Welcome to episode twenty-three of the SaaS Backwards podcast, where we interview CEOs and CMOs of fast-growing SaaS firms to reveal what they are doing that's working, and lessons learned from things that didn't work as planned.
You can listen to the full episode directly below via Spotify, or visit SaaS Backwards on Buzzsprout or wherever you listen to podcasts.
Another Eight-Year Overnight Success Story; Ambition CEO on Virtues of Waiting for a Big Raise
With Brian Trautschold, COO and co-founder of Ambition
Edited for clarity and readability
Host, Ken Lempit:
Welcome to another episode of SaaS Backwards. It's a podcast that helps SaaS CMOs and CEOs to accelerate growth and enhance profitability. We take a look at what's working for growing SaaS companies, leadership decision-making, and what did and didn't work, and why.
Our guest today is Brian Trautschold, co-founder, and COO of Ambition, a sales performance management platform. Hey Brian please tell us a little bit about yourself and your company.
Yeah, happy to. I'm one of three co-founders here at Ambition. It's been almost eight year journey in this business, which is amazing to say. Before this, like so many people that we've served today, I was a sales rep. I got into sales after graduating with a finance degree in 2009, which was a great time to be in finance, and I couldn't be more thankful because it opened my eyes to a lot of things that were huge opportunities in this space.
Over the last eight years, we've had the opportunity to attack those. Ultimately what we've done at Ambition is build a what we call rep performance management and an insight to action center for sales managers, hopefully to drive more performance, have better outcomes for sellers, revenue teams and the folks that face customers. So it's been a lot of fun.
I think when we talked about a week ago, I let you know that so many of the overnight success as we've met are about eight years into it. So you're right on the timeline to be the next overnight success.
I don't want my wife to hear that because then her expectations will go up, but I appreciate that.
Yeah. It's a hard road. Not everybody hits it the first six months or a year, but there was a recent important development in the organization. You were funded recently, and I wanted to dig in on life at a SaaS post-funding because it's an important event and it kind of changes things up. What did you need to do? Post-funding, how did you change your priorities?
That's a great question. I think a lot of folks just see the announcements, like the article on Twitter and you assume everything just clicks and goes. One thing is we're not a super young company. I don't think that we're just figuring things out or just understanding how our business works. I do think that as the team and Ambition, we found out, had a lot of things working.
When you go raise money from growth equity, private equity, later stage venture funds like we did, you have to have a good plan going into it. They're not investing if there's no plan or there's not really clear expectations.
After talking to dozens of funds and weighing a few term sheets, we can go back to executing and the founders, which is what we enjoy. We do not enjoy the fundraising process. I think that we've been pretty public about that. We wanted to find a partner who understood our business like we did and were aligned on the next phases of it.
What's been great is we've been able to continue to build on our leadership team, invest in our people. We think make some really big investments in what customers are going to get from us. And four months in it's been exciting. It's refreshing, I think is the biggest thing.
So this was funding to really realize the vision and execute on your plan?
Yeah--accelerate the growth. I think that we've been operating for a number of years, almost as a boutique enterprise software company. We're in a space with some really well funded peers, some great partners, and great peers around us who've raised hundreds of millions of dollars. And until this most recent round, we've raised six and we've been very capital efficient. We've been very focused on being break-even, which I describe as that's like playing the game on ultra-hard mode in some ways, and sometimes it's playing a different game than a lot of other folks are playing.
I've heard that described as East Coast mentality versus West Coast.
We're in the Southeast and may not be on the map yet. I think there's a portion of it that is regional or East Coast, West Coast. My founders and I at Ambition came through Y Combinator in 2014, effectively at the beginning of the company, so we had a lot of exposure to West Coast or Silicon Valley mentality.
We decided to come back to Chattanooga, Tenn. where the company's based and build the business here.
I think part of that's also a mindset of not building a company that has a binary outcome.
The outcome of Ambition doesn't have to for some mystical acquirer to show up tomorrow and pay $5 billion for Ambition.
That's not the only success criteria.
There's a lot of other ways for us to have a great business and a huge impact, and that's been important for us since 2014.
I just want to underline that a little bit because I think that it may not always be apparent to people outside the funding scenarios. That the more money that's thrown into these companies, the more pressure there is to go for the significant exit and nothing else is viewed as success. And there are a lot of ways to have a business that's bigger than a lifestyle business, but doesn't need to be a billion dollar business necessarily on the next round.
I think that's changing in some ways, but if you go raise a hundred million, which lots of companies do now and deservedly or are making strategic decisions, the minimum viable outcome for the last money in is a billion-dollar exit. And there might be many companies that are worth billions of dollars on the private market.
But when you go look at how many of those companies get acquired for a billion dollars, there's still not a ton of acquisitions on a year-to-year basis of in excess of that.
So if that's the only thing that you are orienting the success of your company on it's playing a really high risk high reward game.
I think that our goal has always been to not take that off the board, but it's also not the only option.
I think that it causes a lot of leadership teams to make limited or shortsighted decisions when they're only prioritizing. How do we put as much money into the business? It’s really just a growth rate, at least in the short term, so that we can approach this huge limited exit.
So you're distorting the business model to fit the funding as opposed to growing the business as it can?
Yeah. The scary thing is I've been in this world long enough between Ambition and two prior companies where you see those companies and suddenly there's an acquisition. There's no price discussion and it all just goes to a company you'd ever heard of.
And what happened is that you didn't hit the home run that you'd kind of built the whole thing for--that sucks for everyone. Investors and employees. And it’s probably not great for the customers either.
We really believe in serving those three stakeholders (employees, customers and our investors). So, I don't think the binary outcome is the right way for everyone.
Awesome. Let's combine these two topics: setting priorities and building your team and alignment. Can you talk a little bit about post-funding prior and how you're investing in the team?
Yeah, like I said, I think a major part of what any founder, you're going to have a loose plan, a series of objectives and key results (OKRs) before you go race funding.
For us, we've been growing really aggressively over the past few years, including and during 2020, and we thought that we were at a point where for a variety of different reasons we could accelerate that.
Part of that was how do we find the gaps in our company, in our leadership org and the resources that we're deploying to go attack that growth.
To do that, we wanted to raise funding to do it quickly, to make some priority hires. And I think it was an interesting exercise and the first time we've gone outside of just the founders, setting those priorities, getting leadership team involved, having our board be really involved and saying, what do we think is possible? And how are we going to make that happen?
We brought in an amazing VP of product at the beginning of 2021. His name's Butler Raines, and he joined us from SalesLoft. We also hired two amazing leaders at the end of 2021, Chris Mills, who's our VP of marketing and Aaron Thompson who's coming on to build our commercial sales arm and kind of enablement org. Those hires are indicative of areas we thought we could improve the business.
Every customer we deal with asks for more stuff, which is good, there's more problems to solve for the customers.
Then the question was how we go tell the story and run effective customer forward sales process. The customer should feel good when they're in our sales process and there shouldn't be a lot of friction. Those are things that Chris and Aaron can do, and so we were really proactive after raising money to go find those people and certain build teams around them.
In terms of that VP of marketing, what were you looking for? Obviously you have a growth ambition now you've taken funding, so we need to grow, but who was this person in your mind before you found the person you hired and what do you from the expansion marketing?
That's an awesome question. I think this is probably not totally unique to us, but there's a period of any startup where its vision focused and like it's what's in your head and how do you turn what's in your head, in that vision of what you want to build into reality?
So, in a lot of the communications, much of the branding is founder driven.
What happened here is that we started to become very tactical, and I thought our message became, what we used to call “speeds and feeds.”
That's not why people buy something that can enable a buyer to understand benefits or functionality, but it doesn't connect with the message and what Chris had and what we were looking for the profile of that was someone who had spent a lot of time being a product marketer.
Someone who understood how to take product and turn that into story.
How do you create a narrative around why the company exists?
What are the results that customers get from using our product?
Why do they love it or utilize it or get value from it versus here is how you're going to get value from using this function?
Chris definitely fit that bill.
He was a product marketer for many years and that was a huge gap for us.
Is there an expectation for marketing that's new--now that you have Chris on the team?
Yeah. I think goes back to the arc of a company but when you go away from telling the story and creating this philosophy.
You must humanize the brand.
The brand has to become the story that people understand versus what they associate the brand with.
When they see ambition.com, functionality words like “cool, there's a bunch of other stuff that has reports and they do sales contests and can build coaching sequences.”
But why does it matter? And what do you feel about it when you read it?
And so, I think the expectation is reestablishing that narrative, making sure that we're connecting with the customer where they are and their journey. A lot of cases, that's educating the customer, helping them understand sometimes really fuzzy problems, like when we go into an org, they don't say, "Hey, I have this incumbent solution that sounds exactly like yours.”
They say, "My reps don't get ramped very well. They're underperforming. They don't necessarily stay very long."
So those are problem statements that don't have an easy solution that's just waiting on the shelf. They have to learn about our solution.
So you're almost making the case for demand generation and brand building versus lead generation. And I think as a proponent and leader of a company, that's in the sales performance management business, that's very refreshing from a marketer to here, right? That the determinant of success is not how many leads you’ll generate in the month of January. It's how well do you position the firm in the minds of people who might be having the problems you can solve?
Yeah. I think when you see a lot of people talk about it and we've done this, and I think I fell into this trap before, as you think about it in this linear path where it goes from marketing, discovery to creating a lead, to creating pipeline, to sold, to retain whatever. It's really this big circle, and marketing is touching all those points of the circle--whether it's at the end, when that person is deciding to renew or expand or become a referral, or it's in the sales process of how does our rep communicate, educate, or if it's on the demand side of why did they fill out a form? Or how did we explain or what questions did we ask when we cold called someone.
That's all a cycle instead of being this one-way path. I think we've messed that up a bunch of times. It's not like that was brilliant out of the gate, but where we are right now, we're trying to certainly invest in it.
I think you're just describing the human condition, right? We all have to learn. I read something recently, the question that someone wanted to ask a one-hundred-year-old person is “when did you stop making mistakes?” And the expected answer is something like “yesterday.”
So it's very difficult to ever be perfect. I want switch gears with you a little bit. It might be a little jarring, but I want to talk about the go-to-market motions that are working for Ambition.
And one of the things we talked about was the role of APIs and part partnerships. So this structure transition, but we have a lot to cover. I feel this is an under-appreciated aspect of SaaS go to market. Having a real integration economy, almost, people call it a platform, but I kind of feel like it's its own economy. And I'm wondering how you've managed that and how you place priority on it.
I think the partnership side it's really interesting. I think it's very dependent on what space you play in. I'm in a box of the sales enablement ecosystem with a sales acceleration CRM ecosystem. And what's interesting in our space is if someone comes and asks, “who do we compete with”, or “what gets in front of us in the sales process,” it could be stuff that has nothing to do with us. It’s functionality that we have no intention of ever building, but the mind share is the way that customers solve their problems i.e how do they sell? How do they manage sellers? How do they get the most out of their people?
It's touching a bunch of different tools. And so I think we're in this place in SaaS and specifically in our category where you have to have a pretty deep, direct integration, understanding and partnership motion with a couple companies, because whether you think you're competing with Salesforce or gone or sales bluff or outreach, it doesn't matter.
You're competing for the wallet and you're competing for the mind share. You're competing for the priority and initiative for the customer. And it's okay in our world to say, "Hey, roll out Salesforce first" in most cases, it's necessary. IT, we need that API. We need that integration to work with, or "Roll out the outreach. We're going to help you get the most out of it after the fact."
And so that's kind of a world where we don't think it's binary if who wins. It's a lot of companies are going to build big platforms here and have done that. For us we've really focused on what's the customer trying to solve for. Our customers trying to solve for better performance with their apps, better insight to their manager, ability to create more effectiveness. And so we've partnered very tightly on our building partnerships, both with our product, but also with our go to market teams with companies that do that also. So that could be Gong, which has an amazing revenue, intelligence conversation, intelligence platform.
Certainly Outreach and SalesLoft.
Right now we're building a million important integration with Seismic and Lessonly. Seismic has a content management platform and Lessonly leads a learning management system and LMS.
Those are all components of how their calls are going or their demos, and that's recorded by Gong and insights are surfaced. With Ambition and Lessonly together, you can tie modules of learning and things that they did on their ramp up to what their actual performance was and correlate that.
Ultimately, it's how's this working for the customer--it has to answer that story. Like it cannot be a let's just go pick big companies that we want to integrate with that have lots of customers, because the story's not there. It has to really be a seamless experience for the customer.
So I think that's the first time I've ever heard that kind of narrative or story-led integration strategy, almost put the customer's own sales vision into your strategy. And if you could get enough of those use cases--it sounds intuitive from a product management standpoint, but really one of the things we're hearing is continuous listening to customers and prospects is important. And I don't think you can have an integration strategy if you're not continuously listening and paying attention to what your customers are telling you.
Well, yeah. I totally agree. It’s Gong, Seismic, and Lessonly who are the three most recent we're putting a ton of energy into and have all been driven by customer requests.
And so that's not maybe the classic version of us.
Getting some MBAs or analysts in a room and saying "Where's the market share and where's the TAM and how do we go address this stuff?"
It's because a customer who we cared about said, "What would really be valuable to me? Could we get this call data from Gong directly inside of Ambition where we're doing our performance reviews with reps? Or could we surface these stats from Seismic into our rep performance scorecards?
And everyone should ask "Why is that valuable to you, customer?" Well, this is like a really indicative metric if they're doing X, Y, or Z or this is going to tell me if they need to be coached on this thing.
Okay. Interesting. And so our product team, then digs in on that customer, that story that you were talking about and what we get to is a strategy and that strategy it's centered on what's the value going to be and how is it impact our vision for the marketing.
We've done this multiple times. And if the partner doesn't see the world in a similar way, then maybe we don't do it. Or maybe we don't prioritize it because they may not have the same vision of the space, but it's worked out really well with these most recent view.
Yeah. I like that idea of this sort of organic prioritization of your ecosystem. Is that changing how you are going to market as a firm? And has that had an impact on how you actually do your own go to market?
It has. I mean, we talked about demand team earlier and our demand team is probably one of the biggest success stories coming out of 2020 because we built a whole new motion. It’s a whole new team, new leader, and they've gotten so much smarter.
I think that we used to think of it as you're out there just looking, cold calling is an underrated way of saying we still do a ton of cold calls. We believe in that, but we do really targeted cold calls.
And we know a lot of firmographic information about who we want to call beforehand. So when we talk to someone, we know they're using Gong, we know what their team looks like, we know other tools in the stack or things that they've been researching and we're not just throwing an SDR at them to cold call and pitch them.
We're going to call and ask some smart questions and try to educate them or show some areas where other customers had success. And I think that gives us a much more consultative view and more of an expert view than, "Hey Ken this brand from Ambition? Do you guys have gamification software? You want to have that be a constructive conversation? Hey Ken, I see you're using Salesforce and Gong you have a hundred sales development reps spread throughout the country. Is X, Y, or Z a challenge for you?" Actually, yeah. It's kind of pain the ass, let's have a conversation.
Do you have an SDR to team in sales or is it in marketing?
It's actually in neither. It's under its own org called demand. And that's where you mentioned like pipeline and what we call sales accepted leads that all lives in a very metric focused group that's called demand generation. And it's right in between sales and marketing.
Interesting. I think that's the first time I've heard that too.
I don't know if that's the good or bad. I think that is not totally unique to us. I know that there are other SaaS companies that we've borrowed that from. But part of the reason is I talked to a number of VPs of marketing and CMOs and the hiring process.
One of the things they continually talked about is the tension as a marketing leader of always saying, well, I want to do this stuff for the brand. I want to of this stuff for the story or content or value creation down funnel. But the thing that I'm really responsible for is the VP of sales call me up and be like, where about leads? And that's this tension that's always going back and forth.
Maybe it's a cop out, but we put a group with its own VP with a whole team, right in between that, we say, "You're going to own turning this messaging, turning these assets and building this targeted lead list into opportunities." And so I don't think it's as much of a one dimensional tension as now it's part of this funnel.
I think it's really interesting. And the idea that marketing can be more aligned with your leadership initiatives, right? They can help you drive where you want to take the company and then let the demand organization be more focus on the sales imperatives. Makes a lot of sense. So I'm going to go with, it's a good idea. But we'll have to check in with you in a year or two and see how it's going.
Another thing that I thought was really interesting was you said that in the earlier days, you weren't able to use your own stuff. And I think that SaaS firms that can use their own software have certain amount of credibility. Can we kind of talk about why that was? You couldn't use your own stuff?
It’s not that we couldn't, but we were not really the target for our own tool.
Our target has for years now been larger, more sophisticated revenue teams and that includes sales teams, sales development, account management, CS teams.
I say larger because at a startup stage, you've got a couple people in each of those roles and you're just throwing stuff at the wall. You're trying to see what sticks and you've got the process is really just a continual experimentation.
Our mission is really a tool for a little bit more mature work where the playbook, the processes, the metrics drive expectations. You’re starting to put that on rails where it's just, “I need these things on the front. I need this type of conversion. I'm going to coach around those metrics and build from there.”
That’s indicative of teams that are probably more in the 15 to 20 range, just in terms of the go to market team.
We hit that two and a half years ago, and we became a decent fit for our own tool.
We had a good playbook. We had a good series of metrics. We knew what our expectations were and it's been even more interesting because we were always a tool that was office centric first.
Our first product pin was like the TV leaderboard in the office where you've got the digital alert when someone does something cool.
In 2020 those all went away--no one's in the office to see that TV. That was a huge challenge for everyone in our space or some of our competitors. We had already built a lot of the remote friendly version of integrations into slack automation to email, integration with zoom.
We became power users of our own tool then, because it was super remote friendly. We also became focused on work from home. Now we've built SDR team that's literally nationwide plus Puerto Rico. And so we've kind of flipped to be this ultra-remote, ultra-power user of our own tool.
That’s been amazing because it lets the company learn the use cases.
For example, it’s the sales development rep who's also using our product, who's being recognized Ambition, or who's being coached Ambition, get on a call with a prospect who would be effectively their boss somewhere or their manager somewhere and be really, transparent, "Hey man, this is how this works for me. This is what's going on right after I get off this call, this will happen."
And they feel it like they're living it. That’s a much more palpable story than “in a world where you have X, Y, or Z, then I don't really live. This is the value prop.”
Yeah. I mean, it sounds really compelling when you're contemplating bringing in a piece of technology, that's going to alter the outcome, right? It's going to alter the experience of the people working for you. It's really nice to know that working somewhere else and the company that is providing the solution is succeeding on top of it. I think that that is compelling.
And I think the idea that you can also, from your own experience, better coach and onboard new clients, right? Because you have the experience of trying to use it yourselves. And just seems like it's a very organic and kind of self-fulfilling use of-
It makes the whole company into experts. Our CSMs are experts because they're living it. They're seeing the same updates they're seeing alerts pop up in slack or an email it's powerful. I think it doesn't always fit. Like especially for companies that build enterprise software, it took us a while to become the right fit for own tool. But since we've been there, it's been awesome.
It might be a good like road mapping goal. To say, "Hey, we need to get to a point where we can use our own stuff or build our product in such a way that we can use it even earlier." Maybe that's a learning there. I wanted to ask you a little bit about how buyer preferences are changing kind of last topic on our list. How are you seeing buyer's behavior changing and where are they finding information about your product besides your own website?
The review sites are huge. I don't know if I'd call it the Amazon or the Yelp effect, but like people want to see reviews. They want to know what someone else's experience has been with this product.
And I think interestingly, sometimes the product reviews matter less than the people reviews.
We see this because I think that this is a real thing that we're excellent as our people are great.
If you're dealing with a CSM or a support person or similar implementation team, we get these amazing reviews. That Corrin was so awesome helping us spin up Ambition, that matters. I think if you're making expensive enterprise purchases that people are putting a big line item in the budget, they want to know that they're going to be supportive. That there's a real person on the other side of the screen that they're going to get help when they get stuck, it’s inevitable.
They're going to have guidance on best practices and how to get the most value of those tools. So they're going to G2, they're going to Forester. They're going all of these places. They're asking questions on LinkedIn and Twitter. We see that more and more where people are just like open ended polling information from the network.
I think that's a big change. I don't know when that all happened, but it seems like G2 has come on huge in the last two years. They've raised a lot of money and become a content powerhouse themselves. We focus on that a lot and on trying to understand the intent of those shoppers.
- If someone's looking for sales performance technology, are they looking for us?
- Are they looking for commission management software?
- Are they looking for territory?
All of those can be similar, but not the same.
So, if you get that call, you see that someone come through the website of being helpful. Like if we can be helpful and you say, “Actually, what you're looking for is an LMS and not Ambition”, that’s cool, let us help you. Let's give you some information and point you in the right direction versus let me hammer our sale versus getting you the thing are actually looking for.
I agree with you. I think reviews are really important. I think that idea that people, I've always felt that in a market where there are multiple players, if you're not a solution set of one, it becomes difficult for the buyer to discern the differences at a point. If they start check boxing two or three solutions, they begin to look similar in their own mind. So, the differentiations become harder to come by.
Often, we coach our clients to focus on who are the implementation people who are the lifetime support people and bring that to life because in the end we buy from other people.
Most often anyway, it’s these kinds of solutions.
I think that's a really great place to land on is that when we're selling enterprise software, we have to be really connected to what people want functionally but we also have to understand how make decisions. And a lot of that's going to be on the strength of the team and the sense that they're going to be making a decision that's safe for their career.
That's exactly right. You mentioned being safe. Like I think a lot of it is de-risking and how can you de-risk the investment on their end?
I think sometimes you've got a lot of people who are in the buying process. They may just be tasked with buying it. They know we see this a ton, where the ultimate buyer is way up there. They've assigned this to someone, and they're shopping. They know the reality of the problem inside, and they're doing what you said. They're going to end up looking at this huge list of check marks that could span multiple categories. And then they're trying to figure out which of these is going to affect my set of problems and it can be very wide.
Ultimately, I think the people part is huge advantage from everything from implementation like you said to what's the CSM relationship going to be like two months from now? Is there going to be one or is it just chat or is it whatever? And it more expensive the deal, the more important that stuff is, was my experience at least.
Thanks for listening to the SaaS Backwards podcast brought to you by Austin Lawrence Group. We are a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand. Learn more about us at www.austinlawrence.com. You can email Ken Lempit at firstname.lastname@example.org about any SaaS marketing or customer retention subject. We hope you'll subscribe, and thanks again for listening.