Nick Mehta’s Post

Great summary of our CXO Summit by our awesome partners Growth Molecules™ SABINA M. PONS, MA Emilia D'Anzica, MBA, PMP

“Oh, Yoshimi, they don't believe me But you won't let those robots defeat me” 🎤 “Yoshimi Battles the Pink Robots” by The Flaming Lips We just wrapped up our 2024 CXO Summit (Miami Version!). We’ve held CXO annually since 2015 and every time, it’s a new high for me 🎈. The concept behind CXO Summit is to create an “un-conference,” where Chief Customer Officers and related #CustomerSuccess executives can meet with each other in small groups and compare notes on the topics everyone wrestles with (“Who owns the renewal?” “How do I scale?” “How do I motivate my team?” “What’s up with Nick’s outfits?”) Over the years, CXO has consistently had a NetPromoter Score above 90 from attendees, with many saying it’s the best work event they’ve ever been to. Most of this credit goes to our indomitable and brilliant head of corporate events, @Kat Leong, and her superstar team. While the vast majority of the event was in peer roundtables, we held a small number of panels to get the discussion going. Shocker - one of the biggest topics was how AI fits into the customer journey. Our President Chuck Ganapathi led a discussion with Erin Siemens from Verizon Connect, Mike Merit from Planet and Stephanie Bourdage-Braun from Intralinks around how Generative AI applies to Customer Success. Some big themes that emerged: ✈️ AI is moving much faster than our companies are in understanding it. 📚 We all have a responsibility to help our teams learn how to use AI - it’s not just for their current jobs, it’s for their long-term careers. 🤔 AI gives companies a chance to democratize knowledge, versus having it trapped in silos. 🤝 In this way, over time roles can be blended together, to improve the customer experience. 🚦 The number one ask of Generative AI is helping to find early warning signals (humblebrag - this is why we bought Staircase.AI!) 🕵🏽♀️ While companies rightfully take security around AI seriously, waiting isn’t an option. Either you embrace AI or your competitors will. At the end of the panel, Chuck asked folks to share a one-word-association for AI. The answers were revealing: “Limitless” 💪🏾 “Amazing” 🤯 “Scary” 🙀 All of the above!

“There's a darkness upon me that's flooded in light And I'm frightened by those who don't see it” 🎤 “Head Full of Doubt/Road Full of Promise” by Avett Brothers I’ve had a few discussions about #CustomerSuccess over the years… okay maybe like 10,000! But sometimes it feels like “Groundhog Day.” At every breakfast, lunch, dinner, Zoom event, conference and so on, the discussion inevitably meanders to “what is the charter of the CSM organization?” And the group proceeds to rattle off: ✅ Product adoption ✅ Value realization ✅ Stakeholder alignment ✅ Customer retention ✅ Customer satisfaction ✅ Expansion ✅ Escalation management ✅ Reference and advocacy management And more But there are a few problems: 🙋🏾♂️ How can one person possibly manage those tasks? 🙋🏾♂️ Even if they could, how would you find someone with all of those skills? 🙋🏾♂️ And don’t those responsibilities overlap with many other organizations? The reality is that we all need to pick a lane. Customer Success can’t be everything to everyone. If it is, it’s destined to be questioned, cut and fail. My belief is that, beyond a Digital-First and/or Scaled CS motion, only three models of CS are viable long-term: 👍🏽 Customer Success is a technical role focused on adoption. In this model, CS is most like Sales Engineering (or Pre-Sales, as some call it). Indeed, in this concept, CSMs and SEs often report to the same leader. The CSMs need to know the product inside and out. But they aren’t Customer Support, since they are proactively driving usage. In many cases, this is what clients want. In this model, CS is often a part of the “Cost of Good Sold” line in the company’s financials 👍🏽 Customer Success is a commercial role and represents the fusion of CSM and Account Management. These CSMs own quotas for renewals and expansions. They blend the best of proactive value orientation from CS and financial ownership and relationship skills from Account Management. Here, CS cost is logically placed in the “Sales and Marketing” line item. 👍🏽 Customer Success is a professional service, often packaged with Premium Support, Training and Professional Services. This makes sense for mission critical products in established categories. And the cost of this function shows up in the Professional Services P&L category. Customer Success needs to come out of the darkness of the bubble and into the light of profitable growth. What is the charter of your Customer Success function? If not one of those 3, what category would you suggest? The more specific, the better!

"I'm traveling at the speed of light I wanna make a supersonic man out of you” 🎤 “Don’t Stop Me Now” by Queen 6 weeks ago, we brought our US and European teammates together for our company meeting (festival?) Well, of course there was karaoke. And an opening parody video. And shoes changes 👟. I mean, it was a Gainsight event after all! But this was probably the most important employee gathering we’ve had for years. In the challenging tech world of 2024, we needed to evolve our culture. We wanted to preserve all of the goodness of what has glued us together for more than a decade. Indeed, what we refer to as “Human-First” business (remembering that every client, prospect, teammate, alum, interview candidate, investor is a human being first) is what has kept Gainsters here for 5, 6, 7, 8, 9, 10 years or more. But our full purpose statement is often forgotten: “To be living proof you can WIN in business, while being Human-First.” Winning in 2021 was a gimme. Though we all thought it was due to our skill! Winning in 2024 takes work. And we all have to rethink the way we operate - starting with me. This is what we call Gainsight 2.0. We translated each of our values into what it means for Gainsight 2.0: ⭐️ Golden Rule: We raise the bar - we all do our best work every single day and help each other get there. This means the little details - sending agendas in advance, writing clear emails without typos, preparing well, etc. But it also means allowing people to take risks as they raise the bar. 🏆 Success for All: We’re all on the field for customers - everyone is here to help our Sales and #CustomerSuccess teams to help our clients. This means things like prioritizing customer meetings over internal ones, responding quickly to customers and going onsite where possible. 🎉 Childlike Joy: We celebrate TRUE wins - we don’t give participation trophies. This one is pretty clear! 🤖 Shoshin: We draft AI on our team - we all learn how to use AI internally and in our products. But the most evocative and emotional principle was our last one. Our fifth longstanding value is “Stay Thirsty, My Friends!” Of course we created that ourselves and totally have no idea if there is a beer commercial with a similar slogan… this value was always about internal drive to achieve. But we needed a way to make this value visceral every day in this new environment. So we came up with our new company mascot: 🍺 Stay Thirsty: We are Honey Badgers. If you don’t get the dated Internet meme reference, Google it! It’s only been a few weeks, but the concept of Gainsight 2.0 and the Honey Badger spirit is helping many of us rally together. Part of this evolution is realizing Gainsight 2.0 isn’t for everyone - and that’s fine. But for those who know how much more we can do, Gainsight 2.0 is not just important, but vital. Indeed, for many of our high performers, the reaction was uniformly “finally!” How are you evolving the culture of your company or team in 2024?

“Until the roof, until the roof The roof comes off, the roof comes off Until my legs, until my legs Give out from underneath me, I I will not fall, I will stand tall Feels like no one can beat me” 🎤 “’Til I Collapse” by Eminem As one does, I was on Twitter over the weekend reading about the latest in mind-blowing AI innovation. And suddenly my feed became full of people sharing the same post by legendary YCombinator founder Paul Graham, “Founder Mode.” [link in comments] Graham recounted a speech to entrepreneurs by Airbnb founder Brian Chesky. The talk focused on rethinking how to run companies. Chesky spoke about all of the mistakes he made when he tried to lean into conventional management techniques - delegate, don't get too involved, etc. Two paragraphs captured the spirit: “Whatever founder mode consists of, it's pretty clear that it's going to break the principle that the CEO should engage with the company only via his or her direct reports. "Skip-level" meetings will become the norm instead of a practice so unusual that there's a name for it. And once you abandon that constraint there are a huge number of permutations to choose from. For example, Steve Jobs used to run an annual retreat for what he considered the 100 most important people at Apple, and these were not the 100 people highest on the org chart. Can you imagine the force of will it would take to do this at the average company? And yet imagine how useful such a thing could be. It could make a big company feel like a startup. Steve presumably wouldn't have kept having these retreats if they didn't work. But I've never heard of another company doing this. So is it a good idea, or a bad one? We still don't know. That's how little we know about founder mode.” I think one reason the post resonated to so many (not just founders and CEOs) is that the popping of the zero-interest-rate-fueled bubble revealed that most tech companies were operating with a hidden, yet powerful tailwind. Now we all face a turbulent headwind - one that every “non-tech” company has navigated since their beginning. So, no sympathy from them! In a world that changes constantly (especially with AI), the idea of old school hierarchy eliminates agility and suffocates hidden talent in companies. Often, the best people for CEOs to consult with don’t have Cs or VPs in their titles. Nearly every great tech leader is able to “dive deep” and truly understand what is working and not working in the business. And they don’t get there simply by relying on their fellow executives. Indeed, this isn't just a theoretical post. Nearly every mistake I've made over the last few years Gainsight was due to me moving away from the principles Graham lists. For a long time, tech companies were propped up by the Federal Reserve and other central banks. Now we’re feeling the same gravity other industries live with. It’s time for a new approach.

"Are we out of the woods?" 🎤 "Out of the Woods" by Taylor Swift In #CustomerSuccess, you're never out of the woods. Every time you think you have a client in a good place and you can see daylight, the shadows of risk - in terms of sponsor change, acquisition, technical issues and more - reappear. We all strive to fight this through "early warning" - getting to future churn before it happens. But many of the techniques to-date are still "relatively late warning." Usage dropped? The client might be moving off of your product. NPS detractor? Are they so frustrated that it's not fixable? And what about the people that didn't respond? We don't just advise companies on these challenges. We live them ourselves at Gainsight. And in SaaS (2024 Version), the "woods" are darker than ever. Two weeks ago, we acquired Staircase AI. Last week, we implemented it. The effort (or lack thereof) was impressive: ✅ 3 days for initial setup (authorize our Gmail, Google Calendar, Slack and Zoom accounts) ✅ 1 week for full configuration ✅ No change management or data entry for CSMs But what blew me away - and embarrassed me, if I'm being honest - is that we uncovered at least 10 customer engagement risks that were completely invisible to us before. Specifically: 🚦 We found several clients with zero recent outreach. 🚦 We identified clients with weak multi-threading, where we were dependent on one relationship. 🚦 We flagged customers who were having challenging conversations outside of CS (with other functions like Sales, Support and Product) that CSMs didn't know about. 🚦 We caught some brewing sentiment risk in some of these non-CSM communications. Of course, we have innumerable processes at Gainsight (and in our own Gainsight instance!) to catch these situations. But in a world depending on collaboration, playbooks and CSM execution, you'll always let things slip through. I'm realizing that AI is almost like a Quality Assurance team for the CS world. While Taylor said "the monsters turned out to be just trees," in SaaS these days, the trees are monsters too! CC Ori Entis Megha Mathur Meenal Shukla Chuck Ganapathi Tori Jeffcoat

"Boy, and as the years go by Our friendship will never die You're gonna see it's our destiny You've got a friend in me" 🎤 "You've Got a Friend in Me" by Randy Newman Pixar may not have planned "Toy Story" to be about SaaS but... OK, even I can't bridge this one 🤦🏽♂️... moving on: It's a tough job market in SaaS - and in #CustomerSuccess - right now. I have so much empathy for those looking for new roles. I speak to 5-10 people looking for job advice every week, and I know the market is ultra-competitive. That being said, I'm finally seeing an uptick in new CS exec and CCO roles. However, given the imbalance between supply (job seekers) and demand (companies hiring), roles are very specific in terms of what they require. In particular, I've heard about several opportunities in the last week that need a background in selling into technical audiences (developers, security, etc.) In these roles, the hiring managers were clear that it's not worth applying without this experience. And I understand - I've seen countless mismatches between CS execs coming from a business applications background and companies selling to technical audiences. If you have leadership experience running big teams (100+ in your org) and selling to technical or security audiences, feel free to DM me.

I had a chance to join an onsite client meeting (meeting people IRL is so 😎) last week where we discussed best practices in Digital Customer Success. Our own Digital CS leader Lane Holt and a multi-time client and digital expert Holly Goodliffe presented. I don't think I added any value to the meeting, but I definitely learned a lot! A few takeaways for me: 💡 Every company does "digital" today, but in a very fragmented way. Marketing send emails about webinars and events. A community team reaches out to drive engagement. Same with a customer education group. CS teams often automate multi-step email journeys. Product pushes in-app messages. 💡 The impact is that digital feels like "spam" to clients. It's not aligned to their needs. Most communications are irrelevant. And because of this, clients "unsubscribe" and disengage. 💡 For digital to work, you need to adopt an integrated approach. 💡 Holly and Lane shared how they have digital campaign managers who coordinate the touches across all channels. 💡 Rather than having a "one size fits all" view (e.g., every feature gets an in-app message to every customer), Lane and Holly drive digital campaigns based upon the customer's desired outcomes and journeys. 💡 As an example, Lane profiles clients in the product (through in-app surveys below) to understand the client's goals - and then drives a digital campaign based upon these. 💡 In addition, both of them shared how journeys are different for users versus "accounts." The digital touches for executives at customers versus practitioners should be distinct. 💡 The outcomes of digital done well - in terms of engagement rates and impact on adoption, are incredible. So fired up for Digital CS to finally becoming an understood and prioritized discipline! 🔥 What best practices have you learned about, in terms of Digital #CustomerSuccess?

"Look, if you had one shot or one opportunity To seize everything you ever wanted in one moment Would you capture it or just let it slip?" 🎤 "Lose Yourself" by Eminem "What's my career path?" This is a question that most people ask at some point in their work journey. Where am I going? How do I get there? One lie that we've told ourselves over the last, ZIRP-fueled, decade is that a company owns the career path of its employees. My perspective: Nearly everyone that's achieved anything realized that they have to be the one driving their future. Companies can help by transparently sharing opportunities and the ways teammates are assessed. Mentors can give advice and advocacy along the way. But the actual vision for where you want to go can only be owned by you. No one can understand your goals better than yourself. The people that impress me the most at Gainsight are the ones that come to me with a pitch - what they want, how they can help, why they are the right fit, etc. It's just like a job interview. Some even come with a presentation to the meeting. But too often, people have 1-1s with me and don't "shoot their shot." They enter the meeting too casually. They don't have a clear agenda. They aren't concise. They miss their opportunity.

"The Dunning–Kruger effect is a cognitive bias in which people with limited competence in a particular domain overestimate their abilities. It was first described by Justin Kruger and David Dunning in 1999. Some researchers also include the opposite effect for high performers: their tendency to underestimate their skills." - Wikipedia Before I was a CEO, I was a VP and GM at a larger company. I thought every day "my job is basically the same as a CEO." When I took my first CEO job, I believed I was so great. I had run big teams. I owned big numbers. I was a "world-class "leader. Then reality happened. My first company almost ran out of money due to a self-inflicted wound (poorly-implemented billing system). We had a multi-day 100% outage. Cultural change seemed like a slam dunk, yet we were stuck in the mud. Then Gainsight came about. I was going to do it right from scratch. I knew what "A players" were. I had made the mistakes and would learn from them. I got the mentors. I was in the CEO groups. I had great investors. But still, we almost ran out of money again. Growth skyrocketed, then slowed. Then skyrocketed, the slowed. Acquisitions were successes but never integrated as quickly as I planned for. People that were performing at a high level and that I thought were perfect for their jobs sometimes fell off in effectiveness. Dozens of "brilliant" ideas that I had didn't work. We still muddled through. > $200M ARR and profitable isn't bad. But every night, I'm haunted by the poor decisions I made and what more we need to do. I started out thinking I knew it all. I got punched in the face. I got despair about knowing nothing. And I eventually came around and realized that I know some stuff, will alway be learning and will never know it all. The Dunning-Kruger effect IRL.