He Built a $60K CPQ Inside HubSpot in 2 Days

0:00 And those changes are gonna impact the, you know, the way that the contracts are

0:04 built or handled. That's gonna be really important that you have someone that

0:07 knows that and owns it and can make sure that those processes are keeping up

0:11 with one another. My guest today is Derek Mogar, one of the architects here at

0:17 LeanScale. Derek, this is a fun one. I'm really excited to get some of the

0:21 projects that were running in the field and share it with our audience. So one of

0:28 the trickiest things when it comes to CPQ and quote-to-cash in general is

0:34 everything that drives the downward systems and motions of your go-to-market.

0:39 Some of the downstream effects like billing and reporting, some of those

0:45 nuances really require a strong CPQ in place. What are some limitations they're

0:51 gonna run into and some things they might not have? I think reconciliation

0:56 and alerting and monitoring, that's not something that I would recommend doing

1:02 on a quarterly basis. If you can automate like alerts of things that you expect to

1:06 come up and there's a lot that could potentially come up, you want to make

1:11 sure that you surface those things immediately. A lot of people don't think

1:15 about that part but there's so many different things that require a really

1:20 really strong logic engine just to produce the quote, let alone document

1:25 everything and connect it to your other systems for reporting and intelligence

1:29 purposes as well. Oh these are nice to have automation so that way we can not

1:35 have to do as much work. This is, oh if we don't do this it could put deals at

1:40 risk, if billing looks funky it could put our reputation at risk, it doesn't look

1:44 good to a customer if you send a bill with the wrong name or don't bill them

1:47 and try to bill them later, it just looks like you don't have your house in order.

1:54 Derek this is a fun one, I'm really excited to get some of the projects that

1:59 were running in the field with actual B2B SaaS AI companies and share it with

2:07 our audience. So with this one you set out to show the customer a demo of what

2:13 advanced selling could look like and you ended up walking away building a

2:19 production level CPQ. When did you realize that the typical throw MVP

2:25 actually became the product? Not gonna call it a love story but it was a love

2:32 at first sight when they saw it. As you said you know we set out to really just

2:38 show them what advanced selling looks like inside of HubSpot because HubSpot

2:44 is so accessible it's really easy to show off a lot of MVPs. You have an idea

2:49 it's really easy to bring it to life but I use all of my knowledge and

2:54 experience with CPQ, quote to cash, my background in sales and a lot of

2:59 discovery and diving into the data before that happened to really tailor

3:05 this MVP to how they sell, the different types of selling motions that they have

3:10 addressing some of the different pain points that they have and now I'm not a

3:15 developer or coder I understand it and I can be dangerous with it at times but I

3:20 understand design really well and that really assisted kind of building it out

3:26 to where they saw it. They loved it immediately and they're basically just

3:31 said well why don't we just use this like why don't we build on this and make

3:35 this kind of the go-to system for everything that the sales team does. So

3:41 it really started as just like hey I just want to show them something really

3:45 cool in HubSpot, something maybe that they haven't seen because coming into

3:50 this they actually already had two months of research into different like

3:54 full-stack kind of quote to cash systems, different CPQ systems, different billing

4:00 and subscription systems and they had kind of started leaning towards one and

4:04 then something that you mentioned sales lead and product lead started to collide.

4:10 Those you know don't tend to act very nice when it comes to billing and

4:16 subscriptions. The way that they enter the system, the way that they grow, they're

4:20 vastly vastly different. So we came in had a really really good time to just

4:26 start talking about it, start really digging in with the sales team. How do you

4:31 actually sell today? From the data we can see a lot of the issues already. We can

4:36 see that the lack of guardrails, the lack of kind of decision-making when it

4:42 comes to selling a certain type of product or selling a certain type of

4:47 motion like a renewal or an expansion or an enterprise product skew, those were

4:52 all things that it was kind of just a wild wild west from what you can see in

4:57 the data and even when we were doing walkthroughs with the sales team you can

5:00 see that just very very clearly. So that was something that I didn't set out to

5:06 prove against. They knew they needed a new solution. What I didn't think is

5:12 that it was going to be this MVP that we were just standing up to show them how

5:17 the full quote to cash system could work. Maybe let's walk through exactly the

5:24 environment that you're walking into because all selling motions are not

5:29 created equal. There's certain things that make selling certain products or

5:34 services more difficult than others. So what did the environment look like? I've

5:37 heard some product led motions, some sales led motions, but what are the

5:41 details of how they sold, how they sold their products and some of the

5:44 challenges that have brought up? So one of the trickiest things when it comes to

5:49 CPQ and quote to cash in general is everything that drives the downward

5:55 systems and motions of your go-to-market. So you can sell one product one way. It

6:02 may have 15, 16 different conversions. It definitely has you know eight to ten

6:07 different ways that it can be billed, sliced and diced. What they had in

6:11 place before was almost like a single motion. Everything was sold the same

6:16 exact way. There were no restrictions around like what could and could not be

6:20 edited. HubSpot does have some natural like out-of-the-box limitations when it

6:26 comes to B2B SaaS Rev Rec and we can probably get into a lot of those later

6:31 but it was almost like a one-trick pony. You can put a product in there. You can

6:35 select a quantity. There's no product SKUs so there's no way to do any kind of

6:40 reporting or segmentation or product level ARR. You can add the discount and

6:45 then that's it. It's giving you a couple kind of bland numbers out of that engine

6:50 but there's so much more that you need from a CPQ system because ultimately

6:56 it's driving how your contracts are laid out, how your proposals are laid out, your

7:02 commission systems, your forecasting. Like everything is kind of branching off of

7:07 really the CPQ as the starting point but really the quote to cash system as a

7:11 whole. Yeah I think you mentioned a couple things where I think a lot of

7:17 people have a simplistic view of oh I just need to build a quote. I probably

7:22 need to put a couple line items, quantities, lock and load but some of the

7:27 downstream effects like billing and reporting some of those nuances really

7:32 require a strong CPQ in place because that's kind of the beginning of that

7:39 process. What are some gotchas that people either not using a CPQ they're

7:45 just doing things maybe in like Google Sheets or Google Docs or they're just

7:51 using very simple out-of-the-box stuff. What are some limitations they're going

7:54 to run into and some things they might not have because they're not using a

7:58 proper CPQ? So I'm gonna dabble into revenue intelligence on this one just

8:05 because one of the most important things outside of the data being in a single

8:10 environment that is consistent, clean, it's structured and that's what a CPQ

8:16 sets the tone for across your entire go-to-market across the entire quote to

8:21 cash is that it creates repeatable, confident, stable, structured data. When it

8:29 comes to revenue you know tons of formulas out there there's tons of

8:32 calculations that are driving it in the back end. For us we want to make it as

8:37 easy as possible for a sales rep to go in there, build a proposal, have confidence

8:42 in the output and get a signature as quick as they possibly can. We don't want

8:47 to really distract them with having to go build out these elaborate pricing and

8:52 quoting tables. They should be filling out a couple questions in the guided

8:56 selling. There should be the products, the few configurations that go with that

9:01 product and everything else should be done for them. It should be really a

9:05 couple you know minutes in there depending on you know how complex the

9:10 the pricing and selling is. It might take a little bit longer but it should get

9:14 them to sharing something with the customer. For sales teams we want them

9:18 spending as much time with the customers, not buried in tools, not buried in

9:23 calculations. We want to try to restrict and reduce the number of errors that can

9:29 happen with say a spreadsheet or can happen just trying to use like out of the

9:34 box HubSpot properties or even in Salesforce. When I've done quote-to-cash

9:39 and CPQ in Salesforce you have a lot of legacy technical debt that gets built up

9:45 over time. So when you're going into a project like this understanding every

9:50 single thing that this might touch, mapping that out completely end-to-end as

9:54 well as anything net new that is going to be coming in, that's day one. Like we

10:00 have to understand the entire ecosystem before we can recommend changes, before

10:04 we can look at tool selection or anything like that. Yeah and I think a

10:10 lot of people don't have an appreciation for the complexity behind it and the

10:15 permutations of different types of pricing and coding models that you could

10:20 have depending on the types of rules that you have in place. So if you have

10:23 like product dependencies, so hey you can't buy this product unless you have

10:27 this product, if you have any like quantity thresholds, if you have a usage

10:31 based product, okay how are you stair-stepping different gates of the

10:36 price per unit. There's so many different things that require really really strong

10:41 logic engine just to produce the quote let alone document everything and

10:46 connect it to your other systems for reporting and intelligence purposes as

10:50 well. So there's a lot in here even if you have an on-paper simple product

10:56 you'd be shocked at how many permutations of quotes you could develop

11:02 with a simple offer. I actually had an interesting conversation with my dad

11:06 this morning, he's been in enterprise sales his entire life but we were going

11:11 into just different types of leadership and how as a business, as a company, as

11:17 an organization you want to find your top performers and try to replicate what

11:21 they're doing. I take the same approach when it comes to quote to cash like I

11:25 want to understand what the top sales people are doing, how are they selling the

11:30 product, let's go into conversation intelligence and really break down the

11:34 ins and outs and a lot of the times you'll find that it's just the simplest

11:38 approach. They get on, it's an honest conversation, they know what the the

11:42 prospect or the customer needs and wants and they're able to get it to them

11:46 really really quickly. So even modeling some of like the guided selling,

11:51 simplifying some of those processes is always an approach that I try to apply

11:56 when it when getting into quote to cash. You can again look at what exists, you

12:01 can look at the data schema, you can look at what you know what tools are in place

12:06 today and you can look at the data itself but actually talking to the

12:11 people that use these systems is really really helpful and even just looking at

12:16 like how they're talking about them, how they're talking about the products. So

12:20 I'll use an example with one of the customers that we had. They were going

12:26 through a selling motion that wasn't a tip like a standard selling motion like

12:30 an enterprise ramp deal or a co-term to expansion. This was a full like rip and

12:37 replace. This existing contract is going to be null and void and this one is

12:41 going to be replacing it. So there's nothing to handle that within their

12:45 system but in talking through discovery we knew like hey this needs to be a

12:50 quoting scenario that we need to address for. I think from like the the CPQ

12:55 standpoint it's about the same. You're building products, you're assigning terms,

12:59 you're going through the same guided selling, but something that the out of

13:03 the box CPQs can't do without heavy heavy customization is okay let's go

13:09 look back at the records. What is this actually replacing? And then you can find

13:14 the differences, you can set credits, you can do a lot more calculations that are

13:18 going to give you much better revenue reporting on the back end. So it's little

13:22 things like that that won't come up or surface in like looking at the

13:27 intangibles but then when you actually talk to the people that are doing it on

13:31 the day-to-day that's when you start to uncover a lot more and then you bring

13:35 that to leadership like is this how we want to sell, is this something that we

13:39 want to continue with and the answer ultimately landed on yes for them

13:44 because it's more revenue. Of course we're gonna you know cancel a contract

13:49 and they can you know go on a new 12-month or 36-month term with more

13:52 seats and products. There's no reason not to do that so build the system and make

13:58 it work and with the the extension UI which is how you do a custom CPQ inside

14:05 of HubSpot we just built out a new scenario for that. So now you have a new

14:09 scenario it can easily handle that and everything on the back end gets done, new

14:14 language goes in the contract that's getting inserted, Maxio which is a

14:21 billing and subscription platform that gets updated and it knows that hey this

14:25 is going to replace this contract. So all that identity resolution is happening in

14:29 the back end because of just a simple discovery and seeing that this was

14:33 something that they needed. So I'd love if you could walk through exactly how

14:39 you built it. I know a lot of this was AI powered but how did you approach it? How

14:46 did you feed the context? How did you deploy it? All of the details if somebody

14:51 could try to figure this out for their own. How did you put it all together? I

14:55 guess the one of the initial steps that you want to take is you need to map the

15:01 full tech stack that is going to be touched by quote-to-cash. So not just the

15:06 the tools that are in place but the typical tools that would be part of

15:10 quote-to-cash which would be CPQ, CLM or document handling and billing and

15:16 subscription and then maybe you tack on like ERP or accounting systems but for

15:21 the most part it's focused around CPQ, document handling and billing and

15:26 subscriptions. Those all need to work together flawlessly. If those can't

15:31 communicate or there are certain elements of one system that aren't

15:35 available in another that's when you have to potentially hit the the

15:40 abandonment button and go a different direction. Luckily with this we were able

15:44 to do a lot of that very early on so we kind of knew where they were leaning on

15:49 the billing and subscription side so we knew what that what that data model

15:54 needed to look like. So that made it a little bit easier. The other part of just

16:00 CPQ in general is what reporting do we want to get out of this and you don't

16:05 need to overload it. If you build it the right way you can always get additional

16:09 reporting but do we want to report you know year-over-year ARR growth for a

16:15 multi-year deal? Do we want to be able to really granularly track like product

16:20 level ARR or do we want to is contracted ARR and bookings is that the only thing

16:24 that's important to us? So you start to go down this list and we have a full

16:28 you know library built out of all the different revenue fields and and

16:34 potentially you can get out of a correctly set up CPQ and we just start

16:38 to go down the list. What of this is important to you? This is what it could

16:43 potentially deliver depending on where they are in their funding stages to

16:46 certain ones might be more important now than they are in the future but I would

16:52 push back and be like well you want to prepare for the future. You know we're

16:55 building something here in the present and it's gonna service you very well but

16:59 we also want to look six months down the road, 12 months down the road, 18 months

17:03 down the road. What are you know the product and price book changes that

17:07 you're gonna be going through? Are you thinking about AI? Are you gonna be

17:11 bringing on a you know partner channel or something like that that might need to

17:15 be serviced by this a little bit differently and there are actually point

17:19 solutions for like partner CPQs out there that I would definitely recommend

17:24 potentially looking at but it's a it's a great way to allow partners to co-sell

17:30 and sell on your behalf so there are options like that out there as well but

17:35 it's you got to think ahead you can't just think about the here and now you

17:40 have to think about where the organization's gonna be what the world's

17:44 gonna look like six months from now with AI it changes on a daily and a weekly

17:48 basis what I would have been talking about from quote to cash six months ago

17:52 to what we're talking about now has dramatically shifted and it's gonna

17:57 continue to change I think within the industry just specifically talking about

18:02 you know CPQs and subscription and building software 2025 you saw big

18:07 consolidation you saw a lot of new kind of all-in-one solutions come up you saw

18:13 a lot of M&A activity across the board that's gonna continue to happen one

18:18 thing I haven't seen but I'm actually really excited to check out is the hub

18:22 spot revenue hub which just got totally revamped by an acquisition that they had

18:27 earlier 2025 might have been end of 2024 but they in that kind of roll out one of

18:34 the biggest things they were trying to address is how do we make this more than

18:39 just a singular subscription system and you know singular like e-commerce style

18:44 sales and revenue system so a lot of what they've a lot of the R&D that they

18:50 put into revenue hub is specifically addressing that some of the most like

18:54 advanced selling motions co-termed expansions ramp deals you're over your

19:00 escalators all of these are some of the toughest to figure out as a rev ops

19:04 person but they're starting to lean that way because they see the benefit of

19:09 having a fully robust and native CPQ built out within HubSpot yeah the tech

19:18 stack is definitely going through quite a bit of an evolution on the HubSpot side

19:22 investing in their own Salesforce end of sailing Salesforce CPQ so not end of

19:30 lifing it if you have you can still use it but they're not selling it anymore and

19:33 there's still a lot of unknowns about their revenue cloud architecture and how

19:39 that's going to impact and then there's a few bigger players like deal hub they

19:43 just acquired subscribe which should help with that subscription based billing

19:47 but yeah it's starting to feel like there's some consolidation there might

19:52 be a couple obvious choices but in the meantime you chose to build it on your

19:57 own so once you have the discovery done you knew exactly the motions they needed

20:02 to account for you knew what the reporting looked like the downstream

20:04 effects all the blueprint of exactly what you needed to build how did you

20:09 actually end up building it it started with the data like what do we want that

20:15 the data outcome to be when it comes to quote to cash so that that was the first

20:20 part and I spent about two months in the data before we got to this point they

20:25 spent two months kind of evaluating different systems and looking at

20:28 different CPQ options different billing and subscription softwares but being

20:34 in the data the problems were crystal clear the the first thing is the the

20:40 guardrails every single selling motion is a little bit different on the front

20:46 end to the salesperson it's the exact same I'm getting on the phone I'm

20:49 putting together a package I'm sharing it with them but how it needs to work in

20:54 the back end is totally different so I started there I started with their

20:58 their three biggest problems so the three biggest problems for them were

21:03 co-termed expansions they weren't able to get accurate ARR values out of the

21:07 co-termed expansions which is a huge miss I think when you're going into a big

21:11 funding round like you want to know what does our expansion pipeline look like

21:17 what does our year-over-year growth across expansion look like you're

21:21 constantly looking for those metrics that signal growth and you couldn't get

21:26 an honest number out of the expansion pipeline so that was that was one of the

21:31 first things the second thing and this is maybe less to do with quote to cash

21:36 and more to do with just renewal motions and churn but how do we honestly churn a

21:43 customer at what point does that happen and what does it drive across the rest

21:47 of the system so churn was also part of this conversation so building a way for

21:53 them to really show accurate churn was was essential and right now the only way

21:59 to show churn was relying on manual input by the rep or going into the

22:04 finance system and see when billing stopped which that's not going to cut it

22:08 when you need to understand your net revenue retention very very quickly and

22:13 have an answer off the cuff ready to go so that was a another kind of portion of

22:18 this is how do we handle renewals and specific renewal motion so an early

22:23 renewal is another type of motion that they go through where it renews say two

22:29 months earlier so that two months what how are we measuring measuring the

22:34 difference so this is new paper new contract usually it's an upsell that's

22:37 happening in that early renewal period but there's that two-month overlap that

22:42 an old contract is ending and a new one is is beginning and we want to make sure

22:47 that we track revenue in that period correctly so one's turning off one's

22:51 turning on essentially and so those were all the scenarios that I started to show

22:56 them and then from there it showed it what I call the payload so when the rep

23:01 hits the apply button quotes on everything looks good they did the guided

23:05 selling what happens then so I show them how accurate numbers can be put in there

23:11 I showed them that instead of doing these co-termed expansion proration

23:18 calculations in a calculator nowhere in a spreadsheet it's all done in a

23:22 calculator it's done automatically you just plug the start date well sorry the

23:26 that you plug in the start date the end dates automatically grabbed now you have

23:30 the exact days of that co-termed expansion and you can do an exact

23:34 proration calculation based on that exact number of days so it gave them an

23:40 accurate number not something that they couldn't trust not something that was

23:43 rep rep manually inputted and again it's it's all just feeding better tracking of

23:49 revenue better commissions invoice schedules I also shared that as part of

23:55 this like MVP walkthrough of how an invoice schedule gets set up so I think

24:01 for you know a very basic example if you look at a 12-month deal they're paying

24:06 annually that's one invoice but now there's the question when does that

24:11 invoice go out does that go out on the contract start date does that go out 30

24:17 days on like net 30 terms so all of that is designed into the guided selling to

24:23 determine what those what those terms are some of the more complex

24:28 organizations that I've worked with and lean scales worked with is when each

24:33 individual line and we can carry individual terms if the whole deal you

24:37 know 15 line items all carry the same terms it's a little bit easier but if

24:41 you have individual products with different configurations different

24:44 start and end dates or delivery dates that adds a whole another layer of

24:47 complexity to everything but for this particular case like showing them how

24:53 invoice schedule gets get set up how this could potentially feed the the

24:59 billing and subscription system making it really easy for invoices to get

25:02 established for a new account to get set up that was all done in two days and

25:07 shared via that MVP conversation just showing them how that that motion should

25:11 work and I think that's ultimately what like entice them to say let's go into

25:16 this more let's look at this if you can make it if you can do this in two days

25:20 what can you do in 30 days so the next 30 days was just hardening the code

25:25 making sure it was production ready we should talk about build or buy I think

25:29 that's something that most you know sass orgs are gonna start talking about is

25:34 with this like AI invincibility cloak that everyone has builder by I think is

25:39 gonna become a huge conversation for everybody should we build it or should

25:42 we buy it from a vendor or a partner or someone that's already doing this into

25:46 the industry for this particular case they landed on build because they knew

25:52 kind of where they were as an organization they knew that by being

25:56 able to control the user interface control the quoting scenarios put the

26:04 guardrails on that kept the data accurate that's where they needed to be

26:09 accurate data so that's that's how we got to that decision of let's go all in

26:14 on this and start building it out now so in the build conversation can you walk

26:19 through technically and mechanically how you built it what tools did you use what

26:24 context did you gather to feed the build how did you deploy how have you

26:30 maintained since that or from MVP to production technically how did you make

26:37 the changes and adjustments how did you use AI to do it and then how are you

26:43 maintaining once it's been deployed I so I started with a simple diagram of what

26:52 the process should look like so I looked at it in four different steps and not

26:58 not the technical steps are like how the plumbing needs to work but here's what

27:03 it needs to do for the front end user so the first is the scenario selection what

27:08 am I selling right now what motion am I going through and that almost sets the

27:12 rest of the CPQ up for what it's going to offload onto the deal onto the line

27:19 items what it's going to set up from a from a revenue standpoint all the 50 to

27:25 100 properties that are updated after the quote is built I started there that

27:32 the selection of a scenario or a selling motion is is kind of position one and a

27:39 lot of CPQ platforms they'll call them workflows so we're selecting a workflow

27:42 that we're going to launch that might be a renewal workflow enterprise workflow

27:48 but for this for this particular purpose we call them quoting scenarios so starts

27:53 with the quoting scenarios then it goes to the products so selecting the

27:57 products selecting the add-ons the services the quantities the discounts the

28:02 number of seats basic kind of like minor product and pricing configuration and

28:08 then right there on that page you're gonna have a summary of the breakdown

28:13 based on the schedule the billing schedule and you're gonna have AR which

28:17 is something they didn't have visibility into before so they're gonna see total

28:21 contract value this is what everything costs end-to-end across two years three

28:26 years whatever that term is you're gonna have the ARR breakdown the MRR

28:30 breakdown and then you're also gonna have you know discount breakdowns for

28:34 co-term expansion you're gonna see the peration discount amount but ARR is

28:40 gonna be accurate in that case which they didn't have before so products

28:44 pricing slight configuration is the next the third steps I would say is more of

28:49 the guided selling slash like commercial terms set up how are we gonna bill for

28:54 this quarterly monthly semi-annually all up front is it net 30 terms one thing

29:01 that we added after that we fell found was very helpful and it got added in 15

29:05 minutes was the ability to change a billing contact so by default it selects

29:10 the signer and or the billing contact role but if you want to adjust that if

29:17 say you know someone else we need to send this to AP at or accounting at they

29:21 can do that in that step or they can come back to it later and change it if

29:25 they want to as well but the the commercial term set up is the third step

29:31 and I would say it's the most important in terms of the payload that comes out

29:34 of it the last step oh here's actually another part another nuance to all of it

29:39 is that certain quoting scenarios will have certain commercial term setups so

29:45 you're you're gonna be setting these up in the parameters that we allow so for a

29:50 12 month deal sorry for a 36 month deal we don't want to allow monthly billing

29:56 for that we want that to be billed annually or all up front so we remove

30:00 that we remove that option from the reps view so now you don't get in the mess of

30:05 like okay they billed it for 36 months either we have to go back to them and

30:10 say we can't do monthly or it's just not an option for them to do that so that

30:14 was all cleaned up put in those guardrails so after you get through those

30:18 three steps you go into just the quick review you want to see that the numbers

30:24 all match up you want to make sure that it's a very you know clean process it's

30:29 all nothing is edited on this final screen it's just the final review step

30:33 before you get to actually generating the document or before you create the

30:37 line items update the line items update the deal data any of that but the very

30:43 bottom was in something new that we also added which was a almost like a selling

30:48 mechanism where reps were allowed to do a one-time discount really quick example

30:54 if you've ever been in sales you get to the end of the year you want to try to

30:59 get people on the phone you want to close out your you're strong so your

31:02 cons you're going to leadership and you're asking for hey can we do an end

31:05 of the year discount of some sort or an end of the year push that we can get

31:10 some more people through the door I have you know pipeline X and I really want to

31:13 get them sold or even at the beginning of the year when budgets get released

31:17 and people start to look at what they you want to do for the upcoming year

31:22 that's also another really good time depending on the industry and they may

31:26 have different planning periods you may see like July fiscal years are when most

31:30 people start to get their budgets and numbers and start to plan out for the

31:35 upcoming year so you have to plan around that but their their idea was like a

31:40 hundred percent like we should be doing this type of stuff all the time but it

31:44 should be controlled so you can't just go in there and put a hundred percent

31:47 discount it was controlled based on the value from those three previous steps so

31:53 that that is something that gets put in at the end it's a you know a line item

31:57 in there in their case when it comes to CPQ and the billing system but it's just

32:02 a really just nice touch and again 15-20 minutes to get that introduced and

32:07 built into the CPQ so definitely gold in hey let's set up all the rules all of

32:15 the decisions the blueprint of everything then did you take that did you

32:20 put it into cloud code and then ask it to build a HubSpot extension how did you

32:25 take the hey I have everything I want it to be in every scenario and then

32:30 actually turn it into something that somebody's going into HubSpot and

32:34 putting a quote into it was first to actually cross-check if HubSpot native

32:42 quoting was a viable option so it was almost like a blueprint of what good

32:47 looks like and then I brought that into Claude to compare to their existing

32:52 environment and just HubSpot native quoting in general is can we get it to

32:58 this point and I kind of knew the answer already to that I knew that it was going

33:02 to be no and the the the biggest dent on arrival point was the lack of guardrails

33:08 that you can put on the the sellers so I knew that was probably going to be a no

33:14 option and then I built a couple other extension UIs out I knew it was a really

33:19 nice way to build custom cards within a HubSpot environment and I decided to

33:24 roll the dice and say let's actually see if we can do this tick so they can see

33:27 that comparison between native quoting and what this MVP is gonna look like I

33:33 wasn't gonna spend like a ton of time on it I was just gonna stand something

33:36 quick Claude enables you to do that really really fast but it took my brain

33:40 dump and the blueprint that I created and it almost like to a T created it

33:46 perfectly the four steps the one part that needed tweaking was the updating of

33:51 the deal itself and the creation of the line items that you know I think the

33:55 initial one was a like a ten field payload and it grew to 50 and then 60 70

34:01 it kept growing because of what they wanted to report on but that's how it

34:05 ultimately got to that first point of getting it in front of them was it was

34:10 showing that you know this is why a HubSpot isn't gonna be suitable for you

34:16 and then it turned into let's build this which was for me I was excited

34:21 something that you actually taught me too it was is you know build or buy you

34:26 know is it gonna be production ready our 20 30 40 50 reps going to be able to use

34:32 this thing without fall and I think because the way extension UIs are built

34:36 they're built in react they're built into the HubSpot environment and we're

34:41 only interacting with HubSpot at that point hundred percent like it's gonna

34:44 it's gonna move quickly I battle tested it too before that first MVP demo yeah

34:50 and maybe it's just maybe that's good to know like the difference between okay

34:54 once you do the MVP they fell in love they're like okay this is great and

34:57 you're able to take the blueprint put it in quad code push it to HubSpot now

35:02 they're in HubSpot looking at it and they're like oh why don't we just do

35:04 this what did you have to do to say okay fun MVP but now we need to make some

35:12 changes to make it production grade anything that stands out as you were

35:16 testing it that you needed to make adjustments to or is it just tweaking

35:20 and fine-tuning yeah we haven't talked about the the tools in the the quote to

35:25 cash space I know we're kind of heavily focused on CPQ right now but I was

35:30 actually trying to recommend subscribe based on PLG sales led motion I was

35:36 really trying to this is beginning of the year trying to really get them to

35:41 look at subscribe I think there were some existing relationships there that

35:45 they thought like oh yeah it sounds like a great system but they just got

35:50 acquired so you know it's it's always a little shaky a little scary to be going

35:56 in as they're getting acquired you have no idea what the acquiring company is

36:00 going to do with this piece of software is it gonna just go away completely are

36:04 you gonna onboard and then have to re-onboard in a couple months so I was

36:08 actually really pushing for subscribe and a lot of like the kind of the

36:12 blueprinting was built with on my experience using subscribe and how they

36:17 go about CPQ guided selling user experience all of that so that's that

36:22 sunk that plan and then they looked at a couple other ones but the the MVP when

36:29 we said hey we're gonna go this route I actually got really excited because it's

36:33 now this you know domain of expertise and the you know level in which like AI

36:39 really really accelerates your ability to fine-tune build create launch deploy

36:45 support it really got me excited about it and not to say like oh we're never

36:51 gonna go with deal hub or subscribe again I think there is absolutely cases

36:55 in which you are 100% going to do that I think for an organization that is very

37:01 AI heavy very AI focus very agent savvy this is a great option because you can

37:06 continue to evolve it support it make simple changes I think every change that

37:11 we made post-launch took about 15 minutes and it was live tested in

37:16 production good to go reps are ready so that that got me really excited about

37:22 doing it the only thing that I was a little bit nervous about is is the the

37:27 battle-tested portion of it can 50 people beyond this and it's not going to

37:31 break and that's where I brought the engineering cloud of lean scale and to

37:35 really look at it and give me the honest answer and they're like well no like the

37:39 way that the code works on the back end it's gonna be very stable because you're

37:44 not having all these different instance they're not all logging into the same

37:47 instance everything is individual to the deal itself hmm walk me through maybe on

37:53 the build versus by scenario I mean this sounds super robust it sounds like it's

37:58 scalable you're not gonna run into any issues it's on hub spots you have all

38:02 the permissioning and everything that you'd expect when when does it make sense

38:08 to say hey this isn't going to be enough for what this company's quote to cash

38:13 process is and we do need to go with something like a deal hub or subscribe

38:18 or new or whoever name your solution of the of the week what are those nuances

38:26 or thresholds or specific things to that company that would say hey this isn't

38:30 gonna cut it I need to go look for a vendor the billing software billing and

38:35 subscription software is going to dictate a lot of that depending on how

38:39 depending on which one they have depending on like which billing and

38:43 exactly exactly so if you're on stripe you need the CPQ and the CRM to work a

38:50 certain way if you're on you know anything else if you're on maxio if

38:57 you're on pandadoc payments there's a lot of bill it real it's honestly one of

39:01 my favorite if I can you know give a tool shout out real it has been one

39:04 that's been on my mind a lot but they took the they took billing and made it

39:09 really simple they don't require a whole lot from the CRM it's actually

39:14 probably the smallest data mapping that we've done I mean for from a revenue

39:22 perspective or from an invoicing setup perspective but I think that is gonna

39:27 dictate a lot of which direction you go when it comes to a CPQ native something

39:34 that that if you don't if you want a standalone solution you don't want it

39:37 native in the CRM that is another potential you want to be fully

39:41 integrated Salesforce and HubSpot are pretty well integrated across the CPQ

39:48 ecosystem right now but that's another thing to keep an eye out and then

39:51 specifically for build versus buy do we have the team to support it long term do

39:58 we have someone that can understand if there's if an issue pops up I'll give

40:03 you a really good example HubSpot just went through their legacy app platform

40:08 upgrade so they gave everybody four weeks and or sorry four months when we

40:14 first became about the update that everyone is going to have to move to

40:18 the platform upgrade that they're doing I believe end of August now is when it's

40:23 going live one of the biggest components of that and this might scare people away

40:27 from the build side of it is they were going to be going away with the

40:31 serverless serverless functionality which being a react application in

40:37 HubSpot that serverless functionality was was crucial so they were gonna be no

40:43 apps were gonna be allowed to use that and that was a you know an aha moment

40:49 for me of like okay I need to make sure they're prepared to actually be able to

40:52 support these types of changes that might come up and I decided with them I

40:59 decided I want to see if this actually goes through so anytime that HubSpot

41:03 puts out a controversial update I always look at the forums I want to know

41:08 exactly what the what the customers are saying and people were grabbing their

41:13 pitchforks and you know lighting the fires and running down the door but I

41:17 had a feeling that they were gonna make a shift and they even in their their own

41:21 announcements we're starting to say like hey we're gonna look at potentially

41:25 reintroducing this and a later update so two months later they came out and they

41:31 said okay now with the new update there is gonna be serverless functionality and

41:34 you can import you know update it and move everything over this way that update

41:39 took 30 minutes I think to get it done get everything moved over to that new

41:44 environment but for an organization like you need someone that can support that

41:49 that understands that they can keep their eye out and really can jump on it

41:53 really quickly because that's an update we had four months to prepare for but

41:57 there's other ones that are going to come an API update for example that you

42:01 don't get to prepare for it just hits you middle of the night and you have to

42:05 jump on it as quick as you can so that makes sense where you don't want to have

42:11 all your eggs in one basket if you will and then the billing integration so it

42:17 sounds like if you're on real it you could probably take a custom built

42:21 pretty far is there anything around the process or blueprint of how outside of

42:30 maybe the tech stack but just are there any complexities of pricing and

42:34 packaging that would make you think a company should go towards a vendor

42:40 solution versus building their own or does it all have to do with the

42:43 surrounding ecosystem like can you take a custom-built app to 500 reps a thousand

42:49 reps you could you could but I would lean on the enterprise-grade softwares

42:56 in those in those cases because you want somebody that is going to introduce

43:01 innovation to it one deal hubs probably my my top rated CPQ out there for if

43:08 you're going with a standalone option they have something called a deal room

43:12 and a deal room is a great way for you to interact especially across enterprise

43:15 deals where you have lots of documents going back and forth lots of people

43:20 multi-threaded into that particular sales process I would say in those cases

43:25 like the more complex the products the more people you have or if you don't

43:32 want to manage a lot you go with an option like that if you have some some

43:36 simplicity from a from a product standpoint every single product is going

43:39 to have very complex billing configurations but from a you know packaging standpoint

43:46 from how products pair together the dependencies like that I would say if

43:52 it's simple or like a medium level then a hundred percent you can get through

43:56 with a with a you know custom-built option in Salesforce or in HubSpot the

44:02 the high high volume fast-paced SMB they need to get it out quickly those

44:09 enterprise systems are gonna slow you down a little bit because they're all

44:11 working through API's typically the the guided selling gets just overly built

44:17 and you just want something that's fast that's accurate fast and reliable and

44:21 custom options probably going to be really good in that case yeah I'm

44:28 thinking it's like there's two forces here one AI capabilities are going to

44:33 continue to grow and then I think the CRM infrastructure is like Salesforce

44:37 going headless I'm sure HubSpot will be forced to go that way may open up more

44:45 capabilities and at the same time you're right these enterprise grade platforms

44:50 are introducing innovation that's kind of outside of just the business logic so

44:54 but I do think it's a much more nuanced conversation than it ever used to be and

45:00 the other thing that is developing as well that I'd really like you to shed

45:06 some light on is the rest of the tool ecosystem outside of the CPQ so that CPQ

45:11 tends to be the brain of everything and pushing the information everywhere where

45:15 it needs to go but what other mission critical tools are there is it reasonable

45:21 to build custom solutions for some of these are there some where you have to

45:26 go with more of a vendor strategy and then what are your favorites so let's

45:33 start with the next step after you get the numbers and the the the numbers

45:39 generated in the CPQ which is how you surface a document and send it to the

45:45 prospect or customer in case of renewals and expansions so the first where I like

45:50 to start there is looking at the actual sales process the sales lifecycle every

45:55 company is a little bit different on what they surface and when some do

45:59 proposals very early on some do very just standard pricing tables very early

46:04 on the I like to look very heavily at the contracting period what does that

46:09 look like is their procurement do you allow red lines do you have you know

46:15 really robust MSAs or you know legal requirements that you would want to

46:19 bring on a professional grade contract lifecycle management system like an iron

46:24 cloud which I really really like ironclad just for how they handle documents and

46:29 really robust lifecycle across the contract but I want to dig into all of

46:35 that and I want to look at all the contracts over the last you know 12

46:39 months I want to look at how they've changed over the last six months and how

46:42 that relates to the last three months so we go into every single contract to see

46:46 how they're being structured how they differ across reps what should be

46:50 locked down what shouldn't be locked down what requires an approval before you

46:54 even gets to that point of sharing a document so we I really like to look at

46:59 the lifecycle and where documents first appear and then from there there's more

47:05 there's more setup I would say I a lot of customers describe that as probably

47:10 one of the biggest pain points in quote to cash is just the level of like

47:15 customization setup that you have to do to set up a ironclad or a panda doc or a

47:20 doc you sign it's also something to be aware of too is when you're making

47:25 changes to the CPQ and those changes are going to impact the you know the way

47:31 that the contracts are built or handled that's gonna be really important that

47:34 you have someone that that knows that and owns it and can make sure that those

47:38 processes are keeping up with one another once you have that all mapped out

47:42 you know all the agreements that need to go out you know all the approval

47:45 processes the type of documents that need to be handled maybe have different

47:49 tiers of service level agreements that need to be attached to these documents

47:52 that's where you then get to do the fun part which is building it out and you

47:58 know building out the template the creative side usually falls on like the

48:01 marketing brand or creative folks I've gotten to do a couple of them I I

48:06 wouldn't say I'm a creative but I really enjoy that stuff I enjoy making things

48:10 look really good and when they don't have the time or resources I'll go in

48:14 there and do it and present it and kind of similar to like the MVP option like

48:18 great let's use that so it's like we just save them some time and it's a

48:22 document that thousands of businesses are gonna see it's it's fun to be a part

48:27 of that and I've always really just I've enjoyed that part of it but yeah the

48:34 the the contract and the document handling is really really important but

48:39 the the North Star for it is I want to see the CRM data the contract data lock

48:44 step like those are fully working operational they're consistent they're

48:50 accurate we can reconcile those against each other that's the North Star of that

48:54 whole process is that those are perfectly aligned the other part too is

49:00 the lifecycle stage like automation how do we automate the lifecycle so reps

49:08 don't have to manually move a stage can we move it from say you know stage three

49:13 which might be like technical evaluation or it might be a POC can we move it to a

49:19 you know negotiation or proposal set or proposal negotiation step based on that

49:25 document going out once it gets closed one or sorry once it gets signed what

49:31 happens after that are we immediately moving it to closed one and having

49:34 finance come in is there a deal desk step or deal desk team that's in the

49:38 middle of all that that is going to you know check everything once over and make

49:42 a good I feel like if you do your if we if the setup is done correctly and

49:47 you've covered every angle and you've looked at looked into the future you

49:51 should have a lot of confidence in that that contract lifecycle automating those

49:56 stages across the board so that that's the contract lifecycle part do you want

50:03 to dig into anything else on that side no I think I think a lot of people don't

50:09 think about that part but like getting everything approved getting a document

50:14 out the door getting it signed getting that signature on it and then once it is

50:19 then pushing that to invoicing and billing and I think that's a big a big

50:27 part where people miss or it's very manual so maybe as we wrap up the full

50:34 quote to cash process what does that last mile look like when you're actually

50:38 getting in an invoice prep sent on the right time and and getting billed and

50:44 collecting collecting revenue yeah it starts with a conversation with the the

50:51 tools technical team or support team so you can understand top to bottom the the

50:59 data mapping between the two systems these are all the types of ways that we

51:04 sell these are all the types of ways that we bill what data do you need in

51:09 order to have a successful billing system and in order for invoices to get

51:14 set up correctly that you know one time end of the year discount how does that

51:19 need to be passed over to your system what objects can you pull from I have a

51:24 horror story from one of our customers of trying to adapt a CRM and a CPQ to a

51:31 billing system which I would I would never recommend because it creates a lot

51:37 of complexity in the system that is unnecessary so be aware of that be aware

51:42 of adapting custom objects to a billing system just because that's what they

51:48 need always look for solutions outside of that but the data mapping exercise is

51:53 the most important then once you understand that then you start to layer

51:57 that into the CPQ into the contracts into everything that is eventually going

52:02 to feed this billing and subscription system I think the something that's like

52:08 a underrated part of quote to cash is just reconciliation and alerting and

52:15 monitoring that's not something that I would recommend doing on a quarterly

52:20 basis if you can automate like alerts of things that you expect to come up and

52:24 there's a lot that could potentially come up you want to make sure that you

52:29 surface those things immediately so to give you an example not you know calling

52:35 out anybody specifically but if a deal gets climate use that actually most

52:40 basic example to explain the point but if a deal gets closed one and you know

52:45 exactly how much that invoice schedule looks like let's just you know make it

52:49 easy it's $100,000 and you have the billing system tied back to the company

52:55 or the account record in your CRM you should be able to reconcile that very

52:59 easy but if you see that that number on the company account side is staying at

53:03 zero you want to be alerted to that immediately if you see that it goes five

53:07 days past the day that it should have been billed that's almost five days two

53:12 lakes and you have this awkward conversation with the customer sending

53:15 them an invoice they were expecting probably weeks ago so setting up the the very

53:20 granular alerts of issues that may pop up is really really important and when

53:26 you get to the billing in the subscription side I would also look at

53:31 the sink to make sure your data map is correct I actually just had an example

53:36 last night when I was working of a stripe sink to HubSpot that was

53:42 overriding the contact first name and last name with the business name because

53:46 of how stripe is set up as a billing system so stripe as a billing system

53:51 they're typically used to subscription which is a typically a person the the

53:57 billing account which is typically an email and they interpreted that when

54:02 they set up the sink as like oh name that's the business name but it's like

54:06 no no no they're solving for the PLG side right they're not the B2B side and

54:10 B2B like your company name is you know what you're going for but that's not

54:15 going to be surfaced and in the way that the sink to HubSpot works with stripe so

54:20 just little like things that you you look out for that it seems great right

54:23 stripe is well connected with Salesforce with HubSpot you know let's get

54:28 this thing set up and start pushing invoices transaction and account records

54:32 but it doesn't miss necessarily mean that the system is set up correctly to be

54:39 able to handle B2B be able to separate out product lead versus sales lead yeah

54:47 and I think a lot of things people don't recognize when they're talking about

54:52 these systems in this process is that if you don't have this streamlined then you

54:59 have a really really tough time getting getting revenue in the door and it could

55:06 compromise certain deals so this is not like oh these are nice to have

55:11 automation so that way we can not have to do as much work this is oh if we don't

55:18 do this it could put deals at risk if billing looks funky it could put our

55:21 reputation at risk it doesn't look good to a customer if you send a bill with the

55:25 wrong name or don't bill them and try to build them later it just looks like you

55:28 don't have your house in order and that's a reflection whatever product and

55:31 service you're offering too and then same with the the reps in the field that

55:36 you've put quotas on if they're running through mud to get quotes out the door

55:42 deals out the door decisions on whether they can quote something or discount

55:47 something you want to be able to empower them as much as you can and the more you

55:50 can it has a massive impact on conversion rate sales cycle shared number

55:58 of closed one deals and then of course downstream effects of cash position and

56:03 collections and everything as well so I think when people are thinking about

56:07 this process sometimes it's seen as oh these are some nice to have automations

56:10 they have real business impact they do they do and to your point it's as much

56:18 about having a great tool that can support your team and reduce friction as

56:22 it is about reliability and trust in the data and I would say that last part that

56:28 the trust and reliability of the data is where a lot of teams setting up quote to

56:33 cash CPQ they don't go to that level of detail and that's a big miss because if

56:39 you're not thinking about that part of it how the data is going to be impacted

56:44 across the systems and it's not just the one deal it's future deals it's future

56:49 expansions it's future churn auto renewals it's future you know early

56:55 renewals or upgrades upsells like all of that is coming off this one deal so

57:00 getting it right is really really important but that's that's where I

57:04 think it falls short they start with the best intentions of hey we want to get

57:08 them a really cool tool it's going to speed them up it's going to eliminate

57:10 some friction but where it gets where you fall short is when you don't look at

57:16 that that next thing that data the data the trust that you want to have in the

57:20 data and just the reliability overall of the system to fit within your go-to

57:24 market and that's where I wanted to spend the most time when it comes to

57:30 quote to cash because it touches so many things you have to go into that level of

57:35 detail with every part of it it can't just be the CPQ you have to look at the

57:41 document handling you have to look at the billing and subscription potentially

57:46 you have to look at the accounting system forecasting commissions being

57:51 able to track that accurately and reliably and so everybody has trust in

57:55 the numbers that are that are feeding the machine that's where I wanted to be

57:59 really good in an expert and that's where I spend most of my time because

58:03 I'm confident in my you know non-designed background design

58:07 capabilities to build something that is seamless and user-friendly I focus

58:12 heavily on the everything that happens after which is let's build trust let's

58:16 build confidence in this system and I think naturally with that you know the the

58:21 reduction of friction the increase of speed velocity all that just starts to

58:26 fall in line with it well Derek this has been a master class on quote to cash and

58:33 specifically on CPQ I'm so impressed I know the customer that you worked with

58:39 is very impressed as well that we've been able to build a custom CPQ

58:43 solution built off of deep discovery deep understanding of the business

58:48 process leveraging cloud code to deploy to HubSpot so you can use it in CRM and

58:54 something that's actually production grade and scalable so I appreciate you

58:59 sharing everything you did it's so much fun to do it with somebody on the team

59:03 who's out in the field building real things every single day and I can't wait

59:09 for the next one and you mentioned earlier in the conversation quote to

59:13 cash is only evolving and changing every single day so we're gonna have to do a

59:17 refresh probably every three months or so of what the latest and greatest is

59:20 I'm on I'm in for that a hundred percent