20Sales: Why You Need a CRO Pre-Product | Why Remote Sales Teams...
The Twenty Minute VC (20VC)Full Title
20Sales: Why You Need a CRO Pre-Product | Why Remote Sales Teams Do Not Work | How Snowflake Built a Sales Machine with Chad Peets
Summary
The episode features Chad Peets discussing the critical importance of hiring a CRO before product development and the nuances of building a successful sales organization.
Peets emphasizes the need for sales-minded individuals to drive product-market fit and outlines strategies for effective sales team scaling and management.
Key Points
- Companies should hire a Chief Revenue Officer (CRO) before product development to ensure the product meets market needs, as CROs are adept at customer discovery and understanding market demands through extensive customer conversations.
- Effective sales require understanding individual motivations beyond just money, focusing on career development and the desire to be the best, which can be assessed by analyzing past career moves and stated motivations.
- Building a successful sales machine, as demonstrated by Snowflake's early growth, relies on a disciplined, well-defined hiring process with clear candidate profiles, avoiding deviations to maintain consistency and quality.
- The collaboration between sales and product teams is crucial, with the CRO acting as a bridge to inform product roadmaps based on real customer insights, preventing misaligned development and fostering shared revenue responsibility.
- A strong sales organization requires clear metrics and incentives, and while ACV (Annual Contract Value) dictates the sales motion (inside vs. outside sales), consistent productivity of 3x OTE (On-Target Earnings) is a key indicator of success.
- Remote sales teams are questioned, with a strong preference for in-office presence for inside sales roles to foster faster learning, development, and collaboration, viewing the commute as a necessary sacrifice for career advancement.
- The difficulty in recruiting top sales talent stems from a perceived lack of willingness among some individuals to commit the necessary sacrifice and effort required for exceptional performance, leading to a focus on hiring those who demonstrate this drive.
- Companies often make critical mistakes when scaling, such as hiring the wrong CRO too early or setting unrealistic revenue forecasts dictated by funding needs rather than business realities, which can derail growth.
- Clear, consistent messaging across the sales organization is vital for building credibility and a cohesive brand identity, requiring diligent alignment on sales pitches and company value propositions.
- Customer success is critical for expansion, but sales reps should remain involved in the customer journey post-deal, working collaboratively with CS to ensure value realization and drive further growth, avoiding reps who simply "land and leave."
Conclusion
The most successful sales leaders and reps are those willing to make sacrifices, invest in their careers, and continuously learn and improve.
Hiring the right CRO pre-product and fostering strong collaboration between sales and product teams are fundamental to building a scalable sales organization.
Companies must avoid common pitfalls like unrealistic forecasts, poor onboarding, and a lack of focus on core sales principles to achieve sustainable growth.
Discussion Topics
- What are the most critical traits to look for in a CRO before product development?
- How can companies balance the need for fast hiring with maintaining the right sales profile in a competitive market?
- Beyond financial incentives, what are the most effective ways to motivate and retain top sales talent in the long term?
Key Terms
- CRO
- Chief Revenue Officer, a senior executive responsible for all revenue-generating activities of a company.
- TAM
- Total Addressable Market, the total market demand for a product or service.
- ICP
- Ideal Customer Profile, a description of the perfect customer for a company's product or service.
- OTE
- On-Target Earnings, the expected total compensation for a sales professional if they meet their quotas.
- ACV
- Annual Contract Value, the average annual revenue generated from a single customer contract.
- SDR
- Sales Development Representative, a role focused on outbound prospecting and qualifying leads.
- AE
- Account Executive, a sales role responsible for closing deals from qualified leads.
- PLG
- Product-Led Growth, a go-to-market strategy where product usage drives customer acquisition, retention, and expansion.
- ARR
- Annual Recurring Revenue, the predictable revenue a company expects to receive from its customers over a year.
- GRR
- Gross Revenue Retention, a metric measuring the percentage of revenue retained from existing customers over a period, excluding any expansion.
- NDR
- Net Dollar Retention, a metric measuring revenue growth from existing customers, including expansions and accounting for churn and contraction.
Timeline
Host introduces Chad Peets and expresses excitement for the discussion.
Chad Peets shares his journey into sales, starting from stockbroking to software sales recruiting.
Peets discusses whether great sales ability is innate or teachable.
Peets explains the importance of focus and understanding your audience in sales.
The conversation shifts to handling horizontal customer bases versus verticalized sales.
Peets elaborates on identifying motivated salespeople beyond just financial gain.
The discussion addresses how to detect genuine motivation for growth versus superficial claims.
The weight and role of references in the hiring process are debated.
Peets explains Sutter Hill's strategy of hiring CROs pre-product.
The unique value a CRO brings to product development compared to a founder is discussed.
Peets disagrees with the notion that founders should create the sales playbook first.
The practicality of Sutter Hill's incubation model is questioned.
The ideal sales organization structure and the CRO's role in it are explored.
The importance of the CRO collaborating with the product organization on roadmaps is highlighted.
The discussion delves into managing sales expansion and product feature requests.
Common mistakes in sales team structure, like hiring without clear ICPs, are analyzed.
The role of sales in product marketing and content creation is debated.
The biggest mistakes companies make when building sales organizations are discussed.
The conversation turns to measuring success and incentives within sales teams.
Peets discusses sales cycle, ACV, and compensation levers for land and expand motions.
The discussion addresses the appropriate ACV for different sales motions.
The balance between inside and outside sales, and productivity metrics, are examined.
Ramp time for enterprise sellers and potential causes for extended ramp times are discussed.
The timing and common mistakes founders make with sales enablement are explored.
The topic of incentivizing expansions and the role of Customer Success (CS) is raised.
Snowflake's approach to CS and the debate around its necessity are mentioned.
Peets clarifies his view on Customer Success and its interaction with sales.
Peets shares lessons learned from building Snowflake's early sales team and the importance of process.
The importance of a structured interview process and avoiding extraneous interviews is emphasized.
The philosophy of "hire fast, fire fast" and the role of speed in scaling are discussed.
The impact of new VPs bringing in candidates who don't match the established profile is analyzed.
The variability of sales profiles based on geography and client type is considered.
The differences between selling to existing large accounts versus new, unknown companies are highlighted.
The responsibility of Account Executives (AEs) for pipeline generation is debated.
The timeline for identifying a "miss" in hiring and the process for making such decisions are discussed.
The reasons for a previously high-performing rep becoming a non-performer are explored.
Peets discusses the trend of reps moving from startups to larger companies after burning out.
The critical element of aligned messaging across the sales team is emphasized.
Peets reflects on whether they would change anything about their hiring process with hindsight.
The balance between hiring speed and candidate quality is discussed.
Peets shares his biggest recruiting mistakes, including a lack of diplomacy.
The challenge of identifying candidates solely motivated by a "hot" company versus genuine career ambition is discussed.
The core elements that define a great salesperson today and whether that has changed are examined.
The perceived lack of willingness for sacrifice among today's workforce is a key concern.
Peets defines his ideal company culture.
The possibility of achieving balance as a great sales leader is questioned.
Peets states that recruiting the right talent is harder than ever due to a lack of willingness to put in the work.
The discussion addresses the problem of reps who "don't give a shit."
Peets discusses whether he would compromise on a remote work policy for sales roles.
Peets explains why he believes in-office presence is crucial for inside sales.
The effectiveness of outbound sales and evolving strategies are discussed.
The importance of content marketing versus cold outreach is debated.
The benefits of verticalization in sales and content creation are contrasted with a horizontal approach.
The difficulty of scaling Product-Led Growth (PLG) motions into enterprise sales is highlighted.
The argument that success in PLG doesn't guarantee enterprise success is made.
Peets believes starting with direct sales before moving to PLG is more effective.
The mistake founders make by expanding into enterprise too early is discussed.
The strategy of starting with mid-market accounts to nail the product and then moving to enterprise is explained.
The common statement that smaller customers are often the most painful is debated.
The idea that it's better to churn the wrong customers, even small ones, is presented.
The importance of both Gross Revenue Retention (GRR) and Net Dollar Retention (NDR) is discussed.
Peets explains that GRR is primarily a product metric, while NDR includes other factors like customer success.
Advice for sales leaders on keeping a team together during difficult times is sought.
The common mistake of CEOs setting unrealistic forecasts that set CROs up for failure is identified.
Sutter Hill's process for aligning forecasts with CROs is contrasted with external practices.
The biggest mistake founders make in onboarding is not having a programmatic approach and dedicating resources.
Peets advises against taking shortcuts in onboarding and discounting.
Peets discusses what he has changed his mind on most in the last 12 months.
Peets states he won't change his core principles but is willing to adapt his communication style.
His biggest advice for new sales reps is to invest in their career and work hard.
His advice for new sales leaders is to deeply understand the business to add value quickly.
The biggest piece of BS advice he hears is that salespeople are purely coin-operated.
Mike Spicer's special qualities are highlighted, emphasizing his integrity and ability to see around corners.
The biggest mistake founders make when scaling to $10M ARR is hiring the wrong CRO.
The question he's not normally asked but thinks he should be is "What's your greatest weakness?"
His greatest weakness is impatience and a tendency to treat all issues as immediate emergencies.
Peets expresses his enjoyment of the conversation and reiterates the value of the insights from Spicer and Dagnan.
A promotional segment for Payhawk begins.
A promotional segment for Miro begins.
A promotional segment for Framer begins.
Episode Details
- Podcast
- The Twenty Minute VC (20VC)
- Episode
- 20Sales: Why You Need a CRO Pre-Product | Why Remote Sales Teams Do Not Work | How Snowflake Built a Sales Machine with Chad Peets
- Official Link
- https://www.thetwentyminutevc.com/
- Published
- November 7, 2025