Predictable, Scalable, Revenue w/ Ron Gabrisko (CRO, Databricks)
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I remember this engineer, he raises his hand, he says, "What exactly does a salesperson do?" I was like, "Okay, we're starting from

from ground zero and they were like why do we pay sales people commissions you know what i mean like a prize fight there's one winner no prize no fight predictable scalable revenue start the go-to-market section of your investor pitch deck with those three words i don't know why it works so well it seems so intuitive like every investor is like i love this guy that's what i want yeah we all want that but the question is how do you get there and

And a predictable sales playbook is a key ingredient. So many startups get that wrong. They think it's a sales deck. They think it's a pitch deck. And in fact, that hurts the go-to-market system. So with the help of Ron Gabrisco, the CRO over at Databricks, we're going to unpack how to build an effective sales playbook.

Because he came into that company when they were about a million in revenue. 50 people, largely engineers and technical folks. They didn't know how to build a playbook, but he did. And nine years later, the company is doing $2.5 billion, and it's worth over $40 billion. Let's find out how he did it. I'm Mark Roberge, and this is the Science of Scaling. So, hey, Ron, welcome to the show. Excited to be here.

Thanks for having me, Mark. Excited to have you. So, I mean, gosh, take us back to how Databricks found you or you found Databricks. Tell us that story. Yeah, no, I mean, first off, it's been amazing. I've been here nine years at Databricks, started for less than a million in sales. I met Ben Horwitz, and he was like, hey, I have this little company called Databricks. I met the founding team, and we hit it off, and I was like,

Let's go for it. Weren't you going into this being like, there's no way I'm joining this small sub-million dollar vendor? I was intrigued, right? Because they had invented Spark. I'm an entrepreneur, so I wanted to do something exciting and fun and

you know, take a big swing. I've done pretty well before. And I think it's a great story so far. It seemed like at that point you were trying to figure out how to come up with a commercial package. Like, what is this thing? What are you going to pay for? What's the price? So how are you navigating these discussions with, I assume these are like CIOs of banks or like, what are we talking about? So we're selling to a lot of, like I said, the tech forward companies, um,

But early days, you know, I hired folks out of my network to go just set up meeting with enterprises. Right. And start talking about like, you know, what kind of challenges do you have? You know, challenges with security or reliability or, you know, kind of speed ups, all those kind of things. So, you know, a lot of the early service.

developed based on just, you know, I would say my advice would be go, go get as many meetings as you can. And I think that's gotta be founder led, like your early sales person, like their main thing should be get, get you in front of customers, right? Cause that's going to form your opinion of, uh, you know, a lot of things that go in your playbook.

Hey folks, just Mark here. I want to just highlight something real quick that's happening here with Ron. And it's a reflection on the biggest value you get from your first sales hire. You know, a lot of people think, okay, absolute North star customers revenue, and that's fine. Like they're going to bring that in, but really this is a pivotal moment where you're going to exponentially grow the customer insights you're getting into your company.

Up until this point, maybe you're like six, seven engineers, a product person, whatever. Maybe you're having like two, three conversations a week with customers. Now you're bringing your ROM. Now you're having 20 to 30 conversations a week. And yeah, they're going to pop a couple customers. But really the biggest thing here is like their ability to reflect and see patterns and then communicate that effectively to you and your team.

That's going to help you get to like the perfect product market fit and go to market fit really aggressively. I'm showing you here the science of scaling overlay on how you optimize each of your go to market system designs according to the stage you're at. And if you're in this product market fit stage, you see here your first sales hire is a combination of almost like an account executive plus a product manager.

An account executive in the sense that they can handle those tough conversations. They can negotiate price. They're comfortable talking about money. They know how to move a conversation through toward a commercial agreement. But a product manager in the sense that they can reflect on 30 conversations and sense make and see patterns and communicate to engineering and technical people.

It's a rare find, but that's really, really instructive to how you're going to assess and pick your first sales hire for your organization. All right, let's get back to Ron. For us, we saw a big opening in data science.

And so that was kind of our first product and how we, you know, kind of entered the market. And, you know, now we've expanded to lots of other products. Beautiful. So you came up with this data science, like thesis, you had a package around it, you had a price around it. Did you get it right? Perfect. Out of the gate. I mean, you have to experiment a little bit, right? We would look to like, what are the alternatives, right? If you're going to try to do this with other technologies or other methods in the market, right.

You're trying to equate price to value. And early days, a lot of these products are way too technical. Folks will be, or at least the messaging is really technical, right? So trying to simplify that so that customers understand how to use it instead of it just being a blank sheet of paper. Are they just telling the deep technical story and research and you're filling the banks? Are these founders who are very technical actually selling products?

Are you teaching them to sell? Our CEO and co-founder, when he took over as CEO, it was just kind of close to when I started too. First thing he came to me, he said was, "I want to learn how to sell. Teach me how to sell." What did he think it was? This is a brilliant individual. Before he met you, what did he think selling was? I think a lot of technical founders think, "I have the best product at the lowest price.

i get the whole market right um you know why do i need these you know kind of evil sales people right um but you know again like i think if you have a pretty technical product sales people need to teach your customers how to use it and how to get value out of it so you know a lot of my selling early days was less about like how do we do the pitch but was more around

discovery and asking questions, right? Like when you're trying to build a playbook, first you have to decide like, what's your target market? What's the persona? And then a lot of it's discovery, like ask smart questions, you know. Biggest question I get every day. How do you build the next unicorn?

How do you build predictable, scalable revenue growth? Luckily, the folks at HubSpot have put together the Science of Scaling Database, real playbooks from companies that have gotten to the scale of like $40 billion in market cap. The playbooks cover key decisions like...

hiring, compensation, go-to-market strategy, ICP development, even stuff on AI in sales. All from the folks behind the fastest growing companies in tech. It's not fluffy. It's super tactical. You know my content. You know my brand. It's stuff that you're going to pick up, download, and put to use within an hour. So head to the description, click on the link, and download your free copy to start scaling your business today.

I totally agree. Like almost any super successful sales leader you talk to mentions that this is all about discovery, qualification, opening the questions up front, understanding pain, understanding needs. Not every single seller they hire is necessarily an A plus or that.

So I don't know if you just had success in finding people that just crush you out of the gate, or did you have some sort of like training wheels or playbook approach to help folks? Like you have to build an enablement team, right? So like one of the things...

I think that is a mistake is not investing in that upfront. You know, you got to sit down and articulate here's the persona because you're going to have to build pipeline. The key to that first zero to 10 million or 10 to 50 is you need to go touch as many of the right customers as possible. And so, you know, and you might not have an army of salespeople either. Right. So focusing them in the right area, pick the personas, these titles, these

These types of companies, so they know where to go on LinkedIn to connect. And then what's your discovery to understand? Are they the right fit? Is this a potential project? Is this an area you should invest time in? Hey folks, just Mark here. Ron is bringing to life a critical operational cadence at this early stage that few teams take advantage of. I personally call it the film review.

And so what this is, is a bunch of people get in a room at four o'clock or five o'clock at night, and you're going to listen to a discovery call, a first meeting with a prospective customer. When you're young and eight people like engineers, product, a designer, I like everyone in the room. I like it every day. The frequency by which we do this is representing how quickly we're starting to understand the market opportunity and seize it.

And so that's really what Ron is bringing to life here. And I've got an example of like best practices on constructing this film review, right? So first off, I assign it to an individual. Usually it's a salesperson and say like, hey, you're on the hot seat today. It's Thursday, you know, at five o'clock next Thursday, I need a recording from you that we can all listen to.

And then as I go into it, this is less about criticizing the individual and it's more about understanding the opportunity. Like, do we have our understanding of the buyer journey? Right. Do we have the right discovery call cadence? Are we building the right product? Are we seeing some some patterns here?

And essentially what I like to do is pre-assign people to give like sort of positive observations on the call and needs for improvement observations on the call. Right. So, and then once we listen to the call, I always like the individual in the hot seat to be able to self-assess first. I feel like they're like less defensive if like criticism actually comes up, if they have an opportunity first to say what they thought. So I always go self-assess.

then positive feedback, then needs for improvement feedback. And then we open up to everybody in the room to basically discuss on how we executed that call and what kind of patterns we're seeing. Try the film review. Try it every day. It's really going to be a barometer on how fast you can actually learn and understand the market opportunity. Let's get back to Ron. If you have 10 salespeople or 20 salespeople or five salespeople,

You know, you need to make a lot of emails, calls and LinkedIn connections. We want to focus in the right area. You don't want to just spray and pray. Right. So we built out a whole playbook. And I think that's a mistake. I sometimes see when I'm talking to other kind of CROs, you need to invest in that early on that whole enablement team and building on a playbook so you can make it.

repeatable, the messaging, certify on that, train people on it. I'm picturing like an SDR or an account executive figure now. I got to make 20 calls today to new people. So you've outlined like the title, the type of company, where they are. Like I can go on LinkedIn and find these people. And then you also talked about things that I can't find online. Like, do they have a need? Is their budget? What are their priorities?

What nomenclature did you use to distinguish between those two? You know, a trick that I think a lot of good sales leaders, you know, Wednesdays was prospecting day for us. So it wasn't just SDRs, everybody in the sales org all day prospecting. Five accounts, 10 accounts, 20 accounts you need to get into. It might take you a hundred calls. Again, prospecting to me is just effort, right? So, and you know, we kind of break at lunch, talk about, okay, who made some connections? I mean, first is getting somebody interested.

Hey, folks, just Mark here. Yet another example here of a huge unicorn and the AEs have to prospect. Good job by Ron. The AEs have to prospect.

And let me explain to you why. The right approach, just like Ron's saying, is, okay, Bob, welcome to Databricks. This is how our model works. You're in this territory. And, you know, it's obviously going to vary quarter to quarter. But for the most part, a third of your pipeline will be generated from marketing. We have a really great marketing team and you'll get a certain number of MQLs.

A third of your pipeline will be generated from your SDR. They're going to be cold, calm, etc. And you have to generate a third of your pipeline through strategic outbound sourcing. And they probably won't do it.

They probably won't do it. And then they'll come back the next quarter and they'll be at 110% of goal. And you say, Bob, great quarter. Why don't you reflect? Yeah, I did this well. I could have done this better. Great. Let's look at the numbers. Wow, you crushed your opportunity close rates. You were really great on your ACV. And oh, wait a minute, Bob.

You only sourced 10% of your pipeline. What happened? He's like, ah, you know, I just didn't get to it. Okay, fine. Next quarter comes along, same story. Hit the quarter and Bob, you know, only 5% of your pipeline was sourced by you. You know, I just didn't get to it. Next quarter, Bob misses, comes in at 70%. What happened, Bob? Well, you know, marketing didn't have a good quarter and my SDR was off. I'm like, Bob, what are you talking about?

Like for the last two quarters, you came in at 10% in Q1 and 5% sourcing for Q2. And now you're standing here, you're still at 5% sourcing your own pipeline. I've been telling you forever that it's 30%. And now you're blaming marketing and SDRs? Bob needs to feel accountable to his own outcomes. AEs must have some level of sourcing accountability. Great job, Ron. Let's get back to him.

You know, we would measure these things. You need, you know, five meetings, 10 meetings a week. So a lot of the qualification came during those initial meetings, discovery and asking those questions. But at least for outreach and prospecting, you know, we were pretty, we had a lot of rigor around how do you identify those companies, research them. And I measured them like every Friday and

We would go around the whole sales org and say, "Hey, how many meetings you get this week? How many POCs you have going?" We ran contests. Make prospecting fun. I think it's the hardest part of sales, but in my opinion, it's the most important part of early company sales. So try to make it fun. That's great. Now, you did say earlier that you hired 40 reps in the first quarter, and I know when we spoke,

I think there was almost some confusion amongst the team, like the largely engineering team on like, what the heck does a salesperson do? Why do we need them? Is that true? Well, I mean, a little bit, like we hired 40 people. I mean, probably half of them were salespeople, half of them were sales engineers. And I think, yeah, early days, I remember, you know, we put together a business plan. I do this amazing presentation that I think on kind of our plan and

how we need to scale out sales and the playbook and how we need to do the pitch and pricing and all this stuff. And I remember this engineering raises his hand. He says, what exactly does a salesperson do? So I was like, okay, we're starting from, uh, from ground zero. You know what I mean? So, uh, and they were like, why do we pay salespeople commissions? Uh,

you know what i mean like a prize fight you know there's one winner no prize no fight but again i think as you start to hire professional sales people that are really good uh you know that culture starts to change your culture a little bit too from just being engineers and engineering centric to being market centric like what do customers want and so we would include engineers uh

you know, in a bunch of the customer calls too, right? So they could kind of see how it worked. And I would go down to the engineering floor too and just try to get people fired up. And early days, your head of sales is, you know, for CEOs, that's your partner. You know, I see this a lot. You know, you raise this round, you hire the CRO, you come into annual planning, whatever it is, and you hire, like you go from zero to 40 in one quarter, right?

You end up with a lot of failure in there. A year later of those 20 AEs you hired in that first quarter, how many worked out? New customers is the oxygen, the lifeblood of a company, right? That's going to be all your next year growth. And so I think it's based on what your growth targets are going to be. Again, I was talking to a CEO, pretty successful company. And they're probably 50, 100 million run rate.

Their land's usually a hundred grand. He's only got 17 salespeople. He's like, "Yeah, but when I hire them, they have 12, 24 month ramps. It's only a hundred grand. How do I pay for this?"

what do you need to do next year? He's like, I need to double the revenue. I go better double your sales team. Right? Like, like I think part of it is just, you need to add that capacity because you need to build the market and listen, some of those might not work out. Like I, I think I have a good, you know, bar, I've good network. You know, I know what a good salesperson looks like. So I personally would interview, you know, probably 10 to 20 people for everyone I hired. That's why I,

I literally blocked out the entire day on Thursday for just interviews and reaching out to people on LinkedIn. I knew what I was looking for. But you have to get that capacity because even if they don't work out, let's say 60%, 70%. And we had, I think, a good rate because my big thing too is I need somebody to make a million bucks. Hey, folks, just Mark here. Unfortunately, this is...

A requirement, and it's one of the hardest and least favorite part of the job. And that is, if you're not moving out underperformers, you're not going to be a top team. And Ron's kind of bringing this to life. So let's frame a couple of things here. First off, the average turnover on a sales team across the industry is 40% a year.

That's not good no matter how you cut it. You run the Excel models on that and assume 40% turnover. It's just really hard to build a good business on that. So even though that's the average, we got to do better. 0% is not good either. It's just you're not that good at hiring. You can't be. If you got 0%, your quarters are too soft. You can get way more out of this team.

So I like to target between 10 and 20%. And of course, I want it to be as much of it as possible as involuntary. It's stuff that I'm controlling. It's just the reality of building a high-performing team. Now, let's also talk about what Ron's walking us through here, which is how do you codify and instrument that? That's one of the advantageous things about sales relative to product or finance or other things is like,

It's very easy to measure success versus failure. And so we got to take advantage of that here as we're thinking about the way we handle underperformers. We often use a performance improvement plan. So just make that quantitative. You miss your quarter. You miss your goal two quarters in a row, below 80%. You go on a plan. You have one quarter to get above. If you get above, you're off the pip. If you're below, you're unfortunately terminated. So...

I like to announce that on the first day of the job. It's obviously not the only thing you say, but like, here's the CEO, here's the product, here's the vision, here's some of the playbook, and here's how the compensation plan works, and here's how the PIP works. People never think they're going to be on it. So it's not like a weird thing, but everybody knows how it works. So that termination is no longer political, and it's never a surprise.

That's going to allow you to have this best practice embedded in your culture without creating a fear-based negative culture. And it's not like, oh, Mark didn't like that person. It's just like, yeah, they just lost in the game. And to be honest, they're going to go off and find a job that they're successful in. So the faster we can figure that out, the better it is for us, the better it is for them. All right, let's get back to Ron.

The good salespeople, especially early stage companies, they ask questions like, okay, who are your biggest customers? What are they buying? But then they immediately go, has anybody made a million bucks and can I talk to them?

Because they want to know your sales culture, how hard is it to sell, all those things. So you're talking about 200 interviews in that first quarter. You're blocking out all of Thursday. So that's like, you know, because I usually see a couple pitfalls when you attempt this. It's like the interview to hire ratio is too low. The other typical pitfalls I see are demand gen capacity. Like how are those folks fed? I think I know the answer, but I want to dive into that because you touched on it a little bit.

There's sales management capacity. In the industry, I think for enterprise teams, it's a six to one ratio of enterprise reps to manager. And inside teams, it's more like eight or nine to one. So if we're going zero to 20 and you're trying to abide by that, or maybe you're breaking it, I don't know. You got two or three managers. So how'd that work? So maybe we just unpack that a little bit. So I think number one is-

hire great leaders. I think the number one thing for a good leader, especially at Databricks, but anywhere is like, what's your ability to hire great people, motivate them, inspire them, mentor them. I mean, it's the Achilles heel of any sales leader is once you can't do that, then kind of hit your ceiling, right? So hire great people,

And they're going to help you build out that whole team. What about the demand gen piece? Because there are a lot of folks fall apart as they haven't figured out how to consistently create leads, demand meetings for the reps or teach the reps to do it. I'm curious how you kept that in sync so that 70% of these people are making their number a year later. Prospecting has to be religious at your company. That's why I said like Wednesdays were prospecting days. You know, we started doing also free training. I think free training is a great opportunity.

methods, especially for these technical companies. So we would basically invite 30 open source users to the office and then we would train them on the open source product, but we use our product so they would actually see the features and then we'd get to meet those folks. And a lot of our early sales came out of doing that. So we expanded that as an event. We started doing Spark Live. So we did a lot of venting to try to capture

I think that's a good thing to do for technical products. Do free training, right? Free certifications, those kind of things. Part of the story was like you came in and you're doing all these meetings talking to customers. The founders are talking to customers. You all are trying to find product, trying to invent a new commercial product with pricing, messaging, all that kind of stuff.

And in the same vein, you're out there doing, you know, 200 interviews in the first quarter, hiring a bunch of leaders. Were those sequential or were you kind of like building the plane while you're flying it? I mean, I was into it. The founders were into it. I mean –

I'm doing calls with Ali on the weekends all the time, right? It's pure grit and effort. Yeah, I totally get it. But the scale while you learn, because it's like, it seems like, okay, you're bringing people on, you're training them on the messaging, all that kind of stuff. But at the same time, you're experimenting with the messaging. And you're with Ali at night, you're like talking to a customer, like, oh, geez, we got this off. We're going to move over here. But gosh, we've already, we spent the last four weeks training 12 reps on

You know what I mean? How are you putting together the scale with the learning and making them all match? We did enablement almost every quarter, right? So, you know, we kind of scheduled that after like a bunch of the roadshows and going to see customers. So we were like, okay, here's kind of initial vision on how we want to pitch Databricks and what's the value and all that. And we taught all the salespeople that.

If you have enough capacity, they're going to give you, like I pitched that, that didn't really work, you know? So the faster you can iterate that feedback loop,

the faster you can grow. The culture sounds so disciplined and I want to go to it like, all right, fine, 60 to 70% workout a year later. That's amazing. To like bring on 40 people, 20 AEs in the first quarter and a year later, you're learning while you fly. But let's talk about the 30 to 40% that did not work out. How do you set the system up so that that sort of happens? Like how do you processize that?

performance plans and terminations? To me, a lot of it was on effort, right? I mean, there's competency and effort. We're in a very technical space. We hire really technical sellers. I think in terms of general sales, I think our people are really smart and driven. So you have to have the confidence for sure. So we hired people that came from

big data and came from this space, that learning curve, like we didn't go hire somebody who had, you know, no real experience. So, so you take that part out of the learning curve. Did you know, like two months in three months in, I mean, yeah, probably have a good idea three to six months in. And so people that are putting in the effort and that come from the space, eventually they're going to be successful. So maybe the first year they had some longer sales cycles and

I would say most of those folks going into year two are pretty successful. Again, the cheat code is I'm hiring from my network so I know what I'm getting or I'm hiring from the industry so they already know the market and the product. Can you advise the audience a bit on interviewing a sales leader?

You mentioned hiring and coaching and that kind of stuff. What are some of your- I'm sure Whitesaw is actually outside of my network. It's funny. Okay, cool. You work 20, 25 years and you think you know everybody, but it's funny. Personally, I love using exec recruiters for key hires. I think it's worth the money because you're going to get a bigger candidate pool.

Right. And so if you can't hire them from your network, certainly I'm reaching out to people on my own LinkedIn and trying to get people interested. But I liked Zach recruiters. I use Jasper at True quite a bit early days. And I think that's a good part to do it. How do you interview key sales? A big part of it when once you find somebody who's really good is you got to sell them on the opportunity. Right. Because if they're good, they're good.

they're going to have lots of people after them, right? Aren't people just going to like hook up their buddies? I mean, I'm going to do multiple back channels. Sure. Because you want to avoid the mistakes, right? Hey folks, just Mark here. Yeah, two points on hiring sales leaders. One is just abstract to any hiring. Backdoor references, back channel. And like, you know,

I'm not a lawyer. I'm not an HR consultant. Talk to your lawyer. Talk to the HR consultant about abiding by the laws when you do this. And a lot of people do. The one question I love to use, whether it's a back channel reference or a regular reference, is these are the three things we look for in our sales leaders. Can you rank them from strongest to, for one, two, three for this individual?

So it's like we look for people who manage conflict well, coach really well, and are exceptional interviewers. Can you rank that for Matthew based on your abilities? It just forces the referrer to just get out of the constant praise.

and pick some strengths and weaknesses, but like maybe average or slightly below average performance. And you can match that against your read on the candidate so far. If you had a concern around coachability and this person literally puts like their coaching ability up at the top, then that helps you get over that risk.

So try that question. The other thing is, as we get back to hiring a sales leader specifically and what they do, remember, they hire, they coach, they hold accountable. We got to set that up and get visibility.

in the interview process. So that surfaces my two favorite questions for these leaders. The first one is, I understand that you hired these types of people at fill in the blank, Oracle, Salesforce, whatever. How would you adjust that hiring profile for our company and why? And if you're saying that you're looking for people with high work ethic, how do you assess them on that?

So great candidates will just like rattle off. They have their scores card. They know how they assess for it, etc. The second thing is coaching. Can you tell me about a common skill deficiency you see amongst the salespeople you've managed over the years? How did you coach people through that? So like you'll get a remarkable answer on like deep diagnosis with effective coaching methods from people that are good.

right so they got to hire they got a coach hopefully those are some insights on how to interview and assess whether these candidates are good let's get back to ron i want to hire the best in the market right and again sometimes i might not be able to get the best of the mark but i want to know who that is for our stage and our company and our market and i'm going to go try to target those people like i'm very specific on

you know, like, especially now, like I'm like, I want the best person on the planet for this role. That's great. Going all the way back nine years of that discussion with Ben Horowitz, um,

I'm sure you're glad you took it. Congrats to the foresight on that. And I know Databricks is really glad they found you too. And all the genius that you walked us through in setting it up. Thanks so much for coming on and walking us through it. Thanks for having me, Mark. Yeah, you bet. Keep it going. Congrats so far. All right. Thanks, buddy. Thanks, Ryan.