Also known as McB, he has overseen the dynamicism of its culture from the days of pioneering and discovery to today's planning and diligence. Specifically, I want you to pay attention to the way he nuances away from words like scalable and towards words like investible when describing the actions that spur growth, as well as the differences between sales and business culture. I think you'll find helpful tidbits in both. This is Michael McBride.
Adam Conner (01:04):
Michael, thank you so much for joining us, but the first thing I want to do is just to ... because I'm going to end up calling you this because I know most people do and so the listeners are like, "Well, what's this? Are they friends?" McB. That's nickname I'll go with here. McB. Is that cool?
Michael McBride (01:17):
That is cool. Yes. There's a lot of mics in the world, so I've been McB for a long time.
Adam Conner (01:22):
Okay. Well, thank you for joining me on this, Mike, to talk a little bit about GitLab and your story there, and of course, how you keep it growing. It's grown quite a bit since you joined four years ago, roughly ... Oh, I don't know, 11, 12 X in the total head count, but specifically within the sales division, much more than that, like 12, 13X. I mean, that's quite the growth. So congrats on that, first of all, during your tenure with your oversight.
Michael McBride (01:48):
Thank you. Yeah. It's been a lot of fun. We'll talk a lot about the details, but it's funny that four year feels really short, but it also feels long at the same time.
Adam Conner (01:59):
Well, it's like an education, isn't it? It's the four year degree. What did it feel like during that orientation? What do you think has stuck the most with you now that if you called a four year mark a sort of graduation point to a different GitLab?
Michael McBride (02:14):
It's funny, when I think back in my career, the very first bag carrying sales job I took, I was moving out of product management, I had been running a product team and I hadn't yet started the account management job that I had accepted within the same company. This is a good technology back in the day. I went and met with the former CEO of Veritas, Mark Leslie, and I remember talking to him and I said, "Yeah, I'm taking over the new role in a month and just wrapping up my product management job," and he said, "You're done today." I was like, "Well, what do you mean?" He said, "Well, you're already behind." I said, "But the new job doesn't start for a month." He said, "You're already behind and you're going to be further behind tomorrow."
Michael McBride (02:58):
I remember so many details from that conversation, but one of them was, he said, "Look, there's three things that lead to success in sales. One is your territory, which is the same thing as saying your market. Do you have a big enough market to sell into? The second is do you have a great product that fit's really well with that big market? Then third is your sales skill. That third one doesn't have much leverage or influence on the outcome if you don't have the first two." I've always thought about those three things in all of these decisions over the years, and when I joined GitLab, it was one of those opportunities, big market, great product, really good fit with that big market, which meant that a lot of the things that were out of our control were in great shape.
Michael McBride (03:46):
So it was really kind of on us. We have to go execute. It doesn't make it easy. There's a lot of execution to do to go take on that big market, but that's a lot of fun for me. So that journey over the four years ... we were under 150 people when I joined as a company, the sales organization was under 40, and we had to go do all of the things to go through each chapter of growth to go pursue that big market. But fortunately for us, it was on us. It was about execution. We weren't waiting for this market to develop. So it's been a journey that you say that beginning to now over the four years, it really feels like probably four or five different chapters, each one of them kind of going through a cycle in less than a year.
Adam Conner (04:34):
Yeah. We'll touch on that in a second because it is, well, similar to computing power in my opinion. It roughly doubles every ... oh, I'm forgetting the exact timeframe. I think it's 18 months or two years or something like that and sounds like the culture at GitLab and the team had to sort of molt and grow into something new where structures were different, behaviors were different and certainly the way in which you attacked each of those three different elements of success was different. Let me start with the first one or two, because you get there, it's under 40 people, as you say, in the sales team. You get this massive blue ocean, you got a good fit, but it's a huge territory. How did you possibly figure out and prioritize the right opportunities at first?
Adam Conner (05:19):
Or was it just, "We'll talk to pretty much everybody we can get because everybody's relevant." The reason why I want to set that up is because I know obviously over time, like now, today, you have over 10 times that on the team and you do things a little differently. There's got to be a lot more rigidity and planning and diligence. So when was the first turning point there where you had to go from whatever you're doing first to that first molt?
Michael McBride (05:43):
Yeah. So unfortunately it was day one, right? Whenever you take a new role, there's typically some stuff that needs to molt right away. We were in that great situation, right? If you're in a growth opportunity, there's typically a couple of things I've seen sort of that pattern over the years. One is hopefully your company's been able to switch from that sort of explorer sale where you're trying to figure out who does our product actually fit with and how can I could possibly convince them to give us money for it? To, "Wow, we've got some fit with the market," and it feels like things are going well, you're selling some software, but really it's reactive. You're reacting to inbound. That only scales so much. To really grow at a high rate, you have to be able to pair that nice organic inbound motion, which is great to have with an outbound motion that's investible.
Michael McBride (06:43):
That outbound motion was missing when I joined GitLab. We were doing well by serving inbound, but when you kind of looked at the details, we didn't have territories. We were reacting to inbound from customers, which meant we were missing out on opportunities that could be very good for us and for the customer simply because they hadn't been as ambitious in their outreach to us and we weren't reaching out to them. So sort of step one was to get some structure so that we could start to measure and make decisions about how we're allocating our time. That first molting, as we re-segmented the business right after I joined and separated the roles in our go to market motion into a large enterprise, a mid-market and an SMB motion, because we do sell very broadly across all the segments. We've got customers of two users up to customers of many hundreds of thousands of users and everything in between. So by segmenting that, we already got to get a lot more efficient in our thinking about how we spend our time and what that motion should be with our target accounts.
Adam Conner (07:50):
What were the first few, or if there were, silver bullets which got you through 80% of the noise when you were first qualifying opportunities in any of those different verticals when you underwent that first transition? Because as you have a big blue ocean, you must spend time in certain places to even get to the point where you can have that structure settled. So I'm curious if you can remember what a few of those were like as the well oiled machine came to be.
Michael McBride (08:20):
Yeah. So in the early days, our easy qualification method, of course, was inbound, raising their hand, or we have a large open source user base that are already using our product in its free form. So they're already sold on the capabilities of GitLab. They're likely in a position to benefit from actually moving to a true sort of enterprise deployment of DevOps platform. But that was also a narrower market than the broad market, which is every company in the world is needing to modernize. They're needing to get their products to market faster. We can help them with a single platform for DevOps. GitLab is the DevOps platform. When we talk about the company GitLab as a all remote company, we're well known for that. The product GitLab is a single platform that is broadly valuable to a lot of companies beyond the ones that just had initially started using it as an open source platform.
Michael McBride (09:24):
So we had to find those early steps to go do outbound, find some of those opportunities that would benefit a lot, but maybe hadn't stumbled across the open source version of the product. A little bit of that was verticals, but what we found was there were some tools that were legacy technologies, might be older source control products like Subversion, things like that. Even some open source adoption of CI like Jenkins, that every time we encountered a company with that one product, we knew the problems that they were facing, we knew how much we could help them, and we knew how likely they were to move quickly. So we actually qualified moving from just already being an open source user to that next step of using some tools that we know were very easy opportunities for us to provide a lot of value to the customer by replacing it.
Adam Conner (10:21):
So this is interesting because you're talking about a few things that ... Okay, so first it's inbound, then you have this wide pool of people who are in a free service. Then you have a number of other tools that you could sort of see they were using and use that as fuel. A lot of that seems to be largely based upon what exists out there, what you can see and the reason I say this is because to me, unless I'm wrong here and you can feel free to correct me, it doesn't seem like as, well, repeatable as you might like. Eventually that's where you'll, and where you probably did, have to get. It was like, "Okay, this is great. We got these really hungry people who are writing us but the velocity isn't always going to be that way. But people are going to keep asking us to hit quota. That quota's going to go up eventually," and this is the case with all public companies, at least, investors determine certain things.
Adam Conner (11:13):
So I want to position the next few questions in the construct of translating computer processing power to a team and its processing power. Like I said, roughly every two years, I think 18 months, processing power doubles. From my mental math here it seems like roughly every year that you've been there, the team has doubled. That means that the goals change. That means the way you do things change. But yet you need to stay for rigid and repeatable. It's sort of computing's Moore's Law versus your laws of Moore. So I'd like to get a hold of some of those laws from you actually to figure out how you change and adapt. So what were the first few things you did when you considered transitioning from, "Okay, we have this great pool of inbound and the free users," to like, "Okay, now we need to find these motions," like you talked about before, "That are more repeatable.
Michael McBride (12:03):
Yeah, and I'll probably use two analogies with that Moore's Law growth. One is capacity, right? You can add people. If you double the people, you double your capacity, even at the same productivity, you're doubling your output. But in a growth company, you also need to be able to keep increasing the productivity of each one of those individuals as well. So if you were to improve the productivity of each person by 50% and also double the size of the team, you've tripled the output. That's a critical balance of those two things, making sure that we're not only growing the team, but we're finding ways to make the team more and more effective. So yes, as the quota goes up, still having everyone exceed that quota, but also being able to do that predictably so that as we add more people, we know we can get that result.
Michael McBride (12:59):
It's a combination of those two and I think the thing that we found, I think, challenging was making sure that we had the mindset internally that we're going to keep making lots of change and we're going to make it more frequently than annually. Because in sales, it's kind of easy to do the big bang each year where it's like, "Okay, we just finished up the year, everyone beat their number. We're going to do new territories, new quotas, maybe change some things in the org design," and then you go execute on that year. Well, we were growing fast enough that it's important to not necessarily be tied to that annual schedule. There's going to be changes we need to make during the year and making sure that everyone is comfortable with that. We've got a framework that you can still be very successful, beat your number and support that change.
Michael McBride (13:47):
That might mean you already know at the beginning of the year that your territory is going to change during the year and you already understand the framework of how that applies to your compensation and it's set up in a way that you're going to go be really successful. That's really important if you're going to be hiring all year that you need to ensure that those people get productive quickly and you're not sort of waiting till the end of the year to give them meaningful new opportunities and new territories.
Adam Conner (14:17):
Sure. I do want to ask you about hiring in a little bit, but of course, one of the foundational words behind the title of this show is all about the culture that that sets. Because if you are hiring all the time, if things are changing all the time, then it's necessary the people who join are going to have markedly different experiences, at least in my head, than those who may have even been there in the quarter prior. So I know that you're a proponent as companies grow of, and as you did with GitLab, transitioning from a "sales culture" to a "business culture". Could you help me expand on that, and what is the difference between the two?
Michael McBride (14:54):
That's a great question. The way I think about that is when you're running a territory as a rep, you're running a region as a manager, you're running the company as a CEO, in all cases, it's a business. I think it's easy, especially in the more granular view to think about it purely as sort of a numbers game. How much pipeline can we generate? How much of that can we convert? How many of those turn into new customers that grow and we retain over time? That's true that that's all the math in the business, but really, we're running this business that we have to drive successful outcomes with our customers and we got to do that every day, every week, every month, every year. We also have to have successful career paths for the team. We also have to deliver results.
Michael McBride (15:45):
We got to take the capital that we're investing and get a great return on that. In that regard, it's a business. I think for a rep that's thinking about this business, instead of just being, "It's all about me, I got to hit my number or not. It's all about demanding the support I need about my number," and instead, "How do I make sure I communicate, collaborate and build a partnership with my customers, with my channel partners, with the product team at the company to get the right outcomes?" That's sort of building a business and when we make that shift, there's a couple of things that happen. There's some stereotypes that I don't like about sales because in my experience, they don't always hold up where there's sort of a culture in sales that's really about this confident, brash effort to just hit the number at all costs.
Adam Conner (16:41):
Sure. Sort of be the alpha, break through every barrier at all costs. I've seen it. I've seen it firsthand.
Michael McBride (16:48):
Yeah. There are some cultures that fit that stereotype, but I've found that the most successful high growth cultures are ones that are really approaching it as stewards of that business. So whether I'm a rep, whether I'm a manager, I'm thinking about what do I need to do to be successful this year and next year and the year after that? Well, when I'm thinking about that longer term motion, I'm thinking about not only how do I serve my customers this year, but how am I efficiently building pipeline? How am I giving feedback to the rest of the business? There might be some marketing things that we need to do that have nothing to do with hitting the number this year, but they have a lot to do with, say, retention in two or three years.
Michael McBride (17:35):
I don't have a direct compensation quota aligned with that. Three years out, not my problem today, right? But we want that insight. This is the team member who's got a lot of that insight firsthand. So building a culture where we're thinking about that tends to lead to the right hiring decisions because you're hiring people who will think that way. It tends to lead to building the right relationships throughout the business. At GitLab, we lead through our values very ambitiously and we use these values in everything that we do every day. It's how we measure our performance. It's how we calibrate on our culture. One of those values is collaboration. It's sort of an expectation not just that you communicate and work together, but it's that you find a way to get the results.
Michael McBride (18:24):
How do you get the outcomes that the business needs? Those outcomes are not necessarily defined just in this quarter or in this year, even, and it leads to really good decision-making. I think one of the big changes we see is in my organization, we've done a full sort of three year work back, each of the last three years where we look forward three years, what's every capability we need three years from now? If you work back to today, what are the things that we need to be doing right now in order to be able to be at that desired end state in three years? If we're not doing them, let's make the changes immediately. Every time we've done that, there's been pretty meaningful changes, whether they're organizationally, structurally, that we've made to the business and they've all had a really good impact on everyone's short term success in addition to setting us up for that long term result.
Michael McBride (19:14):
If we didn't have that mindset, we wouldn't be making those changes in a timely manner. We'd be more reactive rather than making the investments upfront to ensure we're still growing at the rate we need to three years from now.
Adam Conner (19:27):
My guess is that you would also ... because of that reactionary mentality, you may overinvest in something that might not make sense for the long term or the short term. I know something else that you are a big proponent of, and it's obvious from what you've just said, because you're always looking at that three year window, is acting with intention and that means you are taking these actions, which are investible rather than scalable. I hear this word scale so much and it's actually really interesting. On this show we have, in fact, even gone down the road of separating growth and scale. They're not always the same and I think that's incredibly right and I think part of growth is actually figuring out what you can invest in efficiently.
Adam Conner (20:12):
But let's dive into that for just a second. And then I'll come back to what you were just noting about leading through your values, some of the manifestations of that. Because, well, I'm sure it'll be a nice example of that mindset, but let's start with why investible as the word. What about that is optimal for you?
Michael McBride (20:29):
Yeah, so I really hesitate to use the word scalable because scalable means that something could be made bigger and it would still operate. It doesn't necessarily mean that you should make it bigger. Investible means that we not only can grow something, but we can do it with intention. We know that we can put a certain amount of input into whatever motion or process we've got and get a specific output and that output may or may not be limited. You can think of an investible motion, you might have a go to market motion. It's a certain vertical that you're approaching. We can put a certain amount of time, effort, money into that, and we'll get a certain result, but eventually there's a maximum adjustable market in that particular vertical. There might be another vertical that's 10 times bigger. Both of them were scalable, but each of them has different environments for how much capital you can put in, what kind of return you can get out. If we know what we can do, that's going to frame our decisions, right?
Michael McBride (21:35):
So when we talk about investible at GitLab, an example is you could say, "Hey, we could go spend a little bit more money on demand gen and we'll create some more pipeline and we know what rate we convert that," and you can say, "Great. What if I gave you $1 million to put into that motion? Would we get more?" "Well, yeah, we would." "How much more?" Right? If we know exactly how much more, that's important, but then you also start to dig into, "Well, what if I gave you 10 million? What if I gave you 100 million?" At some point, there's diminishing return? Well, is that diminishing return at two million or at 20 million? Because if it's at two million, well, we know that it's got some growth potential, but we can't rely on just that one motion.
Michael McBride (22:14):
We're going to have to have several others. If we know it's a much bigger potential machine, then, yeah, we might be able to put more capital in that and still get that same return. You ask me a few questions about the growth from a private company stage here, but when you get into the public company stage too, really important to understand this so that you can be predictable. You know that you can make certain investments and get a specific growth output, as opposed to in the early days, a lot of growth companies, it's working, you know you're growing, but you can't say exactly by how much you would grow if you put a little more capital to work.
Adam Conner (22:52):
Sure. Yeah, yeah, yeah. It's an interesting mindset and I think that it is ... it really is. It's finding that efficiency of input and output is what every good, true investor of resources does. Most of the time we think about that as investing money, but in this case, it's investing your actions, which is a really not common way that I've heard about it, but smart. Of course, for somebody who has to operate an ever-growing team in the public eye, of course, a smart way to go. Let's talk about that for a second. Continuing to grow no matter what eye you're in front of. When it comes to hiring now, I mean, at first let's say the challenge was hiring person number 41. Now you got to hire person 401 or 501. Right? What has changed now about that hire as opposed to hire number 41? Just what piece of that success equation that you described at the top has been the most changed through that time?
Michael McBride (23:57):
Well, I'm going to start with one thing that hasn't changed and it's the hardest one, I think, along the way, and that is at every point in the journey we're always trying to figure out how to hire the very, very best possible person for a role. I know everyone does that and of course everyone say they're trying to hire the best person for a role, but when we're growing at a high rate, there's a problem that you encounter that, let's say, you hire someone who's managed a team of 10 before and they're great at managing, they've been very successful at that, and they're going to go hire and build a team of 10. But if you're growing very, very quickly, in two or three years, now there's a hundred. Are they going to be able to keep up with that and manage that team of 100? Maybe. Maybe you can grow them into that. Maybe not.
Michael McBride (24:42):
But you want to hire the person who's best able to grow for a longer period of time and lead that growth of the business, as opposed to, again, be reactive to it and try to adapt to the high rate of growth. So that hasn't changed. Now, the profile of that person changes every nine months because the company's bigger, which means the scope of the role that's even just the current state, let alone where we're going to be in three or four years, which hopefully that same person could still be helping lead the business, but the kind of person we can attract changes. We're in a very different position for the type of person we attract now than we were four years ago. It's not that they're necessarily better or worse. They're just different, right? In those earlier days, you can attract a really strong person who kind of thrives from that less predictable, less structured environment and can help you to build some of that structure and help you to navigate some of that uncertainty.
Michael McBride (25:37):
As you get bigger, you can attract some strong leaders, but a slightly different profile where they understand some of the complexities of entering a lot of new markets. They understand multi-tier distribution and how to build a culture that successfully leverages partners in serving our customers without necessarily having to do a wholesale change in the culture. Or you can continue to sell direct and sort of benefit from those partnerships. So those skills aren't as important in that 41st hire, but they are important later. So I think probably the thing that has changed the most is managing volume, right? In the early days, you can be involved in every hire. You can be very personally involved with your own network with every hire. As you get bigger, you have to have built out the capabilities, and this kind of goes back to hiring those great people again, so that they're making good decisions. They're able to attract that top talent.
Michael McBride (26:42):
The best people want to work for great people, so if you, if you got a little short on the hiring in those those middle years with the leaders, it's going to be a lot harder to hire the top talent now. So we did a good job with that, but that scale requires recruiting in different countries. It requires different employment structures, having all of the friction removed from the system so that when you say, "Hey, great, we're going into France and we're going to build a team there," you can do that efficiently. You're not starting from ground zero and realize, "Oh, we got to spend a year making sure we can even employ people there." So staying ahead of that, knowing where you're going to be hiring, not just this year, but year and the year after that. So with the long lead items, whether it's building recruiting organizations, ensuring you've got the right level of leadership in certain markets, that that's all in place by the time you actually need to complete those hires.
Adam Conner (27:36):
That's a good point. It's always good to have that long tail perspective. As we round out here, this is actually where I'd like to finish. A food for thought for the listeners, really, and maybe even for us in this very moment, but you had mentioned through it all here how you are leading through and hiring through certain values of the way that you build teams, the way that those leaders operate and, of course the various characteristics of those people within. I don't mean to put a specific timeframe on it. We've used three years here so perhaps we could do that as well. What do you foresee regardless of the business, but let's just say for a great sales org with a great business culture, what the top values will be three years from now when looking back in the teams that have done the best job in building the greatest growth possible?
Michael McBride (28:30):
I would probably throw three of our values out there. One is transparency, one is iteration and one is collaboration. The reason I choose those three, we find all of our values are required to keep the growth up, but I'm narrowing it to those three for a couple reasons. I'll actually start with the transparency one. We are ambitiously transparent at GitLab. We record meetings, we put them on the internet. All of our product design work and collaboration is done on the open internet. Anyone can see and can even comment with our product team as we develop the product. But internally the expectation is not only do we communicate transparently and share all the information, but that we do it in a timely manner, right? If you've got an observation, a concern, maybe it's not fully backed by all the data yet, maybe you don't have of the conclusion completely solidified, do not wait to share it. Share it the minute you've written the first sentence of your concern, because the rest of us will help figure out the rest of the sentences much, much more quickly and we'll be able to react earlier.
Michael McBride (29:42):
So that sort of excitement about surfacing challenges about surfacing uncertainties risks, if that's fun and supported and celebrated, you get much better collaboration, which is sort of the next point, and that's working to get other to grow requires that you're going to lean on each other. Because the third value I mentioned, iteration, is really about change and its frequency of change. Iteration at GitLab, we talk about making the smallest change possible as frequently as possible in production, right? Actually ship the change. So instead of saying, "Hey, we've been thinking about experimenting with, say, a new logo team for the last year and we're really refining the idea," don't spend the year refining the idea. If you had the idea in January, pick a small group and give it a shot. Learn from it. Do it. By March, you'll already have way better idea than you ever would've had thinking about it for a year.
Michael McBride (30:44):
So that collaboration and iteration kind of goes together in building a culture. You talk a lot about culture in your podcast. One of the big challenges in a lot of cultures is that change is hard. Change might mean risk to my job, might mean extra work. We have to make sure that is the culture. The culture is that change is great and it's celebrated and we'll make sure that everyone has an opportunity to be even more successful as we make that change. Because you can't grow. There's all the different sayings. What got us here won't get us there. It's all true, so the more comfortable everyone is with making change, the better. One way we found to get comfortable with that in a culture is to make smaller changes.
Michael McBride (31:32):
If you make 10 small changes in a row instead of waiting 10 months and making one big change, you'll probably make much better ones and each one individually feels actionable and digestible and the team can just stepping forward. So I would encourage anyone who's listening to think about how you can make change just be part of your norm as opposed to the exception. It's like, "Oh, we got to plan for the change." Just turn that around and be like, "We always change, and that's how we grow. That's a good sign if we're changing."
Adam Conner (32:03):
I think it's smart. There's good risk in every change, big or small. Actually as a point of personal relation, my first tech sales job was all about. It was a piece of software that was helping organizations stand up a test and learn sort of analytic environment. This is for changes they were making in their retail fleets and things like that, but the same applies, in my opinion, to building teams. So it's great to hear you say that. We're 100% aligned there, and I appreciate you rounding out with that context. So for all of this that you've been able to share and teaching me about the laws of Moore versus Moore's Law and all the fun stories in between, McB, thank you so much for joining us. It was great.
Michael McBride (32:44):
Thank you so much for having me. I appreciate it.
Adam Conner (32:49):
Thanks for tuning in today. To hear more conversations which are investible just like this one, head on over to wherever you get your podcasts and search Growth Culture. While you're there, leave us a rating and review to let us know how you liked this one. To learn more about dedicated.ai and our other events, visit us at our website by the same name, or send us an email firstname.lastname@example.org. We'd love to hear from you about what you'd love to hear from us. Until next time, I'm your host, Adam Conner, signing off.