#321 The Art of SaaS Growth: Steve Tafaro's Insights on Nurturing Startups and Scaleups

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Mehmet: Hello and welcome back to a new episode of the CTO Show with Mehmet. Today I'm very pleased joining me, Steve Tafaro. Steve, thank you very much for joining me today on this episode. The way I love to do it is I keep it to my guests to introduce [00:01:00] themselves. So tell us a little bit more about you and, you know, Let's also put the stage of what we're going to be discussing today with you.

Mehmet: So the floor is yours, Steve. 

Steve: Uh, thank you, Mehmet. And it's a pleasure to be with you and your guests this morning. Um, I guess my background is going to be, uh, essential here to add value to your conversation. I, um, I've had 45 years of business experience. I'm 81 years old, believe it or not. And I feel like a, I'm 25.

Steve: I started as a teacher and football coach, believe it or not, for 10 years. And then I left teaching to go into business in the early seventies. And was very fortunate enough to be hired by IBM. Um, their training was exceptional. Uh, so going from teaching to technology at that point was the training was invaluable.

Steve: So I had a good career with IBM. I, uh, also spent time as head of mark, head of sales and [00:02:00] marketing for a software company back in the mid seventies call, which was founded by X IBM executives call company was called software plus. And many people had difficulty spelling the word software in those days.

Steve: Uh, and then after that, I, I was the head of retail industry marketing with Oracle. Um, I left, uh, I started my own business to found associates in 1990 and from 19 for 20 years, I was hired as an interim president and executive, uh, with 11 companies to essentially grow sales. And, and, and shareholder value.

Steve: These companies needed, uh, needed to grow. And, and, and that's what I wasn't a turnaround or anything. I was brought in to lead the, the growth of the company. So I had tremendous experience, uh, and they consisted of companies like Bell Atlantic software systems, [00:03:00] uh, company called invest trend, which was the leading, uh, portfolio management partnership accounting system in those days.

Steve: Uh, I even did work with the. Brands and so forth. So I had a, a, a diverse, uh, experience experiences, if you will. But at the end of the day, it was all about growth. Um, in from 2013 to 2021, I chaired a CEO peer advisory board, uh, in conjunction with Vistage International, which is the largest CEO. Uh, um, entity, um, in the world.

Steve: And, and I had a, uh, group of CEOs, 20 CEOs that were on my board. And, you know, we talked about leadership and how they're going, how they would grow and develop their business today. I, uh, I, I write, I'm an author of speaker and I spend my time doing very high level, um, uh, advisory [00:04:00] work with, with CEOs primarily in the SaaS.

Steve: Entity SaaS business. So that's, that's me. 

Mehmet: Great. Thank you very much, Steve. And you know, wow. What a great energy. And, uh, yeah, you, you, you're young, Steve. 

Steve: I'm very fortunate. Yeah, 

Mehmet: of course. Of course. And we, we always, I say, you know, we, and personally I'm, I was very blessed to have also like veterans like yourself, Steve, with me on the show.

Mehmet: And, you know, the benefit of, of that is. You know, we need to pass this wisdom and knowledge that you have gathered over all these years to the new generation. And this is part of, you know, what is this show all about. So, saying that, what, the first thing I want to ask you, Steve, because, you know, you've seen it all, especially because you had the chance to work with, The big giants like IBM and Oracle and others, um, and we [00:05:00] touched a little bit on the SaaS.

Mehmet: So let me start from, you know, the, and you talked about growth. So how things you, you, from your, from your perspective, how things have shifted when it comes to growing a business from the old days when people were You know, just selling hardware and then later, of course, software, but which was like a little bit kind of commoditized, I would say, to this new era off of the software as a service and SaaSs.

Mehmet: So how the strategies. Started to get differentiated how You know The persona of the buyers also have differentiated between back in the days and today 

Steve: Well, that's a great question and and it has a lot of implications to it So i'll just get up a thousand feet and and say that sure in the old days Software was sold like any other product, right?

Steve: I mean you would buy [00:06:00] it. I typically amortize it over You Let's say a five year period, you'd install it on your computers. So the vendor sold the software, and the obligation of the vendor at that point was to maintain it. And so, you know, the relationship with the customer was, was somewhat casual. And, and, and the companies had to, every month, had to sell new, uh, new deals and, and, and grow.

Steve: Today, us cloud based SaaS companies deliver their solutions in the form of renewable annual subscriptions. And that is a game changer. So regardless of the total contract value of a license agreement, revenues are recognized month to month. So let's say you sell a three year license, In a SaaS for a SaaS solution of worth 72, 000, uh, with a monthly fee of 2, 000.

Steve: Um, the [00:07:00] amount that is booked is 72. Uh, so bookings are forward looking metric, but the amount of revenue that can be recognized is only 2, 000 per month. This presents. Some problems for early stage companies and some and great opportunities. So the problems are, since revenue is recognized month to month, early stage SaaS companies require more upfront capital to develop the network and so forth.

Steve: And they're forced to underwrite the delay in payment, Um, as they build and operate their network. However, so, so the path to profitability is a little longer. However, uh, SaaS businesses are highly predictable. The bookings number is a great number for investors to see, uh, you know, the future value of the company.

Steve: They're, and they're highly scalable. That's great advice. That's really helpful. Thanks, everyone. And growth [00:08:00] is organic. So when you look at that and those things you say to yourself, okay, what do we need to do to execute? flawlessly in a SaaS environment. And I think you need to do three things. You need to continue to sell new business.

Steve: So you need a new account sales organization, but more important, you need to be very customer centric and build your relationship with the customer. The customer has to be thought of as a customer for life. That is a major difference. You need to have an account management group that works very closely with existing customers.

Steve: Uh, and facilitates problem solving and, and, and growth opportunities, which is different from new account selling totally different, uh, capabilities and, and thought process, and you need to be totally integrated with marketing. So there's an [00:09:00] integration of marketing, new account selling and account management that has to be totally integrated.

Steve: The reason is in order to have a customer for life. They have to get value from your system. They also have to have to see your company as, um, a company that will be around for a long period of time that you are our leader in the industry. Marketing does that. Uh, so I think that is critical as you, uh, establish a very customer centric, um, group of, of entities.

Steve: And the other thing I'll say it. Everything has to be based on value based selling. And the reason I say that is, and I'll stop in a minute here, is that one of the things that have changed is the Internet. Uh, you know, today, you know, people look at the Internet as a selling medium. I look at as a, as a buying medium.

Steve: Because [00:10:00] 60 percent 57 to 60 percent of client of customers, potential customers do not engage a sales team early on. They only engage when they're ready to start making a decision. So a lot of the information they're getting is through the Internet through marketing. And so when a salesperson arrives.

Steve: They're not looking to know more about your, what you do, your products. They're looking to see how you can add value to their business. So built into the sales process and the account management process has to be. Uh, value based selling and that's, uh, essentially the differences that, that, that, that I would say, uh, years that has happened.

Mehmet: Steve, like you just touched on many things that I already, you know, plan to ask you about and you cover it, but I want to go one by one and this is very beneficial [00:11:00] for both like established organization, I would say today, because, you know, for someone Um who've seen the evolution of how, uh, the sale organization in a company can, can be structured and how you can, you know, do the growth.

Mehmet: And you touch base on, you know, the difference between, you know, keep, keep acquiring new customers and at the same time, avoid the churn from existing ones. So, because now we have different metrics in, in the game. And you mentioned something about the marketing. I want to start first. You know, from, uh, the model itself, Steve, like, and maybe it's kind of a controversial question.

Mehmet: I know that people sometimes they agree with me or they disagree with me, but I still ask this question, Steve, till, till today. And I'm asking this question because Sometimes I talk to customers as well. I was, I was in the field sales myself also for, for, for some time. I'm still, [00:12:00] uh, I'm still in today as well in, in some shape.

Mehmet: Um, now from business perspective, uh, SaaS is of course very predictable because as you mentioned, we know how much we're going to have, whether you measure this in MRR, Or ARR, whatever, you know, way you want to do it. But from customer perspective, sometimes still we hear about this friction and, you know, they feel like, although the model.

Mehmet: Was presented to have something which we call it OPEX operations, uh, Cost versus capex, which is capital cost. Do you think this debate is settled? Do you think that okay the people who are still Uh pushing back on having a SaaSs Licensing model are outdated kind of, or there is still some space to have a mix between, you [00:13:00] know, a SaaS offering.

Mehmet: And as we used to call it back in days, perpetual license plus support, because you know, some of the customers that I spoke with, you know, and it was justifying because, you know, I work with companies that they flipped the switch between having perpetual license and going to a, a subscription model. And they said, Hey.

Mehmet: I understand where you're coming from, but I was already paying you on yearly basis my, my support contract. So why I need to pay the license on, on a contract base as well. Do you think that this will fade after a while? Do you think that we're going to have still this mix between the two wars? How, how do you envision the future to be?

Steve: I think for, um, If you are selling solutions that are complex, um, in other words, a number of people in an organization have to agree. A number of buyers have to agree that, you know, we want this solution and, uh, it, it, it [00:14:00] deals more with a lot of complexity of the business. I think a SaaSs. Model is, um, will win out over time.

Steve: I mean, I could make a look at, I could say, um, we have a SaaS model. However, you can, uh, purchase the system, um, and, uh, we'll still deliver it. through, uh, you know, you know, a software as a service type operation. You're going to purchase it for, you know, maybe this is a going back to that seven, you know, instead of paying 72, 000 for a three year license, the system will cost you 500, 000.

Steve: You can buy it and we're going to service it on a SaaS basis. Yeah, I mean, I, I can make that argument and maybe good for some people. I don't know. I think there's a difference between how you pay for it and how you finance it versus how it's delivered. And I think the delivery with the internet today and with, um, you know, operating a network and [00:15:00] so forth, if a company doesn't have to do that, a SaaS environment is better, in my opinion.

Steve: I don't know if I've answered your question, but you did. You 

Mehmet: did. You did perfectly. You did. But 

Steve: I think a lot of people confuse it. I mean, if you said to me, you know what? I would rather purchase the software. Can I still purchase it and have you host it? I'd say sure. Um, you know, our normal. But here's the here's what we can do.

Steve: Um, I just think when you look at the break even point between the, Software that would be purchased and that that would be, um, a subscription based. There's about seven or eight years. Okay. So maybe seven years of subscriptions. Would equal the purchase price. I'm generalizing here. So SaaS companies have to have a customer, um, for life.

Steve: I mean, it is, they can't look at it as, uh, [00:16:00] they have to have an organization that is customer centric and, and every part of their culture has to be such that we, we look at this customer for life and we have to continuously add value. I'll tell you, and, and the profitability in a SaaS business is huge. I mean, when you, if you think, let's assume you, you sell a million dollars of, um, SaaS licenses, uh, bookings in a year.

Steve: And you spend a million two to sell it. You're saying, well, gee, that, and plus some money to operate the network. That's not a good model, but the following year, those customers, you don't have that million dollar million, 2 cost anymore. So the margins, um, uh, grow. In year two and three tremendously. And if you can keep that customer for another three years or more, that is a highly, a highly profitable business.

Steve: [00:17:00] So I think the profit opportunities would also win out over a traditional. You know, 

Mehmet: absolutely. Absolutely. And to your point, Steve, I think, you know, some of the confusion that happens sometime is, you know, because when we say SaaS, and I know even in the US, even in some parts in Europe, and of course, here in the region where I'm living in the Middle East, you know, some people, they don't want to send their data to the cloud.

Mehmet: And they assume that, you know, you know, When I say a SaaS model subscription model, that means cloud, which is outside my data center. But yeah, you're right. I've seen a lot of vendors that say, Hey, look, we can have the same software hosted in your data center, but it's going to be a subscript, still a subscription 

Steve: model.

Mehmet: Yeah, of course. Like, uh, but, but, but to be honest, like it's, it's a model that proved itself over the years. I think so. Yeah. And you know, people, when, when. I tell them, guys, you're using SaaS for a long time. I said, how? He [00:18:00] said, yeah, because when you started using the email service provided by Google and Microsoft, like this is SaaS, right?

Mehmet: They said, Oh yeah. So it's not like something, something completely, of course, but the charging from B2B perspective is different. Now you've talked, uh, Steve about the value selling, right? So now, honestly, I think people confuse. You know, value selling to just, you know, the price point perspective, while I believe there's a lot of other factors that can be blended within the value selling itself.

Mehmet: Now I need to hear from, from the expert, which is you, Steve, like a little bit more about value selling and how in SaaS specifically, the value selling becomes key and how companies, they can How do you put the appropriate, I would say, um, metrics to, to make sure that, yes, they are selling on the value without [00:19:00] taking into consideration the price only?

Steve: Yeah, I, I, let me, yes, I mean, I, I think value based selling to me is this, a sale can only occur, in my opinion, if buyers are either looking for a solution to a stated need or willing to discuss that a problem exists. And, and, and I think that that is a principle built into the selling system we have, you, they have to be able to discuss that there's a discrepancy between, uh, where they are today and where they want to be.

Steve: Okay. Uh, and I think, uh, value based selling is the ability to close that gap. So if I can show you our capability of closing that gap between where you are today and where you need to be, and we can do that, and I ask you the question, what would it mean to your organization if we were able to do that?

Steve: You're articulating value. So, so how do you do [00:20:00] that both in a new account setting and in a account management setting? And, um, it's a difficult question because Interest can come from any levels of an organization. Uh, it could be passed down from executives to managers and people. When, when you engage somebody from a new account standpoint, you're typically engaging at a user manager level, and they will always tell you, we know what we want, uh, we know what we think, we know what we want, uh, and that's a general question, but many times they do not see the periphery of what they can have.

Steve: So what. We've developed is something called the power index and the power index is a, um, is an index, um, that says, here's everything our, our solution can deliver for you now, if it's if we're selling [00:21:00] into a vertical, um, investment banking or private equity, the value, the power index would have various categories.

Steve: Here's everything we can do in deal origination. Here's everything we can do in deal management. Here's everything the system will give you in fundraising. If you're, if you're selling a horizontal solution, it's more about operations, administration. Process integration, configuration, and those kinds of things.

Steve: But we show all of the things you can receive. And then we, we, we, we say this, Mehmet, we have a two step sales process. First thing I'm going to do is, um, is, um, show you an overview of our system just for you to get the look and feel. The second thing is I really need to understand how I can add value to your organization.

Steve: And to do that, we have a tool called the power index. And I'm going to show you if you're, um, [00:22:00] responsible for deal origination, everything we can do for you. Tell me where you're under power. That's step number one. Tell me where you're under power. And once I understand that step two is once we understand where you're under powered, we'll show you how our system can deal with those issues.

Steve: And together, I'm going to ask you to put a value on that. What would it mean to your organization if you're able to do it? And then we say, if I can show you value and you can articulate it, would you introduce me to the other members of the buying team? And by the way, besides yourself, who are they? You know, and that's, that's what we do.

Steve: But value is closing the gap between in, between where you, where you are today and where you want to be. In an existing account, it's cross selling and upselling and going to other people within the organization and having that [00:23:00] same discussion, uh, introduced by the people who you're currently working with.

Steve: So it's a consistent process. Um, effort in looking at how you can add value to a company. Um, and so that is value to me and, and, and this forces, this enables a buyer to buy versus you to sell. I mean, you're not selling anymore. Once you do that power index, the buyer is actually buying. Yeah, we really do need this.

Steve: I didn't know you did that. Boy, that's interesting. Can you tell me more about it? Okay. Well, if we did that. What would it mean to you? You know, and, and you have to substantiate that over time on, and it has to be ongoing. And I think if you do that, you, you have the ability to, um, have a customer for life, they have to understand what they're getting from the system.

Steve: Many, many SaaS solutions today are building AI capabilities inside and so forth. And that is something that you consistently have to [00:24:00] do. But, you know, showing that to existing clients and helping them through that process is adding value. Um, so I, I, I hope I think I answered. I hope I answered your question.

Steve: You 

Mehmet: did. You did. Indeed, Steve. Um, of course, one of the other points you mentioned, which I think they are very important that today. You gave like around 50 60 percent of the buyers you said they go out and try to find solution Um now here that means there is a big Uh, I would say responsibility on the marketing team Uh in making sure that these buyers are finding about our solution as a SaaS company.

Steve: Right. 

Mehmet: Uh, now how much in your opinion, you know, if I want to divide the responsibility between marketing, SDRs or inside sales, Hunters, as we call them in sales terminology, [00:25:00] the people who goes after new accounts. So how do you think the best structure would be to have, you know, a healthy pipeline? And, you know, for, for people who are listening, um, to, to us and you are startup founder, you're going to think about this, about building a healthy power plant.

Mehmet: This will help you also when you go after investments. So how, how do you organize this? In today's world, Steve, like how do you, you divide the responsibility between these teams? 

Steve: Well, I think first of all, they have to be integrated, um, and, and talk to each other all the time. I think marketing has takes the lead, uh, in my opinion, it today, it's much more about marketing than selling.

Steve: Marketing is out there with content. And, and it's showing the, uh, perspective buyers that you're a leader, that you understand the problems that they have. You're not just talking about your products or services. It's about [00:26:00] how you solve problems. 86 percent of decisions, according to HubSpot are made from, uh, by.

Steve: Referencing, uh, like customers or customers that, you know, right. And, and, and so you have to constantly make, make that, um, reference and, and be present all the time. So I think marketing is key. Now, once you look at interest, interest, uh, you know, people. you know, uh, open up an email or they communicate with you.

Steve: I think you then have to have a, um, a pre sales organization. We'll call it that to, um, engage. The potential buyer. This is different than selling. So far, the salesperson hasn't entered into the picture. And I think as you engage them, uh, you have to distinguish [00:27:00] those that you can nurture. So, I think out of the vast audience out there, there's a number of people as you contact them and have discussions with them and the power index is a great way to do it.

Steve: Um, you then begin to develop a nurture list. These are people that have communicated with you that have expressed an interest that have, that you've talked to, but are maybe not ready to do anything, but you just nurture them differently than your normal, you know, marketing inbound outbound marketing.

Steve: It's more, you're talking to them and you're developing a relationship. And at some point in time, you're introducing the sales, the sales team. So I think that is. Extremely important to develop that, um, pre sales organization that reports to marketing, but it's the link between sales and marketing. Uh, and, and, and you just can't have, I don't believe salespeople can make cold calls.

Steve: Nobody wants a cold call [00:28:00] today, but I do think marketing can drive interest and interest can be evaluated. And once interest is shown, you need to engage. And I think you need to engage emotionally. You know, Simon Sinek. Uh, on his podcast, um, you know, uh, why the power of why, uh, it does a great job in distinguishing, um, how decisions are made, um, from, you know, the parts of the brain, I mean, the neocortex of the brain, I'm quoting him now is a way that people can get a lot of information, you know, and, and, and, but, but they're not going to make decisions based on that.

Steve: I think in your marketing, in your outreach, you have to show emotion. You have to show. Why you're doing it. You have to, um, get the client to have used the other part of the brain, the Olympic brain L. A. M. B. I. C. to say, boy, these are people that I want to I want to do something with. They know what they're talking about.

Steve: I just like [00:29:00] that. I think that is very important because that drives decisions. And by the way, they've done business with customers that are in my market. They're in my vertical, blah, blah, blah. And, and, um, so I think that refining that is the key. I mean, selling, I can, we have a system that is, um, five steps.

Steve: Each phase has certain things that, that a salesperson has to do, but that's the easy part. Uh, it's getting the attention of the prospect and getting in there to, to do that. Initially, that's the hard part today and marketing Trump sales in my mind. 

Mehmet: Uh, I can't agree more with you, Steve. And this is, you know, something that I'm big believer, uh, also as well.

Mehmet: I come from technical background, but, uh, Once I shifted a little bit to work with companies that are in the tech space as first pre sales, then in sales, I've seen the power of marketing. [00:30:00] Um, because, you know, you need to have demand generation. And then as you mentioned, you start to nurture, you know, Cold leads, you convert them to hot leads, then you involve, you know, the field team to do demos and all this.

Mehmet: Now, but recently we started to see something, uh, you know, again, I'm, I'm, I'm, I'm not judging, I'm not biased, but I, I like to ask you, Steve, this question. So we started to see a trend, especially with SaaS companies to use like specific sales Processes and methodologies to follow and you see the leaders that you know, keep shifting from one company to another taking the same processes from one company to the other and they think that what worked in company X will work in company Y.

Mehmet: Do you think this is a right approach to do it? Or still there is a personalization factor That would, [00:31:00] you know, affect the sales process and not only the sales process, like, I mean, the whole thing from quality, uh, you know, qualifying, you know, if there's a, an opportunity or not, and then later on, you know, taking all this.

Mehmet: So we know like there are a lot of. Uh, methodologies out there for, for sales, uh, uh, you know, processes. But do you think like just copy pasting in every single company is something healthy on the long run, or we need to, to add this, you know, personalization factor to make sure that we are succeeding and we're not falling into the trap that, Hey, company exited this let's, let's implement it here.

Steve: I think, uh, I might ask a very, very good question. I, the only, I always come from a, a, um, My experience is always based on, um, complex selling. And I think that's the difference. If, if, if you are selling something that, um, is a complex sale and I define that by saying there's multiple buyers that have to get involved.[00:32:00] 

Steve: In order to make the decision. So there's users, there's the, you know, technical folks, there's a finance person. Usually there's a team. I don't, I think you have to have a sales person in that process. And that person has to be skilled at, um, engaging at one point in the organization, wherever it is, and showing value there, and then asking the right questions to get to the other, other buyers in the organization.

Steve: I think that is critical because even those 57 60 percent can be done, you know, without the sales at some point for a complex sale, you need somebody to lead it through the process now. Now, this is interesting. You say that because what we do is we chart. So we have a five step process. It starts with qualify.

Steve: Verif, then we go to verify , then we go to a solution, and then, and then, um, and, and, and we go to [00:33:00] positioning, then solution and, and then close. What we do is we, and it is a complex sale. Now, a complex sale can take five to six months to close, but we look at every one of those phases and we measure the length of the phase.

Steve: How long it's taken to do it and the win rate based on that phase. I don't think of it. So if you have a six month sales process, um, and you're in verify, which is the second phase, the goal and verify is to eliminate no decision. If I'm going to, if I'm going to work with you, I'm going to make sure that you're going to make a decision.

Steve: We could win or we can lose, but I don't want to, I don't want to go with four or five months and have you say, well, we're not going to do anything. Okay. So that is the purpose of verify. And there's a number of things you need to do in that phase. You have to confirm their interest, their reason for buying.

Steve: You have to, um, Conduct the demo. You have to look at the power index. You have to agree that if I show value, we can. You can introduce me to other people. You have to [00:34:00] understand who the other buyers are, and then you have to repeat that process with each one of those. So as you go through verification to us is a 30 day process and we get a 25 percent chance of winning after we complete it.

Steve: Okay, we measure that and then you go to positioning once we're finished with positioning to higher levels, 50 percent win rate and, and you know, it's a 45 day process. I can tell you based on those metrics, the five phases, what your sales obligation is, what the average cost of a deal is. If I know the win rate and the time, the closure, I can tell you exactly what you need in your pipeline at any time to make your numbers.

Steve: We have, you know, something called a productivity index that does that. So what does all that mean? It means that in a complex sale, you have to engage people that takes time. You got to measure that you're going to measure that [00:35:00] everybody's doing it correctly, um, and that you have a repeatable measurable process.

Steve: And, uh, and I believe that takes people. Um, something more simple that can be looked at, you know, I can check the boxes and, and, and you have a good reputation that's different, but that's not a complex sale. 

Mehmet: Absolutely. Now, so we touched base on how, especially, and we're talking purely on SaaS models, which can actually applied in others, but, you know, We talk about SaaS and you mentioned, uh, Steve, like, of course, we started how to, to get the attention of the buyers and then how to, you know, get inside the account.

Mehmet: And then you just gave very good metrics also to, to see how well we are doing in our sales process. Now, at the beginning, and at the very beginning, you mentioned something about, and this is, pretty much very common now in, in SaaS business, when you have to do this upsell and cross sell, and you need the, [00:36:00] some organization, they call them customer success team.

Mehmet: Some organizations, they call them the technical account managers team, nevertheless. So these are the guys who, their mission is to make sure that first customers get what they were promised to have. And second, try always to, You know, upsell and cross sell with these customers. So now here, how much is important?

Mehmet: First to have this customer centric culture within the SaaS organization. First to, to convert this to a, to a healthy relationship, I would say, and Also from your experience, because some people would maybe wonder, especially people who are doing SaaS business for the first time, Oh, should I hire one person for every account?

Mehmet: Like what is a good ratio also to have this proper customer success team? Uh down the road without of course breaking the bank I would say 

Steve: well, I'll say that um, they're two different [00:37:00] skills Um new account selling is a different skill set and involves a different personality than Account management.

Steve: Okay account management has both you have to you have to sell you have to have this desire to close business But you also have to be strategic and you and you have to be very adept at relationship building. So it's a different individual different thought process And I think that, um, You stop me here if I'm not answering your question, but I think, I don't think one person could wear two hats.

Steve: I think you need, you need people who are selling new accounts and you need, uh, an individual or two initially that is working with your customers as you start up, ultimately a good SaaS organization would be able to say if we did not sell another new account. This year, we can live profitably off our customer base.

Steve: And, and you [00:38:00] have to have a culture of perpetuity with the customer. So what does that mean when you first close business and you introduce the account management manager? You have to anticipate that you're going to be tested right from the beginning. A, the configuration is wrong. B, this is not what we expected or, or how do we do this better?

Steve: So you're going to be tested as an organization right at the beginning. If that account manager can help, can facilitate the solutions. To your issues in a positive way. That person has just earned your respect. If they start pointing fingers, they're not. So part of that is the anticipation and and you're really changing behavior here of people is is having a culture which says, Let's anticipate the fact that we're going to have some issues early on.

Steve: Let's work with you as to how we resolve those. [00:39:00] Let's get our whole organization ready to resolve those issues. So we get past that. And then once that happens, and you're in a position of where you've earned the customer's respect, then you have to look at, okay, you have to map the organization. Where are we, where are we today?

Steve: And where are the opportunities that we need to, uh, go to within the organization? Who are the people that can get us there? And how do I, um, interface with senior executives? What do senior executives want to hear? Okay? They don't want to hear about your product. Or, you know, we have this pricing special.

Steve: They want to continuously understand how you can add value to the organization. And you have to show that people, I can make a, people can conceptually understand. Sure. If you're selling me a legal system and you can, uh, and I'm only using it for contracts and I can buy your system [00:40:00] for other things. I get that.

Steve: I understand what that means, but how does, how does that affect the way data flows? How does data flow as a result of that? How do you make better decisions that have resulted that? What can I actually do? Yeah. To, you know, to make this thing work, you have to have people that are adept at doing that. And that is an account manager.

Steve: And, and, and, and I, I think that that is the most critical part of the business once you have a customer and folks are, have to be trained to do that and they have to be work hand in hand with your technical folks. Um, and they have to facilitate resolution. Almost as if they were the client. 

Mehmet: Absolutely.

Steve: So. 

Mehmet: Absolutely. And just, I want, because I'm a little biased, Steve, as well. Uh, part of this sales engineers, SEs, uh, play a major role in this, [00:41:00] uh, thing. Of course, I'm talking here about solutions that are a little bit, kind of, they need the solution architect or the solution engineer to be involved. I was one of, of these folks back in the day.

Mehmet: So I'm a little bit biased. But also take care of these guys. And I'm not saying this because I was an SE. I also shifted to an account executive role, but they played a major part of understanding. And I think, you know, this, uh, the, the, the, uh, the value index that you just mentioned at the beginning also, Steve.

Mehmet: So SEs are the ones. Who are on the ground with the technical people there who can actually grab this information for you So this is really something, uh, I would advise highly also to to Trust your se's trust also their uh, their their business acumen also as well So have 

Steve: capabilities where you empower the customer, you know, if, if they have an advocate on their side, who's willing [00:42:00] to learn, work with your folks to learn more about the solution, you know, recognize that, uh, in the form of something, you know, financial or whatever, because at the end of the day, you're going to need that group of that customer advocates to help you.

Steve: Okay, absolute biggest thing we have now is is a I and and everybody is struggling with a I presents a tremendous opportunity I think Because especially for SaaS businesses, because you know what, I, I, I facilitate some, um, boards, executive boards. And, um, I asked some of these folks what they're doing in AI, how do you look at AI today?

Steve: And one of them said something and it resonates with me. And after discussing it with the board, they all agreed. We want it. We want to use AI to take. The low cost work away from the high cost people. So what does that mean? It means that you need [00:43:00] to use artificial intelligence to do what a, you know, gather information, help, you know, position things that have better decisions can be made.

Steve: What does that mean in the SaaS business? It means adoption. If, if, if I'm, if, if I'm working with you and you are interested in artificial intelligence and how you can get a competitive advantage, you need to have every aspect of my system. You need to be, you need to have, you know, have data across the board.

Steve: So I have an opportunity then to, to, uh, upsell tremendously. If I can show you how to, how use artificial, if I have artificial intelligence built into the system and I can show you how to use it. I'm going to get better adoption because you're going to want to be competitive. And so that's a tremendous opportunity that I don't think a lot of people see today.

Steve: And, and, and I think if you play that well, again, your techno folks have to put it in, develop [00:44:00] it, especially relationship management, things like that are huge. 

Mehmet: Absolutely. Absolutely. Steve, as we almost come to an end, just tell me a little bit more about the upcoming book, uh, that I think it's supposed to be available in April or May.

Steve: Probably going to be available in May. It's called, uh, Winning at SaaS, and it's a playbook for CEOs and CROs. Of early stage SaaS companies. Okay. And really it's, it's, um, it talks about, um, you know, the, the, the economics of a SaaS business, it talks about, um, having a culture that is customer centric. It talks about how to build alignment within your organization, the importance of aligning, you Sales, marketing and account management.

Steve: It then gives you step by step. It's a playbook to say [00:45:00] here is it's based on something called it to from my to farrow growth accelerator system that I developed over the years and have refined. It's a selling system, but it's different for account management than sales. So it it takes you through every step of that system.

Steve: And it's a great playbook for someone who is, um, yeah. You know, some investor has put you in a position where you're running this business and it's, uh, it's, it's a book that it's a system that has been very, very successful, uh, in, in, in with clients that I have worked with. So, um, it's a resource and it's going to be out in, I think may, um.

Steve: My website will, uh, stevetofarrow. com will be live this month. We're blogging now, we're writing blogs, we're doing everything. So I'm, I've become quote unquote author. I now have a pipe and an Ascot and a jacket and [00:46:00] all this kind of stuff. I'm only kidding, but my, my whole goal is to give back, is to, is to, um, you know, give something of value to folks that are, are building, uh, Sales and marketing machine and hopefully, um, they'll come to me for speaking or to a high level advisory work or whatever.

Steve: And that's what I'm trying to do. 

Mehmet: Absolutely. And it's good you mentioned. So by the time I believe if for this, for this, by the time you're listening, I think the website will be up. So I'm going to put the link there. So, so I'm going to put the link in the show notes. Uh, and you can follow Steve also on, uh, on LinkedIn, I believe also as well.

Mehmet: So you can, you know, go and go and check, uh, when the book is out. And I believe this is a very valuable resource, Steve, because, and especially because I talked to a lot of first time founders who are looking at exactly to your point, who are looking for some funds, you know, and the first thing that [00:47:00] the investor is going to go and ask them, okay, what What's your plan?

Mehmet: How are you going to go to market? And from what you just described today on, on, on this episode, and you know, the discussion that we had, like it's the book would be, I would say kind of a roadmap. Yes. And I hope, I hope that founders will find, will find it beneficial, especially first time founders. I know like first time founders, probably they don't have.

Mehmet: majority of the time, um, you know, any background or any knowledge probably about sales and marketing, maybe they know a little bit here from here and there. This is very good resource, I would say. So Steve, really, I appreciate the time, uh, today that you gave to me, uh, this morning. evening for me so people know that we always have this time difference thing.

Mehmet: Any final thing you want to say before we close? 

Steve: I just want to thank you for the opportunity and it was a pleasure being on your podcast and any of your [00:48:00] listeners that, um, I'd be happy to talk with them. I'd be happy to, uh, you know, help them in any way. Um, you can get that information from the website.

Steve: We will in the book after each chapter, I have something called comments from the experts. And these are people that have used the system, uh, who are make their own comments in their own business. Um, and you know, that's something that we can bring to the table to I can I get plenty of folks that have used it successfully.

Steve: But anyway, thank you very much. I appreciate the time. Thank you. 

Mehmet: It was my pleasure, Steve. And this is really how I end my episode. So this is for the audience. If you just discovered this podcast by like, thank you for passing by. If you like it, please subscribe. We are available on all podcasting platforms and please also share it with your friends and colleagues.

Mehmet: I really appreciate that. And if you are one of the loyal followers who keep coming, sending me there, Suggestions, comments, and their recommendations. Thank you very much. Keep that coming. I really appreciate all the feedback that you [00:49:00] sent to me. I read every single message you sent, so keep that coming.

Mehmet: And thank you very much for tuning in. We'll be with you again in the next episode very soon. Thank you. Bye bye.