Episode Transcript
Tracy Young: Welcome to Tiger Eyes LinkedIn live show. I'm Tracy Young, co founder and CEO of Tiger Eye. Today we are joined by Kevin Chiu, co founder and COO at Catalyst to discuss the changing skill sets required of today's CROs. Kevin, welcome.
Kevin Chiu: Thank you so much for having me. I'm excited.
Tracy Young: So tell me about growing up.
Where were you raised? Tell me about mom and dad.
Kevin Chiu: I wasn't expecting that one. So growing up, I was born in LA. And then shortly after that, I went to Taiwan for a little bit. And that's actually where my brother and co founder and CEO was born. Spent a few years there. Don't remember much. , and then came back.
We lived in Palm Springs for a little bit, and then I moved to Laguna Niguel, which I oftentimes just say is Laguna Beach if people aren't super familiar with the SoCal area. So, had the Cali experience until college, and then I went to San Francisco and got immersed in tech, and now I'm in New York City.
Tracy Young: This is like a family team too. I've co founded Tiger Eye with my husband and my last company, PlanGrid as well. And you guys are a brother team. So tell me, tell me like the pros and cons of that.
Kevin Chiu: Oh, gosh. Only if you will answer that afterward so we could hear your perspective.
Pros, Edward and I, we're bound by blood. We have a greater good. And we call that, funny enough, our tiger mom, Shirley, who we owe everything to. Before we started the company, she had an experience starting a business with her sister and They're still close now, but there was a period where it was very rocky for them, right?
I don't think it's a best practice to start a company with someone you live with or someone you're married to or someone who you're a sibling to. For us, it works really well because there's the age difference, he's five years older than me. He does really great in the CEO role. It's not something that I have ambition for. We have really good swim lanes on what we're good at and what we're not good at. We try to focus on those areas. I think where it's tough is, Edward and I, for the most part, if you asked anybody at the business, do we work well together? They would say, absolutely.
They wouldn't even know that we have any arguments behind the scenes. And I think the reality of starting a business is there's always going to be debates and you have to know how to disagree and commit.
Edward and I just went through a series of executive coaching together and almost provided a level of therapy because I think we stopped communicating about the hard thing about hard things. It was tough because then I think these things towards the tail end started to really surface up as bigger things.
And we made the mature decision that , like, if we're going to keep working together, we need to be able to communicate in this next chapter of growth. And we went through this executive coach, therapeutic session for about six meetings. And it was really emotional, a lot of a lot of tears being shed.
about some really difficult things that we never said to each other. And, it's actually made us a hundred times stronger and work together. And if Danny's on this call, that is a story that only three people at the business now, but you know, if they all come across this podcast, they'll hear about it soon.
Tracy Young: Oh, I love this so much. That is very vulnerable of you. Thank you for sharing that. As you were talking, Ralph and I for a few years in there had the same exec coach too. And I think maybe it just helped us understand each other better, like having a third party showing us each other's perspective in a new way.
The advice I give people is like, marriage is hard, why complicate it that way? Sibling relationships are hard and why complicate it that way. And so the advice is don't do it. But Ralph and I are also an example that it can work being a married couple running a business together.
And this is our second company together at Tiger Eye. And we chose to co- found a company together after running the first one for nearly 10 years.
Kevin Chiu: It's just all about really strong communication skills. If there's a level of maturity in both stakeholders, then it can work. And it sounds like you have that with your partner. And I think Edward and I have that too. You learn so much from the downs, then, then you do the ops. And so if you can go through that together, oftentimes it makes the most kind of dangerous pair.
Tracy Young: Being a founder and company building feels like we're going to war. And it's just really nice to have our favorite people by our side. You talked about the COO role is a better fit for you and your brother is the CEO.
I have a five year old who's always asking me questions about work and it's very confusing to him why I'm not playing with him and why we work. How would you explain your job as COO to my five year old?
Kevin Chiu: Imagine a Lego set that they're building, and there's always one piece of the Lego set that's about to topple over and I'm the person who you slot in the little weak spot to go fix it up and move on to the next thing.
Tracy Young: Culture's everything, you know, we, we know this as founders and especially in sales culture. I think can drive the best or worst types of teams, and I feel like in sales, especially, there's this cartoon version of sales that's very much like Glenn Gary Glenn Ross. it's it's highly toxic. It's very competitive. It's very aggressive. And I think that type of caricature, limits who wants to go into sales. What impressions of sales do you think are incorrect, like the stereotype, like the gong hitting Red Bull drinking sales culture.
Kevin Chiu: I think if, I think if you're selling mid market, modern enterprise SAAS software and you're taking a always be closing Glen Gary Glen Ross mentality, you're not going to get very far. And honestly, your leadership team should probably just let you go.
I do think that. There is definitely a level of resilience and toughness to great salespeople in this economy. Like you got to be really resilient. I mean, you look at the numbers and the data out there. Sales teams are missing quota left and right SDR outbound teams are missing quota. It's a very, very tough market for every role.
It's an incredibly tough market for sales professionals and CS professionals trying to grow revenue and protect revenue. So I think the best leaders in this market, which I would just call just it's wartime mentality. It's like survival of the fittest almost is the right level of empathy and people first mentality while being tough. Getting shit done. I've worked with a lot of different sales leaders that candidly were a little bit too much about the love and pat on the back and couldn't crack the whip, so to speak. And cracking the whip doesn't need to be like humiliating someone on the sales floor, like Glenn Gary Glenn Ross.
It's just giving tough love like, listen, this is what we need to do. Gear up. If you want to win, this is the game plan. It's not going to be fun. And if you don't, that's okay, you don't actually have to work here, right? It's a level of respect. I used to say this thing: business is a family.
In the early days when you're five to six people in a room together, honestly, probably 24 hours a day, it needs to be that. But at a certain stage and maturity, it's just a really healthy business. Someone comes to work for you, you have expectations for them and vice versa.
As an employer, you need to provide them a really great career path, levels of transparency and for them, it's to do great work. And I think that my vision of culture and great leaders that deploy great culture mentality has just shifted as the economy has rapidly changed. What we used to do back in the day, it just doesn't work anymore.
People need to believe in the core mission, in the leadership team, in the company. And those things are free and you need people that can get people attached to those qualities, not big salary, paychecks, random perks, free lunch. Those things just don't matter.
Tracy Young: It's so shallow, isn't it?
Especially when we're coming into work day in and day out and spending so much time with our colleagues and customers and the industry we serve. But there are those types of people who care about the snacks. I remember doing an exit interview with an engineer who left for Twitter and yeah, I couldn't believe it when she told me, " I'm happy at Plangrid, but the snacks are better at Twitter".
This is like 6, 7 years ago , that was forever ingrained in my head. That stuff matters to some people. But you know, probably not the right fit for my company or your company. So let's get back to sales. I really believe that sales is a great profession and the stereotypes have discouraged people who could be great at sales to go in it. So help me convince a young, ambitious person to go into sales. Tell them what a positive culture, sales culture could look like.
Kevin Chiu: I'm going to share a couple of thoughts that may or may not be connected to one another. To survive in sales, especially in this economy, you have to want it.
There is a special X factor to those people. I've never seen people that need to be convinced. that they should go in sales actually work out. I'll share a few examples, and this is just from my own limited experience. I'm sure there's people who've got 20 plus years of sales experience to me that could give five other data points. And that's awesome. So for me, I remember someone once told me they just didn't even check commission checks. And I was like, wow, like you must really care about the customer, someone like a sales rep, who's just so customer centric. And as a founder of a customer centric company. I was like, that's, that's the best mindset.
Like you're absolutely hired. Salespeople want to make money. And if you have someone who doesn't care about that and isn't motivated by the excitement and adrenaline rush of a quota, they just won't make it. I think you need that. And it doesn't mean that you start selling bad fit deals to hit your quota.
There's just a level of adrenaline rush that you can deal with, which is like you work your ass off for three months in a row. You hit your quota and guess what? Like today, every sales rep at Catalyst has a zero on the dashboard and you got to start that grind all over again. That is not a career path for everybody.
Now, the people who kind of want it deep down, they just need a little bit of a nudge to go in it. Like I've seen two people at Catalyst one that isn't here anymore and one that is still here. One was a consultant who was probably one of the best salespeople I've ever freaking worked with in my life.
Their natural ability to take complex set of requirements and just understand how to be really consultative to each individual on the call and help them feel as like a trusted advisor and move from one stage to another. It just translated so well. And I think there are very few people that will ever be able to get on that level. There wasn't much nudging there. She was already in the sales profession. I just opened a door to give a different type of sale.
And the other person was a recruiter. Most people might not think that that's a sales job, but the act of recruiting comes with prospecting, comes with cold emailing, comes with cold pitches, comes with convincing someone why your company is better than the other and why they should join you.
And that is The art of closing without calling it sales. So I've seen great recruiters become great salespeople. At the end of the day, if all they need is a little bit of a nudge in the right direction, everything in life is kind of selling, right? Convincing someone to go on a date with you, convincing your boss to give you your raise, negotiating a lower mortgage or rent payment, everything comes in a form of negotiation. Once you open your mind to seeing it as such, and if you can learn that skill, it's going to be incredibly helpful for the rest of your life.
Tracy Young: It rewards people who are highly competitive and can brush off failure, not just brush it off, but really take it as a data point and then learn from it, because you're getting nose all the time in sales.
And if that bothers you, I mean, of course it will bother anyone, but there are some people who it will just bother and bring them down for the rest of the year. While others are using it as an inspiration to do even better to have a better conversation next time to learn how to handle that objection better in the next conversation.
And I find those folks are over and over again, the ones who excel in sales, and not surprisingly, many of them are former athletes. I've even seen former actors be great at sales as well, because they've gotten no's so many times and they just keep bringing it. So it's really interesting to hear your perspective as well.
You recently wrote about the main differences between CRO 1. 0 and CRO 2. 0 skill sets. Can you tell us more about that for folks who didn't read your essay?
Kevin Chiu: Yeah, it was definitely a long post. So I think essay is a good categorization. Rewind 12 months ago, what did the venture backed startup world teach us? It taught us to raise as much money as humanly possible, as fast as possible to get a tech crunch and Forbes press release and to be a unicorn.
And you didn't need the metrics to back it up. Candidly, Catalyst fell into that same mindset, right? We raised 70 million from the top VC firms in the world like Excel. They invest in Slack, Facebook, DocuSign, Qualtrics. Their expectations for us is to get to that level. And I think we're still on our way there, but it was a radical mind shift overnight on what it means to build a resilient, profitable, efficient growth engine. And I don't think we were really doing that. And so when you look at what the market teaches you and they shape the narrative, then business leaders like me and you. Leave the board meeting and we start to create job descriptions that match that kind of North star, right?
So who matches that it's the CRO and it's the VP of sales. It's all about new business acquire customers as fast as you can. Go back 12 18 months ago gross retention and net retention did not carry the same level of weight now in this economic market In every board meeting because they're not closing deals and they have to focus on some metric It's are you protecting your revenue base? Are you protecting revenue leak and are you growing revenue through alternative methods through your customers? It's a radical shift that what I call CRO 2. 0 doesn't necessarily mean the SVP of sales or VP of sales who only knows how to run new business sales teams and SDR teams, right?
There is so many different methodologies to drive revenue. It's land and expand. It's growing through the customers. It's understanding how to drive economic value through implementation, support packages, partnership revenue. There is customer referral programs, customer marketing. There are. Many, many different ways to continue revenue growth. And so I think the evolution of both the CRO and CCO 2. 0 is going to think about the entire spectrum of the customer journey.
Tracy Young: And also the different levers for growth that are most efficient for the company. You talked about land and expand. That was a big part of Plangrid, my last company's strategy. We tracked net retention very closely with best in class net retention numbers. It revolved around 130 to 140% over nearly 10 years. Of course we priced too low, so, you know, the following year we could upsell in seats or more products. But for those who are listening, if we were making a dollar in year one from a customer, the next year we would be making 1. 30 or 1. 40 from the same customer. That was a big part of our growth strategy. And it sounds like it's for you guys as well. It's such a great indicator that you really truly have a product And a company and a brand that that customers can stay loyal with. That not only are they renewing with the company, but they are paying you more because of that trust, knowing that you're giving them more value. To you, what are the most important areas of growth for a sales leader, what do you want to see from them?
Kevin Chiu: I think I'll get the, the obvious one out of the way.
Sales is a numbers game. You gotta hit, you gotta hit it on both sides. And I would actually say on the CS side of the house I expect that from our CS leadership team. Gone are the days where you think about sales leadership as the only revenue leadership position.
CS leaders need to move away from being a service leader to being a growth oriented revenue leader. If they want to sit at the table, that is what the executive team, the CEO and the board will demand. But in terms of just answering your question, it's about long term viability. The requirements for selling at seed in series A to series B and series C. It's super scrappy. You might do some deals that don't have repeatability, right? Some pricing packages that don't make sense. But a sales leader that understands where the puck is going knows that some of those decisions you make now are really going to hurt later. So it's always about a trade off. And I think repeatability comes in structure and process includes segmentation.
It includes what is the deal strategy? What is the entrance and exit criteria? Hiring sales leaders and frankly, any role is super tough because the success criteria for a zero to 10 million and 10 to 20 and 20 to 30 is very, very different. And there's always a small percentage of people that can grow successfully from zero to 10 and 10 to 20 and 20 to 30 and 30 to 40.
My board always tells me this, which is stage appropriate talent. And that's actually a mindset that. I'm not free from, and neither is my brother and co founder and CEO. And I actually say that in front of the company, which is there is a new criteria of skills that that person needs to acquire by the time they get to that next stage.
And we need to grow into that. Right? And so I spent a lot of time with executive coaching and mentorship to make sure I grow into that role. And so I kind of expect the same from my sales leadership team is the things that they're doing right now at this stage might not necessarily be the things that they're doing at that next stage. And they need to start indicating to me that they're thinking about those long term plans as the revenue targets just get bigger and bigger and bigger.
Tracy Young: One of the most heartbreaking things about being a founder is that the folks, your leaders who have been through war with for the last three years might not be the right person to take the company the next three years.
And it is such a hard decision, but such a crucial one in the end, because making decisions of like upgrading a leader you know, asking someone who has given their heart and soul to the company to leave because they're no longer the right fit because they can't scale is actually the compassionate and right thing to do for everyone in the company.
That keeping someone you like in their role, but knowing they can't scale to the next phase is hurtful for everyone. And it's so heartbreaking every time that has to happen.
You talked about customer success earlier and how this team can really help drive growth and revenue as well, especially in a land and expand business.
Does your customer success team report to your CRO?
Kevin Chiu: Yes, they do.
Tracy Young: What other functions and teams should report to the CRO in your opinion? I mean, everyone's sort of all over the place and do with the experience of the CRO and the dynamics of the team. For you, what do you think is like a good structure and the ideal structure?
Kevin Chiu: I think this is a big question and it comes with a lot of asterisks. And those asterisks kind of start with what is the business model? What is the stage? How do they sell? Who do they sell to? There's lots of different formulas for success, but it just depends on a lot of those factors.
I think that this is where the CRO 1. 0 and all of these titles, CRO, VP of sales, CCO. Let's just pretend there's a lot of 1. 0 that exists and we need to evolve them to 2. 0 mindsets. When I think about a CRO 1. 0 right now, it's very dangerous territory to give them customer success because there's an entire life cycle of driving economic value through recurring impact that they just don't understand.
I think that there's definitely plenty of sales leaders that can do it, but more times than not, people who just don't. And then you get the resistance from the CS team. You have the wrong comp plans set up. It becomes very messy. Under the right conditions, the person at the helm of the go to market machine, which I would include sales and customer success.
To me, it's less about the title of the person. I've seen the best CCOs, someone at Miro is now the CRO, the CCO at Hoppin is now the CRO and you're seeing the rise of the CCO become the CRO. Why? Because in this market, it demands people that know how to optimize and configure post sale revenue and post sale customer journeys and the VPs of sales and CR 1. 0 don't necessarily know how to understand and optimize that. So really it's like the job to be done is a go to market team that knows how to create a holistic customer experience and extract the most customer lifetime value out of that. And that's just a new different type of person.
Tracy Young: Yeah. It's not just about landing the customer. That might be the easy part. If you have a good enough product, it's about how do you retain this customer, make them happy and successful with your product for the next, hopefully 20, 30 years. Thanks for sharing that. So let's switch over to just leadership and we'll wrap up with some leadership questions.
Trust in leaders can be made or broken when things get tough. And given you guys have been running this company for many years now, I'm sure you've gone through several crises and hard times. How do you deal with that? When things get tough, what do you do for yourself kevin to survive that time?
Kevin Chiu: You just gotta, I'm just taking a pause because it's definitely a tough one. I'm thinking about the hardest moments that Catalyst ever had. We've been through a layoff like every other organization, it's kind of the norm. And we did ours in June of 2022. I was shook. Never been through anything like that as a first time founder and leader.
Tracy Young: How did you feel having to lay off so many people?
Kevin Chiu: So we laid off we're about, I think at the time, 120 people we laid off around, 15.
And it felt Tough. It felt tough. Like it felt like a level of, I felt sad, maybe humiliated. I feel like I was letting people down. I was on the floor of my apartment, really depressed. It was a very emotional, I remember just laying there and just, you know, just, I could, there was tears. I was just, my mom called me and I just couldn't even get the words out of my mouth.
I felt like the world's biggest failure. And I think that As a founder, you kind of have to have the same X factor, if you will, you got to be able to handle that stuff. That is kind of the job. You will bear the weight of all of those darkest moments and you have to have a really good co founder and leadership team to think through these things and be there with you.
I remember I just took a walk. I took a very long walk that night. Hit the gym, hit the sauna and just decompressed, came back, pulled up my computer and I looked at the numbers really thoroughly. And I was just like, this is the right decision. We need to survive as a business. And that is the tough decision that I signed up for. I need to make hard decisions that keep the boat afloat, or if I do nothing, I sink the entire boat and I need to make the responsible decision that there is people who will be along for that next chapter. The reframing that I've had is like, again, it's, it's about healthy business relationships.
And when an economic market crisis happens, no one's kind of free from that exercise. We had to part ways with some really awesome people. And I think we helped every single one of those people find a new job. We tracked it on a spreadsheet. If it wasn't every single one, it was north of 90%. We tracked it. We followed up diligently. We made a lot of intros and we took really good care of them and we gave them great severance packages. People even ended up leaving us five star Glassdoor views after that experience, which just, it just made me realize after it all went down that, Yes, that was a hard decision, but it was the best decision for everyone.
And you just got to take care of people.
Tracy Young: I really loved hearing that in, in the hardest case of being a founder and leader, having to part ways with someone great making the decision because you are protecting the rest of the team. And it's the right decision. It's not just the team, it's the team and their families.
And then for the folks who we do have to let go. It's, there's a compassionate way of doing it. And I heard all the right things - great severance, helping them find new jobs, giving them good references so they could move to the next chapter of their life. But man, it is so hard every single time that happens.
I think the worst part is knowing when we did have a reduction in force, knowing that it was a mistake I made that I probably put a bad plan in place or something happened and I couldn't adapt quickly enough. Or I hired the wrong leader and then they hired a bunch of wrong people.
In either case it was at the end of the day, my fault and having to admit to that and come to terms with that is hard too.
Okay. Tell me about one person who has helped you become the leader that you are today. Because the more I talk to you, it's very clear to me, there's like this war torn soul here that's just gone through a lot as a leader.
Kevin Chiu: War torn soul. I like that. I'd have to say my executive coach, hands down. She's taught me everything that I know, been with me through the toughest moments. I think that you just, you have to learn a lot through failures, and I've had a lot of failures. I've stopped keeping track I've had so many, and she's always been the person that I call, the person that I met on a regular basis.
Her name's Rachel Ryder from MettaWorks, if you don't have an executive coach you should absolutely go sign up and work with their firm. They've, they've leveled me up. You know, I work with some of the best people, some executives that have reported to CEOs of multi billion dollar successfully hundreds and hundreds of millions in revenue, that type of leader. And like, that's why I compare myself to, I have to be on that level. And the only way I can get there is through great exec coaching. So major shout outs to Rachel.
Tracy Young: When I was looking for my exec coach this was the insistence of my, of my lead investor at my last company because exec coaches, it's, it's an investment.
The advice I got from our friend was to kiss a lot of frogs, and I ended up interviewing over 10 people over like a year and a half where I found the right person for me.
How did you know she was the right person to help you and help you grow?
Kevin Chiu: She was willing to challenge me. And, you know, as a young, bullish founder, who's always been in leadership positions at every startup companies, you can start to get a little full of yourself. Think you're, you're better than you really are. And I think I definitely had traits of that, right? And I think there's a level of humility and vulnerability that I've learned as I've gone through many ups and downs of Catalyst over seven years. She was always able to check me. A lot of the soft skills that I needed rounding out, she just rounded them out pretty quickly.
Maybe it didn't happen in the first conversation, but certainly by the third or fourth, she would break down my walls and we'd have very Tough heart to heart conversations about why did the things that I did and open my eyes to a new world of thinking.
Tracy Young: There's this very specific thing that happens to me. I'll have a conversation, someone will say something to check me, to challenge me, and I'll immediately get defensive, like, you don't know what you're talking about, you know, just like, all the defense mechanisms are up.
And then I'll be driving or taking a walk, like two days later, and it'll just dawn and it'll hit me like a ton of bricks. Oh my gosh, that person was right. And I was wrong. Yeah.
Kevin Chiu: She calls it, she calls it the the inner five year old. And so you get this fight or flight reaction where someone says something, your face turns red in a meeting, someone says something in Slack and your initial reaction is like the DM of a page long paragraph of feedback. You really need to step back and think and just take in the moment and understand that positive intent. They probably didn't even mean it that way.
Whenever I get those feelings, which I still do. It's probably happened to me five times in the last week, and it's just about checking yourself and understanding those trigger moments and just stopping it before it becomes a message or some reaction that you end up regretting.
Tracy Young: We're all human. We all know exactly what you're talking about. Even the most mild and chill of us, we know how that feels like.
Yeah. Kevin, it's been so fun talking to you. What I appreciate the most is your candor and authenticity, and I really glad we got to meet and got to do this interview together and getting to learn from you.
I'm sure everyone who's listening is enjoying it. So thank you.
Kevin Chiu: I appreciate it.
Thanks so much for having me on.
