How to nail product market fit
Mike Wolber: I think one of the worst things you can do is assume that what worked at your last adventure is going to be the playbook for the next one. And I've definitely worked for or with VPs or CXOs that brought in a playbook mentality before listing to their team, their customers, their future customers, and failed flat. Versus the ones that came in humbly, listened to their team, sought feedback from the market, and then architected something that really worked.
Devin Reed: This is Reveal: The Revenue Intelligence Podcast, here to help go- to- market leaders do one thing, stop guessing.
Sheena Badani: If you're ready to unlock reality and reach your potential, then this show is for you. I'm Sheena Badani.
Devin Reed: And I'm Devin Reed, coming to you from the Gong Studios. To create a high performing go- to- market machine, you have to understand the wants and needs of your customer. From his time at Nike and now Rent Dynamics, chief revenue officer, Mike Wolber, has learned this lesson time and time again. While he used to unilaterally dictate the playbook, his words, not mine, he now takes a new, more impactful approach to leading his revenue teams to success. If you are ready to enable your revenue teams to work more efficiently and effectively, you'll find tremendous value in Mike's sage wisdom on daring greatly, going where your competitors won't and nailing product market fit. Before we jump into today's episode, I have a quick question for you. What are you doing on June 21st? I want to personally invite you to our upcoming Celebrate Virtual Conference happening on Tuesday, June 21st. You'll hear from revenue leaders at the world's fastest growing companies, including a fireside conversation with Forrester on how to scale and up level your organization, how to increase deal predictability and drive revenue via Gong Labs analysis of 10,000 sales opportunities hosted by yours truly. And you'll get a preview into major upcoming product releases from Gong. Register today and you'll be the first to know when we make the big announcement. The link to get your seat is in the show notes, or you can jump over to celebrate. gong. io. Now back to the show. Mike, welcome to Reveal. Thanks for hanging out with us.
Mike Wolber: Thanks a ton, man. I'm honored and super excited to be here.
Devin Reed: Let's dive into who you are before we dive into our topic today, which is how to win and dominate new verticals. So you're the CRO at Rent Dynamics. Can you give me the high level view of what are you working on as CRO and what is Rent Dynamics all about?
Mike Wolber: I'm chief revenue officer at Rent Dynamics. I am overseeing the entire customer choreography, which is what I call it. So sales, account management and marketing. And as a company, we're a real estate focused product. We are exclusively serving the multi- family sector. And we've got three core products that are truly impacting residents across their entire experience with multi- family or apartment communities across the entire country.
Devin Reed: Customer choreography. You smiled when you said that. I think you knew I was going to dive into that. I've never heard that in all my days. So tell me a little bit more about what that is and maybe why you call it that?
Mike Wolber: So kind of a Mike- ism is that I worked for Nike for the first five years out of my career, and I just fell in love with the power of branding. And jumping into vertical specific technology after that, I really just realized that if you want to bring people along in your career, the more that you can do to brand things and to anchor people in the success of programs, the more good you can do to raise the boat within your organizations. When I joined Rent Dynamics, I did a lot early in my listening tour and saw an opportunity to really brand the organization. So we call ourself team go- to- market, but we're all focused on making the customer choreography or experience from the first time they hear about us in marketing, to making that renewal really predictable in CX a great experience for everybody involved.
Devin Reed: I like that a lot. I like that a lot. As a past seller and a current marketer, that's hitting home for me. I could easily take a hard right turn and we could focus on that for this podcast, but I'll refrain, because throughout your career, you've always worked at vertical specific software companies. So I'm curious, can you give us a quick rundown, what are those verticals that you've served?
Mike Wolber: The umbrella industry that I've served for the last eight years since leaving Nike has been real estate. But really specifically within the real estate category, the three verticals I've been focused on have been multi- family, so think apartment communities, senior living, tons of different care levels within that, so independent assisted, and then self storage. So a very incredible business, even though it's really boxes with people's stuff in it. But those have been the three I've been focused on.
Devin Reed: Yeah. I got images of storage wars for the last one. I'm sure you've heard that joke before though.
Mike Wolber: Oh yeah.
Devin Reed: So what are the advantages of being a vertical solution? Why is that kind of your thing? Because I know you also host a podcast on that topic as well.
Mike Wolber: When you look at outside looking in, it's like, well, why don't you just use enterprise technology in these super niche or nuanced verticals, but I think that's really the why behind it. You start to jump into technicality, integration is different. Or the way that companies run their business when they're really, really focused, it's different. Or the people or the customer, it's just a little bit different. And I think that the TAM for Gong is certainly different than the TAM for the businesses I've been a part of, but the table stakes are still super high. And I think for me, being able to really, really nail both product market fit and go- to- market fit in these vertical specific solutions is hard, but once you get it right, you really have a massive opportunity.
Devin Reed: I might be getting ahead of myself, but I'm curious, because I'm imagining now competitive deals for you all. And so I'm thinking, what would companies be missing by not having a vertical specific solution? Does that give you a competitive edge, I imagine in certain deals?
Mike Wolber: Yeah, it does. Without getting into our product at all today, one of our core offerings is a CRM. So we have a CRM that onsite teams use to turn prospective residents into happy residents that live there. And one of the questions outside looking in that we get all the time was, well, why don't we just use Salesforce or HubSpot, enterprise tech? And the nuance within integration or the way that they're operating their businesses, it's just so different that someone a long time ago made a decision to go vertical specific. And now there's a huge category of real estate CRMs. It's almost like an onion, there are just so many different layers that kind of make certain tech just perform better when it's truly designed for that specific category, or in this case, vertical.
Devin Reed: So your team, so you're leading a team. How large is your kind of your go- to- market team or team GTM?
Mike Wolber: Last year, we scaled our business from 91 to 141 full- time employees while growing revenue by about 80% year over year. My org last year when I joined, we were 18. Now we're about 34 people across sales, account management and marketing. And constantly looking at the data to decide what the next head count needs to be across that whole team. But I've got three great leaders and they've got great teams within them. And I'm really, really proud about the team we're building
Devin Reed: As you're building that team, because you're vertical specific, are you looking for people who have that background in that specific vertical, or maybe people that have vertical specific background, but not that vertical?
Mike Wolber: Totally. So there's three different types of people I love to hire. As a leader, a huge hiring plus for me has been, if you're hungry, humble and smart, if I align to being a great coach, I can turn you into being a great part of our team. What I've seen is that an eclectic team wins. And so folks that come from within the same vertical, always helpful. They bring a book of business. If they've done a good job in the past, that usually means pipeline for them pretty quickly. If they've been part of a different vertical, pharmaceutical, eyewear, you can think of all sorts of different ones that are still quite big, they understand what it looks like to go deep versus going wide. And I think that's helpful. And I've also had a lot of success bringing people in from the enterprise, Microsoft, Oracle. And so, I think an eclectic group then understands enterprise sales methodologies and things like that. A little bit of everything is really feeding into the playbook that I'm trying to assemble.
Devin Reed: Diversity of expertise in action there.
Mike Wolber: For sure. And I know for you, you talk about it a lot in LinkedIn, but even diversity and background. Some of the best people that have sold for me had degrees in things that were so far from even the realm of business. And I think there's a lot of good things that happen when you get an eclectic group together, especially in customer facing positions.
Devin Reed: I've got an English degree and I went to school to be a teacher. So look at me now, you never know. So for the sales motion, so how does a vertical specific sales motion differ from the enterprise motion?
Mike Wolber: It's an awesome question. And it's one of those things that, I think when you jump in to a sales motion, it's really important to listen before you act, especially when you're defining a motion for that respective vertical, because I've hired and worked with a lot of leaders that came in from the enterprise, big, big, big technologies and the billions of dollars of cap rates. And they assumed that the thing they did would be successful here. And here's an example of a nuance in the real estate space that blows a lot of people's minds. Conferences still drive a tremendous amount of pipeline in real estate, because a lot of transactions for properties when they're selling these big multi- family complexes, they're still revolving that around an in person cadence of conferences. So for us, that's one of the most important pieces of our sale, even though to a lot of people in the enterprise, that's archaic, because the pandemic kicked in, we all went virtual and we've done just fine. Those are the kinds of things really worth studying, listening to make sure that what you architect matches with where your customers are truly spending their time
Devin Reed: Makes a lot of sense. And I've heard that before too. And I don't think, it's not a knock on folks with enterprise background. I think it's just a mindset of, well, what worked for me in this realm worked so well, I'm sure it applies over here. We've heard it other folks on this show, one of the biggest mistakes you can make of launching into a new geography, especially if you're in the states moving to Europe or Mia, is assuming the sales process will be about the same and the marketing should land about the same. It's like, no, you got to be careful with some of those assumptions.
Mike Wolber: I think whether you're just checking your ego before stepping in a new position or definitely before coming from a bigger, wider motion in the enterprise to a vertical specific one, I think one of the worst things you can do is assume that what worked at your last adventure is going to be the playbook for the next one. And I've definitely worked for or with VPs or CXOs that brought in a playbook mentality before listing to their team, their customers, their future customers, and fail flat, versus the ones that came in, humbly listened to their team, sought feedback from the market and then architected something that really worked. And I think there's also a balance there, because especially in leadership, you want to prove yourself pretty quick. That is part of the role.
Devin Reed: Yeah. You want that quick win. Everybody does. I've had a few execs join Gong. I like when I've heard a couple of times, I'm on a listening tour right now. I'm not here to make any decisions or assumptions. I'm here in the intake process, which seems to serve them well, because like you said, you get more information. Now you can take past experience and current scenario and make even better choices.
Mike Wolber: It's one of the easiest ways to get wins while also bringing people along, which I think especially in leadership is super important when you're making changes, new technology. I implemented three massive technologies in our team last year. And if I'd done that rogue, could have run a huge risk on not getting adoption and buy- in from my team, which would've meant no insight for me as the executive over revenue, versus listening and understanding where the pain, where the problem was. And a lot of it was in tech. And then what an opportunity to go get a win because I listened to the team first. So I think we can all learn from going a little bit slow early so we can really accelerate and go faster later on.
Devin Reed: Let's shift a little bit here, because you're vertical specific. I've said that probably five times now. I might say it five more times in this one. Not something in my everyday vernacular. But some folks listening might be going into new verticals. Maybe they're launching a new product specifically for vertical. Maybe they're taking their current product with a new vertical. What are some of those risks of being vertical specifically? In our prep call, you had mentioned, if you get it wrong, you get it wrong in a big way.
Mike Wolber: Let's start with the latter, getting it wrong and the impact that makes. I think you look at a total, let alone a serviceable, addressable market for Gong compared to Rent Dynamics, much different numbers. And I think for me, when you get it right in a small industry, there's this incredible flywheel effect, because word of mouth, we're hearing Chris Walker talk a lot about dark social right now. We are winning in the world of dark social by playing into the voice of our customer and creating this flywheel effect. But at the same time, if you get that wrong and have a couple botched deals, or really unhappy customers or whatever the thing might be, in a smaller industry, you run a big risk of impacting your ability to go win deals in that given market. Or in my case, it's really hard to hire if the reps who have worked for you in the past had a hard time selling. And it's all about acceleration and it's all about throughput. And I think when you get it right, you just can go so fast. The momentum feels so good in a vertical specific environment. But once that momentum slows down, it takes a ton of calories to get that thing back going and in motion, whether that's on the sales side, the retention side, or I spend a ton of time recruiting for sure.
Devin Reed: That makes a lot of sense. That word of mouth is so powerful, which is challenging because it's not captured very often. It happens in text messages, and passive conversations and stuff. But yeah, when the word gets out like, eh, it's not really that great of a place to work, or the product's not that good. I was only with it for three months before ditching it. That is a huge impact. So as folks are rebuilding the strategy, going about scaling it in that kind of realm, what are some of the risks that they should look out for, maybe the pitfalls?
Mike Wolber: Some of the pitfalls are not truly understanding the market you're trying to serve before you step into it. And I think that Mark Roberge talks about it a ton in a lot of his literature, been to some of his seminars, have actually been able to do some one on one mentorship with him. And there's a big difference between getting product market fit and go- to- market fit right. And I think that it's really easy to assume that you look at this industry, you think the technology's dated, you're going to bring in something really sexy, you're going to throw AI on top of it and it's going to land, it's going to kill it. You're going to go raise some money a little early and you're going to go. And in my experience, product market fit is important, but it's also important to objectively do market research to understand the why behind why those current technologies and incumbents exist, and then to understand if that market is going to have the appetite for change, because a lot of industries, especially small industries use laggard technology for a reason. There's a lot of businesses in the USA that still run their business off of a three ring binder. That could be disrupted, but there's reasons why they have not been yet. So I just think being thoughtful, being research focused and not being too fast. I think when you go in too fast, you run a huge risk of getting it wrong in a big way.
Devin Reed: I want to call out something real quick. You've mentioned now Chris Walker and Mark Roberge. So I can tell you're a true student of the game, because these are people I'm familiar with. Mark Roberge actually was the first person on Reveal a few years back. I can tell the way that you're approaching learning about this stuff. So how do you go about understanding your market better? Maybe this is you, you're already in it. Maybe you're entrenched, you already know. But maybe to start, did you come from Nike knowing real estate really well, or were there some actions you kind of took to say, hey, let me and the team really understand what's going on here? How do you go about that?
Mike Wolber: There are a couple things that have worked really well for me personally that have become kind of part of the Mike Wolber playbook, if you will. I think that one of the biggest lessons I took from Nike was this radical obsession with understanding the customer. And I always thought it was weird when I worked there, because these high paid executives would fly out all over the world, not just the U.S., to meet with consumers, and it was all about the consumer. And I'd be like, why are you flying to Japan to meet with kids that wear our running shoes when we wear their running shoes? We're their consumer. Can't we just talk to ourselves? Very ignorant of me. And what I realize is the reason that the Nike flywheel has gone so strong is that Phil Knight just set this tone that it was all about delighting the consumer and anticipating what the consumer was going to need next. And as I joined a smaller company, G5, where we first got in touch, I think you realized that if you keep your customer close to your chest, you learn the voice of the customer. And if you can know your customer, there's a great chance that you can codify what your future customer needs as well. And I think it's one of the big things I've taken super seriously. It's why I'm so active on LinkedIn and so few of my competitors are not, is that if I can be in front of them early and often, I know what works, I know what doesn't. It helps us craft the value proposition. Our demos, they kill it because we understand why our customers choose to stay.
Devin Reed: So social is a fantastic place. Speaking of archaic and three ring binders, which is fine if you're listening and I don't know, writing notes from this episode in one, it's a fantastic place to get feedback, and almost real time feedback. As you're testing messaging, you can really observe what's working. And to your point, this is a landscape or an arena that you're dominating, because you're the only one there. If other people aren't even there trying to compete with you in that arena and that social space, gives you tons and tons of green room to get that market feedback.
Mike Wolber: I think there's these two conflicting schools of thoughts in go- to- market. One is meet people where they are and market to them where they want to be marketed to, or whatever it might be. And I think there's a total conflicting statement with that, which is be where your competitors aren't and do things that you're comfortable doing, even if they're hard to measure, like social or podcasting. And I think for me, that's become a big part of our motion is just doing things that our competitors aren't doing, things that aren't necessarily scalable, but things that truly turn customers into raving fans and win the hearts and minds of people. And I think that when you play the long game, really good things happen when you do that kind of stuff. Newsletters, posting daily, all that kind of stuff.
Devin Reed: I feel like you just, not took a page out of my playbook, but we're reading from the same book, because I agree with all of those things, which unfortunately a lot of teams won't go build where they can't measure super clearly or the attribution isn't linear. So I'd love to see you using that to your advantage there. Speaking of measuring, and I know against attribution there for a sec, but you talked about getting it right. I've got this flywheel going. How do you measure that? What are some of the metrics that you're looking at to say, okay, things are accelerating at the right speed, maybe any kind of potential risk? I'm curious, what does Mike Wolber look at from a metric standpoint in this regard?
Mike Wolber: I think there are probably a lot of head nods for anyone who's in the revenue office. It's all about revenue. It's all about predictable revenue. And it's all about that, because it's all that my boss cares about. I work for our CEO. Marketing sourced revenue is the most amazing metric ever, because it shows me that no matter how people found us, marketing is opening up opportunities for our sales team. We're not doing MQLs. We're really focused on sourced revenue from marketing. I think that one of the things I look at a lot is pipeline velocity. So understanding the speed that we're seeing pipeline move through our sales funnel. And that's a really important thing for us so we can understand how we can improve the sales motion to make sure that it's good, both from a sales experience, but also we're focused on the right segment within the market, because we compete with companies that are better served for the enterprise where we're more served for the mid- market, for example. And that's okay to me. And so understanding where you're winning the fastest then feeds into the last one, which is NRR. Net revenue retention is really important, not just client retention, but the overarching growth within our book of business. And when we see the certain segments that are really growing 150 plus percent NRR year over year, that helps us really understand where we should emphasize our focus. And so those are probably the three core ones that I spend the most time really thinking about.
Devin Reed: Mike mentioned pipeline velocity here, which is the speed at which your customers are moving through your sales funnel. But how do you calculate pipeline velocity? Here's a quick equation. First, take the number of sales qualified leads that are in your pipeline, multiply that by your average deal size, then by the percentage of your overall win rate. After multiplying those three numbers, divide that by the average length of your sales cycle. There you have it, you got your pipeline velocity. User pilot reports that many sales leaders have determined that a good sales velocity meets 70 to 80% of the set sales quota. You can use that as your barometer for success. It's critical that sales and marketing teams are aligned and continually monitoring where you see dips, where prospects are leaving and how you can adjust to keep them engaged. Let's hop back in to learn how. I love when I hear marketing focused on revenue, why sales and marketing don't align? Well when the end goal, when they're north star is not the same, there you go. It's pretty clear. And so yeah, take it or leave it. MQLs can be good early indicators in my book. It definitely is not a bad thing. But to your point, if that's the end goal for marketing and then sales is worried about, well, the dollar signs and actually getting revenue, you can read between the lines there. So Mike, I've been at a few companies on the sales side where they're cracking open a new vertical. Big, usually top three strategic initiative for the whole company that year is get into this new vertical. We've touched on it before a little bit today, but how do you know when you're really ready to take that on?
Mike Wolber: It's a great question. One of the things that's important is to understand what your end goal is as a business. And I think one of the things I've experienced and I've also heard about through mentorship and friends I know in various industries is a lot of companies move too fast to open up that second vertical or that second market, even like you talked about with opening up a new GO. And I think it's really important to understand where your product is best suited to win within an industry. Not everyone's going to be able to win in the small kind of corporate segment, the mid- market and the enterprise within their space. And I think it's really easy to get excited when you start to get momentum in one segment, and then to assume that the best thing you can do is open up a second vertical. One of the biggest decisions we made was to not open up a new vertical, but to move up market. And so we opened up a national accounts program and we went up market within the marketing realm. And it was the two biggest growth years during the six years I was there was moving up market within the same industry. And so I think there's always options to segment the sales org or to go down market to more of a self- service model, which are all amazing opportunities within a given vertical. And I think my ultimate advice would be get as many playbooks as you can, and then when you decide to go into a new one, assume that it will all be different so you don't make those mistakes that we talked about earlier on in the podcast.
Devin Reed: I like that a lot. And so how do you prepare? What are some of the pitfalls that our listeners can be on the lookout for?
Mike Wolber: There's a sniff test in sales and a sniff test in marketing that really matters. I think that authenticity is important. I'm a huge fan of the challenger sale. And I think one of the things that I've always applied and my teams now apply is that teaching for differentiation is a huge opportunity still in 2022. When I say the sniff test, you're talking to a business owner and you want them to believe that you have something that they need. And if you cold call or send them a message or whatever the medium is to get their attention and it doesn't hit their expectation, good luck get in to take that call or that meeting. Here's an example, in multi- family, it's a resident. And if you say resident to someone who's in self storage, they're like, what's a resident? It's a tenant. And language matters. And if I cold call a storage operator and say, hey, we've got a great service, your residents are going to love it. I'm not going to pass the sniff test. And in sales, the sniff test really matters. It would've been a great customer, but you got the dial in correct. So I think that's where making sure you're really thoughtful so you can play the long game as you enter a new vertical is super important, even though that sounds pretty tactical.
Devin Reed: You know what? It's tactical, but if you haven't thought that out and then you don't have the insight to see that that's happening, you can be going through this motion and not understanding why your strategy isn't working. It's like, well, ar the finish line, you're saying the wrong words that are not resonating. We did a similar- ish exercise as we're starting to go and have been going to verticals outside of or industries outside of tech. People don't call reps, they're called agents in certain verticals. And so getting that right is super important. Yeah, it's tactical. But the way that you talk about things internally typically is how you end up talking about them externally. So if you don't make that a very conscious decision internally, like you said, it'll start to bleed out in those really important executive conversations, whether it's in a cold call or closing call.
Mike Wolber: For sure. And I mean, one of the things that's worked well for me is really obsessing having tactical relevance in the sales cycle. And so my board saw good signs of sales success in the back half of last year and was like, let's throw gas in the fire. Let's add more reps and let's go hard on this new product line. And my mentality was, no, let's make sure we have the motion right before we bring reps in so they can be successful. So I operated as a frontline AE for months to understand the best demo. Used Gong to really validate the feedback we were getting against competitors. And we codified a literal sales playbook. So as we've brought on new reps, we're exceeding ramp, we're getting them to successful. And it's becoming a compelling reason for the team to say yes to working here. And I think all that stuff matters everywhere, but I really think it matters more when you're in a smaller industry.
Devin Reed: I love that. Getting back in the trenches, as it's called, and learning. That's great. Last question, what about attacking multiple new verticals at once?
Mike Wolber: I think it can work. I think it totally can. I think that one of the things that is dependent on the company, the funding, the phase that you're in as a business is that when you try to have a go- to- market team serving multiple verticals, it can be really hard to almost compartmentalize from this customer to this customer when they are in different worlds. And objection that you can receive from investors is that your org structure can seem top heavy when you're going at multiple verticals. Because one of the things that I've seen work really well is verticalizing your organization structure as much as you can. A vertical specific marketing team that's focused on the plays for that specific customer. Vertical specific sales teams, vertical specific CX teams. And it's like, wait, we have eight VPs and we're only$ 10 million. And I think that's where once you figure out what's working, there is a great chance you can scale it. And I'd say having that two to four year plan and having really good alignment with your investors and the runway you're going to need is super important, because when you try to spread a team too thin across too many different plays, too many verticals, I think that's where you run some risk if you don't have the overhead to support it.
Devin Reed: How would you describe sales in one word?
Mike Wolber: Adrenaline.
Devin Reed: Interesting. Of all of our interviews, we've never had that answer. Would you mind so elaborating?
Mike Wolber: I hate to lose and I love to win. I'm the person who can ever answer that question, because I like and hate both. Being part of a winning team is the most addicting feeling in the world. And building highly functioning, winning teams is even better. And I think there's an adrenaline factor. And one of the things that I think for me I've learned over the past couple plays is that sales sets the tone for a business. And Gong epitomizes it. The motion, the winning mentality, it's everywhere. I follow probably 50 of your AEs and I'm a two time buyer. And I will say that when you get it right and when you win, that is adrenaline. And to me, that is the realest thing and it's why I will forever align to revenue, because you have an opportunity to set the tone for other careers and to create futures for people to change minds. I don't want to be a sales guy. Let's just try it for a year. Do you want to control your income? And all of that stuff to me just feeds into the adrenaline, which is why I said that one.
Devin Reed: I like it. And I like it a lot, because you can't buy that feeling. You can't manufacture that feeling. It's only can be earned. So I got a big smile on my face. I like that a lot. So thank you for sharing your expertise.
Mike Wolber: Huge honor. Thanks a ton for having me.
Devin Reed: If you want to learn more about how revenue intelligence can help your go- to- market teams, head over to gong. io. And if you like what you heard today, give us a five star review on Apple Podcasts, Spotify or wherever you're listening.
From his time at Nike and now Rent Dynamics, Chief Revenue Officer Mike Wolber has learned that the first step in increasing revenue is deeply understanding your customer.
This might include listening to your team, seeking feedback from the market, and architecting a GTM experience playbook to truly source revenue.Listen to this episode of Reveal to get Mike’s sage wisdom on nailing product market fit and go-to-market fit.