Max Freeman on Building Ramp's Sales Machine: Bankers, Pairs and No Comp Plan

Key points

1. 1

   Hire bankers, pay them double, expect four to six times the output

   Ramp put investment bankers into its early sales team, and some now run large parts of the business. Freeman gives three reasons. Bankers are used to long hours, they bring business sense, and a cold call to a CFO from someone who just left Goldman landed when nobody knew Ramp. An early team has no time to teach the basics of a cold email. Ramp paid these SDRs twice the standard rate and asked for 40 to 60 booked meetings, four to six times the usual number.

   “the bet we took early on was to actually pay way above market rate for this talent.”

2. 2

   No comp plan for the first two quarters

   Asked how to pay a founder's first AE and first SDR, Freeman says skip the comp plan and pay full on-target earnings. A guessed quota fails both ways. Set it too low and the founder owes a seller six figures. Set it too high and the seller loses confidence, which is hard to win back. With sales cycles under six months, a 90-day ramp gives enough stage data to set a quota that is ambitious and still reasonable.

   “I usually advise to do 100% OTE for at least the first two quarters.”

3. 3

   Hire sellers in pairs

   With one seller, the only benchmark is the founder, which Freeman calls unfair. Onboarding sellers one at a time also eats founder hours. Two hires bring competition and company. If one far outsells the other, Freeman says you probably need to part with one of them. If the gap is 10 to 20%, the founder has to find the cause first: better pipeline, better product knowledge, or more drive.

   “you should never hire one seller one SDR at a time because the problem is how are you going to benchmark their performance”

4. 4

   Test the champion by asking for their boss

   Freeman says the way to shorten a sales cycle is to qualify harder. If a buyer is not a VP or in the C-suite, find their boss on the org chart. After a strong first call, offer to bring your own technical people to the next one. In return, ask the buyer to bring their boss. If they will not, they may be window shopping or lack the pull to make a change.

   “And there's a subtle way to do this where it's seemingly a give to get.”

5. 5

   Put forecast accuracy in the performance review

   Before Ramp's revenue operations had discipline, sellers ran their own forecasts and the numbers drifted. The fix was to make accuracy part of how sellers, frontline leaders and segment leaders are judged. It comes up in one-on-ones and quarterly reviews. Freeman says sellers forecast on emotion, counting a deal because the buyer called Ramp the vendor of choice, before legal or security review has started. Ramp's finance-built models now land within 5% across the business.

   “you're not going to be compensated or quoted on your forecasting accuracy and discipline, but it's part of your performance review.”