Create a Billion Dollar Sales Culture w/ Greg Holmes (CRO, Zoom)
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One company I advise right now, they just hired a new head of sales after the first couple weeks. I'm like, have you called your top customers? He hadn't done that yet. It was like, no, man, that's got to be first things you do. Over the last 20 years, the startup ecosystem has embraced the term product market fit. Many successful entrepreneurs feel that product market fit is a prerequisite to successful scale. And yet few understand the phrase go to market fit.

which some of the most successful serial entrepreneurs will argue that it's also a prerequisite. It's one that must be approached after finding product market fit, but before scaling. So to understand how to find go-to-market fit, how to build the team to accelerate the finding, how to build the methodology to support go-to-market fit,

I've turned to my friend, Greg Holmes. He was the first sales hire, first sales leader, first CRO at a company we all know, Zoom, where he joined back in 2013 before they had even a dollar in revenue. Just seven years later, not only were they a key company to help society get through the global pandemic, but when he eventually left, their market valuation was $140 billion. I think he credits his ability to build the foundational team

in finding go-to-market fit as a key ingredient to that success. We're going to unpack that story. I'm Marc Roberge and this is the Science of Scaling. All right, Greg.

Good to see you, man. Welcome to the show. Thank you, man. Great to see you again. Always good to be together. Yeah, man. It's awesome. I love learning from you. And like, gosh, like the ride you were a part of and helped create, like one of the most successful software companies in the world. And with Zoom, like I just would love to go back to the, like how you guys found each other. Like how did you first hear about them and like,

Like, did you find them or did they find you? And what made you engage? My first big corporate job was at WebEx. Buddy from college got me in there and I ended up having an 11 year run at WebEx for seven years. I was there. Then Cisco acquired us for four more. And the head of engineering at WebEx and then into Cisco was Eric Yuan, who then left in 2011 to found Zoom.

And after he'd gotten the products kind of set up for first phase, he was looking for a head of sales. And he asked back to some of our executive team from WebEx and my name got thrown around and

i was excited to jump over to a company that was just getting going so really attracted me to just have an opportunity to build a sales team literally from scratch there were like thousands of sellers and sales you know dozens hundreds of sales leaders at webex like why did your name come up do you think when eric was asking around you know i it was our president dave berman i think really was the main um

I think supporter brought my name up. I think he'd given me some opportunities like to run Canada. I pitched Canada actually at WebEx. Why is it always US slash Canada on the slide deck? Why don't we break Canada out and make it its own thing? And so I pitched that and Dave kind of let me run with it. And I ended up building a pretty nice piece of business just focused on the Canadian business unit. That probably was a big reason for it. Yeah, that would make sense. I'm curious, like looking around so many peers, like,

with so many abilities at WebEx, like, how do you decipher that other than just like having that experience? Like, why do you think David allowed you to do a zero to one initially? Like, what did he see in you versus like, maybe some of the other folks that

he might have like branded as more scalers and not zero to one leaders or operators. You get someone like that coming into your office and it's like, why not? That's not a huge, probably a huge risk to break me off and do that. And you probably don't get that enough where people just see something and are willing to sort of stand up, go to their exact team and

Not be afraid to sort of put an idea out there and have confidence that, you know, you could turn it into something. And, you know, that sounds good. Go do it. Hey, folks, just Mark here. I think there's some important learnings here from Greg, especially for folks that are maybe earlier in their sales career. I've gotten this question before, like, hey, Mark, I'm like, you know, I'm a 25 year old AE. I'm working at a pretty big company. How do I stand out? Like, how do I accelerate my career growth?

I think Greg has a perfect example here. I've seen it happen. He's sitting there on the front line and he sees an opportunity for Canada and he literally approaches the president. I guarantee you the president was not, it was not in their top three at that moment of like, yeah, let's really drive growth through Canada. Like nothing against like that opportunity. It's just like there were bigger things to go after in terms of continents and even like new products, right?

But like when you have a 25-year-old account executive approach you with what seems like a fairly qualified, predictable opportunity, and you have to choose between letting him continue to grind out his like $700,000 quote in his territory versus perhaps unlocking a $0 to $8 million opportunity. Yeah, let's go for it. I mean, as an executive, yeah, I was always trying to push the ideas I had for growth, but you got to go find someone to own it.

And then there's a whole handful of good ideas that come proactively from someone who's passionate for it. Great. Those are the ones that lead to success. And I think like that led to a huge opportunity for Greg to demonstrate his abilities as a zero to one and ultimately led to his introduction to Eric. And I think the other thing that pops for me here that I constantly advise folks on a career perspective is weigh the category over the company.

So what that means here is Greg had a passion for online collaboration and communication. He probably had a little bit of conviction that it was the future. And you should really think about that as you're assessing your next job, is put more weight on the category, not the company. Because if you pick the right category, but the wrong company,

you'll probably get scooped up by the winner in the long run. And that'll be great for your career. Versus if you pick the right company in a wrong category with tons of headwinds, you're also going to have headwinds on your career and your growth. So great example by Greg here. Hopefully you can pull away those learnings. Let's get back there. Maybe to him it wasn't,

you know, giving me the whole company or putting me in Zoom quite yet. But it was just a, okay, this guy's a go-getter. He's willing to kind of, he sees things and he's willing to kind of put himself behind it. And he's got a little vision and he's not afraid to get after it. And I think those were probably the big things that made him, you know, after that, think about me for Zoom and like, hey, why not? And that leads to like this great referral, right?

And can you break down, do you remember the conversation with Eric, like the email and the opening chat? Like, what was that like? What intrigued you? You know, he kind of, it was kind of like he had me at hello type of thing. I was, like I said, it was, I literally could go in and like start a sales team. Like, you know, as a sales leader, it was always like, you know, you get the people you get and you work the best with them most of the time. You don't generally ever get to build a team from like literally zero to,

and up. And that was really attractive to me. I was like, this is a cool opportunity. Now there'd be no excuses. I got to pick them. So they're going to be my team. And that was, I was excited about that. Biggest question I get every day. How do you build the next unicorn?

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Paint the picture on like what the team was like there. It was, was it like five engineers and you were the first, like not only salesperson, but business person, like what was the team? So we had 13 engineers in China and then it was Eric, our head of product, Nick Chong. He was kind of any, he was sort of doing product and marketing. We had one support guy, young, kind of young kid named Ross. And we had Bill Liu, who was kind of like chief architect. He was,

Jack of all trades could build the back end, front end. He was just a genius. And then we had a couple of lead engineers that would really manage the team back in China. And then it was me. Hey folks, just Mark here. One secret little nugget there that I hope you didn't miss. This is mostly an engineering and product team. What else did he say? There's support. So Eric chose to hire a support person before a seller. I just love that term.

I've seen that trend. It's like you're building out the team. It's like, especially with a great PLG like this, Eric had the foresight that when choosing between scarce resource hiring, is he going to hire into customer acquisition or is he going to hire into customer success and retention? And he chose the latter. Not a lot of folks do, but you know, you're hearing from one of the best companies so far in the globe and that's what they did. So there's something there.

Let's get back to Greg. And it was just me by myself starting on day one. Just let's go. Let's figure this thing out. What kind of reception was there? Because you hear about those stories and sometimes there's like a lot of angst at that cultural evolution. Because like up until that point, you're very engineering driven. Like engineers, like they're...

sometimes they can be homogeneous and like they can create that culture and they're like, oh my gosh, now the salespeople are coming. Oh no, here comes the salespeople. Like did that happen? And we had a really good thing of like, you know, the reps were always good going and talking to the engineers about what they're hearing or seeing about the product. And we would bring them up for happy hours when we had a, you know,

something like that, anything on the sales floor, we're celebrating a quarter. So we tried to make them, you know, make sure they were felt part of what was going on. And I think it was like, let's, this is exciting. We got someone in now, we put the work in, in the garage or wherever they built Zoom. And now let's get someone to get out there and, you know, show the world. So it was a little more of that kind of- How'd you spend your first month?

At the point I joined, we didn't have a website. We had like a Facebook and Google sign-in capability to create an account on Zoom. At that point, it was all, you know, everyone was just free users. So we had a decent amount of free users. So I started digging into that data. I started looking at, you know, free users with similar, you know, same corporate domains. And I started calling into Google.

you know, those companies to try to understand like what made them find and start using Zoom over the others. I saw something different there. But when I started talking to these, just even free users, you know, they're like 20 people in a company using free Zoom. I'm like, how, why are you doing, why aren't you using WebEx or GoToMeeting or something? And they were just like, I'd never heard somebody so fired up about using software. Hey folks, just Mark here. Just what beautiful behavior and execution that you don't often see.

Most folks that are in this role, first seller, they're trying to set demos to pitch a commercial agreement. But like what's happening here is if we attach this to the science of scam methodology, Zoom is transitioning from finding product market fit to finding go-to market fit. I'm calling sort of like success and product market fit here. It's all about, it's not about signing commercial agreements. It's about seeing and realizing the value from the product. In Zoom's case, it's probably daily active usage. They've got it going on.

There's probably tens of thousands, hundreds of thousands of free users right now using it every day. But Greg's got to go find go-to-market fit. And he's not hypothesizing on a pro package that he's going to pitch. He's going out there to understand why customers are using the product. Learning. Understanding the goals that they're trying to accomplish. Almost sounding more like a customer success or customer support person than a salesperson. That is beautiful.

finding go-to-market fit. All right, let's get back to Greg. And so I spent time just talking to those customers, looking at the data, like who can we sell to? Who are these companies that are actually using Zoom and trying to figure out who do we point to? Because it's going to be tough. People don't know who we are.

So that's kind of what the first month was like. That's great. And just to clarify, this is roughly like for the audience, this is roughly like 2014, 2013. Like this is far before like the COVID energy. This was not because of like COVID. And obviously that was huge for you all, but that was much later. Like this was happening like, you know,

six years prior to that. Yeah, I joined January 1st, my first day or January 2nd, 2013. I love that you went out to those first folks and you weren't like, "Can I show you a demo of the enterprise version?" You were literally like, "Can I understand why?" And can you just like, because I think that's a great guidance for some of our early founders and our early salespeople who might be sitting on a similar context.

How did you even like craft that note or like craft the outreach to get them on the phone so they would take the call? Do you remember? It was genuine, you know, curiosity. I really wanted, truly wanted to understand how they found Zoom, why they're choosing to use that over, you know, everything else that was available to them. And I, you know, I think if you have that tone and

Yes, it's sincerity. You're truly curious. You're interested in what they're doing. And, you know, I think you're always going to have a better chance to get people to respond. You know, I advise one company I advise right now. They just we just hired a new head of sales. And that was like my thing to him after the first couple weeks. I'm like, have you called your top customers?

And in each segment and sort of start figuring out. And he hadn't done that yet. It was like, oh, man, that's got to be kind of first first things you do. If you've got some people using your product as you join, get in there and just don't worry about going out there and selling. And I know you're going to get a quota and stress out about that. But early on. Yeah. Just gather folks that are new to this context. Light bulbs usually go off when they hear that. On occasion, you have some skeptics.

Or like, yeah, I could do that. But like, it feels like manipulative, like, or I'm wasting my time. I just want to like, quickly get down to the people that are interested in buying the pro version. It sounds like you even use this a little later when you had reps of like taking that very soft approach. How did you train the reps and build your playbooks so that at some point you would transition toward a commercial discussion of like, you know,

talking about a paid version and, and, and moving toward that direction. I hired two reps. Like I joined, like I said, January, 2013, I'd hired two reps by the end of that month. Cause I was like, I don't want to do this by myself. Let's, let's get some two more people in here to, to start, you know, kind of trailblazing and figure this out together. Um,

you know, our first thought was, okay, we got a bunch of free users. They're using the product. Let's go after them. If you're kind of continuing to try to hammer people that are already using your product, they're kind of like, why do they keep calling me? I'm already using, what do they want from me? So it wasn't, we weren't having success trying to convert, convert free. We started figuring out that, you know what, the free is like our marketing engine, like let them just use it and be happy and invite their friends to their zoom meetings and they'll see it. And

And ultimately, there's going to be those. We were a little nervous at the time, but it was like, ultimately, that 40-minute time limit, if they're in a critical business meeting, they're not going to want it to time out. They'll move over. That was kind of the trust we had to have. Late January, we turned on our website and we had online purchase. So we started getting people buying a single pro license.

So we started kind of hitting those up. And I think those people minds, they're like, I just made a purchase. So why do I need to why are you calling me now? I mean, so we had to kind of understand that, like, let's reach out to them. And we built an email more like, hey, thank you for purchasing Zoom. We want to make sure you get making the most out of your purchase. Here's some best practices. We put some links in the email and it was more like almost kind of account managers. It's like, hey, we just want to make sure you're good.

And that approach all of a sudden turned and was like, okay. And I always tell people, when you get people who buy online, you got to adjust that approach. It's not a new sales lead, like someone who clicked your contact sales on your website type lead who wants to find out about you. These people just bought something. They're kind of done.

Just get in there and help them and then gather, get some information. And then, you know, you'll find that, oh, yeah, they're a hundred person company and there's 10 more people like them that if they're using Zoom, why aren't those other nine? And that's

then you start building deals around that. And just to clarify for the audience, because someone might not remember that, but in the early days, it was free up to 40 minutes. And then at that point, it turned off. You had to buy a pro version. And I remember that happened even during COVID. Seven years later, you still preserve that initial strategy. Like I said earlier, we didn't hire a head of marketing until 2015. Yeah.

Maybe late 14, but that was our marketing. The PLG was just working so well. I did want to go to those first two folks. Yeah, you added those two people in that first month. Can you talk to the selection there? So I thought, you know, let's get some people that understand the video conferencing world a little bit because we got all this WebEx knowledge. And so that's what I did. I started looking for

people that had kind of been more in that world. They were selling like Polycom. And I think that became a huge help. And that's, I think, early on, you want to think about, you know, build your team of, you know, that different knowledge sets that are sort of going to enrich the whole versus just all. And I think sometimes people will do that. And like, I've seen my own colleagues where they'll just pull over everybody they just work with at the old company, which, I mean, you find great reps, bring them over. I get it. But

For that early situation, I think you want to arm yourself with a little bit of that variety that feeds into what your company is going to be all about. Yeah, I love that. I don't think I've actually personally leaned into that enough from an advisory standpoint. So thank you for that gem. You know, like in the early days of figuring this out, making sure you've got diversified thinking and experience. And like you said, you're very thoughtful around that.

what aspects of WebEx was applicable and what were the gaps. And you went out and filled that. When you went out at those teams from like the Polycom providers, et cetera, was there anything else you were looking for in that salesperson? Did you just go after like the number one performer or were you looking for other attributes from that domain? You know, Eric had really from day one,

He loved that book, Delivering Happiness. And he's like, this is what we're going to do. We're going to be all about delivering happiness. The technology is going to deliver happiness. And we could see it was doing that, but we're going to surround it and we're going to treat people with respect. We're going to listen. We're going to care. We're going to take care of our community, each other, our customers. It was like, it became the religion of Zoom early on. So then when we were looking for hiring people, it was like, you know, this is the best rep at that company, but

they're not the nicest person. They just go grind out deals and kind of probably have to take a shower afterwards, like the sales rep. Hey folks, just Mark here. There's just like so much to unpack here. Like really Zoom has grown to be a modern symbol for how to build a go-to-market culture, probably even a company culture. But I've just really studied the go-to-market side

And you can see that coming through in Greg's description here of Eric's original mission and vision around delivering happiness. Like what a more motivating place to be than just like to deliver on your comp plan and gather commissions. And so like we're seeing a couple examples here. Like first of all, beyond Zoom, one technique, if you haven't seen it,

That's been done. I believe at companies. I know for example. For a fact. At like HubSpot. I know we were inspired by Netflix. I know. I think Amazon did this. Was to create a culture deck. That you publish. And it really describes what. Your culture is and aspires to be. Sometimes it's not. An exact description of your current culture. But it's what you aspire to be. And that's like. A great.

culture execution item because people read that and then it naturally attracts the people that want to work in that. And it naturally causes your new hires to want to reinforce it. So it's just such a scalable way to have a vision for a culture and actually bring it to reality. And I think some other techniques that Greg is seeing here is it's like, it's easy in the early days to try to form that culture because you can just act that way.

Like you're sitting around with 10, 20, 30, 40 people and the way you act is going to dictate the culture. It becomes harder when your team is 2,000 reps and they're across three or four continents. And that's where you're seeing how Greg did it. It's what you talk about. You have a one-hour meeting with your team. What do you highlight? Do you highlight the big deal? Do you highlight the awesome negotiation? Or do you highlight...

creating happiness, right? So Greg's really highlighting the ways that you can continue to develop and reinforce that culture at scale. Let's get back to Greg. Hire the one that are super good person, great fabric. They will listen. They will care. It's not just about the deal, you know? So those are harder to find because some nice guys don't always...

finish first kind of thing. But it's a little more unique kind of seller to find that combination. You know, I think that's what makes great sense. Was there any like magic question or exercise you did in the assessment? I just would ask, you know, give me some examples where you've delivered happiness in your life, maybe in your, just your outside life and maybe at work. When's the last time you delivered happiness? Give me an example. It was like, okay,

You know, so those probably never heard that question before, but yeah, I, you know, it sort of just was taking our mantra and just formed it in a question that would,

That would tell me a lot. And it sounds super simple. People probably listening to this are like, okay, Greg, listen to your customer, you know, care, be curious. Like, yeah, we all do that. But you know what? Nobody was doing it. I mean, I was kind of the same. I'm like, these are like table stakes. I mean, don't you just, doesn't everyone be nice to their customers and listen and really care and like be genuinely curious and

No, it was not, you know, surprise, surprise. And so we started doing it and also we're standing out. I mean, as we've gotten to know each other over the years and I tried to learn from you on those early days, you would often bring up the culture as one of the key ingredients to your sales org and its success. And I've gotten to know many of your subordinates as well. And I think everyone just talks like, you know, as you think about all the successes in software, sometimes

certain companies start to become a symbol of excellence for various things or this discipline forecasting, like sometimes methodologies like Medic or Bant or, you know, whatever. And I feel like Zoom in a way, the sales org is a symbol of like optimal culture. And I'm just curious, like you're giving us some like foundational pieces of that.

And can you just extend that story a little bit? Because that's hard to scale. Yeah, we would just pound the drum. And we'd have our all hands at that point weekly. We would put up examples on slide boards of people that delivered happiness in that past week, whether it was to another fellow employee or

or someone on the support team and something they did with the customers having an issue. And then in my sales meetings, I would do the same. And then it wasn't long until Eric came

created this new position called the chief happiness officer. We're just keeping it in front of everybody weekly through things like that, celebrating examples. And I would just tell the reps, hey, anytime you get an email back or a chat or a voicemail where someone is confirming that you delivered happiness to them,

like send it to me. And so I would build in, like I said, I highlighted every team meeting. I wanted to be in every interview for any salesperson that we hired. I wanted to, I wanted to meet them and know them and make sure they were going to be a good part of the team. And if you could do that, I highly recommend it. And like I said, it's more to

You know, get to know your people and be part of it. And, you know, have that touch with them early before even they accept that offer type of thing. So when they join, it's you're already got a little something going. Amazing. Amazing. And before we leave, I wanted to touch on one other subject to going back kind of the early days and then how it scaled was like.

the communication between the frontline conversations and you in sales with Park and engineering. I mean, you mentioned that when you first joined, you were in two different rooms, you know, but at the same time, they, it wasn't like, Oh no, here comes the salespeople. It was like, yes, here comes Greg and he's going to bring the team and we can finally like get to the next level of,

So it also sounds like there was a lot of like learning along the way on how to price and package and what was, you know, can you talk about how you all proactively, uh,

scaffolded the communication from sales to product engineering and then back to sales? One of the two reps I hired, the one was, and I always tell like when I had new members join my sales team, I'd always say, have you talked to engineering yet? You got to get down there and talk because this guy, Daniel was just like, he just did it. He didn't, I'd have to tell him he was just, he'd get off his calls from the day and he was right over to that engineering office. Like, here's what I'm hearing. And, you know, he's super competitive dude and he wanted to win deals, but, and he knew that,

In order to get there, the product had to be at a certain place. Hey folks, just Mark here. Yeah, this is highlighting a key attribute in finding the right first sales hire or first few sales hires while we're in the finding go-to-market fit phase that so many people overlook. And that is their ability to communicate with engineering and product. Like literally like up until this point as a founder,

I don't know. Maybe you've had two, three, four conversations a week with customers at best. Now this person's going to have 10, 20, 30 a week. I mean, the learning is just accelerated. And if they can't summarize that and get those findings back to product and engineering, that's just like a lost opportunity for acceleration. And you can see that coming through. He kind of subtly says it, that this particular rep was very skilled at it.

So here's like an exercise I do with my new hires at this stage that I don't think a lot of people do is like, hey, you know, you sound like, you know, really passionate about this and great seller. Here's what I'd like you to do. Spend the next two days going through our product. Go use it. Come up with feedback.

and deliver it to, I'm going to have you come back. And as part of the next interview exercise, I'm going to have you deliver to the engineering team. It could be like one engineer. It could be like the whole team, whatever. But I need to see that they're not like overly hinged on one little nit of feedback that they can actually see things holistically. And they communicate the engineering product in a good way that's not like offensive, that like speaks their language.

So just such a key ingredient in hiring the right people at this go-to-market fit phase. All right, let's get back to Greg. But there was this company called Blue Jeans that was sort of rising. Right, I remember that. And they were connecting those two things together early on. They were sort of a connection of video endpoints. That was their thing. You could join through a browser or on Skype and you could be in a meeting with someone on a Polycom or a browser. And Daniel early on is like,

We have to build this into our offering. You know, the engineering team was amazing. Within like three months, we had like first version of this. We called it the room connector. And all of a sudden we started knocking out, knocking out blue jeans because we were like, they couldn't believe it too. Like they put their whole company around building this technology. We did in like three months that sort of really solidified that vision where we were truly bringing in

all those worlds together and we had a product that could handle any of the connections that, you know, just that collaboration with the sales rep and the engineering team

get Eric on board was critical. That's the classic burn at scale is like product engineering, do that. And it worked with this first rep, it sounds like, but then you start to scale the reps and not everyone was as good at it. And I think over time, more experienced engineering and product people have that sort of scar where it's like some rep was so convinced, if you build this, we're going to clean up.

Because they're so like hyper-focused on that last conversation and they spend three months and build it and then nothing changes. And so they stop listening. I don't know, like if you hit that or like, how did you...

Did you have to like alter the way that product engineering learned and that communication mechanism? Okay. Ask the question, is this just going to help this one customer or is this something that's going to help this customer? It's going to be a feature or function that's going to help a lot of customers. Like it was that or it's like, or is this customer like,

such a big name that we can put on the website and maybe it is just feature just for them, but it's going to be a, you know, to have them on our site and they'll maybe do a case study. It'll be game changing in that way for us. Those are sort of the, those are the things we had to kind of instill that you got to kind of think that way and be able to answer that question. That helped, I think, get people to, you know, really go to, go to the engineering team and product when,

We felt like we had something that was going to be an impact. Well, dude, this is awesome, man. Like, obviously, like what what a life ride you've had. You know, who would have thought that that opening introduction would have led to this journey for you? And then like it must have been like such a pinch me moment.

like, seven years later where, you know, our society was going through such a challenging time with the global pandemic and how Zoom played such a role in keeping us connected. And so I just want to, you know, thank you for going through that experience. I'm glad it happened to someone like you. And thank you for sharing those best practices. I'm so thankful. And I love, you know, I love sharing. I love when we do this because, you know, frankly, it's fun just to bring it back out because it's been five years now and

Something I don't think about every day, but so I love kind of going back through it and, you know, hopefully there's some, some lessons and things that I went through that are helpful to others. And I'm always happy to share that. Thanks so much, man. You got it. Thank you, Mark. So that's it folks. Today's episode is written and produced by my favorite producer, Matthew Brown. Editing comes from Patrick Edwards. And Hey, if you like the show, be sure to follow us wherever you listen to podcasts and check out my VC firm stage two capital.com.

We are the VC firm that's running back by the CROs, CCOs, CMOs, and other go-to-market leaders across all of tech. So that's it for today. I'll see you on the next episode.