hubspot's inbound conference is back it's going down live in Boston from September 8th through the 20th get ready to learn from the most successful sales leaders in Tech and don't miss the science of scalings live session on how to scale your Revenue effectively hear from other industry experts on how to differentiate your brand and navigate transitions to achieve growth get the latest HubSpot news and product updates and there's so much more visit inbound. to see the lineup and grab your tickets [Music] today expanding from selling a single product to multiple products it's almost a required Journey for getting to unicorn status and yet that Journey often leads to failure most companies think mobilize the organization train the sales team build the product get the customer support folks trained change the website and that's the approach that leads to failure there's a better way so today we bring in Ryan Meadows head of global sales at clavio he joined them 5 years ago they're around 60 million in ARR today they're north of 700 and on their path to three billion and this expansion to multi-product selling is a key ingredient let's unpack how they did it my name is Mark be and this is the science of scaling so awesome to see what HubSpot Alum go off and do and wow have you gone off and done some amazing stuff so apprciate I'm I'm excited that we get to unpack this together so yeah let's just get right into it I don't know if we can call it clavio 2.0 where you had to go from just like you know more of an app to multiproduct to platform can you tell us about what the company's been doing and then we can unpack how to align the go to market motion with a strategy like that you know the reason I joined clavia the premise was betc CRM and it was this underlying database so no one ever bought clavio because we had the best email editor or the slickest flow it was it was always activating customer data and so he said okay what's the next step in activating customer data well it's first to build out all of your messaging channels so we go one product to two now we have text messaging then we say okay what what other use cases sit on top of that well you should collect reviews if you're if you're an e-commerce uh Merchant and then know by the way you actually want to ingest all of your customer data and make sense of it we really should build the skew for that customer data platform so now now you go from one product to four very quickly and then the rest of the market starts to wake up and they say I I want to do what that small really fast hot company is doing and so larger merchants and Legacy Merchants start to to get interested and so you know we went from average deals $200 a month on on a credit card when I joined to uh our top 10 customers spend on average 1.5 million a year with us now so you just see that change and then of course we see the international market start to kick in and they're just begging can you build in our language can you build features that we specifically need in these markets so that's phase two for us is we're going up Market we're going around the world and we're building out that full architecture rather than just a single single app so it's it's it's put a lot of pressure on evolving our good Market to match a crazy journey and one so common for a successful IPO unicorn and how you're going to grow you know usually there's options for product expansion and there's Market expansion the common ones that you're tackling Enterprise and and international it sounds like you're doing them all at once like can you can you unpack that a little bit yeah it's not it's uh it's what everyone tells you not to do the hardest part about going from 700 million to 2 or 3 billion is you could do a lot of things we have plenty of money in the bank you're you know we we just uh posted earnings 38% yearyear growth uh profitable growth so there's a lot that we can do and uh I think the the vendor that moves quickly will be rewarded and we see a lot of consolidation happening hey folks just Mark here yes this is a requirement to build a unicorn we have to go from single product single Market arguably even single sales motion to to multi-product multimarket Multi Sales motion at least move in one of those those are the three dimensions like let's appreciate that when you look at your business you know how to sell a single product to a single Market through a single sales motion that's usually the early days and anytime you expand one of those you have to do what Ryan's done here and most people don't let's just take like uh product as an example okay it's like all right yeah we we've gotten ourselves to 40 mil it's really good we need to get to 70 million this year and we're not going to do it through our current product market sales motion approach so let's build a new product and then what happens is a great idea so they get everyone in motion the product and engineer team start building it it's January we're going to launch it in June the marketing team starts building the collateral they get the website ready change the website we're going to launch it at the customer conference in July we train all 100 salespeople the customer success team and customer support team are all trained on the new product and we launch it and the product sucks just like what Ryan said they didn't have it right out of the gate I don't know why we think that cuz when we start a company at the beginning we're not like oh I have this idea for a product and while we build it I'm going to hire 50 reps and train them and build a huge website and launch it at a huge conference we don't do that we know we're not going to get it right we do Agile development and customer Centric design and we iterate iterate iterate until we have product Market fit and then we scale that's what we have to do with the new product launcher too and Ryan and clavio did it beautifully don't disrupt the machine grab two salespeople put them on the side and make it almost like the replication of a cross functional seed funded business and give them the space to learn beautiful we're not done with the story there's so many more decisions ahead so let's hear more from Ryan on how he untangled this so we're tackling yeah we're tackling all of them at the same time let's try to bring that to life for our founder and sales leaders that are listening cuz like I'm sure there's a bunch of them that are like okay yeah we are going through a Market expansion yeah we are going to multiproduct so the minute you hear that in the executive leadership team meeting what goes through your mind in terms of what you're going to do like are you all of a sudden like you're like okay I got my 500 salespeople and I'm going to start training them on this product or this Market maybe we have to tackle those one at a time why don't we go why don't we go multiproduct so you've got 500 sales people out there that know how to sell this product really well and now you're building three more what do you do on the sales side yeah I mean you do have to take them one by one and the first thing we do is have conversations cross functionally with R&D and GNA to make sure that the dependencies are clear so that this is not just a sales or go to market initiative you have to you eyes wide open I think that's that's the most important thing that that I can help the business with but then then we say go stack hands this is what we're doing doing let me give you the multi-product one first at that time we had about 100,000 customers and we launched our second product let's incubate that we took two sellers pulled them out of their day job and said you now go sell to our customer base let's see let's really make sure we have product Market fit it's amazing on email but let's be smart about this and we got a hundred things wrong we had pricing that was all wrong the value prop was all wrong uh and so we learned a lot we did that for about 9 months of just those two dedicated sellers you fix a bunch of those things and then we said okay there's something here let's build a team but for us there was so much opportunity in the customer base that the right decision at that time was to spin up a customer growth team which is now you know well over 60 people they're cranking and and they're selling our additional products to our customer base uh but we had to incubate it like that that was not a moment to take it and just bring it to the entire entire sales or so you take these two people and you you say go sell them to the customer base were they were they stepping on anyone's shoes at that point like did anyone own the customer base like account managers or Cs and they were trying to do some expansion and there were some territorial stuff going on we're we're sort of unique in that regard single product acquisition Focus so there's no sales responsibility really post sale we did have csms uh who are doing amazing work trying to get our customers to ad adopt more so there I wouldn't call it friction but there was a lot of learnings on well who owns the customer communication do you call the CSM first before you reach out directly to a customer do you join the qbr that that took a lot of uh tweaking to get right it puts pressure on systems you know our csms were in gain site our salespeople are in Salesforce those weren't integrated gosh what if they just submitted support tickets and they're really upset now I'm calling trying to sell a new product there's a lot of learnings there about how to get that into the same place and and unify it but there was no sales friction because we we simply did not have ownership we we didn't do anything post sale now all of a sudden we're bringing in Cross sell for the first time all right let's talk about those two people because I'm like I'm picturing one of the founder CEO sales okay we're about to do this this is good let's start right at the beginning how' you even pick the two people you know you had you had whatever hundreds of choices what was it about these two that you're like they're the two to do it I think it was the intersection of extremely high business Acumen so they they understand clavo they understand our customers they're they're going to be flexible they're going to be adaptable uh success history of achievement they were good they're both really good and then interest it's a hard place you know we we had to put them on a draw we weren't sure if they were going to sell nothing or or break our comp plan and sell everything hey folks just Mark here yeah this is step two great strategy step one step two Devil's in the details who do we pick and how do we comp him he nailed it this is not your two best reps no it's just like when you're starting a company people always say like don't go hire the best rep at workday like when they went to work like they're the best rep for a reason like they they went through the month-long training they had all the objection handling methodologies they had all the support from their manager and the coaching we don't have that yet when we're starting a company we don't have that yet here when we're launching this new product these are not the two best reps he's nailed the attribution reflection it's like strong business Acumen probably great discovery seller so we can understand where the problem is and where the concerns are of the customer definitely the ability to work on a cross functional team communicate with engineers and work with product it's almost like a PM Plus an account executive and if they're talking about compensation you hire the wrong person I've done that I've built these teams and I got most of them right but the ones I got wrong on the first day of the team they like hey can we talk about my comp that's the wrong person because they recognize that this is not like a this quarter comp discussion this is a huge win for their career to learn this process and get the executive exposure on execution that's going to lead to greater things those are the right hires so it's a complete draw like why is there a commission Plan used at this point no that's that's detractive from the situation it's like why do the PMs and the Cs people get to sit in the room and like think about it iterate and iterate while this person's losing money it's going to put the pressure on the wrong spot it's a full draw it's probably less than what they made W2 because there's no more upside but there's huge career upside for them great job Ryan on the selection and the setup all right let's keep going on this thread you just didn't know and so um you know we needed a high level of interest from them to to go through the ups and downs amazing all right now let's talk about what the heck they even did so it's like all right you two are it go call the install base and sell them this thing can you just tell us like what messaging works there yeah well what so they did a few different things one is you've got to get messaging right well you got to decide who you're going to sell it to what's the messaging and then we did weekly Recaps because everyone in the company wanted to know what what's the customer how are they responding what's what's the feedback uh and we use gong so of course that was a great tool in our tool belt to to listen to these calls but yeah we had to work with marketing come up with the messaging for us it it was pretty straightforward which is uh about half of our customers were already using this messaging Channel SMS with someone else and so it's a consolidation story so we had to hone in okay for 50% of our customers let's get their Tex stack now we can identify this as a consolidation story let's get that right well for the other 50% they didn't they they were not trying this channel very different message here's why why you should try it for the first time uh and here's how you're going to get set up on it very very different so that that was our big learning early on is you just have to get that right and you flirted with this which I was really curious about is how how do you accelerate learning because as you point out like no one gets us right out of the gate you don't have the right product you don't have the right message you may not even know where the earliest low Hing fruit is from a customer perspective and in your seat it's like how can I get this this to people to learn fast but also spread the learnings across the org into the heads of the engineers the product managers the marketers to support them I mean you mentioned gone records and was it just like they were running 90 mes hour and people could like tap in and listen whenever they want or was that formalized it all yeah this and this never goes away so uh you know for example just in the last one month we launched a CDP customer data platform last year and we quickly learned our customers loved the analytics portion of it so much that they wanted to buy that on its own and so we we stood up a twice a week standup for our customer growth team the team that I that we got off the ground with these two people and um that seems like a lot pretty heavy-handed twice a week standup but within four weeks we were able to create a new skew for analytics only because we had product marketing we had R&D we had everyone that was needed to get this done on those standups listening to these calls hearing the feedback so uh you know I think in our business what's really challenging but the opportunity is that we're scaling so quickly but there's so many things that are still builds MH so you're you're still Scrappy trying to figure out product Market fit for a new product and then as far as formalizing it goes you know we we do have six company initiatives that are cross functional so there's a there's a five person Team every person's in a different function Cavo and we meet monthly against uh quarterly goals and monthly goals to to see how we're doing and that that drives a lot of collaboration between R&D GNA and go to market talk about those standups are you actually listening to calls in there or is it just like the reps are venting about what we don't have or this the PMS are asking questions what what happens in there yeah so it's a leadership only standup we typically have eight to 10 people we we'll invite folks depending on the topic and it it came from a place of this customer growth team so we're fast forwarding a few years now this customer growth team figured out SMS it's going beautifully we we took that we scaled it to our acquisition teams our new acquisition team now sells it 30% of the time when they're selling our our first product so you just see our attach rate go way up success let's do that again we roll out reviews we roll out CDP we're right back to square one okay we need to learn about these products so so starting in January we put a big goal on two new products you know we never done it before those products and we say gosh we we need to we need to uh get this going a little bit faster than it is right now so twice a week standup kicks in okay let's get everyone together uh and so you you bring in product you bring in marketing those are going to be the key stakeholders Cs and sales and they just say look what are we learning and that's where uh so you know some gone calls although we'll typically assign that to people to do between the standups hey folks just Mark here yeah step three set this team up for maximum learning right like they're not just out there pitching the product and coming back and saying it's not working no we know it's not going to work out of the gate so we have to set up this communication and data flow in a way that's going to allow the entire organization to learn fast and that's one of the advantages of just choosing the two people as opposed to spreading this across 300 because we're we're putting all the learning moments in two brains as opposed to 300 where it would be diluted so just in that setup we've optimized this and he's setting up a twice a week standup yeah I'll push it to once a day the frequency of that standup represents the frequency of the learning and if my salespeople are doing like three or four customer conversations a day then we're going to see the pattern PS Faster by the end of the month I've got 20 working days I got 20 Reflections discussions I'm going to get to the right answer faster so that's what I love to do here is I just like okay let's all hustle let's run and every day from 4 to 5 or from 5: to 6 we're going to get into a room together as a cross functional team and reflect and that could be listening to a first call with a with a customer and what we discovered or it could be a gone analysis of you know across 10 calls of what we're doing or could just be like a brainstorm discussion where the PMS are thinking One Direction and the sales people are trying to like add evidence and anecdotes around it but we're learning fast that's step three we got to learn fast let's get back to R and keep pulling this thread so the stand-ups are okay we've we've all listened to the gone calls we've all heard the leadership feedback we have a problem we have an opportunity how are we going to what are we going to do what are we going to change to get there let's keep pulling the SMS through cuz it's like you set this up beautifully to learn fast you've got the cross functional team you've got the two sales reps that are chosen precisely for this comped in the way and motivated to do it now it works like how do you what are like the Milestones you're looking for to be like okay this sc's ready to scale and then how do you scale it do you then like train the team like do the big launch at the next customer conference like how do you do it yeah some Milestones let's start there I think the first one is you can't actually look at a report when you're getting started this is the biggest mistake that we we made is you actually try to solve for win rate or closed One deals or pipeline you've got to go right to the customer and hear their response and hear their questions so the the first thing we really do is just hear hear all of their uh rebuttal and address those create messaging so that that's the first marker I'm looking for is what's the customer response yes step four how how do we know when we're done how do we know when we're ready to scale too often people jump to how we measure the Core Business Al T to CAC payback growth rate no that's not it you don't walk into this and be like oh yeah once we get to a million in Revenue we're ready to scale this thing no it's very customer focused initially like Ryan said you can't look at the data I might push back a little bit and say you can look at the data it's just not Revenue math data it's customer value data that's what we have to look at this is classic science of scaling product Market fit then go to market fit that's what he did he focused everything on talking to customers are they getting value from the product are they seeing the value that we're promising so I might say something like our first Northstar this is the SMS message is to get every customer we bring on get like 90% of them to send multiple SMS every day like what's the daily active usage of the seats that we're selling that's the first Northstar I don't care about win rate profits ACV whatever we just need that bats to get in there and once we're confident in that then we can move to go to market fit and that's what we was talking about win rate 20 30% so Flawless execution on the focus of the Northstar and this team to get this product right it's customer value creation first let's keep pulling this thread of the R I think from there uh then you're starting to look at pipeline creation and conversion and so once you have a little bit of volume going we obsess at clavio about conversion rightfully so we're doing thousands of transactions a month so every you know Point shift and conversion makes a difference in our funnel in our in our SB funnel and then uh and then and then you have something okay say all right I'm I'm running at a 25 30% conversion that that's sort of minimum where we would want to be our core product uh in our SMB was at 70% conversion so no longer is the you know 20% good like when you when you have a a great product Market fit you you can go much much higher than that so you're looking for the minimum 25 30% you know win rate or or conversion rate and as you shifted to like is the C is it working for the customer to now is it working from a conversion win rate standpoint is it still just these two reps it was just yes it was just these two reps there that was and then that's the marker then we said okay go and and once we got there we hired our first lead leader so it went from reporting directly to me right so I had directors I don't you know directors managers the whole team reporting to me and these two reps it's just that important then we say okay great BR let's bring in a director let's let's start to scale this [Music] out talking too loud hosted by Chris Savage is brought to you by the HubSpot podcast Network the audio destination for business professionals on this podcast Chris Savage wistia CEO and loudest talker takes you inside the minds of entrepreneurs as they share the hilarious informative and most challenging aspects of building more human Brands you can hear episodes like building a reusable notebook Empire with entrepreneur Joe lame or the AI Video Revolution with whs's own head of production Chris LaVine listen to talking too loud wherever you get your podcasts okay so now it get seems like it continues to get complicated because now I've got my core product that's humming everybody sells it big team now I got these two reps and I I'm very confident in the customer value creation I'm very confident in the win rate and the math around that and it's like we want this to become a a really meaningful driver of Revenue so like what do you is this a separate team do we train the whole team on the product now how' you all think through that yeah and there's uh we're learning every day so I I don't know if there's a perfect model but once we built that team we said look we're going to bring this to our customers but the product's good enough now our value prop is refined look we can bring this to new customers as well and so that was our initiative is at the same time we're not going to combine the teams we do need to keep them separate for Focus we're still this this is middle of Co this is acquisition acquisition acquisition so we we went through a major enablement project to bring this now to what we call our newco team and newco is just customer lands and we and we saw that you know month over month 5% attach rate 8% 10% uh and within about 6 months we got that up to about 18 to 20% now it's hovering just over 30% attach rate so you're just uh and that's all enablement you know I think now what we had to be careful of is we've created a new code team that does one thing and a customer grow team that does something else and there's a there's a lot of room for inconsistent customer experience and customer message that's what I'm now in the middle of so I I wouldn't have done it any other way I think it worked for us at that time but it now gives me a a pretty big exercise here of how do I drive a consistent customer message across two teams that were built to do different things so it's basically um where you all are right now in that Journey most of the new customer story is still around the Legacy product and the SMS and obviously the other prodcts too are largely sold into existing customers and those are different teams the teams start to look less like newco and customer growth and more like my email team and my SMS team which which is just generally going to be a very inconsistent message if you think back to what you know this the CRM this consolidation story so our major enablement initiative this year is to bring the message together step five we're scaling how do you do it that's not easy and you're still feeling a little hesitation and they're they're phasing this out they're doing a good job obviously but you can see how this is hard now Point number one which is easy which is like yeah these two reps aren't necess part of the scale that's fine they're so valuable you know but like they have a particular skill set they're not going to want to be in the factory now that we're building the factory they're going to go off and build something else like you said they're running teams they had so many great so much great executive exposure that bet they made with their career worked out fine but now it's tricky like do you have two separate teams or do you train the Reps the core reps now that we know what this thing is like let's just play that out right like two separate teams is is amazing because they can be experts in that product and so like we can we can really just know everything about that product how to discover around Etc that's a really bad experience for the customer especially if there's a single buyer right like if one product sold the finan the other product sold the marketing that's easier to pull off but if if these two products are sold to the same person that's a really bad experience to have to have two sales people that's confusing now that's one consideration is where do we stand there in this case we stand with probably a single Buy for both products the other consideration is is it even humanly possible for an account executive to keep all these products in your head I would say it's probably okay here like you look at a company like Oracle or Salesforce or Microsoft that's not possible they're just too broad they they a single account executive so you end up with these matrices where some salespeople own the accounts and they can sell anything in there they just don't know how to really sell anything as an expert and they bring in the product salese who have a quota on selling that product a lot of the sale happens internally it's a matrix and that's just the necessity it's a lot of complexity it's a lot of cost and we should try to avoid that so in this case as I'm unpacking clayo it's like okay I don't get a sense that these products are too robust and complicated I think I can train a single salesperson to do it and I'm probably selling to the same team or person so I probably want to go for consolidating this and that's a little bit where he's headed but it's just been a phased approach let's get back to him you're still going to have a new an acquisition in a in a cross cell team but how do you actually have a consistent message so do you comp your your newco team who isn't as trained or maybe not trained at all on SMS because it hasn't been their thing on that sale what so the way we have our team structured is newco will close the deal a dollar is a dollar any product to dollars a dollar so we're highly encouraging bundling our products together you maintain that relationship between four and 6 months depending on the team that you're on and then you pass over to customer growth so you're really trying to get them on get them through adoption we know that adoption at clavio takes three to four months typically speaking a little bit of time to cross sell then then pass it over as we go up Market it's going to have some pressure on that and so for example this year we we just built it's about five people now a strategic accounts team and that strategic accounts team does not have a handoff that's it's a you know it's acquisition it's growth it's it's everything together well Ryan this has just been a wonderful story there's so much to pull here for our Founders and sales leaders and I just want to say like it's just been a great experience for me too you know it's so fun uh to build a great company with great people and what's awesome is to see them go off and do amazing things and it it's it's it's such an honor to see you go off and and see what you've done at clavio and uh you know a lot of the hubs alumni have done great things and you're among the top so congratulations I really appreciate you saying that Mark and I know I know you didn't ask me to say this but I I got to tell a quick story which is uh uh when when you were interviewing and and you hired me so it it was it was a good ending but um uh you you started off the interview with hey I'm a landscaping company Ryan just sell me ni and and uh it's one example of many Mark that I've taken you know we're talking 14 15 years later and still use in some form um and so thank you there's a lot there's a lot of things that cavio has taken from what you built early days at HubSpot and I'm very grateful for well thank you for saying that man and I will tell you I probably didn't invent much of that it was a baton that was handed me to me and it's now handed to you and I know you're handing it on to a bunch of other people too so congratulations yeah I love that thank you thanks [Music] Ryan all right that does it for me folks I'd like to thank our showrunner Matthew Brown editing support comes from Pizza shark Productions of course I want to thank HubSpot for startups and the HubSpot podcast Network for keeping the audio on and by the way uh if I'm a huge fan of feedback and so get this if you're listening on Spotify right now check your phone see that Q&A field that's a direct line to me and our show so let us know what you think all right I'll see you next week [Music]