In this episode, you’ll learn:
- How a role in RevOps prepares you as a Founder
- How to build a strong company foundation
- How to maximize your RevOps Team
What to listen for:
- [01:28] Siva’s Founder story
- [06:01] The transition from RevOps to CEO
- [08:25] Balancing sales and leadership duties
- [19:12] Siva’s most successful initiative
- [21:00] Maximizing your RevOps team for long term success
Check out Siva's blog post "A simple 3-step guide to sales compensation success"
Siva is the Co-founder and CEO at Everstage, a no-code commissions automation platform. Prior to founding the company, he led Revenue Operations at Freshworks and was a consulting at PwC and E&Y. He's passionate about B2B SaaS, scaling go-to-market, business and revenue operations.
Siva: I think RevOps could really be very strategic, that can actually, across the funnel, understand and get insights on what's working, what's not working. Really be that business analyst as well, who the leadership... and really help determine what some of your next investments should be.
Trinity: Welcome to The First 100 days, a show for revenue practitioners by revenue practitioners, giving you unscripted access and tips to help you navigate any new transition or initiative both in life and at work. Siva Rajamani is the co-founder and CEO of Everstage, a no-code commissions platform that removes recurring busy work for your ops and finance teams and provides a transparent and gamified incentives experience to your sales and CS teams. Working previously as a Director of RevOps at FreshWorks, Siva recognized that commission software didn't do what commissions should – incentivize salespeople to sell more.
So how did his experience in rev ops prepare him to radically improve the sales environment? Here's our conversation. So I want to understand Everstage a little bit. I see it's a no-code platform. I'm in marketing. I'm not very familiar with this. Can you give me a context of what's so special about it?
Siva: So, the sales commissions, as a problem, has existed ever since sales got into commissions, right? So essentially, if you look at sales folks, they're typically, up to 50% of their payouts are on commissions. And so it's a very important and significant part, not only for the sales person, but also for the company. Typically, what we see is about 10% of a company's expense goes into commission payouts.
So it's a very significant part of every company's expense, as well as for the sales person, a very significant part of their payoffs. But a lot of companies drive it through spreadsheets, which might work when they are really small, but as they even get to a size of spending 15 sales. What happens is the reason why you are doing commissions gets actually lost when doing it all with spreadsheets.
And what I mean by that is at the end of the day incentives drive behavior. And if ultimately a sales person is not having the context of visibility, real-time, of where they are on their commissions and on their payouts, how can you use that to motivate and drive behavior for them? Because today what happens is more sales folks actually have shadow accounting. They have their own spreadsheets. Keep note of what deals they've closed, just to make sure there's no disputes later. And so it's a very broken process at this point. And I said, this problem has been there, around for some time. And there are some vendors that have been in the market as well, the fall.
But what happened unfortunately, is most of these vendors, previously, that have been around for a long time, at least for 10, 15 years now were in the pre-Cloud era, and essentially where professional services masqueraded as so, what it meant was essentially you had companies sell a solution, but even if you had to make a small change or make an update, which is very common in the post-COVID era, every quarter, there's a different quarter– we're learning as we go – quotas keep changing, compensation plans keep changing, you introduce new programs, et cetera. So you want the product to be extremely self-configurable, but unfortunately, a lot of the vendors in the past have made very difficult tools to make changes and you had to approach the vendor to make changes and all of that. So we really wanted to make a change.
Certainly revenue operations professionals deserve better. We felt the pain and therefore we wanted to go and solve for the other revenue operations professionals. So Everstage is a completely no-code, self-configurable commissions platform. The customer can meet all the changes that they want on an ongoing basis, not only at the start of the implementation, and at the end of the day, also use it to provide visibility to the sales teams, but also actually have, we have some gamification modules that also help drive performance, right. Basically, think of it this way, that they can actually even simulate, even before they close a deal, to see if I really close this deal, how much commissions could I make. And that could be a very powerful motivator for a person working on the deal. So, those are some of the things that we're trying to do.
Help companies drive performance through the commissions automations
Trinity: platform. I like that because a lot of the time you think about like commission or quota planning, backward-looking. Ok, I know what's my quota, what's my comp, and then at the end of the quarter, you look back, did I hit it? But I like the gamification part, because then now you've got a little bit of nudging the right behavior and push a little bit hotter.
I like that. That's cool.
Siva: And also, I was just saying, think of this situation, right? Like in B2B, a lot of companies have multiple different criterias for their commissions. Say one of the typical things that companies have in directing new business activities is if you close a multi-year contract, then you get additional accelerators as a sales force. Say a monthly or an annual contract. But how are you going to motivate and incentivize that behavior?
Because the sales folks are, for that matter, most of us follow the path of least resistance. It's always easier to close an annual contract than a multi-year contract. In order for you to push that behavior, because that helps you in your churn or whatever, you, by providing this gamification platform, you help them visualize and then say, Hey, if I were to move this deal from an annual to multi-year contract, what is the additional commissions I get?
And that really then showcases why they should do that and obviously helps drive the behavior that we want.
Trinity: Wow. I'm actually excited about commission compensation planning right now for the first time. That sounds really fun. So I guess you came up with this idea when you were at FreshWorks, right? A lot of people think, oh, I want to start a company at some point, but you actually took the leap.
What was going on in your head at the time, going through that transition? Walk me through the thought process.
Siva: Absolutely. Essentially, obviously as a revenue operations professional, you're used to a lot of technology because you're evaluating technology for the company. So there were a bunch of areas that I thought were pain points, but this was specifically something that really kind of hit me hard because it was also something that I saw a lot of my friends in sales teams actually facing as a pain point. And I really thought this shouldn't be the way it happens. So the pain was very tiered and me wanting to solve for it was very clear. But to your question on taking the leap of faith, I think that was obviously the hardest part, right?
There's always all of these questions running in your mind to think, Hey, is this gonna work? And just moving from revenue operations to actually be able to build a product is also a big leap of faith. I want to make sure I have the right people around me to be able to get to the vision executed.
So it was months of contemplation and I also, even honestly, after I moved on from FreshWorks I didn't start. Right. I did a lot of research and I spend time in the U.S. Speaking to a lot of fellow revenue operations professionals, want to make sure everybody felt or realized that this was a problem that they wanted to really solve for. Make sure that it was not a one off.
So only after that conviction, I decided to spend more time and build the company. So, there was a brief period where I actually had this option. Hey, you know what? I don't think I was confident off the research. I might just go back and I had a kind of option to go back. So that was not a problem, but yeah, so I think the leap of faith happened in phases.
So I probably took multiple smaller leaps before we finally started Everstage.
Trinity: Was there at any point in time during these phases where you're like, maybe not? Did that ever happen?
Siva: Honestly, I think a founder's journey, I think it happens probably every week. You're constantly second guessing the choices that you made, because obviously the feedback for those are not immediate. And so there were certainly several points early on actually in the journey where I was thinking, Hey, am I doing the right thing? Is this going to work? And I think it's just part of the journey as a founder, I guess.
And I'm sure every founder goes through this.
Trinity: So, are you also doing your own sales now, too? So are you hiring a sales team or are you actually doing sales yourself – at least in the beginning?
Siva: So I am part of all the sales calls, but we do have a couple of sales folks as well in the firm and we are we're growing fast.
So we are hiring as well, but actually it's, a lot of the early customers, I sold it to them directly, and even ongoing conversations, I want to be part of just as a way to be in touch and understand and get product feedback as well. So yeah, consciously doing that.
Trinity: Yeah, founding sales is challenging. Our founder, he is an engineer by trade, but also had to teach himself how to do sales. So it's completely different personality. So I'm curious from your experience of doing sales yourself, coming from a different background than sales, what's the one thing that stood out that you learned during this process?
Where you're like, wow. I wish I knew that, that was awesome. Anything that stuck out.
Siva: So I think I would say one, I was confident about getting into those conversations because this was an area that I understood inside out. So that gave me the confidence to get into conversations comfortably and make sure, because you want to make sure in sales conversations that they're actually adding value, right, at the end of the day for the customer who's evaluating, or prospect, who's evaluating. So that was there. But just the understanding or just the nuances that are required for you to close enterprise deals, the multiple stakeholder mapping that you need to do, the kind of aspirations that each stakeholder might have, which could be different, certainly learning.
And I'm still learning. I don't think you'll ever complete your learning on this front. Each conversation is a different conversation. Each stakeholder, each prospect is new. So I love it.
Trinity: That's good.
So hiring in the U.S. Has been picking up a lot since Q1 this year. So can you break down the process, step-by-step to effectively set up new reps for success when it comes to compensation
Okay. So I think one of the things, as you rightly said, is all of the funding that's going around and with all of the growth targets that companies are chasing after, there's just lots of action happening on the sales and broader go-to-market standpoint. And I think one of the things that was a learning for me, back from FreshWorks, is how do you set the early members in the sales team or the folks who are joining into the sales team up for success, because that's, what's going to drive a big portion of your revenue growth. So what happens is when you get into a new year, when you start your annual planning, with early stage startups, you're planning multiples of revenue, right?
And obviously with the current sales capacity, you're not going to be able to achieve that because you need to additionally hire, so a lot of your growth targets are on the basis of you being able to hire smart folks on time, and also be able to ramp them to get to your eventual full capacity quota within the timeframe that you want them to.
Siva: So there's a lot hinging on this whole aspect of being able to ramp them quickly to be able to hit their sales capacity goals. I think that's where it's very important that right at the planning stage ops, as well as the leadership, sits and really pragmatically looks at what's the right ramp for the new sales person joining in.
And essentially, how do you do that? You have to look at your historical data, obviously, like everything else, start off from there and see what's typically the average sales cycle. Take the average sales cycle, add a portion of training period for the salesperson, and that should be your typical ramp period, provided you're already providing some qualified leads to the sales person. It's not that the sales person has to self-generate all of the leads by himself or herself, because then you will need to also proportionally add that portion of lead gen time before you can actually also set the entire sales cycle and training period, et cetera. And, obviously, this varies by company.
This also varies within a company. If you're directing at different segments, it's important to just look at the data and just be very pragmatic, right. Because yeah, aspirationally all of us want the salesperson person to ramp as quickly as possible, but it'll be great on a spreadsheet when you say you're going to ramp them in three months, but eventually when the reality comes in, you don't want to be looking at it and saying, Hey, you know what? I should have worked it better. Yeah,
Trinity: absolutely. So it looks like this is like the planning, just to recap it, like, planning, gotta make sure you look at historical data, making sure that you buffer in the training, got to make sure that the lead gen is actually working so that you have enough leads to keep these new folks occupied and actually get their hands wet.
So that's on the planning side. And then once you figured that stuff out, what will be the natural next step in terms of determining what's the right quota and compensation, because this is something that I, from my experience working with sales teams, is like companies hire more reps in the same territory, but then also increase their quota.
So like, where is the mismatch? Why do these kind of things happen all the time? Like how to prevent it.
Siva: Yeah, and also, I think that's a great question. I think that's the story of a sales person's life, right? You keep producing the territory and then increasing the quota as they go along. So, obviously, it's not a hundred percent science again, to be honest, because especially with fast-growing companies, you are betting on some things to work, and obviously only when it plays out, you will know. But having said that, once a sales person joins quickly in ops, we call one of the best heuristics to use is the Quota to OD ratio. That actually even talks broadly about the efficiency of the company's sales productivity itself, but the Quota to OD ratio really tells you that on your fully ramped quarter, what are the multiple of the OD on target earnings for the salesperson. And if the multiple on that on target earnings is about four to six times is where the quota is then essentially it's broadly the right number, right, at least in software. So it's about four to six, six – of Quota to OD ratio, so that's one way to think about it. But obviously early stage companies may not be fully mature to be able to take to getting to that kind of a number or, for that matter, they might be investing in a particular geography, which is new and therefore you want to explore. So I think the other way is only again, retrospective, which is, after having set the quotas, what do you see attainment rates at? And again, a good heuristic there is, at least two-thirds of your company needs to get to 90 to 100 percent of their quota.
And if it's not even that, then essentially you've set the quotas way too high or something's breaking in the funnel. Essentially, not only are you going to lose the portion of the reps, but also at the end of the day, obviously, miss your goals, right. So I think , but of course, that's a little bit of retrospective. We don't think of it, but Quota to OD ratio is one thing that you can start off as you set your quota at the
Trinity: starting quarter of the year. I like that.
That's very specific. Thank you. So I think the four-to-six ratio, I think that is really helpful. Really intrigued by what you said about two-thirds of the sales team need to hit like 90 to 100 percent quota attainment. That sounds amazing. So we are a smaller company and so I feel like we already, like most of our reps, actually, all our reps passed their quota, but I know that I read some reports a while back from Salesforce that I think only 60 or 70% of reps hit their quota.
Siva: common? Yeah, that's very common now, which is why I said two thirds around 65-66% is where typically you see folks hitting their quota. And the reason for that is there is obviously going to be some portion of your team who are not high performing, who need a lot more training or the right kind of skill sets to be able to hit their numbers.
Expecting all of them to hit is wishful thinking. But the reality is it's still not, say 80%, it's still somewhere around the 60 to 70%, as you mentioned, that's the number that typically major companies track in terms of attainments. And that's common because essentially as a fast-growing company, again, you say aspirations, just going back to my own personal experience back at Freshworks.
There was a time when, I think, early on, we set a target where we wanted to triple our earnings, right. So it was aspirational considering our base. We were not too early, we were already making sales, and we wanted to improve our revenue from there. And we set quotas. Things went okay, and finally, we ended up doing 2.5 times previous year revenue, which was a great result as a company.
It was great. But then you looked at the sales flow and there were a bunch of folks who were absolutely burned out. Okay, because what you basically did was you had all the aspirations, but then you're transferred a lot of the risk to the sales floor. So, which is the classic problem with a lot of fast-growing companies, that in the search for growth, the sales team really gets hit hard.
So I think the way for you to plan for this is, at least the learning for me from there was trying to ensure that you give them some way of psychological safety. Where say, for example, you still want to set your quotas high or set it in a way that it's aspirational, but maybe make sure that you safeguard they're on target earnings probably earlier.
Let's say that, Hey, the kicker is to start off is probably even for 100%, for example, so that essentially you want them to still go for that a 100%, but in case they miss out on that number, they still don't get docked just because you have been too aspirational with your goal
Trinity: setting. Here's a goal and here's like a moonshot goal and you get higher compensation if you get to the moonshot.
Okay. Absolutely. Yeah, no, it's true. Sometimes, I feel so bad for the sales reps in general. Just everyone complains all the time. And I'm like, part of it is, as a company, you exploring new territory, you don't know what is going to work and it just, they have to bear the brunt of it if things doesn't work out, So I would love to go back to you, as a rev ops-turned founder. So far, what was your most successful initiative? It could be with Everstage, but just in general, can you share the story? What happened?
Siva: I think one, obviously from a rev ops perspective, I think just moving towards the right goals from the subsequent year onwards was a good learning for me and something that I'm proud of, back in my rev ops world.
But I think probably I should say in this new world as a founder, I think one of the things that I am super happy about personally is just being able to convince a lot of my fellow rev ops professionals to join me along in the journey. So we're a small team of 20 members, but we have five revenue operations professionals in the team who are helping out in different areas like product building and marketing.
So actually a lot of folks have rev ops turned functional practitioners at this point, just being able to have their trust and join me early is probably something that I'm proud of, and just helps because at the end of the day, we are rev ops, now truly rev ops building very well, so that way personally and professionally, very happy.
Trinity: ops system must be phenomenal because companies always hire rev ops way too late. Here's the mess. Please fix this for us. You guys probably have every foundation pieces in place perfectly.
Siva: Yeah. I mean, we hope so.
Trinity: That's amazing. I've been trying to convince my CEO, like we need an in-house rev ops person.
He's like, hang on, sales first. I think that's just the evolution of most companies, but good luck. Hopefully, you hire your rev ops person soon, and if you need any help from me to convince your CEO.
I like, Hey see, but I do know anyone, too. So as a final question, can you share some words of encouragement for revenue practitioners that's listening.
Siva: So I think, I think, well, why don't we actually talk about the thing that we just mentioned? Right. Like a lot of founders and leadership wants to think of rev ops a little late in the journey. And I think what I see is a lot of companies which have invested in their first rev ops person is also thinking about the role very tactically, just as a person who is there to fix the process.
But I think rev ops could really be a very strategic, that can actually across the funnel understand and get insights on what's working, what's not working. Really be that business analyst as well to the leadership and really help determine what some of your next investments should be. What's working. And what could you do to increase conversion rates or RPU or whatever for that matter.
So I would strongly urge founders to think of rev ops much more earlier in the journey and think of it more strategic. And for all the rev ops folks listening, essentially, it's just, I think it's the day where, you know, rev ops is in prominence these days, but essentially it's not too far when folks who are really looking and saying, Hey, you know what, I'm just doing too much of tactical work.
I think days are not too far where they do more strategic work. Certainly a lot of leaders are doing more strategic work, but I think it's just a matter of time when the industry, where rev ops was seen as more of a strategy.
Trinity: That makes sense. I'm a hundred percent with you. And if any sales ops or rev ops out there that feel like they do in tactical things, reach out to me.
I'll try to makerec happen. Come join User Gems. No, but that's great. Thank you so much, Siva. It's really fun. And thanks for educating me on all the whole compensation. I took so much notes. I'm going to talk to my CEO about this. So this is awesome.
Siva: Thank you. Perfect. Thanks for having me.
Trinity: Christian, what stuck out to you in this episode?
Siva: So what stuck out to me is just how, I think, similar we are, like in a very similar stage of the company. So many of the questions that you asked, I was thinking, okay, how would I answer this question? And when you asked, what are you proud of? And then I thought the amazing people that, that work for User Gems, and he says basically the same thing.
And I think you, you also made the comment that the founder sells, I mean, I think pretty much every company has to go through that, as the company starts. But I mean, obviously, if the founder is already the sales person, I think that's easier, but in his case, and in my case, it was like we were previously doing something else.
So it was about how can we transition to being the sales person of the company. And I think, as he said, it's like you learn all the failed things, like, how can I have a conversation? How can I add value? How can I figure out how my product can be useful to someone
Trinity: else? What stuck out to me was how prescriptive he was about everything rev ops related. Right. Clearly that's his expertise, but I was so appreciative how specific he was about, like, for example, now that you hire a lot of sales people, are you planning to hire a lot of salespeople because you have an aggressive revenue goal, here are the steps you should do from planning, thinking about the ramp time,
think about quota and territory. So not everyone can give you a play-by-play or step-by-step of the playbooks. I was really impressed. I think anyone who's listening to this and going through the same process of planning for the commission, quota, territory, I mean, Siva basically gave you the playbook right there.
Just need to write that down, or maybe our team will write it down, and post them on a blog post so that you can just copy and use it for yourself. I love it whenever guests can be so prescriptive. It initials that they are an expert in what they doing. They know it so well, that's how they can train and teach you. Yeah.And I think also it showed just how big of a part of the budget, the sales commission is. It makes sense. I think it's even higher than the 10% that he mentioned, but yeah, it's a significant part of your business so I can see why he started a company in that area, because I'm sure there's a lot of optimization that you can do there.
I mean, one of the things we talked about was percentage of sales teams actually hit the quota? Like I think he said 66%, two-thirds of sales team actually hit the quota. That's terrifying, I think, for everyone, for a company to listen, for leaders to listen. Too, for the individual sales reps who, that's terrifying. Yeah, it is. So, I mean, there are a lot of things at play there, but we talked about like how to make sure that you set a moonshot goal, like aggressive goal, but also have some type of safeguards so that you keep your team motivated and not just burnout. Because in one of the other episodes interviews, that we did, or our team did with Brett Gilbert, VP of Sales at Momentive, he also says that, like, being in sales, you got to get used to, like, there's some peaks and there's some valleys.
So if I was a sales person, knowing that the company's understanding enough to give some kind of safeguards when something's not going well, I feel more, like, more confident in coming back and trying to hit the
Siva: peak. Yeah. Especially in sales where basically every month you're being reevaluated and it starts from zero
Trinity: again. It's a stressful job.
So kudos to anyone in sales out there. Are you undergoing a major transition within your organization? Do you have a first 100 days journey to share. If yes, we want to hear from you. Email me your email@example.com. Thanks for listening.