In this interview, Steli, CEO of Close, shares how his sales teams turn users into happy, paying customers.
Wes Bush:
I'm just going to hit the record. Hello everyone, so my name is Wesley Bush and I am the host of the Product-Led Summit. And today, I am so excited to share with you, Steli, who is the CEO of Close.com. Now, Steli has had a really interesting journey to creating Close.com. He has helped tons of Silicon Valley startups, really just grow with sales. And so as he's been doing that with this consultancy initially, he started developing an internal product. And long and behold, they found that this product was absolutely incredible, and so many other people just wanted to get their hands on it. And so, one of the things that I think they have done an incredible job, is just innovating on the way they sell. And so, I'm really happy to share with you some of Steli's thoughts around how to use a sales team to turn free trial users into customers. And so, before we really get into the main meat of this presentation, I'd love to just hear, around your thoughts of why did you build Close.com, Steli?
Steli Efti:
Yeah. What a great intro, by the way, thank you so much for that. So, why did we build it? I always say that we used exactly zero strategy and foresight in the way we came up with Close. We originally started as an outsourced sales team on demand for SaaS companies in Silicon Valley, that had raised at least a series A. So the idea, the hypothesis was that there were... This is in 2012 or so, early 2012. At that time in the Bay area, the SaaS based sales was kind of a dirty word. All companies want it just to build viral enterprise, a B2B app that would grow on their own, not needing any sales help.
Steli Efti:
And so, we knew that there were a lot of incredible companies that had innovated, built great technologies, that were really struggling acquiring customers, and had very little internal expertise for sales team. And we thought that that was a big opportunity to provide them with sales expertise, and help them hire sales teams. And the idea was to build something like Amazon's AWS, but instead of servers, you would have sales reps. And you could just like spin up, you just go online in admin and say, "I want a hundred sales reps selling my product," and boom, an hour later you would have all these sales reps deployed for you. That was at least the vision, we never got fully there.
Steli Efti:
So, as we started doing all this selling for all these difference venture backed SaaS companies, from day one I had been doing, I've been an entrepreneur my whole life, but my superpower as an entrepreneur was always sales if there is any. And so, I knew I hated all the sales software that was out there. And two of my co-founders were developers, were engineers. So, we took those two simple ingredients together. I was like, I have these two dev guys, and I hate sales software, and I was the first salesperson we were renting out. So we just said well, if we do this, let's just build really killer sales software to help our sales reps be more productive, be happy at work. And maybe the software is going to be the foundation that's going to allow us to scale this massive sales organization around the world. That was it, that was the entire thesis of vision for the product.
Steli Efti:
And as we started developing the software, the really unique position we were in was that we eventually, we had a room full of sales people, selling for, I think in total we did over 200 venture backed SaaS companies that we did Salesforce. And the engineers were in the middle of the room, kind of enveloped and surrounded by sales reps. And so, we had this kind of secret sales lab in the heart of Silicon Valley, and it was a very tight feedback loop of the sales reps turning around and screaming at the developers, that this sucked, "Why do I have to deal with this?" Or the engineers looking over the shoulders of the sales rep and saying, "What the hell are you doing? Why do you have 400 windows open? Why do you have all this paper around you? Why are you doing all these weird things?"
Steli Efti:
If you know developers really well, you know that they're lazy in the best way possible. They want to be efficient, they want to be really productive. They would look at our sales rep and go, "What the hell are these people doing? They're so inefficient, all day long with all the stuff they're doing." And that feedback loop back and forth, really developed a unique vision eventually. And at some point the product, the software started to become better and better and better. And then slowly but surely internally, we got that sense, people started talking about the software might be the future of the business, we have something really awesome. And our sales reps started showing the software to other friends that were in sales, and we're like, "This is exclusive to us. Nobody else can have this."
Steli Efti:
And then we started getting our clients to ask us if they can buy the software, not just the services. And that was the final straw that made us go, all right, maybe we have something here, let's release the software and let's just see. And honestly, if today the story was that we had built a really amazing piece of sales software, and nobody cared, and we totally failed with it, it wouldn't surprise me. But we hit a nerve in the market, and we did quite well with it so far.
Wes Bush:
Awesome. And I love that feedback loop, for your engineering team. That's so rare, where they can just look in your own team and see how people are using it. Because I know for a lot of engineers, it is often pretty hard for them to see very quickly how people are using their software. But if they're on the same team, there's a lot less barrier to entry there to kind of see that, improve the product, and get it out in the market, so that's fantastic. And so, I'm really curious, from that beginning in sales and really helping so many of these companies, help them with their sales teams and grow, how do you see sales changing that point to now, for software companies specifically?
Steli Efti:
Yeah, so a lot has happened since then. So we launched Close in 2013, we started the sales consultancy in 2012, maybe. So this is, I don't know, seven years ago, this is ancient. So, the biggest thing that changed has been the culture around sales. So, sales and selling has never been the most popular thing on earth, and it will never be no matter where you are in the world. It's funny when you're in Europe, people think that Americans love sales, it's just Europeans that don't like it. It's just not true, nobody really enjoys selling, it's just to what degree they don't enjoy it. But I think especially in SaaS and in the startup scene and software scene, it moved from, "Sales is dead, we don't need salespeople anymore. Having salespeople is inefficient, it's dumb. Let's just build awesome software that grows itself," to, "This is a business, and salespeople works, and selling works and it's effective. And so, we will need to build expertise and become good at it."
Steli Efti:
And I think today, if you start as a SaaS founder today, and you read up on the latest wisdom on how to build a great SaaS company, you won't find a lot of like, "Don't hire salespeople, don't build sales teams." There's actually a ton of expertise out there on how to do it well, and why you need to do it. I think to a large degree, we helped change the culture on selling. We created a ton of content, a ton of education, really tried to help change the way people felt about it. So, I think today it's much more embraced as a part of doing business, and people are not as maybe... I don't know the right word right now, it doesn't pop up in my mind. But they're not as dreamy about doing this, building a company being like, if you're a software business, all you have to do is build a really amazing product, and it build some virality sprinkles in it, and then you lean back and it just explodes, and money rains on you.
Steli Efti:
I think today, even when we're building a software company, we think about it as a real business. And we understand that there's operational things that come with it, and there's marketing, and selling ,and all these things that we're going to need to be really good at. And we can't just rely on the software doing all the heavy lifting on its own. So, I think that that was a big change. Then there's been, with that embrace, there's been a lot of software that's been developed to make sales teams more effective and salespeople more productive. The last five years have been an incredible innovation around selling, in a way that sales has been neglected for the 50 years prior to that. And again, I think that we played a small insignificant part in that change and building more and more tools to help salespeople do their job better.
Steli Efti:
I think there's still a bit of confusion, especially in the SaaS world on how to do sales well, and we can talk about that if you're interested in it. So, I think that culturally, there's still a little bit of a confusion. There's some companies are like, "Let's go back to the," I don't know, "Wolf of Wall Street days. Let's just hire these hyper aggressive, killer sales reps that go over dead bodies to get to money, and let them loose." And then there's the exact opposite approach of it, which is the, "Well, we don't want aggressiveness. We want to build a great brand, we want to treat our customers really well. So let's hire these hyper-nice, hyper-reactive, kind of information, more like teachers that will wait for the prospect to ask questions to them, give them more and more information, more kind of a concierge or a supporter service of sorts."
Steli Efti:
Both extremes have terrible outcomes for different reasons, so I think that culturally we're still, we haven't found, although the market yet hasn't really found a way to embrace a new model of selling, and understand how to build these sales teams that can be both competitive and friendly, strong but friendly. And that's kind of the model that we're teaching. And then there's the big, I think, hope of artificial intelligence and AI, which in today's marketing terms, we throw around as if it already exists. Everybody has AI in their product, and there's zero I, there's a lot of A with very little I in most of these products. And it's just a marketing term, but I think there's this big vision that at some point software is going to replace the sales people. There's going to be some software program that's going to be sending out emails, responding in chat to customer inquiries, doing virtual demos, sending a contract and collecting the money, and so humans will not be really necessary.
Steli Efti:
And I don't totally agree with that vision. I think parts of these things will probably come true, but not all of it. But I think that that's where we are today. I think companies are better at understanding they need to build sales teams to sell their product, no matter how awesome their product is. But I think there's still a lot of confusion on, how do I hire salespeople and who should these people be, and how should they act with my customers, and how much should I enable them with technology and data, and how much should they do with just their muscle and their sweat equity? I think there's still a lot of insecurity, and I see teams be all over the place in SaaS when it comes to that.
Wes Bush:
Definitely. And I couldn't agree more in terms of the biggest differences. You mentioned the polar opposites, like the challenger sales kind of model, and then that more support driven model for sales, and really just guiding the user through it, making sure they're successful. And so, I definitely agree that if it's a challenger sale, they're great at really helping people understand, because you're telling them the value. But with the more support related approach, it usually goes great with a free trial, freemium model, where you're actually showing people, "Here's the value prop, try it out for yourself and see how it works." And so, I'm curious to just hear in your perspective, when comes to companies that use a free trial or freemium model, how does the role of sales change?
Steli Efti:
Yeah, that's a really great question. Well first of all, it's a much simpler model, because people come to you and they tell you that they have a problem, or they have a desire, and they are trying to figure out if you can help them with their problem, or satisfy their desire. So, that's beautiful, and they come and they sign up, so they give you their contact information. And then they experience your product or get exposed to your product in some way, even if it's just the first 10 seconds of the trial onboarding screen. And even if they leave immediately, they've been exposed to a little bit of what you do on your website, on the free trial.
Steli Efti:
So, it's a much warmer interaction, and it's a much more welcome interaction because the prospect told you they're interested in your product. I think the ideal scenario, the way that we think about this, is I always teach the model of friendly strength. Or maybe as a metaphor, the way you want to interact with these prospects or these free trials, is you need to think about them almost like, let's take the example of a good doctor. Let's say your sales reps are specialists doctors, and every trial is sort of a patient, that comes to you with a pain point and is trying to figure out how to alleviate that, or how to solve that.
Steli Efti:
Now, I think both approaches don't work perfectly. You can't be hyper-aggressive in the sense that, imagine walking into your doctor's office, and before you even sit down, the doctor's like, "Wes, I know exactly what you need. I'm going to prescribe you five things to take, and a surgery next week, and it's going to solve all your problems." You won't feel really good about this.
Wes Bush:
I'd be excited.
Steli Efti:
Yeah. You'd be like, holy shit, I didn't even say hello. How does this person know what I have? It's impossible that this diagnosis is correct, or these medications are things I should take. But you know this is not a good environment, and this person probably is only driven by profit. You won't feel comfortable, you won't trust that doctor, you won't do anything that doctor tells you, hopefully. So, that's not a good model, so you don't want to have somebody sign up with an email, and the first thing you do is you call them the next second, you hard sell them, "You need to buy our product. Here's the five reasons our product is the best product. What's your credit card number? What? You're a wuss, you have to think about it? What's there to think about?" You don't want to be an A-hole, and pretend that your product is the right product for everybody. You don't need to know anything, they just need to give you their credit card. That's a terrible model, that won't work.
Steli Efti:
The flip side of that, so that's hostile strength, the flip side of that is friendly weakness, which is also not great. It's the idea that these people, the modern patient is so sophisticated, and so informed that when that patient comes to me with problems, I'll sit there as a doctor and I'll go, "Yeah, that sounds really bad. Have you done some research on what you want?" The patient goes, "Yeah, well you know, I did look up WebMD and I did a little bit of Googling, but I don't really know." You go, "Yeah well, who really does? Even modern medicine isn't perfect. We can do a number of tests and I can tell you some ideas, but really I'm not a God, and there's many different forms of medicine. There's Asian medicine, there's homeo-therapy, there's doctors that disagree with my assessment. So, I'm going to provide you with a lot of information, a bunch of books, a bunch of research, and another 10 doctors to go and get research from. And then I think that you should be empowered to make your own decisions. It's your body, it's your health."
Steli Efti:
That's not what we want. If I have pain, I don't fucking want that, I don't want a doctor that's like, full of self doubt, "I don't really know. I just have information for you," no. What we want is what I call friendly strength, we want somebody that's friendly because they care about us. They truly want our wellbeing, they truly want to help us accomplish our goal. They care deeply, and they're honest in their care. So, the doctor at first, when you step into the interaction, asks a ton of questions, looks at you holistically, tries to understand who you are, what's the stress in your life, what else has happened that could be associated with this pain?
Steli Efti:
Then the doctor does a few tests, he informs you why he does these tests, why these are important. When the results come back, he'll go through them with you carefully, he'll offer you some of other opinions. But at the end, he'll look you in the eye and he'll go, "I've done this for a really long time, I've seen many, many cases. I know what you have, and I know how we're going to solve it. You trust me, you do what I'm telling you, we're going to solve this for you." That's what we all want. That's when you go, finally I have a doctor, somebody who knows what's going on here. And we all crave for certainty, we can't be experts at everything.
Steli Efti:
And the same thing is true for your product. No matter what your product is, your customers, your prospects, they're not experts in this field. They haven't used all the software in the world, they don't know all the implementations. They're not doing this their entire life, like you do every single day. They're doing this once for like a week or two or a month or two, then they forget about it, and maybe two years later, they'll have to go back in the market and look again at what software exists in this category. They're not experts, and they don't want to be experts. They shouldn't want to be experts.
Steli Efti:
So the ideal model when trials come in, is you need to work with those trials to identify what do they want and why? What is going on in their world? What are the alternative options? What is really important, and what is nice to have? And then once you get a picture that they are truly qualified, and your solution, your product is the best product for them, then it's not the time to ask them to buy, and you're just telling them to buy, then you take over. When I sell to somebody, they always, or most of them they'll buy, because I will spend so much time trying to understand you before I make any kind of proclamation to purchase my product, that by the time I tell you, now that I've learned all these things about you, I can tell you we're the right solution, and here's why. Here's how much you're going to buy, here's how we're going to implement it, and here's why you're going to see incredible success.
Steli Efti:
At that point, I'm not asking, I don't have doubt. I take over, and prospects love me for it. I love salespeople that are trustworthy, and that at some point take over and say, "Steli, I got you. I'm an expert at this. Here's what we're going to do, and here's why it's going to be right for you." I go, hallelujah, finally. I don't want to know everything, I don't want to be an expert in everything. So, that model of first qualifying the inbound leads and spending a ton of time understanding them, but then once you understand them, having a sales team that infuses confidence, that infuses clarity into the sales process, that tells the customer what to do and how to do it, and why they need to do it. And there's no doubt, there's no options. You take over, you actually limit the options, you give them this solution, is something that works incredibly effective, and something that is just a culture mentality challenge that startups have, where they fall on opposite end of the spectrums.
Steli Efti:
But if you will find your middle, you can be incredibly effective. You'll convert a lot more trials. It's not just about converting them and making money, they will love you for it. Because they will feel in good hands in your team, they'll be like, this is a company that knows what it's doing, these people are experts. They treat you really well, they have real clarity, and I want to do business with this company for the longterm.
Wes Bush:
Yeah. And I totally agree with that, and just understanding your customer, when people feel that they're understood, it is just a game changer for them. Because they really do trust you, hopefully by that point, because you're actually trying to understand them and put in that work. But one of the things I find for a lot of people who are going to be listening here, is it's just hard to find the right people. And there's been, especially at the last Product-Led Summit, there's been quite a few people who have had to actually fire their entire sales team, because they hired, let's say the challenger sales, typical sales team. And they just went after these big, big deals and that wasn't actually the right fit for their business.
Wes Bush:
And they found out later the hard way, that they had to find someone more like what you just mentioned. And so, for some of the SaaS companies who are listing here, what are some of the tips you recommend to really find those people that can get really good at understanding your customer, but not go too far over on the right-hand side, and prescribe them like 10 books to read about this, but really just help them, and do a good job of that?
Steli Efti:
Yeah. It's always going to be a challenge. And it's always going to take a while to realize if you really hired the right person or not. I've hired so many salespeople, I'm a sales thought leader, and you'll never hear me say the words, "I just hired a great sales person," because I don't know, I need to wait and see. But here's four quick steps, and for people that want to know more about this, I've written a whole book on sales hiring, especially for SaaS and SATA founders. You can just send me an email steli@close.com, sales hiring book, and I'll send you a link for the free book for you to download. But there's essentially four steps here-
Wes Bush:
Just to jump in here, I'll also put it in the notes for everyone else to jump in and just find it. So, yes, perfect.
Steli Efti:
Awesome. So, there's four steps, I'll run through them really fast, but then when you're like, "Wait a second, this is amazing, but I need more information," you'll get the book for free and you'll be able to read through everything. And then if you have more questions, you email me and I'll answer them. But here's the way that you need to think about this. Step number one, is you have to sell yourself. No matter how little experience you have in selling, no matter how much you think you're not a salesperson, it doesn't matter. If you're the founder, you sell. You do it poorly, you do it badly, it doesn't matter. You do it. You need to be close to your customer, you need to have customer intimacy. And you need to embody that principle of listening, asking lots of questions, caring about the answers, getting to a point where you understand the customer. If you don't understand them, how are you going to build software that's going to solve their problems?
Steli Efti:
And once you understand them, then you take over and you tell them, "Here's how my product is going to solve your problem, and here's what you need to buy." You do it yourself first, there's no way you can skip that step and just hire a bunch of people, and then rely on their intel and their opinions on how to sell and how to build your product. There's no such thing as second hand insights, you need to generate those insights as the founder or the founding team. So, first you sell yourself. It doesn't matter how good or bad.
Steli Efti:
Then the second step is you hire more junior sales people. You don't hire somebody with 10, 20 years of sales experience, that person's going to ruin your life and ruin your business. If somebody has 10 years plus experience in sales, and they're still around, if they're successful in selling, you cannot hire them, it's impossible. These people should be making millions of dollars a year. People that are really good at sales and have been in sales for a long time, are not hireable by you. You're a little startup with no customers and no product market fit, you shouldn't be able to hire these people. With the caveat, if it's your mother or your brother or your neighbor, or somebody you know really well, maybe that's different. But they shouldn't apply to a job post you posted somewhere, no. Don't hire anybody with many years of experience, the only ones that will apply for a job are the ones that are not good at selling.
Steli Efti:
So, you hire somebody more junior, that seems to be hungry to be part of a startup, maybe hungry to be part of something at the very beginning, that has that competitiveness in them. Maybe they've done sports in school. I always find that team sports is a really good place to look for talent. People that excelled a team sports are really good at sales often times. Very competitive, can go through pain, have discipline, but they can work well with others, they can put the effort of the team in front of their own individual performance. So, a lot of times that can be a good indicator for somebody that's good. You look for somebody competitive, but somewhat also compassionate. Somebody who is a good person, just do you like them? If you don't like them, and you wouldn't want to buy from them, don't hire them to sell your product.
Steli Efti:
Look for the type of people you go, yeah, I would want to buy from this person. This person is confident, competitive, but also compassionate and honest and ethical, and I trust this person. Hire them, it doesn't matter how little experience they have. And then just teach them what you've done, just show them how the product works, tell them everything you learned about selling, if you sold a couple of times. And try to teach them to do the same thing you've done, and see if they can replicate the results, that's all you're trying to do. Again, if it's not perfect, it doesn't matter. Nothing ever is.
Steli Efti:
And the other tip I'll give you, is don't hire one person at a time. In sales, you want to hire in triplets, bring in three at the same time for the same position. Again, why? Because if you just have one person and it doesn't work out, you don't know is it the person, is it your product, is the way you teach them? You don't know. If you bring in three people, I guarantee you one is always going to do much better than the other two. And it's going to teach you about who the right type of person is to sell your product, and not just about anything else. So, it gives you more data, more information in less time.
Steli Efti:
And the other thing, I know that people that are engineers that are not very competitive and not natural salespeople, they think, "Oh my God, this is terrible. Three person for one position, this seems such a harsh environment. Nobody would ever like this," true salespeople love this. People that are competitive, if you told me, "Steli, at one position, we'll hire 400 people, and whoever does best gets the job," I get excited. I'm like, I want to be the best out of 400, that's incredible. People that are true salespeople, they get excited about being measured by others, testing their skill against others, having to overcome and be better than others. That makes them excited. If somebody goes, "I don't want to work alongside two other people," they're not good at sales. It's not the right job for them. They might be great people, but not for selling.
Steli Efti:
And the other thing that's beautiful about sales, if let's say by a miracle, all three are incredible, and bring in a ton of revenue, keep them, keep all three of them. This is a revenue generating, profit generating position, so you don't have to let them go if they're making money, you keep them. That's beautiful. You want to bring in junior talent, teach them what you know, you want to bring in multiple people at once, not just one person, it's going to slow you down so much. You're always going to have to stop, "Yeah, this person isn't doing well, but I don't know. Is it the product? Is it the way I teach them, is it this, is it that?" You bring in three, one is doing double the numbers than the others, you'll know a lot more of what's going on.
Steli Efti:
And only at that point, at step three. Now you went from doing sales yourself to being a little bit of a sales manager yourself, now you bring in a junior sales manager from another company, from another SaaS company. Somebody that has visited your future, that's been where you are a year or two ago, and that has seen how success looks like, and now is ready, maybe thy were a salesperson, and now they're ready to become a sales manager and they want to take on the responsibility, and you give it to them.
Steli Efti:
And they come into your company, now you already have maybe two sales reps, and a little bit of a sales process. And they go, "I know what to do. We need to stop this, fix this, improve that, update that." And because they've already gone through this experience, they now can take all their lessons learned, and help you with those, and build on top of it. And only then at the very end, once you have got this going, and you have like five or 10 sales reps, then you need to worry about VP's of sales, and super senior sales executive, that's for much, much later on. But at the beginning you do it yourself, and then you bring in some junior talent. And I know it's not glamorous work, it's not quick, it's not a hack, it's not a shortcut. But if you do it, and you do it the right way, your product and your company is going to flourish and succeed.
Wes Bush:
That's brilliant. And I think for everyone else who's listening, make sure you grab Steli's book on sales hiring, because that is just scraping the surface. And a lot of those points are very interesting, like hiring the triplets and everything else. So, thank you so much, Steli, for taking the time to really just share how you approach sales at Close.com. This has been really fascinating, and for anyone who just wants to learn more about you and Close.com, where can they go?
Steli Efti:
Yeah, so they can always just go to a blog, Close.com/blog, but they can also, the best way really to get in touch with me and my materials, send me an email, steli@close.com. If you put in the subject line, "Bundle," you'll get all my books. I have 11 books about sales, from how to do emails, how to do [inaudible 00:28:24] calls, everything. Those are typically two, three hour reads, they're very actionable, there's no fluff in there. And so, anything you could ever wonder about in selling, at least I got your starting point there. So, if you send me an email, steli@close.com, "Bundle," I'll send you a link, all my books for free. And then if you ever want to learn more, interested in more, you could always get in touch with me. And for those that love podcasts and are listening to a lot of podcasts, if you miss me after today's interview, you can go to thestartupchat.com, thestartupchat.com. Me and Hiten Shah, a legend in the product and SaaS space. The two of us have a biweekly podcast a lot of people enjoy, so you might want to check that out as well.
Wes Bush:
Definitely. And I will mention whenever you send Steli that email for that bundle, somehow he responds so quick, I don't know how he does it, when I emailed him I think it was under an hour. I'm impressed, so grab your bundle.
Steli Efti:
I try to beat Hiten, who's always faster than me. So, Hiten Shah is a legend when it comes to his response time. I'm doing okay, but I could be much better.
Wes Bush:
That's that competitive sales guy again.
Steli Efti:
Yes, fair enough.
Wes Bush:
Perfect. Well, thanks so much Steli, this has been great.
Steli Efti:
Thank you for having me.
