Episode 34: Matt Groetelaars Explains Why Forecasting Is Not About the Number

Co-Founder & General Partner of the The GTM Operators Network joins Pouyan Salehi and Ross Pomerantz to shed light on the emotional rollercoaster of getting acquired before reaching an IPO at Segment, why forecasting is harder than ever in today's market and common mistakes sales leaders make. And finally what he's seeing as the common trend of companies going back to the office vs. working remote.


Matt Groetelaars

The thing I would bear hug a sales leader with and also tell them very directly and candidly is, it's not about the tool. It's not about the tool you are using to do the forecasting. Forecasting should - if your team is actually following process and if you've put in place the right compass for them to use to actually understand the health of a specific automic deal, then forecasting is really easy. It's literally a sixth grade math problem.

Pouyan Salehi  

Let's wind it all the way back to high school days. Oh, those wonderful High School days.

Ross Pomerantz  

Oh, yeah.

Pouyan  0:49  

So tell us more. Walk us through your journey.

Matt  0:51  

I've had a very interesting trajectory that's kind of at face value, like, well, what's the common thread here? Right. Back in the high school days, I ran a landscaping business. And that was sort of just what I fell into. The reason why was my family had just moved back from Europe, I found myself in a small, little suburban town where people had all grown up together. And for me, it was an easier, more motivating task to go knock on neighborhood doors, and eventually just built this thing that ended up taking off. And that being said, you know, I'd say the general arc of my career has been all about wherever I can find interesting learnings and be challenged and do it with an interesting group of characters. That's been the common theme and thread. Eventually, that led me to the Bay Area. I wanted to follow this entrepreneurial instinct. I was an accounting student halfway through college somehow, even though I came to the Bay to do something in the entrepreneurial world and ended up pivoting into a startup that my friends were tinkering on in college. I winded up having a really, really great run. And I ended up sort of running the sales team right out of college. From there, I ended up jumping around to a bunch of different high growth companies in the Bay Area in the heyday of pre-COVID times. And then I found myself as the very first enablement person at Segment when the company was getting towards 100 million in revenue and had totally under invested in a lot of that stuff. And here I am the first enablement person ever when I've only done sales directly or managed sales teams before. I ended up then meandering around a couple other early stage sort of Series A, Series B startups oftentimes as like a first rep, or sometimes like a player coach. But I had a really good friend of mine from college, who was working at Segment when they were going through explosive growth. And I always made a point of staying close to him. And there was a certain point where I was like, hey, I really want to go there, you know? I felt like I'd been in a bunch of scrappy early stage companies that didn't have it figured out. And I said, I want to go to a company that has it figured out. And little did I know, it seemed like Segment had it figured out from the outside looking in. But sure enough, you jump into a company that's even further along. And you realize, every company... I had a mentor tell me early in my career, every company looks like a shining star from the outside looking in. And every company is a dumpster fire from the inside looking out. And so you know, that was sort of the big inflection point of going from earlier stage to later stage. Turning out realizing there's still a whole ton of problems, they're just different problems. But there's no such thing as the perfect company that's got it figured out that is going to be stable and up and to the right as much as it might look that way from the outside.

Pouyan  3:22  

That's one of the hardest roles to take on, I think is that first sales hire at a Series... let's call it like early stage company maybe late seed, Series A, Early B, like a lot of trauma has been created at that stage for folks. 

Matt  3:36  

You're oftentimes having to do one part of building the thing that you don't know what you're actually realistically building the engine of. And you're also having to, in a lot of instances, just create something out of nothing, right? Like there are no customers. Selling in the first, when you're like sub $500,000 of revenue and you're trying to like land those first deals, you don't have anything to lean on. There's no like, 'oh, well, when we sold that company's biggest competitor, we did this and we met with this person, and that was our champion.' It is the kind of fake it till you make it mindset in that window of time. I also think one of the hardest things that's underlooked - when I talk to a lot of people in my network that are thinking about like taking a first AE role at a startup - the thing I always encourage them to think a lot about that they're not thinking about is they're thinking a lot about the market and the total addressable market and who would they go after a lot of the times, but I think the thing they forget about is that one of the biggest people you're selling is actually the founder and CEO that you're going to have to work for. It's not just selling enough to get the job but you're going to have to continue to convince them and have a point of view on what good go-to-market looks like. That first rep, even if you have experience, they're going to want to scrutinize and understand everything that you want to do.

Ross  4:47  

How many, we'll say back to Pouyan's example like late stage or late seed, early A, actually have product market fit? Obviously like everyone in the company thinks they have product market fit. And if you take the role you think they probably have product market fit. But there's just to me, there's so many forces that can make that relationship go wrong, whether it's like the founder who just actually still wants to handle sales entirely like it needs to scrutinize every deal or the AE is just ineffective and maybe there is product market fit, or maybe there's no product market fit at all. Like, what do you guys think the percentage of companies that actually have product market fit at that stage are?

Matt  5:21  

You know they are, of course in order to recruit you and pitch you because that's what they're doing to get you to join as a candidate, they're going to paint a beautiful, vivid picture of how great of a market they're going after and how much product market fit they have. You also know once you get in there, chances are everyone's going to generally believe that because it's tough. When you're in one of those environments, you have to believe it. Otherwise, why would you keep waking up banging your head into the wall every day trying to do that? But to your point, right? Like, probably realistically, I don't know, 10% of them, maybe super optimistically, have product market fit. So realistically, it's like you have to make that assessment outside looking in. And also know that, in my experience, when you look at like a Segment, you look at any of these companies like Airbnb, any of these great stories of great companies being built, they oftentimes pivot their way into that, right? So you also have to be assessing like, realistically, I as the rep might not actually be able to truly know if there's product market fit. It's also knowing the team and do they have enough of an opportunity in this market that they can find their way out along the way. And am I up to be part of that process? Because that's sometimes not selling. That's actually more like being like a solutions engineer than it is an AE right? It's sometimes actually helping them navigate that.

Pouyan  6:37  

Matt, I think you just nailed it, because where I've seen some folks struggle is they'll join at that stage. But they can't make the shift enough in how they think and how they work to that type of environment. Because you have to play a role in helping the company strengthen product market fit. And usually that looks like bringing learnings back to the team. Sharing the things that don't work. And I don't think that happens that often, at least from folks I've talked to and in most established sales teams.

Ross  7:11  

And from a salty sales dog perspective, you don't get paidcommission on learning. 

Matt  7:14  

That's the hard thing about I was just gonna say it's two things, right? It's one, you have to - to your point Ross, you have to re-engineer the way you look at your role as an AE as not just slinging deals, but actually bringing learnings back into the company. The other part though, that I think you're you're hitting on Ross right now, is the company also has to recognize and be willing to not look at you as an AE, right. In other words, they can't look at you as 'Oh, we just hired this person to sling deals,' they have to look at half the equation, like 'we hired this person to tell us the hard things that we don't want to hear because they're really articulate, they understand their customers, and they can package these things up in a way that's believable.' But you also have to have a CEO that is willing to understand like, 'hey, this salesperson is worth their salt more than just the amount of revenue that they've closed.' And I think there's a broader question there maybe even systematically, right, which is should these people even get like comped based on expectation of, you know, certainly, they're gonna have a lower quota if you're the first rep, but should there be some recognition for how, how they're compensated based on their ability to help navigate the company towards that product market fit and the learning, right, because that's not part of the structure. And I think for that reason, it's why oftentimes, yeah, the salty sales dog perspective, I think is fair, right to be like, 'hey, well, I'm not paid to bring learnings I'm paid to bring deals.'

Ross  8:34  

I obviously know about Segment. I obviously know a lot about Twilio. But I'm kind of curious, like, from the company perspective, like, what were those actual headwinds they were running into? Was this COVID related? And can you walk us through the acquisition? Was the acquisition considered a failure? Not like the literal acquisition, but to not IPO? Like obviously, an acquisition, for some people is a huge win. But for most people after Series B, it's not really much of a win. Like, I'm just curious from like, the perspective of someone who is on the inside, like, what was happening? What did that look like? How was that process for you?

Matt  9:19  

So I kind of heard two different questions in there. One was like a little bit about like, because keep in mind when I joined Segment, this was 2019. And the headwinds that I was talking about that were starting to happen there were still 18 plus months from getting acquired. So there was some stuff happening there that just and I can talk about that in terms of just stuff growth stage companies go through. I think your other question, which is like just walk through the whole getting acquired by Twilio that process, how we looked at it, what that experience was like, so I can talk to both of them. If that sounds good, but I'd say in terms of the first piece of things, like I said Segment to me from the outside looking in looked like a company that had a storybook trajectory, you know, it had gone through some, there's a famous story that the founders have had told. And that's out there of Segment having to pivot three times before it got into sort of the customer data infrastructure or customer data platform space that it was in. But once it hit that, Segment had this incredible five years of basically going from nothing in revenue to like north of 50 million in a short window, right? This stuff that I think was starting to happen was just what happens with any company that goes through that spurt of growth where you have the market pulling you further along, right, but there needs to be almost a reset point. Along the way decisions are made really quickly and eventually it catches up to you where it's like, 'oh, my god are we selling the right products to the right people? Are we selling these things in the right way?' And that's what it was at Segment. In our case, a lot of it was we were starting to need to sell not just to our core engineering buyer, but to product and marketing as well. And that's a very different sales motion. It was something that the org was not used to. And we were also moving away from sort of the product lead growth to actually more of like, 'we need to have an enterprise-lead top-down sales motion that we can layer into this. Because if we can have someone like DoorDash come in when they're an early stage startup, but as they quickly mature and grow with us, we need to have an enterprise sales motion to make sure we're we're doing the right things in the right way. And so I think it was a lot of that stuff.  Fast forward to the acquisition by Twilio. COVID ended up being a headwind for Segment at the beginning, just like many companies, but we had to rework a lot of our methodology, narrative positioning, but it ended up becoming a huge accelerant for us because every company needed to become more data driven and be more thoughtful about how they were working with customers digitally. I think a lot of that is what led, of course, to the acquisition by Twilio. To answer your question. You know, I can't offer up the perspective of the entire organization, right, but I can say that my perspective of when we got acquired and I think the feeling of a lot of folks that had been in that intensive period for two or three years where we were really trying to not turn something around, but make sure it kept growing and that we reinflected the growth, like Segment's growth was slowing and we were able to bring it back up. I think the feeling of all the people that were in that window of time was like, 'wow, we were doing some epic shit and there's no reason why we couldn't be on course to an IPO' or something like that. Right. And so I think in some ways, the feeling of some folks, myself included was, 'Wow, this is an incredible outcome. It's great. Obviously, we're not complaining, because this is still a huge win, but ahh it feels like we were just within reach.' We were getting to north of 200 million in revenue and we were seeing people like Amplitude like 10 months after us getting acquired going public at crazy valuations. And so, hindsight 2020, it's probably good that we did get acquired if you think about where our stock would be today. But I think that it definitely felt like we were so close. We could have gotten there on our own. And then, you know, I can I can talk about the acquisition all day long. And all the funs and joy of that. I think I'll hold off on going there. Unless that's the spot we want to go through. But I definitely lived and breathed that.

Pouyan  13:18  

Talk about the the impact of COVID. At first being a headwind than a tailwind. Recently, we've had another big shift for a lot of companies, the market downturn, tons of companies doing layoffs. And one thing I'm hearing from a lot of sales leaders is we need to do more with what we have. We need to do more with the pipeline that we have. And we need to do more with the team that we have. 

Matt  14:01  


Pouyan  14:02  

And a big part of that also comes to like, we just need to know how the heck to forecast because like so much has shifted? You've seen it through a lot, Matt. So I'm curious. Why is forecasting so hard?

Matt  14:16  

Well, I don't want to steal a person's words. And I don't want to use them out of term. But Carl Eisenbach, who was sort of a general partner over at Sequoia and is now Co-CEO over at Workday. My business partner that I partner with on most of my consulting work was at Sequoia last and has oftentimes cited the way Carl would talk about forecasting. And the fact that one of the hardest things about forecasting is we're making it out to be a math equation. I think with that being said it can never be summed into a math equation right? There is so much that is actually going on when you look at $100 million forecasts or whatever and you go down in the deals, the deal is not a math equation, right? It doesn't work that way. It's a bunch of humans that need to align around a problem and a lot of things need to happen in the right way to get that deal done. And so I think a long way of answering your question, one of the biggest challenges with forecasting is, how do you still run it in a way where it is a math equation? It does need to roll up into a number. But also, how do you do it in a way where you're not obscuring away all the complexity that actually does exist at the deal level. And what Carl Eisenbach would talk about is the fact that the process of forecasting is really what matters more than the outcomes. And it's the fact that every week, right, we're looking at the deals and we're saying, what are the things that could go wrong for this to not work? What are the things that need to be true for this to work? And we're rinsing and repeating, right? So it's, it's more about, in my opinion, building the muscle behind doing that. And looking at the fact that on a deal level there's so much complexity that is going on and saying how do we - this is why sales leaders talk about MEDDPIC, right? Because it's critical to say how do we have some framework so we can actually understand all the nuances that are happening, and how it's going to affect our ability to close this deal. And so I think it's more about that. I think one of the challenges right now that a lot of orgs are realizing is we were thinking of it too much like a math equation in the good days. Because the number was just happening, right? We were just achieving it. And now I think it's sort of like, 'Oh my God, all of a sudden, this stuff that we were forecasting we thought was going to come through just didn't materialize. Now they're realizing, wait a minute, we need to course correct and over rotate back on the tactics of getting into the deals and understanding where does this really stand what's going on? And we need to be pretty maniacal about it as well, right? We can't just like, take someone's first answer as the truth. We need to really get down here and inspect and also help the team that's working on the deal, uncover the gaps so that way, we're all on the same page. If the CRO has a different definition of what qualified means, or what commit means than the person that's forecasting it, that's where really big issues can happen. So having a common language, and I think having just a consistent process and making it this consistent improvement, right, more harnessing that Japanese word of Kaizen, right of like, using consistent improvement. I think it's looking at it more that way versus like the outcome itself.

Pouyan  17:28  

Yeah. I think it's interesting, because you've seen it through a few perspectives, right? You've been a seller. So you've been under that pressure of hey, what are you going to close? What are you committing to? What does your pipe look like? You've been a sales leader. You've seen it from an enablement standpoint. And you've seen it from an advisory standpoint. So yeah, I guess I was just curious to hear, you know, there aren't many who have seen it through all of those different lenses. But it does seem to be something that just continues to be a problem for people yet, there's like, all of this stuff out there, that's supposed to help with it. But most companies are still struggling with just understanding what's actually going on.

Matt  18:09  

The thing I would bear hug a sales leader with and also tell them very directly, and candidly, is, it's not about the tool. It's not about the tool you are using to do the forecasting. Forecasting should - if your team is actually doing and if you've put in place the right compass for them to use to actually understand like the health of a specific automic deal, then forecasting is really easy. It's literally sixth grade math. The biggest thing is making sure that we, as an organization, from top to bottom have the same definition of what healthy or good looks like. And then how do we actually have something that's prescriptive, not like hand wavy of oh, you need to go get a better champion, but like, if a salesperson has someone they're working with that's a coach, how do they go get a champion? And how is that going to affect the forecast? How's that gonna affect where the deal stands? And then the forecasting is really just the simple math that you layer on top. So I think the problem is more so in Opportunity Management, I would almost say and like, making sure that the whole org has the same rubric that you're operating from, for what does good look like. So that way, everyone can be on the same page about the gaps, because there's just a lot more gaps now. And there's a lot more things that need to be true to close a deal. And so we need to be more aware of where those gaps are not beating people up over having gaps. Joe (Morrissey) at Segment our CRO, used to talk about this phrase of like, we need to be intellectually honest. Right. And I think that's critical because we just have to be honest about where the gaps are. And then the job of a good sales leader, right is to not beat the rep up over having the gaps but actually get in the boat with them and like help them row in the right direction. So if you can start with those two things, like consistent compass to have a clear view of what does good look like. Intellectual honesty of where the actual gaps are because every deal has gaps, right? And then sales leadership that are actually going to get in the boat and not scream at the scoreboard and say, you know, go get more deals, but actually help the rep think about that and close the deal. Like, those are the three legs of the stool that I would talk about.

You work with a lot of sales teams, or at least you see a lot of companies in the sales teams, what are you seeing as a shift or a trend, in office versus remote?

I've worked with about 10 separate go-to-market teams over the last 12 months or so in a bunch of different parts of the country in a bunch of different industries. The trendline that I see across all of them is, I have not yet worked with a single one that is taking a fully remote stance and we're going to continue to stay fully remote. Almost all of them are trying to drive or actively build go-to-market culture in person. And I've seen that in a lot of different shapes and forms. But it seems to me to that even if they're not necessarily in that state where they're in the office to some extent regularly, the CRO or the CEO, or the sales leaders are trying to move more in that direction for all the reasons that you might expect to hear. So that sort of, I'd say that's the one consistent trend line that I see. And then the way that bears itself out, there are some you know, some companies I've worked with a company that's, you know, in Arkansas of all places, which is not necessarily where you expect it to find a tech company and they're in office like four or five days a week. I've worked with others where it's much more so hybrid, and they have regional hubs, but it's sort of, hey, we want people in two to three days a week. And I've seen it also on a lot of the teams I work with where there's some desire, even though people recognize they're giving up the convenience of work from home, I think almost everyone, at least that I'm interfacing with that are sort of more of the top performing folks on those sales teams, they also have some desire to have some kind of balance towards also being in person and collaborating in person. So that's been my observation.

Pouyan  22:05  

Ross, are you seen anything different? Or similar?

Ross  22:09  

I mean, I can't speak to that many companies, I mean the big ones are all trying to go back the Googles and Salesforces are already at three days, at minimum. It's a little bit easier for them, because they have all the hubs as was already stated. But all I hear is mostly complaining because there's been so many exceptions made during COVID. Like so many people moved away, so many people are remote and like, then the people who didn't want to go back like are local are forced to go back so they're like, well, how come blank gets to do this? So from a morale standpoint, it's pretty tough. The transition, if that's where it's going, like has to start somewhere, and like eventually, we'll get back to potentially being in the office probably never five days, but at minimum three days is probably what I would guess. I mean, I think for me, I would not be able to... if if I was remote, but had an option to go in the office, and I could I would probably go at least two days a week. Personally.

Pouyan  23:11  


Ross  23:13  

I just need other humans. Sales in particular is extremely hard by yourself. And I also think by nature of being near people - like I stand by the whole idea of you're the average of the five people you surround yourself with. And I think like, if you want to advance in your career, and like that matters to you, you're probably going to try and be around the leadership team if they're there. I've heard a lot of instances where leadership teams aren't showing up, but they're mandating it, which is just a really bad look. It's the classic, do as I say not as I do and that's a little bit tough. And then you've got your middle kind of middle upper, I'm talking like VPs, directors who are like, we really don't want to go back over to being told like, we have to go back. So you guys are going back, but we're gonna kind of like do our thing and exist in the shadows still. It's just there's a lot of like, nuance and exceptions and things have gotten so bent the opposite way. It's hard to see it going back fully at any point. But like, that'd be my preference would be two days a week if I could, I would.

Pouyan  24:13  

Awesome. Well, Matt, I know we're coming up on on time here. Thanks so much for joining us. And there's a lot we didn't -  we didn't even get to the user growth, plg stuff. We may have to do another session on that. 

Matt  24:22  


Ross  24:24  

Facts and talk about that landscaping. 

Matt  24:26  

That's right. 

Ross  24:27  

Talk about growing that biz. 

Matt  24:30  

Hopefully it was useful. I certainly enjoyed it. I can I could wax poetic on any number of these topics for  a while. So hopefully we got some good stuff there. I enjoyed it. I hope it's useful for others. And obviously, if you guys want to ever have me back at any point, I'm more than happy to riff on other fronts, but yeah, hopefully we covered a meaningful swath and yeah it was fun. I had a blast with it.

Pouyan  24:59  

Yeah. Anything, Matt, anything you'd want to plug at the end here? Where can people find you?

Ross  25:04  

Yeah, looking for any more advisory roles out there,

Matt  25:08  

The thing I would be interested in plugging is like the stuff I do with GTM Operators Fund. It's a small scale VC fund that we run. We have about 40 or so LPs that are either folks from the Segment mafia, if you would, and/or a lot of go-to-market leaders that have experienced product-led-growth businesses that need to then start to layer in that enterprise sales motion, right. And I think that in the world that we're living in these days, that's going to be something that Segment was one of the maybe early startups that had a huge product led growth and had to make that transition, I think it's a path that many are going to have to go down. And I always enjoy and have interesting conversations with founders on that front. Oftentimes, you know, we write small checks and generally joined alongside a tier one VC in certain rounds that basically bring a lot of that go-to-market expertise, but I enjoy having those conversations that I think would be the thing that I'd want to plug is just if there are founders out there that are thinking about those things and want to be pointed in the right direction, have a thought partner or have a partner along in the journey. I think that obviously my door is always open there and happy to get in touch with folks and be helpful from that standpoint.

Pouyan  26:20  

And I'll vouch for Matt. It's been awesome working with him.

Matt  26:23  

Yeah, well there we go.

Ross  26:27  

Case study right there.

Pouyan  26:27  

Short and sweet

Ross  26:28  

Social proof.