20Sales Slack, Atlassian, Dropbox Five of the Biggest Lessons on Starting, Scaling and Managing Sales Teams from 25 Years Leading the Best with Kevin Egan, Global Head of Enterprise Sales at Atlassian

In this episode of "20 Sales," host Harry Stebbings interviews Kevin Egan, the global head of enterprise sales at Atlassian. Egan shares insights from his extensive sales experience, including the importance of hiring versatile "renaissance reps" in the early stages of a company, and how effective sales teams rely on creating ample pipelines and leveraging A/B testing to measure rep effectiveness. He emphasizes the need for transparency, the strategic use of AI, and the necessity of providing a clear ROI to CFOs involved in deals. Egan also discusses the transition from product-led growth (PLG) to enterprise sales, highlighting the challenges of balancing end-user appeal with enterprise-grade security and processes. He advises founders on structuring sales teams, crafting fair compensation plans, and the art of delivering direct feedback. Egan commends Snowflake's customer-centric sales strategy and underscores the ongoing need for adaptability and customer engagement in sales.

• Hiring multiple sales reps simultaneously can be advantageous in a product-led growth (PLG) environment.
• Early stages of hiring should focus on "renaissance reps" with diverse skill sets.
• A/B testing is a critical strategy for understanding rep effectiveness in top companies.

I do favor hiring two to three at a time if you can afford it in a PLG world. Rep effectiveness the best companies out there are doing a lot of a b testing early days of hiring reps.

This quote emphasizes the importance of hiring multiple sales representatives at once if financially viable, and the necessity of A/B testing to determine the most effective sales strategies.

• Kevin Egan is the global head of enterprise sales at Atlassian with over 25 years of experience.
• His previous roles include VP of North America sales at Slack and Dropbox, and senior sales leadership at Salesforce.
• The podcast acknowledges contributions from Maggie Hot, Kim Graves, and Reynou Gupta for their question suggestions.

Today, I'm so thrilled to be joined by Kevin Egan, global head of enterprise sales at Atlassian and brings more than 25 years of enterprise sales experience and leadership to the company.

This quote introduces Kevin Egan and his extensive experience in enterprise sales, setting the stage for the insights he will share.

• Pocus is a revenue data platform that aids go-to-market teams without the need for engineers.
• Salesloft is a sales engagement platform used by companies like Google and Shopify.
• Zoominfo provides a comprehensive solution for B2B professionals to find customers and streamline operations.

Pocus is a revenue data platform that makes it easy for go to market teams to analyze, visualize and action data about their prospects and customers without needing engineers.

This quote describes Pocus as a valuable tool for sales teams, highlighting its ease of use and the ability to work without engineering support.

• Kevin Egan started at Oracle in a technical support role before moving to sales engineering.
• His career progression at Oracle provided a fast-paced environment conducive to learning.

So I was lucky to join Oracle in the mid ninety s and I started in the data center in a technical support role and quickly made my way over the sales engineering side of the house again at Oracle in the late 90s in their DMD organization, which was a fast moving, fantastic place to learn.

This quote outlines Kevin Egan's entry into the sales world, beginning with a technical support role at Oracle and transitioning to sales engineering within the same company.

• Salesforce was an early adopter of product-led growth with a focus on solving customer business problems.
• Dropbox emphasized balancing end-user satisfaction with enterprise-level security and trust.
• Slack's value increased with larger teams, combining end-user engagement with enterprise needs from the start.

Salesforce does not get enough credit for being one of the original product led growth companies.

This quote from Kevin Egan points out Salesforce's role as a pioneer in the PLG space, particularly through their use of trial periods to engage potential clients.

• Kevin Egan prefers the term "sales motions" over "playbooks," emphasizing solutions to business problems rather than feature-selling.
• The CEO or founder should inspire and provide high-level ideas, while the VP of Sales should codify and detail the sales motions.

I don't typically use the word playbook. Playbook to me seems like just a simple one, two, three and you follow these steps and you're going to close the deal.

This quote reflects Kevin Egan's view that a sales playbook is too simplistic and that a more nuanced approach is required to address customer needs effectively.

• It is possible but challenging to pursue PLG and enterprise sales simultaneously.
• A sequential approach, starting with PLG and then layering enterprise features, is often more practical.
• Slack's move to enterprise sales was driven by user adoption and demand within large organizations.

I think you can, but I think it's extremely difficult. I think Slack was able to do it.

Kevin Egan acknowledges the difficulty of balancing PLG and enterprise sales, using Slack as an example of a company that successfully managed both.

• Enterprises require guaranteed uptime and service level agreements (SLAs).
• Data geography and residency are critical for global enterprise operations.
• Detailed process controls and data security protocols are expected.
• Encryption and data loss prevention are standard requirements.
• Compliance with evolving regulations like GDPR is an ongoing process.
• Transitioning to enterprise solutions is a continuous partnership with customers.

"They need to know that if this becomes business critical, you're going to be providing the slas and the 99.99 uptime."

This quote emphasizes the importance of reliability and uptime in enterprise-level service offerings.

"There's data geography requirements around data residency."

This quote highlights the need for local data centers and adherence to data residency laws, which vary by region.

"It's naive to think it's just a few features, because, in fact, it is a lifelong pursuit to make sure that you're staying up with the most stringent requirements that are coming out of enterprises today."

The quote underscores the ongoing commitment required when servicing enterprise clients, especially regarding compliance and feature development.

• Sales teams provide crucial customer feedback for product development.
• Initial sales efforts focus on creating a feedback loop for product improvement.
• Traditional sales structures emerge once a repeatable sales process is established.
• Sales teams evolve to include core sellers, sales engineers, and support staff.

"Early days is creating a major feedback loop which you can build that repeatability on."

This quote explains the early role of sales teams in gathering customer insights to refine the product.

"Once you have that repeatability, then you can start to build sales teams that are more traditional."

The quote indicates the progression from a feedback-focused sales approach to a more structured, traditional sales team as the company scales.

• A/B testing is a common method to evaluate sales rep performance.
• Comparing account management between online channels and sales reps reveals effectiveness.
• Hiring multiple reps at once can provide comparative data on performance.

"The best companies out there are doing a lot of a b testing."

This quote highlights the use of A/B testing by successful companies to determine the best sales strategies.

"So you simply have a cohort of customers that are managed through the web channels and another cohort that are managed through sales reps."

The quote describes the A/B testing process by comparing customer management via different channels.

• Hiring great salespeople requires a disciplined process.
• Candidates should undergo a multistep interview process.
• Mock scenarios are used to evaluate a candidate's problem-solving and presentation skills.
• Meeting with multiple people from the company ensures a thorough assessment.

"To hire, well, you really need to put a multistep process in to get to know the candidate."

This quote stresses the importance of a comprehensive hiring process for sales candidates.

"No hire that I've made at my past companies have gotten the job until they've presented a mock scenario around a fictitious company."

The quote explains the use of mock scenarios as a crucial step in the hiring process for sales roles.

• Mock scenarios can be based on either a fictitious company or the candidate's current service.
• The scenario tests the candidate's ability to articulate solutions and handle objections.
• Tougher questions should be posed if the candidate presents a familiar product.

"I think if they're selling you what they already know, then the audience should be delivering much harder questions and harder objections."

This quote suggests that familiarity with the product should be balanced with more challenging interview questions.

"Good versus great comes down to, are they consistent throughout the whole process?"

The quote identifies consistency in performance across the interview process as a key indicator of a candidate's potential.

• The type of sales rep needed changes over time with the company's maturity.
• Early-stage companies require versatile reps who enjoy building processes.
• Mature companies attract reps more focused on compensation and quotas.
• The transition to enterprise sales may necessitate more experienced reps.

"Early days of hiring reps, you're going to need renaissance reps that have a very wide breadth of skill sets who enjoy the building process."

This quote describes the adaptable and broad skill set required from sales reps in the early stages of a company.

"But certainly as you go into enterprise and you've been there longer, that rep that is going to be successful there has more experience and is more focused on what are my set of accounts and how do I crush my number."

The quote contrasts the early-stage sales rep with the more experienced, quota-driven rep needed for established enterprise sales.

• Sales reps are often motivated by compensation and incentives.
• Concerns about reps being too focused on compensation may arise.
• A strong focus on compensation is not inherently negative.

"Do you think it's a fair description that sales reps are coin operated and is that a bad thing?"

This question addresses the stereotype of sales reps being primarily motivated by financial incentives.

"Again, going back to tithing, it does not"

The incomplete quote suggests a continuation of the discussion on sales rep motivation, potentially relating to the concept of tithing or giving, but the context is not provided.

• In the beginning, a sales team should focus on connecting the product with potential customers rather than meeting sales quotas.
• Specialization and revenue growth become more important as the company grows.
• Sales reps need to make a living, so a focus on revenue is acceptable in later stages.

"The early days are really about who is creating the best connection between my developing product and my potential customer."

This quote emphasizes the importance of relationship-building over quota-meeting in the initial phase of a business.

"But I think in the later years or as you build out your sales organization, while I don't like the term coin operated, people do become more specialized as you get bigger as a company and the specialization of the sales rep is to bring in customers and grow revenue and they need to make a living."

Here, the speaker acknowledges that while the term "coin operated" is not preferred, specialization in sales is a natural progression as a company matures.

• Hiring big-name company employees doesn't guarantee success.
• Intellectual range is critical for early sales leaders due to the variety of tasks they must handle.

"I could absolutely see where the big logo hire does not work out."

The speaker recognizes that hiring from well-known companies does not always lead to success.

"What you're looking for there is intellectual range and that often doesn't just show up by the fact that they worked at Microsoft or King from Google, what have you."

Intellectual range is identified as a key attribute to look for in hires, beyond the prestige of their previous employer.

• Compensation plans should be fair and reflect the candidate's interest in the company's long-term journey.
• Overemphasis on compensation can be a red flag.
• Total rewards include job satisfaction and career advancement, not just the compensation plan.

"Are they really interested about the long term journey of this company?"

This question is used to gauge a candidate's commitment beyond the immediate compensation package.

"Sometimes if it becomes too much about the comp plan, then that's a red flag."

An excessive focus on compensation is considered a warning sign of a candidate's priorities.

• Clear expectations and a directive approach are necessary at the start.
• The relationship evolves into a partnership as competence grows.
• The manager-employee relationship changes over time.

"Well, I think on the journey of people joining a company in the early days, they want to have clear expectations, and you as a leader need to be a little bit more directive on what are the expectations and how you're going to get there."

This quote emphasizes the need for clear expectations and guidance for new hires.

• Employees need to understand the additional responsibilities of their managers.
• Moments of directness maintain hierarchy.
• Hierarchy is respected when employees appreciate the workload and skills required at different levels.

"If they feel like you're doing the same job as them, then you're in trouble and the hierarchy is going to break down."

The speaker suggests that a clear distinction in roles and responsibilities is necessary to maintain a functional hierarchy.

• Direct feedback should be a portion of the relationship, not constant.
• Feedback should be constructive, focusing on improvement and team objectives.
• Managers should not shy away from giving necessary feedback.

"But again, you can't be afraid to provide that feedback."

The importance of not avoiding giving feedback, even when it's challenging, is highlighted.

• Clarity on the business problem and expected ROI is crucial for sales forecasting.
• Deals are less forecastable without a clear understanding of the solution's value.

"You better be crystal clear on the business problem that your solution is solving and why the company would spend money on it, and what are they expecting in terms of return?"

The speaker stresses the need for clarity in the value proposition for effective sales forecasting.

• CFO involvement indicates strategic importance.
• Sales teams must provide clear ROI analysis.
• CFO engagement is welcomed as it signifies a collaborative partnership.

"I think if a CFO is involved in your deal and they're spending time on that deal, that tells you that you are strategic to them."

The speaker views CFO involvement as a positive indicator of the deal's strategic value.

• Leadership support may be necessary for crucial deals in early-stage companies.
• Reps should create enough pipeline to meet targets without unnatural deal-closing tactics.
• Building a sufficient pipeline throughout the year is ideal for meeting quarterly numbers.

"The best reps are creating ample pipeline throughout the year."

This quote highlights the importance of consistently building a sales pipeline to meet targets without resorting to aggressive tactics.

• A robust pipeline is essential to cover potential shortcomings in sales.
• Over the long run, maintaining a strong pipeline can mitigate various issues.

"So you don't put yourselves in that position. Now, is that possible every time? Probably not. But for the most part, over the long run, pipeline covers all sins."

The quote emphasizes the importance of a strong pipeline in ensuring sales stability and success, suggesting that while it may not be foolproof, it is a critical strategy for long-term success.

• The company in question does not practice discounting; instead, they focus on terms that work for the customer while maintaining a programmatic approach.
• Previous employers did discount, but it was mutually beneficial for both the company and the customer.

"My friend, we don't discount. We try to work on terms that work for our customer, but everything's programmatic."

This quote highlights the company's policy of not offering discounts and their commitment to fairness and transparency in pricing.

• The CFO should oversee discounting, providing a discount matrix based on margins and volumes.
• Sales reps may have limited discounting power, with more significant discounts requiring higher-level approval.

"Good discounting should originate from the office of the CFO, meaning the CFO knows the margins."

The quote outlines the proper management of discounting within a company, suggesting that it should be a strategic decision involving the CFO and based on the company's financial thresholds.

• Startups may face more pressure to discount from procurement agents who are aware of the startup's need for revenue.
• Procurement looks for conviction and understanding of the product's business value from the startup.

"And what they're looking for is conviction on your side, that you believe in the product, that you have an understanding of the business value and the ROI that it's going to provide."

This quote identifies the challenge startups face when negotiating with procurement and the importance of demonstrating belief in their product's value.

• Deal reviews should be frequent and vary in frequency depending on one's role.
• Effective deal reviews focus on potential deal weaknesses rather than just the positive aspects.

"What separates good from great? I think great is organized using medic or MedpiC or some framework for how do we assess the deal."

The quote suggests that structured methodologies are essential for conducting effective deal reviews that focus on identifying and addressing potential deal weaknesses.

• Understanding whether a deal was committed for the quarter or just a potential is crucial.
• If a committed deal slips, a full review is necessary to identify issues with pricing, product, or sales execution.

"When I hear it slipped to next quarter, what I'm looking for is did you commit it to this quarter."

This quote underlines the need for clarity on deal commitments and the importance of thorough reviews when deals do not close as expected.

• Written communication and transparency are key enduring sales tactics.
• Withholding information is an outdated sales tactic due to increased demand for transparency.

"The sales tactics that have died at death are really around withholding information."

The quote reflects the shift in sales tactics from withholding information to transparency, indicating a change in customer expectations and sales strategies.

• New sales leaders should avoid pattern matching from previous companies.
• It is important to understand the broader organizational perspective, especially from engineering leadership.

"Really get to know your peer group and the other side of the equation, that being probably the engineering leadership."

The quote advises new sales leaders to engage with different parts of the organization to gain a comprehensive understanding of the product and its problem-solving capabilities.

• AI can assist sales reps in understanding the best next steps for their customers.
• Adopting AI can lead to more informed and effective customer engagement.

"I think that there's an opportunity with AI to use technology to help every sales rep understand the best next step for their customers."

This quote highlights the potential for AI to revolutionize the sales process by providing reps with actionable insights tailored to their customers' needs.

• The challenge is to provide opinionated solutions to help customers succeed.
• It is important to work closely with customers to improve product delivery and success.

"How are we helping engineering teams and broader companies ship better products faster and really getting into the weeds with them and providing an opinionated solution."

The quote discusses the ongoing effort at Atlassian to deeply engage with customers and offer solutions that enhance their product development processes.

• Snowflake is recognized for its customer-centric approach and internal alignment.
• The company's recent success is attributed to its focused and intense sales environment.

"I'm impressed by Snowflake from afar... that company, from the CEO on down, has really great alignment and it's customer centric."

The quote expresses admiration for Snowflake's sales strategy, particularly its alignment and customer focus, which are seen as key drivers of its success.

• The conversation is appreciated, and thanks are extended for the opportunity to participate.

"Harry, thanks so much for having me."

The quote is a polite acknowledgment and expression of gratitude for the discussion that took place during the podcast.