How Canva Reinvented its Enterprise Sales Motion at $1B ARR with Aarti Raman

Sean Lane 0:00 Sean, Hey everyone, welcome to operations, the show where we look under the hood of companies in hyper growth. My name is Sean Lane. An interesting pattern has emerged when I talk to companies now, I find it's much more common for CEOs and revenue leaders to tell me right away that they are explicitly a product led company or they are specifically a sales led company when it comes to their go to market, the concepts aren't new. People are just more binary and vocal about their approach. But like most business models, the ideas of product led and sales led growth exist on a spectrum pure plg that is entirely self serve, no humans. It's pretty rare. Even companies that you think of as being primarily self serve, Slack, zoom, Dropbox, Calendly, they still have a version of their sales process that is led by humans. This is an interesting spectrum to navigate if you're an operator within those companies trying to figure out the sweet spot for your particular product and your go to market motions. The good news is we don't have to speculate anymore about what navigating that spectrum is like, because on this episode, we're going to go deep on one such example. Canva, our guide in that explanation is RT Raman, former Global Head of revenue strategy and operations at the design company reportedly valued at more than $30 billion the story of Canvas sales motions is a fascinating one. When RT arrived in 2022 the company had already crossed $1 billion in ARR, not valuation. Arr, largely through B to C, bottoms up, product led adoption models, but their B to B enterprise sales led model was much less mature in our conversation. RT reveals the thinking behind shifting their enterprise B to B from sales led to product LED. We talk about how to pull off pricing changes at a company of Canvas scale, and why, even at their size, you still have to argue about what a PQL is to start. I asked Artie to take me back to when she first arrived at the company and they were making the decision to move the B to B team from a sales led model to a product led model. Rewind Aarti Raman 2:25 back about two years, and a Canva even then, had really strong bottoms up adoption, so it was already over a billion in ARR all from bottoms up adoption. So really strong product usage. People love the product, but obviously having traction and B to B with investor with enterprise customers is super important to investors for like, long term stickiness and growth. But that side of the house, as is common in many companies, with a strong b to c base, but evolving and B to B was pretty nascent, so there had been several iterations on the right B to B model, and what had been in place for several years prior to 2022 was a very traditional sales led model. So what that meant is there was actually for the enterprise product, no way for a prospect to even try the offering for free, like there was no free no free trial, no freemium. So although there were all these pockets of organic usage, there was no way that could seamlessly lead to enterprise wide adoption. So it was a pretty traditional sales led model. There was a contact sales button on the pricing page for anything enterprise related, and there was no standard enterprise pricing. So it was all sales led so sales would do things like offer steep discounts to sign deals early, just you know, whatever you can imagine from a very traditional sales led structure, which over time, the leadership team realized was at odds with their mission of empowering everyone in the world to design so there was not much enterprise adoption. It wasn't aligned with the company's mission and goals. So the other decision was made to start that blank slate and see, how do we kind of unify this very successful bottoms up adoption with like, basically what we don't have at all on the B to B side. So the blank slate idea was, we're going to make enterprise pricing super transparent so everyone gets the same price. And yes, there were some tiers for, like large people who wanted to purchase a lot of seats. But the guidance from leadership was, first, everything should be super transparent. It should be super joyful, easy, transparent pricing. That was number one. And the second was, we have to leverage this. A massive bottoms up adoption to kind of drive value for enterprise customers. So there were some high level directives like that given from the top and then operationalizing that was kind of left to the go to market engine. So that's kind of like a little bit of context of where Canva was at that time, and like, what the leadership team's vision was. So I'll just pause there to see whether, yeah, that kind of answered your first question. I Sean Lane 5:27 want to learn a whole bunch more about how you operationalize that. But like, yeah, even some of the questions that you just said were posed at that time were probably potentially hairy questions, right? So the first is, like, this idea of the bottoms up versus the tops down, it sounds like, and just so I can understand and make it real for people, if you worked at a company in an enterprise that one of your peers was using Canva, and you were using Canva, like, at that moment in time, just even the two of you being in the same instance was not possible. It Aarti Raman 5:57 was possible. Like, for example, if I would if you went to the funnel. If Exactly, yeah, yeah, I'll just clarify that a little bit. So let's say I work at Google and you work at Google too, although I never have and you probably haven't either. I might with my Google email, sign up for Canva. You might do the same with your Google email for a separate team at Google. There was no way we could, like, unify our teams, right? Unless we both contacted sales and then sales would say, Hey, you're at the pro pricing. You're at the pro pricing. But if you sign a deal tomorrow, I'll get you on this much reduced pricing. So there was no unified framework, so to speak, on a flow right like or if sales saw five different pockets of usage and this usage threshold occurred, there would be an automated sequence. So none of that. It was all very like manual and left to the discretion of sales. So as a small team at Google, both of us probably had good user experiences because the bottoms up like product. Product experience is great, sure, but the process of getting to an enterprise wide adoption was not, Sean Lane 7:11 I'll remind you that this was all at $1 billion in ARR that's crazy. It's also a testament to how far an amazing product can get you and for what it's worth, of all the reasons that RT outlined, I totally buy why Canvas should make this change. It makes total sense. But I'd also imagine that making a go to market change of this magnitude at a company with $1 billion in ARR is going to be met with some reservations. Pricing changes that a small startup can be contentious, never mind the types of pricing standardization that she's talking about putting on enterprise B to B reps. More on that later. By the way, I posed to her that I imagined that this was a difficult time to navigate. Aarti Raman 7:55 You nailed it. Yeah, as we talk about the long term evolution of this whole journey, some of that will come up as well. But yes, there were lots of concerns at first, because obviously this is a massive change, and the devil is always in the details, right? So the first Yes, it's still even in if you look at Canvas product and pricing today, it's different from what it was when the change was first made sure, right? So the goal of the leadership team was to just have three SKUs, then Canva free, Canva Pro, which was like for small teams and Canva teams. And Canva teams could be used for your little like local coffee store with four people who want to put out little flyers, and also for like your Googles or your large company. So it's basically like it was just these three super simple skews. So that caused some panic with sales, right? They're like, how do I differentiate an enterprise offering from, like a regular teams offering? And then even in that they were, like, maybe a little less concerned about the impact to, like, completely new prospects, because you could kind of start from scratch there. The biggest concern was for existing customers, because there were a handful of, like, fairly large customers who had been given discounted pricing. And while the team's pricing was still pretty cheap compared to, like a regular enterprise type pricing of like Adobe or some other like similar competitor offering, like a somewhat similar product, because of all the lack of transparency, like the although the pricing on average would be cheaper, like some customers, some teams would experience some increases or some changes. So there was a lot of panic on what would happen to existing customers, and also, generally, obviously, when anything changes, the question is, what about my incentive plan? Like, what about my commission, right? What about this deal I just. Negotiated. So there was a lot of like, Hey, what's going to happen to my existing customers? And B, how is this going to impact me? So that was kind of all the, I mean, I wouldn't say it was holdouts, because people knew that, like, this was going to be a positive change long term, but it was like, This is so where we are, so different now. How do we get there? So there was a lot of concern around that for sure. Sean Lane 10:22 All right, so let's talk about where we are now and how we get there, right? You mentioned the idea of, okay, this decision gets made, and then you're sitting there with the responsibility to operationalize all of this. Where do you start? How did you pull that off? Yeah, Aarti Raman 10:37 so the first thing that we got tops down, aside from, like, the high level directive, is this new pricing, right? Like it's Hey, all enterprise customers will be on the same pricing. And here's kind of, like the website, the pricing page and the contact sales button is gone. So those are, like, the very basic level the directive from, like, top down. So then what we had to figure out. And I think one good thing that happened is from the time that change happened for the next up until the end of that fiscal year, all sales reps were put on a guarantee. So essentially, because we knew that for the next six to seven months, everything was going to be thrown up in the air, we wanted everyone to be brought on the journey together. So I think this is a fairly I mean, it was, it was a good decision for all concerned, because we wanted sales to be a part of this experiment. We were like for the next and that was kind of around the time I was brought in for the next, like, six or eight months to just keep everyone on a guarantee, maybe do some like spiffs or contests like here and there, once we have a better sense of the metrics. But for now to ease people's concern and pivot them to this new motion, put them on a guarantee. So that was just a people like, okay, my pay, yeah, well, there's no upside anymore, but My pay is guaranteed. That was one thing that happened which was good. The next thing that happened is really like a framework had to be put in place. It's all still like the strategy that we had to do and not get the operationalization, but like, we had to think about, what are we let's make a few like scenarios. What do we do with brand new customers, or, like prospects, prospects with ongoing pipeline, or like late stage pipeline, and then the super hairy existing customers? What do we do with people who have renewals coming up in the next six months, right? Like, do we move them to the new pricing at renewable? Should we pull forward the renewals from like, let's say there were renewables early next year, when we do plan to be on new incentive plans? Like, do we take, try to pull all the risk into this current year, but at least everyone is on guaranteed pay, right? And then it was kind of like for very large customers who are noticing some price changes. How do we message things? Should we have this horrible word exceptions where we for some people, you know, like grandfather, pre existing pricing? So we kind of had to put together, it's difficult to handle everything on a case by case basis. So we had to put together some like scenarios on if A happens, and we do this if B happens. So the first thing we did was kind of like document those instances and scenarios with feedback from sales because they are closest to the customers, and kind of lay that out guaranteed Sean Lane 13:18 compensation, existing customer impact, renewal, scenario planning. If this were only a pricing change, this would be incredibly complicated. It would require an immense amount of planning and work to pull this off. But the pricing change, remember, is only one piece of the puzzle already's team at Canva was also changing the way they sell entirely for a business that was built on product led adoption, you still have these humans that are on your sales team. So at a certain point, one of the questions that Canva needed to answer was, at what point should a human get involved in this sale? To figure this out, you need to plot exactly where your company lives on the product led to sales led spectrum that we talked about at the top of the show. Here's Artie to explain Aarti Raman 14:03 the way I think about the world from product led to traditional enterprises. There's like the super pure plg, where, in my mind, there is no human right. Like, it's just, I think it works best in for products where value is realized in small pockets, right? Like, enterprise wide adoption is not really a thing, you know, I think maybe, like, Calendly, way back in the day, was like that, right? Like you didn't really need enterprise wide adoption. Great value was accessed in small pockets of solo or maybe even small team usage. It was great. So, like, no human right, the only funnel is self serve. People purchase self serve. Maybe they do a free trial. Maybe they don't. They just buy online, and it's usually like a monthly type phone that's like, super pure, no human at all. Then somewhere in the middle is this product initiated, and sales expand. Did motion, which I think is where that's also like a pretty wide spectrum. I think Canva was still a little bit more towards the product to the left of that funnel, right. And then there's, like, on the far right, it's primarily sales LED. Maybe people can buy self serve, but super gated to tiny teams, or there is no self serve at all. So for example, if it's like an IT SaaS type product, you know, like a secure like security, or what have you where, like, you have to have enterprise wide adoption. There's no self serve at all. Right? So that's kind of the spectrum. So Canva was not in the super pure, no human part of the spectrum, when we made the first change, basically where they were at, is the primary funnel would be product where we landed, is sales would do very minimal or no cold calling. So what that meant is, if there was no product bottoms of product adoption in that prospect, they would not even make it to books of business, with a few exceptions. It's like super large company, whatever wish list, dream company, maybe, right? So to answer your question, for new prospects, right? Like one of the things that we had to do was just redesign our books of business. So a part of that was, what is end what is mid market, what is SMB? But more importantly, what qualifies a prospect to be in a book of business. So previously was purely employee count, like your traditional firmographic What are our target industries? Employee count. But now what we had to do was add in a layer of product usage. So there was a lot of debate on, like, what is that magic number? Should it be based on free Maus, paid Maus, because there is still this like so the self serve, there is a self serve product, right? So basically, what we landed on was, in order to qualify to be in a book of business, you need to meet the firmographic thresholds for end, mid market, SMB, what have you, but you also need to have this minimum level of product usage. It was, I'm forgetting the exact number, but was some degree of, like, paid self serve users within that company domain. So that was a big change, right? Like, because previously, sales teams could, basically, they had these massive territories, right? And then they could contact anyone in those territories. The way we got over that was essentially lay out the value of this, like fly wheel that we were hoping to create that would make their jobs easier, right? Like cold calling is expensive. It takes time. It takes away time that sales reps could instead use on helping these prospects see value in the product before converting. So there was a lot of like, messaging and training that we had to do to kind of like show this value to them. But yeah, the biggest change was territories became smaller tighter, and product usage became a marker of territory quality. So when I eventually made books of business, it was like, hey, enterprise will have books of this size where the average paid monthly usage organic would be x, and mid market would be y, and so on. So it was, that was, that was like territory cuts changed a good deal. Sean Lane 18:12 And I would imagine when, when you say the word territory, right? I feel like people have this like static thought in their mind, of like, these are my accounts. The accounts do not change. But in this type of model and in this type of environment, I would imagine there is a lot more fluidity required as the number of users and the usage data changes. So how did you account and accommodate for that? Yeah, those accounts are changing on a daily basis. Aarti Raman 18:42 Very good question. So again, because you can't operate this like super pure product led model with a large sales team. So we said, You know what? Our books of business will be frozen in like, half year segments, or like, you know, so we'll be able to do our territories biannually. So we were preparing for 2023 right, like, so we were like, hey, we'll do one cut of territories in like, November, December, see how the first half of the new fiscal year goes, where we're introducing all these new incentive plans and so on. Then do another cut of territories in June for the next six so we were like, You know what? There could be some app from fluctuation, but we'll freeze these paid monthly users we are using for territory, cutting, like twice a year. And so accounts wouldn't disappear from territories, but if during the course of those like three to six months, some very promising new accounts emerge. So for example, they were in Salesforce, but they were somehow very low in, like pay in, like monthly usage, but because of some uptick in activity, and we also had, like, a separate product advocate team who was working on accounts not in books of business for this new motion, they were. Surface these accounts with the relevant firmographic data that had surpassed the threshold, the usage thresholds, those would be on a case by case basis, added to books. But we didn't expect that flow to be very significant, and it was not. Sean Lane 20:13 My biggest takeaway from RT here is that in order to pull off a model switch like this, you need a planning or an ops function within your company that is dynamic. You need to build the agility of this group into your org structure, kind of like the role that argu is hired for. So how did she and her team's roles change as a result of this business model shift after the break? As rev ops leaders, our roles require juggling marketing forms enrichment and complex lead routing. The entire inner workings of the go to market falls on our shoulders. But what if there was an easier way? That's why I'm excited to announce our new sponsor, default. Imagine this, a lead submits a form on your website instantly, default, enriches the contact intelligently routes different sized companies to different paths, schedules meetings and logs everything in HubSpot or Salesforce, all automated, all in real time, and perhaps most importantly, all in one place. Visit default.com/sean Lane today, or click the link in the show notes to learn more and revolutionize your rev ops today. Okay, back to Artie. Before the break, Artie was explaining the shift that the Canva ops team had to make to bridge the gap between their highly successful bottoms up adoption business and the less mature enterprise sales motion. And in doing that, not only did the company's business motion change, but so too did the work of the operations team itself. And Archie said that they as operators, embraced this as an opportunity to understand what the new needs within their own team needed to be in order to support this new model. Aarti Raman 21:56 Previously, there was, like, a really large systems team. It was very light on like analytics, right? Like when I joined in the second half of 2022 I was hired to oversee this right transition and guide the team and so on. I had to shoulder a lot of like the analytics burden. So I had to kind of hire an analytics team, because there's so much that can be done with data in this type of hybrid motion, right? So one of the learnings in 2022 is we need more analytics, people with an analytics background in the rev ops team who can partner closely with data science as they figure out, what is a product qualified account or a p q, a, what are the product qualified lead or a p q, l, like, how do we identify among all these, like bottoms up users who could be a decision maker. So that's like, you know, so we needed someone closely partner with data science on these items, and also someone who could, at a very basic level, mind some product info to design these books of business that I shared with you. So that was one need that emerged. The other need was, while we didn't need a deals desk function, because pricing was standard, and we realized there were a lot of these exceptions that kind of quasi amounted to having this person who would be the go to and hey, there is, yes, we know pricing is uniform, but there was This person who, two years ago, signed a multi year deal, although they shouldn't have, what do we do? Right? Because all those questions can't be ad hoc. They can't all come to your head of sales. Often, it's like, all right, up. It's not, it's not scalable. Oh, while we have standard pricing, we do need someone who can go in the system, who can make a decision based on frameworks, go into the system and make that quick override or that quick change, right? Like, so it's kind of like what you were saying, or like you were saying, a rep gets promoted, because unfortunately, like companies promotion cycles don't align with like your sales planning cycles, right? And like, people aren't going to be like, I'm going to hold off on my race for three months just to keep my book of business or whatever. So it was like, Hey, how do you transition accounts from one person to another if they are getting promoted from women market enterprises? So we did kind of need these people who could, like, interpret our pricing models and our rules of engagement and make informed judgments on how to adapt to certain, like, exceptional situation. So in order to make that happen, one thing I had to do was document everything right. Say, here's our rules. Here's when we change territories. Here's what happens if a, b, c, a customer churns because of this pricing. Here's how we protect the reps. Here's what happens when someone moves territories because of ideally, we don't move territories in six months. So add, kind of like, I call them rules of engagement. It's, like, pretty common, right in these changing models, it's really important to have, like, well documented rules of engagement. And you in that 2022, time frame, almost every couple of days, I was adding to those rules of in. Eight, you're like, Oh, this is a scenario we didn't think about. Let's like, add it in so we have something codified for 2023 that was the next year. And to answer your question, in a nutshell, that time in 2022 was used to figure out, what are the needs of the sales ops team, the DevOps team to support this motion. What can we learn? What can we do to kind of make everything as static as possible for 2023 so let's like figure out all those kinks and nuances. Now, of course, that worked 90% but there were still things that we learned in 2023 that I'll get to that kind of upended our understanding a little bit. But what we tried to do was use that guaranteed time frame to make decisions for the next year, Sean Lane 25:40 static, but flexible, is what I'm hearing. Yeah. Everything you just said about kind of how you design your team and kind of specialize, you need some folks who are going to be more on like the product usage, data analytics side of things. You need folks who are going to be more on the deal desk side of things, or deal management, whatever you want to call it. Yeah. Basically in that first bucket, the thing I think it's important not to gloss over there, is that for those data analytics insights people to be successful, that assumes, one that all of the plumbing under the hood of where that product usage data comes from and where it goes is set up properly, which is a monster assumption and a huge amount of work. Aarti Raman 26:19 Monster, yeah. Sean Lane 26:20 And then second, now that the team is approaching their day differently, I would imagine which of those product usage insights you chose to surface to them and the manner in which you decided to surface to them also needed to shift. Did you all spend time thinking about, Okay, what's the most important information that an AE will need to effectively sell this account Aarti Raman 26:48 100% so we did a lot of work on that prior to 2020 in like the run up to 2023 but then our understanding evolved in 2023 as well. So generally, my philosophy and DevOps is, don't buy a tool unless you know what data goes into it and how you want to use it, right, because it's so much vendor bloat everywhere. So our thought at that time was, we won't pump anything into Salesforce, because Salesforce isn't equipped, you know, to handle like, tons of product data and there's so much bottoms of adoption. One thought at that time was, should we just pump all bottoms up users into Salesforce? And I was like, no. So what we decided at that time is, we are learning now, so let's just have like bi dash. Would we use mode, which is kind of like Tableau we use mode at the time, so we'll have and through our data warehouse, we can kind of pull query data from Salesforce on like, book of businesses account owners, who's the AE, who's a CSM, etc, then, based on domain, join it with product usage data. So we were like, I know it does involve another screen for a rep to look at, but before we dump a ton of stuff into Salesforce or jump the gun and, like, get a vendor, let's have these more source of truth dashboards that show us we can go a little bit into PQ ways and PQL, but show us like these accounts which are product qualified per rep and so on. So additionally, now, because for some of the metrics that we decided to incentivize the teams on for this like 2023 period, some of those metrics also involved product adoption, because it wasn't just your ARR signed, but we wanted our customer. We wanted reps to focus on usage as well. Because sometimes, you know, in traditional enterprise, you can sign these over large deals for like discounts and whatever, but there's not much usage, so when the time for renewal happens, there's a big hit, right? So we also wanted to incentivize them on usage data, again, which Salesforce is not the source of truth. So even for their like performance reporting, we had to pivot from basic sales force like bookings type reports, which was the norm before into ARR and usage type reports which we had to query from this union of Salesforce and more. So, what we decided is, for the first half of 2023 all our product usage and product qualifying data and also all our performance data would be in these would be queried via SQL and displayed in as user friendly a manner as possible using these BI dashboards. That's amazing, but that had to evolve in 2023 and I'll chat about that in a bit. Yeah, yeah, but I love Sean Lane 29:33 the approach, though, right of, hey, we got to figure this out. Let's not force everything into Salesforce. Because one, it's the lift of getting everything in there. But two, I think the bigger potential ripple effect there is, you're kind of experimenting in front of everybody, and then everyone starts to lose faith in what they see. Because at the beginning, it's not going to be perfect, right? And so kind of having this in between stage and mode to. To test, experiment, verify that the plumbing is actually working correctly and the product usage data that you're looking at is even right. Yeah, having that intermediate step, I think, makes a ton of sense. You've alluded to this idea of a PQL multiple times. Can you help folks understand what that is and how you all decided to define it? Yeah. Aarti Raman 30:16 So I think when this furor around like plg happened a couple of years ago. Everyone just thought about these. Like, the utopia is, like, every day you're getting these, like warm leads and like, sales goes after these leads, and you can sign a deal so fast. And that's how it works. Yeah, these leads were called product qualified leads, which meant, like, I mean, I think, like, the utopian definition is that they have experienced this aha moment or this value from the product, and they are like, oh so ready to sign a deal. But in reality, identifying them is like, not that straightforward. So while our reports initially were called PQL reports, what they actually showed were like product qualified accounts. So because we weren't, at that time in our rev one surfacing leads, because we still expected sales to research on LinkedIn, new Sales Navigator and so on, and find a decision maker, right? So we were like, here are product qualified accounts. So what we try to do is for every rep, every book of business, right? Like, we stack rank accounts based on Chase certain like, certain parameters, like changes in design usage, usage of certain features, like collaboration or, I mean, it was a design platform, so there were anecdotally, it also based on some data that we had, like certain like high, high value actions that are taken by like sharing A design or publishing a design, or adding new members into a team, right? Are these are like, high value actions taken that kind of show that people are maybe the companies may be ready for the next step. So we kind of like bucketed, like a couple of high value actions, decided that we kind of look at, like, month on month, or sometimes week on week, changes of this and like, averaged out those deltas. And then for every book of business, stack ranked prospects based on these product qualified account scores. So what actually we did was the first rev just showed product qualified it's stack ranked accounts based on product usage, right? Like, so it wasn't really PQL. We were like, What is the word for this? We said, okay, pq, a which is product qualified accounts then and obviously, understandably, we all want to do our best, right? But it's not fun to do your work for a sales rep, to do all this new stuff with Salesforce and go to a dashboard. So there was a lot of grumbling. It's like, oh, my time is so valuable, which I get. So then somewhere in q1 of 2023 we're like, hey, let's start like, ideating. How do we make this thing better, right? We're like, hey, are there certain scores that we can pipe into Salesforce, knowing that these scores change, right? So we also had to do a lot of like, educating on, like, how to read these scores. Where is the score most recent? Because Salesforce only updates once every 24 hours. There are all sorts of like, data lags and everything the plumbing, like you said, that makes it so hard. So we were like, Okay, we'll pump these scores into Salesforce. But then people were like, but then who do I reach out to? Like, Sure, they'll do their research on, like, Sales Navigator, but one core part of this motion was finding a product champion, right? Like, so that champion is usually someone who may or may not have full like, buying decision power, but someone who can at least, like, introduce us to the right parties, right? But so those product champions are usually users. We were like, how do we surface those users in a good way to sale so they can put them in their outreach sequences? That's when we started thinking more about, what is a PQL, right? Like? So again, that required a lot of pouring through, like, a lot of data. And we were like, okay, within these product qualified accounts, there will have to be these users who maybe we have some title info about them. Because when, sometimes, when you sign up on Canva, it asks, like, what is your role? So you were like, hey, if someone's like, intern, but using it a lot, then maybe we don't qualify them as a lead. So there was, like, a bunch of various parameters. If they're an admin, yes, that's a good sign. We do have, like, title info about them, and they seem to be manager and about that's a good sign, obviously, if they're using the data a lot, so we kind of had to be a little creative and figuring out who are the people that we want to surface to sales so they can find this product champion, who can then connect the dots and introduce the CMO. Or some companies, like HR was using Canva, and some companies obviously marketing PR, right, like who could then introduce to those like VP level people who likely wouldn't be users, right? So, right? That kind of led to the evolution of within these product qualified accounts. How do we identify these PQ, LS, right? And then there were all these, like, little except. Difference? Oh, can you have a PQL if it's not a PQ, a or PQA, but, you know, there's all these like little edge cases. So that's kind of the evolution of PQ, ways to PQL. I hope Sean Lane 35:11 you're taking notes, or you're gonna go back and run this episode through your favorite AI note taker, because rd is giving us such a detailed tactical breakdown here, warts and all, she's outlined a blueprint for how to use this treasure trove of data that's available in a product led business to your advantage. But she's also telling us that that does not come without its pitfalls. First, you need to make sure that your plumbing is working and that the data you're surfacing is reliable. She used mode as her own kind of testing ground to prove that out. Next, you need to align on definitions and buying signals so that when you go to your sales team with meaningful product usage events, everyone knows what those events mean and what to do with them. Next. Put all of that together with the pricing changes and the new sales team responsibilities, and you're asking for a lot, by the way. I think it's brilliant that they were able to de risk people's comp for a six month period of time. They basically guarantee that they would encourage folks to work together towards solving all of these problems, instead of freaking out when things inevitably went wrong. Kudos to the leadership team there for making what I'm sure was a difficult call at the time, but what happens after those six months? What happens when things got real? What broke what happened that she didn't expect? Archie told us that just about every aspect of the team's cross functional collaboration needed to change. Obviously, Aarti Raman 36:37 everyone is, like, super optimistic and enthusiastic and wants to make it work, but hey, come Jan, one, your pay is at stake, and also everyone's like, we had to roll out, like, new incentive plans. So people's metrics are different, right? Even roles and responsibilities change, like AES and CSMs now had different metrics, but some shared some metrics that influenced each other, so it just required a whole new level of like, collaboration. So not only were there, like day to day changing in terms of pricing, product offering, what they do in Salesforce, but even the way they interacted with their peers changed and their COVID changing. So the good things that happened is, you know, we had, like, proof read all their books of business, like, socialize, them all, like so much that there was a little bit of flux early Jan, because maybe some late December renewals didn't work out as we had planned. But like all of that, we kind of so by basically, like second week of Jan, people had 99% final books of business. All that was great. Now, things that we learned is, hey, actually, not having the contact sales button on your website is not a great idea, because sometimes your books of business, you might have missed a subsidiary of a big company that wants to use Canvas that that account is not in a sales reps books of business, so it's not showing in like the PQA, all these beautiful reports, right? And they're using Canva. They've gotten to the point where they want to speak to someone. How do they get in touch with you? So then, you know, they were all these prospects trying, which is a good problem to have, right? Trying to contact sales on LinkedIn, right? So then come, like, one or two months in, we were like, Hey, not having this contact sales button, it's just leaving, oh my gosh, so much opportunity on the table, right? So that had to change. So some somewhere in March, like, how do we, you know, that contact sales button, which is now, like, grayed out, hyperlinked, like, a little footnote somewhere on the price, how do we, kind of, like, up level, back, back to the pricing page, right? Like, so that, and then that resulted in, like, a new flow of leads, right? That were, now we kind of call them MQLs. Although we're going to have MQLs, we only had P, Q, l, s, right? So that was a new flow that had to be, like quasi qualified and then assigned. So that was a thing to figure out, but a good problem, right? Because it's like more and more inflow. So that was one learning. The second learning was actually, you know, you do need a separate SKU for enterprise, right? Like, because you're, I mean, yes, like, I think it was a very beautiful, like, utopian vision to have three super simple SKUs. But hey, your mom and pop, like, grocery store where a team of five is using Canva, it's going to be different from, like, a large company where, like, multiple teams of 100 are using the product, right? That took longer to evolve, so that only fully changed towards the end of 2023 but, like, that was a big learning, hey, like, the pricing isn't really like serving enterprise customers, right? And some enterprise customers, they need volume based discount. Like, they are used to this, right? Like, it's also, like, there's this ideal world, but this is what teams are used to. And especially in a difficult economy, companies are like, Hey, I would buy your product. It is cheap, but I plan to use 5000 seats. Or, like, 10,000 seats. What am I getting? Right? Like, so. Know, it was almost like it wasn't even like we hadn't thought about this in planning. It was just a learning on where on that product to that, you know, that middle spectrum, the middle part of that spectrum, like, where along that you kind of want to lie. So that was a big learning. And then third, in terms of operationalizing this, we knew would be kind of a problem, but the extent of the problem surprised me. It's like this difficulty and like looking at a mode report or BI report, then doing some stuff in Salesforce. I mean, the amount of time I spend, me and my team spend in that year, like explaining the one day data lag to people are like, okay, but I get it because, especially on the last day of the quarter, when our commissions were paid every quarter, like people are rushing to get deals and they're like, I don't know my I thought my number would go from 98 to 102% it's still at 99 What do I do? Right? So this whole look in multiple places, that was a problem. The second is, there was a lot of manual work that was being done by sales, because they'd get their qualified accounts from here, they'd have to manually look up the leads and outreach and send these sequences. So a lot of time was spent in admin. So those were like, I think the big three pockets of learning. So was kind of like this contact, sales button, the skews and pricing issue, and then all this, like, Where do I see my data? And how can I kind of make it as real time as possible? And then how do I remove, like, the admin load on sales? Those were, like the big four pockets of learning. Sean Lane 41:34 And I would imagine the decision to do this right, if we go way back to the beginning, the decision to do this at a strategic level is ultimately to increase revenue, increase efficiency, increase productivity per rep. Do you feel like now, looking back bumps and all, were you able to point six months, 12 months, 18 months later at whether or not this was the right call for the business at that moment in time. Aarti Raman 42:06 Yeah, so, so I would say the high level leadership directive was better customer experience, right and replicate B to C, success, B to B. I don't think they were thinking so much about things like productivity per rep, which, when we operationalized, those were core metrics for the go to market team. But that wasn't necessarily the leadership that makes sense so, but like, looking but looking back, I think a lot of things helped, right, like, so one thing is, like, over time, win rates improved. They did right? It was, it was a bumpy road. But like, hey, being able to identify these warm leads. It did result in shorter sales cycles, right? The second thing that we didn't speak about too much here is like, the impact on like expansion of existing customers. So we spoke a lot about like, the new business side of the house, but this product qualified approach also really helped in these other motions, aside from land like expand and consolidate. So there was a big consolidation motion where you have a renewal, but then now, with all this product data, you see, hey, there's all these multiple pockets of usage, how can I kind of, like, bring them in and really expand on this renewal? So expansions on renewals did significantly better. Now in terms of things like productivity per rep. I would love to say those improve, but like, I think you need, like, multiple years of at least more than two years of data to kind of see significant improvements in that. And the thing is, like, in this evolutionary phase, as these motions are changing, it's actually really hard to compare apples to apples in terms of, like, how productive? What is productivity per like, thinking back to, like, my previous years, like Glassdoor and so on, where, like, we did have multiple years of sales data, right. Like there, we were able to compare, hey, how much more productive did an AE get? How much more efficient did renewables get? But I don't think like in more like nascent go to market motions, that comparison can be done, but it's not really apples to apples. So I wish I could say I knew efficiency increased. I'm not sure I can say, though that like more granular metrics, like wind rates improved, deal cycles reduced, and growth on renewals improved in spite of the overall pricing reductions. Sean Lane 44:29 Before we go, at the end of each show, we're gonna ask each guest at the same lightning round of questions. Ready? Here we go. Best book you've read in the last six months? Aarti Raman 44:39 Oh, I mostly only read fiction for fun. Yeah, yeah, but I read this book called how high we go in the dark. By Oh, I actually forget the author's name, but how high we go in the dark. It's this amazing book on the world post pandemic, not the pandemic we went through, but it's like a weird kind of zombie. Pandemic, and it's just like, so beautiful and so heartwarming, like, all right, I would actually read it again. It's how high we go and how high we go in the dark. I love it. I love Sean Lane 45:09 it. All right, I'll put it on the list. Yeah, favorite part about working in OPS, I Aarti Raman 45:13 think it's seeing immediate change. And I would like to say immediate value, because I feel like it is kind of like, what you do takes immediate effect, and I think that's something I have come to appreciate. Sean Lane 45:26 Flip Side, least favorite part about working in OPS, Aarti Raman 45:29 yeah, it can be like, pretty contentious. I got some grades over the years, and you gotta have to feel like you're on the front lines helping sales, but also defending your rev ops team, so that part can get kind of tiring. Yeah, Sean Lane 45:47 it's tough. Yeah, someone who impacted you getting to the job you have today, Aarti Raman 45:50 I would say it's probably multiple people. I think there have been a couple of CROs who have been instrumental in me kind of getting here. One was the head of sales at Canva, who hired me into my role there, and previously, some VPs of Rev ops have taken chances of me and like, helped me, like, build and grow a team. So I think it's like hard to point like one person, but multiple like, bosses and mentors, both in sales and rev ops, kind of helped shape my career. Yeah. Sean Lane 46:17 All right. Last one, one piece of advice for people who want to have your job someday. I Aarti Raman 46:22 think it's a little cliched, but it is a marathon, not a sprint, right, like, so I think you have to pick your battles right. Sometimes you want to be like, really a utopian and do everything perfectly. That is like, not going to be possible. So you have to acknowledge that out of a team of like 100 salespeople, five people are going to be really mad at you for something, and that's okay. It's just acknowledging that you cannot make everyone happy, and you have to pick who you want to make happy, right? So sometimes, if I'd open my computer and they'd be, like, 10,000 slack messages, despite all the things on, like, these are the appropriate channels for deal support. Like, ultimately, everything's an emergency, everything goes to the head of DevOps, right? Like, like, triage, who's answering, whose method will make your life easier today and often. I mean, it sounds bad, but like, hey, if your CRO messages you answer and answer them, right? Like, if, like, a rep messages you because they think one account in their book of business as an employee count, that's 5% off that can wait. So it's just kind of like you can't please everyone. Just triage and know that someone will be unhappy with you every Sean Lane 47:34 day. Thanks so much to RT for joining us on this week's episode of operations, if you liked what you heard, make sure you are subscribed to our show, so you get a new episode in your feed every other Friday. Also, if you learned something from RT or from any of our guests, please leave us a review on Apple podcasts or wherever you get your podcasts. It really helps people to find the show. Six star reviews only. All right, that's gonna do it for me. Thanks so much for listening. We'll see you.