---
title: "How to Bolt Sales onto PLG Without Cannibalizing It"
episode: 130
podcast: "The LeanScale Podcast"
publisher: "LeanScale"
guest: "Dan Cook"
guest_title: "President & CEO, PDQ"
date_published: 2026-10-01
date_modified: 2026-10-21
duration: 00:55:46
word_count: 11145
topics: ["gtm-strategy", "revenue-operations", "sales-leadership", "mergers-acquisitions", "brand-positioning", "demand-generation"]
canonical_url: https://www.leanscale.team/knowledge/podcast/dan-cook-pdq-bolt-sales-onto-plg/
source: "LeanScale Knowledge Hub — https://www.leanscale.team/knowledge"
license: "Free to quote and cite with attribution to The LeanScale Podcast."
---

# How to Bolt Sales onto PLG Without Cannibalizing It

_Dan Cook (CEO, PDQ) on testing whether sales is accretive or just cannibalizing self-serve, the 4x payback rule, a 6:1 seller-to-RevOps ratio early, a first CRM built in a Google spreadsheet, and an M&A playbook worked backwards from the easiest step_

**Episode 130 · The LeanScale Podcast**  
Dan Cook, President & CEO, PDQ · Hosted by Anthony Enrico  
Published October 1, 2026 · Updated October 21, 2026 · 00:55:46  
Canonical: https://www.leanscale.team/knowledge/podcast/dan-cook-pdq-bolt-sales-onto-plg/

**Topics:** GTM Strategy · Revenue Operations · Sales Leadership · Mergers & Acquisitions · Brand & Positioning · Demand Generation


## Executive summary

Dan Cook is President and CEO of PDQ, the device management and IT automation company behind PDQ Connect, PDQ Deploy, PDQ Inventory and PDQ Detect. Two twin brothers who had wanted to be Hollywood writers bootstrapped it to about $20 million in revenue and 15,000 customers on weekly webcasts, YouTube videos and Reddit word of mouth, with no sales team. Dan joined in 2020. PDQ is now past $100 million in revenue, profitably, with four tuck-in acquisitions behind it. Before PDQ he built the revenue organization at Lucid Software from nothing and served as its CRO as the company scaled past $150 million in ARR.

The conversation centers on one question: how do you add a sales motion to a product-led business that already works without breaking it? Dan's first sales call at Lucid set the tone. Hundreds of Uber employees were already using Lucidchart on scattered subscriptions, a former colleague introduced him to Uber's head of IT, and the buyer asked how much he could get for $15,000. Dan muted the call, made up 300 licenses, and closed what turned out to be Lucid's third-biggest customer. The lesson he draws is that a strong freemium motion hands sales a list of companies already adopting the product, and that the job is to elevate it without cannibalizing it.

His test is simple to state and hard to run: is sales accretive to growth, or are reps being paid commission on revenue that would have arrived anyway? Lucid answered it with a paywall, an enterprise SKU with admin features that only sales could sell, which made attribution clean. PDQ opened the aperture and let reps work self-serve leads, betting on two theses. Bigger initial lands by pulling other sysadmins into the deal mostly failed and lengthened sales cycles. Cross-selling acquired products worked, and the higher attach rate more than paid for the reps. Dan also describes Smartsheet's ghost book, a control territory no rep was allowed to touch, so reps were tested against the status quo as well as against each other.

On capital allocation, Dan's order is SEO and now AEO, then a growth team that gets visitors into the product quickly, then paid campaigns with known cost per lead or trial, and only then sales. Reps are hired in multiples so they can be compared, measured over three to six months, and expected to return four times their cost in year one. He tells the story of his own forecast at Lucid: he assumed his first four reps would manage half his production, and three months in they were doubling it.

The second half turns to RevOps, systems and M&A. Companies Dan admired ran about one RevOps hire for every six sellers early and about one for every 30 at scale, and he treats RevOps as the quantitative Switzerland between the exec team and sales leaders. His favorite first hire is a former investment banker or consultant with two years before business school. Lucid's first CRM was a Google spreadsheet, designed from what reps logged on their own plus what leadership needed. PDQ's acquisition playbook starts with the easiest step, a cross-sell email to customers, and works back through overlay reps and sales engineers, required enablement, CRM migration, and finally shared authentication and billing. He closes on authenticity as the premium in an era of AI slop, and on how PDQ is adopting AI with budget rigor.


## Key takeaways

1. **Answer one question before hiring a rep into PLG: is sales accretive or cannibalizing?** — Dan calls this the right-in-front-of-your-face risk of layering sales on a product-led business. If a sales professional only closes what self-serve would have closed, you have added cost and some sophistication and no growth. Every PLG-to-sales company he has talked with, close to a hundred, has had to decide where to draw the line so that sales attribution is clear.
   _Why it matters:_ Define, before the first hire, how you will prove that sales adds revenue rather than relabeling it. Without that line, the debate about whether sales is working turns into opinion.
   _For:_ Founders, Revenue Executives, Sales Leaders

2. **A paywall SKU makes attribution clean, especially for horizontal products** — Lucid kept self-serve small-team accounts frictionless but introduced an enterprise-wide offering with admin features that could only be bought through sales. The paywall split the business cleanly: a rep upselling a company into that SKU was visibly adding something a credit card online could not. Dan contrasts Lucidchart, which anyone can use for any use case at a low ACV, with PDQ, which serves one persona, the system administrator. A broad, low-ACV product usually needs something like an enterprise admin paywall to justify a conversation with a central buyer.
   _Why it matters:_ If your enterprise buyers need central management, compliance or admin controls, a sales-only SKU is the simplest way to separate sales-driven revenue from self-serve. If no central buyer cares enough to buy company-wide, sales may never be accretive.
   _For:_ Founders, Revenue Executives, Sales Leaders

3. **Letting reps work self-serve leads only pays if they bring a specific thesis** — At PDQ, reps engage self-serve leads and quota is used as an offset: some of what they close would have self-served, so they must prove an increment on top. PDQ tested two ways to earn it. Pulling other sysadmins into a bigger first land mostly failed and lengthened sales cycles. Cross-selling acquired products raised the attach rate enough to more than pay for the added quota cost.
   _Why it matters:_ Give reps a stated reason to touch an inbound lead, such as larger deal size or cross-sell, test it with one or two reps, and keep only the thesis that proves out.
   _For:_ Sales Leaders, Revenue Executives, RevOps Leaders

4. **Test reps against an untouched control book, not just against each other** — Smartsheet, another PLG and sales-assist business, created a ghost book: with four or five reps, it set aside an extra book of accounts that no rep was allowed to touch. Reps were A/B tested against each other, and the whole team was tested against the status quo.
   _Why it matters:_ Comparing reps only tells you who is best at the motion. A control group tells you whether the motion adds anything at all.
   _For:_ RevOps Leaders, Sales Leaders, Revenue Executives

5. **Fund the funnel in order: SEO and AEO, growth, paid, then sales** — Dan nails PLG before adding sales because self-serve adoption proves the product has value. The order at Lucid and PDQ starts with search, SEO and now AEO, so people find the product. Next comes a growth team that gets visitors into the product and to value as fast as possible. Then paid campaigns, run by quantitative people who track cost per lead, demo or trial. Being comfortable with those economics is the inflection point before sales.
   _Why it matters:_ The first two stages are mostly headcount costs. Know your marketing unit economics before you start moving budget into quota-carrying reps.
   _For:_ Founders, Marketing Leaders, Revenue Executives

6. **Hire reps in multiples and expect a 4x first-year payback** — Dan always starts with two or four reps so they can be compared. Over three to six months, he checks whether each is run-rating to a return on their own base and variable compensation. Lucid targeted a 4x payback on a rep in their first year. With that plus a tuned marketing funnel, the team could sit down with finance and know whether it was scaling efficiently. When Dan hired Lucid's first four reps, he assumed they would manage half his own production. About three months in, their run rate was double his, so Lucid adjusted quotas and added headcount.
   _Why it matters:_ A clear payback target turns the hiring-pace debate with finance into arithmetic and keeps emotion out of it. Being data driven means acting quickly when reps beat the plan as well as when they miss it.
   _For:_ Revenue Executives, Sales Leaders, Founders

7. **Relationship-led sales leaders will celebrate deals that were already coming** — Dan sees sellers on a spectrum from quant-heavy to relationship-heavy. A first sales leader on the relationship side will feel great closing deals but may not appreciate the cannibalization risk. They spike the football on a deal that might have happened anyway, and soon executives are saying sales is not closing anything incremental while the sales team celebrates. The result is cultural misalignment.
   _Why it matters:_ Know where you skew as a leader and hire people who complement you. A PLG-to-sales motion needs both the numbers and the relationships.
   _For:_ Revenue Executives, Sales Leaders, Founders

8. **RevOps is the quantitative Switzerland between executives and sales** — Dan's answer to that misalignment is RevOps infrastructure early: a person or team, slightly more quantitative, that sits between the exec team and the sales leaders and measures whether the effort is working and whether deals are truly incremental. From there it works into compensation plans, systems and enablement so the motion can scale quickly if it works.
   _Why it matters:_ Invest early and often in RevOps. It is the function that lets a revenue leader tell the CEO, with confidence, that the sales investment is working.
   _For:_ RevOps Leaders, Revenue Executives, Founders

9. **Overinvest in RevOps early: about 6:1 sellers to RevOps, easing to 30:1 at scale** — PDQ ran an informal study of companies it admired. The best ones overinvested in RevOps early, at roughly one RevOps hire for every six sellers. Once they reached hundreds of sellers, the ratio moved to about 30 sellers per RevOps person. Dan's conclusion is that the foundations for scale live in data, systems and process.
   _Why it matters:_ The ratio gives a revenue leader a benchmark to justify RevOps headcount to a CEO or CFO. Getting the foundations right is what makes it safe to pour gas on the fire later.
   _For:_ RevOps Leaders, Revenue Executives, Founders

10. **Hire the first RevOps generalist from banking or consulting, two years before business school** — Dan's moneyball hire is someone who has done two or three years of investment banking, or a two-year program at Bain, BCG or McKinsey, and wants a couple of years elsewhere before business school. They cost far less than a 10- or 20-year veteran, are quantitative enough to be dangerous, and are happy to work 80 hours a week because it beats 100. They can own forecasting and rep performance as a partner to the sales leader.
   _Why it matters:_ Expect to supplement them on systems, which is usually the next hire. Anthony notes that the experienced version of this profile becomes cost-prohibitive, which is why the pre-MBA pool is valuable.
   _For:_ Revenue Executives, RevOps Leaders, Founders

11. **Design CRM v1 from what reps log on their own plus what leadership needs** — Lucid's first CRM was a Google spreadsheet. Dan watched what the four early sellers logged unprompted, since reps only log what has meaning to them, and combined it with the information leadership needed to measure ROI. That combination became the v1 design. He did not plan it that way, but he believes it sharply reduces the margin of error on a CRM implementation.
   _Why it matters:_ If your sales process is not good and repeatable, beware of a systems implementation, because it raises risk and cost. Do the unscalable thing first so you can do the scalable thing well.
   _For:_ RevOps Leaders, Founders, Sales Leaders

12. **Integrate acquisitions starting from the easiest step and work backwards** — PDQ has done four tuck-in acquisitions of 10 to 60 people over four years. The playbook starts with a basic marketing cross-sell: email existing customers about the new product and drive them to webinars or demos. Sales engineers then back up reps who do not yet know the acquired product, and reps must complete recorded enablement with manager sign-off before they get leads for it. CRM migration comes next, then shared authentication and billing. Whether the apps merge, use an app switcher or stay standalone is decided product by product.
   _Why it matters:_ Pipeline from an acquisition can start in the first weeks while the heavy systems work follows. Assigning owners to each step is part of the playbook.
   _For:_ Revenue Executives, RevOps Leaders, Marketing Leaders

13. **Only pursue M&A for growth if you have channel conviction** — Dan repeats advice he was once given: if you see hair during diligence, expect a wig factory after close. To make M&A work as a growth lever, he says you need real confidence that you can bring the acquired product to your channel, that they can bring your product to theirs, or that they bring a new channel for your products.
   _Why it matters:_ Channel conviction covers a multitude of integration sins. Without it, or without an experienced playbook, M&A adds complexity faster than growth.
   _For:_ Revenue Executives, Founders

14. **Audience built on broad, consistent, authentic content outlasts the founders** — PDQ's founders went on YouTube in 2010 and ran a weekly live webcast with Q&A. They covered topics far beyond their own product, which widened the audience, and they were relentlessly consistent. That community carried into Reddit, where people speak fondly of PDQ. When the founders retired, Dan found he needed something like a studio operation, with several personalities: technical experts for credibility and charismatic people for levity.
   _Why it matters:_ If your brand runs on personalities, build a pipeline of them. Dan expects authentic content and experiences to become the premium that separates brands as AI slop spreads.
   _For:_ Marketing Leaders, Founders, Revenue Executives

15. **Adopt AI with access for everyone and rigor on budget** — PDQ gives every team member access to appropriate AI tools but requires justification for spend. In product it is adding automation customers will value. In go-to-market it is revisiting customer acquisition, from AI-driven outbound BDR experiments to an RFP generator that scrapes the web for opportunities, plus enablement and certification for sellers. Dan says PDQ is still in the wilderness on where it is headed.
   _Why it matters:_ Treat AI spend like the sales investment: measure ROI, and set aside time to try new tools so you ride the wave instead of being crushed by it.
   _For:_ Revenue Executives, Founders, RevOps Leaders


## Frameworks

### The Accretive Test (06:48)

**Definition:** Before and while adding sales to a PLG motion, prove that sales adds growth rather than collecting commission on revenue self-serve would have produced anyway.

Dan calls this the most immediate risk of layering sales onto PLG. Companies answer it on a spectrum. Some draw a hard line with a sales-only SKU. Others let reps work every self-serve lead and use quota as an offset, requiring an increment through larger deals or cross-sell. Either way, the rep must have a thesis, be isolated and tested, and show the result over a period of time with one or two reps before the motion scales.

### The Paywall SKU (07:45)

**Definition:** Keep small accounts self-serve and put enterprise-wide administrative features in a SKU that can only be bought through sales, so sales attribution is unambiguous.

Lucid introduced an enterprise IT admin offering that buyers had to purchase through a sales professional. Because small-team accounts stayed frictionless, any upsell into the enterprise SKU was clearly sales-driven. Dan notes this suits broad, low-ACV products where something more compelling is needed to justify a conversation with a central buyer.

### The Ghost Book (13:35)

**Definition:** Set aside a book of accounts that no rep may touch and measure the sales team against it as a control group.

Smartsheet, a PLG and sales-assist business, would add a fifth book to four or five rep books and keep it untouched. Reps were A/B tested against each other to see who executed the thesis well, and the team as a whole was tested against the status quo to confirm that sales was accretive and not adding cost without benefit.

### Fund the Funnel in Order (17:22)

**Definition:** Invest in search (SEO, now AEO), then a growth team that speeds visitors to value, then paid campaigns with known unit economics, and only then sales.

The first two stages are mostly headcount. Paid campaigns need quantitative people managing cost per lead, demo or trial. Feeling comfortable with those economics is the inflection point before adding sales. Reps are then hired in multiples, measured over three to six months, and held to a 4x first-year payback, in partnership with marketing and finance.

### The 4x Payback Rule (19:46)

**Definition:** A new sales rep should return four times their base and variable compensation in their first year.

Lucid targeted a 4x first-year payback on each rep. Combined with a tuned marketing funnel and a clear view of costs, it let the team sit down with finance and judge whether it was scaling in a capital-efficient way. When the first four reps run-rated at double Dan's own production, quotas were adjusted and more headcount was added.

### RevOps as Switzerland (24:45)

**Definition:** An early, quantitative RevOps person or team that stands between the exec team and sales leaders to measure whether the sales effort is truly incremental.

Dan introduces it as the fix for the misalignment that happens when a relationship-led sales leader celebrates deals that might have closed anyway. RevOps presents outcomes, then extends into compensation plans, systems and enablement so the motion can scale quickly once it works.

### The RevOps Ratio: 6:1 Early, 30:1 at Scale (27:27)

**Definition:** Benchmark RevOps headcount at about one RevOps hire per six sellers early, easing to about one per 30 sellers once a company has hundreds of sellers.

Drawn from PDQ's informal interviews with companies it admired. The best ones overinvested in RevOps early because the foundations for scale sit in data, systems and process. Dan says that confidence in those foundations raises the return on later sales investment and the revenue leader's credibility with the CEO.

### The Moneyball RevOps Hire (28:21)

**Definition:** Make the first RevOps hire a former investment banker or management consultant with a couple of years to fill before business school.

They are generalists enough to be dangerous, quantitative, and willing to grind, and they cost much less than a 10- or 20-year veteran. They can hold down forecasting and rep performance as a partner to the sales leader. Systems expertise is usually the next hire.

### Spreadsheet-First CRM Design (31:11)

**Definition:** Run the early sales process in a spreadsheet, watch what reps log on their own, add what leadership needs to measure ROI, and use the combination as the CRM v1 design.

Lucid's first CRM was a Google spreadsheet. What reps logged unprompted showed what had meaning to them, and leadership's must-haves showed what was needed to vet the sales investment. Dan says this approach reduces the margin of error on implementation and avoids the Frankenstein CRM that comes from expensive consultants, out-of-the-box installs or hacking along. He warns against implementing systems before the sales process is repeatable.

### M&A Integration, Worked Backwards (35:57)

**Definition:** Integrate an acquisition starting with the easiest, fastest-value step and work back to the heaviest: marketing cross-sell, overlay sales support, enablement, CRM migration, then shared authentication and billing.

PDQ emails customers about the newly acquired product and drives them to webinars or demos. Sales engineers back up reps who do not yet know the product, and reps must pass recorded enablement signed off by a manager before receiving leads. The CRM is then migrated, and finally authentication and billing are unified. Whether the products merge, share an app switcher or stay standalone is decided case by case, with clear owners for each step.


## Quotes

_Speakers inferred from an undiarized transcript — verify before attributing._

> "He said, "Well, you like to talk." And so it was a very low bar for qualifying to be a salesperson at Lucid at that time."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (03:12)

> "I hit mute on the phone. I pretend to calculate a number and I just make up, "Well, how about 300 licenses?""
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (04:38)

> "Is sales actually going to be accretive to growth? Or when you add a sales professional, are they just going to cannibalize the PLG motion?"
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (07:04)

> "I'm really grateful for this shadow IT movement because it's basically helped build my career."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (08:05)

> "You have to have a key thesis in mind of why the sales rep should engage with a lead that was otherwise coming to you."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (13:07)

> "They called it a ghost book. So imagine you have five reps to start or four reps or whatever. They would create a fifth kind of a book where they would not let a rep touch it."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (13:43)

> "The road is littered with SaaS companies that PLG'd in, added sales reps, the sales reps got paid commission, cannibalized what was already going to happen and all you did was add cost to your P&L."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (16:13)

> "We tried to target a 4x payback on the sales rep in their first year."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (19:46)

> "I was materially off in my forecast of what a sales rep could do at Lucid."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (20:53)

> "They'll spike the football on the deal, but it's like, "Well, that deal might have happened.""
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (24:24)

> "Some of the best in class companies that at least we admired over invested early in RevOps to the magnitude of like a six to one seller to RevOps hire ratio."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (27:27)

> "The first CRM we built at Lucid, true story, was a Google spreadsheet."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (31:11)

> "Clearly, if a sales rep is logging something on their own, it suggests that there's meaning or value to the information. Otherwise the sales rep will never log anything."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (31:30)

> "The forecast was all of the EAs of the VPs of sales emailing an Excel spreadsheet to the top head of sales EA who compiled all of the forecasts."
>
> — Anthony Enrico, The LeanScale Podcast Ep. 130 (33:37)

> "If you don't have a sales process that you believe is good and repeatable, then beware of your systems implementation."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (34:26)

> "If you're going to make acquisitions and you see hair during the diligence period, expect a wig factory once you've closed the deal."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (40:24)

> "Authentic content, authentic communication, and authentic customer experiences and engagements are going to be the premium that can oftentimes separate your brand."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (45:19)

> "One way you show authenticity is that you are a technical expert."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (49:18)

> "It's hard to vibe code what we do."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (50:58)

> "If a wave is coming, how do you make sure you don't miss the wave? And how do you make sure you don't have the wave crash down on you? You want to ride this wave."
>
> — Dan Cook, The LeanScale Podcast Ep. 130 (53:26)


## Practical advice by role

### Founders

- Nail product-led adoption before adding sales. Self-serve adoption is the evidence that the product has value.
- Decide up front how you will prove sales is accretive, whether with a sales-only enterprise SKU or with quota offsets on self-serve leads.
- Ask whether a central buyer cares enough about your product to buy it company-wide. Broad, low-ACV products usually need an enterprise admin paywall to justify sales.
- Do the unscalable thing first: run early sales in a spreadsheet and design the CRM from what reps actually log.
- If your brand depends on founder personalities, start building other voices before the founders step back.

### Revenue Executives

- Hire reps in multiples, measure them over three to six months, and target a 4x first-year payback on their compensation.
- Keep an untouched control book, as Smartsheet did, so you can see whether the whole sales team beats the status quo.
- Know whether you skew quantitative or relationship-driven, and hire leaders who cover the other side.
- Agree SLAs with marketing, product and finance on what success means, and meet regularly so emotion does not drive the investment pace.
- Pursue acquisitions for growth only with conviction about channels: their product into yours, yours into theirs, or a new channel.

### RevOps Leaders

- Use roughly one RevOps hire per six sellers early, easing toward one per 30 at scale, as a benchmark for headcount requests.
- Position RevOps as the neutral, quantitative function that measures whether sales-closed deals are truly incremental.
- Recruit early generalists from two-year banking or consulting programs who want a couple of years before business school, and plan a systems hire next.
- Combine what reps log unprompted with what leadership needs to measure ROI to define the first CRM design, and prune opportunity-object bloat over time.
- In acquisitions, own the sequence after the cross-sell launch: CRM migration first, then shared authentication and billing.

### Sales Leaders

- Before touching a self-serve lead, have a stated thesis for what you will add, such as a cross-sell or a larger land.
- Test new theses with one or two reps first. PDQ found bigger first lands lengthened cycles while cross-sell raised attach rates.
- Do not celebrate deals that self-serve would have closed. Measure your team's increment, not its bookings.
- Require recorded enablement and manager sign-off before reps get leads for an acquired product, and pair them with sales engineers early on.

### Marketing Leaders

- Invest in SEO and now AEO first, then a growth function that gets visitors into the product and to value quickly, then paid campaigns with known cost per lead, demo or trial.
- After an acquisition, launch a simple cross-sell campaign to existing customers through email and webinars. It is the fastest source of leads.
- Build audience with consistent content that covers your customers' wider world, not only your product, and include live Q&A.
- Treat authenticity, including visible technical expertise, as a differentiator as AI-generated content floods every channel.


## AI takeaways

**Thesis:** Dan treats AI as he treats a new sales motion: give everyone access, demand an ROI case for the spend, and stay humble about where it is going. He also expects AI to raise the value of what it cannot fake, namely authentic content, authentic experiences and the trust involved in putting software on customers' devices.

- **** — 
- **** — 
- **** — 
- **** — 
- **** — 

**Agent & automation ideas**

- An RFP-finder agent that scrapes the web for relevant RFPs and routes them to the sales team, which PDQ is building.
- An AI outbound BDR experiment that works alongside the self-serve funnel.
- A cannibalization monitor that compares rep-touched accounts with an untouched ghost book and flags deals likely to have self-served.
- A CRM design assistant that analyzes what reps log unprompted in a spreadsheet and proposes a v1 object model.
- An acquisition cross-sell agent that identifies existing customers most likely to want a newly acquired product and drafts the invitation to a webinar or demo.


## Operations takeaways

### Revenue operations

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### Pipeline & marketing ops

- **.** 
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- **.** 


## Metrics mentioned

| Value | Metric | Context |
| --- | --- | --- |
| About $20 million | PDQ revenue when Dan joined | Bootstrapped by the founders with no sales team, alongside 15,000 customers. |
| 15,000 | PDQ customers when Dan joined | Built on freemium, YouTube content and community word of mouth. |
| $100 million+ | PDQ revenue today | Reached profitably in the six years since Dan joined in 2020, per the show notes. |
| 4 over 4 years | Tuck-in acquisitions | Small to mid-sized companies of roughly 10 to 60 team members each. |
| $150 million+ | Lucid ARR scale | The ARR Lucid Software reached with Dan as CRO, per the show notes. |
| $15,000 for 300 licenses | Dan's first deal at Lucid | Paid by credit card by Uber's head of IT. It made Uber Lucid's third-biggest customer at the time. |
| 4x | First-year rep payback target | Lucid's target return on a new rep's base and variable compensation in year one. |
| 3–6 months | Rep evaluation window | The period over which new reps are measured for whether they are run-rating to a return on their compensation. |
| About 2x Dan's own, against a forecast of half | First reps' production versus forecast | Three months in, Lucid's first four reps were doubling Dan's production. He had assumed they would manage half of it. |
| 6:1 | Seller-to-RevOps ratio early | What the best companies Dan studied invested in RevOps early in their scale journey. |
| 30:1 | Seller-to-RevOps ratio at scale | The ratio those companies moved to once they had hundreds of sellers. |
| About 70, roughly 40 former sysadmins | PDQ team when Dan joined | Many were PDQ customers recruited into every function of the business. |
| Tens, close to 100 | PLG-to-sales leaders Dan has spoken with | The basis for his view that common playbooks have emerged for adding sales to PLG. |


## Entities mentioned

- **PDQ** (company) — Dan's company, where he is President and CEO. A device management and IT automation business for system administrators, bootstrapped by twin-brother founders to about $20 million in revenue and 15,000 customers before Dan joined with roughly 70 team members, about 40 of them former sysadmins. It has since grown past $100 million in revenue profitably, done four tuck-in acquisitions, and lets reps work self-serve leads with a cross-sell thesis. · https://www.leanscale.team/knowledge/company/pdq/
- **Lucid Software** (company) — Where Dan started as Director of Operations at about 30 people, all engineers but him, and was asked to try sales. He built the sales motion on top of Lucidchart's freemium adoption, drew a paywall around an enterprise IT admin SKU, hired the first four reps, and ran the first CRM in a Google spreadsheet. · https://www.leanscale.team/knowledge/company/lucid-software/
- **Uber** (company) — Dan's first sales call at Lucid. Hundreds of Uber employees were already using Lucidchart on scattered subscriptions. A former colleague who had become an early Uber hire introduced him to the head of IT, who asked how much he could get for $15,000 and paid by credit card for 300 licenses, making Uber Lucid's third-biggest customer at the time. · https://www.leanscale.team/knowledge/company/uber/
- **Smartsheet** (company) — Cited as a PLG and sales-assist business that created a ghost book, a set of accounts no rep could touch, so reps could be tested against each other and the sales team against the status quo. · https://www.leanscale.team/knowledge/company/smartsheet/
- **LexisNexis Risk Solutions** (company) — Mentioned by Anthony: a company he worked at was acquired by LexisNexis, whose multi-billion-dollar revenue organization still compiled its forecast in 2020 by having executive assistants email Excel spreadsheets to the head of sales's assistant every Friday. · https://www.leanscale.team/knowledge/company/lexisnexis/
- **Boston Consulting Group (BCG)** (company) — One of the two-year consulting programs Dan recruits early RevOps generalists from. · https://www.leanscale.team/knowledge/company/bcg/
- **McKinsey & Company** (company) — One of the two-year consulting programs Dan recruits early RevOps generalists from. · https://www.leanscale.team/knowledge/company/mckinsey/
- **Bain & Company** (company) — One of the two-year consulting programs Dan recruits early RevOps generalists from. · https://www.leanscale.team/knowledge/company/bain/
- **LeanScale** (company) — Anthony's company. He mentions using Lucidchart at LeanScale for org charts and flow charts. · https://www.leanscale.team/knowledge/company/leanscale/
- **Dan Cook** (person, guest) — President & CEO of PDQ; former CRO of Lucid Software. · https://www.leanscale.team/knowledge/guest/dan-cook/
- **Anthony Enrico** (person, host) — Co-founder of LeanScale and host of The LeanScale Podcast. · https://www.leanscale.team/knowledge/guest/anthony-enrico/
- **Lucidchart** (tool, Diagramming / Visual Collaboration) — Lucid Software's diagramming product. Its freemium adoption, with hundreds of users at companies like Uber on scattered subscriptions, gave Dan his first sales targets. Anthony says he has used it at every company, including LeanScale.
- **Google Sheets** (tool, Productivity / Spreadsheet) — Lucid's first CRM was a Google spreadsheet, which Dan used to learn what reps logged on their own before designing the real CRM.
- **Microsoft Excel** (tool, Productivity / Spreadsheet) — The tool of Dan's investment banking years, and the spreadsheet that Anthony says LexisNexis sales executives' assistants emailed around to compile the weekly forecast.
- **Claude** (tool, AI Assistant) — Dan suggests a good back-and-forth with Claude to get the right information can cover a multitude of CRM sins, though not a missing sales process.
- **YouTube** (tool, Video Platform) — Where PDQ's founders started publishing in 2010, alongside a weekly live webcast with Q&A, building the sysadmin audience that drove PDQ's growth.
- **Reddit** (tool, Community / Social) — Where PDQ's community carried over and where, Dan says, people speak fondly of PDQ because the founders were authentic.


## FAQ

**Q: How do you add a sales team to a product-led growth company without cannibalizing self-serve revenue?**

A: PDQ CEO Dan Cook says the first question is whether sales will be accretive to growth or will just collect commission on revenue that self-serve would have produced. Companies answer it in two main ways. Lucid Software, where Dan built the sales team, kept small-team accounts self-serve and put enterprise IT admin features in a SKU only sales could sell, which made attribution clean. PDQ lets reps work self-serve leads but uses quota as an offset and requires an increment, which it gets mainly by cross-selling other products. In both cases reps need a specific thesis, should be tested one or two at a time, and should be measured against a control group.

**Q: What is a ghost book in sales?**

A: A ghost book is a set of accounts that no sales rep is allowed to touch, used as a control group. Dan Cook describes Smartsheet doing this while adding sales to its product-led motion: with four or five reps, it created an extra book that stayed untouched. Reps were A/B tested against each other, and the whole sales team was tested against the ghost book to confirm that sales was adding growth rather than adding cost to revenue that would have arrived anyway.

**Q: What payback should you expect from a new sales rep?**

A: At Lucid Software, Dan Cook's team targeted a 4x payback on a new rep's base and variable compensation in the first year. Reps were hired in multiples, at least two or four, so they could be compared, and measured over three to six months to see whether they were run-rating to that return. Combined with a tuned marketing funnel and a known cost per lead or trial, the target let sales, marketing and finance agree on how fast to add headcount.

**Q: How many RevOps people do you need per sales rep?**

A: In an informal study of companies PDQ admired, Dan Cook found that the best overinvested in RevOps early, at roughly one RevOps hire for every six sellers. Once they had hundreds of sellers, the ratio moved to about one RevOps person for every 30 sellers. His reasoning is that the foundations for scale sit in data, systems and process, and that getting them right early raises the return on later sales investment and the revenue leader's credibility with the CEO.

**Q: Who should be the first RevOps hire at a startup?**

A: Dan Cook, CEO of PDQ and former CRO of Lucid Software, recommends someone who has finished two or three years of investment banking, or a two-year program at Bain, BCG or McKinsey, and wants a couple of years in a company before business school. They are quantitative, used to long hours, and cost far less than a veteran. They can own forecasting and rep performance as a partner to the sales leader. A systems specialist is usually the next RevOps hire.

**Q: How should you design your first CRM?**

A: Dan Cook's first CRM at Lucid Software was a Google spreadsheet. He watched what the four early reps logged on their own, since reps only log what they find meaningful, and combined it with the information leadership needed to measure the return on sales. That combination became the v1 CRM design. He warns that implementing a CRM before you have a good, repeatable sales process significantly raises risk and cost, and often produces a Frankenstein system the team regrets years later.

**Q: How do you integrate an acquired company's go-to-market?**

A: PDQ, which has done four tuck-in acquisitions, starts with the easiest step and works backwards. First, a basic marketing cross-sell: email existing customers about the new product and invite them to webinars or demos. Next, sales engineers support reps who do not yet know the product, and reps must complete recorded enablement with manager sign-off before getting leads. Then the CRM is migrated, and finally authentication and billing are unified. Whether the products are fully merged, share an app switcher or stay standalone is decided product by product. CEO Dan Cook adds that M&A only works as a growth lever with real conviction about channels.

**Q: How did PDQ build its audience?**

A: PDQ's founders, twin brothers who had moved to Los Angeles to become Hollywood writers and became system administrators instead, started publishing on YouTube in 2010 and ran a weekly live webcast with Q&A. They covered topics across sysadmin work rather than only their product, which widened the audience, and they were relentlessly consistent and authentic. The community spread to Reddit, where people speak fondly of PDQ. After the founders retired, CEO Dan Cook built a studio-style lineup of technical experts and charismatic presenters to keep that voice going.


## Timeline

- **00:00** — Cold open + intro
- **01:51** — The first sales call: "How much can I get for 15K?"
- **06:07** — The accretive test: is sales adding growth or eating it?
- **13:35** — Smartsheet's ghost book: A/B testing against the status quo
- **16:36** — Capital allocation: SEO, AEO, growth, paid, then sales
- **19:25** — The 4x payback rule, and the forecast Dan got badly wrong
- **22:28** — Red flags: quant versus relationship leaders, and RevOps as Switzerland
- **26:04** — The RevOps ratio study: 6:1 early, 30:1 at scale
- **30:46** — The first CRM was a Google spreadsheet
- **34:51** — The M&A playbook: four tuck-ins, worked backwards
- **41:16** — The PDQ founder story: Hollywood writers to YouTube in 2010
- **46:58** — Keeping the voice after the founders leave
- **50:05** — What's next: AI at PDQ and riding the wave
- **54:19** — Wrap


## Related episodes

- **Ep. 101: Why You Can't Sell Your Way Into PLG** (Bryce Winkelman (Typeform)) — Running self-serve and enterprise sales side by side at another PLG company, the same problem Dan solves with paywalls, quota offsets and cross-sell.
- **Ep. 107: Why Circle's Co-Founder Ran 1,500 Sales Demos Before Hiring a Single Rep** (Andy Guttormsen (Circle)) — A founder who sold before hiring reps, comparable to Dan closing Lucid's first deals himself and then misjudging what his first four reps could do.
- **Ep. 115: What RevOps Should Look Like at Every Stage** (Hassan Irshad (Unify)) — A stage-by-stage RevOps build order to set against Dan's 6:1-early, 30:1-at-scale ratio and his moneyball first hire.
- **Ep. 87: Most Acquisitions Fail Like This: What Nobody Tells You About M&A** (Chris Heller (Place)) — Another operator's view of M&A integration, alongside PDQ's playbook of cross-sell first and systems migration last. · https://www.leanscale.team/knowledge/podcast/chris-heller-why-most-acquisitions-fail/
- **Ep. 93: How HubSpot Built a Media Empire** (Jonathan Hunt (HubSpot)) — Owned media and video-first audience building at scale, the same moat PDQ's founders built with weekly webcasts and YouTube. · https://www.leanscale.team/knowledge/podcast/jonathan-hunt-hubspot-media-empire/
- **Ep. 110: Why You Can't Automate Reddit** (Shawn Tenam (Clearbox)) — Why authentic human effort wins on Reddit, where PDQ's community carried its reputation, and why that matches Dan's view of authenticity as the premium in an AI era.
- **Ep. 95: Why AI Means More RevOps Hires, Not Fewer** (Jimmy O'Halloran (New Relic)) — A complementary argument for investing in RevOps headcount, to read with Dan's case for overinvesting early. · https://www.leanscale.team/knowledge/podcast/jimmy-ohalloran-new-relic-revops-consumption-revenue/
- **Ep. 41: Why Structure (Not Headcount) Builds Great RevOps** (Steve Dinner (Owner.com)) — A contrasting take on RevOps sizing that leans on structure and specialist contractors, which PDQ also uses for systems migrations. · https://www.leanscale.team/knowledge/podcast/steve-dinner-structure-not-headcount-revops/


## Full transcript

_Machine-transcribed and not diarized; speaker attribution is inferred._  
_Transcript only, as a separate file: https://www.leanscale.team/knowledge/podcast/dan-cook-pdq-bolt-sales-onto-plg/transcript.md_

### 00:00 — Cold open + intro

**[0:00]** You know, great story at PDQ. It's a great American story. You know, the founders who are

**[0:03]** twin brothers, they graduate high school. They want to be Hollywood writers. They move to LA,

**[0:09]** and it turns out they can't get jobs as Hollywood writers. Maybe no surprise.

**[0:13]** My guest today is Dan Cook, president and CEO of PDQ, a device management company that two twin

**[0:20]** brothers bootstrapped to 20 million in revenue and 15,000 customers before Dan ever walked in the door.

**[0:28]** The journey clearly, whatever operations were for me was not working because the COO pulled me aside

**[0:33]** and said, "Hey, Dan, would you want to try out sales here at Lucid?" Of course, my first question

**[0:37]** was like, "Well, why me?" And the business at the time was about 30 plus people, and he said, "Well,

**[0:42]** you like to talk." I've seen it go really well, and I've seen it go south to where you start to

**[0:50]** really take away maybe the magic of what you have built. The road is littered with SaaS companies

**[0:55]** that PLG'd in, added sales reps. The sales reps got paid commission, cannibalized. What was already

**[1:00]** going to happen, all you did was add cost to your P&L. And then there's a few that don't know how

**[1:07]** to value that early investment or don't know how to articulate that to their CEO or CFO of, "Hey,

**[1:14]** this is necessary." If a wave is coming, how do you make sure you don't miss the wave? And how do you

**[1:20]** make sure you don't have the wave crash down on you? You want to ride this wave. One area I want

**[1:24]** to get into as well, I think a lot of the former moats that companies were built on are just

**[1:33]** starting to really go away. And one that seems to be continuing to provide outsized returns are

**[1:40]** companies that build a very, very strong audience. Dan, your first sales call at Lucid was with the

### 01:51 — The first sales call: "How much can I get for 15K?"

**[1:56]** head of IT at Uber. And the guy essentially handed you a credit card and asked, "How much could I get

**[2:01]** for 15 grand?" Take us into the room. What did that moment tell you about what you had actually

**[2:06]** walked into? Yeah, sure. Well, first, thanks for having me. Really excited to be here. And congrats

**[2:11]** just on building a great podcast and community. Honestly, it was one of those kind of fun and

**[2:16]** career defining moments for me that I always look back on with fondness. So just to set the stage,

**[2:21]** I had joined this business called Lucid Software. They make a product called Lucid Chart, great

**[2:27]** business, a great product if you ever need to try it out. And turns out this business had built a

**[2:32]** great product that hundreds, if not thousands, hundreds of thousands of users were signing up

**[2:36]** for in a freemium style and then they could pull out their credit card and buy a single license

**[2:40]** here or a small team account there. I had joined to do what--the title was Director of Operations.

**[2:47]** And, you know, for those of you who know, you know that that title means really very little or no one

**[2:52]** understands what a Director of Operations actually does. And about a month into the journey, clearly,

**[2:57]** whatever operations were for me was not working because the COO pulled me aside and said, "Hey,

**[3:02]** Dan, would you want to like try out sales here at Lucid?" And, of course, my first question was like,

**[3:07]** "Well, why me?" And the business at the time was about 30 plus people of which everyone was an

**[3:12]** engineer except for me. And he said, "Well, you like to talk." And so it was a very low bar for

**[3:17]** qualifying to be a salesperson at Lucid at that time. But I was eager to give it a shot. So it

**[3:22]** turns out you show up at this business with a great kind of freemium motion, users that are already

**[3:28]** enjoying the product and that sets you up pretty nicely. You would then list the companies where

**[3:34]** you were seeing some of this self-serve adoption from top to bottom and you would see some of the

**[3:38]** great names where oftentimes hundreds and a few instances thousands of end users had found this

**[3:43]** product without a salesperson ever knocking on the door. And so it turns out Uber is one of these

**[3:48]** companies where there were hundreds of users of Lucidchart that already existed there all on

**[3:53]** scattered subscriptions or oftentimes using the free product. Well, it turns out, you know, maybe

**[3:58]** TMI but I had previously worked with someone who had gotten fired from a job but ended up as the

**[4:04]** number 10 hire at Uber just to tell you how life's not fair. And so when I saw that Uber had a lot

**[4:10]** of Lucidchart users and I reflected on this former colleague, I reached out to him, said, "Hey, who

**[4:14]** should I talk to about this Lucidchart adoption at Uber?" He connects me with the head of IT.

**[4:19]** My very first sales call because I like to talk, I get on the call and so said, "Hey, you know, you

**[4:24]** got a couple hundred users of this product called Lucidchart. We see that sometimes people want to

**[4:28]** put it all onto one subscription and manage it centrally. Would you be interested?" And he says,

**[4:34]** "Yeah, how much can I get for 15K?" And of course, I wasn't expecting that response so I hit mute on

**[4:38]** the phone. I pretend to calculate a number and I just make up, "Well, how about 300 licenses?"

**[4:44]** And he says, "Yeah, here's my credit card. Gives me the credit card number. We close a 15K deal."

**[4:49]** And I was in the room with another member of the team and as soon as we got off the call,

**[4:53]** he stands up. He's fist-pumping, chest-pumping and I'm like, "Is this not normal?" He's like,

**[4:57]** "No, man. That's like our third biggest customer." And so I walk out into the broader room where

**[5:02]** there's a bunch of engineers who, you know, generally don't like to talk and they're giving

**[5:05]** me like a nice golf-clap round of applause for closing this deal. And I guess I'm off to the

**[5:09]** races at that point because, you know, you close your first deal for 15K which at the time was a

**[5:13]** big deal for us and all of a sudden the bar is pretty high for me to keep the pace up. But it

**[5:19]** did set a really nice stage for me and candidly a ton of learnings along the way about how you

**[5:24]** can inherit something that's really great and then try to really elevate it via a sales-assisted

**[5:29]** and sales-enhanced motion. And so I'm grateful that that first call close happened. That's such

**[5:36]** an amazing story and I'm personally, I'm a huge fan of Lucidchart. I've used it at every company

**[5:42]** I've ever been at. I use it still to this day. Lean Scale, building org charts, building flow

**[5:48]** charts, all kinds of stuff. I feel like it's the best thing to organize my thoughts. It really is

**[5:52]** a great product. Fantastic. You know, if you're in like a revenue ops role or any kind of leadership

**[5:56]** role, just to get your thoughts on paper, document a process, think through things. It's a great

**[6:00]** product for that type of thing. So hat tip to them. Totally is. Totally is. I'm curious though

### 06:07 — The accretive test: is sales adding growth or eating it?

**[6:07]** how, I feel like I've seen this a few times, like great product, building a bunch of momentum

**[6:13]** on the self-serve motion and then just hadn't done any sales-led growth at all. But I've seen it,

**[6:22]** I've seen it go really well and I've seen it go south to where you start to really take away maybe

**[6:30]** the magic of what you have built. Yep. When you're thinking about, okay, it's time to start layering

**[6:36]** this on. What order of operations do you take and how do you make sure you don't ruin the good thing

**[6:42]** you have while being additive with the sales motion? Yeah, it's a great question. And you know,

**[6:48]** now that I've probably talked to, I don't know, tens, if not close to a hundred different PLG to

**[6:53]** sales type leaders and companies, I think there are playbooks that have emerged here and maybe

**[6:58]** a lot of the listeners have participated in some of that. To me, I think the first, like in most,

**[7:04]** what I'll call right in front of your face risk in layering sales on is, is sales actually going

**[7:09]** to be accretive to growth? Or when you add a sales professional, are they just going to cannibalize

**[7:14]** the PLG motion? And you might not get any better, but you've just layered in cost and maybe some

**[7:18]** sophistication. And so it seems as if every company I've talked with, and of course, in my journey at

**[7:24]** Lucid and now at PDQ, you've had to ask this question, which is what, how comfortable are you

**[7:30]** with introducing a sales rep into this process? And where do you draw the line so that you can

**[7:34]** clearly define attribution that a sales professional or sales team is adding and driving growth to your

**[7:40]** revenue, not just cannibalizing existing revenue? And a lot of companies do it quite differently. So

**[7:45]** at Lucid, we determined that the self-serve product was quite successful. You could buy a

**[7:51]** small team account with your credit card and no friction. And so why add friction? But what we

**[7:55]** found was that just like this Uber example, there were businesses that wanted to manage software

**[8:00]** centrally. They felt really compelled to, to make sure that they knew everything that was going on.

**[8:05]** And I'm really grateful for this shadow IT movement because it's basically helped build my career.

**[8:09]** And so what we determined was there was an actual SKU or paywall we would introduce

**[8:14]** for an enterprise wide offering that only a sales professional could provide and you had to buy

**[8:20]** through sales. You could self-serve into the small accounts, but you wouldn't get some of the

**[8:24]** enterprise or administrative features that organizations oftentimes require. And that

**[8:30]** line of that paywall, so to speak, created a real nice bifurcation because then you could clearly

**[8:35]** show attribution where a sales rep was able to drive an upsell into this SKU versus maybe a

**[8:41]** self-serve account that they could have just bought with their credit card online. What's

**[8:44]** been interesting to me to see is not every company does it that way. There's actually quite a few,

**[8:48]** there's a spectrum of models. So there are some PLG businesses that decide, you know what, we're

**[8:53]** actually going to let the sales reps cannibalize or engage in every single self-serve PLG lead.

**[9:00]** And they'll use quota as an offset to say, hey, we know you're going to get X percent of your quota

**[9:05]** through what would have been self-serve. We need you to show that you can drive some percentage

**[9:10]** increment on top of it. And the way you might do that is through larger deal sizes, maybe by

**[9:15]** qualifying and trying to expand into other parts of the business, you can land a larger deal than

**[9:20]** self-serve would. Or maybe you do it through a cross-sell motion. We have multiple products,

**[9:25]** we want to, you know, take that lead and see if you can cross-sell. And if you can do that

**[9:29]** effectively, it's worth giving up the freemium lead so that you can drive a larger, you know,

**[9:34]** land footprint. And, you know, each company has to kind of make their own decisions. Interestingly,

**[9:38]** at Lucid, we drew the skew on this enterprise IT admin product. At PDQ, we've actually opened it

**[9:46]** up, the aperture, and let our sales reps engage in leads. And what we've seen there is we go for

**[9:51]** larger deal sizes. And because of their discovery and the presence that they have in engaging with

**[9:56]** prospects, the larger deal size makes up for, you know, the cannibalization of what maybe would have

**[10:02]** self-served, if this makes sense. So every company has to kind of do it a little differently. But I

**[10:05]** say that's like bucket one, is how do you really truly understand is sales accretive to your growth

**[10:11]** and not just cannibalizing something that's already working? That does seem to be the part where

**[10:16]** companies have the biggest challenge, where it's the messy middle. It's should sales come into

**[10:22]** this opportunity? Should we just let them grow organically and keep stacking on licenses?

**[10:28]** I think your point of bringing it back to the offer is really helpful. I'm curious. So at Lucid,

**[10:35]** you have the carved out, here's the enterprise plan with like, oh, we need HIPAA compliance,

**[10:39]** we need XYZ things, and, you know, probably things that you would only need if you're doing a bigger

**[10:45]** deal. At PDQ, is it a product offering that made you say, hey, we're going to take a different

**[10:53]** approach? If somebody's listening to this thinking, hey, should I carve out that enterprise plan

**[11:00]** versus kind of keep the same plans regardless and then just let sales navigate where they need to,

**[11:06]** what went into making that decision? Yeah. So I think there's a couple of kind of parts to the

**[11:10]** framework. So, well, and we'll just call it like, what are the, what are some examples of the

**[11:15]** decision nodes that might make you comfortable doing this? So we mentioned one, we'll call it the

**[11:18]** SKU or the Paywall, clearly bifurcates where rep can engage versus where marketing or growth kind

**[11:25]** of drives, you know, adoption. At PDQ, our thesis was actually, hey, we are generally dealing with

**[11:31]** an end user IT professional that might be nested within a larger business with other similarly,

**[11:38]** similar IT professionals. The title of these, of our customers is often the system administrator.

**[11:42]** They're the people that like, when your computer's not working, you send them a note and say, hey,

**[11:46]** man, my computer's not working and they generally tell you to, have you tried restarting your

**[11:49]** computer again? That's our customer. So what we, what we, what our thesis was, was that we're

**[11:54]** landing with that one IT professional who might manage a set of devices in their company.

**[11:58]** If we let our sales team engage with that lead and do the right discovery, can we actually expand

**[12:03]** the size of the land by getting the other sysadmins involved in the buying decision? And so therefore,

**[12:10]** instead of doing the land a small deal and then hope to expand later, maybe we can actually pull

**[12:15]** forward some of that in the initial land. So that was thesis one. And again, you have to test it. You

**[12:21]** have to see if our sales reps do this the right way. Can we actually drive a larger deal size?

**[12:26]** I think the second element was we actually had other products that we had acquired. You'd

**[12:31]** mentioned in the intro and we had this additional thesis, which was, hey, they come in with one

**[12:36]** product in mind. Can we do the right amount of discovery and introduce this portfolio of products?

**[12:42]** And that might also be another way to enhance your deal sizes. And it turns out on the former

**[12:47]** thesis, it became actually quite difficult. We were elongating our sales cycles and oftentimes

**[12:52]** weren't getting the larger deal because it just was hard to do. But when we introduced the cross

**[12:57]** sale motion of, Hey, what about product two and product three? We found that we got a larger

**[13:02]** attach rate by having sales touch those leads and that more than paid for the increased cost of the

**[13:07]** sales reps quota. You have to have a key thesis in mind of why the sales rep should engage with a

**[13:12]** lead that was otherwise coming to you. I think you have to be very test driven and really try

**[13:17]** to isolate the rep and see if they can perform an action that drives that growth in deal size or

**[13:23]** across the skew or whatever the thing might be. And if you can see that you can prove it over a,

**[13:27]** you know, period of time with one or two reps, then you can have confidence that maybe that's

**[13:30]** the right step for you to take. And maybe the last thing I'll share is when I talked to a couple

### 13:35 — Smartsheet's ghost book: A/B testing against the status quo

**[13:35]** different companies, there's a company called smart sheet. That's a great, another great business

**[13:39]** that built on PLG and sales assist. And they actually did something really interesting,

**[13:43]** took some sophistication, but they would create a, they called it a ghost book. So imagine you have

**[13:48]** five reps to start or four reps or whatever. They would create a fifth kind of a book where they

**[13:53]** would not let a rep touch it. And they wanted to just run an AB test to say, Hey, let's just,

**[13:57]** let's AB test our reps against each other and see which reps are doing a good job at this thesis.

**[14:01]** But let's also make sure we're testing it against like the status quo to make sure that it's actually

**[14:05]** truly a creative to growth and not adding costs without benefit. And I thought that was another

**[14:10]** interesting approach on how you might test your way into sales coverage on top of PLG. So

**[14:19]** makes a ton of sense. And I think what I'm hearing, and let me know if I'm hearing it correctly,

**[14:24]** it depends on the value proposition that the product may be offering to the customer.

**[14:29]** The way I'm seeing it is Lucid, you may have value just for that one particular person who

**[14:36]** wants to have a license and they don't necessarily need to have the entire company leveraging Lucid

**[14:40]** to get the value out of it. Or maybe PDQ like, Hey, the real value comes when you're managing

**[14:46]** all of the devices with the software. So we want to make sure you're actually getting the most out

**[14:51]** of the product offering. Does it feel like individualistic versus like enterprise value

**[14:57]** can maybe shift the spectrum? Yeah, that's another great kind of way to think about it. And in fact,

**[15:03]** you know, you think about the contrast in these, these two businesses, which again, listeners

**[15:06]** probably wouldn't know enough about, but like with Lucid chart, anyone can use it for any

**[15:10]** use case at PDQ is a very specific persona. And so I think that also creates an interesting dynamic,

**[15:16]** you know, how horizontal is your product versus how vertical are you? If you have like a key core

**[15:21]** persona, that might actually have additional implications for how you approach this. Whereas

**[15:25]** if you're this broad platform where every single person could use it at a low ACV, you might need

**[15:30]** something more compelling to drive the right sales types conversations with a, with some sort of buyer

**[15:35]** or persona at the business in order to really justify a sales approach. And, you know, I've

**[15:40]** seen a few PLG based businesses where the product just might not be important enough candidly to

**[15:45]** the enterprise where it's really hard to break into some centralized buyer and IT team or elsewhere.

**[15:51]** But there's plenty of businesses who figured that out as well. And, you know, oftentimes it's a

**[15:55]** paywall around some enterprise view and IT admin features. So, yeah, I mean, each business has to

**[16:00]** kind of think about it a little differently. I would say my learnings are you got to test into it,

**[16:04]** you got to be aligned with your marketing and product teams. You definitely got to be watching

**[16:08]** for cannibalization and you can't get too confident that success is truly earned if you're just

**[16:13]** cannibalizing something that would have happened. And, you know, I think the road is littered with

**[16:18]** SaaS companies that PLG'd in, added sales reps, the sales reps got paid commission,

**[16:22]** cannibalized what was already going to happen and all you did was add cost to your to your P&L.

**[16:26]** So, it's a, it's a, it's a quite an interesting journey, but when you do it right,

**[16:30]** it can really accelerate growth. And, you know, fortunately at Lucid and PDQ it's worked.

### 16:36 — Capital allocation: SEO, AEO, growth, paid, then sales

**[16:36]** Once you feel like you have the right thesis and you've been testing it, it feels like, okay,

**[16:41]** we have an understanding of where sales comes in versus what we let live in the PLG world.

**[16:48]** I imagine the next challenge is how am I going to allocate capital across these two motions?

**[16:54]** I know sometimes they serve each other, but PLG is typically much, much more marketing driven

**[17:00]** versus layering in sales headcount and as a CRO leading revenue, how would you

**[17:08]** recommend going through that decision of where to shift capital from your PLG motion to your

**[17:14]** SLG motion? Yeah, great question. So, I think, you know, if you think about the order of operations,

**[17:22]** there's generally, I think, a very positive benefit to nailing the PLG part first before

**[17:28]** you add in the sales motion, right? And for obvious reasons. If you're having people adopt your product

**[17:33]** without a sales team, it suggests that there's real value there. And, and so I think the order,

**[17:39]** at least that we took it at Lucid and I think similarly here at PDQ was you'd start with what

**[17:43]** I'll call traditional search. You try to drive an optimized SEO strategy and now increasingly an

**[17:50]** AEO strategy. Make sure that people can find and discover your product when they search for

**[17:55]** something in the category that you exist in. That's generally a function of, of course, you know,

**[17:59]** adding the right content strategy and team and, and of course, someone who's expert in these,

**[18:05]** in these ways of attracting customers to click on the link and to find your product.

**[18:10]** The second one, once you've kind of nailed that, and that's usually just a headcount cost,

**[18:14]** you're then going to think about how do we make sure that when they land on our webpage,

**[18:17]** there's an optimized path to get into the product and to get the value as fast as possible.

**[18:21]** And of course, different companies define this role differently. There are growth teams and other,

**[18:26]** other approaches that you might take. But really what you're trying to do then is to just take the

**[18:31]** most advantage of any single person that comes to your website and get them to try the product. And

**[18:36]** again, we have a team that does that here. And again, that's headcount centric. You then,

**[18:40]** if you want to start widening your funnel, you start paying for campaigns. And of course,

**[18:44]** that's where I think you have to have a particularly quantitative

**[18:48]** set of team members who can ensure that you're getting an appropriate cost per lead or,

**[18:53]** or cost per demo or cost per trial. And I think if you, if you can feel comfortable about those

**[18:59]** economics sand sales team, that, that's a really critical, what I'll call inflection point before

**[19:05]** you decide to start layering on sales. You know, that's maybe just rocket science, but I think,

**[19:10]** or not rocket science, it's, it's probably pretty basic, but we've just tried to make sure that we

**[19:13]** understand our marketing fundamentals before we start layering in a sales team. I think once you,

**[19:18]** once you start thinking about sales, and again, I'm trying to think if this is going to be that

**[19:21]** novel to listeners, but maybe it's good just to revisit it. And here I am kind of thinking through

### 19:25 — The 4x payback rule, and the forecast Dan got badly wrong

**[19:25]** it out loud with you. You know, you, you, you add two reps or four reps, you, you, you always start

**[19:30]** in multiples so you can kind of A/B test against each other. They have a base salary. They have a

**[19:35]** variable compensation. You want to try and use over some period of time, call it three months or six

**[19:40]** months to identify whether they're run rating in terms of ROI on their own compensation. And, you

**[19:46]** know, we tried to target a 4x payback on the sales rep in, in their first year. And we felt like if you

**[19:52]** had 4x payback plus a tuned marketing funnel with an understanding of costs that you could sit back,

**[20:00]** stare at the spreadsheet, sit down with your finance partners, and feel really comfortable

**[20:04]** about whether you were scaling efficiently and effectively and in a capital efficient way.

**[20:08]** And so that's the approach we took. You know, you can get into the real weeds in terms of the math

**[20:14]** on this and the right way to drive attribution and those types of things. But of course, took a real

**[20:19]** partnership with both marketing, sales, and your finance team to make sure everyone's on the same

**[20:24]** page about the right rate and pace to invest in sales team members. What we found was, and you'll

**[20:30]** actually appreciate the story, we hired four reps. I had been selling. I, you know, closed the Uber

**[20:35]** deal, of course, and was feeling pretty proud about myself. I had closed a few other deals. And so

**[20:40]** when I was hiring the first set of four reps, I assumed that they would be able to do half the

**[20:44]** production that I could do because, you know, how could they do as well as I do? And they were going

**[20:49]** to be pretty efficient at it. And it turns out about three months in, we were watching their run rate

**[20:53]** and they were 2x'ing my pay. So I was materially off in my forecast of what a sales rep could do

**[20:59]** at Lucid. And so we quickly adjusted those quotas and also felt confident we could start adding

**[21:03]** additional headcount. And I think just being deliberate, being thoughtful, having good partners

**[21:08]** and making sure you're data driven, you can't let emotion get in the way. And I think that's

**[21:11]** probably a great way to just approach that problem. I think that's one of the only times

**[21:17]** I've heard someone be surprised that the new reps are outperforming what their expectations are.

**[21:23]** Well, what can I say? I was pretty confident in myself.

**[21:26]** No, I think that makes a ton of sense. I think just culturally, I think it's a big change

**[21:31]** when the team is used to having, okay, we're pouring money into marketing and ads usually for

**[21:38]** for PLG motions and all these other channels. And then it's like, oh, we have to start shifting and

**[21:44]** taking some of that that maybe we can't do some of the things we did over here anymore. We got to

**[21:47]** move it over there. So I think the way you framed it, hey, let's measure the unit economics of each

**[21:52]** decision. And then as well, drive alignment between sales and marketing and product. It's

**[21:58]** probably the only way to do it. Yeah. I mean, it takes some iterations. I think one of my learnings

**[22:03]** was you have to obviously be meeting regularly and communicating regularly. You have to have really

**[22:09]** good, I'll call them SLAs for lack of a better term between teams and departments to just make

**[22:12]** sure that we agree on what is success and what are the outcomes we're looking for here. And we're

**[22:18]** humans, emotion can get in, especially in scale of mode. Everyone's working hard. Everyone's got the

**[22:22]** right motivation in mind. So you just always got to be aware of that. Because you mentioned there's

### 22:28 — Red flags: quant versus relationship leaders, and RevOps as Switzerland

**[22:28]** a lot of companies where this has gone off the rails. So you have a great PLG company, you layer

**[22:34]** in SLG and it's just a complete miss on the investment. What are some of the big red flags

**[22:40]** a CRO or CEO should be looking out for when they start running this new motion? Yeah. So maybe a

**[22:47]** few things and maybe they might not all be red flags, but they might be things to avoid the red

**[22:52]** flags. So maybe I'll kind of pivot your question a little bit. I think one of the things I found,

**[22:57]** and I'm curious if the folks listed in have had similar experiences. It's like you think about the

**[23:02]** diversity in GTM organizations and just in terms of how people think, their strengths and their

**[23:07]** weaknesses. You're going to have like one set of sellers on one spectrum that are going to be a

**[23:12]** little more what I'll call quant heavy and into the numbers and the metrics. And then you're going

**[23:17]** to have the other side of the spectrum of the sellers who are amazing with prospects, amazing

**[23:22]** with customers. They're really into the relationship, but maybe the numbers aren't as much of a

**[23:27]** strength. And I think that that's an important dynamic to understand as you're reflecting on

**[23:32]** yourself building one of these organizations. Where are your comparative advantages? Where

**[23:37]** do you skew? And that way you can then hire people around you that can compliment you because I think

**[23:42]** to be successful in this motion, you need people who are good at both of these things. And sure,

**[23:46]** there's some people who are amazing with people and quants, a little harder to find. But I found

**[23:50]** that very quickly identifying your own strength which takes some humility, your own weaknesses

**[23:55]** especially, and then trying to compliment with hires that can surround you with additional skill

**[24:01]** sets. So let me give you an example. I think one of the biggest challenges in the PLG motion is that

**[24:06]** when you hire your first sales leader and if they're more on what I'll call sales relationship

**[24:11]** side of things, they're going to feel really excited when they're closing deals. But they're

**[24:16]** probably not going to fully appreciate, and this may be a stereotype, that there's this

**[24:19]** cannibalization risk and that we have to be incredibly careful that we're not just consuming

**[24:24]** revenue that was already happening. They'll spike the football on the deal, but it's like, "Well,

**[24:27]** that deal might have happened." And before you know it, it happened without you. And before you

**[24:31]** know it, you have misalignment culturally and you have the execs and folks in other rooms saying,

**[24:36]** "Well, the sales team is not closing anything incremental." But the sales leaders over there

**[24:40]** spiking the football with their team because they were able to close the deal. So what is my point?

**[24:45]** I think a RevOps infrastructure early is actually incredibly helpful. And what is RevOps? We can all

**[24:51]** define that differently. But to me, it's a reflection that there's someone or a team that

**[24:57]** are slightly more quantitative in nature that can be a little bit of a, we'll call it the Switzerland

**[25:03]** between your exec team and your sales leaders to really truly measure the efficacy of the effort

**[25:08]** and ensure that the appropriate amount of support is being lent to make sure it's working appropriately.

**[25:13]** And this, of course, is across a variety of things. So, for example, you got to be quantitative enough

**[25:18]** to actually, you know, present outcomes. Are we closing deals? Are they truly incremental, etc.

**[25:24]** But then you work your way into compensation plans. You work your way into systems. And we could have

**[25:28]** a whole conversation about the landmines associated with your system strategy. And of course, you have

**[25:34]** an enablement strategy that you also want to implement so that you can think about how you

**[25:37]** might scale this effort if it's working rapidly. And so I found that maybe it's not a red flag,

**[25:44]** unless you're not doing it this way, it might just be something you should think about. How do you

**[25:47]** invest early and often in an appropriate, quantitatively driven Switzerland-like RevOps

**[25:53]** function that can just make sure that the ship is headed in the right direction with the right

**[25:58]** alignment? I think that's like a critical one to watch for. I really appreciate you bringing that up.

### 26:04 — The RevOps ratio study: 6:1 early, 30:1 at scale

**[26:04]** And I'm wondering if you have, I know it'll depend on different companies and what the

**[26:09]** GTM setup is, but I think there's a lot of companies or a lot of leaders that recognize

**[26:16]** that and they do make the investment early. And then there's a few that don't know how

**[26:23]** to value that early investment or don't know how to articulate that to their CEO or CFO

**[26:29]** of, "Hey, this is necessary." This might be a two-part question. One, when should you start

**[26:36]** investing which resources? What do you need early stage, mid stage as you're scaling?

**[26:42]** How do you think of building out that RevOps team? And then two, how do you justify the

**[26:49]** amount of investment? Do you tie it to how many sellers? How much ARR? Why do you need a five

**[26:57]** person team versus a one person team? So the magnitude of investment, where do you tend to

**[27:02]** make that argument to senior executives? Yeah, so great question. Maybe I'll start with the

**[27:07]** second one first. We actually did a little bit of our own informal study on this and we interviewed

**[27:12]** a couple of companies that we admired to understand the RevOps investment relative to, we'll call it

**[27:17]** generic sales investment early and then we'll call it later in the scale journey. And I can't remember

**[27:23]** all the companies we interviewed and again, stages, how do you even measure stage? Probably based on

**[27:27]** employee count. But what we found was some of the best in class companies that at least we admired

**[27:32]** over invested early in RevOps to the magnitude of like a six to one seller to RevOps higher ratio.

**[27:39]** And then as you watch the scale journey happen and once they were into the hundreds of sellers,

**[27:44]** that ratio would be as, it would dramatically change to like 30 sellers to one RevOps person.

**[27:50]** And the takeaway for us was, hey, we should invest early because the foundations for scale

**[27:55]** are totally intertwined in your data, in your systems and in your process. And if you can feel

**[28:02]** real confidence that you've made the appropriate investments, that everything is looking square

**[28:06]** there, then your confidence in pouring gas on the fire and the return on that investment will

**[28:10]** dramatically grow. And as a revenue leader, your ability to communicate to your broader leadership

**[28:16]** team, the CEO, that what you're doing is working, the confidence levels just go through the roof.

**[28:21]** And so we actually, we did something interesting here. And this is a hack that I found everywhere

**[28:26]** I've worked. We'll specifically loose it in PDQ. It turns out there's a type of persona that's a

**[28:31]** great person to be like a first hire here. They can be generalists enough to be dangerous and they

**[28:36]** just grind. And the persona is basically, it was what I was when I graduated college. I went to and

**[28:41]** did an investment banking job and you basically sit in a cubicle all day. You stare at Excel spreadsheets,

**[28:46]** you work 100 hours a week and you just grind away and you make okay money, but not enough to really

**[28:51]** justify that lifestyle. And every single one of those kids eventually wants to go off to business

**[28:57]** school or be a CEO or whatever ambitious thing. You know, otherwise, why would you work 100 hours

**[29:01]** a week doing Excel? And what we found, and it's kind of a money ball strategy is if you could find

**[29:06]** someone like that two to three years, they've done their investment banking program, they're

**[29:10]** looking for another role for a couple years prior to going to business school. It was a great hire

**[29:14]** that was a low cost persona that you needed to pay them, but you didn't need to pay them nearly as

**[29:19]** much as some five, 10, 20 year veteran. They came in and were happy to work 80 hours a week because

**[29:25]** that's much better than 100. And they were quantitative enough to be dangerous to really

**[29:29]** help you get comfortable with the numbers associated with your scaling efforts. Maybe

**[29:34]** they weren't as systems centric and you need to augment there, but generally pretty smart,

**[29:40]** pretty motivated. The other group to hire out of is these, you know, you do these two year

**[29:44]** consulting programs out of Bain or BCG and McKinsey. And if you can convince somebody like that,

**[29:49]** hey, finish your two years, come work for me for two years and then go off to B school.

**[29:54]** It's a great money ball. There's real value in those types of folks and they will grind. So

**[29:58]** that's a little hat tip I could come back to. But so you hire someone like that, they can

**[30:04]** kind of be a generalist for you. They can hold down the fort on what we'll call forecasting

**[30:09]** and sales rep performance and be a partner to whoever your sales leader is or your sales reps.

**[30:15]** The next critical junk jump was into the systems piece. And I guess you want me to keep going.

**[30:21]** Yeah, absolutely. I'm loving this. First of all, I've never, I'm recruiting these people all day.

**[30:26]** And typically we're kind of looking for someone. Maybe they are already in the startup,

**[30:31]** but you're right. That's what happens. Like, well, once they've built a career in it and they have a

**[30:35]** couple, you know, good notches on their belt, then it is pretty cost prohibitive. And then it's like,

**[30:41]** where do you find the pool of people who haven't already made it yet? I think it's brilliant. So

### 30:46 — The first CRM was a Google spreadsheet

**[30:46]** yeah, I would love your perspective on the systems side too. Yeah. So the systems one is like, uh,

**[30:52]** you know, I'm sure everybody who's ever had to implement systems new or who's inherited bad

**[30:57]** systems, um, you know, could pull their sleeve back and just show the scars, you know, um, you

**[31:02]** know, what was interesting for me is because I hadn't really been a sales leader before I'd,

**[31:06]** you know, sold money for a venture capital firm, but like I was not a, I didn't know what I didn't

**[31:11]** know. And because I'd been in a cubicle for a couple of years, you know, building Excel sheets,

**[31:15]** the first CRM we built at Lucid true story was a Google spreadsheet. And, you know, the thought was

**[31:20]** like, let's actually figure out what information matters when we're engaging with the prospect.

**[31:25]** And let's, it was really interesting to watch what, what information would one of our four

**[31:30]** early sellers log? Clearly, if a sales rep is logging something on their own, it suggests that

**[31:35]** there's meaning or value to the information. Otherwise the sales rep will never log anything.

**[31:38]** I think we all know this 100%. What was, what was information that they were logging? That was

**[31:43]** telling. And then what was information that I and others felt like we just had to have in order to

**[31:49]** truly measure and vet the ROI of this effort. And so of course you come, we come with the things we

**[31:54]** want those reps to log and then they have the things that they're logging organically. And what

**[31:59]** do you know? You now have your V1 design for your CRM. And, and what I appreciated about that effort,

**[32:07]** even if it wasn't, I didn't do it on purpose. I just didn't know any better is I think there's

**[32:10]** actually real wisdom in it. If you understand your underlying process, and if you feel like you have

**[32:15]** a process that's now repeatable one, and then two, if you actually know what information is important

**[32:20]** to you as sales leader, as CRO, as CEO, and then as the reps, what do they need? You can basically

**[32:28]** reduce your margin of error on CRM implementation dramatically. And I think the, again, the road is

**[32:34]** littered with organizations who bring in the high priced ECRM consultant or who just do an out of the

**[32:39]** box implementation or candidly who just hack their way along the, along the way. And you just end up

**[32:45]** building the Frankenstein that then years later, the whole team is like, what have we, what have

**[32:51]** we done? And, and unfortunately, you know, look, it wasn't perfect, but I think for us, we were able

**[32:57]** to get that V1 out and it worked really well for us. And then of course you build and eventually

**[33:03]** hire the right professionals who can help you manage that your process will change inevitably.

**[33:08]** You'll get bloat in your opportunity object and all the different things you're doing on in your

**[33:12]** CRM. You'll have to occasionally whittle that back. But we found that the early effort in maybe doing

**[33:18]** the unscalable thing first was like critical and eventually allowed you to do the scalable thing

**[33:23]** more effectively. I think there is a lot of wisdom baked in that I, I worked for a few tech companies.

**[33:29]** One of them ended up getting acquired by Lexus Nexus fortune 1000 company, and they had a

**[33:37]** multi-billion dollar revenue organization. The forecast was all of the EAs of the VPs of sales,

**[33:46]** emailing a Excel spreadsheet to the top head of sales EA who compiled all of the forecasts.

**[33:54]** And they did that every Friday afternoon. That was their process. And that wasn't that long ago.

**[33:59]** That was in 2020. So I think the point is if you have a really good process and you nail that out,

**[34:06]** nail that down first, that's perfect. Then you layer on the acceleration of having systems to

**[34:11]** make it efficient, even better. A hundred percent. Yep. And you know, I look, I think AI will probably

**[34:16]** help here a little bit. You know, I think you can, you can cover a multitude of CRM sins probably

**[34:21]** with just a good, you know, Claude, you know, back and forth and asking for the right information

**[34:26]** and data. But I think the, I think the underlying, the underlying principle for me is if you don't

**[34:31]** have a sales process that you believe is good and repeatable, then beware of your systems

**[34:35]** implementation because it will likely increase your, your, your risk significantly and the costs

**[34:42]** associated with it. So I think it's a really good caution. I want to get into PDQ a little bit

### 34:51 — The M&A playbook: four tuck-ins, worked backwards

**[34:51]** because I think one, one part of this journey that always throws a whole bunch of wrenches in the

**[34:58]** growth is layering in acquisitions. So you come in, there's a PLG motion. We're going to bolt on the

**[35:05]** SLG motion, which is already difficult enough and plenty of things to work out. Then on top of that,

**[35:11]** as you're growing, we're going to bolt on some acquisitions, do integrations and get new sales

**[35:15]** teams working together. New PLG motions combined into one story that makes sense. Walk me through

**[35:22]** it. How'd you do it? Oh man. Well, I'll pull up my other arm and show you the scars from, from that.

**[35:29]** You know, I think we've learned a lot. So we've done four tucking acquisitions over the past four

**[35:34]** years, you know, small to mid-sized companies between call it 10 and 60 team members, right?

**[35:40]** So we're not, these aren't massive deals, but you know, anyone who's worked at businesses of that

**[35:45]** size and scale knows that there's oftentimes a lot of homegrownness and you know, there's stuff that

**[35:50]** works really well. And then there's a few things where you inherit and you're like, huh, why did,

**[35:53]** you know, why did they do it that way? And of course they might say the same thing about PDQ.

**[35:57]** So what I think the playbook that we've, we've generated is one where you start with,

**[36:03]** when you're integrating two teams and companies and products together,

**[36:07]** you start with like the easiest thing first and you work your way back. And you, you of course,

**[36:11]** build a playbook that ensures that you have the right owners of each of these things. So let me

**[36:15]** give you an example. We found that you could very quickly acquire a business, send an email out to

**[36:21]** your customers and say, Hey, we've introduced this product to our new, to our family of products.

**[36:26]** Are you interested in a demo? And believe it or not, just a nascent or very basic marketing

**[36:31]** cross-sell campaign effort where you drive them to webinars or you just invite them to raise their

**[36:36]** hand and experiment with the product has been an incredibly easy and valuable way to drive leads.

**[36:41]** Now, of course, what happens is the lead gets registered and it's in their CRM or it's in our

**[36:45]** CRM. And so you have to start kind of working your way back to understand and identify how do we then

**[36:51]** build a unified process and eventually migrate systems so that this doesn't just become some

**[36:57]** similarly Frankenstein backend. So our playbook consists of a cross-sell strategy. It starts

**[37:04]** with marketing, a cross-sell strategy that then has the appropriate overlay rep that can speak,

**[37:10]** you know, an expert speak to the product and ensure a positive experience from the prospect.

**[37:17]** And then you eventually and inevitably migrate the CRM, which again requires a big systems lift.

**[37:24]** And then lastly, on the product side, you introduce and eventually build common authentication to the

**[37:30]** product and migrate them to a similar billing system. Whether you end up integrating the

**[37:36]** products completely as a UI, UX or whether you have an app switcher or whether the apps continue

**[37:41]** to be standalone, each product we've had a somewhat different strategy there. But said another way,

**[37:46]** you kind of work your way back through this playbook of sorts and I think we've got to a

**[37:50]** place where we're pretty good at it. You know, I think to summarize our playbook on acquisitions,

**[37:54]** we've effectively early and often cross-sold the product immediately to try and again generate

**[38:01]** interest using a marketing campaign that's generally pretty basic but, you know, a variety

**[38:06]** of different touch points there, email, webinar, webcast, etc. We then use sales engineers to

**[38:14]** help supplement or augment sellers who don't know the technicality of the new product that we've

**[38:18]** acquired yet but can then just help generate, you know, the movement of the pipeline.

**[38:24]** We do introduce an enablement effort so that our reps have to sign off on the acquired product

**[38:30]** in order to start getting leads. We want our reps to really feel confident in the products they're

**[38:35]** selling and so we force them through, you know, a recorded enablement and a manager signs off on it

**[38:40]** and we just find that as a nice touch point. Technically, we use--we will integrate authentication

**[38:46]** so you use the same username and password. We'll eventually integrate billing, same billing, same

**[38:52]** quote and then in some instances, we've integrated the apps completely or use an app switch or let

**[38:57]** the apps continue to exist standalone. So that's been our playbook. I think, you know, M&A can

**[39:02]** definitely create some real complexity in all of this. We're not perfect at PDQ. There's still

**[39:07]** some lingering systems that we're continuing to migrate but we built a nice playbook here and you

**[39:12]** built some capabilities around it. You utilize the right systems resources and sometimes occasionally

**[39:17]** contractors and other smart folks and that can be a real help as you move through kind of an M&A

**[39:22]** strategy. Yeah, I think I've seen it--I've seen it done well and I've seen it done really poorly

**[39:29]** and when it's done well, it's amazing. You get that synergy between the go-to-market teams,

**[39:34]** the cross-selling activity starts happening, you're sharing opportunities and there's a lot

**[39:39]** of momentum. Then I've seen it where how it's been years before you integrate the CRMs and they're

**[39:44]** basically just running on their own and we're not getting any outsized value of this acquisition

**[39:49]** that we made and if any or even worse some like toxicity between the teams and not giving them to

**[39:55]** gel well. So I think it's just be very thoughtful when you're making an acquisition which sounds

**[40:02]** like you've taken an extremely thoughtful approach in who you've targeted and who you brought in.

**[40:07]** Yeah, look, 100% and, you know, I think I would say M&A as a growth lever, I could argue at times

**[40:15]** it's you've got to be pre-dialed in to make it work. If you don't feel like you've got a really

**[40:19]** good playbook or experience doing it or just incredible conviction and I heard somebody once

**[40:24]** told me that if you're going to make acquisitions and you see hair during the diligence period,

**[40:30]** expect a wig factory once you've closed the deal, you know, and it turns out that's been the case

**[40:35]** for us a lot of times. You see something, we're like, "Oh, that doesn't seem right" or something

**[40:37]** maybe and then once you acquire the business, you're like, "Wow, we just inherited an interesting

**[40:41]** challenge," right? And, you know, it might not be the fault of the acquired business, they just did

**[40:45]** things the way that they did them. And so I think if you're going to explore an M&A strategy from a

**[40:49]** GTM perspective, you have to have real confidence that you can bring that product to your channel

**[40:55]** successfully or they can bring your product to their channel or that they bring a new channel

**[41:01]** that you can distribute your own products through. And I think if you can get conviction of those

**[41:05]** things, then it probably increases the probability and similarly covers a multitude of integration

**[41:10]** sins, you know, that can happen with an M&A deal. One area I want to get into as well, I think a lot

### 41:16 — The PDQ founder story: Hollywood writers to YouTube in 2010

**[41:16]** of the former moats that companies were built on are just starting to really go away. Sure.

**[41:25]** And one that seems to be continuing to provide outsized returns are companies that build a very,

**[41:32]** very strong audience. Early in PDQ's history, the founders did a really good job of that and

**[41:38]** team that up. I would just love your take on what it's like being in a business that made that

**[41:45]** investment early on and carried it through. And if you have any advice for other companies

**[41:50]** interested in doing the same thing. You know, great story at PDQ. It's a great American story.

**[41:54]** You know, the founders who are twin brothers, they graduate high school, they want to be Hollywood

**[41:58]** writers, they moved to LA and turns out they can't get jobs as Hollywood writers, maybe no surprise.

**[42:05]** And so to pay the bills, they end up becoming system administrators, IT professionals. And

**[42:10]** that ends up being a very fortuitous decision because within a few years of that, they build

**[42:15]** a little consulting firm and then a few later from that decide let's build software and that's where

**[42:19]** PDQ originates. And to their credit, because they had been the customer, they nailed product market

**[42:25]** fit with the original product, just nailed it. Understood. The need really had an ethos of giving

**[42:30]** IT professionals a win. And I think they landed that. Second, they would admit that they didn't

**[42:36]** know how to sell or market the product. And so they first, from a packaging standpoint, started

**[42:41]** just giving the thing away for free and eventually figured out, hey, let's ask people to pay us with

**[42:45]** a credit card. So they kind of fell into freemium meets PLG. And then last point, they thought,

**[42:52]** well, why don't we channel our Hollywood writing ambitions? And they just started going on YouTube.

**[42:57]** And they were so consistent and so religious about the consistency and the content that they

**[43:03]** wanted to bring to give IT professionals a win. And this was 2010 when YouTube was still pretty

**[43:09]** nascent. I mean, you know, that was the time when it was just, you know, what do you want to call it,

**[43:12]** user-generated content of all shapes and sizes. And so they would go on every week and do a live

**[43:17]** webcast. They would invite their customers to attend. They actually used some homegrown software

**[43:22]** for some of that at first. But then we're also doing YouTube content. And to the credit of these

**[43:26]** guys, they had the right kind of humor, the right authenticity. And over time, virality,

**[43:33]** you know, maybe not capital V, but an IT world virality that led to other IT professionals

**[43:38]** finding the content. And a few things that they did that I think were particularly smart. One,

**[43:41]** they didn't keep their content contained or confined to our product. Like they tried to

**[43:46]** broaden the conversation to a whole host of topics that sysadmins and IT professionals dealt with.

**[43:51]** And again, maybe not totally rocket science, but I think it allowed them to capture a wider

**[43:57]** set of viewers. And of course, that viewership just got nurtured over time. And eventually,

**[44:02]** all of them end up trying the product at some point or another, right? Second,

**[44:06]** the consistency was critical. And third, they actually would do live Q&A. So they actually

**[44:11]** had like a live show. And I think that just built a community that then found its way into Reddit,

**[44:18]** where people would speak very positively in terms of their sentiment. And, you know,

**[44:21]** Reddit's not what I would call the friendliest place in the world at times. But people talk

**[44:25]** very fondly of PDQ because I think these founders were really authentic. I think a couple takeaways

**[44:30]** that I've had since. First of all, you know, anytime you inherit a business and are asked to

**[44:34]** take over for founders, they've since retired. They moved to Puerto Rico. I think one of the

**[44:38]** things I appreciated was, one, let's not screw this up. How do we continue to invest in appropriate

**[44:45]** content that's regular, that's authentic, that is relevant to our customers? And, you know,

**[44:52]** I've been having this thought lately without getting too philosophical with everyone here.

**[44:55]** But, you know, you think about the world of AI. I mean, all of us are experiencing the AI slop,

**[45:00]** you know, that's all around us. I am convinced, and I don't know if it's some evolutionary thing,

**[45:05]** where we can see something and recognize that something's off. Like, it's not right. It's not

**[45:10]** real. And it'll get better, surely. And maybe there's a time when our brains will get tricked.

**[45:16]** And I'm sure we've all gotten tricked at one point by one of these videos even recently.

**[45:19]** But what is my point? Like, I think that authentic content, authentic communication,

**[45:25]** and authentic customer experiences and engagements are going to be the premium

**[45:29]** that can oftentimes separate your brand. There might be some instances where an agent is going

**[45:36]** to purchase from another agent and, you know, authenticity and personality, you know, won't matter

**[45:40]** at all. But in so much as I think humans will still be involved in a lot of the experiences

**[45:44]** associated with AI, I'm bullish that there's still a role for us, you know, in an agentic and AI world.

**[45:50]** Like, I think the authenticity of the content you create, the experiences you create for your

**[45:54]** customers and how you engage with them is going to be the differentiator. And I've even hypothesized

**[45:58]** that there will be some company or companies out there who say that they're only human,

**[46:02]** that they don't even use AI. And I bet all of us will decide at some point or another that we want

**[46:06]** to buy from that brand because they're a human brand, right? And so I think it just goes to show

**[46:10]** that there will be real premium to authentic, authentic to your brand, authentic to your team,

**[46:17]** experiences that customers will want. And the founders were a really great example of that.

**[46:22]** I've never heard it framed that way, but it makes me think people can even see through if it is a

**[46:26]** real person, whether that person is being authentic or not. So to try to get a AI avatar

**[46:34]** to exude the same authenticity, I think is going to be, to your point, unbelievably challenging,

**[46:40]** potentially impossible. And also just the supply of real people doing real things,

**[46:47]** that's inherently the value of it. And it's going to be really limited as we continue to create more

**[46:52]** and more AI driven content. So I'm with you. I think there's going to be a huge opportunity

### 46:58 — Keeping the voice after the founders leave

**[46:58]** for it. And maybe there's a point in time you can do this. I'm curious on the transfer of content,

**[47:08]** because a lot of times it's built around a personality. In this case, you had a very

**[47:11]** unique situation. You had two people who want to be Hollywood writers. They kind of got to live out

**[47:15]** their dream through their tech company. How do you transition that and keep the same feel of it?

**[47:26]** Yeah. Well, so this has been really interesting. When I joined PDQ with 70 team members, and I

**[47:31]** want to say 40 of them, had been system administrators, customers of PDQ, who'd been recruited

**[47:37]** to work at the business. And to the founders, maybe credit, I can say maybe, they then infused

**[47:44]** every function inside the business with system administrators. And I think all of our team

**[47:48]** members would admit that there were times when that was really great, because there was real

**[47:52]** customer empathy for what they were experiencing and doing. And so every function, product,

**[47:58]** design, engineering, sales, there was system administrator DNA that could just really empathize

**[48:04]** with the customer. But maybe you lacked at sometimes the benefits of specialization of

**[48:08]** people who were just really good at sales or really good at marketing independent of system

**[48:12]** administration. And I think we've tried to create the right fine balance mix of bringing in those

**[48:18]** experts so that you kind of get the best in class of how to do a certain function. But then you got

**[48:23]** a system administrator kind of tied or embedded in the team that can really help us understand the

**[48:28]** customer problems. And maybe even have some empathy for like what our IT customers are going

**[48:33]** through. I mean, they're grinding every day, oftentimes in a thankless job, right? So I think

**[48:37]** that's one is how do you keep the right amount of what we'll call customer empathy, just throughout

**[48:43]** your organization. To your point about like some of our content strategy, it turns out when you have

**[48:48]** really dynamic and we'll call it charismatic founders who are now living in Puerto Rico,

**[48:53]** and they're no longer on your webcast. I don't think I fully appreciated that I needed to be

**[48:58]** running like a studio operation almost akin to like an increment, you know, where I had to have

**[49:02]** like a weather person and the sports person and the anchors, right? And I think to our credit, and really

**[49:07]** the team, we've been able to develop additional personalities, so to speak, right? And it is pretty

**[49:13]** funny, like you need people who are really technical expertise to the point about authenticity.

**[49:18]** One way you show authenticity is that you are a technical expert. And so we've had to make sure

**[49:22]** we have people who really know their stuff. And then sometimes it's nice to just have some charisma,

**[49:26]** someone who can be kind of the person who brings levity and enjoyment, and you know,

**[49:30]** they have to know enough to be dangerous. But so said another way, anytime you deploy a strategy

**[49:34]** where personalities are actually important to being authentic and authentic brand, you know,

**[49:39]** just just be aware that you're also going to, you know, run into a situation where you're going to

**[49:43]** have to have a pipeline, you're going to have to realize that some of these folks will, if they

**[49:47]** ever leave, you know, you'll have you might have some challenges to replace them. And, you know,

**[49:50]** we've had different moments where it's worked really well, and others where it has, it's been

**[49:54]** a challenge. But, you know, kudos to the team, they continue to find great people to to be our voices

**[49:58]** and our, our, you know, our presence, you know, on these on these forums. So

### 50:05 — What's next: AI at PDQ and riding the wave

**[50:05]** what's next for you and PDQ? What's on the horizon?

**[50:10]** Yeah, well, like probably many of the folks listening, I assume there's going to be like a

**[50:14]** spectrum of folks that are going through similar stuff. So you're either one, you've already joined

**[50:20]** the what I'll call like AI native business. And so a lot of what you're trying to think about is

**[50:25]** old paradigms to new, and how do you now scale a PLG company in an AI first or centric era?

**[50:33]** That's an interesting set of problems. PDQ is not in that category. We were a SaaS business that's

**[50:38]** now kind of going through that evolution of how do we continue to stay relevant, but also continue

**[50:44]** to delight our customers and be prepared for a future AI or a gentic driven era. And I think that

**[50:50]** that category, so that's where we are, there's probably another set of folks that are listening

**[50:54]** who are looking for their next opportunity or might not even be in the software world.

**[50:58]** I think for us at PDQ, we feel one really confident in the position of our products,

**[51:03]** you know, it's hard to vibe code what we do. You can, we're putting software on the devices we

**[51:07]** manage. There's a lot of trust that's embedded in that. And we're in that kind of cybersecurity

**[51:12]** vulnerability management world that is actually quite, quite positive for us, given that AI is

**[51:19]** showing really well at finding vulnerabilities and other issues, right? So we feel pretty well

**[51:23]** positioned for that. That being said, a lot of what we're doing, we're revisiting and trying to

**[51:28]** think through how can AI be appropriately introduced in an authentic to us way and in

**[51:34]** an effective ROI driven way. You know, we talked about the ROI of PLG and sales assist and how do

**[51:40]** you make sure you're, you've got the economics right. I mean, you talk to any business right

**[51:44]** now and we're all trying to wrap our heads around token usage and what's the appropriate kind of

**[51:48]** amount of spend on AI relative to the ROI and can you measure it? But how it looks for us though

**[51:55]** is one, we've tried to enable every single team member here to have access to appropriate AI

**[52:01]** tools. Two, where we've introduced some rigor associated with budgets. We just can't go spend

**[52:06]** money like crazy. We kind of need some justification. I'd say three, in product, we're actively

**[52:11]** evolving our products to include the appropriate automation that we think will delight the customer.

**[52:16]** In our go to market, we're actively revisiting our entire customer acquisition strategy

**[52:21]** and finding the appropriate and what I'll call mature enough AI driven approaches to the pipeline

**[52:28]** and to the funnel. That's everything from experimenting with some outbound BDR concepts

**[52:34]** with AI to building a RFP generator that scrapes the web using AI and identifies some opportunities

**[52:40]** for our sales team to our sales enablement strategy and how we ensure that our sellers

**[52:46]** have the right content and training and certification so they can feel confident

**[52:50]** in the products that they're selling. So I would say AI is a key theme as it is for probably many

**[52:54]** in terms of how we adopt, implement, and see real returns from that investment. We're still in the

**[52:59]** wilderness there a little bit in terms of feeling totally confident in where we're headed, but I'd

**[53:05]** say that's been a big theme. And then the second theme of course is always just how do you keep your

**[53:08]** own saw sharp or your blade sharp, right? And I think each of us owes it to ourselves to make sure

**[53:15]** we're spending the appropriate amount of time reflecting on how our own roles can evolve or

**[53:20]** how we can adopt tools to help us be better at our jobs. And so that's been a big kind of

**[53:26]** personal focus is just how do you make sure that we don't, if a wave is coming, how do you make

**[53:32]** sure you don't miss the wave? And how do you make sure you don't have the wave crash down on you?

**[53:37]** You want to ride this wave and I think it's an exciting time and hopefully everybody feels

**[53:42]** motivated enough to have fun riding it. Yeah, and I think you mentioned something. I don't think

**[53:47]** anybody's sitting in there feeling like they're fully confident and dialed in on exactly how to

**[53:51]** take advantage of the wave. So I think most are feeling that way. If you are feeling that confident,

**[53:57]** then you're probably going to have the wave crash down on you because you're probably missing

**[54:00]** something. I mean, things are changing so fast, right? I mean, it's every day is something new.

**[54:04]** And I think the key thing is how do you just appropriately set aside some time in a week

**[54:08]** or in a month to try a new thing here and there. And it's hard when you're trying to build and

**[54:14]** scale and there's any problem on any given day, but I think it's an exciting time.

### 54:19 — Wrap

**[54:19]** Yeah, adaptability and agility are going to be super key here in the next. They always have been,

**[54:26]** but in particular now. Dan, this has been incredible. Thank you for sharing everything

**[54:33]** you have. Everything from your story of how you got into SaaS Lucid is such an amazing company to

**[54:39]** begin that journey in. And I love the story of bolting on the SLG to the PLG motion and all the

**[54:44]** wisdom that you shared in there. Also appreciate you diving deep on RevOps and helping people

**[54:49]** understand how much investment they should be making at which time, knowing it might be a little

**[54:54]** bit heavier at the beginning, but letting that investment scale out. And then everything you're

**[54:59]** doing at PDQ from bolting on SLG, managing acquisitions, maintaining an audience after

**[55:06]** the founders are living their best lives in Puerto Rico, as you put it, and really preparing for the

**[55:12]** future. I think there's so much in here. So Dan, really appreciate you being on the podcast,

**[55:18]** everything you shared. Can't wait to watch what you in PDQ do next. And thank you again.

**[55:25]** Yeah, thanks for having me. I mean, congrats on all you've built at Lean Scale and I've enjoyed

**[55:29]** a lot of the content you put out. And of course, if, you know, to anyone listening, if you're going

**[55:34]** through any of this stuff or just want to compare notes, you know, happy to connect on LinkedIn.

**[55:39]** But otherwise, yeah, I really appreciate the conversation. It's been a lot of fun.


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_LeanScale Knowledge Hub. Free to quote and cite with attribution to The LeanScale Podcast (https://www.leanscale.team)._