How I'd Build a 50-Person Sales Team in 90 Days — Transcript

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1. 0:00I sell social media services to sports
2. 0:02entertainment clients like Netflix, NBC
3. 0:04Sports, um etc. We do about 12 million
4. 0:07in revenue. Um like you always say, too,
5. 0:09I think we sell time actually to these
6. 0:11huge whale clients cuz that's what they
7. 0:13need. Um I'd like to be at 25-30 million
8. 0:16in revenue.
9. 0:17What's stopping us is
10. 0:19Give you an example. So, for the last 12
11. 0:21months we've seen a big uptick in sports
12. 0:24sponsors wanting to really up their game
13. 0:27on social media. So, think Verizon,
14. 0:28Visa, State Farm, etc. So, I told my
15. 0:31team, "How do we get four State Farms
16. 0:33next year?" And they [ __ ] freaked
17. 0:35out. Like, that's not possible. We can't
18. 0:37maintain quality, staffing. So, I do
19. 0:39think our problem that's stopping us is
20. 0:41a trained bench of talent that can
21. 0:44service this opportunity we have right
22. 0:46now on the on the table because it's
23. 0:48like the only niche that
24. 0:50uh we have expertise for this clientele,
25. 0:52so.
26. 0:53>> Okay.
27. 0:55That sounds right.
28. 0:56>> Well, I think you guys are
29. 0:58From what I hear from your team, you
30. 0:58guys are dealing with the same thing
31. 1:00right now. Like, how do you just
32. 1:01operationalize or what do you found be
33. 1:02successful to start to
34. 1:05>> On the recruiting side?
35. 1:06>> Recruiting and making sure you have
36. 1:07talent to fulfill demand, high demand.
37. 1:11>> So, I mean, it's a manpower constraint,
38. 1:13right? Um and so, we get really
39. 1:15aggressive on recruiting.
40. 1:18So, uh I think I think what happened So,
41. 1:20there's two things that I say like what
42. 1:21what hold people back from recruiting
43. 1:23issues. Um Miss Metzba doctor, so this
44. 1:26applies to you. Um but this also
45. 1:29Um
46. 1:32Um
47. 1:33I I spoke to a dentist uh a a month ago
48. 1:36and he was doing around 20-ish million
49. 1:39and he had 4 million, I think, in profit
50. 1:41that he was making and he was saying the
51. 1:43same issue of like, "I need to get
52. 1:44really specialized dentist, blah blah
53. 1:45blah blah."
54. 1:46And so, I was like, "Okay, well,
55. 1:49I'll walk you through this math. So, how
56. 1:51much does one of your specialized talent
57. 1:53make you per year in gross profit?"
58. 1:57>> Um you talking of maybe like a director
59. 1:59of social, how many clients they can
60. 2:00bring on?
61. 2:01>> Yeah.
62. 2:02>> Um I would say
63. 2:05um
64. 2:061.25 million.
65. 2:07>> Okay, so they make you 1.25 million.
66. 2:09>> Yeah.
67. 2:10>> And that's gross profit?
68. 2:11>> Yeah.
69. 2:11>> Or okay, great. So 1.25 million in gross
70. 2:14profit, okay. And
71. 2:17um
72. 2:18what are you willing to spend to make an
73. 2:20extra 1.25 million gross profit per
74. 2:22year?
75. 2:23>> Uh a lot. Um
76. 2:25yeah, that that role costs about 200
77. 2:27grand.
78. 2:28>> That role will cost 200 grand.
79. 2:29>> Yeah.
80. 2:30>> Okay, cool. That's fine.
81. 2:31>> And it takes a pod of people that person
82. 2:32has to oversee for daily management,
83. 2:34obviously, but
84. 2:35>> So there's a pod underneath of them as
85. 2:36well. Okay, well how much
86. 2:38how much does that total pod cost?
87. 2:40>> Uh
88. 2:41I would probably say roughly
89. 2:44350.
90. 2:45>> Okay, so like 550 in total.
91. 2:47>> Yeah.
92. 2:47>> But that would be added into the 550 is
93. 2:49already taken out of this, correct? For
94. 2:50gross profit?
95. 2:51>> Yes.
96. 2:52>> Okay.
97. 2:53Um so then the question is just
98. 2:55of the 1.25, what are you willing to pay
99. 2:59to attract the $200,000 per year person?
100. 3:01>> Mhm.
101. 3:02>> It's an open question.
102. 3:04>> Uh well, we want to I want to do 20%
103. 3:05profit. It I'd be yeah, 700 grand or
104. 3:08something.
105. 3:09>> [snorts]
106. 3:09>> What would you be willing to pay?
107. 3:11So if I said for $700,000 I can find you
108. 3:13this person, you'd pay me?
109. 3:15>> No.
110. 3:16>> Your service.
111. 3:17>> I just think but to your point it's like
112. 3:18find out what a what a pod of people can
113. 3:20take on in terms of client revenue and
114. 3:23>> I'll finish this and I think it'll it'll
115. 3:24it'll be easier
116. 3:25So right now what this is is a lifetime
117. 3:27gross profit
118. 3:29Sorry, annual gross profit, sorry.
119. 3:32Uh gross profit per employee.
120. 3:35And then instead of
121. 3:37uh CAC like LTGP to CAC, which you guys
122. 3:39everybody should know the difference by
123. 3:40now.
124. 3:41It's cost of acquiring talent.
125. 3:45So just like you have LTV to CAC on the
126. 3:46front end, you have lifetime gross
127. 3:48profit per employee to cost of acquiring
128. 3:50talent on the back end.
129. 3:51>> Got it.
130. 3:52>> And so realistically, let's say that
131. 3:54this person Let's say your average
132. 3:55tenure for this role is 4 years.
133. 3:57>> Mhm.
134. 3:58>> Right? So, that would be $5 million is
135. 4:00what this person's going to bring in
136. 4:01over lifetime.
137. 4:03And if you really think about it, this
138. 4:051.25, let's say you guys trade it 8
139. 4:07million, sorry, 8x or something like
140. 4:09that. So, that adds $10 million
141. 4:12in enterprise value to the business tax
142. 4:13free
143. 4:14>> Mhm.
144. 4:14>> by just adding this person.
145. 4:16And so, it's what am I willing to spend
146. 4:17to do that? So, for me, I'd be like,
147. 4:18"Cool, I'm willing to spend 125k
148. 4:22one time to add an extra $1.25 million
149. 4:24per year all day."
150. 4:27Like all day.
151. 4:28>> We just haven't done the math to make it
152. 4:30It's not Yeah, no [ __ ]
153. 4:32>> Yeah. Um like I had to We had a
154. 4:34portfolio company that we had to scale
155. 4:36up the sales team. Uh it was a long
156. 4:37story, but we had an outsourced sales
157. 4:38team cuz it blew up really fast. And so,
158. 4:40we we had to build a 50-person sales
159. 4:44team uh in 90 days.
160. 4:46>> Mhm.
161. 4:47>> And so, um
162. 4:49like how do we do it? Well, we hired 80
163. 4:51guys.
164. 4:52We kept 50.
165. 4:54And we had 15 head hunting firms all
166. 4:56spun up at the same time
167. 4:59uh bringing us candidates plus our
168. 5:00internal our internal assets.
169. 5:03And that's how you hire
170. 5:04>> Mhm.
171. 5:04>> 80 sales guys in 12 weeks. And so, to
172. 5:06the same degree, it's like, "Okay, well,
173. 5:08how much do I have to pay to a blue chip
174. 5:10recruiting firm to go get these two
175. 5:12people?"
176. 5:12>> Yeah.
177. 5:13>> If you're paying them 200, typically
178. 5:15it's like 60.
179. 5:16>> Mhm.
180. 5:16>> So, I'm like, "Am I going to pay 60 to
181. 5:18make 1.25?"
182. 5:20I would make that investment.
183. 5:21>> Yep.
184. 5:22>> Right. And so, as long as you're
185. 5:23profitable, which I'm assuming you are,
186. 5:25>> Mhm.
187. 5:26>> that to loop back to close the loop on
188. 5:28the dentist story I was telling earlier,
189. 5:30um
190. 5:31he was like, "It might cost, you know, I
191. 5:33did this math with him and he made
192. 5:34$700,000 in gross profit per per
193. 5:36dentist. And the recruiting would be and
194. 5:39he needed three dentists to get to the
195. 5:41the goal that he had for like 2 years or
196. 5:42something." And I was like, "Okay.
197. 5:44And that recruiting cost would be like
198. 5:46$100,000 per. So, it's $300,000 in
199. 5:48total. I was like, "Okay, so are you
200. 5:49willing to make $3.7 million this year
201. 5:51instead of four so you can get your
202. 5:52three-year goal to happen like in the
203. 5:54next 6 months?"
204. 5:55>> Yep.
205. 5:55>> I was like, "Well." I was like, "Yeah,
206. 5:57right?" And so, sometimes it's like we
207. 5:58just haven't like actually taken in the
208. 5:59cost of what it what it costs to do
209. 6:01something like this. And specialized
210. 6:03roles, just kind of for everyone, the
211. 6:04more specialized it is, the more I'm
212. 6:05like, "Okay." For somebody else that
213. 6:07built their entire business around
214. 6:08finding it, I don't want to Like if you
215. 6:10think about every role as a new customer
216. 6:13that you have to build an acquisition
217. 6:14process for, I will build out like
218. 6:16infrastructure and true processes around
219. 6:18repeated roles. So, if I'm build You
220. 6:21know, if you have a big sales team, if
221. 6:22you have a big customer service team,
222. 6:23big editing team, for media, like
223. 6:24whatever your repeated roles are,
224. 6:27uh your cleaner, you have obviously
225. 6:28cleaners are going to be your your thing
226. 6:30that you have to go after, then having a
227. 6:32strong recruiting like process
228. 6:33end-to-end makes sense. If you're
229. 6:35looking for one role one time, I just
230. 6:37pay the money.
231. 6:38>> Yeah.
232. 6:40Well, appreciate it, man.
233. 6:41>> Yeah, you bet.
234. 6:41>> Thank you.
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