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good morning please welcome will ker from light speed Venture partners and David Baga Chief business officer of Lyft all right well uh welcome to saster 2017 I just found out about a couple minutes ago that we got to kick off the conference and I was going to do my B my best Jason impersonation but I am not nearly as charismatic or funny so we will just hop right into this um it's my pleasure to be able to uh introduce and just engage in a conversation with David Baga who is Chief business officer at Lyft and as you all know the topic that we're uh going to really just casually discuss is um how to put a lot of veneer on your business to get to a $100 million valuation as quickly as possible easy right easy um in fact it's building and scaling your company up through the various stages and the reason why David is just such a uh a great person to be able to engage a conversation with is he has a a very unique perspective he's been part of companies that have sold to different types of customers uh different types of products and really operated at various stages very successfully so without further Ado David great thank you so uh really excited to be here today and and share some of this story um I I have had a very varied background and it's been a great privilege to have experiences that range from the biggest companies in the in the world some of the most mature sales organizations like Oracle to the earliest age startups and uh and everything in between with the mid-market sellers like information Builders uh I've had uh a couple of experiences now where I have been literally the oneman band and the first professional seller in an organization uh first at Rocket Lawyer and uh and then uh most recently at Lyft and and it's one of the most uh interesting provocative challenging uh scary periods of of going from 1 to 100 and then things kind of start to to form around you and you start to to recruit and build a team and all of a sudden you're not on stage by yourself you you've got you got some folks to support you you got to cast of characters and that's a really really fun period if you keep going you you end up in a situation where you actually find yourself leading a a mature organization you're orchestrating and leading Specialists across the across a wide spectrum of go to market functions and that's where I find myself here today at at Lyft and so through that experience of um the rocket lawyers trapez information Builders oracles and and and lft I have uh I've got a conclusion and and really what it comes down to is that going from 1 to 100 is really hard thank you for coming yeah I I'm pretty much done here right so I uh I've done it now a couple times and it's still really hard so I don't want anyone walking out of here thinking that they're going to just take great notes and have a Playbook that they can go operate against the the struggle is really constant but I can assure you that it is uh the most rewarding uh part of the the entire journey is right here in this period so if you don't mind let's do a little uh survey uh who in the audience would put themselves in the Onan band category raise your hands founder Le sales calling on every favor you have can you see anything I can't see anything yeah um how about the rock band who feels that you know they've got a little momentum they have a bit of a team going you're feeling good but every now and then you're making things up and then how about the orchestra how many people out there are and if you're in an orchestra please I'd like to meet meet with you after light speed would love to um but let's get into the three stages of growth uh kind of walk us through just some lessons learned and how you kind of categorize it yeah so I I think that there there are really three distinct stages and a lot of while they're related um going from you know finding your product Market fit to really trying to design and build your goto Market model and then finally really operating at scale and and trying to drive towards profitability they are related entities but they are different sports and so it's not like going from minor league hockey to Junior Hockey to to to the NHL it's really that you're picking up a brand new set of skills with completely different motions and so I think it's important to recognize that you have to have a really conscious shift and have a distinct mindset uh that prepares yourself for each of these phases I've noticed you don't have metrics and like hey 1 million ARR we're off to the next phase uh 10 customers were often than that why do you avoid putting metrics when it seems like that's all people want to write about that's all people want to calibrate around VCS love metrics okay we do we do we I love metrics too but I I don't think it's quite as uh as binary so I could tell you that you uh you know it it's likely that there's a range that if you are under 2 million in ARR that you probably are still finding product Market fit uh if you are 2 to 25 then you are building your go to market but you're not yet scaling but I can also tell you that when you think you have shut the door on product Market fit and you're like check that box you're coming back because you're going to search for it again because you're going to need new Industries new segments new products that you're going to introduce for cross sell and upsell and so you're coming back through this whole stage again and in fact you could go through this stage as uh as an organization multiple times even in a mature company so you've said product Market fit a lot probably one of the most overused terms um how do you define it how do you think about it it's it seems like something when you get wrong when you're not calibrated on you start spending in the wrong direction and it's really tough to recover so what can the audience learn about product Market fit I I think I got my best lessons of uh finding product Market fit uh at Rocket Lawyer and uh that was the first time that was really close to the the product design engineering teams and I think there's a lot that that the sales and marketing organization can can basically steal from the agile methodologies uh from what Steve blank is talking about from what Eric ree talks about with this iteration of of uh building measuring and learning and really what you're trying to do when you're finding uh finding your footing as a as a new company in a new category with new products or Services is is run a lot of experiments and the faster that you can get that Loop going the better chances you have of identifying something that's really working and you're really looking for one thing that is working first and so this can be everything from testing your demand generation channels to testing positioning and messaging on Outreach to completely different uh sales profiles in terms of uh an SDR function to an ISR to you know God forbid a a a field sales representative so you I Love Field sales don't get me wrong so you have some uh tooling you have measurement um things are starting to show some good data um what are some lessons learned that product Market fit actually still isn't there and even though the data may suggest so yeah so I I I really think that it's about creating a I call it kind of instrumenting the the machine so you're really trying to measure everything and I don't care how unsophisticated the measurement is but you you need to be getting it into a spreadsheet so you can analyze and learn from it the second thing that I see a lot out there is people not finishing experiments so they go 80% of the way and then they they quit on it and yet there's probably the remaining 50% of the value of the experiment is in that last 20% so you have to finish it so that you can feel uh confident that you can disqualify a go to market strategy completely Far and Away the most dangerous um error to make I would say is what I consider CEO magic so there's a lot of Founders out there that uh are are are the the organization's first professional seller actually they're they an unprofessional seller and they are out there and they will win their first account and maybe the the first few customers and now they believe that they are maybe they come to Someone Like You and they they raise some money and now they're going to build their their sales team and they're going to try and hire their first BPS sales or a chief Revenue officer and they they are selling this story that hey I I already did this job I was out there I sold customer One customer two customer 3 four five but they did it with CEO magic and what I mean by that is they've they've broken some rules they are agreeing to build something for the customer that's bespoke they are uh rolling over on on legal terms like indemnification or limitation of liability or they are um uh even even worse uh giving away free trials or or really really uh big discounts and then they bring in this professional sales organization or sales leader to build this team and they're like hey you have to do this but you can't use any CEO Magic and I think it's a real problem when when they think they found product Market fit and they actually really haven't sometimes product uh Co magic is also called YC magic when your entire customer list are fellow YC companies um all right so you have product Market fit it's time to put some fuel on the fire what questions do you ask when you start to think about how do I build my goto Market Playbook what are some of the triggers the dials that you just need to be aware of so you're spending the right way and creating the right type of org yeah uh so so one of the things I I really make sure that I I have before I am going into building that team is is reference accounts so I I really am a big believer that if I can make one really successful customer that I know that provided that my total available Market is large enough I'm going to turn that into 10 and I'm going to turn 10 successful customers into 100 and 100 I'm going to turn into 10,000 so I I I really think that there is an opportunity to lay down that Foundation of testimonials case studies uh reference calls people that will advocate for you before you get into that building that go to market team so getting into it um you know my the early part of my my career was largely uh in the heavy B2B uh selling into Fortune 350 uh government education Healthcare and that was the lineon share of that was was at Oracle and it wasn't until I uh I left Oracle and I saw some some very different uh playbooks that needed to be run and so one of the things that I think is a big um mistake that I made earlier in my career was actually when I left Oracle and I I went to a company called information Builders it was uh 1500 people doing a few hundred million in sales I was the the general manager of the western region and I came in full of Oracle Swagger and and implemented the Oracle Playbook and it just didn't work it it was a it was a huge mistake and I had to completely reset the territories the profile uh the compensation structure and everything when I went to uh Rocket Lawyer I I saw completely the other end of the spectrum and it gave me this this this concept of these slider scales of being able to evaluate what does your Market what does your segment what does your ideal customer profile look like and so you know on the on the far right you you've got the the kind of that Oracle World selling into it into the biggest organizations in the world when I went to Rocket Lawyer we were selling $4 a month subscriptions to you know Joe's bait shop and very small businesses and so it was very different uh super high velocity very transactional uh major Reliance on uh demand generation and a very lead-rich model and it was exactly the polar opposite interestingly now today I I sort of look at at uh where I am at at Lyft as being able to to leverage both of these experiences because we are going all the way from the B to C world to the B to very small B all the way up to the the most mature organizations in the country I think that people have to really step back and figure this part out before they are able to design a a go to market model because if you if you aren't hyperaware of um of who your customer is you're going to choose the wrong type of profile of people you're going to build the wrong composition of team and you're probably going to find yourself upside down on rep level unit economics which means you're not going to get to that next stage of investment what are some of the lessons you've learned hiring people out of organizations that have proven in whatever sector that they did it once hey you know I I I have a Enterprise sales model so I'm going to hire someone out of the top SAS company and yet they come in and maybe that one Playbook they had over there isn't relevant or the Dynamics a little different the do you have any anecdotes of uh sometimes the hiring to match that goto Market Playbook that you've designed may not go exactly as you planned yeah I think you have to be really intellectually honest with how your organization is set up and what stage you're at you know pulling somebody out of a mature organ gation that has been successful at scale even if they are in your industry uh selling to in your territory and pulling them in and expecting that they're going to succeed in your very not mature very not rigorously designed organization is is is a recipe for a disaster you know when you're going from 1 to 100 what I have uh I guess learned the hard way I consider myself an experiential learner is that I I think that adaptability is the number one trait that I'm looking for so I really kind of look at the world of uh as pioneers and these are tough gritty adaptable think on their feet and then you've got the settlers and settlers come from those very mature organizations you need the pioneering mentality when you're going from 1 to 100 and the adaptability I think can be really broken down into into three segments number one is is do I have the willingness to change and the second thing is do I have the ability to change and third and finally is how fast can you change because I need you to really move quickly to get to 1 to 100 and so I really find that the thing that holds most of those folks back from coming from very mature organizations is that they they just cannot check off on those three boxes of adoptability some people think that these uh go to market models and the stages of them are you know very discreet stages and there are candidates that fit stage 1 two and three three and that you should expect every 18 to 24 months to change a VP of sales by the way in prep I actually asked David this and he looked at me and said well not me I go all the way through not everyone is you do is it realistic to expect that you're going to have to uh kind of change out uh in each of these stages because of those unique dynamics of succeeding and the nuances of dialing in the Playbook I do think that for the most part that you are going to go through some phases and likely we'll have uh a couple probably a couple sales leaders uh before you reach a chief Revenue officer and and I look at at someone that's the chief Revenue officer is distinctly different from the vpa sales I think that you're really looking uh at a broader spectrum and trying to organize and coordinate between your product your marketing your sales and Business Development uh together in in an orchestrated fashion so I I'd say that there is an early stage VP sales profile and I think that there is a a uh building the go to market model profile and then there's some folks that just love operating at scale with their their dashboards and their reports and their operating efficiencies and you know that's a that's a completely different animal unto itself so after go to market you have a very after go to market is dialed in you have a very unique experience through your time at Oracle where you when we talk about scaling and the orchestra and the Playbook uh I mean it's a Once in a Lifetime company maybe you could share what it was like to take that to scale to immense profitability and how you saw the machine work and why it did y well first of all I should clarify I didn't do it all on my own oh you didn't no I didn't uh but I I did take away some some really fabulous lessons out of the Oracle experience and I think that surprisingly a lot of them are are are things I'm still leveraging even at the very earliest stages you know the the number one thing that uh you take away is that uh Oracle is really big so when I went there in 2002 I started as a business development consultant uh which is a what you equivalent of an SDR today or bdr and uh we were 44,000 employees uh I was Employee 55773 and uh we exactly exactly and we it's on your badge and and so then I I went from uh from there and in 6 years we acquired 72 companies and we went from 44,000 people to over 100,000 people that is what 100,000 people looks like to to organize a machine that's not Levi Stadium by the way no that is not they don't get many people anymore we have to be hopeful hopeful yeah so to to coordinate that many people and have them execute you know you're really talking about a tremendous amount of discipline and so the things that I really observe there that I think uh are relevant to every stage of company is one document everything they do a really good job of documenting process and and and policy and then they take it a step further and they codify it by turning it into workflow and I think that is something that uh we all have the means with today's technology stocks to be able to do that the the second thing is is that it is an ABS abolute training machine and one of my core values that I lead my teams with is out learning so I don't want to just outwork you I actually want to out learn you I think it's a competitive Advantage I saw that at Oracle I got more training in my six years there than I have in the rest of my career combined so they do a tremendous job of creating a a recruiting engine a hiring engine an onboarding engine and then continuously work on on uh employee development the third thing thing is I I think probably most importantly is the emphasis on the sales culture and the Frontline manager the Frontline manager is the most critical part of the entire organization at Oracle it it is uh there as U acts as somewhat of a a sherpa to to the Reps to carry the torch on all this policy and process and systems they're uh predominantly responsible for coaching and development uh they they over index on Frontline manager uh training and development because they have such a promote from within strategy and those people are going to become the Future Leaders of your organization um and that was all really run by uh at that time when I was at Oracle direct which is the inside sales organization for Oracle it was led by a woman named Hillary cppo McAdams who's now's the president of of New Relic and she did a phenomenal job of installing that mindset of the front line manager and even at 2500 uh inside sales where at was 400 sales managers when I interviewed to become the a manager in my second year uh She interviewed me personally and She interviewed every regional manager that gives just gives you a sense of how critical of a success factor it is for Oracle direct so that recipe is um you know that that kind of rins repeat that Oracle had over such a long period of time is again very unique it was a immovable piece of the infrastructure it seems most companies mere mortals of companies even at scale need to almost revisit some of the product Market fit the go to market when they start moving either Upstream when they start testing out other markets or other products right how do you reinstitute these practices and lift is a good example it's a direct to Consumer offering that we all love and now you're you know you head you headed up the commercial business how do you reinstitute that even after it took so long to figure out the Playbook over here to relaunch internally yeah so just just a level set so I I lead the teams at Lyft that work with Enterprises and organizations that are are trying to figure out how they can get rides for the people that they care about so this could be corporate clients that are looking for corporate travel commute programs or perks and benefits in healthcare it's uh non-emergency medical transportation in uh Elder Mobility really around age in place initiatives and then um we we are uh doing some emerging work partnering with transit authorities to solve Last Mile and first mile Solutions and and then we have Partnerships which is we all the really fun consumer Partnerships are like T-Mobile and uh JetBlue and Southwest Airlines so we have a a we created created a business unit it has a its own distinct product design engineering marketing full pnls and then sales and and client services to go to market with and I think you have to protect that is particular particularly when you're creating a uh almost like an entrepreneurship model uh you need to make sure that that's Court owned off and has its own lane for resources resource access otherwise you you will never make it above the line for all of the b2c business and I I I ran into this first at Rocket Lawyer uh where I was uh hired by Dan NY to to build their SMB model and then had some hard lessons there that I applied to to do a better job setting expectations coming into LIF one of the um uh not failure modes we've seen but uh I guess some companies are reluctant to admit how uh how a very focused strategy is is a good strategy so when even our uh mature scaling companies are looking at a new product line um you know they're they're almost hesitant to say say you know what this is such a small Niche customer base but at least it's a test bed to see where else we can go um how important is it to have focus in the very early stages for a very young company or even for a scaled company when you're going into a new Direction yeah so I I like to really throw quite a bit against the wall to test those are those hypotheses that I create and then we run experiments against them and once you start to get some early indicators that this is something that that uh uh looks like it it has a strong probability of succeeding then I'm doubling down on it and I'm I'm winding down some of those other experiments to make sure my resources are really directed in the places that I need them to be it it is um it's hard to do uh you know our eyes get get big um but I I really think that you you get maximum value out of your product organization you get maximum value out of the brand you're creating and you get maximum value out of your base and th those reference customers that you're creating when you are disciplined and really tackle one beach head first I mean it's classic jeffre Moore crossing the chasm kind of stuff um one of the things we've talked about last night and in prep here is when you dial all the metric back all the stages of the company it it really comes down to the people uh within an organization and I think one of the things I really credit lft is you know in the last couple weeks as we all know the company I mean the country has really taken an interesting Direction with something that impacts everyone globally and domestically and that is with the immigration ban um I credit your company for jumping on that in a very quick Manner and in a very unifying manner with with a message and that message wasn't just relevant politically but it really seemed to be a kind of a ring cry for the culture within your company and culture is very important because without it none of this really matters so one I just wanted wanted to acknowledge the issue at hand acknowledge how impactful it is obviously here and everywhere but also to credit you and and maybe give you a chance to talk about how that has kind of unified a bit of the messaging the culture within Lyft yeah so John and Logan uh are the founders of Lyft uh I've known these guys for a uh a few years now actually when I was at Rocket Lawyer uh John and Logan tried to recruit me to come join them at zimride which was their predecessor company these guys have been focused on their mission and their Vision which is really about transforming Transportation uh improving accessibility uh Bringing Down the cost making it reliable making it safe for the communities that we live in and they've been trying to do that for over a decade now they uh I didn't join Zim ride and they were telling me about Lyft actually uh this was August 2012 and uh John was saying saying hey David this is going to change everything it it's going to change the world uh anybody could be a driver and anybody can be a passenger and you're going to be able to request a car the car that's just driving by on the road and you're going to be able to get it uh just through your mobile phone and you're going to sit in the front seat not the back seat because it's a community that we're creating and when you get in you're going to fist bump with this driver because that that's the kind of relationship we want to have I'll do and and so I he's like that's not even the best part and he runs back uh into the back of the the office the office was probably about the size of the stage at the time and he comes up with one of our big famous fluffy pink mustaches and he goes all of the cars are going to have these on the front and what a great idea and I walked out to that meeting going this is never going to work these kids are crazy right so I didn't join them uh and uh and then I watched them uh over time and so when they they got in touch uh towards the end of of um of 14 and said hey we're we're working on this this new um this new strategy to take lift into the Enterprise I knew that these guys had a vision and a mission that was authentic they'd been doing it for 10 years through thick and thin even before all the wild success that Lyft had and I think it really comes down to being very clear on their values these values are uh really the the tenor that that Lyft operates with and when you see your leadership across the entire executive team humbly enacting these values every day being yourself uplifting others around you making it happen and and creating fearlessly it it is really a a something that emboldens the entire community of of lift and so as a result uh it it's what we we hire for it's what we develop it is what we prosecute and Performance Management for it is really really something that is um that that we stand for and so when when that situation arose I think that it was incredibly uh easy and and Swift for John and Logan to come out with our stance because that's really who they are and they've been that way for over a decade have you seen in the various companies you've been at where values get in the way of performance yes I think that there is a so I so I actually think what happens is is that you have your stated values which almost all of us have stated values and then you've got your acted values and I think that there is a values Gap and so you might have a a you might have a value that says that uh we operate with a sense of urgency but when then the opportunity arises for that to be tested it takes you I don't know a day to get back to me when I am trying to solve an urgent customer issue and I need you to be responsive inside of on hour that that I think is really uh something that that people have to uh honestly evaluate and assess and and and measure themselves against to figure out are these values actually what we are living every day so I think um I I I have to ask that uh there's another large ride sharing company out there is that right yeah i' I've um what's what's the future hold for Lyft what what is uh what direction are you really excited that you know you can hold up as a real competitive advantage and where you see the future of Transportation going and how lift plays in it so as far as Transportation I don't think that we could possibly be living in more exciting times I mean you you really have seen in the last uh call it uh 15 months really I would say you have seen every Hardware manufacturer every major software manufacturer every Automotive uh supplier and OEM has come to the table elbowed their way to the table to this domestically it's a $2 trillion opportunity and and uh globally it's A10 trillion opportunity and really what we're talking about is the the transformation from a culture that is really uh uh car ownership Centric to being ultimately being able to deliver Transportation as a service and and doing that by bringing down the cost making it more accessible making it more convenient and we at Lyft uh have laid out a a a road map for the future that essentially is is showing this transition that it includes today where we are of of of a ride sharing mentality and and in the next phase really a a hybrid uh of um of autonomous vehicles where we believe in the next 5 years half the vehicles in our Fleet are going to be autonomous and in in 10 years thereout a decade uh all of the rides that are on the lift Network are going to be delivered autonomously and this is a an incredible opportunity for us to be able to redesign and reimagine the cities that we live on live in you know today you know the the automobile uh manufacturers are spending $283 billion do a year in the United States marketing to us advertising to us that this is a symbol of freedom and yet it is the the second highest household expense second only to to housing ahead of Health Care ahead of insurance ahead of food ahead of Youth Athletics and soccer soccer on the peninsula for sure and and so as a result of that you know the we have American Family spending $9,000 a year and yet is is a terribly used asset we're only using it 4% of the time and so there's a better path forward and I think that the lift has a really compelling exciting Vision we're not worried about those other guys we continue to focus on what we do best which is take care of of our driver Community take care of of our customer community and take care of each other at at lift to make sure that we're delivering the world's greatest Transportation so are you a one man band a rock band or an orchestra we're somewhere between uh a few rock bands and an orchestra right now nice yeah um it was awesome uh I just through prepping for this I actually learned a lot just in how you think about uh building businesses leveraging your experience so it's been a pleasure to have this conversation and uh congrats on all your success particularly in the last couple weeks you guys are as I said really setting a new standard so pleasure David thank you very much I really appreciate it yes