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TCT Exclusive: Dakota McKenzie, GTM @ Unusual Ventures

We’re thrilled to announce this week’s exclusive with Dakota McKenzie, Senior Associate, GTM @ Unusual Ventures! Prior to joining Unusual Ventures, Dakota worked on the top performing Enterprise team at Segment, and was also an early sales hire at Databricks. Dakota’s operating experience helped catapult him onto the venture scene, where he now focuses on helping founders scale their sales and customer acquisition efforts. With deep domain expertise in all things GTM, we sat down and discussed:

Dakota McKenzie

TCT: Thanks for sitting down with us, Dakota. Let’s jump in.

How did you start out with regards to your career?

I learned what a premier SaaS company was like during my first internship in SaaS at Demandware (IPO, then acquired by $CRM). It was an incredible opportunity to learn the fundamentals of a high growth startup and experience a transition from late-stage growth to IPO. I noticed a change from a “win deals at all costs” approach to focusing on operational margins, growth metrics, building specific roles for the entire pre-sales and post-sales motions, and other critical IPO-readiness requirements. 

I eventually made my way out to the Bay Area to join Sumo Logic where I learned  how to drive complex technical deals and had the opportunity to work on a world-class Go-to-Market team. 

I was presented with the opportunity to join Databricks in the early days of the company and I felt this was a “can’t miss” career move due to the hype around Machine Learning, AI, and Spark. During my 2.5 year tenure, I built a greenfield territory from scratch, and made a strong contribution to the team while we grew from $10M - $100M ARR. This was one of the best experiences in my early career. Not only did I learn about one of the world’s most popular open-source projects at the early stages, but I consider this where I got my “Sales MBA.” I feel incredibly lucky to have been a part of the team at such an integral time and feel fortunate to have relationships with leaders at the organization. 

The opportunity presented itself to “build” again when I joined Segment as one of the first 10 Enterprise AE’s (Account Executive) as they expanded up-market to sell to Fortune 500s and revolutionize their customer data strategy. During my time, I exceeded my number alongside the top performing Enterprise team at the company. It was a tough decision to leave (as you may have heard they were recently acquired by Twilio, which says a lot about Segment’s opportunity in the market!), but I was presented with the opportunity to join Unusual Ventures and could not pass up the chance to work with multiple early stage companies at one time. I’m excited to share what’s so unique about Unusual and why I found this to be the next “can’t miss” opportunity in my career. 

You transitioned from enterprise sales to working at a Venture firm. What’s been the biggest learning curve to date?

Unusual’s Get Ahead Platform (GAP) team and the Unusual Method sold me on joining the firm and I’m excited to share with you why Unusual’s approach is so unique.

Starting a company is extremely difficult for a long list of reasons, but founders also get large sums of capital to start a company with the expectation that they know how to recruit, market, sell, and build a world-class product without much support. Unusual recognizes this thought process is backwards and through the Get Ahead Platform,  we’ve hired the best operators in Sales, Marketing, and Recruiting from world class companies — including MongoDB, Okta, AppDynamics, LaunchDarkly, and many others — to work inside portfolio companies for 3-6 months at a time helping founders execute on specific KPIs/OKRs to accelerate and improve their likelihood of raising a Series A investment. 

To clarify, the GAP Team does not just advise and conduct occasional check-ins. We take what we’ve learned from our experiences of building and scaling renowned companies and distill it down to  help early stage companies go from Idea to Product Market Fit. A lot of other firms have operating teams that say they work with founders, but in the form of the infrequent whiteboard session or introduction to someone outside the firm versus Unusual’s hands-on approach. The main difference in how Unusual works with founders, compared to other firms out there that also have a Platform team, is the GAP team members have the same OKRs as the portfolio company so its a joint fail/succeed model. If they don’t hit their milestones, neither do we.

Through our GAP engagements, we become an extension of our portfolio companies’ teams and our founders can measure our impact with the same metrics they would use with a full-time VP of Sales. Our engagements meet our founders where they are in their journey — from ideation around an ICP or product hypothesis all the way to closing deals and hitting a quarterly quota.

One major challenge has been trying to “codify” my learnings and playbooks I’ve built at other organizations and make it applicable to founders at the early stage. Our Field Guides are a perfect example of how we use our experience to accelerate the success of our portfolio companies. We’re building a lot of resources internally and with founders to improve this process each quarter. 

It’s one of the most exciting and rewarding jobs I’ve had to date and I’m thrilled to be a part of such a talented group. I haven’t even mentioned the caliber of our investment team (John Vrionis [Managing Partner], Andy Johns [former President of Wealthfront, helped build and grow social powerhouses like Facebook, Twitter, and Quora], Sarah Leary [co-Founder of Nextdoor], Noah Carr [Armorblox investor] , Rachel Star, and Jordan Segall) who I’ve had the pleasure of learning from consistently about investing and building renowned enterprise and consumer  companies. 

You’re currently a Senior Associate at Unusual Ventures. Tell us about your experience so far. What has been the most challenging aspect of the job? What’s been the most rewarding moment to date?

I have even greater admiration for early stage founders given the obstacles they have to overcome. My experience and expertise in certain areas on Go-to-Market certainly helps, but the challenge is finding the right sales motion depending on the market, team’s experience, and the adoption behaviors of ideal users and buyers. 

Matt Wells, the founder and CTO of Shujinko, shared an example that we see many founders experience

“As someone who managed a $25 million software budget in a previous life, I thought, “I bought enterprise software products before — this can’t be hard.” Wrong. Landing discovery meetings wasn’t an issue — given our domain expertise and backgrounds, my cofounder Scott and I were able to land initial discovery meetings with CIOs, CTOs, and CISOs at companies we were targeting. However, once we found ourselves running the initial meetings, handling the follow up, and trying to convert prospects into paying customers, we realized we were in uncharted territory.”

To simplify this challenge, our Get Ahead Platform team takes an approach similar to what an Engineer would do while building a product: Hypothesize, test, iterate, deploy, scale, etc. Our team works with founders day-to-day to build a disciplined and flexible process to not only execute in the early stages of their startup journey, but to impart the right frameworks to hire their first VP of Sales, VP of Marketing, Lead Recruiter, etc. 

From the beginning of our sales engagements, we try to get very specific about who to target and kick-off initial outreach. Recently, I worked with a portfolio company to kick off their first prospective customer conversations with the goal of 24 meetings in a quarter. In three months, they’ve met with over 60 different prospective customers and had a 4x response rate on outreach. 

Following on that example, after experiencing similar results with another startup, we were able to generate >$600K in pipeline in a quarter and are making strong progress to selling into Fortune 500 companies using a disciplined and structured sales process you’d typically see at the later stages of a company. 

Overall, as a team we’ve generated over $5M in qualified pipeline, and closed >$1M in net-new business with our portfolio companies. Exciting progress... and we’re just getting started! 

It’s important to highlight that our team coaches founding teams on how to execute in the same way we do to ensure the team can scale after GAP engagements. Founders use our playbooks and initial momentum to put their team on the path to scale for long-term growth. 

What’s your advice to AE’s who want to get into venture capital or angel investing?

Similar to sales, you have to get out there and meet with as many people in the industry as you can. Assuming you’re an AE at an earlier-stage company, think about the steps you took to land a job at a startup. Now think about taking that same process and digging even deeper to find a role in a very small industry. 

One thing that has been valuable throughout my career — and has certainly helped me at Unusual — is sharing my domain expertise and experience with VCs. Many are trying to find the next best company or help their companies build GTM functions. I’ve built some great relationships with folks by being a resource and adding value in certain areas. 

The guidance and collaboration with VCs throughout my career has helped me identify how to map my more tactical efforts to the key elements that matter most at the Investor/Board level:

Using my experience as a salesperson and learning how VCs evaluate investments and pitch to founders, I’ve noticed a lot of parallels between sales and venture. 

Pitching a firm is a lot like sales, but few firms have people with a sales background to help. Investors can benefit from sales input to refine the positioning, pitch, and articulating the firm’s unique and comparative differentiators.

Since making the shift to a remote-first culture, what’s been the best source for deal flow in 2020 so far? Has anything changed or is it still status quo? 

I ran this by Rachel Star and Jordan Segall on our investment team and here's what they had to say: 

“Despite the remote nature of our work currently, the general sources of deals have remained the same. Generally speaking though — I think people are more amenable to cold outreach because hoping on a Zoom is much less taxing than an in person meeting.” - Rachel Star, Senior Associate, Consumer Investment Team

“We haven't fundamentally changed our sourcing strategy since being remote, other than taking all of our meetings on Zoom! Since we are seed stage focused, it has always been important for us to try to engage and assist entrepreneurs as early as possible, even when the idea is just in their head. Perhaps before remote we would compliment our strategy with some in-person conferences focused on specific thematic areas to meet founders, which is obviously not an option in a COVID-era. But, our focus on being a resource to potential founders even before they've decided to commit to starting a company has remained unchanged." - Jordan Segall, Associate, Enterprise Investment Team

You’ve written about the importance of ICPs (Ideal Customer Profiles) when it comes to scaling revenue orgs. What was your inspiration behind this, and how does this tie into your work helping portco’s at Unusual?

Great question — it seems like a silly thing to write so much about, but every single company has a gap in understanding their customer. From a B2B sales perspective, knowing who my ideal customer is helps me focus my time on seeking patterns and signals to qualify quality deals vs. wasting time on prospects unlikely to ever buy. That said, the way Product teams can make better decisions on what they’re building is knowing how, why, and what the customer needs from having a clear understanding of who they are. 

This is also relevant for finding PMF at Consumer companies as well — Unusual Partner Sarah Leary created this awesome exercise for Consumer companies, and Unusual Partner Andy Johns points out that your target customer “must be almost comically narrow to the point where you may be misunderstood for such a narrow focus.” 

Now, this may sound like a “startup problem,” but I can assure you that companies of all sizes hit a wall at some point. Examples include high churn, lack of pipeline growth, a growing list of customer demands that don’t fit the current product scope, expensive sales reps taking too long to ramp, etc. We recently met with a founder of a very successful startup who said, “I wish I knew who my customer was way earlier on — I wasted almost two years by not figuring this out at the beginning.”

More often than most think, companies of all sizes (seed stage to publicly traded) hire an outside sales consultant who rallies executive stakeholders at a company to conduct an exercise on topics related to  better identifying the company’s customer. Although this seems like a basic exercise, this can take teams days to come to an agreement, and 6-12 months to get employees up to speed on the topics discussed in those meetings — not to mention can cost companies a pretty penny to hire  the outside consultant to begin with. If you look at the landing pages of B2B SaaS tools, most use the same exact language — it’s not a coincidence.  Whether you’re hiring your first VP of Sales, or you’re discussing your traction metrics with the board, you must be able to articulate the information below to make sure the team is performant, but to get the rest of the organization to rally behind serving your customers:

“Why do people buy from you? What are the urgent use cases people want to solve?”

“Who buys from you? Who are the Buyers? What about the users?” 

“What are your differentiators? Who else can solve this problem?”

“What are the main three use cases that make up 80%+ of your revenue?” 

What is the perfect Enterprise sales tech stack in 2021?

There are lots of other tools out there, but I think you can accomplish a lot with this stack to start. (Here’s an image of the stack that I typically advise teams to consider during engagements) 

The year is 2025. Will sales teams be “automated”? Is this a trend that’s emerging at all, or wishful thinking?

There are parts of sales that should and will be automated.

Transactional deals (like buying a $50/seat license) will become more automated, but the best companies will prevail by talking with their customers and knowing the specifics of their requirements in order to make changes on the fly like a world-class Engineering team. 

Superhuman is an example of a successful transaction without salespeople, but their onboarding process is very similar to how salespeople conduct discovery and map to the needs of their purchasers. They use such inputs to influence where they go next. 

Multi-million dollar transactions require cross-functional collaboration, a clear understanding of navigating organizational politics (external), and how to be a value-added resource. 

True “strategic” deals require so much manual effort that the only automation we should expect is improving the data and intelligence reps can acquire and use to drive deals forward versus being replaced. 

What are some observations you’ve noticed when working with founders and how sales could improve? 

Most founding teams are at one extreme or the other when it comes to sales process: they either have too much process or no process at all. That said, all should start with the basics of the topics below, but few formally go through this exercise until pipeline is looking a little scarce:

If you’re in sales and are considering going to a very early stage startup, show founders you know how to do all of the above in order to help them achieve their fundraising milestones.

Thank you for your time and thoughts, Dakota. We look forward to the continued success of you and Unusual Ventures!

Deal News 10/10-10/16

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Sources: Crunchbase, LinkedIn, Twitter

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