And we did that in India with the Coditas team. There was another team to start with.

Chris Beall (18:17):

So I think it’s an iterative process often. And we did this all while servicing real customers, some of the biggest companies in the world, IBM, SAP, folks like that. So we took the product apart and put it back together repeatedly. And one thing we’ve done, which is not available to everybody, but if you can do it, do it, we only used our product to sell our product. So we’re so utterly dependent on it that we don’t do anything else. We don’t send emails. We don’t advertise. We don’t do anything else. We just use our product. And so we must make it work or else, we fail before we get started.

Boris Agranovich (18:58):

Oh, fantastic. So you don’t have to hire to make a lot of advertisement, hire a lot kind of expensive marketing team. Just use your product to sell your products. This is kind of perpetual, more or less, as they say it.

Chris Beall (19:19):

I told you, I’m an old physicist, man. I don’t believe in perpetual motion, but I believe in reducing friction to almost zero if you can.

Boris Agranovich (19:26):

Oh, this is worthy. So let’s talk about personal opinion. So you are doing a lot in the sales and marketing business. So what is a commonly held belief, for example, in the sales industry that you strongly or even passionately disagree with?

Chris Beall (19:54):

That you can sell in business to business with digital means only. I think it’s a crazy proposition and the reason is simple. The business buyer is inherently risk-averse because they’re risking their career. So the company’s risk is secondary to their personal professional risk. And as a result, they must trust the seller more than they trust themselves because the seller is an expert. So how do you get to that level of trust? You can’t do it by sending… but it seems like digital sends a lot of information. But think about this. In our conversation right now, we’re conversing at a bit rate of a minimum of 20,000 bits a second, right? And an email only has 5,000 bits in it. So if I send you an email and you read my email, and it takes a certain number of bits for you to trust me, say 600,000, 700,000 bits, that email has 5,000 bits.

Chris Beall (20:47):

I’ve got to get you to read 30, 40, 50, 60 emails in a row, understand each one perfectly, and then grow to trust me, or I can talk to you for about 20 seconds, right? So the human brain is built to evaluate the trustworthiness of people based on their voice. It’s what it’s built for. It’s an ancient capability. We all do it. We’re all really good at it. And almost nobody can fake it. Now sure, there are psychopaths who could fake it. So look out for them. But most people actually express their sincerity. The fact that they’re on your side and their competent through their voice, through the tone of their voice, and the way they choose their words. And it’s very different. So digital techniques only have one advantage, they’re cheap. And everything is cheap. Gresham’s law tells us, right? Bad money drives out good. Cheap communication drives out good communication in business.

Chris Beall (21:49):

And so we get flooded with emails. We get flooded with social. It’s like, “Oh, now I have InMails.” Great. You get flooded with InMails. “Oh, I have social outreach on LinkedIn.” You get flooded with that. You get flooded with cheap stuff. Podcasts are not cheap. These are expensive, right? They have to be set up. That’s why people gravitate. That’s why people come to Clubhouse. Clubhouse is expensive. I have to spend my time and there’s no recording. And I hear those human voices. So I think human voices is the essence of beginning trust relationships. And without trust, we can’t ever do business, especially if we’re innovators. The number one risk to the innovation economy is lack of correctly conducted first conversations with people who might eventually become buyers.

Boris Agranovich (22:38):

Fantastic. So looking broadly into your industry, what are the major trends you see? What should we expect from you guys in the future?

Chris Beall (22:50):

Well, work from home is here to stay. And it’s because in the big companies, the major executives have moved away to their retirement home keeping their jobs. It’s a brand new phenomenon. It never happened before in history. And these are the decision-makers. So are they going to decide… We just bought a house in Tucson, Arizona, south of Tucson, my fiance and I. And we bought that house because she doesn’t have to go to Microsoft headquarters anymore. So she manages a pretty substantial quota. Think nine-figure kind of quota, maybe it’s 10. 10 figure quota at Microsoft. And so she was free because Microsoft just had to work from home to move. So we bought a house two hours away from headquarters, and now we bought one all the way at the Mexican border.

Chris Beall (23:40):

And you think she is going to say, “Hey guys…” A coyote is right over there. It just went by a minute ago. So that work from home thing that’s happened, I call it a mousetrap in the economy. It has snapped. It will never be reset. The mouse is dead. And it changes everything about business. Work from home does. So for instance, somebody might say, “Well, travel comes back after COVID. So can’t I go knock on doors of companies?” Well no, because you don’t know if their people are working there or working from home. So your risk of knocking on an empty door goes up so high, you won’t get on an airplane. So now you’ll need an appointment, but you may as well meet at a restaurant. So it’s huge what’s going on. Everybody in business is betting too small on the impact of work from home. They think they are making bets, but all they’ve made so far is an adaptation. The big bets are yet to be made.

Boris Agranovich (24:40):

Oh, fantastic. So summarizing, if someone who is listening to this interview would like to walk away with one or two major takeaways, what it would be?

Chris Beall (24:54):

Number one is look at the role of conversations in your organization. Are your people talking to enough people? A good standard for top of the funnel is top of the funnel sales rep should be talking to 30 to 40 decision-makers a day. Yours are probably talking to two or three. So you’re taking a 10 to 15 times risk that you shouldn’t be taking. Your pipeline is at risk. I know somebody in the insurance industry that’s actually fielding a product that is addressing pipeline risk directly, because they’re saying it’s the number one risk to growth. And if we don’t have growth, we risk everything in business. So that would be number one.

Chris Beall (25:32):

And number two, ask yourself as a leader, “Am I having most of my conversation internally or externally?” Just look at the proportion. Take your day and map it out. What percentage of the conversations you are having with folks who work for you? What percentage of the conversations you’re having with people who are your existing customers and what percentage with folks who are potential future customers? And if you’re not having 60% of your conversations with potential future customers, including those you don’t think are important because those are the ones who will turn out to be important, adjust your schedule.

Boris Agranovich (26:07):

Fantastic. So I think that’s all my questions. Maybe if I forgot something, would you like something to add to our audience?

Chris Beall (26:20):

I have a podcast on my own called, Market Dominance Guys. If you want to hear some weird stuff, we’re at episode 75 and it’s a cookbook on how to dominate markets. I believe you either dominate or you go out of business. So my view is that the number one risk issue in business is lack of market dominance. And most folks don’t even have a plan to do it. So it’s a cookbook for market dominance.

Boris Agranovich (26:46):

Certainly, I will subscribe because I’m looking to grow my company. And I think you are kind of doing what you are saying. So I think you were one of the guys that not only teaching the stuff, fluffy stuff that they never sell anything in real life, but you are actually doing this stuff that you are talking about.

Chris Beall (27:18):

Yeah. Thanks. I try.

Boris Agranovich (27:21):

All right, Chris, thank you very much. I think it was fantastic to hear your opinion. It’s a different world, but as you explained, we converge on that as the biggest risk that we don’t sustain our business with great pipeline. So your tool is actually very fantastic that can be of help of risk managers as well. So I think we will talk probably maybe next time about your progress in few quarters or whatever you extend into, expand into Europe as well, as you told me.

Chris Beall (28:08):

Yeah. We’re expanding into Europe and I’m working with the guys at HUB International on really, a market dominance program for the commercial insurance industry. Their view is that sales, their own pipeline, is the bottleneck of their business. They have generated using ConnectAndSell in the first two months of this year, plus two weeks. They’ve generated 551 meetings with CFOs to talk about a global risk reduction program that includes reduction of pipeline risk. And we are seriously talking with them, that’s their idea, not mine, about revenue insurance, about going to somebody who’s a little adventurous like Lloyd’s of London, and having enough data that we can generate on a company’s pipeline through a clause that insurance policies can be written against revenue shortfalls.

Boris Agranovich (29:03):

Wow. It’s something that I never, never heard of. I heard about Gong [inaudible 00:29:11]. They kind of analyze sales conversations, but they’re just to improve kind of performance of sales. But this, I never heard about revenue insurance. Well, it’s a completely new world.

Chris Beall (29:29):

Yeah. We’ll see if we do that one together. They’re very serious about it. And these guys are serious guys. I mean, they’re their chief strategy officer is really, really smart. And their chief sales officer is a beast. So he just called me right before this. He called me before this to complain that he said, “Hey, for our blitz this morning that we’re doing with our 35 people, I was in the waiting room for two minutes. And your guy didn’t let me in for two minutes.” I apologized to him. I said, “It was a new guy. Just call me. I’ll make sure that you get it.” He says, “Okay. But two minutes is two minutes.” I like you.

Boris Agranovich (30:15):

Fantastic. Thank You. Thank you.

Chris Beall (30:19):

Thanks so much, Boris. This is really great. I’ll talk with you later. I look forward to show B&L.

Boris Agranovich (30:28):

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Boris Agranovich (31:17):

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