Lenny's Podcast Transcripts

Transcript

Jen Abel[00:00:00)]You need to vision cast, you need to sell to a gap, don't sell to a problem. When you're selling to a leader, you need to be selling an opportunity. The market doesn't want to be sold to,

they want to buy. Lenny Rachitsky[00:00:12)]Most founders would rather get 10, 10K deals than lose nine and get one 100

K deal. Jen Abel[00:00:17)]In the very early days, people will discount till the cows come home because they think that's the way to get a deal done. The best clients are not going to do that to you. If they're sitting there nickel-and-diming you,

It might be giving you a false sense of success and product market fit. Jen Abel[00:00:34)]As soon as you become a comparison, as soon as you become one of three that they're testing out,

Something else that you talk about is that enterprise sales is very creative. Jen Abel[00:00:52)]It's more of an art. It's all about deal crafting. It is a relationship you're building with someone. If they know they can call on you, people will turn over rocks for you. I have a client at a Fortune 10 company where I was like, "It's so important we get the deal done this year. Is that possible?" And she's like, "It's a tall order, but if it's going to help you, let's do it."

These are how enterprise deals gets done. It's relationships. Lenny Rachitsky[00:01:15)]What's kind of like the state of the art on go-to-market outbound tooling?

Jen Abel[00:01:18)]I don't use a tool. The thing about AI tools is they're all pulling from the same databases. I want to email someone not in the database that's getting hit by a million folks. I want to take a back door in,

not the front door where everyone else is trick or treating. Lenny Rachitsky[00:01:33)]Today, my guest is Jen Abel, co-founder of JJELLYFISH where she and her team help early stage founders learn how to sell and now GM of Enterprise at State Affairs. If you want to become better at selling your product, this episode is going to blow your mind and make you so much better in every way. This is the second time Jen's been on the podcast. Our first conversation was focused around getting from zero to 1 million ARR,

essentially founder led sales.[00:01:59)]This conversation is part two going from around one million in ARR to around 10 million. This is the most tactical and in the weeds discussion you will find anywhere for free on how to actually become more effective at selling to enterprises. I'm so excited for you to listen to this conversation. If you enjoy this podcast, don't forget to subscribe and followed in your favorite podcasting app or YouTube,

it helps tremendously.[00:02:22)]And if you become an annual subscriber of my newsletter, you get 17 incredible products for free for an entire year, including Devin, Lovable, Replit, Bolt, n8n, Linear, Superhuman, Descript, Wispr Flow, Gamma, Perplexity, Warp, Granola, Magic Patterns, Raycast, ChatPRD and Mobbin. Head on over to lennysnewsletter.com and click Product Pass. With that,

I bring you Jen Abel after a short word from our sponsors.[00:02:47)]Here's a puzzle for you. What do OpenAI, Cursor, Perplexity, Vercel, Platt, and hundreds of other winning companies have in common? The answer is they're all powered by today's sponsor, WorkOS. If you're building software for enterprises, you've probably felt the pain of integrating single sign-on, SKIM, RBAC, audit logs and other features required by big customers. WorkOS turns those deal blockers into drop-in APIs with a modern developer platform built specifically for B2

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and a smooth developer experience. Go to Workos.com to make your app enterprise ready today.[00:03:48)]This episode is brought to you by Lovable. Not only are they the fastest growing company in history, I use it regularly and I could not recommend it more highly. If you've ever had an idea for an app, but didn't know where to start, Lovable is for you. Lovable lets you build working apps and websites by simply chatting with AI. Then you can customize it at automations and deploy it to live domain. It's perfect for marketers, spinning up tools, product managers,

prototyping new ideas and founders launching their next business.[00:04:17)]Unlike no-code tools, Lovable isn't about static pages. It builds full apps with real functionality and it's fast. What used to take weeks, months, or years, you can now do over a weekend. So if you've been sitting on an idea, now is the time to bring it to life. Get started for free at lovable.dev, that's lovable.dev. Jen, thank you so much for being here,

welcome to the podcast Jen Abel[00:04:45)]Lenny,

it's starting to feel familiar and I like it. Lenny Rachitsky[00:04:48)]I should have said welcome back to the podcast. So I actually shared on Twitter that you're coming back and I had so many people ask so many questions. Clearly, there is a lot of confusion and a lot of need for learning how to get better at the stuff, we're going to talk about sales, enterprise sales to frame the discussion, our first chat, which we're going to point people to if they want to start there, we focused on founder-led sales, which is essentially the beginning phases of a startup, kind of going from zero to about 100

million ARR.[00:05:17)]This discussion is on the next phase, which is going from about a million ARR to about 10 million ARR in enterprise sales, not like PLG or anything like that. You have a bunch of really strong and counter intuitive opinions and piece of advice on how to be successful at this. So I'm just going to go through a bunch of these things. We'll see where it goes. Before we get into the first one, is there anything broadly, I don't know, is there anything broadly you want to share? Anything you want to say before we dive in?

Jen Abel[00:05:41)]No,

let's dive right in. Lenny Rachitsky[00:05:42)]Okay. Okay, so the first thing that I haven't heard anyone talk about before is this point that you often make that the mid-market does not exist. People often hear about enterprise companies. There's obviously SMBs and startups. There's also people just, "Oh, I'm going to go after the mid-market." Somewhere between. You don't think that's real? Talk about your experience there,

what people should know. Jen Abel[00:06:03)]It's fascinating because if you ask someone to describe the mid-market, actually, if you ask someone to describe the enterprise, every single person has a different answer. It's either based off of revenue, it's either based off of market cap, it's based off of employee size,

and I think a lot of people can get lost because selling to a hundred person organization is a radically different game than selling to a thousand person organization and there's no hybrid approach.[00:06:35)]So the best way to think about it is you have small business which typically can be really powered by marketing, and then you have enterprise, which is typically going to be sales led. If you bucket them into these two very specific silos, it makes it much, much easier to understand what game you're playing. Now, when we talk about mid-market, I usually will say, "Are we talking about the upper end of small business or are we talking about the lower end of enterprise?" (00:07:04): And most people are usually saying the lower end of enterprise. And I say, "Great, know you're playing the enterprise game. Know the type of people you need to hire, the type of ACV they need because it makes it a lot easier than trying to have this middle ground that catches everything that doesn't distinctly define SMB and enterprise." So I say the mid-market doesn't exist because what is a mid-market hire? It's either low end enterprise or upper end SMB,

and if you bleed those two games you're going to lose. They're so distinctly different. So that's kind of my theory on it. Lenny Rachitsky[00:07:36)]You have this chart that you shared with me that will link people to where you kind of show the number of companies within each of these segments and there's basically nobody in this kind of middle segment,

talk about that a bit. Jen Abel[00:07:46)]That's right, and just like the power laws, if you look at the Fortune 1,000 and then the lower end enterprise from there,

it trails off so fast. Power laws totally exist in these large corporations and we can't be treating everyone the same. Lenny Rachitsky[00:08:08)]This begs the question, where do you suggest companies start? There's obviously startups classically are just like innovators, move fast, can make quick decisions, enterprises have all the money. Usually the advice I hear is just don't go after the fancy companies to start because they take a long time. You don't want to screw it up. What's your advice on where to start for most companies?

Jen Abel[00:08:30)]The exact opposite. Early adopters are those logos because they have to continue to stay at the number one spot. So they'll take tons of swings to continue to stay in the ... Staying in the number one spot is the hardest part. So those number one logos are like if you can give me just a slight bit of alpha, just a tiny bit, that's where I get promoted,

that's where I get the pat on the back because we are the world's leader in our industry and we cannot be disrupted there.[00:09:05)]So there's this running joke where not a running joke, there's this running statement where a lot of VCs will say, "Don't go after tier one logos, go learn down market." Or, "o learn from logos that don't necessarily carry a lot of weight." The ones that carry all the weight are the ones that are willing to take a shot and want to help, right? Because they also want to be,

they also want to be able to dictate the roadmap.[00:09:30)]Now it's the founder's job to decide what can be done and what shouldn't be done, but their voice takes you a $100,000 deal into a million dollar deal in a very short period of time. It will literally guide you there. So when someone says, "Hey, go after startups, such as short sales cycle." Yeah,

that makes sense. I totally get that. It's very easy to define the decision maker.[00:09:54)]It's very easy, you don't have to go through procurement, but in the age of AI where it's all about sucking the oxygen out of the room and winning the deal and getting your foot in the door as quickly as humanly possible before someone else tries to take that,

you want to get to the enterprise as fast as humanly possible. Lenny Rachitsky[00:10:12)]Just so folks understand what we're talking about here, when you say tier one, what's a good way to think about what tier one is?

Jen Abel[00:10:16)]Tier one is like your Walmarts, your McDonald's, your NVIDIAs, your Tesla, your ExxonMobil, your UnitedHealthcare, the logos that are the leader in their space,

Wow. Your advice is because this is very counterintuitive. This is exactly what you're here not to do. Your advice is go after the Chevrons and the Mobils and the Walmarts as a startup. Jen Abel[00:10:46)]Because if you can get them,

that's all the proof you need. Lenny Rachitsky[00:10:50)]How do you approach finding someone? Let's just get tactical there. Just like say you're going after Walmart. I know this is not a five-second answer, but just how would someone approach finding someone at Walmart to sell to?

Jen Abel[00:11:01)]First of all, make sure the founder is involved, right? Everyone loves talking to a founder, so we'll start with let's get the founder involved as fast as human possible. The second is you need to vision cast, you need to sell to a gap, don't sell to a problem. There's a very big difference between problem selling and gap selling. Problem selling is highly specific, more technical than not, and it's the way that every salesperson is going to go about it,

find the problem and anchor to it.[00:11:33)]When you're selling to a leader, you need to be vision casting and you need to be selling an opportunity which is they are here, here's where we can take you. You know that image where it's like Mario or Mario, and then there's the mushroom and then there's Mario on blast, and everyone is like, "Don't sell the mushroom, sell Mario on blast." Well,

that's exactly what it's saying.[00:11:57)]It's about selling the opportunity. That's what gets the tier one logos excited and that is the best thing for a founder to sell, selling the vision versus the problem, and also it's what gets them to want to take a swing. Who wants to take a swing because you can do some small problem?

They're not going to go to bath for that. Lenny Rachitsky[00:12:17)]What's an example of a vision cast in a company you've worked with just to make this real? What does it look like when you've done a great job?

Jen Abel[00:12:23)]We have an ability to deliver alpha, meaning, we have information, we have data, we have a way of working that no one else can do or is going to unlock a new way of thinking for you or an ability to deliver to a customer or an ability to solve a problem. Right now, you have an ability to access this level of information. I have an opportunity through our resources or through this gated data, we have access to get you much further upstream so that you can get information faster sooner. It's kind of like the high-frequency trading that one second, that one second. They didn't do much. They didn't sell, "Oh, we're doing fiber cable connectivity. We're giving you one second of alpha before everyone else." It's more of that ability and that's not problem-selling,

that's opportunity selling. Lenny Rachitsky[00:13:14)]I like this phrasing of just giving them alpha,

that's such a simple way to imagine what this should feel like. We'll link to that image you're talking about with the Mario and- Jen Abel[00:13:22)]You know that image?

Lenny Rachitsky[00:13:23)]Yeah, the person that made that image originally is Kathy Sierra, if you remember her, do you remember? So there's this person, Kathy Sierra, she's from back in the day. This was a big, I don't know,

lesson she taught is you want to not sell your people on a feature or a product. You want to sell them on them becoming a superhero. Jen Abel[00:13:42)]Yeah,

They are now a superhero because of the thing you've built for them. And so the vision here is here's how you become a superhero. Here's how this alpha will help you become more successful. Jen Abel[00:13:50)]And that's why founders are so good at selling because they naturally go to vision selling and vision casting versus a typical trained salesperson is find the problem, ask these questions and it just kills the vibe. It just feels like you're talking to a salesperson, right? (00:14:08): It's like, "What's your script? And it's like that's not vision selling, that's like playbook selling." And in the age of AI where a lot of it is Alpha, it's about speed, it's about getting access to information, it's about training data,

and look at how the market is reacting to it. It's all opportunity and it's all about the alpha. Lenny Rachitsky[00:14:30)]So just to make this more concrete for people, Sam, like sales person at Cursor, what would be an example of vision casting? The obvious idea there is your team will be more productive, you'll get more done faster than everybody else. Is that a big enough vision to cast?

Jen Abel[00:14:47)]I think it may be more of you'll be able to actually hire the 10X engineers that you don't necessarily have access to because they want to be able to use this type of tool. It's about letting them get differentiated talent or that's probably more of what I would anchor to of this is the 10X engineers use cursor. You don't, do you want access to 10X engineers?

They won't even join your company if you're not using Cursor. Jen Abel[00:15:18)]Yeah, yeah. Think about it. So many people are so specific about what they're able to, I think especially technical folks, I'm not a technical person, but I would imagine that they're not going to go to,

they don't like to go to these corporations because they're forced to use some incumbent tools. Lenny Rachitsky[00:15:35)]Going back to going after these larger companies, I asked your colleague, Justin, what he sees you do that most impacts the success that teams have with their sales process. And there's a bunch of I'm going to touch on, but one is most founders are insecure about asking for large ACVs for charging, or the way he put it is most founders would rather get 10 10K deals than lose nine and get one 100

K deal. Talk about your advice there and what you see. Jen Abel[00:16:04)]There are in the very early days is people will discount till the cows come home because they think that's the way to get a deal done. The best clients are not going to do that to you because that's like a qualification criteria, which is like if they're sitting there nickel-and-diming you being like, "No, I don't believe it's worth this. I don't believe it's worth that."

They're not fully bought in on what you're selling them.[00:16:32)]So when I say I'd rather get $100,000 deal than $10,000 deals, I'd rather have one rock star client that's going to help me figure out the next stage of where this is going than 10 or maybe five that are a good fit, five that are not, and I still have to serve those five that are not a good fit, and that's going to distract me. So this is why I love enterprise sales is they're not going to do the hard work of bringing you in if it's not critical or if it's not, when I say critical, it's going to impact them in a way that they're going to make it successful,

that's what I love about enterprise sales.[00:17:14)]They have the resources to ensure that it gets implemented because most in today's day and age, if people are not using the tool, you just get rid of the tool. So they're going to want to make sure whatever they bring in, what they go to bat for, remember, they go to bat once every two years,

maybe once every three years. You've got to make it feel incredible. You've got to make it feel like they're going to be a superhero going back to it.[00:17:42)]Otherwise, what's the point? Because the way enterprises are structured is it is designed today to make it hard to buy because they want to make sure whatever you're bringing in, you really, really want it gets rid of the mediocre. I think this would be good and it gets to this is going to change the way we work. It's going to impact our ability to capture some form of alpha,

however you want to define that for them and it's sticky because of that. Lenny Rachitsky[00:18:16)]So your advice here broadly is don't pay attention to the smaller 10K-ish kind of opportunities for a bunch of reasons. One is it might be giving you a false sense of success in product market fit. Two,

those companies are maybe not as innovative and won't lead you in the right direction. Three are probably discounts just like your product than your pricing just gets thrown off. Jen Abel[00:18:38)]Yep, and also you don't really get taken seriously for 10K. You get way more taken seriously for a 100Ks, it's much harder to get a 100K deal done and an executive use needs to be involved. I'd much rather have an executive sign-off on something and spend two more months getting the deal done because you know that they are bought in, you can now ensure what kind of value do they want to unlock and maybe you have an opportunity to turn them into a user, which to me, in today's day and age, with our generation being the ones that are now the executives at these corporations,

this is native to them. Lenny Rachitsky[00:19:15)]Who is this true for? Is the advice here basically, if you're trying to build a successful B2B company, everybody should be aiming towards these a 100K sort of deals? Is there a world where you can be successful with 10Ks for a long time?

Jen Abel[00:19:30)]If you have a super high win rate in a massive market, because all you have to do is reverse engineer the math. If you need to generate a hundred million dollars in revenue, how many 10K deals do you need? And the expansion on a 10K deal is in parallel to that. Where can you go? 10 to 15? That's a 50% growth, much easier to go to a 100K to 500

K because they want more bodies or they want more value out of you.[00:19:58)]For an enterprise, they'd love to get more out of an existing customer. You're already trusted. So it's also about the type of company you are. If you're venture-backed, you can't be selling $10,000 deals to the enterprise, you'll get killed,

or you've already lost the game because you're playing a small business game in the wrong sector. Lenny Rachitsky[00:20:17)]Have you seen startups you've worked with succeed in that 10K, 20K bucket or is it really, really rare?

Jen Abel[00:20:23)]If they're going after the enterprise?

Yeah. Jen Abel[00:20:25)]Yes, if it's the first three months and then after three months, it turns into a 50K and then a 100K and it ramps up quickly. Sure, that makes sense. You got your foot in the door and you can expand it exponentially in a healthy manner. I think that that's fine. $10,000 a year, then going to 12, then going to 15,

the math will break. Lenny Rachitsky[00:20:45)]This is great. I feel like most founders to this are like, "No, no, we're kind of in that exception we'll be all right. 10K, we'll do 20K. That's crazy to consider 100K."

Jen Abel[00:20:52)]Yeah, the math will break. And also, a really good salesperson, you're commissioned on a 10K deal, they're not going to get a great salesperson. They're going to want to be anchored to how can I sell a $250,000 deal? How can I sell a half a million dollar deal?

That's the type of person you want. Lenny Rachitsky[00:21:11)]And a big part of this is this is a good lens to force you to build the product that you can sell for 100K, 500

K. Jen Abel[00:21:19)]Yeah, absolutely. And again, this is about playing that enterprise game. If you're trying to sell, if you're a small business, if you're in the small business place and an enterprise company comes to you and is like, "I like this."

Ensure that you structure it for an enterprise. Don't play the small business team with an enterprise company. Lenny Rachitsky[00:21:38)]Talk more about that. What does that mean?

Jen Abel[00:21:40)]Let's say you're PLG, and a big company like Walmart comes to and is like, "Hey, can we get access for three of our users?" And they're like, "This is so exciting." And then they sell them the small business pricing for three users to Walmart. Very, very hard now to go from those three users that you just priced them at in a small business way, turn that into 100

K because now it's documented what they're actually paying for this.[00:22:08)]So you're stuck. You've kind of anchored yourself to this price. Not to mention how are you going to unlock the executive high level value so that you can get that senior executive to buy in and stamp this as well. Otherwise, it's just going to be throwing it on the credit card. But again,

you've just ruined your enterprise game because you're anchoring to a small business price.[00:22:34)]So this is why when you bleed these two games, it's very, very, very dangerous because these are really smart companies. They're going to say, "Well, wait a second, I just paid $9,000 last year and now you want to charge me $90,000. Well, what's the step change in value? What's the 10X value I'm now getting?"

That's super hard to prove. Lenny Rachitsky[00:22:54)]So the tip here is your initial price will really screw you if you get it wrong. And so obviously we're not going to give people the answer on their pricing strategy fully, but just is the advice just charged more or what would you recommend?

Jen Abel[00:23:08)]It is enterprise companies are very used to a land, when I say the first initial contract, somewhat between 75K and 150K, very used to that. In fact, that's probably where you want to start because you also want to understand where can you grow from this. Start contained, don't say 150K and sell the farm. Say, "It's 150K, here's who gets access, here's the value we're going to deliver and here's where we're going over time." You also want them to know, "Here's what we plan to do roughly in year two, year three." (00:23:42): I know it's hard to look that far out, but plant the seed with them in terms of where this is going. If you come in at $10,000, even if they want to bring you in and want to spend 100K with you, they have to be able to defend that and now they see a $10,000, it can get really messy, especially because a lot of them are using AI now to understand contracts. So they're going to quickly say, "Oh wait, you spent a thousand dollars with Lenny and now Lenny is asking you for a 100K. Great. Just help me understand why or defend it."

Lenny Rachitsky[00:24:15)]I could totally see ChatGPT being like, "This is interesting."

Jen Abel[00:24:19)]Yeah,

exactly. Lenny Rachitsky[00:24:19)]It used to be 1K, now it's a 100K. What might be going on here?

Jen Abel[00:24:22)]Totally. The people don't realize how, again,

know the game you're playing and don't be sloppy about it. Lenny Rachitsky[00:24:34)]So your advice here is really interesting. There's the land to expand. Expand is very important,

but the landing may screw your expanding because it sets the wrong reference point. Jen Abel[00:24:45)]1,000%.

That's exactly right. You said it better than I did. Lenny Rachitsky[00:24:48)]And so you may see in theory if you land a 10K go to 100K, that's an amazing NRR,

everyone's going to be really impressed. But you're saying people won't buy into that. It's going to feel absurd and wrong. Jen Abel[00:25:00)]Unless it's defendable. All it needs to be is defendable. But who can really defend? That's very hard to defend a 10X. 10X jump, they're going to want to see 15

Oh yeah. Lenny Rachitsky[00:25:13)]This is something most founders try to do. They find a few folks to work with, to help them build the thing. What's your advice on when to start finding design partners? How to find design partners, what a good relationship looks like?

Jen Abel[00:25:24)]Design partners are incredible. They're the hardest logos to upsell, meaning go from design partner to full rollout customer. So don't expect these people to be your million dollar pipeline. Expect these people to be the guide, to help you understand, maybe design partners could be a technology company in the Fortune 1,000. (00:25:50): So they're used to experimenting. They're used to technology, they're used to, they were once a startup,

so they get it. Those make really good design partners. Most of the design partners that I've closed are usually technology based. They get it and they also are excited about advancing the org and also giving the team an ability to have that startup feel.[00:26:12)]So if you're a large massive corporation like Stripe. Stripe doesn't get that startup vibe as much like that 50 person startup vibe, but this can be a gift to give them that lens and give them that voice and give them that excitement that they don't get as a larger company. But those are great types of logos to be early design partners because one, they want to make sure they continue to stay on the cutting edge, but two is they are, to try and build something without that guidance is really, really,

really hard because they're not using it.[00:26:54)]So you need that user feedback and you also need to tie that to the executive value. It's actually a lot, it's very hard to do, but if you can come out of it and upsell a design partner to a full rollout customer, such a huge win for the market for you, for your team,

and also for your investors because it's the hardest customer to actually truly convert.[00:27:23)]They've been it when it was messy, they usually got a low price point. But if you again frame it, say, "Listen, I would love for you to be a design partner. I want a little skin in the game to get you to point it. Here's where we want to go and you'll get a discount because you were in the beginning, but I'm setting the framing. Here's where we want to go with pricing. Here's where we are today. You'll always have 30% concession in perpetuity because you are there with us on day one." (00:27:49): So again, it's not about asking for $10,000 and then not expecting that design partner to upsell and keep it flat because there's no growth there. It's a flat. It's about getting that early design partner, set the framing, own the framing and let them know where you're going. Again, a $100,000 to these large logos if they want it,

it's very easy for them to get it in. Lenny Rachitsky[00:28:11)]There's this really interesting underlying piece of advice of finding a company that pulls you in the direction that leads to success. A company that's kind of a visionary. There's the obvious companies that everyone is always trying to get these days, OpenAI and Anthropic and Stripe I think is one. And any advice for just picking the right early? What are signs that this is a company that will point you in the right direction?

Jen Abel[00:28:34)]I think they have to be part of a logo that is deemed startup-friendly or in that world, and then I think it's the person, is this person excited to give feedback? Does this person buy in to where we're going? Do they see this world differently like us? Are they in lockstep with the founder vision? (00:28:58): Are they excited to use a tool that's janky? Because it is janky in the beginning, but they know that where this can go can be incredible. So I think it's really about the person and making sure that they're aligned for what they're getting into, and I think a lot of salespeople oversell it. I think that's a common thing that happens and that leads to churn, that leads to frustration,

They oversell the initial kind of design partners phase over the product. Jen Abel[00:29:33)]They sell everything. Yeah, design partner, even full rollout, and it's so, so important to tell them, "Here's where we are today. Here's what we cannot do." Which is just as important. It builds trust. "Here's what we will allow you to do in the next six months. Do you want to be on this journey with us? And it's really ugly right now." Right? "Barely anything exists, but we would love your voice to be a part of it."

Lenny Rachitsky[00:29:55)]One of the biggest fears I think founders have is having a company pull, basically build just for their use case and then it ends up not being used by a lot of people. And so how far do you go fixing their specific problems? Any advice on just how far to go with one company?

Jen Abel[00:30:10)]That is the founder's job. The founder's job is to have a clear vision and do not let anything delineate from that. It's important to take feedback in terms of what is the market's reality, but it is the founder, and this is why being a founder is so hard. It is the founder's job to interpret that because a lot of feedback you get is this is the old way,

they're responding this way because it's the old way of working.[00:30:37)]They want you to build this because that's how they're traditionally expecting to do that. It is not, "Here's where we're going, this is why we're not doing that. I hear you, but here's why we're not going to do that because we're going to completely change the way you do this."

That is the founder's job.[00:30:53)]And I think we did a bunch of design partnerships late last year and there was a lot of feedback given, a lot of feedback given, but the founder had such clarity with where he wanted to go that he was like 80% noise, 20% had I not asked this question, I wouldn't have gotten that gold in terms of where they are today. And it's that 80/20 rule where 80% of what they're going to tell you is probably going to be not related to where you want to go or based off of the old way, but that 20% of, "Oh, I did not think about it that way."

That drives everything. Lenny Rachitsky[00:31:35)]Have you seen a design partner pull a company in the wrong direction? Just screw their path? Have you seen that or is that pretty rare?

Jen Abel[00:31:42)]No, I don't think it's that rare. We hear people complain about it all the time,

but I think it's more of an excuse. Lenny Rachitsky[00:31:49)]Coming back to this question of going after the enterprise versus SMBs. And again, early advice you gave is there's no, don't go in between. Either pick SMB small company, which I know you said there's a million ways to differentiate what this means,

but I guess I think of employee numbers under some number over a thousand is maybe enterprise. Is that a good way to think about it just like- Jen Abel[00:32:13)]Yeah, it depends. Are you selling per seats or are you selling based off of usage or are you selling off of, I think it also depends on the pricing model a little bit. I look at headcount too because it's just such an easy way to think about it because you can also gauge usage off that and a bunch of other things, but sometimes the small companies, I think we're going to see a lot more larger companies become smaller because of AI, not significantly smaller,

Yeah. Oh yeah. Lenny Rachitsky[00:32:59)]So interesting. So where I was going to go with this question is when people are deciding, I'm going to go enterprise versus I'm going to sell to startups, like YC companies are the typical example they sell to their own YC batches and you just broad advice of picking, "Okay, we go enterprise versus no, let's actually go startup."

Jen Abel[00:33:18)]I think it's about, and I read this somewhere and I wholeheartedly agree with it because I've seen it live. I think it's about what game does the founder best understand? Are they an incredible marketer and have some competitive edge for how they can win a massive audience? (00:33:34): I would say go SMB and marketing led or are they a bit more really understand how large corporations work and really excited to deliver on $100,000

plus type of opportunities or the value that they are building for is way more relatable to an enterprise versus a small business. Lenny Rachitsky[00:33:57)]That is really interesting. I've never heard of it described that way. I think about linear, which started very startup-ey and my take is they did that because changing the way you work is really hard and their bet was like, "Let's start with companies and grow with them and over time that becomes the default." Any reaction to that?

Jen Abel[00:34:16)]I think that it sounds like that that's a great way to work because that's a technical tool, so that you need the right, also need to have the right infrastructure to sell. I think Slack, look, Slack and Microsoft Teams are still battling it out at the enterprise. I think it's also how you plug in and how you integrate and do they even have the right systems to support you?

Say more about that. Jen Abel[00:34:46)]So the value, people were bringing their own use cases to it and it's not like they, well they can ingest and they built that, it's a brand new thing and they started I think, this is someone told me this, so this could be hearsay,

but I believe that they were already speaking to CTOs even well before they released to help them explain where this is all going and get their buy-in.[00:35:17)]And it's much easier to get into the enterprise when you're like, "We won't even touch your data, won't even touch your data. Just use it to solve problems and then we can build trust and then start to integrate and connect the pipes." But part of the challenges with selling in the enterprise, they're like, "All right, well let's connect all your data in the ..." "Whoa, that's extremely risky." (00:35:41): So you have to start small and low risk, which is like, "Hey, what is the subset of consumers that churned? Let's figure out how we could have made them happier, whatever it be." So that data is lower risk. So again,

it's also understanding your market and understanding what their ability to experiment is. Lenny Rachitsky[00:36:03)]It's interesting this distinction between OpenAI right now, and Anthropic, I don't know if you've been seeing their growth, it feels like OpenAI is very consumer first and Anthropic is more and more winning on B2B. I saw this chart recently where they're overtaking OpenAI now on B2B. I don't know, any reaction there of just these two different approaches?

I don't because most enterprises I'm talking to mentioned Gemini. Lenny Rachitsky[00:36:27)]Oh,

interesting. Jen Abel[00:36:30)]Or Microsoft Copilot. So I don't hear much about Anthropic to be honest. So that might be more of a small business startup-ey,

I don't know or it's a different part of the organization that's using it. Lenny Rachitsky[00:36:45)]Yeah,

that's a whole discussion or bundling right there of Slack and teams and then just Gemini just kind of coming in automatically. People don't have to adopt anything new. Jen Abel[00:36:54)]Yeah,

totally. Lenny Rachitsky[00:36:55)]There's something else that you talk about that I love that I don't think people talk much about,

Talk about that. Jen Abel[00:37:06)]So I personally believe that small business sales is really a, I used to think it was more science than art. It was more figuring out what didn't work, running experiments, testing and validating, which I do believe, that's to get to foundations, where do we play? What do we want to do? Like that early, early,

early zero to one.[00:37:33)]From one to 10, I think it's more of an art, which is how do I take my learning and how do I package it up where I own the framing, I can speak to very specific alpha,

I can vision cast and where I better understand the problem over time better than the market does. And it's all about deal crafting.[00:38:00)]They just need to feel like the value they're getting out of it is way more than the cost. And it's sometimes about giving away things that don't really cost much to you, but are super expensive for them. For example, "Hey, we're selling X tool. We can build out Y specifically for you over the next year and integrate it because I know that you would've spent X number of dollars on engineering resources or you wouldn't have gotten in engineering head internally to do this, but we're just leave it to you. You got to give us a year to build it out." (00:38:37): Again, you're not letting them sidetrack you too much, you're kind of containing it. "We'll do that for you at no additional cost." That's huge value. Right? Or, "Hey, we're going to run an event and we want you at the forefront of it. We want you to be a speaker."

Huge value. So it's like all of these additional things that add value beyond just the product but are all part of the product and the vision. Everyone keeps thinking the product is just what goes into their hand.[00:39:07)]The product is pricing. The product is the opportunity, the framing and not letting them compare you to something else. And I know we talked that on our first call, which is as soon as you become a comparison, as soon as you become one of three that they're testing out,

you've already sort of lost. It's all about differentiation and it's all about here's what you will be able to do tomorrow because of how we're going to serve you today. Lenny Rachitsky[00:39:39)]So along those lines, it reminds me in our first chat you actually made this point that I've never heard anyone else make, which is that services are a really good way to start getting into the companies that were most founders here. Like, "No, don't do manual stuff for the company. Build a product that you can scale."

Your advice is the opposite. Actually start with self-services. Talk about that. Jen Abel[00:39:59)]Enterprise is the number one thing they buy services, they know how to do it's super easy, they do it all of the time. It's like the most consistent thing they do. It's their largest budget item, external resources, consultants,

whatever.[00:40:13)]If they have a very immature way of understanding the problem or they've never purchased technology to solve it to some extent, either one, you are doing something that's never been done before, which is rare in today's day and age, or they might just be laggards on the journey. So you have to decide is this someone you really want to be working with? And if so, selling them as service,

even though the technology is powering it on the backend is the fastest way to get your foot in the door.[00:40:50)]It's what they know how to buy. Now, the idea is to once you sell that surface, once you get that foot in the door, then it's to guide them towards the product. "Hey, you're spending so much here, why don't we get you to come in and leverage the tool that's been powering this the whole time and move this more into technology serving you versus the human."

Wow. I think this will blow a lot of people's minds. Jen Abel[00:41:15)]Palantir, this Forward Deployed Engineer, that's exactly what they're doing. There's a lot of companies out, I'm sure OpenAI, and this is what someone told me they were in and talking to CTOs and helping them better understand how AI and their organization can better work together. And it was them coaching them, educating them, whether they did it for free or not, I don't know, but they got their foot in the door,

they started to build trust and then it gets adopted. Lenny Rachitsky[00:41:40)]This is the epitome of doing things that don't scale that advice we always hear this is like, "Okay, this is what that looks like. We will solve this problem for you. We are using software to do it." And then over time, "Oh, you could just do this yourself. It'll cost you less. You can scale this."

Jen Abel[00:41:54)]Yep, that's right. And they don't even need to know at first that software's doing it. That could be the magic part, which is like, "Guys, we literally, we are literally doing this with our technology."

Lenny Rachitsky[00:42:05)]Today's episode is brought to you by Coda. I personally use Coda every single day to manage my podcast and also to manage my community. It's where I put the questions that I plan to ask every guest that's coming on the podcast. It's where I put my community resources,

it's how I manage my workflows.[00:42:20)]Here's how Coda can help you. Imagine starting a project at work and your vision is clear, you know exactly who's doing what and where to find the data that you need to do your part. In fact, you don't have to waste time searching for anything because everything your team needs from project trackers and OKRs, the documents and spreadsheets lives in one tab all in Coda. With Coda's collaborative all in one workspace, you get the flexibility of docs, the structure of spreadsheets, the power of applications, and the intelligence of AI,

all in one easy to organize tab.[00:42:52)]Like I mentioned earlier, I use Coda every single day. And more than 50,000 teams trust Coda to keep them more aligned and focused. If you're a startup team looking to increase alignment and agility, Coda can help you move from planning to execution in record time. To try it for yourself, go to coda.io/lenny today and get six months free of the team plan for startups,

that's C-O-D-A.io/lenny to get started for free and get six months of the team plan. Coda.io/lenny.[00:43:22)]There's a lot of talk these days about this idea forward deployed something volunteer was really famous for, just essentially an engineer sitting in your office solving problems with you basically as an employee. And then through that, they learn what software to build. Is that something you're seeing too?

Jen Abel[00:43:38)]Oh yeah, I think that a lot of companies, sorry, a lot of folks that serve the enterprise, they have a butt in a seat in their office. You look at these large consultancies like McKinsey, they're not in their headquarters, they're in their client's office all the time. And the other interesting thing and proof of this is how many people go to a Deloitte or Accenture and expect them to be a channel partner? (00:44:02): This is exactly what this is all about, which is they sell this service, they come in and then they introduce, "Hey, look at what this startup is doing over here. You might want to give them a shot. The problem with channel partnerships and why I don't believe in them is there are a hundred of you on this list and you're expecting them to sell it on your behalf." (00:44:21): Biggest no-no, they're not vision casters, they're not visionaries, they're consultants, but it goes all towards go. I remember startups saying, "Oh, I'm going to go win over Accenture and then have them disseminate me into their clients." And I'm like,

as if that's a workable strategy. Lenny Rachitsky[00:44:41)]Okay. You know what might be helpful is, let me try to summarize some of the best pieces of advice you've shared so far. And this is specifically for folks trying to go from about a million ARR to about 10 million ARR. And then I want to ask you just what's most different about these two stages, but let me share this first. So advice one is go for tier one logos earlier than you think you should because they're early adopters, they can move fast,

And they excite investors too. Lenny Rachitsky[00:45:11)]Yeah,

for sure. And other leads are. Jen Abel[00:45:14)]Yeah, and other talent, future employees. Yeah,

exactly. Lenny Rachitsky[00:45:20)]So the counterintuitive insight here is you think they will move slow and be too busy,

but they are actually the early adopters. Jen Abel[00:45:27)]That's right. They have to maintain that number one spot. And also, all of the people that are in the number two, number three, number four spot,

all want to do what number one is doing. So it's also pure referenceability too. Lenny Rachitsky[00:45:40)]And the point about them being the early adopters, the people that join the Stripes in OpenAIs and Anthropics are like they individually love technology and love the latest stuff. So as a human they're like, "Oh, this is cool."

Jen Abel[00:45:52)]That's exactly right. I'm just agreeing with myself, that's kind of funny. But yeah,

Lenny Rachitsky[00:45:56)]That's a good sign. So two is ideally try to price closer to about a 100K, like 75 to 150-ishK is what you said. Most enterprises are used to buying. So instead of starting or even sticking with 10K, 20K for too long, you need to make yourself go towards 75 to 150

K. Jen Abel[00:46:18)]That's right, yep. And if you were to sell a service, I know we're talking about selling services first, throw weight that over time, so maybe it's 10

K a month. So they start to get used to what that pricing looks like. Lenny Rachitsky[00:46:28)]So this is a way to make it feel, this is like how you get to 75 to 150K is there's a service attached to it. It's not just, here's my SaaS product, we will solve this problem for you,

or a person will be sitting there doing this for you. Jen Abel[00:46:41)]Or no, it's the technology too. You can add the services. I always, well let me take that back. Whether the services is bundled into it or not, some people will unbundle it, other people will say the services is a part of it. But yeah, it nets out to 75 to 150

K. That's right. Lenny Rachitsky[00:46:57)]Okay. And you said that it's okay to start lower on ACVs and deals, but you need to push fast towards a 100

K over a few months. Jen Abel[00:47:05)]Yep, that's right. If you can get into an enterprise for 10K in a month, which is not doable, but if you could, and you could go from 10 K to 50 K in four months through an expansion strategy all game, that makes sense,

but it's really rare and very hard to do. Lenny Rachitsky[00:47:22)]And so there's two different paths there. One is land cheap and grow quickly. The other is move your ACV average up quickly. Seems like both,

the latter is probably the more common strategy is just keep increasing prices. Jen Abel[00:47:35)]Yeah, because the former you can get tripped up because they could say, "Okay, now give me an economical price for doing this for a hundred people." And then it all kind of evens out because now you're at the 100K deal anyway, but it's much, there's more room for error, which is why I say go in and try to land 100

K. Lenny Rachitsky[00:47:53)]By the way, in our first chat, we talked a lot about the procurement process, which is what trips a lot of people up and is really painful. And I vividly remember that conversation still. So if people are having issues getting through the sales process and procurement,

a lot of good advice there. Jen Abel[00:48:09)]And getting stuck in procurement is usually because you're not speaking to a senior enough person and they don't know how to navigate it, which is why I'm like that executive needs to be involved because as soon as the executive picks up a phone and tries to get a hold of their buying group,

things move.[00:48:27)]When people say, "Oh, I'm stuck in procurement." I'm like, "Oh, that could just be a qualification error and you never get out of it because you sold to someone too junior." So that's why the 100K is such a safe zone because even for 10K, you might have to go through procurement. So this is the surest way to make sure that you don't ... Listen, I've seen 10

No bueno. Jen Abel[00:48:53)]Yeah,

so. Lenny Rachitsky[00:48:55)]Okay. Next piece of advice is this idea of vision casting instead of problem solving. So the advice here is instead of here's your problem, here's how our product solves it is here's how you will achieve alpha in the market by adopting the software. We talked about the example of cursor where if you adopt cursor, you're going to draw the 10

X engineers that are joining other companies right now. This will give you a big advantage. Jen Abel[00:49:16)]That's right. And yeah, it's pain versus opportunity, especially in the age of AI, and I know that we're moving into the next dimension. It's all about solving for a gap. It's seldom about solving for a very, very specific problem because people are trying to figure out what's our AI strategy? Where are we going to go with this? What is the world going to look like?

I want to be a part of that new world. So it's a great time to be doing that. Lenny Rachitsky[00:49:42)]And then there's a bunch of advice you shared about design partners, of just how to select them. Your advice is definitely have design partners because they will help you build the right thing. But as a founder,

you need to have a clear vision and sense of where you want to go and not just build everything they're asking you to build. Jen Abel[00:50:00)]That's right, because important to say no. And that's all part of the framing, which is like here's, we want a little skin in the game. You set the price, but here's what we're marching towards in the next six to 12 months. Are we aligned there? If we deliver on what we say we're going to deliver, are we aligned there and do that kind of handshake?

Lenny Rachitsky[00:50:24)]Is there anything else that I missed that you think is really important for this stage?

Jen Abel[00:50:29)]So one to 10 is no longer the founder. Maybe the founder comes in very strategic points, but you need a really good enterprise salespeople. Taking someone from small business and expecting them to do enterprise sales, big no-no, it's a different game, right?

Vibe like a different game.[00:50:47)]You need to understand how corporations buy. You need to understand how executives think. You need to better understand simply just what the enterprise business model is all about and their ability to take on risk. People will bring in super junior enterprise sales reps and I'm like, "You're looking to sell to an executive and you have this person that's five years out of school with no corporate experience doing it, again, unless they have some extremely deep experience in the industry or are just a unicorn in terms of, wow, this person can sell ice to an Eskimo kind of thing." (00:51:27): A junior person converting an executive, again, if the founder is involved, maybe that's doable, but usually the founder can't be involved in every deal and you need people that can, I always say you need people that can cosplay a founder, which is selling the vision, getting them excited, running through a wall to get the deal done and getting creative on ... None of my deals look exactly the same, every deal looks different and that's okay because every organization has slightly different opportunities of where they want to go,

and you have to kind of build towards that and the framing may change.[00:52:14)]So it's this ability to adapt from what you're hearing and let that compound over time, but I always say, can this person cosplay the founder?

I think that that's the best type of salesperson because it doesn't feel like sales. It's more of the art. Lenny Rachitsky[00:52:30)]This is amazing advice. What is a common profile that you've seen be successful? What level of seniority? What kind of personality and any traits to look for?

Jen Abel[00:52:38)]Maybe a former founder if you can get that, because they're used to selling, they sold investors and they've sold employees. Two is someone with no sales experience, but has deep product experience or an engineer and can think about things in a unique way where the market is like, "Oh, this is so interesting." (00:53:00): Taking a typical salesperson then and putting them into a sales role almost always is where people get frustrated. The market, it feels salesy. The market doesn't want to be sold to, they want to buy. And I know that it's very hard to hire a really good enterprise salesperson. The number of people that I've interviewed, I can count on my hand the ones that I get really,

really excited by.[00:53:29)]It's almost like coming across a great founder. It's not as common as everyone expects, and I think that that's true for engineering. I think that that's true for sales and I think a lot of people, sales is like, "Oh, just throw a body into it. The product will do the work."

Lenny Rachitsky[00:53:48)]Advice I often hear is don't hire a senior VP of salesperson from a bigger company. Do you agree with that? What's like to senior?

Jen Abel[00:53:55)]Yeah, so the bigger company thing, the brand was doing all of the work. The brand built the trust. You need this person to be able to build the trust and they're usually,

the product is still so new. The product is the founder in the zero to one stage. The product is just starting to get a case study.[00:54:15)]You probably have maybe a few references, but it's still very, very early days. You need the market to believe the salesperson and you need that market to know that they're trustworthy. A VP of sales at a large company, I would say, they're best suited for a large company because one to 10,

you're running through walls.[00:54:33)]You have to figure out, you're doing a lot of convincing, you're doing a lot of educating, you're doing a lot of creative deal crafting. A lot of owning the frame. It's not necessarily selling a product, it's selling that future value, which a VP of sales at a large companies,

it's very different. It's a different game. It's kind of like the SMB and enterprise. Lenny Rachitsky[00:54:53)]It's interesting you said when you described the profile of a great hire here is you said they don't need to have done sales. If they have done sales, what's a number years or kind of what do you look for that tells you, "Okay, this is a good fit for the first hire."

Jen Abel[00:55:06)]I actually think it's less about experience and more about the person. Does this person make you feel good? Do you want to buy from this person? I think Jason, Jason Lemkin said that best. Would you want to buy from this person?

Lenny Rachitsky[00:55:15)]Can they sell you a pen?

Jen Abel[00:55:16)]The classic. Yeah, exactly. Do they mimic or mirror the market they're selling to? It's much easier to buy from someone that looks and feels like you than it does from somebody that's in a totally different realm. And also,

an executive wants to talk to another senior person.[00:55:41)]They don't want to talk to someone that just graduated from college and is selling them the new way of working. What do they know? So I think it's tricky. I would say someone with no sales experience makes it feel different and special, that's what I like about it. Someone with sales experience knows how to navigate and probably be qualified better,

but it's almost like the blend of those two things.[00:56:05)]And that's why I go back to cosplaying the founder, which is like, could this person close a future employee? Do they get excited about the problems they're solving internally and the vision that they get to sell to?

Lenny Rachitsky[00:56:19)]This actually was a reader question, listener question from Twitter. So Peter Dedenne asked, "How do you make this first salesperson as enthusiastic about the product as you? Is there something you could do? Is it more just they already are and you just leverage that?"

Easy. Jen Abel[00:56:42)]So if they know it's possible, if they know it's possible,

If they see how much they could make. Amazing. I imagine there still also has to be an innate excitement about the product and the opportunity. Jen Abel[00:56:58)]They have to believe in it. They have to believe in the founder, but incentives usually make the world go round, but yeah, is this person, are they asking the right questions to the founder? The best thing to do is have the founder join the first five calls. You know after five calls if this person has what it takes, and don't be afraid to fire. One in every two salespeople usually are fired. Yeah,

Because you can tell pretty quickly how it's going. Jen Abel[00:57:35)]You can tell,

or the vision of the founders is just very wrong. Lenny Rachitsky[00:57:39)]Speaking of incentives, do you have any quick advice on how to structure their comp? Just like how much they earn?

Jen Abel[00:57:45)]It's usually 50/50. So it's 50% OTE. So it's 50% base salary, 50%

OTE. Lenny Rachitsky[00:57:53)]And then how much of the sale do they typically get?

Say the first sales hire. Jen Abel[00:57:57)]It depends on the size of the deal, but in technology, it could be anywhere between eight and 12%. So rounds out around 10%.

Lenny Rachitsky[00:58:07)]Okay. Awesome. When do you hire the first salesperson? Is it around the 1 million ARR mark usually?

Jen Abel[00:58:13)]Yeah, it's around that 1 million ARR, mark and I, and it's usually when you have your first seven to 10 customers and there's some pattern recognition around it that you can share with somebody else, there's some consistencies. Otherwise,

it's just like that would be very hard. Lenny Rachitsky[00:58:34)]Basically as a founder, you have to figure out how to sell enough times so that you can show someone, "Here's what's working."

Jen Abel[00:58:40)]And this is the common thing I hear, "Well, I'm a $10 million business. I'm in this small business space. You're $0 in enterprise." It's a zero to one right now in enterprise. It's a totally different game. It's a different value proposition, it's a different deal structuring,

It doesn't work. Jen Abel[00:59:08)]...

There's a lot of unlearning that needs to happen when you move into a new market. Lenny Rachitsky[00:59:12)]So the advice here is make yourself sell up until around a million ARR, especially if you're trying to go enterprise selling to enterprises yourself as a founder,

which is really hard. You have so much to do and you have to be selling this thing for a long time time. Jen Abel[00:59:26)]Yep. And then try and find someone that you get excited by. It's funny, if you ask the founder, are you excited by your salesperson? I'm curious what the real answer is. It's like, "Well, it's a button to see it in. It was hard to hire, so."

Lenny Rachitsky[00:59:41)]Interesting. I remember,

That's right. Lenny Rachitsky[00:59:46)]So you can compare them. Do you agree with that?

Jen Abel[00:59:48)]100%. Yeah, because of the 50% failure rate. I think that's exactly right. So yeah, even a tall order, go find two people that are good. But yeah,

I think that that's right because one in two will fail. Lenny Rachitsky[01:00:02)]Okay, let me ask you another reader question from Hang Huang. This is kind of in a different direction. So he says, "The biggest challenge is always cutting through the noise to get that initial meeting with the right decision maker. How do you even get their attention?"

Jen Abel[01:00:15)]It's the vision. What is the opportunity that you're selling? That if they are excited by that, they will take a call. I see it all the time, and don't give away the farm. Keep it to three sentences. And I know I said this on our first call, but say something counterintuitive, they could feel different. Make it feel like they can learn from you by taking a 15-minute call. You see the standards of like, "Oh, I came across your LinkedIn." And, "Are you looking to grow your business by 15%?" It's like, "What kind of statement is that?"

Yeah. Lenny Rachitsky[01:00:56)]Awesome. So this is a good segue to another reader question from Hugo Alves, Co-Founder of Synthetic users. He asked, "What's the best advice for going from healthy inbound to targeted outbound?"

Jen Abel[01:01:07)]Healthy inbound usually is a marketing-led initiative. So that's a marketing game. It depends what deal value you're selling. Are you selling a $5,000 deal? It's got to be marketing-led to make the engine work. If you're selling $100,000 deal, you're doing outbound day one. So again, it breaks it into those. This is like that blending of the, I see a blending of that question. This is where you're doing small business marketing-led activities or are you a sales-led organization selling a $100,000 deal?

Lenny Rachitsky[01:01:40)]And the reason that's important, just in case it's not obvious, is you're not going to make money if you're selling. People are spending time closing deals that are making 10, 20

That's right. Yep. Lenny Rachitsky[01:01:53)]Awesome. By the way, let me just say, Jen,

Oh this awesome. Lenny Rachitsky[01:01:58)]... Through so much. This is exactly what I was hoping to get through and we've gone through so much advice that I think is going to be so helpful to so many people. There's a few things that your partner, Justin also suggested I ask you about that I want to touch on. One is you have this question you ask founders a lot that opens up their mind. You ask them, "If you give your product away for free, would people even use this?" And every founder is like, "Of course." And then you ask, "A customer this?" And they're like, "Nah, we wouldn't use this."

And that just blows their mind. Talk about just the power of that and how you recommend people approach this. Jen Abel[01:02:33)]I always say ask the questions you're afraid to because that truth is going to get you closer and closer to the answer. So I'll ask a client straight up on a call, I'll say, "Honestly, do we think we're going to get the deal done this year? Is it possible?" They'll give you the real answer and people are afraid to ask. But the other side is sort of if they're in it with you, they don't care about that question, right? (01:03:01): Can't ask that question on day one, but if you are, and we didn't talk about this, but maybe this is important. Every single enterprise deal I have done, the deal is done, the deal is closed and pretty much done through text. It's not on email anymore. It is a relationship you're building with someone where if my enterprise client called me,

I'm picking up that phone immediately or I'm responding them to immediately because that builds so much trust.[01:03:31)]If they know they can call on you, they're going to get you to pick up and they know that you're going to do everything humanly possible to make sure that this is successful. People will turn over rocks for you. I have a client at a Fortune 10 company where I was like, it's so important we get the deal done this year. Is that possible? And she's like, it's a tall order, but if it's going to help you,

let's do it.[01:04:00)]These are how enterprise deals gets done, it's relationships and it's this, and this is why I'm saying structuring the deal, make it feel like you went to bat for them and in often cases, you are going to bat for them and structure it in a way that makes sense for them. Everyone kind of just tries and pigeonhole. Pigeonholing and deal structuring consistency is important for a $10,000, sub-$10,000 deal. A $100,000 deal,

it very commonly will look different every time. Lenny Rachitsky[01:04:32)]April Dunford was on the podcast and she shared this really interesting insight that the reason people behave this way is the person at the company buying this thing, their ass is on the line Also,

their reputation is on the line for this thing to work out. So they want it to go really well. Jen Abel[01:04:45)]That's right. Again, they do this one in every three years, one in every two years, maybe one in every five years. Hell, I don't know. They don't do this every year. It's very rare. It's no one likes a new tool. No one. Not you, not me,

unless it changes everything. Lenny Rachitsky[01:05:05)]Yeah. Figma was a great example,

Everything you've touched Lenny Rachitsky[01:05:10)]Everything that worked out. You said that you asked these questions that people are afraid to ask. What are some other examples of questions you often ask that people are afraid to ask?

Jen Abel[01:05:20)]I will say, "Listen, this is $150,000 engagement. I will co-author it with you where we can make this a little bit bigger if you need something else. We can make it a little bit smaller in year one, but in year two it steps up. How do we get this done so when you go to bat, it's a win?" Sell them, do they take it to the wrong side and try and discount you?

I've actually never seen that because at that point you have a relationship.[01:05:51)]So co-authoring the pricing is so important because they need to know that they go to bat, they can say, "I got this out of them. If we get this deal done." So this is why when I say every deal looks the same, you're asking great questions because it's explaining why I meant by that, but this is another example of why every deal in the enterprise sort of looks somewhat different because a lot of it is co-authored. So again, if someone wants a slightly lower price, give it to them,

but maybe them lock them in a little bit longer. Lenny Rachitsky[01:06:25)]There's another point that Justin makes that you've touched on a bit, but it's when your no, the way he phrased it is,

Jen always talks about how no is the best answer to yes because no is data that you can use. Talk about that. Jen Abel[01:06:38)]I am a qualification crazy person. I will not get in on another call with someone because on the first call it's either a yes or a no, there's no in between. Humans are, we're so different and we're so unpredictable, but we're also so predictable at the same time, right? It's very obvious if someone is excited and wants to do something,

it is so obvious when someone is just trying to be nice.[01:07:06)]So I will say to them on that call, "I'm sort of getting the vibe that this might not be a good fit or might not be good timing. Did I misinterpret that?" And they will usually say, "Yeah, you're right, it's probably not a good fit." And then immediately, "Great, I would love to stay in touch. You've just saved a relationship and you've just saved yourself a ton of time."

Lenny Rachitsky[01:07:24)]And the implication here is just to your point,

you're limited on time. You don't want to be spending time going down or rival that won't you anywhere. Jen Abel[01:07:24)]Yeah,

exactly. Lenny Rachitsky[01:07:33)]I'm going to take a quick tangent on tools. What's the state of the art on go-to-market outbound tooling?

Jen Abel[01:07:39)]I don't use a tool because I believe in the manual and I'll explain why. Every single note I send is slightly different because I see a picture of them and I'm like, "Oh, I don't know if that's going to land." Or I'm like, "Oh, they actually might appreciate this. It's weird." Visual cues are so helpful. A picture is a visual cue, looking at how long they've been in the role,

looking how long they've been at the company.[01:08:05)]I use all of these little things and I seldom customize a note in a way that people expect which is that first customized sentence because AI does that, and everyone's doing that. So I go the opposite extreme, which is like remove it and I customize it with how I frame it or the subject line. So it's like if I'm talking to someone like a peer,

I might say quick question like QQ.[01:08:36)]If I'm talking to someone that has a bit more experience, I might write a little bit of a tighter note, not all lowercase. So it just depends on who you're speaking to. And again, this is why it's okay to spend a little bit of time on this because it's a hundred thousand dollars. It's actually a million dollars at the end of the day because a $100,000

deal if you play your cards right turns into a million dollar deal over three to five years. Lenny Rachitsky[01:09:03)]I love how much you enjoy this. It's so fun to, so essentially what are you doing? You're sitting on LinkedIn finding folks to ping and then you cold email them one individually,

manually. Jen Abel[01:09:13)]It's so weird, Lenny, I have no process. I kind of just go with the vibe. I'll read an article about Tesla and I'm like, "Huh, they could be interested in this." Not because that article had anything to do with the problem I'm solving, but because I'm like, "This feels like a good Tesla day." It's hard to describe. It's a very emotional thing for me, and not to toot my own horn, obviously,

but I've been successful in sales and the most successful sales people can't explain why they're good at it.[01:09:51)]It just comes to them naturally. It's just like an emotional thing. It's like the world's best founders. How do you be a good founder? It's very, very hard to define. How do you become a good engineer? Very,

very hard to define. So I don't believe in playbooks. I believe that there's a feel to it. I emailed a chief legal officer at a hedge fund once and he responded to me because I wrote to him on Saturday. I knew it was going to be busy. I made it one sentence and it was tweaked for him. Lenny Rachitsky[01:10:29)]Do you feel like this is going to be the way as AI SDRs just kind of take over and everyone's getting billions of emails that feel AI-ish?

Yes. Lenny Rachitsky[01:10:40)]So I guess maybe speak more there. Just like is the alpha essentially just become human? Don't automate? Should you think you should?

Jen Abel[01:10:49)]The thing about AI tools is they're all pulling from the same databases. So I'm like, "I want to email someone not in the database that's getting hit by a million folks. I want to take a back door in, not the front door where everyone else is trick-or-treating."

Lenny Rachitsky[01:11:04)]And this is effective for very large deal,

Yeah. Lenny Rachitsky[01:11:12)]Interesting. So you're not like sitting in Clay, you're not like Apollo,

Yep. Lenny Rachitsky[01:11:20)]Do you start with a target prospect list at least just like, "Here's the companies that are the perfect fit for this and let's work through them."

Jen Abel[01:11:30)]It's all in my brain. I've been doing this for so long, I have in my brain, I'm like, these are my early adopters. These who I'm going to go to after I close those logos, they get excited by those logos. So it's just experience of you land a Walmart, you're going to go to the rest of the industry and say, "Hey, we're working with Walmart." Versus you go to some lower end enterprise company and they're like, "Wait, what do you do?"

I can't even comprehend.[01:12:02)]Also, the most strategic people, some of the most strategic executives are at these tier one logos. That's why they're tier one because they've got super smart, really capable folks. They also extract the best talent,

the best talent likes to experiment and continue to improve. So it's like this compounding thing. Lenny Rachitsky[01:12:20)]For someone that isn't Jen and has all this experience, say their founder, they're hit a million ARR. They're just like, "Okay, where do we find our customers?" Do you have any advice for just coming up with who we should go after? Should they be using these tools? Should they be hiring someone like a Jen?

I know this is what you do for companies. So one crowd is go hire JJELLYFISH to help them through this. Jen Abel[01:12:39)]Founder, the founder. I would say the founder, this is sort of in tune with them in a way. They just have to find it. It's so weird to say it's all, and I hate saying it because it's like a commonplace thing to say, but it's like there's this thing about flow and it's like some of these brands are in flow with you right now, right? You found this insight from somewhere. Who else? What's the next adjacent ring of people that would buy into that?

Lenny Rachitsky[01:13:21)]And so what I'm hearing is just pay attention to what's happening,

Yeah. Lenny Rachitsky[01:13:25)]The news, what companies are doing interesting things,

who are the kind of early adopters in the market. Jen Abel[01:13:29)]If it was just a database list and it was just about figuring out the right messaging and then emailing folks,

we would've known by that by now. Lenny Rachitsky[01:13:39)]That's so interesting. Okay, maybe one more question. This again is from Justin. He shares that when you hit resistance, you never argue, you reframe. If someone says, "We already have X solution, you'll agree and pivot and totally X is great for this thing, but here's what we can do."

Jen Abel[01:13:55)]This is why it's sell to the alpha. Hey, I know. Listen, that problem you just described,

you're right. You have a tool for that. We're taking you much further upstream with value. This is the opportunity I want you guys to have access to. Lenny Rachitsky[01:14:08)]I love it, Jen. I've gone through everything I was hoping to get through. On the other hand, I feel like we could do another hour on all these things,

We have three. Lenny Rachitsky[01:14:19)]Yeah, we need round three on the next phase and all the things that people want to dig further into. Before we get to our very exciting lightning round, is there anything else that you wanted to touch on or share?

Jen Abel[01:14:30)]This stuff is really hard. It's very hard. Sales is also all about learning very, very quickly from the rejection. The rejection is good because it's a forced learning and you never want to go through that again, but you have to be, I don't like to use the word cringe. You can't be afraid to cringe is like bringing your AI recorder into a call, that's cringey, but sending 15 notes to people that you can deliver serious value to, don't be afraid,

and don't be afraid to ask the hard questions. Be different.[01:15:12)]The whole game is about, "Oh, this feels different. That's what people want access to." Yet everyone commoditizes themselves. They try and mimic what everyone, they try and mimic a forward deployed engineer. Just rename it. You don't have to use the same nomenclature. Everyone gets excited by the new because the new could be the next thing, the thing that changes it all. So that's why I'm always like, "Don't be better. Be different."

Lenny Rachitsky[01:15:40)]An amazing way to end it. With that, Jen, we've reached our very exciting lightning round. I've got five questions for you. Are you ready?

Yeah. Lenny Rachitsky[01:15:48)]First question, what are two or three books that you find yourself recommending most to other people?

I do Twitter accounts. Lenny Rachitsky[01:15:57)]Oh, Twitter accounts to follow? Oh,

Okay. Jen Abel[01:16:00)]Lenny,

Cool. Twitter accounts to follow. Tell me. Jen Abel[01:16:11)]Yeah. Look, obviously you, you produce some of the best content, truthfully,

Appreciate it. Jen Abel[01:16:18)]You get into the minds of people that they're not even giving this insight on Twitter. Who else do I absolutely love? Jason Lemkin. So for sales, Jason Lemkin is awesome, awesome follow for sales, and also he had a great, great recording with you. So link to that because that was a great piece. I actually learned a ton from Matt. I love Gavin Baker. Super nuanced takes. Takes a lot of obvious statements, but shares a lot of the non-obvious insight. He's great. Jason Cohen, have you ever had Jason Cohen on the cast?

Lenny Rachitsky[01:16:57)]Jason Cohen, a Smart Bear Jason Cohen?

Jen Abel[01:17:00)]Yeah, yeah,

He's coming on the podcast at the end of the year or something. Jen Abel[01:17:05)]Oh,

Yes. Jen Abel[01:17:08)]Yeah, those three would be great. I know they're all men,

Yeah. Lenny Rachitsky[01:17:12)]Next question, is there a favorite recent movie or TV show that you've really enjoyed?

I know you said you have time to read. Jen Abel[01:17:18)]This is going to be embarrassing,

Baywatch. Jen Abel[01:17:22)]Yeah. Baywatch channel. It's just so Numby, and it's like '90

s classic. Baywatch. Lenny Rachitsky[01:17:30)]Wow, I've never heard that one before. So this is original Baywatch with?

This is original Hasselhoff. David Hasselhoff. Lenny Rachitsky[01:17:37)]Yeah,

Pamela Anderson. Jen Abel[01:17:39)]Yasmine Bleeth. Pamela Anderson,

Yeah. Lenny Rachitsky[01:17:42)]Okay. Deep cut. Is there a product you recently discovered that you really love?

Jen Abel[01:17:47)]So the number one thing for me right now is an app called Playground,

Amazing. I need that. We get emails and Google Photos. I would really love that. Jen Abel[01:18:09)]Yeah, there was another one called ClassDojo. There's a few of them,

Love ClassDojo. I'm a small investor. Jen Abel[01:18:17)]Are you really?

I am. Jen Abel[01:18:18)]Oh,

that's awesome. Lenny Rachitsky[01:18:19)]How about that? Two more questions. Do you have a favorite life motto that you find yourself coming back to find useful in work or in life?

Jen Abel[01:18:26)]Yeah, be direct. Cut the fluff. Give me the bullet,

not the paragraph. Lenny Rachitsky[01:18:34)]Final question. I was told that by Justin that you've never read a sales book. You've just learned to do this. If you were to read a sales book, if there was someone else out there that you look up to, learn from, is there anyone else out there in the world of sales that you most respect?

Jen Abel[01:18:51)]I think Jason Lemkin has the strongest understanding of sales. His content is unbelievable. He speaks about it clearly and cleanly, I would say. And as I mentioned,

Awesome. Jen Abel[01:19:06)]I've actually learned a lot from him too. The 50/50 thing or a higher two salespeople, he's spot on. Failure rate is actually probably higher than 50%.

I love that guy. And he's so AI-forward these days. He's just building. He almost took down Replit with his complaints. It was a whole new cycle of how Replit- Jen Abel[01:19:24)]He should interact. Sometimes he says things that are harsh, but you're like, "He's not wrong."

Yeah. Lenny Rachitsky[01:19:33)]Jen, this was incredible. This was everything I wanted to be. I feel like we just leveled up all the founders that have listened to this in their ability to close. We're going to just create all the economic value and a lot of happy VCs from all the sales that will be closed as a result of the advice you shared. Two final questions. Where can folks find you if they want to either work with you or follow you online? And how can listeners be useful to you?

Jen Abel[01:19:54)]Twitter. Every new learning or mishap, I put red on Twitter,

so it's like my personal diary and super responsive on Twitter DM. Lenny Rachitsky[01:20:06)]What's your Twitter handle?

Twitter handle. Jen Abel[01:20:08)]It's double J, So J-J-E-N_

A-B-E-L. Lenny Rachitsky[01:20:15)]You did not make that easy for people to find you,

but we- Jen Abel[01:20:17)]Yeah, I know, I know,

I know I didn't. Lenny Rachitsky[01:20:20)]And the J is for JJELLYFISH, is that where the extra J is for?

Jen Abel[01:20:23)]Yeah, the double Js. Then also, well, someone else had the handle, so I was like, "I need my name."

Lenny Rachitsky[01:20:26)]Got it. By the way,

just tell people what JJELLYFISH is in case that might be helpful to them. Jen Abel[01:20:30)]Yeah, so it's a consultancy that helps folks in the zero to one stage, and now I'm at general manager of enterprise at State Affairs, which is basically giving citizens and corporations an inside peek into what's actually going on inside the state capitol building. State policy is way more impact than on you,

than federal policy. Federal policy is written more about. Lenny Rachitsky[01:20:54)]Incredible. I've only recently learned that that's what you're doing these days, and that is super impactful and important,

Even democracy. Lenny Rachitsky[01:21:04)]No big deal. Jen,

thank you so much for being here. Jen Abel[01:21:06)]Thank you so much,

Lenny. This was a blast. Lenny Rachitsky[01:21:08)]Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.