Chetan Chaudhary is a former CRO and GTM Executive who led revenue teams at Scale AI, Twilio, Cisco, and Oracle. In his over 10 years of sales leadership at Twilio, he learned that sales executives must evolve into a modern “distribution executive” in this era of product-led growth. Chetan is now investing in and advising startups as a partner at NewView Capital.
How was selling at Twilio different from your experiences at Cisco and Oracle?
We had a significant amount of leads that were signing up every day. Jeff Lawson had this idea of treating every developer like a consumer. We were marketing to developers as though we were a B2C company versus an enterprise sales company.
Jeff, along with the Product teams, built a frictionless process allowing developers to sign up with ease. This created a ton of top of the funnel leads.
Users would sign up using their first name, last name, and email address. That's it. We had to bring them on top of the funnel. Twilio is a very horizontal product. You start broad and then narrow down the use case for each customer.
How did Sales at Twilio evolve to meet this new Product-Led motion?
That’s one of the biggest learnings in my time at Twilio. George Hu, who was our COO and also the former COO of Salesforce, introduced the notion of a “distribution executive.” It’s a different way to think about Sales.
There are two types of individuals in sales. The first is a traditional sales executive. I call them transactional heroes. They understood how to negotiate and close the transaction. They are typically good at deal prosecution. They understand how to execute a pipeline and forecast deals.
The second individual - I would call a Distribution executive. The main difference between the two is the understanding how to create a route to market. Distribution executives understand how to build a process that can scale to drive revenue. The number of companies you touch, the content you provide them, and their usage all tell a story. Through a large set of touchpoints, you can understand how to address more and more customers. Distribution executives in my opinion fundamentally focus on building vs transacting.
Twilio changed the game for traditional sales motion companies, because they quickly learned how to hire distribution executives, who understood how to layer in sales executives to distribute Twilio to particular market segments. Upon my new role at NewView Capital, I am attempting to provide that insight into our portfolio companies as I believe it is a different way of thinking.
When you’re a distribution executive, you start thinking about Sales as a machine. And you have to build the telemetry of that machine in order to really understand the ROI of your routes to market. Some of those routes to market are worth investing in and others you need to ignore. Twilio built a lot of this telemetry providing insights not only to product usage, but also how customers were interacting with the platform. This allowed sales individuals to have intelligent conversations with customers.
As you scale a product-led company, you’ll inevitably have multiple routes to market going in parallel. You need to think about what are the inputs needed for each route to market to get the outputs so when they all roll up, you’ll hit your number.
How does a Sales team figure out routes to market in the first place?
We just saw these usage patterns. We were seeing early adopters, and we had to bucket them somehow.
We started by just trying to sell it to anyone. Then that usage pattern gave us the ability to pattern recognize customers in a particular cohort. Once you identify it, it allows you to layer in a sales motion that was complementary to that cohort.
Sometimes you have a general thesis, and it doesn't have to be exact. You layer in a sales motion that can see if that will boost the overall revenue amount. Then you kind of established that this cohort needs XYZ salespeople.
A huge part of the bottom-up sales strategy is listening to your users. For example, if your product is ready for enterprise, your customers will tell you instantly. If you have a product-led self service motion where Coca Cola and Citibank are buying through a credit card, you're probably on your way to becoming enterprise-ready and need to apply a sales rep there.
Tell us how you figured out one of these early routes to market?
I started at Twilio as an AE. There were three things I looked for in each PQL:
I would always ask myself as a rep, Could this become a big deal? I would try to to a quick back of the napkin math on how big the deal could be, giving myself a target.
- Then I looked at the usage pattern. Was there a continual usage over some period of time? I wanted an ‘up into the right’ type of usage pattern on important features.
- Lastly, what would be the use case? I’d look at their usage and support tickets to formulate a pitch in my head of why they potentially would use it. So we would then marry the use case with the usage pattern and make pitches.
In this process, I came across ISVs as an important route to market for Twilio. These were companies like Zendesk who embedded Twilio in their own product. I figured it out by talking to customers and seeing the traction. Companies wanted to embed voice and SMS capabilities into their own products. After proving out the early traction with customers, we built a route to market around it.
How did figuring out routes to market evolve over time?
We definitely got more scientific about it over time. As we grew larger, we could look across a lot more data. We grouped different usage patterns into cohorts to see if we could see which usage patterns turned into the biggest deals.
So for example, if you were spending $10 dollars a month with us, what was your likelihood of becoming a $100 a month customer and how could we influence it. From there, can we take them from $100 to $1000 a month and so on. This process informed us of who to go after and when to call.
From there, we did lots of testing on pitches and tactics. We started simply with a marketing drip email. Then eventually we tried having a BDR reach out. Later we got a BDR to reach out with specific content based on use cases. We’d eventually looped in the Solutions Engineer and AE once we saw that we could really influence the speed and size of deals.
We AB tested each of these pitches and tactics. Did the customer grow faster or bigger with sales getting involved or not? What size customer does the ROI make sense to get a BDR involved versus a Solutions Engineer and AE?
How can individual sales reps become distribution executives?
You create a culture where everyone is the general manager of their patch. At Twilio, there was a program called, “having the GM mentality.”
CROs and CEOs constantly allocate capital within business functions. As a CRO, you're allocating capital across the sales compensation, sales enablement, and headcount to see if these levers move your productivity metrics and drive revenue.
You want to filter that down into the organization. You want individuals to think in a very similar way. An AE should look at their users and product usage data to make smart decisions. They should be able to say, ‘I need X dollars or users here within this territory in order to drive Y revenue.’ The GM mentality is knowing what it means to allocate capital within your sphere.
So if you're an individual AE covering Southeast in the United States, you need to be thinking about what it will take to get 100% of the quota number. What would it take to get to 150%? The only way that you can do that is to think broadly. How many signups from marketing do you need to get PQLs coming through the door? How many events do you have to do?
It doesn't change from CRO to AE in terms of concepts. It's just in terms of scale and responsibility.
Where do you see the future of sales headed?
Sales reps and AEs will all understand how to build routes to market. They're not transactional heroes. They're not snapping their fingers or shooting from the hip. Those days are over.
The next generation of salespeople will have usage data and use cases very integrated into their pitches. If you don't, you're going to get left behind primarily because the buyers are becoming more sophisticated. The tolerance level for salespeople not understanding their business is very low. So you want to go in there with really strong data points to be able to drive a particular outcome. If you don't, you just get eaten alive. I think this expectation of the customer wasn't there ten years ago as deeply as it is today.
What’s your advice for building Sales teams at a product-led companies?
If you are $0 to $5 million in revenue, you want to do a product-led, self-service motion. I would not hire a salesperson first. I would start with marketing, and I would figure out a way to use content to generate top of the funnel leads. At $5 to $10 million, I would hire BDRs initially. Someone who could talk to customers and help them buy. They would be supporting the inbound demand. I would hire a traditional salesperson to help learn why and how customers are buying. Focus on developing a sales process, or at least a baseline of a sales process before layering in a small sales team.
Beyond $10 million, that's when you want to start hiring sales reps as a product-led company. I’d recommend you hire (1) leader and at least 3 to 5 reps . They’ll start leveraging the sales processes you developed in the previous phase.
Iterate on and start measuring sales productivity right away. Constantly ask yourself the question, how can I feed these sales people?
What are the interesting trends you're looking to invest in?
Sales tooling is a great space right now. You can now track emails, phone calls, product usage, support tickets, and all of these data points. Sales readiness is definitely a problem that AI could solve. We need to have a holistic score about whether a deal is going to potentially close or not, or where sales reps should spend more time. It’s exciting to leverage both AI and all of these data sources.
I would love to see another product-led sales motion company with similar characteristics to Twilio. It’s an interesting dynamic to create a flywheel through product-led first, before layering in sales. If you can get the product-led flywheel to work first, it compounds. The flywheel is the work of demand generation, product marketing, and product teams. Then the intersection of these three drives interesting usage patterns, which helps salespeople.