This week, Madrona Managing Director Karan Mehandru hosts Madrona Operating Partner Anna Baird. The operating partner role is a new one for Madrona, and we’re excited to have her on the team to advise our founders. Before transitioning to board positions in the last couple of years, Anna was most recently the CRO at Outreach. Before that, she was the COO at Outreach, and before that, she was the CFO at several companies. That trifecta of C-Suite experience gives Anna a unique perspective to help founders navigate any blind spots they may have. Anna and Karan, who is on the board of Outreach, dive into how the sales profession has changed, how the role of the CRO has changed since COVID, how to talk to customers, how to build high-performance sales teams, go-to-market strategy, AI’s role in sales, and so much more. These two tackle it all, and it’s a must-listen.
- Maintain focused consistency: When running a business, especially in the sales domain, avoid changing strategies too frequently. Find a core focus and maintain it for sustainable growth.
- Adapt and stay close to customers: The market might change but always understand the pain points your product solves. Continuously evolve by staying close to the customers and their changing needs.
- Balance growth and profitability: Understand the balance between growth and profitability. It’s crucial to stay focused, not just on expanding but also on maintaining a profitable approach.
- Hire for traits, not just experience: When hiring for sales teams, seek traits like intellectual curiosity, a desire to win, and collaborative skills. These traits often matter more than specific experiences when navigating new or challenging markets.
This transcript was automatically generated and edited for clarity.
Karan: Hello everyone. My name is Karan Mehandru. I’m one of the managing directors here at Madrona out of the California office. It is my pleasure and privilege to welcome Anna Baird to this podcast, and Anna and I go back a long way. I’ve had the pleasure of calling her my friend for almost a decade, and I’ve had the privilege of working with her for almost five years out of the 10 at Outreach. So, super excited to have you with us, Anna. Thank you so much for making time.
Anna: Hey, Karan. Super glad to be here and part of the Madrona family.
Karan: Awesome. We’re excited to have you. We have a lot of great topics to cover with you. Maybe we start with how your journey and your career took off and how did you get into tech in the first place?
Anna: I’ve been in tech since I started. I was an accounting major in college and got into one of the big accounting firms, KPMG, but I wanted to do tech. I wanted to do the accounting side and help tech companies. So, I moved to Silicon Valley, San Jose, at the time and was with KPMG for 17-and-a-half years.
I started by helping startups go public. I worked with Google pre-IPO, and then Intuit, and a bunch of others for the next seven years. There’s probably not a boardroom in Silicon Valley I haven’t sat in at one point or another after 17-and-a-half years. I moved to the consulting side partway through that and really loved helping set those foundations to operate effectively.
I left and became a senior vice president at McAfee, running finance governance risk. When they were bought by Intel, I decided to be CFO. I like to do a lot of different things. I became CFO and then a COO and then a CRO. Those are all the C’s I’m covering. No more. I’m done. That was it.
Karan: Great. Not many people we encounter have taken the CFO, COO, and CRO roles, making you unique in and of itself. Tell me why you transitioned from being a CFO to wanting to be A CRO. Did you just wake up one day and say, well, I’m done counting the numbers, and now I’m going to start driving the numbers? How did that mental switch come about in your head?
Getting into tech from accounting
Anna: Well, it’s funny. People don’t realize this, but as a partner at KPMG, I had a 6 million quota a year, so I was already selling.
Karan: We’re all salespeople.
Anna: That is so true. As a CFO, you’re trying to get investors. You’re selling the company. I loved that aspect. I loved customers. I loved understanding what the customer pain was. My favorite thing, even when I was in accounting, was what is product building and how are they solving the customer pain?
I loved understanding those things. I think it’s what made me a good consultant and an accountant at that time. I think it’s also what made me a good CFO, but even as a CFO, I kept ending up taking on other things because I loved the operational side. Everybody’s like, oh, Anna, take this, and Anna, take that. Then I said, you know what? I’m going to do the COO side. I have more flexibility in the breadth.
Then, of course, in 2019, you, Manny, and others asked if I would take on the CRO role. When you are building a company, and it’s all hands on deck, and you’re growing like crazy, and there’s a change that you need to make sure stabilizes, it’s the right thing to do, right? Sometimes, there are things that are just the right thing to do for the business.
One thing I’ve been pretty good at in my career is always putting the business first. I was helping a lot with sales anyway as A COO, so it wasn’t like some crazy transition, but I loved the team, and I knew we needed to stabilize and make some different changes, so took that on from 2019 until 2022.
Karan: We’re so glad you did because you took Outreach. I remember, when you came in, we were still under 20 million, and you took it all the way to 250 million, so it was a wonderful journey. I’d love to ask you about that, but just to clarify for listeners, the decision for us as the board was simple because we just got you to ask for the budget, approve the budget and then drive the numbers, so we didn’t have to do anything. So that was awesome.
Anna: I was the COO and the CRO for too long. It took us a while to find a CFO. That was the easiest job I ever had. I was like, is this a good idea? Yes, it is. Let’s go do that.
Karan: That’s awesome. Let’s talk about how the sales profession has changed over the last decade. I mean, there’s so much that has happened, new tools in tech. There are so many changes in the actual way things are sold, whether it’s product-led growth or sales-led growth. Then, things changed even more when we went through COVID.
I’d love to talk to you about your experience in this profession. You’ve been around CROs, you’ve been a CRO, you’ve been a CFO, you’ve been a COO. So, from your purview, what are some of the biggest changes that you’ve seen play out in the market in the sales profession, and then how did that get either accelerated or exacerbated when COVID hit?
Changes in the sales profession since Covid
Anna: It’s been a fascinating journey, especially these last few years, right? Everybody says, oh, how did you lead through a pandemic? Well, no one’s ever done it, so there’s no playbook. We were all figuring it out as we went and trying to make the best decisions.
I think one of the things that changed, and I’ll start at the top, is the CRO role in general, as it expanded significantly to what you need to understand, the skillset you need to have. I always explain that CRO became part CHRO from a human resource side, part CIO, and part CFO.
CHRO to deal with the mental health and the remote work, and how did you make sure that you kept your team focused and effective and addressed issues quickly so that you could make sure that everybody was healthy and in a good place, CIO, to understand the technology available to you to work with remote employees and what tech was available and how did you think about utilization of that tech for your go-to-market strategy?
Then CFO, the data, I mean data is so key when you have the technology, you have to understand what data you need to be able to run the business and how you are viewing it and what is the rhythm of your reporting and operating so that you could make sure you were making data-centric decisions because you couldn’t see everything anymore.
That changed for CROs, obviously, but it also changed for the teams for their understanding of customer engagement, what was happening, and how they wanted to be educated. When you think about the world being so remote when we first hit COVID and still quite a bit remote today, there’s so much self-education happening with customers.
We’ve talked about the number of touchpoints you have to get a deal approved and went from 10 to 17 to 21. You know what I mean? It was insane. They’re all working in different locations, and they’re not sitting in some conference room talking about your deal, your product every day. So, how do you educate that group? How do you create central locations where they can access business cases and videos on the product and those sorts of things?
If they’re already a customer, how do you do some product-led growth with showing them what’s available? Those things became way more critical than they used to be. For the account executives and the go-to-market teams, people didn’t want to wait to have three calls to get their question answered anymore either. They didn’t have the time. They were back-to-back with scheduled meetings because that’s how we’ve had to operate and still do.
So, they can’t sit there and go, yeah, let me get back to you. Let me get back to you on that question. Let me come back. We used to do things like that, I think, wtih go-to-market strategy, and it was okay. It was accepted as part of the ecosystem, and it’s not anymore. How can you educate a customer before they show up on a call?
Can you send a video to give them some visibility into the product and talk about, “Hey, like you, here are the four things from leaders that we hear?” So you make it, understand their role, and you understand who they are. Here’s some things we hear from leaders like you. We’re experts in the industry, how could we help you and how can we make this next call the most effective? Here’s a video of what our product does. Those kinds of things are game-changing now.
Karan: It’s interesting. As I listened to you, it makes total sense, and it sounds coherent, it sounds logical. That said, put in the context of companies that are starting out and the founders and their experiences. There’s so many founders that we work with these days that are product founders or tech founders, and a lot of times go-to-market isn’t a very natural trait, that skill or experience that they’ve had.
A lot of times, they don’t have any go-to-market people around them, so help us understand, when you advise founders now in this role as an operating partner at Madrona and being on boards of companies and you’re looking at early-stage founders that just got their product out, how do you advise them to interact with their go-to-market teams?
How do you think about advising them about go-to-market strategy? At what point should they start thinking about it? If you build it, they will come, which is usually the model that a lot of them operate on. So, help us understand what do you advise them when you’re looking at a new founder or a founder of an early-stage company that’s starting to think about go-to-market strategy.
Anna: I think there’s a couple of things. Getting your go-to-market organization, getting them to have a foundation, a process that is consistent across the teams, you have to build it, right? You got to build it from that, again, that foundation up. Part of it is, you’ve got to make sure you let them focus. Don’t change strategy every quarter. You cannot have new messaging, new strategy. You need to make sure you’re getting the message out to the market and watching how the market responds, and that can be pretty fast, but don’t change strategy every quarter. I think, especially when you are a product founder, you can change product sometimes quickly, and nobody knows. They don’t see what’s happened in the background.
When you’re changing your messaging all the time, you definitely see it, right? Each of those go-to-market people is the best marketer you have. They’re the voice on the street every day, talking about who you are, what you stand for, and what pain you solve.
I think that is so critical because, especially as product founders, you get so engaged in the engineering and the tech, and you want to talk about the features that you built and the functionality that you have, and your customers don’t care about that. They care about the pain you solve for them, the problem that you make less painful. So, how do you make sure that you are creating the language and keeping that consistent?
Here’s why we exist as a company, here’s the pain we solve for you, and here’s why we know your pain. We’re totally empathetic because we see other leaders like you all the time because that’s who we talk to every day, and we know that these are the types of issues that you run into. Then you get that whole empathy, I’m in your shoes, you’re selling with them, not to them, because they’re trying to solve a problem in their organization, not buy a feature or functionality.
Karan: Love it. I love that framework — why we exist, what we do, and how we do it — which is a great framework for all of us to remember, and more so, I guess, in a time when there’s massive change, just to remind everybody to rinse and repeat that message. You used the word focus, and I want to come back to that.
Obviously, scarcity does breed focus, but then companies grow up, and then they raise a lot of money, then they become multi-product, and then they hire a lot of people, then they have multiple locations, and then they have the tyranny of choices in front of them.
We went from scarcity to abundance in the market, and now we’re going back to a little bit of scarcity because the market is correcting in front of us. One of the things I’d love to understand from you is, you manage the sales team through scarcity, then to abundance, then back into scarcity.
You’ve been a CRO, and you’ve been a COO, and you’ve been a CFO, so you understand the difference between growth and profitability more than most CROs who are just thinking about growth. It would be great to hear some of your anecdotes or lessons learned as you manage that massive growth engine within Outreach and Livongo and all these companies. How do you balance that growth and profitability? How do you breed focus when there’s so many choices in front of you?
Balancing growth and profitability
Anna: We say it all the time, and it’s like what you say no to, right? You do have to say no to things. You can’t have 20 key priorities for the business for a go-to-market team or engineering. There has to be three things that we are trying to accomplish in this 12 and 18 months, whatever your timeframe is, and you have to be maniacal about that focus.
That’s where it’s not changing every quarter because it takes time to build it. If you’re looking at building competitive moats and you’re looking at solving that customer pain, whether the market has an abundance or in scarcity, you control what you can control, which is why do you exist? It’s back to that again, right? Why do you exist as a company? Because you solved something, and don’t ever forget that.
Even when it’s abundant, you must stay focused on solving a pain. How do we solve it even better? How do we make it more effective? How do we make it faster? How do we solve the next piece of the pain, and building that roadmap of understanding? We talk about our product roadmaps and really needing something that is 12, 24, and 36 months out of what would we do next. If we said this is the customer’s pain, and here’s what we’re seeing, what would we take next?
Always stay close to the customers, always stay close to understanding what’s happening in the market, and make sure you are controlling what you control, which is what your company does, and what you build, what you put in the marketplace. That is always a recipe for success. What happens is people get scared, and I get it. When you watch your child suffer, it is hard to be objective.
You must also surround yourself with leaders who will help you. It’s too personal. So, when you have leaders around you who can help you go, let’s all breathe for a minute together and let’s talk this through. What will be the most impactful thing for our business and our team?
Always remember the most impactful thing for your customers is going to be the right strategy to go after, and obviously, based on the tech that you built and where you have the assets to take those major next steps.
Karan: That’s great advice. I want to talk about culture and as part of that, hiring in particular, and you mentioned one of the first things you can do is build leaders around you that embody the cultural values that you and the company espouses.
When you think about building a high-performance sales team and when you think about hiring your next-generation leaders, maybe even the first rep or the first five reps, what are some of the organizing principles or traits that you look for when you’re lighting up a sales team?
Building a high-performance sales team
Anna: That’s a great question. There’s something that a lot of people don’t do. Everybody’s like, I just hired a salesperson, and they were great, and they came from this other company and they did great there, so they’re going to do great here. Anybody who’s been in this long enough, you know that’s not true.
I still remember when I first came to Outreach. We hired some of the top salespeople from companies that had been crazy successful, but they’d never introduced a new category. They’d never done an educated sell because the company had a great product that people came to them, or they just needed to talk about it. When you’re trying to educate for something that never existed before, that is a whole different selling strategy.
So, it’s like what are the core attributes you’re looking for in your salespeople, and those understanding the business you have and what they need to do in the marketplace is the first step. What are the traits that you need? But I’ll say three traits that are always critical when you think about the skill sets you’re hiring for.
It’s intellectual curiosity. You want them to understand the customer’s pain. That’s critical. Understand the customer strategy. How do we align our product so that we’ll win every time? It is a desire to win, Which comes from a lot of different places: overcoming adversity in their background, big families is a good one. They’re one of seven children. They had to compete to stay ahead.
Not just athletics, but competitive arenas in general, like chess, and lots of different areas where people are like, I really like winning. That adrenaline is that desire to overcome and to get to that outcome. Then you also need somebody who knows how to quarterback but is an incredible collaborator because one of the things they know is how to bring the power of a team to a customer, not just themselves.
If they’re all about being the hero and winning every time on their own, that works okay in some of your early days sometimes. That is not a strategy for long-term success. When you bring the power of the team, you win faster; you win more efficiently; you win bigger.
So, somebody who knows how to get out of their own way and they don’t have to be the star. They know how to take a step back, bring the right people in, and prepare them for a great customer conversation. I think those three.
Karan: I remember you telling us all at one of our sales offsites at Outreach when you got up on stage and said if you want to go fast, go alone. If you want to go far, go together. That’s one of the African sayings you reminded everybody, and I still remember that.
Anna: Yeah, and it’s totally true. It, just like history, repeats itself over and over and over again. We see that. You forget sometimes. You have to remember the basics.
Karan: So, Anna, now let’s fast-forward to today. You are our first operating partner at Madrona. You’ve collected a wealth of experience, lived every role in a company that exists from early to late, worked in different industries, such as sales and healthcare. I would love to hear your reasoning for why you joined Madrona and why you’re an operating partner here today. And then secondly, to the next Anna that is just graduating from college and potentially getting out of KPMG and aspires to be a CEO, CRO, COO, what have you, what would you tell the 22, 23-year-old Anna that’s graduating today?
Anna: Oh, great questions. I joined Madrona because I’m a big believer, and this was part of the stage of my career. I think it’s important, and you see this a lot at Madrona. How do we help fill in the skill sets and the gaps that some of our founders might have? They’re not all coming from 10 different backgrounds, so how do we bring to the table skills and capabilities to make them even more successful?
When you’re a founder, and you’re looking at, especially those ABC rounds, you need a partner who will bring to the table things that help you figure out those corners you can’t see around because you’ve never been around them.
This stage of my career was about giving back. It was about teaching all those things that I learned in all those roles you mentioned and how to avoid the mistakes and take advantage of the opportunities faster because you do learn a lot of that. It’s like getting a mortgage. By the time you get good at it, you don’t do it anymore. So, how do I make sure I help other people avoid that mistake or those mistakes?
In this marketplace in particular, when you are looking for a great partner, people like Madrona are thinking about bringing executives onto their teams, prior executives onto the teams, and we have quite a few at Madrona. Those people have your back. They’re there to make sure it’s one phone call away to say, hey, can I talk about X or Y?
At one of our CEO’s all-hands the other day, I talked about this maniacal focus on focus. Stop looking at the market and focus on the pain to solve, what you’re building, and how you’re taking that to market. If you do that, you will get through this. Getting distracted by all the noise is one of the challenges that you’ll deal with, and we’re learning it well right now. That’s really critical.
One of the other things that is key, and you hit on this earlier, is the culture you build. We were talking about performance culture, and I just wanted to hit on it for a second. One of the reasons I joined Madrona was because it had an incredible backbone of ethics, culture, and incredible skills on this team.
That is important as you think about the partners you’ll work with because part of something that your board and your investors will do for you is help be culture bearers and think about what’s going to make your company successful. When I look at founders and some of the founders that I’ve worked with and said, okay, what are the things that help lay some of that foundation?
It’s okay to say, I don’t know. As a leader to say, it’s okay to say I don’t know, but it is not okay not to try, not to come with a perspective, and not to come with a point of view. When you start to create that openness, you get the diversity of thought. I always try to make sure I say it. It’s, I don’t know, I don’t know the answer to this, but let’s talk it through. Let’s work this out.
As a founder, when you do that, it’s even more powerful because you are the one who created this product, this company, so bringing that openness and opening the floor to diversity of thought gives people the freedom to do that. Fear is a tactic, not a strategy. When you put fear in play, it’s because you are trying to emphasize how dire a situation might be.
Sometimes that’s okay, but you use it at a point in time, not as a strategy every day, because people who respect you and want to please you and want to make sure that they’re working hard for you work 10 times harder if they don’t have that fear because fear makes them do things that are not thoughtful and are not strategic and are the opposite of really what you want.
When they admire you, they are going to work that much harder, and I think it’s a foundation you have to build from the early days of who you want to be, what you want your company to be known for, and when you have those things, you also recruit incredible talent. That is something I see with some of our founders, and what would I tell the 22-year-old Anna?
Karan: Yeah, 23-year-old Anna. I mean, that’s only five years ago, so you should have no problem remembering.
Advice: don’t try to make failure look pretty
Anna: I wish it were only five years ago. I think I’ve been pretty good at this, but being an executive and a founder is about taking risks. It’s about saying no to things, but it’s also about what you say yes to. But don’t try to make failure look pretty. Call it a failure and move on.
It is one of the most critical things that we all can do, and it is easy for us to say it wasn’t that bad. It was okay. If we just do this with it, if we just do that with it, or maybe we just need to try harder. Sometimes, it is just failure, and that’s okay. You learn so much from that, but you don’t if you don’t pivot and take another direction quickly. If I’d known that earlier, it would’ve been super helpful.
The other thing that I just hit is, what pain do you solve in the marketplace? It’s why you exist. Don’t ever, ever forget that. I say this to our founders, too. You have to sit in front of customers, no matter what leader you have on the team. I’ve heard CROs go, oh, when you get to be a CRO, you don’t have to do customer meetings anymore. I was like, that’s insane. Everybody should be doing customer meetings, everybody.
Heads of product, heads of engineering, heads of marketing, obviously CEOs and CROs every day, right? That is how you make sure you are staying in touch with what you’re solving in the marketplace, and is the market changing on you because, if you miss that, you miss those cues, then it will cost you. It’s going to cost you time. It’s going to cost you money, so stay close to that pain, and don’t make failure look pretty.
Karan: I love it. Talking about failure reminds me of a wonderful speech that JK Rowling gave at the Harvard commencement a few years ago about the power of failure. Your comment around failure reminded me of that, and I would encourage everybody to listen to that, as well.
Anna: You are the king of commencement speeches. I know that is one of your things. It’s funny, I just read something the other day. Apple was talking about one of the things they look for in all their interviews, and I was like, okay, I’ll click on this. What do they look for in every interview? It’s for somebody to say, I don’t know.
Karan: That’s great. Awesome. Well, I have two other questions that’ll hopefully be short. I don’t think I can do a podcast in 2023 if I don’t talk about AI. So, is AI going to take all the sales jobs away, Anna?
Is AI going to take all the sales jobs away, Anna?
Anna: No. Hopefully, it just really helps. I think we’ve talked so much about how do I enable you to be faster, better, and smarter. That’s what customers want. They want you to be faster, better, and smarter, so how do we do that with AI? AI is going to be game-changing in really improving time-to-value for customers and in time-to-value for go-to-market teams, as well, right?
On both sides of that, that’s a win-win. Will there be changes? Absolutely, and you see it already, but I think there’s so much there that will be positive, and AI is not as sophisticated as we’d like it to be yet. We all want it to be the end-all-be-all.
As you all know, you have to tell it the 10 things to get to the answer you want, and it’s only as smart as what it can find out there. That will obviously improve. That will get better. It will learn, and so will we. There’s just, we are going to get into a culture where go-to-market stategy is a lot more effective than it used to be.
Karan: That’s great. Well, I’m sure many people will breathe a sigh of relief after hearing that. Are there any books you’ve read recently that you would recommend to our listeners?
Book recommendation: “Simplicity”
Anna: Oh, wow. The one I just started is called “Simplicity.” It’s by Edward De Bono, and it’s about how you boil things back down again? How do you get back to simplicity? It resonated for me, and I’m just starting it. Somebody had recommended it to me, so I’m going to recommend it out, but it was about the world being so complicated, and we are trying to do 25 things to impact, and sometimes it’s not 25 things, sometimes it’s three.
We over-engineer ourselves. We over-engineer the problem sometimes. I loved this concept because, as I step back and I look at my career and the not five years that it has been, it is so much. There are three key lessons. I come back to the same core. I come back to the same principles.
The problem is we forget to focus on them, and we don’t focus on them and weave that thread through everything we do, and that’s what creates more of the challenges. We over-complicate the environment versus focusing on what’s really critical here for us to win, to be successful, and to move our company to the next stage.
Karan: That’s great. I love it. Well, on that note, I want to thank you, Anna. This has been awesome. Obviously, I was sad when you left Outreach, and I figured we’d never get a chance to work again, but I’m so glad you chose to come to Madrona as an operating partner. Our founders are lucky to have you as an advisor.
We are lucky as investors to have your insight and experience guide us in our investment decision-making, and I’m just so happy that we get to have lunch right after this in the office. So, thank you again for your time. Thank you for sharing all these pearls of wisdom with our audience today.
Anna: It has been such a pleasure. I love working with this team. Thank you.
Coral: Thank you for listening to this week’s episode of Founded & Funded. We’d love you to rate and review us wherever you get your podcasts. Thanks again for listening, and tune in a couple of weeks for our next episode of Founded & Funded.