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Yesterday, Office Hours welcomed Lars Nilsson, VP Sales Development from Snowflake to talk about his learnings across 5 companies he helped take public.

Throughout the hour, Lars provided insightful perspectives on how to build sales organizations. These the five most memorable takeaways for me.

1. In early-stage companies, founders sell for the first three to four quarters. Then, many founders opt to hire an AE. Hiring a sales or business-development representative (SDR/BDR) can be the better choice. Incoming account executives will want to see a significant lead volume before joining, especially when selling into the enterprise.

Before the Second World War, King George journaled the end of Neville Chamberlain’s term as prime minister:

“I accepted his resignation, & told him how grossly unfairly I thought he had been treated, & that I was terribly sorry that all this controversy had happened. … I sent for Winston & asked him to form a Government. This he accepted & told me he had not thought this was the reason for my having sent for him.”

Salesforce is worth $113 billion. 1% of $113 billion is $1.13 billion. ServiceNow is worth $34B and Workday is worth $33B. 3% of $33-34B is $1B. Atlassian is worth $20.5B. 5% of $20.5B is $1B. Why am I doing all this simple math you might ask?

We have reached a point in SaaS where a small fraction of an incumbent is a billion-dollar company. If you start a business tomorrow that is able to cleave 1% of revenue from Salesforce, you will have built a billion-dollar business.

Let me tell you a tale of two software sales processes.

Take 1: An ambitious account executive engages a sales prospect and hustles to sell the customer a mega contract that consumes nearly the entirety of a budget. Big commission check, high fives, president’s club, feeling fine.

Nine months into the contract, the customer realizes they have over-provisioned. The buyer’s eyes were too big for their appetite. Time for a crash diet - a 60% reduction in seats. The customer loses confidence in the account executive, feels misaligned, and blushes under the challenging questions from the procurement team.

Pop any venture firm’s website into the wayback machine, peruse the bios from the late 90s, and you’ll see statements like “I invest in Internet companies.” Or Web2.0 or SoLoMo. At the time, it made sense. But not anymore.

Why isn’t time kind to these types of proclamations?

Novel infrastructure often enables new software. We refer to each wave by its architecture advance: internet, mobile, cloud, data lake, single-page apps, containers, serverless.

On July 13th at 10am Pacific, Office Hours welcomes Lars Nilsson, VP of Global Sales Development at Snowflake.

Having worked at five startups which went public - Snowflake, Cloudera, ArcSight, Riverbed and Portal Software, Lars is an expert in sales. He’s lived through many different go-to-market models and structures, through economic cycles.

With all the changes in the broader macro-environment, sales leaders may be wondering how to prepare for lengthening sales cycles, pricing pressure in conversations, and an internal focus on efficiency. During this session, we’ll cover those topics and others.

Last week, I installed Github’s Copilot, a machine learning tool that helps engineers write software. I often code in R, Go, Ruby, markdown, bash and other languages to automate some task or update my CRM, so I was excited.

I typed in def get_tweets_for_user(username) in ruby. Copilot completed the entire function in less than 5 seconds, like a GMail smart reply but for programming. I entered my API credentials, executed the program, and it ran. 5 minutes’ work compressed to a tab-key-press and a copy/paste.

Funnel optimization for web3 companies will become critical to their success. Token grants cost 4-7x than traditional customer acquisition techniques.

Other techniques, like incentivized referral, improve the economics but still tally 19 month payback periods. A year-and-a-half might be fine for a SaaS company selling a $50k to $100k ARR product, but long-term viability demands achieving 3-6 month paybacks of modern web2 consumer companies.

Why are the payback periods so high? Many web3 consumer experiences ask users to complete a Tough Mudder to use the product. For example:

Coinbase and Uniswap are two of the leading crypto exchanges. The market values COIN, Coinbase’s stock, and UNI, Uniswap’s token at about 3x trailing 12-month revenues. But should they be trading at similar multiples?

As the market has corrected, so have the trailing 12-month revenues (TTM)/Market Cap multiples. They move in synchrony with an R^2 of 0.79.

Just how comparable are these businesses?

For web3 startups to thrive, their marketing teams will need to spend marketing dollars to acquire users efficiently. Existing marketing technology won’t work for web3.

Web2 marketing employs the cookie as the primary identifier of a person, not a wallet. There’s no bridge between web2 & web3 data, yet. The behavioral patterns in web3 differ driven by anonymity, communication patterns on discord and telegram, and the consequences of using tokens as user acquisition, as governance votes, and currency.