Product-Led Sales (PLS) AMA: Pete Prowitt

Alexa, CEO of Pocus, hosts Product-Led Sales (PLS) AMAs with PLS experts to share best practices, frameworks, and insights on this emerging category. These AMAs are an opportunity to ask PLS leaders any question - ranging from hiring to sales compensation to tech stack - in a low-key, casual environment.

The PLS AMAs are for members of the Product-Led Sales community, the go-to-place to learn, discuss, and connect with GTM leaders at product-led companies. The goal of the community is to bring together the most thoughtful and innovative GTM leaders to build the next generation of sales together.

Interested in joining? Request an invite here.

Introducing Pete

Pete is currently VP of Revenue at Rewatch, a video hub that lets you securely save, manage, and search all your video content. Prior to joining Rewatch, Pete was the first sales hire at Loom, where he grew the business from one to seven million in ARR. He built out the entire sales and success engine at the company. 

Before Loom, Pete held a variety of sales roles both as an IC and manager at companies like Intercom, Quip and Box. Before his career in sales, Pete was actually a basketball player by trade, playing in college and internationally. His path to sales was not linear from playing basketball - he had a few pit stops in investment banking and speech writing, before discovering his passion for software sales.

In this AMA recap, we’ll dive into our favorite topics from this community conversation: 

• Challenges and opportunities when you’re the first sales hire at a PLG company 
• Transitioning from sales IC to manager
• Pete’s experiences building sales teams at Loom, Intercom, Box, and Quip

So, you’re the first sales hire at a PLG company…

There is a tendency in sales and really in any function to want to take existing playbooks you’ve used at previous companies and try to “run” them again when you land a new role. 

Pete admits he tried to do this when he became the second sales hire at Quip. At the time, Quip was a 20 person company building a collaborative document platform. Pete was joining Quip from Box, a document management company, so naturally he assumed that his existing playbook might be easily translatable. 

“I took after my first three and a half years, four years at Box, what I thought was a great sales playbook, it was kind of the old Aaron Ross Predictable Revenue sales playbook. I went to Quip as the second sales employee, and nothing worked. It was a completely different sale.” 

His advice for others becoming the first or second hire at a PLG company? Don’t try and simply copy and paste what you may know from the enterprise sales world. It won’t work. 

Find the right tool for the right job 

Instead of trying to fit a square peg in a round hole, try and find the right tool for the right job. After leaving Quip, Pete’s next sales adventure was at Intercom where he spent 5 years. This became his mantra “the right tool for the right job.”

In practice, what this meant for sales was to recognize what levers to pull depending on the size of the customer, where they were in their PLG journey, and just how impactful a sales touchpoint would be to their conversion. 

“For SMB customers, let's make sure that they're having an easy enough in-product experience to self-serve effectively. If we [the sales team] need to help them, let’s leverage a sales assist role or over index on success/support and do that early. There might be a little bit of a trade off on efficiency, but we’ll win on brand sentiment.”

So you’ve hired your first Head of Sales…

Now put yourself in the shoes of a PLG CEO who is hiring their first Head of Sales, how do you set them up for success so they don’t just run after the “copy/paste” playbook.

Planning the first 90 days

First you need to decide what you want your hire to do most urgently. It’s best to actually agree on these needs in the interview process so you can be aligned from the start. 

What do you need that first hire to do? Is it building top of funnel lead? Is it converting freemium users? Do you have product-market fit and need someone to scale it? Pete suggests having a candid conversation between the CEO and the potential head of sales hire. 

As a potential hire you should be really honest about where you spike and how far you can take them. Be open about what stage of company you are comfortable with…

“I think it's important to have a candid conversation between that hire and the CEO, about how far that hire can take the company. For example, the sales hire might say that they have the background scaling companies from $10 or $20 million in ARR, but really heavy outbound sales is not their skillset, so when we reach that point maybe it will be a good time to layer in another leader.”

Pete advises sellers to reflect and be very clear on where they “spike” or have the most skills before having this conversation. 

Transitioning from IC to sales manager

Your first manager role might be a terrifying move. 

At least it was in Pete’s case. 

The primary reason? When you are a first time manager, it is easy to fall into thinking that you need to be a superstar rep who has the answers to everything. 

At all costs, you want to avoid this. Thinking you need to know everything will lead to micromanaging your team and inadvertently burning everyone out. 

Here are some quick tips from Pete to keep in mind when moving from IC to manager:

• It’s ok not to know things. 
• You have to let your reps learn through failure, unless something is too important to let someone fail
  

As a first time manager, metrics can be really helpful to get your team aligned and focused. Pete shared a story of one of the first teams he led. 

“My first team was a bit experimental. I had six reps and we had a goal to prove a 3.5x return on investment (ROI) on a specific subset of the business that was currently underserved. We had a finance team that didn’t believe in the need for this sales team, so I was determined to prove this out. Over a six month period we managed to actually prove a 5.5x ROI.”

Finding the right hires for PLG

As a first time manager, one of the most important skills is your ability to staff a team. So when you are hiring sales people at PLG companies, what should you look for in a good candidate?

Pete’s take is to opt for the “missionary” persona versus the mercenary. 

Optimizing for the missionary persona means you are hiring someone who skews toward evangelism and building demand as opposed to someone who is optimizing for closing deals and taking names. 

Some other key attributes, Pete suggests looking for:

• Focused on value for users (not just revenue against a compensation plan). For PLG, it’s important to hire salespeople who understand the value of the product and understand that deepening engagement with the product is a prerequisite to making a sale. This means not just optimizing for maximum revenue, but really considering what the customer wants/needs in the same way a customer success rep might. ‍
• True partner to product and marketing. Your first sales hire will also need to act as a conduit for your product team, relaying product feedback and being very tightly aligned with design, engineering, as well as marketing. 
• Growth oriented and understand unit economics of the business. Finding someone who understands the importance of PLG and how the business grows will be important. You need to have someone who is able to look at unit economics early and understand what's working and what's not. If you have someone who only has experience building direct sales teams they're going to probably index more towards the traditional enterprise sale, which may hurt other parts of the growth model (like SMB and Mid-Market).
  

For Pete, a bonus skill he’s biased towards is finding someone who is organized and can wear the project management hat. This is not a necessity, but a nice to have. 

Navigating the lines between self-serve and sales at Intercom

Having started sales teams at several PLG companies, Pete has experience balancing the self-serve channels that helped create the initial revenue engine driven by sales. 

How do you balance self-serve and sales without making enemies? 

• Do what is best for the customer. Yes, you want to win logos, but you also want to create positive customer experiences and brand sentiment. 
• Break down any dogma that might exist. Showing progress was the easiest way to do this for Pete’s team. Some of the biggest early customers grew at 1.7x rate and were 120% more likely to renew when they had a sales interaction. 
• Set organizational goals and shared KPIs. Pete advocates for the CRO model where you can have shared metrics and revenue goals across sales, marketing, and growth teams. 

If you fail to get alignment at the organization level, you run the risk of cannibalization between the two channels. 

Get sales at the table for important decisions

One important learning for Pete was that sales needed a seat at the table for important GTM conversations. In particular pricing and packaging discussions. At Intercom in particular, the product was so successful that there was initial resistance to the idea of sales, so it took a while to get a seat at the table. 

What helped? 

Creating a framework for providing pricing feedback with the team on a bi-monthly basis. Instead of random bursts of feedback or sharing anecdotal evidence in a Slack message, having a bi-monthly sync helped establish a relationship between the teams.

In those bi-weekly meetings, the sales team would share:

• What deals were being blocked because of pricing
• Deals lost as a result of pricing
  

Going from zero to 100 with sales at Loom

It’s no secret that products like Loom experienced a massive growth spike due to COVID and work from home. During Pete’s tenure, sign ups for Loom grew 20x over the course of a month, and the business accelerated faster than expected. 

When Pete joined the Loom, they were at the beginning of a six month beta of the business/enterprise version of the product.

A key learning for him during that time was that they were building for the enterprise, but lacked a shared definition of what "enterprise" was and wasn't at the outset.

While the business was surging, there was still an opportunity to align on what "enterprise" meant, how that impacted product, pricing, and roadmap decisions, and how to target customers in a more focused manner as the enterprise motion scaled. 

Here’s how Pete went about getting alignment on who to target for the enterprise motion:

Step #1 - Identify the ICP (does “enterprise” mean a Zendesk at 4k employees or IBM at 515k employees?)

Step #2 - Identify the buying committee at that ICP - economic buyer vs. influencer

Step #3 - Identify the ideal users/product champions

Just because a PLG company has great free usage and loyal users, you need to ensure clear alignment around these definitions to make sure the success of user growth translates into revenue growth. 

Key Takeaways

1. Sales in PLG is not a copy and paste job. You can’t take playbooks from one PLG company to the next and hope they work. Being a successful PLG seller is understanding the product, how users get value, and how sales can help in that journey. 
2. Making the move from sales IC to manager is not easy. Avoid the temptation to be a “superstar” who never fails. Embrace failure yourself and help your team do the same. 
3. Balance sales and self-serve channels by focusing on whatever is best for the customer. Create alignment through shared metrics to avoid cannibalization between these two channels.