The Science of Scaling & AI - Mark Roberge

Proven Podcast

Mark Roberge discusses the transformative impact of AI on scaling businesses, leadership, and organizational design, emphasizing measurable progress through selling time and rep-to-manager ratios. He warns of societal ch

Key takeaways

• AI will boost sales productivity by increasing selling time to 75%

Transcript preview

Welcome to the Proven Podcast, where I don't care what you think, only what you can prove. Normally I go into a long list of who the person is and what's going on. Sure, I could talk about Mark exiting out of HubSpot and the fact that he's run to fund and the fact that he's a professor at Harvard and the fact that he's been rigorous and broken down the science of scaling in such a way that I've already changed how I operate my businesses after I got off the call with him. But that's not the exciting part of this episode. This episode. This episode is this episode is absolutely my AI is going to be for the next 30 minutes, but where it's going to be in the next 30 days and more so the next 30 years, how it's a fundamental change of how we run our orgs, how it changes leadership, and how it changes scaling across the board. This is one of those episodes where you stop, take a breath and then re-listen to it. That show starts now. All right, everybody, welcome back to the show, I'm excited to have you on man. Thanks, and, heads up who are you what have you done? Oh come on there's a lot of people that don't. Yeah I guess at the foundation I'm a tech entrepreneur I've just found very like variant ways to express it so in the first part of my career probably about 15 years I started three companies three or four the last one is the one I'm most known for HubSpot I was the fourth employee there joined as the first salesperson and then was the founding CRO through the IPO over a nine year period that ended like 2013. In the goal to take a minor break, I was fortunately recruited to join the faculty full-time at Harvard Business School to teach sales to the MBA program, build and teach the sales program, which I still do 13 years later. So that's been a blast and has been quite instructive to some of the things that we're going to talk about here and the pattern recognition that comes from that post. And then eight years ago was approached by a gentleman at Besser. venture partners to start the first VC firm running back by the best sales and marketing leaders in tech which we have done it's called Stage 2 Capital we have four funds that we have raised and deployed across 150 startups and that also has been quite instructive to what we're about to talk about today. Yeah so there's a lot there there's Hubs out there's Harvard there's stage four there's a bunch of stuff you're doing that's moved around you and I have started kind of the same start line, but then you outran me within about three seconds. So thank you for that. Oh, come on, Dad. Just different expressions, yeah. And actually, I forgot Charles, which partially we're talking about today too is I've written two books, one the Sales Acceleration Formula 12 years ago after HubSpot's and more recently published The Science of Scaling, which we can weave in today. We'll talk a little bit about it and I've donated the proceeds to both of both of them to different causes. The most recent one with signs of scaling, 100% of scaling, 100% we might be able to take a little tangent on why there during our session. Let's go ride into that tangent if you want to. Let's talk about why you do it. We'll do it toward the end. It's all good. Yeah, yeah. All right. So everyone talks about the scaling and how importance is and all that, but most people are terrified of AI right now. And they don't understand that artificial, it doesn't mean artificial intelligence, it means always incorrect at the moment, but that's going to change. And the next 12 to 36 months, Oh yeah, everyone's talking about that right now. I have to do a lot of thinking about that. It's a part of my job. It's also a part of my just natural curiosity. I love tech and the way it can change society. For better and for worse, you know, leaning into the better and mitigate the worse. And that's part of what we're trying to do. Let me give you a construct. Probably, it's hard to know how long of a period this construct is. I think like when we had the shot heard around the world in November of I mean at the time if you remember people were predicting like no humans would have jobs in 18 months you know like so I think like historically so far I feel like Silicon Valley has been probably a little too aggressive on their prediction on timing okay so we have that backdrop this is gonna take longer than the teckies are predicted. and where we are today. And so let me give you sort of like a longer term view of four potential phases that are specific to go to market but can be extracted to the other functions. Okay. So phase one is really the elimination of all work besides humans talking to humans. So you still have human sellers talking to human buyers, but a lot of the other work goes away. that's pretty much measured by selling time. You know, selling time is an industry standard that measures the percentage of a seller's week that is spent with a buyer or prospect. And over the last few decades, best-in-class orgs have gotten that to like 25 or 30 percent, which sounds embarrassing and low, and it just kind of shows the upside that we have. And I do think even this year, some best-in-class adopters of AI in the sales order can get that to 75 percent, and that's going to improvement in productivity. Okay, so we'll circle back to that because that's the shorter term opportunity that I think you're asking about Charles. Phase two, I do think at some point we will have AI agent sellers. We're starting to see some signs of that in the tech. I think it will start with like what we see today and product led growth, very transactional, maybe SMB simple sales. I don't think it'll ever get there in like the big million dollar deals. I think you'll still have humans involved. but I think we'll start to see a trend in that in phase two. Phase three will be we'll have AI agent buyers. You know if you're doing a new ERP assessment for a large global organization I just think AI today can do a much deeper and more accurate assessment of the needs of the org than a hundred person global committee and can assess vendors without being contaminated by steak dinners and golf outings and you know tailor swift tickets, whatever. And so I think we'll have that in the mix later on. And then finally, if you want to talk Star Trek, I think the phase four is the functional boundaries within an org blur. I think if you extract the organizational design back to first principles, the reason why we have a finance department and a marketing department and a marketing department or product department and engineering department, a sales department is because of human limitation. You know you don't see a lot of people who study finance and then go code and vice versa and so we build these departments around our our you know what we've studied and the experience we've built up which has advantages but also disadvantages. Those boundaries create inefficiency. You know finance would love to be closer to revenue. you know like there's there's alignment I think in phase four those will blur and you'll start to see organizations that almost operate more like GMs of business units with that are very agent enabled very cross-functional and so like whatever we can talk about yeah but let me circle back Charles to your short-term question of like you know what does it look like in like And I show up to a lot of board meetings and people are like, hey, good news, like, we are so AI enabled in our sales org. Like we are so AI advanced. And I'm like, prove it to me, dude. Like, how are we measuring this? And so that's what I'm kind of been working with the ecosystem on is, how do you measure in 2026 how AI enabled your sales team is? And so that's what I'm kind of been working with the ecosystem on is, is, how do you measure in 2026, how AI enabled, how AI enabled your And my working hypothesis now that I have a decent amount of conviction on is the two input measures are one selling time, which we talked about. So first off, measure selling time. Right. So like use AI to like see how often your reps are either in meetings with people with the calendar integration or on zooms with people with the zoom integration. What however you're gonna do it and try to get that to 75% and then the other one is your rep to manager ratio, which historically at least in tech, at has been 7 to 1. And that varies if inside or outside, whatever. But like, today's AI can coach reps better than humans, most human managers. And so you can push that to 15 to 1 if you've if you've adequately enabled AI as a deal support and deal coacher. Okay? So that the combination of selling time going from 25 to 75 percent and the combination of the rep to I think at least will double productivity per rep. So if you had Marty and Jane, you know, Jane, producing 250K a quarter for the last three years, they'll be producing 500K, at least, which will be profound. Now, that's like pie in the sky. I'm happy to dig in Charles to very specific use cases and how it works, but I'll let you take it from there. Yeah, so there's a lot of different things there. I like how the silos or the or the origin are starting to blur. and I still love that HR still is its own silo on its own and no one still wants to talk to HR makes me happy that's just me ripping on HR from there when we get into the AI side there's a lot of people were freaking out about not only the future but what's happening right now and before we even jumped on the call and started recording we talked about how what's happening right now isn't what life's gonna look like politically or economically in the next 30 years and this idea of just can we survive through the next garbage that we're dealing with right now of how do you see that also playing into because everyone's talking so much about AI right now not understanding that we have huge ways of how we operate across the world from data centers to politics to power to all those other things are changing pretty intensely so how do we survive the next four to five years? Yeah let's go there Charles I rarely get to on podcast but dude you're a guy that we can do this with and I got we have to take off I got to take I should probably take the vest off because I'm when I'm about to do this clip I am not Marker bears managing director of stage two professor at Harvard yeah I am marker bears United States citizen and everything okay so this is just me guys all right and if you try to twist it shame on you folks right so yeah I mean it's crazy how much effort, time, capital is going into building AI and not thinking through and how society can adapt. Correct. And that's troubling. And that's part of why I'm donating the proceeds of my book to a mental health because I do think that all of us in tech need to do more to balance that. Don't just build, but help society adapt. Because I do think that all of us in tech need to do more to balance that. Don't just build, but help society adapt. delegate this to Washington or academia, not because they're not qualified, but because they're just not close enough to it to really understand at the level that you need to to look ahead and help society adapt. And with each technical revolution, let's like we most recently live through the internet one, we do come out the other sizes of species evolved, but it doesn't come without its scars. Right. And, you know, we we're still experiencing them from the internet way of specifically in social media and they're going to be worse if they aren't mitigated in AI. Yeah, I see. Yeah, when we go when we talk about social media like oh we're going to be more and more connected then if you look at the patterns over the last couple years people who want to do early exits which is a nice way of saying you know often themselves radically increase because loneliness increase and isolation increase and bullying increase and all of these things because we're being fed dopamine based off human behavior to make us react a certain way. The positive for that for the companies are we're glued to these little screens because if I would have told you because I'm old enough in 48 if I would have told you when I was 15 16 years old that I'm gonna be staring at a screen for 10 hours a day I'm like you're out of your mind go outside the graphics are better but as someone who was a Microsoft trainer I got to see it up front I'm like this is fundamentally changing how human beings amplifier of that where I used to say alcohol is an amplifier if you're a jerk before you drink and I give you a bunch of alcohol you're gonna be a bigger jerk if you're a goofball and I give you a bunch of alcohol same thing same thing with money. AI and tech is that force multiplier as well where it just takes off and it scales it and I do agree with you how it is evolving us at a rate that I don't believe we as a species can keep up with fast enough without some help. Yeah and I think like if you want to go there and this is an area where later more tactically about the principles of the book on like how to scale revenue which I I'm one of the most well read I think in the world if I could say that humbly and I can speak to you in depth there what I'm about to speak to I'm not certainly at that level I'm not an economist I'm not like a politician but I am a tech entrepreneur I think I'm decent at vision and I've also have been curious about this for many years because I don't want to bring attacking the world that harms society. So I think it's important that we think about this. My personal opinion is you have to zoom way out to like almost a multi thousand year view. I do think this movement around AI is not comparable to the transition to the internet. It's comparable to when we went from a nomadic species to an agricultural one. It's comparable to when we went from feudism to democracy. And if you look at the histories there. There was a lot of skepticism as to whether that could even be had and there were multiple generations of massive pain in the transition. If you look at the history of moving from nomadic to agricultural, there was tremendous skepticism. It was like, where are you going to find enough animals to eat if you just stay in the same place? And how are you going to protect yourself from like attack? the same place. Everyone's going to know where you are. And they tried it and everybody went back to nomadic because not only did those through things happen, everyone was dying of disease because as a species we'd never lived in close quarters with animals for so long that we didn't adapt. So people gave up on agricultural for three generations, but after living through a hybrid, they eventually figured out and got there. Now you look at at, you know, feudism, we got kings and queens with like walls and we were protected. Now someone like Adam Smith comes around with the wealth of nations and is like, hey, if you make people free, if you give them free will, everyone will be better off. It's a thing called capitalism. And they're like, what are you talking about? You're gonna let the peasants decide? You're gonna, like, you're gonna create like mass hysterical. like craziness. And yeah, United States was this wonderful experiment. Was it easy? No. In 1840 we were killing each other in a civil war. Do you think people thought like democracy was working? Right? So like when you go through these massive ships, if not mitigated with massive intelligence, you go through generations of pain. Yes. So like when you go through these massive The pain that is coming upon us is we have a very difficult situation and I'll speak specific to the United States government and some of this can be you know applied to other government entities. I believe in our long-term mission which is human rights and freedom I believe in that and I think we have been the world leader on that mission for centuries. So I want to see us continue to drive that mission. in the short recent years how well we've done at that. But like that mission is going to be tricky because it's our version of democracy and capitalism our economy is likely not compatible with AI, a post AI world. Our version of capitalism is you know like 2% GDP growth 4% unemployment you know start work at 22 and at 65. work eight hours a day, five hours a week, two weeks vacation, which by the way, why is it that way? It seems all right. Why is that? And that's not compatible, I don't