[00:48] Walter’s background
[04:16] Common themes and mistakes Walter notices among founding teams when he starts working with them
[05:40] What do First Principles mean in the context of sales?
[07:30] How to apply an engineering mindset to sales, compassion, and truth
[09:58] Becoming a better salesperson: The 3 W’s (Steve Browne)
[15:10] Usually the biggest obstacle is oneself
[23:36] How Walter unwinds
Speaker 2: (01:03)
Onto the episode. Okay. So today we have Walter Roth and I'm really excited for this conversation because it's going to be a bit different than our normal conversations. Walter helps founders and founding teams with how to approach sales from an engineering mindset using first principles. So Walter Stokes, that we're about to have this conversation welcome to the show. Thank you for having me. So it was a mouthful, right? Founders and founding teams, engineering mindset, first principles. We've got a lot of words in there that we need to unpack. So where should we begin? Where, where does it, where does your story begin with this? Uh, yeah, sure. Um, well, I, well, I dropped out of college a semester short, um, getting my industrial engineering degree. So I've always been engineering. My always had an engineering mindset. Um, and I did a startup. I raised about $9.8 million across three rounds of financing.
Speaker 2: (01:56)
And, um, it eventually failed, but I, I learned a lot, went back to college, um, finished and basically just been an entrepreneur ever since then spend time at a venture fund, being an entrepreneur in residence as well. Um, and when I was like 25, I'd experienced being a CEO, but nothing else. Um, my mentor at the time, Barry Wyman from a venture fund, um, told me, you know, Hey, if you're not going to be a CEO right now, you should go get yourself strips. And so I went to go get myself stripes at Oracle, and I started at the bottom of the barrel in the regeneration and I learned sales there and I, and I S I sucked it all up, got great training. And then I went to a startup to be the VP of business development. And when I was there, I met a guy who had been an engineer, and he found out that the sales guys made five times more than him and he was offended.
Speaker 2: (02:54)
And so he decided that he wanted to become a sales person. And so he became a sales engineer to watch all the best salespeople at Oracle, um, to see how they sold any backwards, engineered the first principles of sales. And then it became a monster, you know, deal salesmen and created, um, a repeatable process to create repeatable sales processes using first principles. And so he taught me that and ever since then, I've always applied it to whatever startup I was whenever we'd run out of money, I would go out and get an enterprise deal. And, um, whenever, um, people asked to get mentored, I'd mentioned them on like fundraising as well as on, um, doing their first sales. And a couple of times, um, they ended up raising a bunch of money, starting the company, and then selling. So, um, after spending about 10 years doing startups, um, and investing all my money in each of the startups, um, and none of them were a big success. I looked at my background and said, what's been the biggest, uh, creation of value in the smallest amount of time. And that has been in, um, coaching and mentoring other founders in, um, starting sales based on the first principles that I learned from Steve Brown. Um, my sales mentor that former engineer turned sales pro, uh, pro. Um, and so that's, that's basically how I got to where I am today to where I mostly focused on helping founders and founding teams, um, apply the first principles to figure out their repeatable sales process.
Speaker 2: (04:29)
So explain this to me, like what, what do you typically see when you come into these founding teams? What is the pattern or the thing that you almost without knowing it, but you can guess like, ah, this is what I'm going to walk into. These are the assumptions, the processes, the kind of things that I'm gonna have to undo. And then what is, let's start there and then let's go into what you try to replace those with. Yeah. So typically you have really smart founders and founding teams, and a lot of them don't have experience doing sales, or they don't have experience doing sales for a startup.
Speaker 2: (05:12)
And they're typically making all the same mistakes. They're wasting a huge amount of time when you ask them about their deals. They have a lot of stories. And so the first thing I do is try to teach them the first principles and not talk a lot about details of deals, but really get to what are the first principles. Is there alignment with this deal? Is it even worth your time? And if it is, what is the next best steps to take with each of your deals? So for those of us who don't know what you mean by first principles in this context, can you enlighten us? Sure. So, you know, first principles is taking big complex problems and sales is usually a big complex problem, and you're breaking it down, getting away from all the assumptions and all the analogies of, of the problem space and getting it down to the, the ground truth.
Speaker 2: (06:10)
What do you know? That's true. Um, and then from there really defining what is, what, what is the root problems you're trying to solve and then work your way up to novel solutions based upon those truths. And so in, in deals, um, there's, there's kind of like the first principles. So at a high level, there's like, um, don't waste time. So, you know, is this deal worth your time in the second one is, you know, are you ending specific suffering? Are you aligned? Right. Um, so it's not about pitching, it's about searching for people that have the specific suffering that you have. And then the last part is like, is it true? Right? Is what they're saying to you? True. Is there a deeper truth or are you even, are you even, um, lying to yourself? And so those are kind of the first principles and then how you apply them are kind of like 10 steps.
Speaker 2: (07:12)
Okay. And that's, and that's one of the things I go through with people. So I feel like my mushrooms are starting to kick in right about now. This is very like, uh, I don't, I don't think I've ever heard sales discussed about in this light before, but I like where this trip is going. So how, I mean, how now I'm curious about you personally, like, how did you come around to, you mentioned you had this mentor, is all of this, just a line of kind of engineering thinking that, um, has kind of this spin to it enlightened me. Yeah, sure. So, um, let me just think for a moment. So what I try to do is focus on what is someone's, you know, biggest, what's the biggest suffering they're in that they're aware of. And then as you start to end it, you get to the root causes of their suffering, right.
Speaker 2: (08:12)
Um, and that's basically train them to do with the people they're trying to sell to. And so, um, basically when I work with people, the first part of working with them is how do they become more intentional with sales? And so that's what applying that engineering mindset to sales. Um, but then the second part about it is how do you actually care for the people that you're selling to that you're trying to you in the deepest part of your heart wants to end their suffering. And if they're not suffering in a way that you uniquely end, how can you then become truthful with yourself and to them that there isn't alignment. And you tell them that, you know, it's not worth their time or your time to continue to be in sales discussions. And so where it starts off with an engineering mindset, it then goes into compassion, and then it goes into truth, starting with your own personal truth.
Speaker 2: (09:05)
You know, that the fear, the greed that's involved in sales, as well as their personal truth, like what truly is their suffering and is there alignment for you to end their suffering? You know, and is that suffering, not just the person who you're selling to, but their entire organization, and do they have the structure to actually end their own suffering with your help, right? Otherwise you're wasting your time. You're wasting their time. And so the work that's done in sales starts off very kind of mechanical, but then it gets into a lot of, you know, personal, um, it gets kind of into inner inner work. So to ask us sales,
Speaker 3: (09:44)
The question, how do you begin to qualify? What they're suffering really is like, how do you peel back the onion to understand that you're to get past the jargon, to get past all of that, to understand truly what their suffering is, so that you can begin to figure out whether or not there is alignment and truth.
Speaker 2: (10:04)
Awesome. Awesome. Great. That's a super good question. So at a high level, when you walk into a deal, usually they're like dance monkey dance. What's show me the demo, showing the pricing. I'll tell you what I want to do or not. Right. And so the first thing to do is to step out and have the mindset of I'm here to see if it even makes sense to spend any time together. Right? I want to make sure that that what your needs are, are aligned with what we do. And so basically what you do is you search for the three W's. This is from Steve Brown, the three W's is why buy anything? Why buy us and why buy now? He created this like, I don't know, 20 years ago. And basically that comes from, um, you know, he looked at like, what makes a good salesperson?
Speaker 2: (10:52)
And the best salespeople are the ones that spend all their time on the deals that we're going to close and very little in time on the deals that weren't going to close. And so he's like, great. And so he's like, okay, so how do you figure out if a deal's not going to close? And he's like, well, you gotta be selling something of value. Um, first off. And second of all, you need to have the answers to these three questions. And so why buy anything basically is, you know, what is so painful that someone's talking to an enterprise sales rep and that they're actually going to go through all the hurdles that's going to come up, um, and actually change what they're doing. Right. And so that's like really get into, like, why would you do anything? And to test that you ask the flip question, which is what happens if you don't do anything.
Speaker 2: (11:36)
And I got to tell you, I talked to a lot of founders and it's like, you go in there and you say, why would they buy anything? And at best people give you like a feature list. And you're like, no, that's a feature that's not suffering. And so then they go, Oh, well, they want to make more money. You're like, okay, well, that's, that's, that's some suffering, but it's only surface level. And you got to dig even deeper. Like, what happens if they don't make money? Like how much more money do they have to make? So w to where, um, it's worth them actually doing something. Right. Um, and so then you go to the next question of the three, why buy us? Because oftentimes there is enough suffering to have the activation energy to change, but there isn't the alignment with what you do.
Speaker 2: (12:22)
And so, um, to get to the bottom of why buy us, you ask the flip question, what happens if you try to do this in house, or what happens if you do this with someone else, not us. And I got to tell you that everyone has an answer for, you know, why by us. And then the moment that you ask them, the flip question, all their answers go out the window. It exposes, you know, like that. The third question is why by now and again, um, I always have to explain why buy now. Isn't like, why buy today? It's more about two things. One is why buy within a meaningful amount of time what's meaningful? Well, if you, if you're a rep, you might need them to buy by the end of the quarter. Or if you're a founder, you might have to have a certain number of deals close to you, get your next round next year.
Speaker 2: (13:10)
Right. Um, the second, why by now, um, element is what happens if the timeline slides, because so many times timeline slide. And so what you want to do is try to find some reason, like, if you're selling to e-commerce and, you know, you have a deal that needs to be done by a certain date so that they can then have it available for black Friday. And if you Ms. Black Friday by a week, it doesn't matter. Right. I mean, it matters huge, right? That's where all the profits come from. Um, that's a good why by now. And the flip question is just what happens if the timeline slides, right? And so those are the answers, and you'd be surprised that smart people have a really hard time coming up with the answers. And they have a hard time getting down to the root of the answers and not just for the business, but like each person involved, you know?
Speaker 2: (14:03)
So like someone's trying to get a, um, a promotion into the management team and this is going to show them leadership. Right. And so it goes really deep. Um, and so, so yeah, those are the three W's, that's the, you know, why buy anything? Why buy, why buy now? That's like the root of suffering. And then every now, and that's actually step two of the 10 steps. And then every step after that is basically just reiterating the three W's, you know, the next step is with the champion. The next step is with the executive sponsor. It's always important to know that those oftentimes have different three W's and then you use the three W's of everyone involved to get through, you know, all the other steps, like getting, um, pricing negotiations, getting through terms of service and such getting signed, and then getting the success story.
Speaker 2: (14:49)
Wow. So I, I, I, I love the way that you've broken this down. Um, I'm curious if you could think it's always easier to see how this works when you have kind of real life examples. And I know you do a ton of working with these founders and founding teams. So are there any fun examples you could give of like radical state change? You know, you came in, it was like this, and some of the fun stories of working through these deals with the founders and founding teams, um, as they went along the path and maybe even highlight some of the challenges that you typically see, like points of friction, where it's especially hard to adopt these specific pieces of it at first, but then when they have some sort of aha moment, it just flows. Yeah. Um, well, it's important to note that if, if anyone's reading this, that wants to apply the first principles, if they go to my website, they can download Google docs that I've created that help you without my help to apply them.
Speaker 2: (15:52)
And then when I have, um, you know, if, if you do engage with me that I do walk you through them, it just accelerates the speed in which you can learn them. Um, but the important thing to note it's moment sales.com, right? Yeah. sales.com and there's a button it says, apply for a pilot or download the free templates. Right. And the reason why I say this is because the kind of the fun moment is when I'm leading through deals or founders deals, um, you know, the, the, the teams that are the smartest that are most aligned with the market that are doing the right things already as they go through this with them, um, I will walk into a room when, but I don't know anything about the product or the market. Am I bringing them through this? It's funny. They kind of like look shocked at me.
Speaker 2: (16:46)
And they're like, how do you know so much about what we do? And it's, it's that because this is first principles I can get to the absolute, like value as well as absolute, like misalignments that they have. And what's funny is when I'm working with reps or founders that are making tons of assumptions, that aren't doing the kinds of things you need to do in sales, and they're too attached at some point, the, the meeting gets halted and they're like, hold on a second. What do you know about our industry? Like, what do you know about, you know, selling to healthcare? And what's funny is that's the moment I realized they don't know, you know, they're, they're flying in the dark and I've, and I've done this enough time. So that's when you start to move from the process because they're resisting the process and that's when you start to move into, okay, let's look what's happening right now.
Speaker 2: (17:49)
You know, like, what are you feeling in your body? Right? Like, like what, what, what are you holding on to be true? That might not be true, right? That if you let go of this, what's, what's a possible new insight or new, um, next step that you could take that would totally unblock this deal. And I just stepped back and you can just watch all of a sudden, it almost becomes like a coaching slash therapy session. It's amazing how quickly helping earlier stage companies can turn into a therapy session in a good way. But yeah, go ahead. No, go ahead. And so it becomes a point where, you know, like we were talking about, you know, it starts with kind of an engineering mindset with first principles of sales, it then gets into like, are you truly committed to end suffering and not just believe your own BS, write your own stories.
Speaker 2: (18:43)
But then it becomes like oftentimes founders, their biggest obstacle, as well as smart reps that aren't quite methodical. You know, they're like, I call them singers and dancers. Right. Um, they, they don't know what they're doing, why they're doing it. They just do a bunch of stuff that works, which is hard when you're trying to sell something new. And you're trying to then replicate the success that you've had with more reps, um, that it becomes really, um, a situation where you're trying to figure out how can you unattached to outcome? How can you see things as they are, and more clearly, right? How can you be fully present? You know, when you're talking to people that you're selling to, and be so honest with yourself that you can start to disarm the person you're talking to, and I'm not talking about like super soft skills that if you don't have on, you're screwed, I'm talking about like, okay, so here's a story you asked for a story. You know, there's a founder who, um, was, was selling to, um, executives at like Tesla. And he, he, he gets into a, um, a meeting where all of a sudden he realizes that it's the wrong team.
Speaker 2: (20:01)
And, um, you know, the, the meetings is going to get over and it's gonna be a waste of time. And it's really hard to get meetings with the right people at Tesla, you know, and this was really important. And so what I taught him was he started freaking out. He started getting really upset with himself and a lot of fear was coming up. And so I had trained him to be like, okay, you know, tune into oneself in the meeting, you know, what am I feeling fear of my fearing? You know, that these are the wrong people. This is a waste of time. And so I've told them like, get in touch with yourself and then just share it with them. And so he stopped the meeting. He's like, Hey guys, I just really, I enjoy talking to you guys, but like, I'm just really afraid right now that we're talking about this, but you guys are the wrong team and we're making decisions for people that aren't here and that, that might not lead to a good place.
Speaker 2: (20:53)
What do we do? And there's this big pause. And then the guys are like, we could call them. And so in this meeting, all these other people to get on the phone, and then they were, are you able to actually have the real meeting that needed to happen? And the next steps were much more. And, um, you know, afterwards the CEO is, was, was, um, catching me up, uh, catching me up on this, on the village pub in Woodside. And he's this going? His mind was blown. And this guy is like super, super techie, right? Like, you're your technical co you know, technical founder. And he just had this huge smile and he's like, Oh man, gosh, all you gotta do is like pause to see what you're feeling and then tell them, and then they solve your problems for you, every meeting mechanically. But the result is almost like a Renee Brown. I think that's the right word know, word, forget Bernay Brown. Yeah.
Speaker 2: (21:52)
What's that? I think it's called daring greatly, right? Yeah. Daring greatly. She's got a great Ted talk. She's got a great, and that's a Netflix episode. Um, but basically he's, it's like a masterclass to being vulnerable in a way that is coherent in a way that's aligned with sales in a way that disarms other people and you get your outcome. And so he now does laughs every meeting, he does it and he just kind of giggles. It's like, this is like unfair. And it's like, yeah, dude, it's like being an integrated human coming in with first principles and templates. And then it leads you to, what's the biggest obstacle. And usually it's oneself. I love that. So, Walter, uh, normally I like to ask what, you know, what people do for fun, but I happen to know that you are recording this with me while in a cabin in the woods.
Speaker 2: (22:49)
So I feel like I know a little bit about what you do for fun, but what helps you unwind when you're not working with, uh, working with founders? Yeah, yeah. Hmm. You know, I don't, this is, this is the, you know, I'm a big fan of inner work and that includes meditation. So to unwind and to kind of feel more present in my life, I meditate a lot, um, different, different types, some based on neuroscience, some, some based on things I learned from gurus that I met in India, Germany, um, I'm a big proponent of therapy. I read a lot of books on kind of like the psychology neuroscience. Um, I'm kind of big into indigenous kind of journeys and, you know, medicine journeys and, and, you know, anything that basically gets down to the, to knowing oneself better, um, to be awake my life, you know, to actually be present and enjoy it, the ups and the downs.
Speaker 2: (23:52)
Um, and I, and I, I love it so much. It really helps me feel more fulfilled. And the irony is that it makes me feel like I have much sharper knives when I go into sales and, you know, coach people on how to, how to sharpen their knives as well. Amazing. Well, I've really enjoyed this conversation. I think that there's, uh, there's so many unique things about your approach and, uh, just general demeanor that a lot of our audience will enjoy and be able to learn from. So thanks again for taking the time Walter, I really enjoyed this conversation. Thank you. It was my pleasure.