15:18 There's some different ways. I'm going to touch on something on compensation. Not that it really gives them the support, but it definitely builds the right culture.
15:29 I'm a huge fan in a tiered commission plan, and I think a tiered commission plan does exactly what it's meant to do, which is overcompensate my high performers so that they'll never even think about looking anywhere else because they're disgustingly paid, and for those that don't do well are making so little that they're going to go look on their own.
15:48 And that works. So if you have somebody who will use just a simple number, somebody with a $500,000 quota, if I pay 2% on the first 100, 4% on the second 100, 6% on the third 100, 10% on the fourth, 12%, 15% on the fifth, and then 20% anything above that, those top performers can't afford to leave.
16:08 Won't even think about it. And those that are stuck at $200,000 aren't making enough money to stay. And that kind of just leads to that own self-fulfilling issue where I'm not the one having to go ahead and dismiss them, which there's obviously cost involved with that, etc.
16:24 And just allows for that natural evolution to constantly be raising the bar, right? So when I look at any commercial organization, quotas are important, quotas are key, and we can talk about setting quotas and how you go about doing that and dealing with PE and growth expectations.
16:39 But at the end of the day, when you're looking at performance, it's the mean, okay? The sales team across the board sold an average of a million dollars a year. Did you sell a million in two? You're probably not the first person I'm looking at.
16:54 Did you sell 700? You probably are, right? And if you constantly run this playbook and keep doing this over and over again with that tiered commission plan, that mean is going to naturally rise because the team's going to constantly get better.
17:07 And it's just them pushing themselves, right? So that has always worked for me. It's also worked for me earlier in my career when I was doing a lot of line management, reps get quotas, quotas go up, businesses growing, and it's always the same thing.
17:21 How are we ever going to do that? It's January. How am I going to sell $1.5 million? There's no way I can do that. Just sell more than the average, guys.
17:28 And that just leads to a natural competition, and it works, right? Now everybody's looking at everything, and I had years at SNL where the sales team was about 6 A.E.s, where the greatest variance in production was less than 5% across the board.
17:48 I had all the cylinders hitting, exactly. They were all after it. You would think there'd be like two up here and the rest down there, and that's typically what I've seen a lot of other places.
17:58 But if the territories are split right, and you can get the right motivation in place, you can get those bottom cylinders to rise. But I will quote somebody, one of my mentors from years ago, you've got to trust your spidey senses.
18:11 If you know a salesperson's not making it, you've got to cut bait. And I don't mean to sound ruthless, but at the end of the day, it's better for them just as much as it is for you.
18:21 They're going to find somewhere where they can be successful, but it's just not here. And if you're on the fence, then you know the answer, okay? You're not on the fence.
18:29 You're just trying to convince yourself that you don't want to do what you don't want to do. And the faster you do that, the better off you are, and you're always looking for reps.
18:37 Any line manager that is not always looking for reps. I don't mean like lazy man looking like ads on LinkedIn. I mean going out and sniping, going to the competition.
18:47 Hey, your name came up in a conversation about, you know, would you be interested in having a conversation? You'll be amazed. Everyone wants to listen. Everyone loves to feel loved.
18:56 So go snipe. It's a game of winning here. It's not a game of, I guess, whatever. Play nice in the sandbox. I'm not saying do anything unethical. Never do anything illegal. Never lie.
19:09 That will always come back to get you. But playing to win in sales in any kind of SaaS business is table stakes in 2026.
19:20 I think people severely underestimate the level of competition at play in any given market.
19:27 And unfortunately, for the most part, it's a zero-sum game. So if you're not doing everything you can to win, the other person will, and it'll come to get you.
19:42 So if you're thinking like your competitors are sitting around being comfortable, not calling your people, not trying to poach your people, not trying to look at, not trying to get into your best accounts and best customers and seal them from you or build the product that can put your product out of business, every single angle they're looking to take you down.
19:59 And if you're not playing offense and defense at the same time, you're going to lose, which by the way, is not good for any of the people in your company in the first place.
20:07 No, no, it's definitely not. And I say this jokingly, but the worst thing to be is the market leader.
20:13 It's the absolute worst spot to be. I want to be number two, right? With a laser focus on being that market leader.
20:20 That is the best spot to be by far, right? Because you have your goal, you have your target, if you will, and you're going after it, you're going after it aggressively.
20:28 And that works, right? Once you're the market leader, there tends to be a bit of resting on your laurels. And that was really illuminated for me when I worked for SNL and when it sold to S&P.
20:40 And it sold to S&P. It's a Fortune 500 company. They have lots of data. It's S&P, right? McGraw Hill, like everybody knows who they are.
20:47 And there was definitely kind of like, I don't have to sell. There's enough inbound to keep me happy. And everybody already knows who we are and what we do.
20:57 And you found out over time that that works and you'll be an average-ish performing person there.
21:04 But if you go look at the people at S&P that are the true rock stars, because there's definitely that 80/20 split of the company like that.
21:10 When your rock stars are the ones that hunt, you've got to go after it. You've got to play like every sale means everything.
21:18 Now, it doesn't mean hang on to sales that aren't going to happen. Knowing when to cut bait is equally important. But you've got to have passion and you've got to want to win.
21:28 If you're going to approach sales with a clock in, clock out, there's no way that's going to work for you.
21:36 No, not a chance. My COO says probably a couple of times a week, he runs sales here at Lean scale. He said, "Chill don't pay the bill." So he is constantly getting after it and getting creative.
21:49 I want to go back to the team where you said the variance was 5%. I have literally never, I have worked with over 100 different companies here at Lean scale.
21:59 I've operated in SaaS and AI companies before Lean scale. I've never seen a team that tight before.
22:06 Sounds like the comp plan plays a really significant role in that. And before I move on, I just have to say, I've never thought about the comp plan as a way of weeding people out.
22:17 I've always thought of it as like, yes, incentivize performance. But I think that's really unique to think of it as incentivize people to voluntarily go to your competitors if they're not performing.
22:28 So anyway, I think that's a component that makes a lot of sense. There's a couple other things I'd love to pick your brain on because to do that, you rattle them off a little bit.
22:38 But how do you build equitable territories while you're scaling? And then was there anything else that just kept that team running Lean, Mean, and firing on all cylinders?
22:51 So culture eats process for breakfast is another quote, another mentor of mine. So the culture, that was Esal energy where they perform that tightly, the culture Esal energy was a winning culture.
23:06 Like we were in it together. These salespeople hung out together after work. They worked hard together. Like they were a unit. They were all about helping each other.
23:18 They all wanted to be the number one person, right? But at the same time, getting there by not helping your partner was construed almost as cheating.
23:27 It's a cheap win, right? Oh, I didn't help Mary with her lead at XYZ and therefore I got to sell more than her. That's cheating, right?
23:35 We're all on the same team. We all help each other. You need to win, win honestly. And that seemed to really, really work with that.
23:40 As far as the territories went, I think those, it was a couple of years where they performed that closely was there was probably more market than we could have, we could deal with.
23:49 So I think at that point, it was a question of like, I was not expanding the team fast enough in that situation, which is another stretchy thing to deal with, right?
23:59 Like when you start adding more, especially when you have a true hunter farmer mentality.
24:04 I understand it's very simple to decide when to add more customer success, when to add more account managers, farmers, whatever you want to call them.
24:11 When to add more hunters and how many more hunters and when, when you're growing and you're trying to remain profitable and like it was a fairly conservatively run company, et cetera, was a real balancing act.
24:23 If we were VC backed earlier on, we probably would have had a lot more salespeople on that team, to be really honest and using the hindsight of what I know now versus that was 10, 12 years ago.
24:34 Do you think it would have been more successful though? Because I have a, I have an appreciation, so I didn't raise money at all for Leanscove and Bootstrap the whole time.
24:43 I think, because I know what my ideas were five years ago and how I wanted to scale and what I want to do and what I thought would have been important, what I thought would have worked.
24:52 I think I would have ran this company into a brick wall if somebody gave me money.
24:56 It's funny you say that, I somewhat agree. I think the founder, Reed Nagel, along with the CEO Mike Chin, I think the two of them ran the company prudently and therefore kept everyone in check, right?
25:22 I really understood or appreciated how much and how important that controlled growth is.
25:27 I mean, you can see that at Ascent. Ascent is growing and growing nicely.
25:31 You could take like, we have PE backers, so it's a little bit different, but if you had like VC backers, you could argue triple the sales team.
25:39 And you could maybe run the company into a wall to use your phrase, right?
25:44 So being able to have that growth, control that growth and know that growth is paramountly important.
25:50 I also think, and I can't speak to your experience, but I don't think I knew enough about my exact ICP.
25:56 And again, because of size and ability and operational depth, I don't think I really knew like, well, how much can I really capture a year?
26:04 It feels like I can capture a ton more if I hire a bunch more people, so it must be true.
26:09 But I didn't have the data to back that up because I didn't have the operational infrastructure to get me that kind of data, frankly, at that stage.
26:15 I think as companies get bigger, right, you go look at companies, again, like an S&P Global, they know more or less what's coming in, right?
26:23 There is enough analysis. There is enough operational diligence, et cetera, that they can budget out how much commission is going to be paid this year.
26:31 They can budget out how much money is coming in within a couple of points.
26:35 I mean, they have to, right?
26:36 They got to answer to Wall Street every quarter, and they can't be like massive misses, like 20, 30 percent misses. Like, could you imagine if a company was like forecasting like that?
26:46 The volatility of the shareholders, there'd be like mutiny in the streets.
26:50 I think when companies are smaller, unfortunately, there is some gut with that because you just don't have the infrastructure for that.
26:56 And let's be honest, it's not where you're throwing your money early, early on.