A "Tenure Troubles" Reminder

One of my favorite sales practitioner accounts on Twitter - The Deal Director - made a great post on sales and software outcomes. All bolding add by me:

On why we are moving towards "outcome based" tech sales models.

There are 3 big criteria when it comes to delivering the outcome from buying software.

1. Fast delivery

2. High quality

3. Lowest cost

What customers ideally would want is to award a contract to the cheapest vendor, who can get the job done and can implement it quickly. This is what we would call "pie in the sky" scenario.

Everything in life includes trade-offs and software is no different.

If you want to be cheap and implement quickly, probably the product is not as well featured or performing as the competition. If want a top tier product and a quick implementation, it's very likely that you need to pay up for expensive services. If you want to take your time and shop around to get it "just right" on features and cost, it's likely that it will take a while to implement properly because vendors don't want to invest a lot of resources on low margin deals.

A big part of the tech sales bull run between 2010 and 2022 was driven by customers being tricked into glossing over these details. Most companies tried to pretend like services or getting to an outcome quickly was either not relevant or "probable".

This was done under the banner of SOFTWARE AS A SERVICE, as if solving the problem of hosting a service was the same thing as getting the outcome.

Today things look quite different. Customers that are unrealistic about the 3 key factors don't get too far. Vendors that can't deliver realistic outcomes are struggling. As a tech sales rep, your job is to guide them trough the realistic path of getting to the outcome. The worst thing you can do is downplay the new reality in order to "just get the deal, bro!".

Surprisingly Quiet Areas = ROI + Tenure

I have strong opinions on what is under-discussed in software.

Even with all of the transparency in SaaS (a sea of benchmarks, open-sourcing operating playbooks whether at SaaStr-style conferences or by blog post, etc) and very deep coverage of certain topics (customer success, PLG, most areas of GTM), two areas are surprisingly quiet:

#1 ROI - Regular readers have heard my ROI opinions again and again. Nonethless, I will flag my appearance on Craig Rosenberg / Matt Amundson 's "The Transaction Podcast" which was very ROI-centric:

#2 Tenure - To set the context, here are tenure related facts via my earlier "Tenure Troubles" note leveraging People Data Labs data (h/t Sean Saint ):

I’ve seen a bit more coverage of private company tenure, like this quote from Sam Jacobs , CEO of Pavilion (a GTM leader executive network + community):

The average tenure for a PE/VC-backed GTM executive is 17 months. At this pace, you'll work for 14 companies over a 20 year career.

Working with People Data Labs, we mapped a representative sample of 28 public software companies:

Surprisingly, public company GTM tenure (1.8 years / 20 months) is not that much higher than PE/VC-backed tenure (1.4 years / 14 months), particularly when accounting for public company maturity, scale, and growth rates.

Tenure Impact On Software Buyer Outcomes

Back to The Deal Director 's post:

A big part of the tech sales bull run between 2010 and 2022 was driven by customers being tricked into glossing over these [outcome] details.

When tenures are in the 14 - 20 month range, a lack of focus on outcomes makes perfect sense.

Taking into account sales cycles, implementation timelines, and the fact that very few software purchases are made simultaneously with an employee start date,?your median employee will only "live" with a new software for a handful of months!

Combine this with incentive structures that are amplified by short tenures.

New initiatives and big projects are a path to promotion. I've heard my share of "The whole team knows we purchased XYZTool as part of Chad's promotion from Director to VP. Of course, he left 4 months later."

Said differently, the incentives are weighted to the near-term "buy" and NOT the project's long-term outcomes.

How GTM Tech Stacks Are Born - ScaleMatters CEO Episode

Related: Changing and growing teams impact how well a tech stack - particularly in GTM - is built and optimized.

Scott Stouffer , Founder + CEO of scaleMatters - RevOps optimization software AND services - captured this well on our earlier podcast:

"There tends to be a gap if you think about how most of these companies get started.

The first sales person is the one who often implements the CRM. The first marketing person implements the marketing automation platform.

These people are not rev ops people right.

They are not skilled technologists and this technology that we're talking about.

Whether it's you know recording tools like Gong and Chorus or cadence tools like SalesLoft, Outreach, Groove, CRMs like Salesforce, marketing automation platforms like Marketo and HubSpot.

This stuff is sophisticated technology and to put it together properly requires very skilled people.

It's no different than any other kind of IT right but here we are most of these companies with sales people and marketing people playing IT people so these tech stacks are always put together terrible and so you have you know data that's not syncing with each other.

So there's it's stuck in silos. It's contradictory you've probably heard about the very common practice where sales leaders say we're not getting enough leads marketing leaders saying well. We gave you all these leads and it's because what they call leads are two completely different things and they're looking at in different databases for their metrics.

So the issue is that these companies generally wait too long to invest in the technical talent to set up the infrastructure properly so that it actually is very well instrumented and as a result you just have a bunch of garbage data that's not particularly useful."

Perhaps all of this is obvious. Or too narrow of a point... but The Deal Director provided an opportunity for me to re-highlight the tenure topic.

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