Entrepreneur Intel

EI - Michael Eckhoff
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Intro: [00:00:00] This is the unfiltered truth about entrepreneurship. Raw. No VS. No sugarcoating. Welcome to Entrepreneur Intel. I'm your host, Wes Matthews. Each episode, we'll learn from experienced founders and uncover the top 5 percent learnings that led to their success in all things personal, family, and business.

This show is sponsored by Stealth Consulting, delivering clear marketing strategies, ROI, and no surprises.

Wes: I'm super excited for today's guest. Uh, he is an award winning

sales leader with a stellar track record.

Deep rooted history in recruiting building, training and leading teams. startups, scale ups and Fortune 500 companies alike. Uh, most recently as CRO at an early AI startup company. So an early [00:01:00] company in that space, uh, Fractional CRO at Sales Growth International. Welcome, Michael Eckhoff.

Michael: Thank you. Appreciate it, Wes. Good. Enjoy being here.

Wes: Well, thanks so much for coming on. Um, I got to first ask you, Fractional CRO, right? Why world are you a fractional CRO? What does that mean to you?

Michael: Well, besides having enough gray hair to say I've been around for a while, um, you know, for me, it's, it's an opportunity to do some of the things that I love. and touch and affect multiple companies. So, you know, I've spent my career growing from very large companies. Um, you know, I always recommend people start in a bigger company where you've got more established processes, you know, you can learn and go through training, get good mentors.

Build relationships that will last throughout the rest of your career. Um, and I was lucky enough to do that early in my career. And then I made the jump into the startup world once I felt like I had had enough of corporate America and really wanted to get into a more, uh, [00:02:00] direct involvement in growing and building and moved into the startup world, had some fantastic runs with some great exits.

Um, and of course in the startup world, you always have those that don't work out quite as well. It's a higher risk and higher reward scenario. Um, what I found is in the past several years, uh, the VC landscape has changed in that there's a lot of companies that get, uh, Too much money, frankly, with a good idea, but not really the execution to demonstrate that they haven't really gotten to true product market fit and the ability to start growing the business with anything other than a bunch of KPIs focused on how to get to the next round of funding.

So in the last company, when we had to make some changes, retool the product, um, we decided that sales and marketing was not the right place to be spending money at that time. So, uh, step down and. Looked at a few companies out there and realized as a builder, [00:03:00] I like growing companies. I like taking a company that's gotten that product market fit, um, and then exploding it, right.

Getting that exponential growth. And I didn't see a lot of those opportunities on the market. So rather than. take something that wasn't the right fit for me. Um, I stepped back into a advisory role and into a fractional CRO role. And what that means essentially is I'm working with a few different clients.

I've come in, I help them understand what are the challenges in their go to market model, in their sales structure, customer success structure, how the interplay between marketing and sales and product is operating. Um, help them define and design whether they're product led sales, product led growth, some hybrid between that.

Um, you know, and then really identify and execute on how do we make those changes to help them hit that next stage of growth?

Wes: You mentioned something that I want to hit on, you know, about like, you know, [00:04:00] not investing in sales versus like product. I mean, From a CRO perspective, right? You have the sales channel, right? You have to sell but you also have to make the donuts. Is that you didn't want to invest in sales because like, I want to talk on the deliverable. Is that because the product and the deliverable was not at a certain standard quite yet or like can you dive in a little bit on that

Michael: Yeah. So there's, a couple of things you got to think about when you're looking at being able to scale a product in the early stage. In my opinion, the best companies are those that start out founder led, founder has passion, they've got a network of people, the founder is doing the early stage sales.

Because, you know, you can feel that energy when you're sitting down with a founder who's excited about a product. they've put something out they think is really interesting. And in many cases, those early adopters or those, even very beyond that, I'm kind of a, Advocate of the, Jeffrey Moore crossing the chasm model, but you know, what people don't [00:05:00] realize is that it's not just one chasm.

Between early adopter and mass market. There's actually a chasm between every stage in that product life cycle growth. And those very, very early adopters that are quite often friends and family or referral sales are great ways to test the product. But you've got to make sure that those customers are happy, that they're actually getting value from the product before you can move into the next stage where you try to start scaling your sales team.

And that's where that transition from founder led sales to, or to a true sales team, many companies are falling down at that stage because, you know, founders can convince somebody to buy a product, but they may not. Be getting a tremendous amount of value, or there may be barriers to getting that product in production or product, getting adoption across an organization.

Um, and to truly hit that scale factor, you've got to be able to show adoption, ongoing value, and drive that [00:06:00] across multiple companies, multiple industries, multiple segments, whatever that is, you've got to understand what your target market is and be able to replicate that value across that, or that audience.

Wes: and what's a typical time frame for that in your opinion? Right. I know it could probably vary and be all over the place, but as an entrepreneur, like I'm like, boom, boom, boom. Like I want to go, go, go, go. But you know, what in your experience, what does that typically translate to?

Michael: Uh, you know, I mean, it's, it's years. I rarely ever see that happen in, you know, less than a year or two, and sometimes it can take five, even 10 years before you really see that, that adoption happen. And a lot of it comes down to market dynamics, and it's one of the things we had quite a bit that we focused on in the last company was that the product they built was early.

It was something the market didn't know it needed yet. And as many of the companies out there, we start talking to them, they find out, they see this, they're like, this is amazing. I'm not sure how I would use it, but it's absolutely [00:07:00] incredible. It's a great product. That gives you the indicator that you're probably a little early to the market with that solution.

And with the, the, obviously the boom of AI that happened with the, the widespread recognition of chat GPT, now everything is AI. So if you're selling an early stage AI product, um, and then. Now, large language model becomes the de facto definition of AI. Um, and you're not in the large language model space.

It causes a lot of distraction. And so what, what winds up happening is there's a lot of focus on it. You get a lot of attention, but you start to find out that the actual utility of the product you're selling doesn't fit the market. And so that's when you have to think about retooling, changing the product.

Um, or changing the basic problem that you're trying to solve.

Wes: Yeah. You bring up a good, uh, Some good things, because as I'm listening to you, I'm reflecting in my own mind. Like I had a digital marketing company for 15 years. [00:08:00] I sold it in 21. part of that reason that drove that is I'm like, You know, back in like the early, you know, 2010 SEO, organic search, like that was the thing, then all of a sudden here comes AI and in my mind, my, my crystal ball was like, this industry is going to get completely disrupted by AI. Like, I don't think it's quite happened yet. But I see so many products and little things coming into the market now that used to be like back then you had to buy this whole solution and you got to go on Salesforce or this big clunky system. But now there's a lot of little things that you can piecemeal together. I used to joke with people back then and say, Hey, you don't want, you know, your sister, your sister's cousin's brother's friend building your website. You want to hire a professional company. And today I look at that statement and say, man, that same person with access today can build some really cool stuff and actually do a really good job.

So I want to touch on that because you have [00:09:00] sales experience around AI. And I think that's a real hot button with a lot of entrepreneurs. Can you talk about that? Or like, you know, what's that, what's the biggest shifts you've seen in the past, like five years or just your general feedback on that?

Michael: Yeah. I mean, I think you hit on, you hit on the key point, which is you used to be that anybody can go build a website. I can go to one of the online tools. I can go to WordPress and build a website. It's not going to be very good. Um, if I use AI technology, I can still do that and it'll be better, but that doesn't change the fact that the, the human experience, the human knowledge that's guiding the AI.

is the real differentiator. And I think that's true across every function that you have. Um, I know some companies out there that are helping train people on how to write secure code. And yes, I can write code with AI. Is that code going to follow my standard corporate security practices? Is [00:10:00] it going to write code that is better and less vulnerable than the code that A professional developer would write?

Probably not. What it's going to do is it's going to accelerate the pace of release of code and give even more opportunity for error and bugs, because now I'm letting an AI do things in seconds or minutes that might take me hours. And if I don't know what I'm doing, then I'm just making more problems.

It's kind of the same thing with sales. If you think about the proliferation of AI based sales tools, what are most people doing and what are most companies doing? They're bolting on a large language model to an existing product, you know, and that's like taking your, you know, your grandma's 1970 Chevy Nova, you know, and putting a supercharged Ferrari engine into it and saying, here you go, take it away.

What's going to happen? Well, it's probably going to break down. You're probably going to crash. You're going to hurt yourself. Um, and I think that's what's happening in a [00:11:00] lot of cases right now is the, the use of AI, um, completely unfettered without guidance, without controls, uh, is, is putting people into bad position.

Wes: So what's the opportunity for an entrepreneurial company, right? You know, a lot of founders are asking that question. AI, just, and it, to me, it's very similar to when I started my web company and SEO, like SEO came about and there was different levels of people that had experience or knowledge around it.

Maybe they went to a networking mixer and they're like, I need to do SEO. I'm going to invest in it. Right. And it's going to do all this magical stuff. Never really learn about it, but then hire an agency and things go crazy. Right. And I feel AI is like that same thing, right? Where people hear a little bit about it and they're like, I just need to implement AI to solve these problems.

But you know, what's the

an entrepreneur should do to even start to investigate this stuff?

Michael: Yeah, absolutely. And, you know, I mean, I think I want to be [00:12:00] clear. I'm a huge proponent of AI, so I'm not negative on a at all at AI at all. I'm a proponent of effective use of AI. And so, you know, in your example, what should an entrepreneur focus on? Well, I think it comes back to this idea that I want to use AI to augment it.

People, I want to make people better using AI. And, you know, early days, everybody said, Oh, AI is going to take my job. And I heard a lot of salespeople with this concept that, Oh, they're going to have AI based salespeople that's going to take my job. And my answer to that is no, AI is not going to take your job, but the sales rep who effectively uses AI.

Is going to take your job, right? And so it's, how do you make, you know, it's, it's, how do you make an augmented human who takes the skills and knowledge that they've built up and then accelerates their, their effectiveness and their capabilities using AI? I mean, I'm, I'm using it every day. You know, every piece of [00:13:00] every email I write, every blog post I write, everything I write, I'm not asking AI to write it for me, but I'm absolutely posting it into an AI and asking it to improve it.

And then I look at it and I see, is this in my voice? Is this something that represents me? Um, is it accurate? But it's not, I'm not letting AI do it for me. I'm just using AI to be more effective.

Wes: You know, what's interesting is I, uh, had an opportunity to speak in front of a group of, Entrepreneurial students. And, uh, of them reached out and they wanted to grab a half hour. Just, he's kind of thirst for learning. And I, and I sat down and, uh, I recorded it through zoom, through the cloud recording. So after I recorded that half hour conversation, it gave me the video recording and then all of the notes, right? So I went through all of the notes, right? Click copied, shoved all of that in chat GPT. And I said, how do you think this went? And it gave me like some of the [00:14:00] best feedback. Um, it actually said, Hey, you talked way too much.

Like you offered a lot of value, but you really didn't listen. You know, we score this about an eight and a half out of 10. And then I asked it another layer of questions. And I said, you know, if I were to consult, how much do you think this is worth per hour? And it literally gave me a specific detail and it said like, you know, 250 to this.

But if you change this and get it to a nine point, like, was like, this is, this is mind blowing. Like that's, that's one little thing that you can do, but are there other that you recommend or you see or tools or widgets? Like you had said email, like, is that copy and pasting and putting everything in chat GPT? Or are you using extensions or like, how do you use this technology?

Michael: Yeah, I mean, you know, it's, it's interesting in terms of naming conventions, um, company, big companies used to fight over naming conventions all the time. And, and I'm not gonna name the companies, but you know, one company released the term co-pilot early on, and [00:15:00] now everybody uses the term co-pilot. It's become kind of a de facto standard for a parallel ai.

And so I love the co pilot model, which is, uh, you know, whether it's old school tools like Grammarly, where as I'm typing, it's just saying, Hey, you know what? You could say that in a better way. Um, anything that can have real time impact that doesn't require me to do a bunch of work and then do more work by engaging the AI.

If it can do it in real time, then I see it as a value add. To your point about using Zoom and the AI there, it's great to use a call recording tool. And everybody uses call recording tools these days. There was a point in time when people were afraid of using tools like Gong because they were, oh, customers aren't going to let us record the calls.

It's become such the norm now that, you know, on a typical call, I'll have three or four note takers join the call at the same time because everybody's got their AI based note taker. Where [00:16:00] I see the real value in these AI based note takers when they can start analyzing the conversation in real time. Um, so I'm using a tool now that shows me a talk time monitor and it says, you know, you've been talking for two and a half minutes, you might want to stop.

And it's giving me that real world guidance or real time guidance of how to be more effective in the moment. You know, it's, it's kind of like. I, you know, I, I love to play golf. I'm terrible at it. And so I've tried taking lessons a few times and it's great to take a lesson where you go out, they video your swing, you go back, you sit down, they're showing you the video, they're pointing out all the things you're doing wrong, then you go back out and you try to fix them.

Um, if you try to do that on your own, that's like using AI to improve your, your writing after the fact. If the golf pro is standing there beside me. playing around with me. And as I'm stepping in to take the swing and he's like, wait, hold on. Tip your shoulder back a little [00:17:00] more. Now lean back a little bit.

All right, now swing. When you get that real time instruction, it's order of magnitude, more impactful. MAC LEOD

Wes: or, know, entrepreneurs in my experience have no shortage of ideas. It's the execution where you start to get into trouble, right?

Where you need. operator, uh, COO, but a visionary that's going to dabble, like where, is there a good, like Apple has, you know, the app, you know, all of their apps. I mean, is there something out there for AI right now that can start to like, understand, Oh, this solves this problem. This solves that problem.

I personally haven't seen anything like that.

Michael: No, and I think in some ways, it's a good thing. You haven't seen that yet, because, um, that's when I get scared, right? That's, that's when [00:18:00] things get a little too advanced and I'm a little, I start getting worried. The reality of it is right now for an entrepreneur, you've got to be single minded. You've got to be focused on what problem are you trying to solve?

and Whatever product it is, I'll, I'll, um, I'll give you an example. There's a fantastic entrepreneur, serial entrepreneur that I worked with in a company some time ago, um, reached out to me and said, Hey, Mike, you're a sales guy. I got an idea, right? The problem that I see is companies want to research products.

They want to get quotes. They don't want to talk to salespeople and salespeople want to find buyers that are in an active engagement cycle. So I want to create a platform. That lets buyers explore information without having to expose who they are to the sales reps and sales reps to respond to that information and find a way to bridge the two together so that the people that you really talk to are the ones that are actively [00:19:00] engaged and the people that You're talking from a sales point of view on a buyer's side, there are people that actually can solve your problem.

And I'm like, fantastic idea. That's a problem. That's a real problem in the industry. Now, focus on how to solve that problem. At no point has AI come into this equation at all. Now, there are specific things I need to do, which is, I need to go test the problem. How do I find people that are potentially good fits for this?

Perfect use of AI, right? Now I can go to AI and describe what I'm trying to do and say, who are potential people that I should talk to? Who are the, the buyer side, who are the seller side? Um, so enabling me to do the steps to get to market, to get to scale, to develop the product, those are fantastic uses of AI, but AI for the sake of AI.

Is a complete distraction and should be avoided at all costs.

Wes: Now, how do you see this? Like taking a step back, right. You know, when I, [00:20:00] when I graduated from high school or college, I mean, cell phones just sort of came out. Uh, technology was nowhere where it is today, but now you have like YouTube, you have all these different things. So like, how does this impact schools and college and even leading up to like, you had mentioned like your experience with large enterprise companies, or even if you go the entrepreneurial route. I mean, with devices now and you know, you have so much access to, you know, in the palm of your hand, kids are just putting tests into ChatGPT or all these AIs. Like, how, how does, how do you see that unraveling?

Michael: Yeah. You know, it's funny. I looked at the stories around use of AI in education and you know, what was the first, the first thing that popped up after people realized that they were writing papers using AI?

created a platform that I could put in a set of, uh, you know, a piece of writing and say, was this written by AI? Uh, now the funny thing is I've tested that. I've done a couple of things where I had AI write something and then I went in and made some [00:21:00] changes and put it into one of those. And it came back and said, no chance, this is not AI at all.

I'm like, well, I guess that means I probably could make it better. Cause if, if it doesn't think it's AI, it's probably not that good. Um, but you know, today, you know, just go through. Any, any theme park, any restaurant, every kid that you see under 10 years old has got a device in their hand. Um, two years old, they've got devices going on an airplane.

You know, you're, you're going to see kids playing on iPads and tablets and phones. Um, you know, kids, you see the, the YouTube videos all the time. Kids will pick up their parents phone. They know how to unlock it. They know how to access apps. Um, it's just second nature. So like you said, you know, when you grew up picking up a telephone, With Second Nature, you knew how to do it.

Um, my, my daughter is actually in a master's program right now for occupational therapy, and one of the things they do for cognitive testing is they test people on, [00:22:00] are they able to write a check? And her group is like, what do you mean? Why would we ever write a check? That's not, that's not a test of cognition anymore.

And so all of our expectations are going to have to be updated based on this digital. generation. They already know how to use these tools. So how do you make them more effective? How do you meet them where they are and give them access to the tools that they need, but also take the experience of those of us with some gray hair and put that into a context that they understand and they can utilize.

Wes: Yeah, you bring up a great point. And what's funny, my son, actually, he, he used ChatGPT to, to complete an assignment, right? He's 15. And I said, can't your teachers just detect that stuff with the software? He goes, Oh yeah. But what you do is you tell the chat, you tell the chatbot to make itself undetected.

Michael: See, prompt engineering, right? That's going to be the next skill set is prompt engineering.

Wes: [00:23:00] right. For AI. And then they, the solution is, well, let's make a detector. And then you just tell the AI to be undetect, like, it's kind of mind blowing if you think about it. but

then I'm also right. I'm like,

that's creative thinking.

Right. I mean, it might be kind of sick to think that way, but I'm like, he's starting to think, because, you Yeah, you're right. I mean, I see kids on devices and they're glued to the thing and all the content they're getting is in such short form now, right through TikTok and all these other Snapchat. I mean, my kids literally don't call on the phone.

It's, it's all, I tell them like it, their, their cell phone is like a Snapchat device and a TikTok device.

they almost don't even know what a phone number is. It's pretty wild. Um,

Michael: I actually, I actually sent, um, I sent my phone number to somebody in a Slack message a year ago and I was like, you know, Hey, give me a call. And they're like, wait, this, is this a zoom link? I, what is this? And I'm like, it's my phone number. Let's actually have a human conversation.

Wes: What's crazy now, like when I see my

wife on the phone, I'm like, Oh [00:24:00] my gosh, is everything okay? Like,

usually just texting, you know, which is, which is wild. And how does that like shape business, right? For you on the CRO side? I mean, I rewind back to 2009, everything was phone, uh, email, Lotus notes just came out, PDF documents.

Like it's just started now. How do you see that shaping the new wave of

sales for entrepreneurial or enterprise companies?

Michael: Yeah, you know, in some ways I say everything that is, uh, is old is new again. And whether you think about it in a sine wave or a pendulum swing, you know, technology shifts and just like you described, there's all these new tools that are coming out, all these point solutions that are coming out. We're at the, the, the.

Extreme end of that pendulum swing where innovation is at a peak. Now, what happens. Is that pendulum is already starting to swing back the other way where some of that innovation is going to die because it can't find a market, can't find revenue, and [00:25:00] can't find a way to grow. And the other innovation is either going to get big and make a lot of money and buy up all the other things.

And you go from, and you can look out over the past 30 years in, in enterprise software and see that it's happening. It's a bunch of point solutions come along that have a, a particular value ad, some differentiator from the existing way of doing things. They build up enough market share, enough presence that either they acquire or they get acquired.

They become the big companies. They become the suites. They have to focus on integrating all these tools together. Their innovation drops, and now you have the swing to suites. As you get that swing to big enterprise suites there, then people recognize, hey, there's something else I need. They build a point solution and the swing starts back the other way.

So, you know, with, with AI, it's, it's kind of the same story, right? We've, we've built up chat GPT. It's gotten huge. In many ways, this market right now is a market of talent acquisitions. [00:26:00] So there's so many AI startups out there. Last I saw over 3000 in the past year, new companies starting up specifically for an AI based tool that.

The vast majority of those companies, unfortunately, are not going to make it. And so the big companies are recognizing that and they're going to buy up and acquire those smaller companies. Uh, but the ones that are going to proliferate are the ones that, again, go back to that basic entrepreneurial problem of what problem am I solving?

Solve that problem. Do it different. You know, don't, don't just be the same as somebody else. Right. You've got to create your own category. You've got to be completely different in how you're, how you're approaching it, and those are the companies that are going to succeed and do well.

Wes: Yeah, it's interesting. So like as, um, like what's your experience here around like sales today, right, as a fractional CRO, I mean, is it, is it still like, you know, meet, meet potential clients where they're [00:27:00] at and solve the problem through whatever mechanism that they like to communicate or, you know, what are the methods you got cold calling, you got email marketing campaigns, obviously there's branding, but as a salesperson, like, what do you, what do you see in the

market that is. Still most effective.

Michael: Yeah, believe it or not, it's in that pendulum swing, right? Face to face meetings are coming back. And a lot of the people I talk to, and I know a lot of great sales leaders, um, companies are even putting quotas around face to face sales meetings.

Wes: It's

Michael: that personal touch is, is now new. It's something interesting.

It's new again. Um, it doesn't mean people want to interact with a salesperson right away. And that's the key is understanding the buyer journey and how do people interact with your company, your product, and your people. So if I look at a typical buyer journey, you know, metrics will say at least 70 percent of that buyer journey happens before they ever [00:28:00] interact with A real person.

And that can be through perusing the website, um, finding information on public sources like G2 and understanding, you know, referral based business, researching, still researching through Google, researching through AI. And a lot of companies do that as well. So that's already happening. The buyer journey is not in the control of the salesperson anymore.

And so I've talked publicly quite a bit about a lot of the legacy sales methodologies that just don't work anymore because the idea of most of these sales methodologies is how do you as a sales rep retain control over the process? And today I think sales control over a buying process is a fallacy. It doesn't exist.

What you have to do is better understand where your customer is in their journey and meet them at their point they're at. Um, and that's a data [00:29:00] driven sales process where now I'm tracking website activity. Um, I've got monitors on, are they hitting my site? What are the search terms they're looking for? I can see the signals and the buying intent.

Um, when I see someone who's expressing an interest, then I start giving them Just knowledge sharing, not trying to sell them anything, just awareness, giving them information, targeted ads that are very specific and very tailored to where somebody is in that journey. And then when they're ready to interact, I want to make it available in whatever format they want, whether that's through a chat bot.

on a website that a real human gets involved with, through a phone call, or through a group dinner where we bring a group of people together in a particular city and do just open information sharing. It's very different than it used to be in that the buyer retains the control.

Wes: No, that's really interesting points you make. I mean, I, my mind toggles back to like outside sales versus [00:30:00] inside sales. You talked a lot about, you know, founder led sales, but a lot of what you just mentioned seems like all the technology and all the marketing and branding is doing the majority of the work. You know, how, how does that shape the sales landscape? Right. Because you have the old traditional go out, shake hands, kiss babies. You're kind of doing the road show, but do you see the paradigm shift or the shift of, you know, whether it's called inside sales or like, you know, the technology is doing all the, you know, 70 percent of the work.

And then you have really good sales staff that can handle inbound. Cause there's that inbound versus outbound struggle, right. Of sales guy saying, am I going to get leads in this company

or am I going to have to go hunt? You know, a hundred percent of my time.

Michael: Yeah, I'm a, I'm a baseball guy. So I, I like to, um, to use Yogi Berra isms. And my favorite is I want 40 percent of my pipeline to come from marketing. In other words, inbound activity. I want 40 percent of my pipeline to come from partners and their network and their team. [00:31:00] And I want 40 percent of my pipeline to come from my sales team actually doing outbound activity.

Um, I figure if I can, if I can keep that ratio, I'm hitting 120 percent of my pipeline target, I'm in good shape. Um, so 40 40 40 is the number I always try to accomplish.

Wes: if you could only keep one of those,

which one do you think is

the most important?

Michael: You

can't. Um, I just, I, I, I refuse to answer that question. Um, there are some cases where, where partners may not be the right fit. Um, now in, in the enterprise B2B space, I would argue that's, um, that's also just a misunderstanding of the sales process because whether it's a GSI, a local bar, a distributor, a cloud provider, um, the influence those companies have over the purchasing decisions and the, the technology direction, um, is massive, and it's typically very much underestimated.

You know, if you don't know who the partner is that's influencing [00:32:00] that buying decision, then you're probably at risk for that deal not closing.

Wes: As a CRO in your experience, like taking a look at those three buckets, if you will, you know, marketing, um, partners, sales efforts, right? To me, that's like three big buckets. Do you see somebody at the head of marketing? The head of partners, the head of sales. And those are like three different groups that need to harmonize well together. like how would you build that team and that structure? I mean, obviously it's different for different

companies, but you know, what would be the ideal scenario in your mind?

Michael: Well, you've come full circle back to the original question, which is why am I, why am I doing fractional work? Um, everybody needs it. Most people can't afford it, especially in the entrepreneurial startup space. Um, so to have a chief revenue officer, a head of marketing, a head of partners, a head Um, you know, that could exceed, you know, the cost of those three people alone [00:33:00] could exceed an early stage company's revenue.

Um, and that's the problem. I've had companies with a million dollars in revenue want to hire me as a CRO. And my answer is, you're just not big enough. You're not ready for a CRO. Um, I would argue that you need to be in the 10 to 20 million of ARR before you really should be bringing on a full time CRO.

Um, and it could be said, same thing for, for CMO and marketing. Now, can you have one person that does all of those things? Sure. Um, I haven't met that person that's, that's capable of doing all those things yet, but you know, maybe with AI, they exist. Um, I mean, I can go into Salesforce and HubSpot and I can do some of my own operations, but I know that to get what I need and to get to the level I need, I need a really good marketing or sales operations person or revenue operations person.

Um, I know to really effectively do SEO, SEM, AI based searches, all those things, I need somebody who is an expert in that space. [00:34:00] So I think that's why, you know, Fractional is the new black, right? Everybody's looking at how I can get talented people who understand, who have the experience to do the things I need, at a cost free level.

structure that I can afford as an entrepreneur. the proliferation of fractional executives at this point is massive. so you can bring on people to do each of those activities if you're doing it with a well structured plan and you're doing it in a fractional capacity.

Wes: Yeah, no, I love it. Uh, it's like my main company, we're fractional CMO. So I totally agree with everything you say. I take it a step further in the sense of I've hired previous companies. Executives, where I'm like, they kind of only work fractionally anyway. the reality is if you hire a fractional, they're going to dedicate and be dialed in and deliver at a, at a, at a really high level. And the beauty is for a business, if it's not working out, right. If it's not a good fit, it's not working [00:35:00] out. They're not. It's not an employee, there doesn't have to be a long term relationship. I mean, most fracturals, I know it's month to month, like you're either delivering value or you're not and they move on.

Right. So I think it's such a great, I think it's really important what you said too, because I, in my mind, right. Or as an entrepreneur, it's like, you have to make capital investments to, to continue to grow. And it's, to me, it's a game of double, it's like that jump rope game where it's like, when do you jump in?

Because you don't want to blow it up and get hit, but you have to make those capital investments. But to me, sales cures all you still have to have a great deliverable, but sales typically will fuel that in my experience. what would you recommend then for, for an entrepreneur, right? Cause most, most entrepreneurial companies are founder led.

Everything you said is on founders excited, but at some point they have to make that transition, right? They have to pass the baton. They have, would you bring in a fractional CRO first? With that quote, you know, that founder and say, all right, we're going to build a strategy and execute together [00:36:00] because that, that entrepreneur is going to want to bring in a sales guy right away just say, I'm too busy.

I, I, there's so many meetings. I just got to bring people in. What would you

recommend is the best structure in your experience?

Michael: Yeah, and I think, you know, for, for me, I would say it depends on a couple of things. If you've got so many, so much inbound interest, you've got people that are talking about it, you're getting demand, um, I would bring in a sales rep. I would bring in a sales rep and I would test, can I transfer my founder knowledge to this sales rep?

Um, and can that person be successful? And then if I can start to, you know, impose them with my experience and knowledge, and I can, um, see them be successful selling the product the way that I do, then you think about scaling. Right. And that scaling is where I typically would look to bring in a fractional executive that's got the experience to do it.

Um, because that's really the point where you need somebody that's been there, that's done it before, that knows the different structures, the [00:37:00] processes to put in place, the tools to put in place. Um, bringing that person in first, and I've had companies that, that wanted me to do it. Um, the first thing I'm going to do, if you bring me in to a company where it's founder led sales, is that I'm going to look at how do I take that Founder knowledge and transfer it into a sales rep.

And I can do that myself, but I can't do it as effectively as a full time sales rep. So I'm happy to be involved in customer conversations, but I'm not there every day answering the phone, following up on email and following up on demos and meetings. That's where a sales rep is really, is really key. Is that tactical part of the business?

Wes: Yeah, that's, that's interesting. And I think that's, that's a really hard thing, right? I think for an entrepreneur to do the data transfer. the founder is like such a unique person, so much passion. Then you have a sales rep who's might be thirsty and they have passion, but they're, they're not the founder, right?

There's a big, but at some point, something's got to give because a founder gets to a point, whether it's people, revenue, or just something where they're like, [00:38:00] You know, lack of follow up or, you know, so that's really interesting. Um, then how important is it for, what's some of the first things that you would do in that scenario, like get that sales rep in to get to transfer knowledge.

And then it's, it's built out like a sales

playbook. Like what would be the next move after that?

Michael: Yeah, I actually did a presentation, um, at the end of last year about tearing up the playbook and that the playbook is actually an antiquated concept. Um, you know, this is where bringing in an organization that's a fractional marketing organization or a fractional go to market organization can really help.

Um, you got to get the infrastructure in place. I've come into organizations where their Salesforce environment was Such a mess, um, because there were, you know, hundreds of opportunities there. None of them real. None of them followed up on, um, they had integrations with HubSpot. They had every tool known to sales, none of them integrated.

None of them, none of them, you know, no single source of the truth. Um, and that's, [00:39:00] that's that idea of I'm a founder and I'm just going to keep doing stuff and, oh, wait, I need a tool to do this. I'll just go buy it. It doesn't cost that much. Um, but the cost isn't in the cost of the tool. The cost is in the lost opportunity that you have and not getting these things integrated.

So getting that sales rep in, but also getting the advice of somebody who can help you set up the tech. If I can be very focused on the opportunities that are, Actually have a good opportunity to close, you know, so I understand what my ideal client profile is, or at least I have an idea of what it is and I can go test it.

I understand what personas actually show interest in my product or could benefit from my product. I can explain the value based messaging. And I say that very specifically because if I'm talking about a feature of a product, I'm probably not going to scale, right? I got to talk about what value does my product bring to you?

As an individual within this company, within this context, what problem do you have that my [00:40:00] platform or my solution can help with, right? If I can explain that in a language to you, that you understand, um, that's a value based message and then bringing in the right tools and the support for that, you can really.

You know, accelerate the capabilities of your first one, two, three, five sales reps before you have to bring in a full time CRO or sales leader. Um, but those having that foundational element in place is, is critical.

Wes: One last question. So I know this is subject to the company, but what's your favorite, like sales tools, CRM. I mean, there's Salesforce HubSpot. There's all these. There's a million of them out there, right. And they all fulfill a certain purpose, but is there anything for you

that just stands out? That's just a really good platform that you love.

Michael: I'll reference. I just posted an article on LinkedIn a couple of days ago about, um, stack ranking your sales tech stack. And the, uh, the idea behind it is. Every year I'll get the head of finance coming back to me going, Hey, you know, you're, you're spending X amount [00:41:00] of dollars per sales rep. And, you know, we really need to cut that down by 10 to 15 percent or whatever the number is.

And so it's kind of constant exercise that I do. And most CROs do, which is all right. What tools do we have? What tools are we actually using? And, and I basically broke them down into eight different categories.

First being CRM. And my, my first point was, yeah, I get it. We all hate the CRM, but it's a requirement. We have to have it. Um, I think that the challenge with a CRM is you want to start with something that's simple. You want to start with something that you can grow with. Uh, but if you get big, then you quite often outgrow those early stage tools.

Um, I've used Zoho. Zoho I've used. I mean, I've used Dynamics back in the old days, Siebel, HubSpot, Salesforce, um, for a big organization, Salesforce is probably the best, the best tool out there because they've got the most integrations, the most capabilities, the most customization. I find HubSpot to be [00:42:00] much easier, especially if you're using it across the stack.

Um, and that's one where I can configure it myself. I can get it up and running. I can do what I need to do with it. The integrations out there are pretty much out of the box these days, so it's not hard to integrate tools together, but yeah, nobody, nobody has a perfect CRM yet.

Wes: Yeah.

Michael: the right answer.

Wes: Well, Michael, I could talk to you for a long time. I love, I love this topic. It's near and dear to my heart. I love it, but I want to thank you for coming on today. Um, learned a lot. I think we've, uh, I think you, you were able to spark a lot of ideas. So any entrepreneur listening, you know, you got to start thinking about this stuff, right?

So in the event, somebody has got some more questions or they want to read some of your articles or reach out to you, what's

the easiest way somebody could find you or reach out to you?

Michael: Yeah, I mean, probably LinkedIn. I certainly can connect with me on LinkedIn. My company, as you said, is called Sales Growth International. It's easy. Mike at [00:43:00] SalesGrowthInternational. com. And I'm always happy to have those conversations. I love meeting entrepreneurs. I love hearing the ideas. And if I can help in any way, I'm happy to.

Wes: Awesome. Well, thank you so much, Michael. Uh, if you

learned something, please share the podcast, but again, I really appreciate the time today.

Outro: This has been another episode of Entrepreneur Intel. Thank you for joining us. For show notes or other episodes, please visit us at entrepreneurintel. com. Until next time.