Sales for Founders with Ben Orenstein, Co-Founder of Tuple

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Thank you. The most admired is uh application I have not heard before. That's pretty great.

Really, I feel like that that's kind of how people think of Tuple Tuple. Like.

As you were saying, it kind of resonated. I was like, oh yeah, I guess people do seem to like us. It's, it's that weird thing where like, I am aware of all of our flaws, but people have a more nuance or like a sort of more holistic view of us. And I was just thinking like of like various Twitter threads and whatnot. It's like, oh yeah. I guess people are mostly quite positive.

Yeah. So the genesis of this conversation today was we met at Founder Summit. Um, and you were supposed to give a talk on sales for founders, which is a topic we've talked a lot about on this show. And is it like a really tough thing? Um, for first time founders, especially, uh, you know, a tough thing to learn. And so you were supposed to give a talk on that.

Yeah. I mean, that sounds great. I, I have, I have the outline. I have a table of contents of a book that I would like, kind of wanted to write, but it wasn't probably gonna follow up with, and I have this talk that almost happened, but then I went on a taco crawl in Mexico City and got quite sick, don't do that the night before you're supposed to say. Um, And so, yeah, I'm stoked to talk about this.

Yeah. I mean, I think that point there is something that, that really hits home that, you know, Mathias and I talk about is like, wait, why can't they just like sign up online for an account? And I'm like, no, they have like, they have procurement. Like you need to use their portal. And like, it's like, why, why can't we just build something that they can just upload all of those things to, and then we do it and then it's automated.

Yeah. So the, the outline for this book that I was going to write in the intro, the, of the first topic heading is your intuition is right, sales is kind of. Like I kept fighting it for a while where I was like, but hold on, this is, this is dumb. This doesn't make sense. Why, why can't it work like this? And eventually you sort of just learned to like, you can't refactor the sales process of everyone you're talking to.

So you mentioned there's some key lessons that you've learned.

Yeah.

What's the high level of those lessons.

It's kind of a lot, I would say there's, so again, I'll throw this caveat out there because it's important, which is I have done this for one company. And so our tool is a um, something targeted at developers. So it's adopted by engineering teams and we make it easy for the teams to come in and get in and try it. And the way our sales process usually gets kicked off is the engineers try it. They like it. They ask someone to buy it over and procure.

That's also how we do sales as well, like we, we never did any cold outreach. I don't think we've ever really tried to it to someone who wasn't already interested in it. And in many ways, I think we kind of took inspiration from slack because I feel like that was a lot of their early growth as well. Was the engineering teams using it by like liking it, wanting to use it, other teams hearing about it. And then, and then it's just a matter of filling in.

Yeah.

so to speak rather than having to do cold outreach and pitching and stuff like that, which I guess I've, I've only done sales as a founder from that perspective as well. But I did work at an agency as my first job out of college at a web development agency. And we were going out and pitching and making proposals and replying to RFP. Dude that was so much work. And most of it led to absolutely nothing. And I think that's why I love this bottom up approach to sales is.

Yeah, I think it's just a nicer way to be. And I think if, I think, especially if you're a bootstrapped company, it makes life a lot easier. Like the sales process is much simpler when they're already sold on the thing. It's easier on from your side, and I also think you're more likely to succeed. Like it feels like to me getting a tool, selling a tool from the top of the org chart and then having that decision get made and then having it sort of trickled down, feels like a recipe for bad fit.

I'm curious, you know, I don't want to oversimplify the sales process because we do have a lot of times when you know that person on the engineering team or even that team and their manager really liked you Geocodio, for example, but then they have to sell it to their director or their VP and they bring us to help sell it. And it's not just like that. They like it. And then a PO shows up that does happen.

Um, That is totally like a high leverage opportunity, I would say. So that does happen with us so often it is a an engineer somewhere towards the bottom of the org chart, trying to sell it to their team lead or a team lead, trying to sell it to a director or a VP or something. And those are pretty critical conversations actually like that, that, that affects that can have a big impact. And so the main thing we've done around this is we made a thing.

So you just, you just touched on something that. I think is a key part of this, which is letting people try it for free or very cheaply before they need, you know to be able to use like the corporate credit card or, or, you know, get a PO for it or whatnot. So you mentioned that after the free trial, so, so what is the sort of Tupelo model from that perspective?

Um, Right now we have a 14 day free trial with no credit card required.

And you mentioned right now, you have that I'm curious, has that changed over.

Yes, it's changed several times actually. So immediately before that it was a 14 day trial with credit card required upfront which we switched away from because so many of our customers don't actually have a company credit card. So it was like, Hey, I want to try this tool. Oh, it needs to require a credit card. Let me go ask my boss for their credit card. Oh, I haven't tried the thing that I'm asking for the credit card for, which is awkward.

That's really interesting. Cause I, I feel like I hear in that, that you have learned a lot about how teams acquire software.

Yeah, for sure. That was, I mean, that was the big learning for me. I originally thought that the customers for Tupelo were going to be freelanced. Just like individual developers working with clients or something. And I was like, it didn't even occur to me that like, no, no, your ideal customer is a whole bunch of developers on the team, obviously. And it just didn't click.

So when you have those people who are using the, the $100 free trial, which sounds like it was like the, I mean, the thing about Tuple you have this network effect, right? Like the more people within the organization are using it, the more value the organization is getting out of it, right? Like if you're the only one Tuple in your organization, you do not have anyone to Tupelo within the organization. So like, you'd need at least one other, one other person to use it with ideally a lot.

Um, Do I know who

Like who was actually putting in the credit card? Cause you said the next step you switched to having credit card, trying, credit card required for a free trial. And that didn't really work because the people who wanted to try it didn't have the credit card. So it sounds like there was a shift in the buyer when you changed from paid trial to free trial with credit card.

Weirdly enough people with sometimes DME and say, I wanted to try Tuple so badly that I paid for the a hundred dollars myself on my

Wow.

Yeah. Which is cool. I mean, it's a vote of confidence, right? That was like awesome. Our reputation was really good. And so like people wanted to try the software but it was also like, okay, that's seems wrong. People probably shouldn't be shelling out a hundred dollars personally to try or software.

I mean, I hope they got reimbursed later. Once

Hopefully, although it's like, you know, it's one of those things where we're getting a hundred bucks back. It's probably not quite worth it from the company, you know?

That is really interesting. So then when you shifted to free trial credit card required, were you thinking that people would continue to use their personal cards

They did. That happened a lot because they still didn't have a company credit card and they still want to try the software. It just got a bit easier. It got cheaper basically. Whereas before they would like eat the a hundred bucks to try it or slash get reimbursed, now they would put their personal card down and then be like, okay, I have to remember to swap this out for the company card. If we like.

So let's get down to like nitty-gritty here. How did you figure that insight out that what was happening was that people were putting in their personal card and then either canceling it or maybe even doing a chargeback or, and then trying to get it switched onto their personal card. Take me into how that insight developed that the people basically, you need to sell this within the organization, don't have access to a credit.

Um, I don't remember exactly how I got that insight. I would say that we are pretty, especially in the early days as very aggressive about talking to not aggressive, but I was, you know, I was trying to talk to everyone or like email everyone, so like if we had a failed trial like that, if a trial canceled that looked like it was good, I would email them and say, Hey, what was going on? Or, and I think we even had automated emails for when people would cancel or trials wouldn't succeed.

Interesting. So when you shifted between those sort of acquisition models. Did you head to head test them against each other or did you go okay from one day to the next you, you changed the most.

We just swapped. Yeah. I think there's value in AB testing stuff, but I'm not sure we had the volume to like, do like a statistically significant test or really the willingness to like the interest, we were sort of like, this, this model has worked for us for a little bit.

Yeah, that would be really, really interesting. Mean, so you mentioned that the strength of the Tuple brand and I think something else that's probably going on that I'm curious about your thoughts on is, you know, you have people who have been using Tuple at their jobs for maybe like, you know, years at this point. Um, So when did you guys launch?

Um, Launched, we will be four years old next month, but our first eight months were a little more than three years ago.

Is that it

Yeah.

dude? I feel like you like your legends of the indie, like software world, like quite frankly have probably, you know, after base camp, like resigned their position as the leaders of the movement. I feel like it's almost you guys who are leading it and you're only like four years old. What is this like,

Uh, Yeah, well, yeah, there was this, there was this event where a lot of people started working remotely at that happened a couple of

Oh, yeah. That thing. Yeah. I feel like I vaguely heard about that.

So you could, you could argue we've had some tailwinds.

So, okay. I was going to ask something else, but I want to go in on that for a second. So you started out with us, you had this pay us an upfront for a year. Period, which was your first eight months. And then you shifted to pay us a hundred bucks for a month. So then it, so if your first eight months, if we're kind of making a timeline here was pay us for a year. Then you went to a hundred dollars for a one month unlimited trial. How long did that period last.

uh, Six months, Maybe,

Okay. So now we're, we're 14 months in and then you switched to free trial credit card required. How long did that last?

A long time a years?

So did that shift around like 20 20 period?

Uh, No, actually it was, I mean, it was this, it was this year. I think it was a few months ago or last and last year. Yeah.

Oh, oh, okay. So super recent.

That the one where we shifted note to no credit card was, yeah, was six, less than six months ago.

Oh, interesting. Interesting. But, so I wonder if you, if you've had this, like, All of this growth over the past couple of, I S I'm still like in shock that it's only four years old. That's just, that's just not true. Like, I'm sorry. I reject that. Um, You have people who are moving from one job. To another, who probably used Tuple at their previous job.

All the time. Yeah. That happens a lot. Which is great. One nice thing about selling to developers is they are passionate about tools and also passionate about sharing them and like arguing for them. So yeah, we get, people emailing us, like probably every week maybe saying like, oh, I used Tuple at this place and now I'm here and I'm trying to get them to adopt it. I'm trying to get us to buy some licenses and.

That's awesome. And the other thing running under current of that too, is it's not just that they are passionate about it, but then company's value their developers more than other employees for better or for worse, like making the developers efficient is like you, you can't really find any executive or VP that would argue against that. Right? Like it's, it's sort of like, you know, straight in the heart, right.

Yeah, for sure. And if you take that and then add on like a viral component where people invite each other to it and inviting people makes the monthly price go up, it's a, it's a very good business model.

Yeah.

Has a lot of things going for it.

That sounds pretty sweet. So I think we've only hit the first points on your list. Let's keep going. What do you got next?

Yeah. So I think a big shift that happened as I got more experienced with enterprise sales was realizing how much I could say no to.

Ooh, I love this, especially when you have some.

Yeah. And so there's this sort of natural tendency, which is like, oh my gosh, I want them to buy it. I need to agree to everything. And what it turns out is like procurement and legal and everyone will sort of make, will make requests of you that are not deal breakers. And so it's natural to assume that everything is a deal breaker. And if you don't do every single thing they ask of you, it's not going to happen. And in reality, it's more like it's probably like 30% of them are deal breakers.

So let's demystify this a little bit especially for founders who don't have a ton of experience with sales or big enterprises with giant checklists, you said about. 30% of those things are actually required and you can push back on 70% of them. What are those examples of things that you push back on?

I actually made a list of things I've said no to, and still gotten a deal done.

This is going to be good.

Yeah, this discounts. Procurement is basically always going to ask you for a discount. Why not?

So this is, I'm just going to pause you on this list. So I heard and I think, I don't know if this is from Patrick McKenzie or somebody else the, basically when you're dealing with like giant company procurement people, they are basically incentivized to get like something like five to a 10% discount on every deal, every renewal.

Totally. Yeah, you can make this easier on yourself by inflating the base price and then giving them a fake discount down to whatever actually you want to sell it for, and this is kind of like the game that everyone, that a lot of people play, Um, but you don't have to play it. You could just be like, the price is the price and we don't do discounts, sorry. Or you could say like, we offer discounts for purchases above this. That's it.

Right. That's not going to happen.

Right. And so if they say, can I have a 10% discount? And you say, no, they're not going to walk away from the deal almost ever.

And especially if it's a product that they have been using for two, three years now, that is well integrated into the engineering pipeline or

Oh yeah,

Like they're going to ask, cause they're incentivized to

yeah, yeah,

but it's not going to tank the renewal or the.

I mean, most of the time, if it turns out your product is not as useful as they thought it was going to be, and engineering has said, yeah, we'd like it, but it's not critical. Well, now you might need to discount. It depends a lot on what the actual situation is, right? Like if, oh, we use it occasionally, we like it versus I don't, we get this done. We want this, this is, you know, please renew this, you know, signs, Marriott, VP of engineering.

I mean, this is the equivalent of, you know, being in a sort of traditional marketplace and you are, you know, this, I mean, this is effectively like bargaining at this point. And then you just walk.

Yeah. And it's just like, as, as someone new to sales, you will tend to, this advice is like targeted towards people that kind of becoming, like getting into this, like, you know, probably engineers who are sort of forced reluctantly into sales. And I will say that you are, you're used to a world where if someone asks you to do a thing, you should probably do this. And sales is just like, everything is negotiable. Your default mental like map is probably kind of wrong.

Interesting. I'm curious, what are things that you have said no to that were a deal?

Procurement generally wants to get the deal done. So sometimes it's price. Sometimes you ask for a thing and you say no, and they say, we can't, do it at this price. So occasionally price becomes the deal breaker, but it's actually, while procurement wants to get the deal done, legal doesn't care as much, legal has a weird place in the thing where it's like because legal is protecting the legal interests of the company, they have a bit more social capital.

Yeah. And speaking of negotiation, I'm reminded of something that I often think of, which is that you end up in cases, especially in, I guess, organizations with not tons of process, but there's, there's still procurement and legal and everything involved where people just want to have an edit on something. Like they feel like they're supposed to negotiate. They feel like they're supposed to bargain in some way. Um, It reminds me of, you know uh, a designer, friend of mine.

So that thing of including some sort of request or item that you know is going to get rejected is something you can do in contracts as well.

So good. We, we use that for years before we actually got our, got our own.

Yep. So yeah, I would start from that and then just edit it for your needs. But then I would add a bunch of really, really friendly clauses to you, so like you agree to that we can do a case study and we can mention your name publicly and we can put your logo on the website and you'll do an interview with us. Uh, You agree that every year your price is going to go up automatically by 10%, that your payment terms are 15 days.

So I agree on that, that logo and you know, mentioned in case study is a, is a really common one that is sort of a awesome if it gets through, but, oh, well, if not, you mentioned invoicing terms. You know, there was like three of them there.

Um, I think I've touched on the main ones. I usually start, I think another big one is the limitation of liability. This is like, I think that gets fought over quite a bit, and legal departments are very much on the lookout for is, who is liable when, and for what. And who is going, like give each other protection and defend each other from, various things.

Have you played those clauses against each other. For example, someone is asking for, let's say, they're asking for a discount or they are asking for, let's say better. You know, they, they don't want to do 30 day payments. They want to do 60 day payment terms and then you play that off of, okay, we'll do that. If we can use your logo on it.

oh, sure. Yeah, yeah, totally. Yeah. You can try. I, that does not worked that well for me though, honestly. A lot of the times. You're dealing with legal when you're negotiating the contract, but like determining who can use the company's logo is like a marketing thing or like a PR or comms thing, and so sometimes they're like, yeah, we can't offer this, you'll have to negotiate this separately with our PR department or something.

Yeah, I think so. So that, that element of like social capital and like who has the capital in the company and legal, it might be stronger than the communications team, for example.

True. Yeah. And again, it also comes down to like, how badly does the company want to get the deal done? And How badly do you want that thing? Are you going to walk, if they won't let you use their logo? Because if you're going to walk, if, if they won't and they really want the software, I bet you can get the logo, but if they kind of want the software and you're not going to walk, it's a lot harder.

So the thing I'm curious about your experience with it, that I've experienced is insurance. This often feels like something in contracts that feels pretty set in stone, that it says, you know, it's pretty common for there to be like, you know, five different kinds of insurance required. It says you need to have, you know, general liability. You might need to have umbrella, you know, umbrella liability, excess coverage.

Yeah.

And then pretty much then they're like, oh no, no,

Yeah. Yeah. I've also experienced them sort of folding on insurance requirements. It's kind of like a wishlist more than hard. Do they really care if it's 5 million versus 4 million? And I probably not, not really. Although I will say it's a very easy requirement to hit. We use founder shield and we just like tell them what we want and they send us like a group, like I got a collective policy kind of thing.

Uh, agreed. We actually use founder's summit ourselves as well.

that founder shield. Yep. Yeah, they're good.

all the things named founder. So what else is on this list?

I mean a million things I'm going to give. I'm going to give some, some terrible legal advice here.

this is, not legal advice.

this is not legal advice. This

Consult your lawyer.

This is advice. that I think is probably pretty good, 99% of the time. And then 1% of the time will be catastrophic for you. And so just, just heads up, which is a contract that you signed with another company is enforceable in court. You have to imagine, like, will we get sued if if this thing is going to be enforced by a judge in a courtroom with lawyers involved that are making thousands of dollars per hour.

I think it's also too important to note that like, if there is a conflict about something in the contract, like everybody wants to avoid court because as you said, it's extremely expensive to the point where like a lot of big enterprise contracts like that, they said, it has to go into arbitration, like. You start with negotiating, which is talking about the problem and finding a solution to it there.

Yeah, exactly. And that this advice is like coming from someone that has not been sued. So

Yes, I guess I

I imagine some, some number of years I will look back on this conversation and go, wow,

We did get a cease and desist list at once. That was. probably the closest we ever for a side project yet a mobile app

So, anyway, I guess my, I guess my, you probably won't get sued is my uh, my high-level advice and do with that information of what you will,

cool. What's next?

um, Let's talk about pricing. I learned a weird thing when I started doing these deals, which is that a hundred thousand dollars a year is not a lot of money.

Can you break that down?

Yes. So as a person, a hundred thousand dollars a year is a lot of money. Like you're uh, an individual, you have a job, you make a hundred thousand dollars a year. You make a lot of money. You're doing great. If I was like, Hey, you need to pay me an extra a hundred thousand dollars this year. You say what? Absolutely. There's no way I can pay you a hundred extra $200,000 this year, a hundred grand a year as a person is a lot of money.

You mentioned a lot of this advice in the beginning is stuff that will break somebody's brain, especially if they come into this with an engineering mindset where everything makes sense and is logical. And this is absolutely not logical on the surface, but then it actually is. When you think about all of the work that you not only put into serving these customers, but also this all of this gymnastics that goes into actually delivering the product to them and all of these other pieces of.

I would almost phrase it differently, actually, which is that a hundred thousand dollars a year is just, is something that if a company has a hundred engineers paying a hundred grand a year is something that they would do to solve a problem with like medium below annoyance. They are like a hundred percent company is solving.

And, you know, the thing to think about with that is that they have that $20 million investment in their engineers, and you know, speaking of like to Tuple, for example, to spend a hundred thousand dollars to a much higher return on that $20 million investment.

Yeah, totally. And I wish they would think about that. Exactly like you placed it, like you said, it like a hundred grand a year is half a percent on a $20 million payroll. And so it would be great if I could just say tubal makes you 0.6% of a percent uh, more efficient and therefore you should clearly pay me a hundred grand a year and they would go, yes, that makes perfect logical sense. I agree. It doesn't quite work that way. It'd be nice if that argument like resonated better.

Yeah, absolutely. What's next on the.

Um, Do annual pricing with quarterly truths. So charge a big amount per year and every quarter, like so, well, first of all, have pricing that gets, goes up as the company gets more value as they use your product. Uh, expansion revenue is the best kind of revenue. So if your pricing model does not allow your most successful customers to continually be paying you more money, you're pricing.

Interesting. I think it's always interesting for you to, like, we don't do per seat pricing. Um, But we do do like volume-based pricing for example, which is sort of a, like, I feel like per seat pricing is the most, most typical form of expansion revenue and, you know, they're getting more value out of it. So you, they pay you more. There's also, you know, volume based, which is where we are. And I'm trying to think of if there's any other sort of way of having like expansion built in.

So the high-level term for this is value metric. Um, And I think your pricing needs a value metric of some kinds, which I think the the way to figure it out, it's just like if the customer started getting 10 times as much value from the software, what would they be doing more of or using more of, or seeing more of that you can charge. So, is it, is it compute time? Is it requests? Is it users? Is it, you know, tasks they can have in the system?

Wow.

Yeah.

I think the thing I love about that too, is that you are. Your incentives are aligned with your customer, right? Because the more value they are getting out of it, the more you are charging them. And, you know, there are some products like gyms are the classic example of this, that they expand their revenue by their customers, not using their product.

It also has to make intuitive sense to the customer. Like I use bare metrics and their pricing has always kind of irked me a little bit where bare metrics charges you, bare metrics has an analytics tool for like diving into your financial data like your subscription metrics, like churn and average customer value and things like that. And bare metrics, charges you a base amount and then increases as you make more money as your MRR goes up, as your revenue goes up.

I think it's bare metrics, I, and they are redoing their pricing right now. I've seen a couple of friends post a rather long email they got from bare metrics on their pricing changes. That does not say what the pricing changes are, but I'm curious. I bet they have a sense that their pricing was not aligned.

I think they're struggling with some pricing stuff right now. And I think that email was a big swing and a miss.

Yeah. Okay. So we've got about five minutes left. We usually think that, you know, people listen to software social while they're out, say running 5k, and they are probably approaching 10 K at this point. So I apologize to your legs, dear listener, or to your dog who is tired of walking around the block uh, so many times. So can you give us a, just like a quick point by point of those remaining items that were on the

right, I'm going to do them all lightning

yes. Lightning lightning rounds.

All right. Here's the rest. Here's the rest of the things, don't agree to a custom contract that does not have a big price tag on it. Make sure you negotiate that upfront before you dive into the terms and figure out what you agree on. Put your price on your website. It's good to have an anchor there, starts at 20,000 a year. So you don't people wasting your, charge more for single sign on, even though it annoys people, put that in your enterprise to your charge a lot for it.

There's so much good advice in there. Um, So what are the things I wish we could dive in on a what a tremendous gifts to spell all of that out, I feel a little bit obligated to give you some advice at this point and say, Ben, when are we getting the sales for founders review newsletter, where you start writing the rough draft of your sales for founders.

Hmm, that's a good question. So actually it was inspired of the day because Nathan Barry shared that he has a paid email sequence, like a paid email course that he sells. And I think that's an awesome format where like, he can sort of like when he feels like, if he adds another email to the sequence and you're basically buying it, like for like a hundred bucks, you get like what, however many emails are currently in the sequence. And then at any additional ones.

That sounds awesome. Hope to see that out there sometime soon.

Well, thanks Until then you can follow me on Twitter. and I'll eventually talk about it there. If I do it.

um, Awesome. Well, thank you. so much for stopping by Ben. Such a pleasure to talk to you, and I hope that we will get more writing from you on sales for founders.

thank you. Appreciate that. Happy to come by.

And that will wrap up this week's episode of software, social, Colleen. We'll be back with me next week. Make sure to check out this week, sponsor a cloud forecast to manage your AWS bill@cloudforecast.io.