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Seed to Exit
Welcome to Seed to Exit, the ultimate podcast all about startups, scaling, and venture capital. Your host is Riece Keck: Startup veteran and recruitment entrepreneur.
Join us as we dive into the journeys of startup founders and venture capitalists who share their insights, successes, and lessons learned from seed stage to successful exit.
Each episode, we bring you candid conversations with startup founders, executives, and investors. Whether you're looking for inspiration, actionable advice, or a deeper understanding of the startup ecosystem, Seed to Exit offers invaluable knowledge and real-world experiences to help you on your entrepreneurial journey.
Tune in to Seed to Exit and get ready to be inspired, educated, and connected with the exciting and ever-changing world of startups and venture capital.
Seed to Exit
Ashar Rizqi and Matt Cooley, Co-Founders of Bounti.ai | Transforming Sales with AI | Revolutionizing Go-to-Market Strategies and Future Sales Insights
What if you could revolutionize your sales process with just a few clicks? Join us as we sit down with Ashar Rizqi and Matt Cooley, the visionary co-founders of Bounti AI, who are on a mission to transform go-to-market strategies through the power of artificial intelligence. Ashar, formerly leading at Blameless, shares his intriguing journey from managing incidents to pioneering "outcome as a service," while Matt brings his seasoned expertise in scaling companies from his experiences at New Relic and Quip. Together, they weave a narrative of how AI can redefine the buyer's journey by marrying technology with human insight.
Our conversation with Ashar and Matt dives into the core of building a business from the ground up. They share the importance of trust, communication, and mentorship between co-founders and draw from their rich experiences in previous roles to shed light on managing sales, prioritizing leads, and understanding critical metrics like Customer Acquisition Cost (CAC) and lifetime value. We also explore their innovative approach to outbound prospecting and discuss the significant challenges founders face with hiring and scaling effectively. Listen in for their firsthand insights that are sure to inspire early-stage companies.
In this engaging episode, we also touch on the evolving roles within sales teams and the impact AI has on consumer experiences. Matt and Ashar discuss the crucial balance between automation and genuine human connection, highlighting the need for authentic interactions in high-stakes transactions. They reflect on their journey to increase deal sizes with strategic pricing models and reveal how Bounty AI is enhancing productivity for founder-led sales teams. Discover the future of AI in sales, where human elements remain indispensable, and learn strategies to elevate your go-to-market efforts with Ashar and Matt's transformative vision.
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Number one was, as we were building this really AI-first technology in a different space for a different audience, developers and automating like sort of the human aspect of incident management using AI. And then me having being a first-time founder trying founder-led sales, I was like man, there's just so much in go-to-market, just generally that could be done in a similar model with, like you know so, ai. So that was kind of the very earliest inspiration of starting Bounty was to take a lot of those experiences and learnings from a very different domain, different type of buyer, different sort of problem space, and applying it in the world of go-to-market.
Speaker 2:Thanks for listening to Seed to Exit. As always, I'm your host, rhys Keck, and today I'm joined by two exceptional entrepreneurs who have combined their strengths to build something extraordinary. First we have Ash Arrisky. He's a serial entrepreneur who has previously founded YC-backed Blameless after leading engineering teams at MuleSoft and Box, and he's partnered with Matt Cooley, who is one of Silicon Valley's most accomplished sales leaders Valley's most accomplished sales leaders. Matt's impressive career includes leading New Relic to a multi-billion dollar IPO and Quip to a $750 million acquisition by Salesforce. Together, they've joined forces to found Bounty AI and they're combining Ashar's technical innovation and values-driven leadership with Matt's proven abilities to scale companies. I absolutely loved recording this episode. We cover so many go-to-market topics and each of these guys drop some incredible wisdom. I hope you enjoy it as much as I did.
Speaker 3:You're listening to the Seed to Exit podcast with your host, rhys Keck. Here you'll learn from startup executives, founders, investors and industry experts. You'll learn from the best about building amazing products, scaling companies, raising capital, hiring the right people and more. Subscribe and listen in for new episodes and enjoy the show.
Speaker 2:All right, usher and Matt welcome on. Excited to have you guys.
Speaker 4:Thanks for having us Nice to be here.
Speaker 2:So, as I shared with you guys and so for the listeners, this is a first having two folks on the podcast at once. So I appreciate you guys being my guinea pigs, but definitely excited for the upcoming conversation that we have here. So, just to start things off, for anyone who's not familiar with Bounty Usher, maybe if you wouldn't give us a quick overview, yeah, sure, thanks again for having us, rhys.
Speaker 1:A quick overview on Bounty we are basically a platform that's using AI to deliver go-to-market outcomes as a service, specifically around outbound prospecting, inbound personalization and so on, so you can think of us eventually in the future covering the full buyer's funnel and lifecycle journey. And what you're getting when you buy Bounty is both a AI experience combined with a human experience. Gotcha.
Speaker 2:Okay, maybe this is my ignorance, maybe this is a term you made up, but what is outcome as a service, because I've not heard that before it is a pretty much made up term that.
Speaker 1:I'm trying to market and get everybody else to think about. But in the simplest way, if you think about just within sales and marketing and customer success, do you care more about revenue or do you care more about sales activity, right? So the outcome is that, hey, are we booking meetings, are we generating pipeline? Are we generating revenue just within the domain of sales, so all of those sort of leading indicators. And so when I say outcome as a service, you know, imagine if you could buy a piece of software or a service that basically delivers on that particular outcome. So that's the attempt at calling it outcome as a service, definitely more market-y made up term.
Speaker 1:And so but yes, that's what it would be Cool All right, I love it.
Speaker 2:So just in terms of the history of the company, so I know that it was founded approximately three years ago and you two were co-founders, but Matt, I know you came on a little bit later. So, usher, where did the idea for the business come from? And then, how did you and Matt meet and have him decide to come on as a later co-founder?
Speaker 1:Yeah, A lot of skeletons in the closet. You're going to make me bring those out, but no, no, just totally kidding. So just my quick background very, very quickly immigrant founder, been in SaaS for the last 15 years, worked at companies like Boxcom and MuleSoft. Started my first company called Blameless, which was really in the DevOps developer tooling space, automating incident management for SaaS software teams, right, and so it was also venture-backed. Recently exited. I left before the exit happened and started Bounty.
Speaker 1:So my experience, a lot of what the story behind starting Bounty was very, very heavily influenced and colored by that first experience of starting my first company as a first-time founder and CEO. So number one was, as we were building this really AI-first technology in a different space for a different audience, developers and automating the human aspect of incident management using AI. And then me being a first-time founder, trying founder-led sales, I was like man, there's just so much in go-to-market just generally that could be done in a similar model with, like you know so, AI. So that was kind of the very earliest inspiration of starting Bounty was to take a lot of those experiences, learning from a very different domain, different type of buyer, different sort of problem space, and applying it in the world of go-to-market I was just genuinely. The thing that I really really loved about the go-to-market space is that when you're selling to developers I love developers too but there's definitely a little bit of a chip on your shoulder where it's like, oh, I can build that, I can do that, Whereas there's much more appreciation and gratitude that you feel when you're selling to folks that aren't equipped with those sort of the software development skill set Right, it's like I can't go build this myself. So, wow, I'm so grateful. So I just really love the buyer. I love you know working with that.
Speaker 1:You know those kinds of folks I met, Matt, you know, when obviously I don't have the go to market domain expertise, you know when obviously I don't have the go to market domain expertise, and so that was critical when you're starting a company, and so one of the ways that the early, early strategies at Bounty was to say, CMOs, chief, you know, customer officers, and so just covering that full spectrum so that we could kind of build this brain, this knowledge brain that could, where we could sort of productizing ideas that are coming out of those discussions. And obviously Matt, you know, just given his experience, was part of that early journey. I met him through his brother, TJ, who was also, you know, a good, a good, close friend, and Matt and I got to know each other, became, you know, really really good friends throughout that journey. And you know, it's like what I learned from my first experience is like, you know, on one hand, you don't want to be starting companies with like real, like friends you've known since childhood, right, Because you'll probably end up killing each other, and then, on the other hand, you don't want to start companies with like complete strangers.
Speaker 1:So with Matt, like it was just a mix of great chemistry, just like really aligned in the way we think about things, just really complimentary experiences and the way that we it's like literally two sides of a brain in the way that we approach problems, but we always end up landing on the same kind of uh place where we want to be. So that was kind of like a really strong foundation to restart a friendship. And then, um, obviously, like just his experience is just phenomenal and what we're able to turn into a product and then, you know, turn into a big company. So that's how we, just very early, how we met um, how Matt, you know, uh, you know, joined the company like as a late co-founder, but it's just been an amazing, incredible journey ever since then.
Speaker 2:I love that. So, matt, how has the relationship or partnership evolved since starting and coming on board with Bounty? What would you say you two have learned from each other?
Speaker 4:Yeah, so I invested like almost four years ago and always been advising, and one of the things I love about us like we became fast friends. Normally I have a period like a specific amount of time that I can spend with the companies I advise for, but I found myself like calling us on the weekend and we have just again. We grew up in very similar ways in some aspects and the synergy between the two of us is there's no ego, because there is a lot of focus around what he does and what he's great at and what I do and what I'm great at, and there's a lot of trust there. But there's a ton of communication around it too. I think we talk two or three times a day, which is great around it too. I think we talked two or three times a day, which is great.
Speaker 4:So, yeah, so that just continued for three and a half years or so and I was available at the time. I loved what they were doing and decided to join as co-founder right, and so, yeah, it's been an awesome ride and the things that I've learned from Usher like I've always wanted to know more about product and engineering and you know I sit in on those meetings and, you know, at some point maybe I want to be a CEO, who knows? But understanding the entire business helps me be more effective in my role, and Usher has been very good about informing me, and spending time with the team has been helpful.
Speaker 2:Love that. So, matt, you've obviously had some phenomenal experience in go-to-market in both startups and well-known companies, and, of course, one of your biggest accomplishments is you were able to scale New Relic from zero or close to zero to ultimately through exit, and this could probably be the subject of its own podcast by itself. Unfortunately, we don't have that much time, but can you talk me through what that process was like, how you scaled it at different stages?
Speaker 4:Yeah, so when I joined New Relic, the founding team had come from Wiley, which was on-premise technology sales-led, and I came from Citrix, online, which is really go to meeting. That'll date me a little bit, but it was very much inbound and velocity type sales small, small transactions, but a number of them. So it was much more operational in way that you know, I wasn't a sales leader that was getting on a plane and going and having this good dinner, right. It was all about like the funnel and obsessing over the funnel and making tweaks where we needed to, and like little, small things like increasing your average deal size by 10% at scale made a really big difference, right, and that was my first job. I ended up leaving there running global commercial sales. I took a 30,. I was 30 years old and honestly terrified. I moved to Cisco and I've got this group of Dartmouth grads that have done it before, that are, you know, 10 years older than me, and but they brought me in because I knew the product led like. However, the nice thing about New Relic was I had great mentors that would allow me to operate in what I knew, but I couldn't articulate well, right, and so they'd allow me to go, make mistakes right and learn, and it just never made them twice. Right, I'd sit down with Mark Saclaban or Lou Cerny and you know I deviated or made a mistake, but I understood why. I wrote it down and then the next week I came back and articulated it, and so the part of it was having great mentors but also worked really hard. Right, this was my first opportunity at like a huge success, right, and you know I didn't have a lot of equity or anything like that at Citrix Online, so it was an opportunity for me to create some, you know, outside opportunities for my family as well, and, honestly, I was just so passionate about the team I worked with and even though it was a totally different technology, the model doesn't change so much. Like you do have to adapt to what the sales model is, but if the product does a lot of the selling, like, the sales team is transacting, right, and so you know what is the sales assist.
Speaker 4:Handoff was super important. There was a lot of foundational things that they weren't privy to, and I came in and there was a thousand leads a month coming in. I had one sales rep and I'm like Lou, what do I do here? I don't know where to spend my time. And the interesting thing is how it translates back to why I invested and brought Lou over to Bounty is the original product was like this insights product. So when I sat down with Lou and I said, look, we've got a thousand trials, we have no visibility. You know Lou will do this like he'll look this side and be like okay, and he comes back like two days later and he has this internal CRM that we literally became a cheat code over time and it would show you, you know how many servers were deployed, what the application name was, what the throughput was, and it would help us identify where to prioritize. So it helped us run lean. And so one of the biggest things that I learned there was how to optimize technology to run lean.
Speaker 4:And when Patrick Moran joined, he was our CMO, our first CMO we had this rhythm down of sales was like demand. It was trailing demand right. We didn't hire heads to go and drive sales. It wasn't sales led. We had a very strict algorithm for it. So every rep we knew that got 300 leads in a quarter based on the average deal size. But the output would be their quota right and not for everybody. It depends on level of skill, but we had it down and so we didn't hire until we had exceeded that amount. Right, and so it was just like it was. It was a lot of it was how to run a business efficiently and how to think about CAC and lifetime value and how important those are to your business.
Speaker 4:The one thing that I see with a lot of the companies that I advise they are concerned with CAC, right, they don't know the next move and, especially with founder led early stage, they're doing all the selling. Who's the first person I should hire? How many? What's the background they need? And, honestly, if you boil down all the questions that I normally get when I advise, it all results in how to manage CAC, because you don't want that to get out of whack over time. If you don't know what you're doing, or doing it for the first time, like in a couple of years, it's hard to come back from it, right? So what are the first steps you take in order to build a foundation that is conservative but smart?
Speaker 2:Right, and how should founders be thinking about CAC in your opinion when it's coming to the subject of early stage startups, whether you're founder-led or just starting to build that GTM motion?
Speaker 4:Yeah, I mean, I think it depends on the stage right. If you're at seed stage, it's get as many people using the platform as possible, right, and hire a couple people, but also support that with technology, which is what Bounty does, right. But also, you know, support that with technology, which is what Bounty does, right. It is you have to lean into a little bit of risk to figure out like do you have product market fit and beyond seed at A, you don't necessarily need to have predictability, like strong predictability, but you need to have, you know, customer growth, like you know eyeballs on the tack right. It doesn't need to be like necessarily need to be ARR growth. It needs to be some level of a chart that goes up into the right. Either it can be monetized or it already is monetized, but usually it's not. So how do you create some level of like freemium that you can monetize later and also show some level of predictability in upgrading those by B? You better know dollar in, dollar out, right, the magic number is a real thing and in today's world it can't be sub 1.1, right. In the growth market you could make $0.80 on $1. 1.1, right In the growth market, you could make 80 cents on a dollar In today's market it better be 1.20,. You know $1.20 on a dollar in. So it really depends on the market you're playing in.
Speaker 4:But there are basic principles you got to be thinking about at every stage. But in the beginning there's a foundation that is necessary for Series B. If you don't start to operate that way, you can't come back from it. It's really hard to come back from it unless you move up market and then you're making decisions based on average deal size to balance out CAC and the magic number and lifetime value and companies can get lost in that. And so the foundational aspects of building a business from the beginning. There are principles there.
Speaker 1:Yeah, risa, I wanted to just add to what Matt was saying because it made me reflect back on my experience with my first company, blameless. I didn't even know what CAC even means. Like, what is CAC, what is LTV? And it's like, oh yeah, we'll worry about it when it's a problem. And I think that is the trap that I think a lot of early stage founders again it's a problem, right, and I think that is, um, the trap that I think a lot of early stage founders again it's a spectrum. You can.
Speaker 1:You don't want to overly obsess at the early stage to be like, oh, we're going to have the most perfect cac and ltv, and then you know you don't want to be thinking about it too late.
Speaker 1:But as matt was talking, it was just it was kind of like a lot of my scars started to burn because I was like man, like if we had this kind of awareness, right, it's almost like a superpower.
Speaker 1:And if you can start thinking about it early on and understanding like these are foundational plumbing, this is foundational plumbing for your business long-term, like you can't build a house without having plumbing in it, right. And so I almost see what Matt is saying with what he's talking about CAC and sort of magic number and LTV, like all of these numbers, all these metrics, is having a foundational understanding really allows you to then figure out like, hey, how am I going to start building, putting in the rest of the pieces, like where do I want to go? And I think I have in my experience with other founders is that it's just very, very rare to see that at early stages, early foundational company forming stages, because a lot of times the advice, like Matt said, is like, oh, growth at all costs, just get as many users as you possibly can. Excuse me, because that's become. That has been the advice for the last 15 years or so and I think that's starting to change.
Speaker 2:And do we think it's just starting to change because of the macro shifts in the environment and a greater focus on profitability?
Speaker 1:I think that's a factor. I also just think there's more awareness around it now and I think even just the venture capital industry has become better at articulating and communicating the asks around that, the knowledge around that amongst early stage founders. You're just seeing more of that. So I think it's just a function of things. I think definitely post-COVID 2021, 2022, when things really started to slow down kind of really made it, you know, really brought it to light for people and unfortunately, there were a lot of companies during that timeframe early stage that frankly had to wrap up just because they were not growing in any kind of sustainable way, and it was just. It was sad to see that.
Speaker 2:Yeah, it's certainly been a tough couple of years. So the magic number that's been referred to a couple of times is that, referring to the three to one LTV, to CAC that's usually referenced.
Speaker 4:The way that we look at it is sales and marketing spend to revenue. That's the way we look at it. There's probably different ways that people look at it, but that's the way that we think about it. So it's an efficiency metric that we combine with lifetime value and net churn and all that Gotcha.
Speaker 2:Okay, and then with the freemium model, because Does that throw off the LTV to CAC equation? Because you still had to have paid to acquire those customers, that ultimately never gave you any sort of revenue because they just didn't go beyond the trial. So then do you need more lifetime value out of the folks who do actually convert, or how do you approach that?
Speaker 4:Yeah, it's very much like there's a couple of things to this. So the land expand aspect of this is really important right. We have this product now that's out. We have plans for getting closer to pipeline and the customer um later.
Speaker 4:So landing and expanding is really important thing.
Speaker 4:What we we basically obsess over our funnel right and there are benchmarks for conversion rates from visit to sign up, to sign up to start trial, to engage with sales and pipeline and then close and the one thing you can control is average deal size.
Speaker 4:But it is, yeah, I mean it has to come over time. It has to come by growing customers right over time. But if you can set it up in a way that your cost per lead is low which again we obsess over all of this on the front end and this just comes from experience doing it Most companies don't because they're thinking just grow a customer on the technology they have and that's where they start to fail is if you set up the top of funnel and the entire experience before they become a customer, it makes it a hell of a lot easier for you to sustain the lifetime value in CAC by growing those customers right and the closer you get to pipeline and revenue and, you know, doing some level of human and combination of AI, people pay more for that because it's actually impacting further down the funnel, and so we have plans to go through the whole customer journey.
Speaker 1:One thing I wanted to add to that, another way that has helped me think about and frame things is the freemium spend is almost like a marketing spend. You can think of it as like oh, that could be my branding spend, that's like the equivalent of my branding spend or marketing spend. Right, like it's like you can think of it as like oh, that could be my branding spend. That's like the equivalent of my branding spend or marketing spend. So I think when you, when you think of things that way, that can change the dynamics a little bit in that or in your organization where you're like oh, we have, like you said, we have this massive freemium model and we got to make up for it. On the other side, or you could just be like, hey, that's just branding, for example, like there's awareness that we would have spent anyways that it's hard to put place ROI on too.
Speaker 4:Yeah, that's a good point. That's a good point, Usher, is it creates a community of users and word of mouth and organic growth right. So it does pay back, but you have to know how to build that and how to measure it, and we obsess over that stuff.
Speaker 2:That's a great way to think about it, matt, you mentioned a couple of times that the easiest way to grow is growing average deal size. I know you mentioned you did it by 10% at New Relic and you've referenced it a couple of times with Bounty. How does one grow average deal size other than the simple answer of raise prices?
Speaker 4:Well. So it's not raising price, it's growing customer spend by having a pricing model that incrementally increases based on the value you're getting right, so it's close them quick. Acquisition so the way that I build sales teams is there's an acquisition team that transacts quick and that first transaction should be easily digestible, right, you could go into a starter pack and then you go to a pro pack and like it's all pricing and packaging and those become like sort of paid leads, you know, paid trials for the team. Then the team will upgrade those based on the units that you're selling. So just in like one product, like you can do that.
Speaker 4:And then, at the right time, you think about what the adjacent offerings are going to be and then you're selling a platform. Right, and you got to do that in sequence, it can't be all at once. And that's another mistake I've seen people make is oh, we got our next product already, let's go build it. But no, let's make sure that our first product is honed in, differentiated and we're winning there and we know that we can sustain customer, we can grow customer and we can convert prospects. Let's do that first Strong product, market fit and differentiation.
Speaker 4:Then it's the way that I think about it is it's almost like you have an incubator on the side that's thinking about a year from now right, and it's like a separate team, maybe as a GM. And it's thinking about a year from now Right, and it's like a separate team, maybe as a GM, and it's thinking about our second product, and so by the time, we need our second products there right, but the core company is focused on what we do today, because when people try to do two things at once, it's it all falls apart, right, they don't know what to do, and so siloing that in a way is really important. But thinking about what do we need a year, year and a half from now to continue and sustain the growth or accelerate, is super important. So it is upselling the current product and it is adding new products to the platform.
Speaker 1:Yeah, go ahead. Sorry, one quick thing I was going to add that this highlights right, and you're probably seeing this, it's just the rise of usage-based billing models. Now, right, like just metering, and you're just seeing that happen more across the board. Because once you have metering in place, that gives you fine-grained control, refinement, understanding, and then that becomes a really important and powerful lever that allows you to play around with the outcome being average deal size, right, but you can actually start doing all sorts of creative uh things when you have something like that in place, right?
Speaker 2:yeah, that's a great point, because there's a lot of companies, particularly on the uh, the ai side, that are using tokens, because obviously we need a certain amount of tokens to generate ai responses, and so that that, for example, is what you'd be referring to when you're talking about usage, or just one example.
Speaker 1:Yeah, exactly. So tokens is an example, right, but what it allows you to do is to really tie mentally in the buyer's mind, psychologically, like the, to the value that I'm getting out of this tool, right? So if I'm using it more, I'm going to pay more, but I'm getting more value out of it. That is hard to do, for example, in a seat-based pricing, because you're like, oh, a seat, and then the seat has, like, all these different things and I'm using two out of these 10 features, but I'm paying for all 10 of them, right? So that's what something like this, you know, like you said, token-based or usage-based, just having the ability to meter gives you that ability to have more flexibility on your deal sizes.
Speaker 4:Yeah, I would agree with that. I think I'll be provocative here for a second. But the seat-based pricing is kind of dying, right, it does become shelfware at some point. Right, and I totally agree with Asha, you're using two things out of 10 things. Is cost and value in line anymore? And like a platform, there's two types of customers, right, some customers want predictability in what they're spending every month, which is just a flat rate, and then there's some customers, like depending on, like the company size, really that want control over the usage, right, so there's a platform fee that's lower and then it's usage-based and then at some point they use so much that they want to raise the platform. So it just becomes this like overage opportunity to continue to upsell.
Speaker 2:And how do you approach that from a pricing perspective at Bounty so today, we just have a platform fee, right.
Speaker 4:We are moving in the direction of having multiple ways of exporting, like an output from the core product that we have today and also allowing people to import. So you can either pay a flat fee or you can use tokens to import more information or export information in multiple ways. So that's a different model that we're looking at right now.
Speaker 1:Yeah, and the thing that is there today is that, you know, instead of focusing on seats, we've moved the unit of value around accounts or companies. Essentially is what it is, which is again kind of step zero or step one before you move into a more refined usage based type of token oriented model Right.
Speaker 2:Yeah, so I actually got into your guys' product last night and signed up for the trial and I was playing around with it so I could have an idea of what we were talking about. What do you think of it? I liked it. I liked it it was, and it actually created a kind of a couple of additional questions. I think the automated research portion of it works very well and I love the different buyer personas, for and I, you know, I gave it the folks that I typically sell into, like for my recruiting business, for example, and the copy was good, the ICPs were good. But I did have a question in just the context of and I think you've sort of alluded to this in that I think this is more of the beginning and obviously you're going to continue to expand. But there's no, it really was and correct me if I'm wrong, maybe and this is just in the trial, but it's like you can send directly from the platform or like copy paste into a like an engagement tool?
Speaker 1:is that generally correct? Yeah, yeah, you're talking about the. I'm assuming you're referring to integrations like having yeah, yep, yep, yeah. So that's exactly right and that's intentional.
Speaker 1:You know um, where we wanted to have a limited trial experience, where and if you think about our icp right, like um, which is we're hyper-focused on early stage, founder-led sales type teams like that are just much smaller. You know, for those folks, number one budget is tight. So we know that, hey, it's unlikely you're going to have some kind of a sequencing tool. It's going to be very limited and you know we don't want to. We want to be in a price point where you can get all of this value around research and data. You know the contact database and messaging and all that kind of stuff, uh, that you would have to put together um at like a pretty reasonable price point and then if you are a bigger team that has integrations, then, like, let's talk, like you talk, to sales and then we can enable those integrations for you.
Speaker 1:Uh, the other piece that you don't you can, you may or may not have experience in your trial is but there is a human API, human as an API element behind this, which is that you know, most of the research is automated, but if there are things that are really hard for us to find, that the AI finds hard to find, then it gets kicked off to a human workflow that will go and augment it, but to you it would be pretty invisible, right, and that is pretty. I would say just an approach in general across AI that I think you'll see more adoption of like hey, how are we, when we're providing a service, how do we combine both the AI, because AI is not going to be enough. You know this right, it's just who wants to have the headache. Is it you, reese? Or is it like do I want to hand that headache off to someone else? So it's like, okay, I'd rather hand it off to someone else to deal with, and so that's kind of core to that experience.
Speaker 2:Okay, got it. And so you've emphasized and I do worry here a little bit that I mentioned my own experience with the trial, but I don't think it was really expanded on on really what the core product of bounty does. So maybe we could rewind a little bit and one of you could explain that just for the listeners.
Speaker 1:Yeah. So for the listeners it would be that you are hiring a quote unquote a bounty AI teammate experience to help you outbound prospect and what that means specifically. If you think about prospecting and break it up into different stages or tasks, it is having a list of companies researching what's going on in those companies, what are the key events that I can reach out to people for to tell them here's how I can help you so, doing the research on the company, finding the right personas based on the product that you sell, the capabilities and the use cases that you solve. For Now, typically, if you think about how long it takes a human to do that about, and the output of all of that is some kind of personalized message that you can either put in the form of a PDF or an email or whatever it is Like. We're not explicitly in the email business, but let's just say you have a message that you've personalized Now that you can choose to either send it out on your own or you can say, hey, bounty, I want you to send it out. Sequence it on my behalf, right, and that's the outcome as a service. But essentially that whole workflow, if you think about it, for one personalized message can take you know anywhere between 60 to 90 minutes in a best case scenario, right Whereas you get it within. You know if you've tried it in the trial experience you've got a message ready to go within less than five minutes. So that's a pretty huge productivity gain that you get.
Speaker 1:So that's what Bounty does today for you is really focusing on outbound prospecting in two forms. One is you can use it on your own, but you are responsible for sequencing and doing the work and putting it into the different tools and then prompt engineering and keeping it up to date. That's on you. If you buy our startup service, then you can say like hey, I am an early stage founder, early stage company that doesn't really have the resources, but I need to build pipeline, I need to build warm leads, I need to nurture them. I want to hand it off to Bounty. That's the second part of our service, which is like hand it to us and we will run all of that for you, that whole workflow for you, but specifically today focused on outbound prospecting using both AI and humans.
Speaker 2:Yeah, does that give you a?
Speaker 1:little bit more clarity.
Speaker 2:That does.
Speaker 4:Super helpful, I'll add. My experience in this BDR has become this get up in the morning, blast out 300 emails, hope for meetings because incentives are off right. Bdrs get compensated on meetings and sales reps get compensated on pipeline. And then a gift card on top of it, right Like now, you're giving T-shirts and gift cards. It's just like losing proposition today and then like the world has changed right.
Speaker 4:So you have really bright folks are graduating from college but they're working from home for the most part and they're asked to do the most strategic outreach in the company. So you know. Then you know they do all of this work. They can't get it done at scale. They've never done it before. They don't know how to go out and, you know, tie their solution to create a pitch to the company. They're trying to contact at the buyer persona what that person cares about. That would take them all day to get three out that were good, like even average, to be honest, and so they can't do it at scale.
Speaker 4:So it's become this mass email thing. It's this mass email and gift card and get meetings and hope and pray that people are showing up for value and not the gift card. And that's the world that we live in today. And the other aspect of this, like what we've seen it was unintended to be honest with you at first is we're creating better salespeople. We are literally telling you, we're showing you, how to do it right.
Speaker 4:The product does it, and then you read through it. You understand what the value drivers are, the buyer persona you're trying to sell to. You understand how your solution ties to business and public business objectives of the company you're trying to sell to. We're creating better salespeople, we're training and enabling people and we're also helping them get out. Like Asha said, the email and the output is just like a feature of what we do. Just like a feature of what we do, but it is this hub of knowledge that can train people and also be manipulated in a way that you can export it for multiple things in the future, not just an email. It can be a lot more than that.
Speaker 2:Yeah, you're not going to get any argument from me that the role of the BDR has changed, and I think particularly you're right with the work from home when you're at that more junior level. There's so much you learn just from osmosis and by sitting by more senior salespeople and if you don't get to do that then it kneecaps your growth At the same time. Is there also just to be a little bit contrarian is there also an argument that doing some of that work and doing some of that struggle and maybe taking all day to send those three meals is that a necessary part of learning and training and growth is kind of figuring it out on your own, or not? Is it more helpful just to say, hey, here's the right answer, and then you learn by eventually looking at enough of the right answers that this is how you should do your customization?
Speaker 4:Yeah, well, it depends on how you trade off enablement versus revenue, right? So if the idea is that you're enabling and training BDRs now, then meetings are going to suffer and pipelines are going to suffer, right? So I hear that, right. So maybe it's like the first two weeks of training you go through that and do that. But, um, if that's the purpose of it, I think every company is going to trade off more pipeline, more meetings, for enablement do we need bdrs with a tool like bounty?
Speaker 4:you know what? What? I think there's two scenarios that we see, right. There's the early, early stage founder-led sales who is considering hiring a BDR that maybe doesn't, or maybe hires one and then hires Bounty. Then there is the more mature company that has 20, 30 BDRs. We're not trying to replace them, right, we want to help. And it's almost like the one person's trash is another person's treasure. Right, if you can elevate a BDR to do more work, that's closer to the customer, guess what? The sales rep gets to move up, too, right. And then everybody moves up.
Speaker 4:And this is the problem that I see today is there's too much talking about calling and prepping to call a customer and not enough calling the customer. And if we can solve for that, this is why salespeople get into sales. They don't get into sales because they need to log Salesforce tasks all day and have forecast calls and do prospecting. No, they want to be on phone calls. That's why they're here. They're social people, right. And it's a declining thing right now where there's more work in the day than there is actually doing the work. Doing the work of talking to the customer, prepping for the call, has become the predominant use of their time.
Speaker 1:You know sales is all about. You know, if you think about your superpower as a human being versus AI, right, it is how you use social intelligence and judgment to manage complex problems. Right, that's really what it comes down to and that is something you know, what we're really really intentional about. Because with AI, any kind of AI, right, it's all about, it's what it is and it's a reflection of what you put in. You put in garbage, you get garbage. You put in good, you get good. You put in bad, you get bad.
Speaker 1:So we took a stance to say, like we are going to inject good, good behaviors, good outcomes, and we're going to get that right. That really means is when we think about, in the context of a BDR is like, hey, bdr, like you know, this research, like Matt said, like don't spend the time prepping, spend the time in figuring out what is the appropriate social engagement and interaction that's going to get this person to have a conversation with you about the pain and the problem that they're facing right now, because after that, guess what? You actually have to actually help them solve the problem, which is okay. So that requires you to learn, have the time, the mental bandwidth, the emotional bandwidth to go pick up new, new skills, new technology. So I almost see, you know, the BDRs becoming more what we call AEs, for example.
Speaker 1:But I think I would take it one step further, which is that I almost at a go to market level it is. You know, imagine a world in which the go-to-market folks are becoming extremely, extremely close to the product. They're shifting closer and closer to the product, to how it gets built and just picking up skills along the way and new sort of neural connections forming, so that I think being really super intentional about that is really important, having a viewpoint on it is really important. But yeah, like you know, I completely, 100% agree with what Matt is saying. It's like it's just that amplify the social intelligence and complex problem solving. That is the important piece, versus like, oh, we're going to replace BDRs because it's like, well, replace them with what you know. That's the open question.
Speaker 4:Well, there are. What we're doing is replacing the title BDR and, like the first entry level is junior sales. That's what it should be. If junior sales can be doing the demos, then sales folks can be working on managing their pipeline and being in front of customers. So that's the whole aspect of moving everybody up closer to the customer. And there's a reason why every company plans for a decline in productivity every year, because a lot of companies are throwing headcount at growth and then the demand, right, the lead generation has spread more thin right. So every year you plan for a decline of 10%. So you can make a number that you can report growth. But you can also report hitting your goal. And the number of folks that are making quota today has declined right.
Speaker 4:Like at New Relic, we intentionally set a goal. We had this thing called the morale tax right, and Mark Shackleben and I would work on it. Mark's the CFO there now he was the COO. When I was there We'd say look, you know what? We're going to carve out a million dollars for the year and we're going to set quotas where they're attainable and 70% of the team 75% of the team is going to make their number. Well, guess what you just did. You just improved morale implicitly. And then you also recruiting becomes easier because everybody's making their number. Culture is awesome and the million dollars is now just like become $3 million in soft costs across the board.
Speaker 4:People don't leave, people are happy, people wanna work there. We don't have to recruit, it's all inbound right. That is the thing. People aren't like chasing quota the entire time. Because what happens when you allow somebody to see beyond the line of quota? They work harder. You actually get more out of them. When they are have no chance of making their quota. Guess what they do? They look for another job and they sink and they, they, they honestly poison the culture. So it's just such an easy thing to think about. Like combining that like that type of thinking. You can, you can augment that with bounty, like, like. That is something that like will make it easier. So you don't have to have that morale tax. You already have it built in.
Speaker 2:Right. So from a consumer perspective I don't know if you'd seen this, but Mark Mark Kosaglo, who is the first employee outreach and he scaled it up to 200 plus in revenue he recently founded a company called Operator which, as of this recording, they haven't released their product yet, so not a hundred percent sure what it is. But the problem that has been described is that contact commoditization and AI outreach has done damage to Outbound because it's like when everyone, when everything is personalized, it's no longer special. How do you respond to that? What are your thoughts?
Speaker 1:um, I think I think there's truth to that, right like it's at some point it's. Imagine a world where it's like bots talking to bots, right, it's like that. That's kind of. I think the way that I see, um, this playing out is like okay, so in that world where you've got bots that are generated and it's like you can't really tell the difference, you're starting to like tune out channels, right, like email, like email is already pretty tuned out for cold. I would say. You know, linkedin is becoming extremely, extremely crowded with a lot of this stuff. So people are starting to tune, starting to tune that out.
Speaker 1:And I think the emphasis and importance which I think is we're talking about the problem is like OK, how do you actually stand out, you know, how do you actually? And the way again that I see it is like it's not going to be just a standalone AI solution, that's just it's. I don't. I don't see a world where that happens, where it's a standalone AI solution. I think the opportunity there is like OK, how do you again bring really bring forth the human in the loop element as part of that consumer experience? Now, right, where you're just like, and, by the way, you know, maybe there's a world where people just get so attuned and attached to that, with people being remote and post COVID, where they're like I never want to talk to a human and I just love the fact that I'm talking to a bot all the time.
Speaker 1:I don't know, I could be wrong, but I think there's definitely. I think there's going to be starvation for human online connection in in like sort of my purchasing experience. That, um, I think you have to figure out. We have to, collectively, all of the AI companies that are in this space have to figure out like, how do you bring that forward, how do you bring that to light, and so for that you've got to have the right people, infrastructure, the right skills you know in within your company, within your product, that you, you know, are able to bring that to light. So that's that's how I would respond to it, which would be like, yeah, I agree, like contact, monetization and AI like has wreaked havoc and people have started to tune out, but I think it's also created an opportunity, which is like okay, here's how we can bubble up through the noise If you can really figure out where is the right place to put the human in that interaction.
Speaker 4:Yeah, we're seeing that. First of all, I think humans are important very still, and I think AI will not stand on its own in this space for quite some time unless a lot of things change. Because there's got to be a judgment call on the content, right? Someone has to make a judgment call, otherwise you just sound like you're talking to a bot, right, and it's just as bad as a generic email. So the last 5%, we'll get you 95% of the way there, and we have our team that's tweaking behind the scenes that's human in the loop. The sales reps and BDRs just have to make judgment calls on whether that is the right message to send. That's where I think we are today, is humans still make the judgment on what goes out and what doesn't, but they don't have to do all the heavy lifting.
Speaker 2:Yeah, because there's another company that just recently raised a fairly similarly sized seed round that is a fully AI BDR, as far as I'm aware. I haven't tried the product, but there's no human in the loop, and my hesitancy about that is essentially what you just described. Do you think there will be a point where a technology like that is feasible, or do we think there will always be a human in the loop?
Speaker 1:I think it'll be, it's feasible from a like bill. Can we build it? And will people buy? Probably, like you'll see this spike, we'll see this like oh, I want to try it, I want to see what it's like. But I think, as we've seen with a lot of ai technologies that launched in the last three to four years, is that there's this very extreme spike of excitement and interest and then also an equally sort of uh of downward spiral in terms of disillusionment that people feel. So let's just say the example.
Speaker 1:I don't know if you guys ever watched that movie I think it was called Her with Joaquin Phoenix. I've seen parts of it, right, but there's this really deep emotional connection that you form with the AI, but then you realize that there's like 10,000 people that are also forming the same kind of emotional connection and I just I just kind of like I think that you know, having a world where you have people that are interacting that way with AI is pretty close to reality in my personal opinion. And you know but would I be you? You know there's got to be something deeper, like there's always. That's like almost like step, stage zero in your sales process.
Speaker 1:Okay, I'm done with stage. I booked a meeting. Now, what right like? So there's all this opportunity ahead of like. Okay, where is that deeper connection that comes from physical touch, that comes from the three of us? Looking at each other's faces, you know, reading each's expressions, making rapid, instant in time decisions around oh, do I want to buy Reese's product or not? Or like, is he convincing me? What's his tone of voice? You know, that thing I feel like is is really going to be hard to replicate and I feel like that is, you know, even though it's going to be like you said, it's feasible and it will be done and people will do it, even though it's going to be like you said, it's feasible and it will be done and people will do it. But I think there's going to be a really, really high premium on this. What's happening right now.
Speaker 4:Really really high premium on that it's a long road, in my opinion. Based on your average deal size, either, the product can sell itself, right. Low price point, transactional. I don't see AI selling 25,000 plus average deal sizes. I don't think people are going to buy that way. I do agree with ushers there's a degree of trust when you're spending a certain amount of money. You want to look somebody in the eye, you want to hear their voice, their tone, their body language. You have to trust them, right? Eye contact is a big thing, right, and it's I don't know. You know, I just don't. I think it's a long road to that point that I don't see it's just again, it's like people buy from people or people will buy from your product experience. But it depends on the price point, right?
Speaker 2:Yeah, dan from Stage 2 had mentioned that a few weeks ago when he was on here. Basically, the similar thought was that, yeah, for PLG small deal size stuff you can probably get away with AI, but no one's buying. I mean you said 25. I think he said a million. Nobody's spending a million dollars on an enterprise deal without talking to several humans much less.
Speaker 4:One, nobody's spending 25,000. To several humans, much less one. Nobody's spending $25,000. I mean, it's a lower bar than that. Right Like a million is outrageous to think about, right, unless they're two guys talking to each other.
Speaker 2:Never know. So when we think about what the structure of go-to-market teams looks like in the future, you mentioned a little bit on the sales side that you think everyone will more or less ratchet up a step and have the more junior folks doing the demos and the more senior folks managing the pipeline. How do you see that changing, if at all? On the post-sales and customer success side, Ashi, you want to touch on?
Speaker 1:Yeah, yeah, no, I think this is an ongoing debate around this, right, and there's a few ways to look at it. There was a point in time in our life, at Bounty, where we were like, oh, imagine a world where you could just you literally think about AI teammates as actual teammates, right? So you're thinking about it in terms of you know, you've got a CFO that's looking at headcount, building out a model, and then, like you have a spreadsheet that has like reese, um and matt and usher, and then it's like ai teammate bob and ai teammate karen, or whatever it is right. Um, so I think it's it's it's fanciful and romantic that things think about things that way, and maybe there's some reality which is like, okay, I'm going to design my sales team and I'm going to have, you know, three ai bdrs and two junior sales reps and like four AEs and you know an SE and stuff like that. So there's like one world that could possibly emerge that looks a lot like that, just depending on how buying patterns emerge.
Speaker 1:I think the other world is just like everything AI co-pilot, like it's like, ok, you know, everybody gets an Ironman suit. It's like, okay, everybody gets an Ironman suit. Okay, everybody is Tony Stark on the team and everybody gets an Ironman suit, which is this AI co-pilot in post-sales, pre-sales, whatever it is, and that's a much more sort of blended way of looking at AI and how it plays. And maybe in some places you will see the Jarvis, the AI, doing a lot more work on your behalf, which is on the BDR prospecting side, and you're just kind of like sitting in the suit. And then on the AESC solution engineering side, it's more like, hey, tony Stark is doing most of the work and the fighting, but you've still got the AI that's augmenting me in a bunch of different places, like solutions engineering is, I think, is a really interesting one.
Speaker 1:I was talking to my friend about that use case yesterday, which is, you know, that's where you're really looking at a complex landscape, but you really want to get information about people's systems quickly so that you can come up with a reference architecture and deploy it. So you know that's a much more blended AI model. So that's how I see. You know, those are the kind of two world views that I think we are starting to look at and how some of this stuff evolves over time. So yeah, we'll see, you know it's hard to tell.
Speaker 4:I would take that. If I want to step down to more tactical explanation, then Dosh was very good at doing the high level. But tactically, if you think about enabling reps and DDRs to be better with our platform but also creating high quality value meetings, the laws of average trickle down. There's people coming to a meeting because they are interested instead of getting a gift card Handing over to the sales team on the pipeline, a much more highly qualified opportunity.
Speaker 4:Again, the laws of average is today salespeople are discounting by 40% to just get a deal done at the end of the quarter because cost and value aren't in line, because it starts with the meeting they had and it's like all right, well, I'll buy it, but I'm going to do it month to month. So they're selling month to month deals or 90-day outs and they are discounting at 40% and so cost and value is already misaligned and then handing it over to CS and CS ends up just chasing cancellations instead of maintaining like solid relationships, like that whole thing is broken. The whole customer journey is entirely broken and that's why again I go back to why productivity is declining. The more people you add, the more problems you get. Like this problem gets bigger and bigger. And so if you're discounting at 40% to get a deal done on average, well, what if you were just discounting at 10%, cause those opportunities were much more highly qualified? Would you need to lower productivity every year? Probably not.
Speaker 4:That's a great point Super interesting.
Speaker 2:Well guys, this has been awesome. If someone wants to check out bounty or do a demo, what's the what's the best way to do that?
Speaker 1:If someone wants to check out Bounty or do a demo, what's the best?
Speaker 4:way to do that. Go to our website. Bountyai Watch your cell phone. Yeah, just get a watch your cell phone number.
Speaker 2:Publish it in the show notes, Cool guys. Don't call me Awesome. Thank you so much, really appreciate you coming on.
Speaker 3:Thanks for listening to See to Exit. If you enjoyed the episode, don't forget to subscribe and we'll see you next time.
