Episode 297 · 30 April 2026 · 52:24
Why Everything You Know About Sales Is Wrong, with Thomas Waites
Featuring Thomas Waites
Why Everything You Know About Sales Is Wrong, with Thomas Waites
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Who is Thomas Waites?
What a Chief Revenue Officer actually does
From door-to-door sales to contrarian takes
interview#door-to-door-sales#sales-background#contrarian-views
The tattoo bet story
Selling to 40,000 Warner Brothers employees
Why honesty is a competitive advantage
interview#honesty-in-sales#competitive-advantage#sales-ethics
The reframe that changed everything
Sales for STEM founders
The 75/25 rule and negative reverse selling
interview#75-25-rule#negative-reverse-selling#sales-strategy
Handling rejection as a founder
Building your sales team — hire junior first
The founder-to-sales-leader progression
interview#founder-to-sales-leader#career-progression#sales-management
Commission structures that actually work
interview#commission-structures#sales-compensation#incentives
Where to find Thomas
Top 3 takeaways
Show notes
Why Everything You Know About Sales Is Wrong — with Thomas Waites
Guest: Thomas Waites — fractional Chief Revenue Officer and startup advisor who has scaled multiple companies from seed stage to successful acquisition.
Most founders believe sales requires pushiness, persuasion, and a thick skin. Thomas Waites thinks that's exactly backwards.
Thomas joins Al and Leanne to argue that the very traits many founders think disqualify them from sales — honesty, empathy, and a hatred for pushiness — are actually their greatest competitive advantages. He shares the story behind his "tattoo bet" culture (yes, there's a bull on his shoulder), why STEM founders make some of the best salespeople on earth, and the 75/25 rule that flips the traditional sales script.
Top 3 Takeaways
Honesty is a competitive advantage. Most prospects walk into a sales call expecting to be lied to. When you're transparent about what your product can't do, you build instant, unshakeable trust.
Stop talking, start listening. Thomas inverts the standard sales talk ratio — the best salespeople speak only 25% of the time. Logic supports a purchase, but emotions drive it.
Don't hire a senior salesperson too soon. Your first sales hire should not be a VP of Sales or a CRO. Bring in a BDR to fill the pipeline while you, the founder, continue to close. Only hire a sales leader once the process is proven — typically around 3–4 salespeople.
More From Thomas Waites
- Website: twsales.com
- Live Call-In Show: twsales.com/live-call-in-show/
- LinkedIn: linkedin.com/in/thomaswaites/
Connect With Us
Get in touch, book a call, or find Al and Leanne on LinkedIn — all in one place: truthliesandwork.com/connect
Mental health support: findahelpline.com — UK: Samaritans 116 123 · Mind 0300 123 3393 — US: 988 — Australia: Lifeline 13 11 14
Truth, Lies & Work is part of the HubSpot Podcast Network.
Full transcript
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Al ElliottI want you to meet Thomas Waites. He's a fractional chief revenue officer, a startup sales architect, and the guy who once got a tattoo of a bull to celebrate closing a deal with 40,000 employees at Warner Brothers.
Thomas WaitesI ended up getting a tattoo because we made a bet about setting a new milestone for largest deal ever. And when I sold all 40,000 employees at Warner Brothers, I got to— well, I had to or got to, depending on how you think about it.
Leanne ElliottFor me, Thomas is also someone who spent years watching salespeople lie, push, and manipulate their way to mediocre results, and he decided to do the exact opposite.
Thomas WaitesAll prospects come into a sales call expecting the salesperson to be dishonest with them, expecting them to push something on them, expecting them to not act in their best interest. And so if you're aware of that and somebody asks you a question like, hey, do you have this feature? And you're like, no, we don't have that feature. And you leave it at that, they might be disappointed about that, but they will definitely trust you.
Al ElliottToday we're asking, what if everything founders believed about sales, that you need to be pushy or persuasive or even a little bit slippery, is completely wrong?
Leanne ElliottThomas has coached founders who swore they'd never be able to sell effectively, to close deals they never thought possible. And his method is so counterintuitive, even experienced salespeople are a bit shocked when they see it work.
Al ElliottThis one is going to change how you think about sales forever.
Leanne ElliottHello and welcome to Truth, Lies and Work, the award-winning podcast where behavioural science meets workplace culture, brought to you by the HubSpot Podcast Network, the audio destination for business professionals. My name is Leanne. I'm a chartered occupational psychologist.
Al ElliottMy name is Al and I'm a business owner, and we are here to help you simplify the science of work and create amazing workplace cultures. Thomas Waites has scaled multiple startups from early revenue to acquisition, including taking one company from $1.5 million annual recurring revenue to a successful exit. He now works as a fractional CRO, helping founders and early-stage teams build sales from the ground up without losing their soul in the process.
Leanne ElliottSo if you're a founder who built something brilliant, knows you need to sell it, but finds the whole thing kind of icky, Thomas has a message for you. The traits you think disqualify you from sales— honesty, caring too much, hating pushiness— those are actually your biggest advantages. Let's go meet Thomas Waites after this short break.
Al ElliottThe dirty little secret is that most businesses think they know their customers. They have the data, the records, the history, but it's scattered across 3 teams and systems, and in our case, about 216,000 spreadsheets, which means nobody can actually use it.
Leanne ElliottWhat you should be doing is using HubSpot, because why? HubSpot connects it all— every interaction, every support ticket, every conversation— into one platform every team can work from. So when sales talks to a customer, marketing already knows the full story. And when you know more, you grow more.
Al ElliottNice. Check out hubspot.com, the agentic customer platform for growing businesses.
Thomas WaitesI am a fractional chief revenue officer and advisor to startups. So I primarily focus on startups ranging from seed stage, Series A, and Series B. There's some other types of companies that I work with as well, but that's really my bread and butter. And prior to that, I've scaled several startups basically since my first job out of grad school. I was the first employee at a startup. I was acquired by a $9 billion company, scaled up our sales there, did it again at a prop tech company. And then 2 years ago now, sold the last company that I was VP of sales at, scaled that from $1.5 million in ARR up to another successful acquisition that was a global SaaS company. And then most recently was CRO last year at a company I had been an advisor at for 2 years. So, Yeah, for me, I mean, the bread and butter of what I do is scaling revenue and sales at startups.
Al ElliottWe could do an entire hour just on that journey that you just, you just caught up with there, which is incredible. But I think what we really like to talk about here is sales. Now, when we say Chief Revenue Officer, is that a fancy corporate way of saying sales?
Thomas WaitesSo Chief Revenue Officer, it's, it's, it's really interesting for people who work in tech, they know what that is. And then people who do not work in tech, they have no idea. Like I remember telling my father, I I was very excited about becoming CRO. I told my father and he had no idea what that was. He works, you know, he's an executive at construction company and they don't have those there, right? And so it's very much like a tech role that you see, but not really, you don't really see it in traditional business. So typically a CRO, they tend to have a sales background typically. And then what they do is they, it can vary, but typically they lead sales.
Leanne ElliottMm-hmm.
Thomas WaitesThey lead marketing and then they also lead customer success at tech companies.
Al ElliottI see. So we're talking about the entire— it's not just getting the deal sold or getting the customer in, it's actually looking after them through the entire journey.
Thomas WaitesThat's right. Or the way I explained it to my grandmother once, who also didn't know what that role was, it's really hard sharing this wonderful news and people having no idea in my family what I was doing. But I said to my grandma, I was like, I make all the money basically. Like that's, you know, and have all the humility, but it's basically anything that is revenue focused. That's what I'm taking care of.
Al ElliottBrilliant. I think the '80s and '90s would've called that a rainmaker, I think, wouldn't they?
Thomas WaitesI like that. I like that. That could be the R. Yeah. Rainmaker.
Al ElliottChief Rainmaker Officer.
Thomas WaitesThere we go.
Al ElliottIf I see that on your LinkedIn profile, I will be in touch. Look, one of the things that we, when we first chatted was that you seem to take a very contrarian view to sales.
Thomas WaitesI come from a sales background.
Al ElliottAs in, I was door-to-door sales. I was cold-calling people sales. That was tough and horrible, and I hated it. But I sense that your outlook on sales is very different to that. So tell me, what's your contrarian take on sales?
Thomas WaitesSo it turns out I have a lot of these contrarian takes, which is interesting. And so, you know, in terms of why that's the case, I've never reported to a sales leader before. I've always been the sales leader. And so like at my first startup, like I said, it was the first employee. Everybody was engineers except for me, although I did a master's in economics. So not that far off from engineering. And I ended up through a series of events, ended up leading our sales. And so for me, and then as subsequent roles, I was the sales leader. And so I developed the things that I do from sort of first principles as opposed to, you know, observing, you know, my boss or other people or that sort of thing. And so because I took that approach, it turned out that I ended up with all these contrarian takes that I didn't realize were contrarian until I ended up, you know, speaking at different events or, you know, talking to other sales leaders or, you know, when I hire people to my teams, they're like, oh, we've never, you know, I've never done this before. This is really cool. And then I would ask, it's like, well, how do you do it? And then they'd tell me, I was like, oh, okay. So that's That's like how I ended up with these, you know, sort of contrarian things. It's not that I'm intentioning to be one, let's say. It just sort of happened. There's a lot of them. I mean, I do fairly unorthodox things. Like my teams, we have tattoo bets as an example. I don't know that anyone's ever done that before. I've never heard of that.
Al ElliottTell me more about that.
Thomas WaitesSure, sure, sure, sure. So this happened 2 companies ago. So the company was called Together. And we were at, we were just under $1.5 million when I, when I came on to lead sales. And I had a very small team at the time. And my second week there, we had this offsite and we had a celebrity murder mystery party. And I went as Dennis Rodman and I had all these fake tattoos. And then I ended up having all these leftover tattoos. So I ended up, I, it was my second week at the company. I ended up tattooing all my colleagues. They all wanted them. So we're all covered in these tattoos. And they were like hilariously good quality. So they sort of stayed with us for like the week. We were all just like tatted up and I had these tattoos up my neck and all this sort of thing. And then anyway, and then we ended up like, I think I made a joke. I was like, when we hit $100 million in ARR, I was like, we should all get together logo tattoos. And our logo was like this like little hand. It was kind of cute. And everybody agreed. I was like, great. And And also like going from $1.5 to $100 million in ARR, you know, that was gonna take some years, right? It was gonna take some time and it was just, it was kind of a goofy thing. Anyway, one of my junior employees, it was 2 weeks later, he messages me on the Monday and I'm only like a month into the role at this point. He messages me on the Monday and he says, Thomas, can we talk? And I was like, oh, I was like, something seemed wrong. I was like, sure. So I get on a call with him quickly and he puts his ankle on his desk and shows me, and he had gotten our Together logo. On his ankle. And he was so excited about this, he went and got it early. We were nowhere near $100 million in ARR at the time. And then, so then it just became this thing. So then we used to make tattoo bets about all sorts of different things. And obviously people could opt in or opt out. Nobody had opted out, like there was no pressure. But yeah. And then for me, I ended up getting a tattoo because we made a bet about setting a new milestone for largest deal ever. And when I sold all 40,000 employees at Warner Brothers, I got to, well, I had to or got to, depending on how you think about it. For me, got to. It was an honor, a tattoo of my choosing. So I have a bull on my right shoulder blade from that. Anyway, I told this story. I guess I never told an audience of people this story. I knew it was unorthodox, obviously, but I told this story at a big tech event on, you know, I was talking about how to build sales team culture and I told this story and people were stunned. It was all sales leaders and I was like, oh, this is even crazier than I thought it was.
Al ElliottDid you just say you sold 40 5,000 employees at Warner Brothers. Is that what you just said?
Thomas WaitesYeah, yeah, yeah, yeah, yeah.
Al ElliottYou gotta tell us the story of that. What, what, what was that?
Thomas WaitesSo the company was together and we were selling peer-to-peer, um, and mentorship software for companies. And so we're basically only selling to very large enterprise. So our customers were like Netflix, Microsoft, um, Warner Brothers Discovery. Um, and so, um, When I joined, we had all these big logos, but it was like, you know, big company would only have like 100 users on our platform, right? And so we had these really impressive logos with these very small contracts. And then so for me, like the thing that I set out to do to scale our revenue is like, obviously we need to increase, like, you know, increase the number of customers we have, but it's like we have a lot of room to grow these accounts. And so I came up with a strategy to go from like, you know, sort of the small per-user model to what I called our all-employee plan. And so then I was initially selling that to get it off the ground, and then I, you know, taught my sales team how to do it and then scaled it. And in that process, yeah, sold all 40,000 employees at Warner Brothers Discovery. It was by far our largest deal. And then it also hit this milestone where we had a tattoo bet. And so then I had to get a tattoo.
Al ElliottWe could just end now. And that's just like the greatest story you've had in the pod. That is amazing.
Thomas WaitesYeah.
Al ElliottI'm going to ask you a bit of a, I'm going to ask you a question that I don't know whether you're able to answer. And it's nothing like proprietary or personal.
Leanne ElliottSure.
Al ElliottI think when a lot of people think of salespeople, they have this idea of someone in a cheap suit who's convincing them to do stuff they don't want to do. Whereas you are immediately, we've been talking, what, 11 minutes? And I just want to hang out with you and hear your stories. This is another contrarian thing. You are not like other salespeople. What are they?
Thomas WaitesI think that you're right. So there's, I mean, there's the, and I was resistant to being in sales. You know, like I went to a pretty top grad program for economics and, you know, I remember getting together with my peers because we were pretty close, you know, after we had graduated and we were working and that sort of thing, we all got together. And I remember somebody asked me, they're like, what sort of analysis are you doing? Was their question. Like, you know, 'cause they're all quants, right? Like, they either went on to do their PhDs or they're working for the government or they're working for big banks, like that sort of thing. And I said to them, I love how you— yeah, I said to them, I was just like, I was like, oh no, no, no. I was like, I'm leading sales for a solar company in the States. And they were just like, Like, what? Like, so yeah, so I was like very much like the black sheep of my, of my program, you know, like a master's in economics is, is like, uh, you know, you're doing, uh, computer modeling and math proofs, right? So like, I think inherently, like, come to it from a different place, but I did have that resistance because when I would tell people what I was doing, people thought I was sort of wasting my time or, you know, the, they think of like, uh, they think of salespeople as being dishonest or they think of them as being pushy. Self-interested, like just sort of like immoral, let's say. And I've certainly met a lot of, like, I actually, to be honest, like when people say that to me and they say it to me often in different ways or imply it, I'm never offended because it's like I've met a lot of salespeople and it's like I actually do think that that's the case in a lot of different ways, right? And so it's like I'm not even offended by the stereotype. But for me, the thing that I learned is one, if you're doing those things, like, I just don't feel good. And so, there was actually a period during my career where I actually left sales, or, well, I tried to leave sales. So, I went to a different startup and then I was in a different type of role, more operations and business development, 'cause I was like, I was so burnt out from sales. And part of it was because I kind of thought that this was inherent to it, you know? And I wasn't, because I was such like a baby sales leader, I wasn't setting the culture as I wanted it to be. And I don't even think I realized I had the power to that. I was sort of like going along with things. We were still successful, to be clear, but I just didn't feel good, you know? And, or my salespeople would talk to me about like, 'cause I had so many, it was B2C, it was like door-to-door sales, telesales, that's, you know, so I had like so many salespeople across the US and they would tell me the things they were doing. I was like, oh, okay. And, you know, and it was like working, but it like didn't feel good, you know? It really, really didn't feel good. And so I think that's why I got so burnt out. And then I tried to do something else and then we ended up needing a sales team at that startup. And then the founders asked me if I'd start and then I got back in. But then for me, it was an opportunity to create it as I wanted to. And so, you know, the thing that I learned is it's like, if I'm being dishonest with people, even if it's like white lies, like it doesn't have to be wildly dishonest, like even just anything that is like manipulative or, you know, being short-sighted or Um, taking liberties with the, like, 'cause it's, you know, like it's hard. Like when a customer asks you, it's like, hey, do you have this feature? And you don't, it's hard to say, no, we don't have that. Right? Because inside you're like, I'm, you have this fear. It's like, I'm going to lose the deal. Right? Like it's not that salespeople are like these monsters or whatever, but it's like, it, it makes sense. It's like, it's like you want, like you have to get deals done. Otherwise you're, you have, um, your job's at risk. And, and so it's like, it's, it's hard to, to have that conviction, I think. So one is that I didn't feel very good. And then, and so I was like, I can't do it that way. And then the other thing is that I think just practically speaking, I actually found that I'm way better when I do live by those principles. And so what ends up happening is that, um, I talked to my, my teams about this, is that all prospects come into a sales call, um, expecting, uh, the salesperson to be dishonest with them. Expecting them to push something on them, expecting them to not act in their best interest. And so if you're aware of that and somebody asks you a question like, hey, do you have this feature? And you're like, no, we don't have that feature. And you leave it at that, they might be disappointed about that, but they will definitely trust you. Right? Like, and so that's what ends up happening. And so what happens is With our, like over time with different customers, prospects, that sort of thing, is that people trust me a lot because I don't sound like the other people that they engage with. Right. And so it's really interesting that way. Or, you know, sometimes somebody might ask for like a discount and, you know, like I'll get on the call with my account executive or what have you. And it's like, we want the deal signed by the end of the month because we want to reach our target. They want a discount. And so I'll say, we'll give you a discount until the end of the month. But some prospects, it feels like we're sort of playing a game with them, right? And I remember one time I just explained to somebody, 'cause they were confused as to why I would do this. And I said to them, I was like, I'm like, we have a big target to reach and that's why it's important to me if it gets done by the end of whatever it was, March. And they're like, oh, okay. And then we got off the call and my account executive and I were debriefing and they're like, I'm so surprised you just told them that, right? Like, they're like, I didn't know you could just tell people. It's like, Well, yeah, because if I tell 'em anything else, it won't make sense to them and they'll know that I'm being dishonest in some manner. Right? Whereas if I tell them it's like, and that was the truth, it was like I wanted to hit my target, right? And they wanted a discount. So it was like, great, like let's help each other out. And then I remember that prospect followed up, they signed the deal, and then they followed up and they said, I hope you hit your milestone. Like, you know, and they were so, so like those things, like it, it, it's not only for me as a person, like And how I want to live, but also like, even if you wanted to be dishonest, I still think practically speaking, you're better to do that, you know, and being really, really sincere. Or for me, like I try to, even though I want to get every deal done, I really try to suspend it. And so it's like, it's like if it's not a good fit for somebody, it's like, I'm not going to push them on that. Right. And so I think when people, you know, when people say it's like, oh, I'm not going to renew or I'm not going to buy or whatever. For me, like the reaction most salespeople have is then they try to push harder. I normally am like, oh, okay. It was like, that's not, you know, no problem. And then what ends up happening, I've actually stumbled into a sales technique I didn't realize, it's called negative reverse selling, is like when I do that with people, they tend to end up selling themselves because they don't resist, which is fascinating. And so I've actually done, I've done a lot of sessions with salespeople and founders who are selling. on negative reverse selling and they watch these calls and they're just shocked because the person will say, no, no, I don't want that. And I'll be like, okay, that's fine. And then they end up talking and then we get the sale at the end of the call, which is like, never happens. And so for me, it's respecting people. It's trying to be oriented towards others and then trying to live from my values. And then as it turns out, like, it also works extremely well.
Al ElliottSo, It sounds like you have almost done some kind of reframe, which I know is a sales technique anyway, but a reframe of what sales is. The majority of people go, I'm going into sales, therefore it's about me and my targets. It doesn't sound like it's like that with you. Tell me about that process. How do you think about sales?
Thomas WaitesIt would be incorrect for me to say that I'm always like feeling this way. Like, it's really interesting. Like, I remember, uh, when I first joined Together, We took off like a rocket ship my first 6 months, like every single month from my first full month onwards, we set revenue target or we set revenue records. And I remember that December, which was my 6th month there, I think we 12x'd the prior December. And that was with no like additional marketing spend, no additional hires. I actually let go of the most senior person pretty early on. So it wasn't anything like that. Like, you can, I can send you the chart, like you can see it on my LinkedIn because I posted it. And so, you know, so we continued on and we were setting these records. And then I remember, because it's really hard to do that, it's hard to hit a new record every single month, especially we weren't just kind of smashing the records, like we were like clear, like clearing them, right? And so, and then I remember, you know, the next 6 months, We sort of started to plateau. And I remember then I sort of started, I started pressuring my sales team more and we started having less fun. And I was like really obsessed with like setting these records. And it was a, it was an, and I started to like my, my team's performance like plateaued and I think it perpetuated for that reason. And then I caught myself and I was just like, I'm not having fun anymore. I'm like stressing about these targets. My team doesn't seem happy because what I've learned is that however I'm feeling or thinking about things is like my team mirrors that basically. Like they mirror my energy. And so then they were feeling, you know, they were anxious, they were stressed, and it's just not a good way to work from. And so I think it's easy to fall into that trap. And then so for me, it's just like, I just have to reset, right? And it's like, okay, it's like, why am I here? It's like, I want to help people, right? Like we're like, in that case with that team, it's like we're selling peer-to-peer software, mentorship software, which I'm very, very passionate about. And so it's just like, I want to help people with that, right? And it's like with my team, it's like I deeply, deeply care about the people who work for me and mentoring them and seeing their progression and seeing their growth. And so once I start fixating on the targets too much, what ends up happening is then I get stressed, I get anxious and that sort of thing. And so for me, I really have to refocus on, it's like, why am I doing this? What are the right things to be doing? Like, what's my purpose? Like, how do I want to be? And then as soon as I'm like that, like things with the team go really well. We start hitting our targets, you know, even if we were behind. And so I think I've really centered on that through learning. But I used to, particularly in the past, like it wasn't just like a clean cut, This is always how I've been. It's, for me, it's like been a process of learning, but I know that if I'm, if I'm focused on the wrong things, it just doesn't go well. It never goes well.
Leanne ElliottDid you know that the UK's number 1 management podcast, that's us by the way, and the UK's number 1 marketing podcast are both on the same podcast network?
Al ElliottWe actually have a lot in common. We both use behavioral science to help people do better at work.
Leanne ElliottAnd we both had to wrangle Rory Sutherland on an episode.
Thomas WaitesAnd 2 out of 3 of us are devilishly good-looking.
Al ElliottAnd you're not going to say which. Phil, host of Nudge, UK's number one marketing podcast. It's brought to you— we need to do this in 3s—
Leanne Elliottthe HubSpot Podcast Network, the audio destination for business professionals.
Al ElliottSeamless, seamless. Tell us about your latest episode, Phil.
Thomas WaitesWe've just done an episode on Fake fandom and how New York indie bands are paying agencies to create fake TikTok videos about how much they like their work. And we talk about the behavioral science behind fandom and how that encourages people to enjoy the music and all of that good stuff, and do some big things about how this affects the world of politics, business, and brands as well. It is.
Leanne ElliottIt's such it's such a good show. Of course, you'll hear all the stuff you want to hear about how to grow your business by using behavioral science in your marketing. But there's also just some really interesting episodes that'll be right up your street. Personally, I enjoyed Can Balsamic Vinegar Make Beer Taste Better?
Thomas WaitesIt can.
Leanne ElliottAnd Are We All Just Status-Seeking Monkeys?
Thomas WaitesI am.
Al ElliottGo and listen to Nudge wherever you get your podcasts.
Leanne ElliottBut come back.
Al ElliottYeah, come back.
Thomas WaitesDefinitely come back because Nudge isn't as good as this. So come back.
Al ElliottI'll cut that out. Keep that in. We're going to come back to leading sales teams shortly. But this is a nice segue into founders who have, find themselves having to sell. Now, I think a lot of founders are great at coming up with an idea. They're great at building the product or service, and then they, then they feel like it's all icky and they have to go out there and sell it. But what you just said there was that if you care deeply about the problem you're solving, then sales isn't even sales. What have I misunderstood?
Thomas WaitesIf you, if you genuinely care about people and you care about the problem you're solving, um, I think you'll, you'll be selling in a much more proficient way. I think like, as an example, um, like what happens, like it sort of goes back to, I think, I think trust is huge in sales. And like I was saying, it's, it's like you start in a trust deficit basically with everybody because everybody has preconceived notions about salespeople. And I think everybody, And anyone that we've sold software to, like they've had negative experiences with salespeople of varying degrees and probably many of them. And so the thing is, is like if I'm talking to somebody like, and it's like they, you know, when, if you're selling like a per user model as an example, let's say they only want 100 users and you're like, okay, but it's like you wanna sell them all of their employ— you wanna sell them thousands of users, right? And the thing is, is that it's like, that might not be right for the person, right? Like, it's like they might be really scared to roll out a program like that, or they might not know what they're doing, or, you know, if it doesn't go well for them, it's like maybe their job's gonna be on the line 'cause they've, you know, done this like project and it's a huge flop in front of it. Like, so there's lots of different things like that. And so for me, I try to sincerely understand like what's going on with the prospects and like the, actually the person across from me.
Al ElliottYeah.
Thomas WaitesAnd if it's really not a good fit, then it's like, I don't want to sell it to them. Like, I have no interest in doing that. I won't feel good about it. And the thing is, is because I have that approach, normally what happens is then people are much more open and vulnerable with me, and then they'll share. They're like, you know, we do want to go bigger, but I have these concerns. And you're like, oh, okay, that's cool. Like, it's like, well, let's talk about those concerns, right? And then And then you end up getting much larger deals, right? Like, it's, it's, it's, it's almost paradoxical. It's, it's if you do not need and you do not push for that deal and you're not attached to that outcome and clinging to it, people trust you much, much more. And they, and they're, they're, they want to be engaging with you and they trust that you're there to solve their problems, you know, and that you're not just making recommendations that are self-serving.
Al ElliottI've got a note down here that you that you tend to favor the STEM founder. First of all, what does that stand for? And secondly, is there a story that you can think of, like a transformation of someone who didn't want to sell and end up being brilliant?
Thomas WaitesYeah. So STEM, hopefully I'm right on this, is science, technology, engineering, and mathematics, I believe. And so basically people who come to sales and revenue from More of a quantitative background, let's say. And generally speaking, not always, but generally speaking, salespeople tend not to have those sorts of traits and dispositions. And so normally it's a challenge for those founders to then go sell. And then oftentimes as well, those founders never thought that they would be selling ever. Like they never thought that. When they started their companies, it wasn't because they're like, oh, I'm, I'm really excited to go, you know, sell and, and, and then lead my, you know, my future. Like, that's not what they were thinking. Like, they wanted to solve a great problem. They had a great idea. Um, they wanna go execute on that. And then sales and revenue is sort of like, it's like, oh, okay, I guess we have to go sell this 'cause it's not gonna sell itself and we need money, right? And so sales oftentimes for most founders is sort of like a necessary evil that They also have these preconceived notions about what sales is all about, and they're often reluctant to do it, but they know that they need to. And so they start tackling it. In terms of transformation, somebody that I saw be really proficient in sales was actually my CEO at Together, and he was leading sales before I joined. And he's His name is Matt. I love Matt to death. He was wonderful to me and we were very successful together and he trusted me a lot. And, but he did the initial sales before I arrived. And, you know, him and I talked about it. I actually interviewed him to share with other founders that I'm working with so that he could share his story. And, you know, Matt is fairly introverted. He's deeply, deeply analytical. You know, he, you know, I think he feels some discomfort when connecting with new people and that sort of thing, which in sales you're constantly connecting with new people. And it's really interesting is he was very, very successful, I think for some of the reasons that I'm actually discussing, because it's like Matt has huge integrity. He's very honest with people. I remember the case for when I was going through the interview process was he wanted me to coach him on one of his sales calls.
Al ElliottHmm.
Thomas WaitesWhich was interesting because he wanted to see how I would potentially coach the team. And yeah, he was just very honest with people, very straightforward, very trustworthy. Basically the principles I'm talking about, like that is how he was, you know, and he also deeply, deeply cared because he really believed in the problem we were solving and he really wanted to help the people. It just came in the package of somebody who's a little bit more shy and introverted and that sort of thing. And he was very successful. Like he did the first million in sales for the company. Yeah. So I've seen that. That's why I love working with founders because you can, you can help people who don't think that they could be good at sales, don't seem like the typical salesperson, and they can totally do it and they can be very successful. The other thing that Matt possesses and the other founders with the sort of background that I've seen be very successful, Is they're like highly, highly coachable and highly, highly open to learning. And so that's really important. And so like when I interviewed Matt about this process that he went through and we really dug deep into it, it was that he's just constantly iterating and like almost like you would like an engineering problem as well, you know, but that's how he was like, he was treating it like that. And the founders who do that and have that self-awareness, I think do really well too. But it's hard because, you know, it's interesting. It's like if you're doing like an engineering problem, for example, your work is, I suppose, a bit of an extension of yourself, or you might think of it as an extension of yourself, but it's a little bit more impersonal than sales. Where sales, it can sometimes be hard to be open and coachable because it's deeply, deeply personal. Like what's more personal than how you interact with people, right? You have to look at it and you're like, oh, I didn't connect with that person. Or it's like, oh, it's like I was really awkward, or that explanation didn't make sense. Or, you know, And so it's hard for people to look within because it's inherent, like sales is inherently personal. And to get better at it, you really have to examine yourself and be strong in yourself and your interpersonal skills.
Al ElliottCan we stick with this engineer idea for a second? Because my only experience of engineering is software engineering. If you're an engineer and you've started a company, a software engineer started a company and there's a bug in your code, you know there's a logical reason why that is not happening, why the outcome is not happening. If you're an engineer and you're talking to someone and selling them, there's no, not necessarily a logical reason why this person's saying no. So how are you reconciling that with people who are very technically minded?
Thomas WaitesYeah. Yeah. And that's why it can be hard. And it's interesting is like, even with salespeople as well, like, it's like we record all of our calls so you can go back and watch, right? Like if you lost a deal, you could go pinpoint it. But a lot of people, I don't know if it's that they lack the self-awareness or the mechanisms for pinpointing it, or they just don't want to see it. I'm not, I'm not really sure what, you know, because it's hard watching your call. Like, even for me, even today, if I did a sales call and it went really well, when I watch it, I'm just, for me, I have all sorts of feedback for myself. Like, and so I think the, I think the challenge is part of it's the self-awareness. So as an example, like, A lot of, a lot of the sort of STEM background founders, they think about selling and selling their product as being information. They think that because they tend to make decisions in a very logical way, they tend to think that that's how you're going to sell somebody on something. It's like, this will just make sense to them, right? And, and then the other thing is that they tend to be focused on themselves.
Al ElliottYeah.
Thomas WaitesBecause, and I don't mean that they're, you know, selfish or anything like that, but they tend to be focused on themselves because they've spent all this time and they've poured all their energy into building this thing. And so when they hop on a call, they're like, let me show you all this cool stuff my, my platform does, or like, you know, and so they, that's what they're doing. And, and perhaps nervously as well. And so they lose sight of the prospect because they're focusing on showing their thing.
Leanne ElliottYeah.
Thomas WaitesAnd they're not focused on the prospect. And so the biggest change that I help people with is going from not selling in, in like sort of like what I call the thinking state and selling people in the emotional state. And that's where sales happens. And so I talk to them about this. It's like to, to connect with somebody emotionally, it's like first you have to listen to them, right? And so I talk a lot about talk ratio with my team. And most salespeople, their talk ratio is like 70/30, meaning that they're speaking 70% of the time and the prospect's speaking 30. I invert that. Like if you look at my talk ratio, I've written some articles on my site and I've posted some screenshots of my talk. Like my talk ratio is typically in like the mid-20s. And so, which is like highly, highly unusual. And then with my teams, I get them to do the same. And so it's like people open up to us, we're very focused on them. And we're able to connect with them emotionally in that manner, right? And then it's like a lot of people, like a lot of salespeople do this too, but the STEM founders, it's like they sell sort of factually where they're like, look at all these features and benefits, but they don't focus on the emotion behind them, which is the pain that it's solving for or the excitement that they can generate from it. And people move towards either relieving their pain or something that's exciting to them.
Al ElliottYeah.
Thomas WaitesWhereas oftentimes, like the founders, they'll share all of this factual information. And the thing that they end up doing is they just overwhelm the person on the other side of the table. And then when somebody's overwhelmed, they tend to ruminate or shut down and then they don't make buying decisions. And so normally what happens is like, if I give a founder, there's a lot more to it as well, but those are some examples. Like if I give a founder that framework, And they believe in that, then they can then go watch their calls. And then we talk about subsequently where they're like, oh yeah, I mostly talked the whole time. They're like, I didn't really ask questions. And then we get into the mindset. It's like, well, you know, why, like, why didn't you ask questions? And they're like, oh, well, because, you know, this person came to see me about this platform. And so it's like, I should just talk about the platform, right? Like, it's, it's like perfectly logical, right? It just doesn't work is all, right? And They tend to, people with STEM backgrounds tend not to be as feeling oriented, right? And so, you know, therefore logically they wouldn't think that others would make buying decisions from a place of emotion. And so it's like really with these sorts of frameworks that people can then go review what they're doing and then transform, I think. But I think without somebody giving you those frameworks or that understanding, It's very, very hard 'cause it'd be like, well, I give them the information, right? And it's just like, if they're not buying, they just need more information, you know? And then the follow-up emails are, are like a novel and the, the person just shuts down.
Al ElliottI think a lot of founders worry about a sales situation because if someone says no to the product, they're saying no to them and their baby. Is— you've seen that too?
Thomas WaitesFor sure. For sure. I think that's one of the hardest things. Like I wrote an article, uh, in a coaching series for founders I did, uh, this past year. And I wrote about mindset and that was one of the key things is that like once it, like, so it's like, like I was talking about with sales, it's inherently very personal 'cause it's like you're connecting with somebody, right? So you have to look at that and it's like, oh, I didn't connect with that person very well. Or, you know, whatever feedback you might have for yourself. And then it's even more personal for founders because it's like sales is personal and then being reject— like feeling rejected about you and your company is like, That's a hard pill to swallow, you know? And, and then the other thing too is that it's hard not to operate from a place of scarcity when you're the founder doing the sales. 'Cause when you're a founder doing the sales, that means like you need every dollar you're trying to sell. Like you need every deal, right? And so it's, it's very hard not to be attached to the outcome, right? It's very, very hard. But the thing is, is like when you're attached to the outcome or you're, or you need somebody to say yes so that you feel that validation, Um, whether it's product validation or personal validation, whatever it might be, it's very hard to follow the principles that I have for sales because what you'll end up doing is all of the things that are like, that's when, like, if you deeply, deeply need a deal to happen for those reasons, that's when you might be a little bit dishonest with someone when they're like, hey, do you have this feature? And then you're like, yeah, I have this feature, right? Like, um, or when they push back, it's hard to respect their no. Like, I always respect somebody's no. Right? And then that's when they tend to end up circling around and saying yes, you know, like I'm very good at turning nos into yes, but it's because it's not like a trick. It's that I respect people. And if it's a no, then it's like, okay, cool. Like no problem. You know, but it's so hard for founders to have that mindset. So I have a lot of empathy for why that is.
Al ElliottBut if a founder is at the point where they're like, oh shit, this has got to happen. Otherwise I might have to shut the doors in 30 days. Is there anything they can do to try and separate the bills coming in 30 days, the bailiffs in 30 days, and this sale?
Thomas WaitesI mean, it's not, I mean, it's more catastrophic than let's say what my salespeople go through, but my salespeople, I mean, for them it's like, they're like, okay, I missed target last quarter. I missed target this quarter. And it's like, if I don't hit target this quarter, I'm probably not going to have a job, right? Like that's inherent. Just like, it's always like very Like you, you feel that urgency and also that vulnerability and those fears, right? Like, and then in the example you're giving, it's even more. The tough thing that I see is it's really like once a salesperson or a founder gets into that spiral, it's very, very hard to get out of it because what ends up happening is it's like you end up not following the principles you need to follow to be successful in sales. And then you're less successful. And then so you follow them less, right? And, and so it's like you cling to the deal more, you're more attached. And then so people tend, and then also too, like you need to be confident when, when you're selling, um, you need like all these sorts of things. And so you see this like negative spiral. So I've, I've even seen success, like people that I know will be like, I've let salespeople go that it's like they weren't successful on my team, but it's like, I know they'll be successful somewhere else. I like, I know it, but I just know that they have to go reset somewhere else, you know? And, and I've actually seen that. And interestingly, there's some people that I've let go that I, I still like stay in touch with and that sort of thing. And I'm cheering for them, right? And there's been decisions that I've made where it's like I let somebody go and it's like, oh shoot, like I know they're gonna be successful somewhere else, but it's like they've just gotten into this spiral. And, and, uh, and it, and also like I failed to coach them out of it, you know? And so I think for a founder, if they're in that situation they're talking about, like I think it's very tough.
Leanne ElliottYeah.
Thomas WaitesBut really, like, they would have to do like a mindset reset, basically. But without that, it's, they're, they're going to have a hard time.
Al ElliottSo let's imagine that we are a Matt. Okay. So we've built out, we've done the first million in sales. We're able, we've got the luxury now of going, great, I'm going to bring in a team. How do you build the team and how do you manage that team? Tell me your secrets, Thomas.
Thomas WaitesA lot of the founders that I work with are in that transition or they, or they've started it. And you don't need to get to your first million in ARR either. Like you can bring people on sooner. The thing that I would do is, or the common mistake that I see is that a lot of founders want to bring in somebody who's very senior. Like they want to bring in, like they want their first sales hire to be a VP of sales or CRO or director, like whatever it is. And I really, really advise, against that because one, those hires are very expensive. Like very, like it'll, if you're paying market, like they'll be by far the, you know, the most expensive hire that you have at the company. So there's that. There is a big difference between being an exceptional sales leader and an exceptional salesperson. And oftentimes, you know, I've worked with a lot of exceptional sellers who are not great sales leaders.
Al ElliottYeah.
Thomas WaitesAnd, uh, and there's some sales leaders who aren't, who are, who are proficient and really great at what they do, and they're, they're not the best, uh, sellers. Um, and so there's that. The other thing too is that what needs to be done typically, like the sales activities that need to be done, is like, there needs to be like cold outreach done, uh, which is more like a junior BDR, uh, type activity. Um, they need to be hustling deals, like all these sorts of things. And the thing is, is like, if somebody's progressed to a really senior level, Even if they can do these things really well, they probably don't want to, right? And it's like, it's like you don't want to pay somebody, let's say, let's say you brought on a director of sales. It's like, you don't want to pay a director of sales like $300,000, $400,000 a year to be making cold calls for you. Like, that's just, that's just not the thing that you want to be doing. So there's lots of different reasons for it. And so normally what I advise is that they bring on the more junior roles. So this would be like a BDR, SDR, like level 1 salesperson. So they're generating—
Al ElliottI just want to ask you, you're using BDR, SDR. If someone's not come across those terms, what do they mean?
Thomas WaitesSure. So BDR would be business development representative and SDR would be sales. And they get used in different ways. And so, but basically it's a level 1 salesperson who is not focused on closing deals. They're focused on generating like more discovery calls or generating more demos, basically generating more top-of-funnel pipeline for somebody else to go close. And so I would recommend typically, I mean, there's some nuance obviously, but typically I would recommend bringing on those folks or like an account executive who can go close deals if you have lots of pipeline. And so like what you want is you want sellers who are going to go sell, And then the CEO or founder, whoever was doing the selling, they effectively become the sales leader in that case, and they're gonna manage those people, right? And so then you wanna like scale that up and then you bring on the sales leader later on. Like I had a client of mine last year who I've been working with and they're working on their, on a round of funding. And she said to me, she's like, I really wanna bring you on as CRO full-time once we have this funding. And I said to her, like, I love the company. I love what they're doing. I really liked working with her. Um, but I said to her, I was just like, it does not make sense for you to have CRO at this point. And especially like what you'd have to pay. I was like, don't, like, don't, don't do that. I was like, me, me or anybody else. Like, I was like, here's what, here's what you want, you know?
Al ElliottSo just to nail down this progression. So I'm a founder. I've been doing the sales myself. Then I go next stage is potentially I bring on these SDRs and BDRs. who are going to generate leads that potentially I close.
Thomas WaitesYes.
Al ElliottAnd then the next stage is that I don't necessarily lead the sales team. I bring someone in to lead the sales team. Is that what you recommend?
Thomas WaitesYeah. So it would be like the BDR, SDRs who are going to generate more pipeline, and then the founder continues to close those deals. So they're sort of like phasing themselves out, then bring on an account executive, and the account executive is then going to Replace them needing to close the deals. And so it's like, once you have those 2 roles, then the founder hopefully can step back, um, and not actually be actively selling. Like maybe, maybe if someone more senior is necessary for some calls, maybe they join those. Um, but that's the idea is, so it's not, I think a lot of founders think it's like, I'm going to sell X amount. And then once we are at X, then I can cleanly cut out of sales and, and it, it does not work. And it's like, and then I'm going to hand it over to this great sales leader. They'll be wonderful and I'll never have to do that again. And it's just, it practically doesn't work. And so that's what I would advocate for. And then you bring on the sales leader a little bit later. So in the case with Together, when I joined, Matt was leading the sales team and we had 4 people on the— yeah, we had 4 people on the sales team when I joined.
Al ElliottAnd I would say like 3 or 4 salespeople is the right time for a sales leader So while we're talking tactically, then I think the dream for a founder is to bring someone on who's SDR, BDR, who's commission only, because then there's no risk to the founder. But as an experienced sales leader, what's your thoughts on that?
Thomas WaitesSo for tech sales, you definitely have to pay like some base. And it depends on what the prevailing norms are like in North America. I would say that for the more junior roles, you might pay them disproportionately more base than variable. But typically like a 50/50 split. So it's like, as an example, it's like with a BDR, it's like maybe you're gonna pay them what you call on-target earnings or OTE. And on-target earnings is base, the base salary plus the variable comp that you expect them to earn. And so like a BDR comp might be OTE. So on-target earnings is $90K. And it's like you're gonna pay them $50K in base and you're gonna pay them $40K in variable. And the variable is tied to targets that they need to hit.
Al ElliottIs there any kind of formula you might use to work out what that, work out what that commission is across both the exec and the SDRs and the BDRs?
Thomas WaitesYeah, good question. So, I mean, I look for on-target earnings. I look at a number of things. So I look at what are the comparables, like, so what is the prevailing norms? I tend to actually pay my BDRs and SDRs more than whatever normal is because then I get to have my pick of the litter in terms of those folks. And I know that those people, especially early on, like, 'cause I've done this a few times now, like I know that the early members of the team are going to go on to become the leaders of my team and they're gonna promote the culture and the norms and all these sorts of things. So it's like those early people are really, really important. And I much prefer for my BDRs and SDRs to progress into the more senior roles than trying to hire people externally for those roles. It generally goes a lot better. So it's like, I'm gonna invest in these early people heavily. And so it's like, I want them to be exceptional and I want, and so I tend to pay more than market for the more junior roles. So I look at market comps and then in terms of setting the variable targets, this is really interesting, is that there's a norm in tech sales where Companies will recruit people and they say, oh, your on-target earnings is $250,000. And then the person gets to the company and it's like, you know, not even God could sell, you know, and get to $250,000, you know? And so the targets are, are very unreasonable and it's very aspirational. And so that's why a lot of sellers, when they're interviewing places, they'll say like, how, like, what percentage of your team is hitting target? Right? And sometimes it'll be like 10%.
Al ElliottRight.
Thomas WaitesSo it's like, yeah, your on-target earnings are $250K. It's like, how many people are hitting that? It's like, and if it's like 10%, I was like, well, like that's a huge red flag. Right. And so, whereas for me, the way I set on-target earnings is that it is the expectation. Like if you're not hitting on-target earnings, like that means that like you are underperforming and like something's going wrong. And so it's like, it's meant to be achievable. And then the way that I back out what is and is not achievable is like, Early days, like I'll sell some deals myself so I get an idea. It's like, okay, it's like I can sell X in a month. Like what could another seller reasonably sell? I look at team performance, I look at comparable norms, I look at the economics because it's like, let's say I think a BDR can only set 10 demos in a month and it's like, I look at it as like, okay, but for paying this person X and they set 10 demos a month, like is it even worth that? And so there's a lot that goes into it, but for me, like One of the big principles about my teams is that like the on-target earnings has to be attainable. Otherwise there's all sorts of problems with it. And it's very commonly the case that it's not attainable.
Al ElliottIf someone's listening and goes, do you know what? I need a Thomas in my life. How do they get in touch with you? What are you offering at the moment?
Thomas WaitesSo I have my website, which is twsales.com. And so I post a lot of like long-form articles on there that focus on sales skills, mindset. I have articles for sales managers, sales leaders. And then also for founders as well. So people can go check those out. And then I also have something I started this year, which is a live call-in show, which I'm very excited about. And so basically it's like, you can think of it as like live coaching, live call-in where every other week 5 sales leaders can join and every other week 5 founders who are either doing sales themselves or leading an early sales team can join and ask me questions. and get feedback and advice. So just a fun way for me to connect with new people. And then also folks can find me on LinkedIn.
Al ElliottThat was Thomas Waites, and this might be the most useful conversation for you if you're a founder or a sales leader in the trenches doing sales right now. 3 takeaways, Leigh?
Leanne ElliottYes. First, honesty is your competitive advantage. Every prospect walks into a sales call expecting to be lied to. When you tell the truth, even when it's uncomfortable, You build trust faster than any sales technique ever could.
Al ElliottLesson 2, stop talking, start listening. We say this all the time. Thomas inverts the standard sales talk ratio. He speaks for about 25% of the time and lets the prospect do about 75% of the time. So you need to stop pitching features. You need to ask questions. Remember, people buy on emotion, not information.
Leanne ElliottAnd number 3, don't hire a senior salesperson too soon. Your first sales hire should not be a VP or a CRO. Bring on a junior business development representative to generate a pipeline of interested prospects while you still close the deals, then scale from there. The founder who tries to skip straight to the sales leader almost always regrets it.
Al ElliottYou can find Thomas and his long-form articles, which are on sales mindset, skills, and team building, at twsales.com. He's also got a brand new live call-in coaching show on the same website. Just check the show notes for the link.
Leanne ElliottThis is Truth, Lies and Work. We will see you next week.