20Sales Five Lessons Scaling Snowflake to $1BN ARR, Why Customer Success is BS and Should Be Removed, Why All Sales Reps Should Do Eight Calls Per Week & Why You Should Hire a Head of Sales Sooner Than You Think with Chris Degnan, CRO @ Snowflake

In a candid conversation on "20 Sales with Harry Stebbings," Chris Degnan, CRO at Snowflake, shares his journey from the company's first sales hire to driving revenues exceeding a billion dollars. Degnan emphasizes the importance of being a product expert and maintaining a rigorous schedule of eight sales calls per week to ensure consistent prospecting and pipeline generation. He challenges the traditional role of customer success, advocating for its elimination in favor of sales reps managing renewals and growth quotas. Degnan credits Snowflake's success to a close relationship between sales and engineering, the adaptability to change, and a culture that values customer feedback, which has been instrumental in product development. He also highlights the significance of having sales leaders who are hands-on and lead from the front, as well as the effectiveness of Amazon's sales strategy in fostering the success of their partners.

• Emphasize the importance of consistent sales activity, recommending eight sales calls per week.
• Salespeople should thoroughly understand and be a student of the product they're selling.
• Prospecting and cold calling are essential and should be ongoing activities.
• Marketing teams play a crucial role in lead and pipeline generation.
• Professional relationships in sales are not personal; the focus is on job performance and fulfilling obligations to shareholders.

"You must go on eight sales calls a week and you must be a student of what you sell."

This quote highlights the necessity for sales representatives to maintain a high level of engagement with potential clients and to deeply understand the product or service they offer.

• Chris Degnan joined Snowflake as the first sales hire and scaled the company to significant revenue milestones.
• Snowflake was a startup with no customers when Degnan joined, and he played a key role in its growth.
• The discussion covers the transition from a company with no clear sales direction to a structured sales approach.

"He joined Snowflake as the first sales hire and employee number 13 since he's scaled the company from no customers at all to annual product revenues of over a billion dollars."

This quote outlines Chris Degnan's significant contribution to Snowflake's success, marking his journey from the first sales hire to achieving substantial revenue growth.

• A sales playbook is a guide that outlines the sales process, strategies, and best practices.
• Degnan emphasizes the need for salespeople to understand their product and engage in a certain number of sales calls.
• The playbook should be adaptable based on customer feedback and market conditions.
• The importance of targeting the right customers and understanding the market is highlighted.

"You must go on eight sales calls a week and you must be a student of what you sell."

This quote reiterates the importance of the sales playbook concept, focusing on consistent customer engagement and product knowledge as key to sales success.

• Founders must have a vision for the product and be open to customer feedback.
• The culture of putting the customer first is vital for product improvement and sales strategy.
• Sales leaders contribute to refining the product and identifying key features based on market demand.
• The collaboration between founders and sales leaders is crucial in creating a successful sales playbook.

"Our culture at Snowflake, to this day, comes from our founders, and it's put the customer first."

This quote emphasizes the customer-centric approach that Snowflake's founders instilled, which is a cornerstone of their sales strategy and company culture.

• Liveflow is introduced as a leader in financial analysis, automating financial modeling and integrating with accounting systems.
• Outreach is presented as an AI-powered sales execution platform that enhances seller productivity and supports various revenue activities.
• ZoomInfo is mentioned as a tool that provides quality B2B data and insights for identifying and engaging with prospects efficiently.

"Liveflow is the leader in financial analysis. According to G2, Liveflow helps finance teams at Y Combinator, Openphone, Lending AI, and thousands more forward-thinking companies to turn their spreadsheets into a real-time FP&A platform."

This quote describes the capabilities and benefits of Liveflow, a financial analysis tool that automates and streamlines financial processes for companies.

• Chris Degnan shares his personal journey into the world of sales.
• He discusses his initial dislike for HR and the moment he discovered his love for sales.
• Degnan's competitive nature and enjoyment of teaching and improving others' work experiences played a role in his passion for sales.

"My next rotation was in sales and it was like click I love this."

This quote captures the moment Degnan realized his affinity for sales, marking the beginning of his successful career in the field.

• Sales provide immediate gratification through the achievement of hitting targets and closing deals.
• The competitive aspect of sales is a motivating factor for Degnan.
• The cyclical nature of sales, with each quarter presenting new challenges and opportunities, is highlighted.

"Competition is what drives me. So I think that's really probably what I love the most about it."

Degnan's quote reveals his competitive spirit as a key motivator in his sales career, emphasizing the thrill of competing in the market.

• Chris Degnan recounts the early days at Snowflake, including the lack of customers and the uncertainty he faced.
• He discusses the importance of customer feedback in shaping the company's direction.
• Degnan's willingness to take risks and make sacrifices for the potential success of Snowflake is mentioned.

"There was zero customers when I showed up. And I think I had a panic moment of like, man, did I make the right decision."

This quote provides insight into the initial challenges Degnan faced when joining Snowflake, reflecting the uncertainty that comes with joining a startup.

• Being open to feedback is crucial for success at any level, from sales director to chief revenue officer.
• Adaptability and willingness to improve are valued traits in team members and leaders.
• Chris Degnan emphasizes the importance of not being rigid and knowing it all, but rather being receptive to new information and growth.

"I think you have to be very much open and very much have to take feedback."

This quote underlines the necessity of being receptive to constructive criticism as a means to personal and professional development.

• Chris Degnan advises founders to hire sales leaders who are willing to be hands-on and have something to prove.
• He suggests that hiring a chief revenue officer from the start can be a mistake due to the difficulty of replacing them later.
• It's better to start with a VP of sales who can later be transitioned to a different role if needed.

"I think hiring a vp of sales, I think it's a mistake for a founder to hire a chief revenue officer right away, because getting rid of a chief revenue officer is going to be more painful."

This quote emphasizes the strategic approach to hiring sales leaders, suggesting a more cautious and flexible hiring process that allows for growth and change.

• Chris Degnan stresses the importance of meeting sales metrics and holding oneself accountable.
• He used to send weekly emails to the entire company detailing his sales calls, which provided valuable feedback for product development.
• Sales reps should strive to meet set metrics, like a certain number of sales calls per week, to maintain accountability and drive results.

"I'd go on eight sales calls a week, and then at the end of every week, I'd send an email to the entire company on the eight sales calls I had."

This quote illustrates a practical method for maintaining transparency and accountability within a sales team, as well as contributing to the overall product development process.

• Direct interaction between sales and product teams is essential for product improvement.
• Sales reps should bring product engineers to customer meetings for firsthand feedback.
• Chris Degnan highlights the success of involving engineers in sales calls to understand customer needs and develop features accordingly.

"That's the beauty of the relationship between sales and product, is I bring them to water and they have to drink it, and they can figure out if they're going to drink it or not."

This quote captures the symbiotic relationship between sales and product development, where sales bring customer insights to the product team, who then create solutions.

• Chris Degnan believes in using competition as a motivator for sales teams.
• He compares it to sports, where viewing the opponent as the enemy can be a powerful driver for performance.
• This approach can create a sense of urgency and focus within the team.

"I love having an enemy, by the way. I have multiple enemies."

This quote reflects the competitive spirit that can be harnessed to motivate sales teams and improve performance.

• Chris Degnan emphasizes the need for a compelling event or reason for a customer to make a purchase.
• Effective forecasting involves understanding the customer's timeline and creating a sense of urgency.
• He advises against relying on relationships alone and encourages asking hard questions to uncover true buying intentions.

"The biggest hole that you can poke in a forecast is what is the compelling reason or compelling event that the customer is going to do something."

This quote highlights the critical role of understanding the customer's motivations in accurate sales forecasting.

• Startups often underestimate the complexity and time involved in selling to large enterprises.
• Chris Degnan warns against being lured by the potential revenue from large institutions, as they can divert a startup's focus and resources.
• He advocates for targeting customers that align with the startup's ideal customer profile (ICP) for more efficient sales cycles.

"But those large enterprises, especially in an early stage startup, they will suck the life out of that startup because they will say, I need these 100 features."

This quote advises startups to be wary of the demands of large enterprises, which can derail a startup's product roadmap and exhaust its resources.

• It's important to build multiple champions within a client's organization to safeguard against turnover.
• Sales reps should leverage senior team members to gain access to economic buyers and validate their internal champions.
• Chris Degnan explains that a technical champion should be willing to introduce the sales team to the decision-makers.

"A good sales rep uses us as a pawn. I always say I'm an actor in the sales rep's movie, they're the director."

This quote suggests that sales reps should strategically use their team's hierarchy to navigate client organizations and secure buy-in from key stakeholders.

• The director's role is to position individuals to succeed by guiding them to say and do the right things.
• Being a good director involves enabling others to perform their best.

e me the director, good luck. You're probably going to fail. But if you're the director and you're putting me in the right position to say the right things, that's a good director.

The quote emphasizes the importance of a director's role in setting up individuals for success, suggesting that without proper guidance, failure is likely.

• Bottlenecks occur when a key person cannot be present everywhere, slowing down processes.
• Chris Degnan was a bottleneck at Snowflake for major deals due to his schedule constraints.
• To prevent being a bottleneck, it's crucial to build trust and delegate responsibilities to capable leaders.

That's the beauty of what Frank Slutman brought to Snowflake, is he said to me, Chris, you're a deal jockey. And he said, that got snowflake to where it needed to be, but that's not going to get Snowflake to where it needs to go.

Frank Slutman's advice to Chris Degnan highlights the need to evolve beyond being a central figure in deals to enable Snowflake's growth.

• It's important to hire leaders who share the same foundational beliefs and work ethic.
• Being a student of what you sell and leading from the front are critical qualities for sales leaders.
• The challenge in hiring is to identify genuine leaders as some may misrepresent their work ethic.

So you have to find people that kind of believe in the foundation that you believe in. Be a student of what you sell.

Chris Degnan stresses the significance of hiring leaders who are committed to the company's values and are proactive in their sales approach.

• Founders often make mistakes by focusing on product marketing instead of pipeline generation.
• The marketing team's primary role should be to generate leads and meetings, not just create marketing literature.
• Sales teams and founders should work together to understand and communicate the product's value.

Founders love product marketers. They understand the product and they're going to build this marketing literature and stuff like that. That's a waste of time.

Chris Degnan criticizes the common founder mistake of prioritizing product marketing over lead generation, which is essential for sales.

• Measuring success in pipeline generation requires focusing on qualified meetings rather than MQLs or SQLs.
• It is crucial to maintain integrity in the pipeline to avoid friction between sales and marketing teams.

We're never going to talk about MQLs or SQLs anymore. We're just going to talk about qualified meetings.

Denise, the CMO hired by Chris Degnan, shifted the focus to qualified meetings as a more meaningful metric for pipeline generation.

• Outbound sales, including cold calling and prospecting, should never become obsolete.
• Outbound efforts are more effective as one becomes more influential and should be increased, not decreased.

Anyone who says that's dead is crazy.

Chris Degnan advocates for the continued importance of outbound sales activities, dismissing the idea that they are outdated.

• With Snowflake's consumption model, it is possible to monitor customer activity and predict churn in real-time.
• Fast changes in consumption can be an indicator of overspending or underspending, which requires immediate attention.

You can see the dial turn real time.

Chris Degnan explains how Snowflake's business model allows for immediate insights into customer behavior and potential churn.

• Different divisions have varying expectations for seller productivity based on the sales cycle length.
• It's important to evaluate whether sales representatives understand the product and can effectively sell it within the expected timeframes.

If you go out on a sales call and the person doesn't know what the hell they're talking about and they've been on the job for six months, yeah.

Chris Degnan indicates that a sales representative's lack of product knowledge after a significant period is a clear sign of poor performance.

• Hiring sales representatives in pairs allows for comparison and identification of successful strategies.
• Observing the differences in performance between two salespeople in the same territory can reveal whether issues are due to individual efforts or external factors.

If you hire twos and you put people in the field and you see one person's successful, one person's not.

Chris Degnan suggests that hiring in pairs provides a more reliable assessment of what contributes to sales success.

• It is possible to give tough, direct feedback without being mean or disrespectful.
• Corporate obligations to shareholders sometimes necessitate making difficult decisions regarding personnel.

You don't have to be an asshole. You don't have to be mean to people.

Chris Degnan emphasizes that empathy and professionalism can coexist with the need for straightforward feedback in a corporate setting.

• In the corporate world, personal relationships can complicate making tough decisions about personnel changes.
• The transition from a startup to a larger corporate entity often involves difficult choices that affect long-standing colleagues.

It's awful. When you build a startup, you're building it from scratch.

Chris Degnan reflects on the emotional challenges of making tough corporate decisions that impact people he has worked closely with.

• CEOs and founders often blame others for failures, with sales leaders frequently being the first to be blamed.
• Having experienced sales leadership on the board, like John McMahon at Snowflake, is beneficial for feedback and assessing a sales leader's ability to scale.
• Feedback is crucial, and sales leaders must act on it to improve and retain their positions.

"Because when Mike Spiser came to Bob and said, hey, you're going to go hiring someone over Chris, Bob was like, no. And why? What am I going to get that Chris isn't giving me?"

This quote illustrates the importance of recognizing the value that current leaders bring to the table and the potential risks of replacing them without clear benefits.

• The decision to fire a head of sales is complex, with some founders being too quick to fire and others too slow.
• Founders must listen to customers, ensure product development is on track, and evaluate the marketing and sales teams' performance.
• It's essential to consider the unique situational context of the company before making personnel changes.

"I've seen both. I've seen know the board of directors are saying this person stinks and they don't."

This quote acknowledges that the decision to fire a sales leader can be influenced by various factors, including misjudgments by the board and a lack of alignment with the company's actual issues.

• Acknowledging good performance is important, but it's also necessary to understand and diagnose bad quarters.
• External factors like Covid or inflation must be distinguished from internal issues within the sales team.
• Celebrating top performers and recognizing their achievements is crucial for morale.

"Every quarter I do a quarterly review with the entire sales team. I celebrate the top performers."

This quote emphasizes the practice of regularly celebrating success within a team to maintain motivation and acknowledge hard work.

• Chris Degnan challenges the conventional role of customer success teams, suggesting they often lack clear value.
• He advocates for investing in professional services and sales engineers instead of traditional customer success roles.
• Sales teams should be enabled to demonstrate business value to customers themselves.

"I don't believe in customer success."

This quote directly states Chris Degnan's controversial stance on the customer success function, suggesting that its typical roles are neither effective in sales nor sufficiently technical.

• Professional services can be a low-margin but vital enablement function, helping customers use the product effectively.
• Training and enablement content from professional services can be distributed to partners and customers.
• Even as a public company, it's important to remain within operational bounds and avoid making unattainable product commitments.

"So our professional services organization is a single digit profit margin business."

This quote explains that while professional services may not be a major profit center, they play a critical role in customer enablement and product usage.

• Change is constant and necessary for growth; restructuring, even late-stage, is done by ripping off the band-aid and just doing it.
• Evaluating and implementing changes for efficiency is an ongoing process, regardless of company scale.

"You rip the band aid off and just do it."

This quote captures the decisive approach to making significant organizational changes, emphasizing the need for swift action to adapt and improve.

• Sales calls and understanding the product remain unchanged as effective sales tactics.
• Relationship-based sales tactics, like taking clients golfing, are becoming less effective.
• Urgency and immediate action are key lessons from working with Frank Slootman.

"Going on eight sales calls a week and becoming a student of what you sell."

This quote underscores the timeless importance of direct engagement with customers and in-depth product knowledge in sales.

• Amazon is praised for its ability to enable success for competing products on its platform.
• The balance of competition and collaboration with companies like Snowflake is a challenging but impressive feat.

"They invented the cloud. They invented how to work with companies like us."

This quote highlights Amazon's innovative approach to the cloud market and its strategic partnerships, even with competitors.

• Chris Degnan shares personal experiences, including the anxiety of potentially being fired and the surprise of receiving stock from Frank Slootman.
• The discussion touches on the misconception of salespeople as less intelligent and the importance of the relationship between sales and engineering teams.

"Do it now. High sense of urgency. Now."

This quote reflects the biggest lesson learned from working with Frank Slootman, emphasizing the value of immediate action and urgency in business operations.