Welcome to the Chain Stories podcast, the podcast that celebrates disruptors who defy convention. Here we dive into the bold stories of trailblazers who turned audacious ideas into billion dollar ventures. Hey everyone. Welcome to the ChainStories Podcast. Today we have Adam Kling from Territories.AI. How are you doing Adam? Doing well, thanks. Glad to be here. Awesome. Super excited for you having booked this podcast. Was looking at Territories.ai and I do think this is quite a revolutionary idea and I'm super keen and interested in getting to know more, but first of all, could you give us a brief intro about yourself and how did you got started into this idea? Yeah, absolutely. So I've been in sales my entire career. I started in high school selling shoes at Sears. Realizing that I could make a lot more commission focusing on the high cost work boots to less customers than fighting over with the three or four other sales reps, trying to sell boots and heels to female shoppers, really found that as my passion. And then, so worked into the insurance industry, where I worked for a commercial insurance brokerage for quite a few years and realized, about five, six years into my career that I really wanted to pivot over to an industry that had a lot more innovation and was faster moving. And so I went from a relatively established career in insurance over to Qualtrics. So Qualtrics it's experience management survey research platform, at the time was what's 60 million in revenue, 200 employees. And I went from managing a program, building a team to an entry level sales rep. And, really just thoroughly enjoyed the experience of pivoting over into software. Qualtrics was a phenomenal teacher, right? Going through just hyper growth at that entry level sales rep up into some leadership roles and enterprise sales role. And then the last four and a half years, I've really gone back to my roots of startups. So being a head of sales, a chief revenue officer for sub 10 million in revenue organizations, one of which was a sub 1 million in revenue organization. And just putting the foundation in place when, with my last organization, we had an opportunity to exit and I started to interview at a lot of different places, head of sales roles, CRO roles, some consultancy roles just to help build kind of revenue functions and, actually ended up turning down four or five offers. Because there was just something that was missing. And so finally I decided, you know what, I'm going to take a week off. I'm going to spend my time figuring out what do I want to do next? What do I have a passion for? And over a couple of days and a lot of note taking, I've got a whiteboard just over here on the wall. It really just hit me of, I've dealt with this same problem at every single company that I've been at, regardless of size, regardless of industry and it's revenue planning. And as a seller, as an individual rep, it impacts my confidence in my ability to close deals. And it also impacts my actual ability to close revenue. As a leader, it highly impacts. Do I have the ability or does my team have the ability to be successful? A lot of times, especially with startups, your revenue goal is something that the CEO, maybe the board dictates down and says, Hey, we're at 5 million, you need to get to 9 million. And then it's your job with very limited resources to figure that out. Even in larger organizations, it's a top down model where a combination of finance, the board, the C suite come to your CRO or your head of sales, your VP of revenue and say, Hey, this is the goal. This is the budget figure out how to do it. And historically, even with a revenue operations team, that process for small businesses can take weeks, for big organizations it's months. I've been at companies where figuring out how we're going to go from 50 to a hundred million or a hundred million to 140 million can take four to five months because our ICP changing. What does our hiring plan look like? Do we need to hire a hundred reps at 30 percent average attainment, or do we need to hire 40 reps at 70 percent average attainment? Do we actually have a process to connect marketing and sales? And then ultimately it's how do we create territories that are equitable? And for me, equitable is not everyone's happy. Everyone thinks it's fair. Equitable is everyone has an equal chance based on what their quota or target is. And so it really become this, that became this realization of, that this is a problem that I've struggled with every single time. And the more and more, previous colleagues and previous customers I've chatted with, everyone feeling the same thing is, yeah, this process sucks. And we decided to fix it. That's pretty fascinating. And how did it feel to you going from a very stable career in a stable top company in insurance to the start up worlds? Was this something you really thought about or you're like, okay let's just do it. Yes. That's a good question. I enjoy risk. And I get bored easily. And so for me, my wife is much more risk averse. So there's obviously, there's a lot of dialogue that has to happen for me to get her permission to do something like this. But I think for me, it's look, I have to feel that there's a challenge happening. And if I don't feel like I'm being challenged, I don't feel fulfilled. And so jumping from insurance to software was, yeah, it was a big leap. I took an 80 percent pay cut when I jumped over to Qualtrics, which, yeah, my wife was not super excited, but it was a risk. You build savings, you build a plan, you give yourself a certain amount of runway, and then you just dive in. And that worked out, switching over to Qualtrics ended up being a phenomenal career change and knock on wood, it's worked out this far with Territories.ai. And a lot of entrepreneurs, they usually are willing to take that 80 percent pay cut because they believe at the end of the day, there is an exit or liquidation event. Was this something that you had as the Northern star for all that time or one of your goals, and how was it when you finally had that exits? Was it relieving and you felt, wow I did it? Yeah. So early in my career, jumping from the insurance industry to Qualtrics, it was less about an exit and more about, just a need to do something different. We were young in our career. We didn't have a lot of expenses. It really became about, how do I give my career, a factor of 10 growth rather than a factor of two growth. And I think Qualtrics did a lot to fulfill that. Now, obviously Qualtrics had an exit. It was what six and a half years, six years after I joined and it was great. I'd been there long enough. I'd had success. I was able to move up that career path with them, and it was, just a phenomenal company, all around. And so for me, yeah, personally, there was a great exit for our family. But that's, yeah, that jump wasn't as much about the exit as it was about the journey. And now you're being married and having a family and for those listening, what do you think it's like to be an entrepreneur before having that responsibility and now that you have, and you're still getting into Territories.ai. Yeah. Yeah. So sitting down with my wife, Andrea, sitting down with her in March, April of this year and saying, Hey, I'm still going to look around for career opportunities, but I'm having this itch. And I think that there's this real opportunity here with building this business. And that means that we won't take an income. It's a very different conversation. And so that was weeks of what do our finances look like? What can we cut out of our lives? Is this something that we're both mutually willing to commit to? Because as much of a financial sacrifice as it is for me to start a business, it's an equal sacrifice on my wife, right? And just her willingness to understand that this is different hours. It's a lot more stress, I've gone bald over the last couple of years. and so I think there's just a lot more to take into consideration. And I had a conversation with one of my sons shortly after starting the company that was, he was asking about, Oh, are we making a lot of money because you're a CEO. And the response was actually no, we're making$0 right now because our company isn't making money. And my 10 year old had this realization of, I get more allowance. Like I make more money than my dad does. And he offered to loan me some money. Which is very generous. But, yeah, I think it is a different sacrifice. And then there is, you need to be willing to really involve those that are going to be impacted in the decision and understand that it's a different way of operating. Do you think it's a path for everyone, for those that are in their office job for the last 10 years and maybe I should go and do a startup. Maybe I should just quit this, have some money saved up and just fix this problem that I keep having and just go full on all this. Yeah. So I think anyone can be an entrepreneur. This is actually the second company that I've started. The first one was before I was married, really small insurance startup. But I've always had a passion for this, but I think anyone can do this. What I would recommend is first and foremost, assess your willingness to take risk. Because as much of a risk as you think it is, it can feel a lot bigger than that. Can feel a lot bigger than that, especially as you're watching your checking and savings accounts, go down every month. I think the second thing is if you want to go and leave, like dive full time into starting something new. My personal check mark is 12 months of savings. At least 12 months of savings. And then on top of that, what my wife and I talked about was look, we'll have 12 months of savings to go a hundred percent into this. And then on top of that, we need another six months of a safety net, if this doesn't work out and it takes a while to find another job. So obviously having that safety net helps quite a bit. It also mitigates a lot of that risk. And then I think that the last thing would really be patience, nothing in starting a business moves as fast as you think it's going to. It's difficult, it's slow, and even with AI. And a lot of the innovation and just the speed and efficiency that can come from that, just the overall process, like AI is not going to get customers for you. AI is not going to test your product the way that your customers will test your product. And so as quickly as you can build something, you still need to understand that it needs to launch. It needs to be iterated on. It needs to go through three, four, five, six versions before it really becomes something that someone comes and says, Hey, I'm willing to pay money for this. Yeah. It makes total sense. And diving into Territories.ai, you mentioned early on that as a sales rep, you used to have the problem of where is this revenue coming in from or staying motivated. Is this something that you had in your mind as the reason to create these projects? And is this what keeps you motivating is a let's figure this out because no one out there has done it or some might have done it, but I want to do it my way and I want to fix this problem to thousands of people? Yeah, that's actually exactly right. There's a couple organizations that do revenue planning. there's a lot of organizations that could do structured revenue operations or an outsource model. But I think the big gap that I identified, the passion that I have is for those startups, right? I love the startup environment. I've been in that space for a long time. And historically organizations that are sub 10 million in revenue, sometimes it's sub 100 employees, they really have a disadvantage in that revenue operations in its current state is really expensive. You have to hire dedicated resources or you're outsourcing to third parties. Or you're trying to secure enterprise software when you're not an enterprise organization yet. So you're talking about budget that is, Hey, I could hire another sales rep, or I could use this for marketing budget. And I can't spend 50 grand, a hundred grand on process yet. And so yeah, that's where we wanted to come in was look, there's an opportunity to make this way more accessible, way easier to use, and significantly more cost effective for small organizations from a leadership standpoint, so that they can come in and have high confidence in building their plan in the first place. And then also for the reps below them. That CS rep, customer success manager, a sales rep, a marketing team to say, look, we all understand what our goal is. We all understand why this is our goal, how we're going to achieve that goal. And as an individual contributor, I can go in with high confidence that I'm going to be successful. And diving into Territories.ai, what are you trying to solve specifically and what was your approach to this? We started the first kind of aha moment for me was territories because a lot of the organizations that I've been at, territory planning is much more art than it is science. And I think a lot of organizations approach it heavily from a science perspective, but their data is based on art. If that makes sense. So it really becomes this big cyclical loop of, I think our account scoring should look like this. And so we build a model and then using that model, we build these really structured territories. And what that turns into is that if the art of count scoring is wrong, then your territories are completely wrong, and I've been at organizations where we had an entire sales team just with remiss, incredibly hard because new territories were launched and it was based on bad data structuring. And so that really was the first aha moment for me was, look, I think we can change this and I think we can do this better. And then as we started to build that process, early this year, the data piece of that became more and more apparent of even if we can build incredibly structured territories, we still have to do that based on data. And so that's where we incorporated in, why don't we do the account scoring for them? And why don't we actually make account scoring for most small organizations free? Because the value to us is not scoring accounts. The value to us is making sure that there's data integrity so that we can build a solid plan for them. And then snowball that over the last few months, it really became, you have account scoring, you have the territories that you want to build, but you also need to understand your capacity planning and be able to align demand to that. And if you can do those two things, account scoring and capacity and demand alignment really well, the territories part actually becomes pretty easy. And so that's what this is matured into is helping just automate the process of leaders understanding what their plan should look like and then designing and implementing them for them. This actually is pretty interesting. I worked at a fortune 500 for a couple of years and I was a sales rep and looking into your software, you have a gold buffer, which tells us a percentage that we almost reached that goal. And even an ROI per territory per plan. And I do think this can be quite revolutionary. Is there anything in particular that you see as the competitive advantage of using these versus other platforms out there? Yeah. So I think the first piece for us is our technology is designed for the individual that does not have a PhD in data science or isn't an Excelist right there. There's a lot of softwares out there that are really good at this, but you still have to have a dedicated resource to be able to understand the science behind it and build those models. And that's expensive. And so for us, it was most organizations don't have that yet, or they don't have the resources for that yet. And if we can make this as simple as possible, so that a brand new head of sales that has never done revenue planning before, or has mapped out how he's going to hit his number next year, he can get in, click a couple buttons, answer a couple questions, and he can get his plan. And then his plan will even say, you've got a 87 or 97.8 percent accuracy score on this plan. That's really, I think that's where our bread and butter comes in. And I think the second piece is we're intentionally pricing this to help smaller organizations compete with larger ones, because again, they don't have that hundred and fifty thousand dollar budget, either for software or a dedicated person or a lot of times both, right? Because even if you buy the software, you still need a very experienced person to manage it. And so for us, it's look, we actually have a freemium version. Our full platform starts at$2,500 a month for small teams. And so we're giving these small organizations an advantage, right? Where we're taking away that unique differentiator, if you will that their bigger competitors have and leveling playing field. You touched upon smaller organizations. What do you think is the current protocol that smaller startups use in terms of metrics and measuring these. Is it just Excel spreadsheet is just up in the air for a sales rep. Yeah. So really small startups, and I've actually, I was in that scenario where I was external hire number one, brought in as a head of sales to build out process and people. It was Excel, right? Everything's Excel or Google sheets for me. as we started to grow a little bit, that matured into HubSpot. And HubSpot is quite easy to use, which is helpful, but it's still time consuming and it's great at tracking, but it's not great at planning or modeling. And so I could start to track and understand where we were and how we were performing and find kind of risk areas, but I still needed something that could come in and say, Hey, my CEO just gave us our 2022 number. How do I hit that? your big CRMs, your big data systems don't do anything in that realm. and so that's really where we wanted to come in was rather than kind of building in excel and making a lot of guesses until we're big enough to focus on RevOps. It's what if you could start to implement revenue operations now, so that$2 million,$3 million, or$4 million more in ARR from now, you're not spending months trying to clean and fix data because we've been doing it the right way the whole time. So you're saying that if I am a small setup and now coming in January, and then we do revision of books and look at the yearly goals, we can just go in and create a new plan with your software. Hey, let's hit a million dollars this year in sales. You would tell us basically where we could pull this revenue from or come up with a plan in some shape or form. Yeah. Yeah. Across hiring, across territories, across defining, Hey, what does our ICP actually look like? Because especially as a startup, one of the hardest things is understanding, am I selling to the right customer? You start with this kind of spaghetti at the wall mentality of I'm just going to go after everyone, see who actually wants to talk to me. But a lot of times people scheduling initial meetings and having those initial meetings doesn't mean that those are the ones that are going to buy, right? they could just be interested in the area, but you're not a good fit. And so what we really try and focus on is what are your customers look like today? What is your product roadmap look like over the next 6 to 12 months? Because that obviously highly impacts what your customers could look like. And then what restrictions do you have? So for example, we don't have HIPAA certification. And so our ICP is definitely not healthcare companies. And so by understanding what customers look like today, what are our kind of no go zones are, and then what our roadmap looks like over the next 12, 18, 36 months, that really helps us start to zero in on who does have our best potential to spend. Very interesting. And do you have any roadmap plans into integrating AI and what capacity will AI come in and advise or be usable by the startup planner? Yeah, so V1, we already have quite a bit of AI incorporated into it. most of our AI right now is on data analysis and output. And so again, where something may take weeks to analyze a hundred thousand accounts and build account scores and map territories, our system is doing that in a couple of minutes, using AI. A lot of that is just machine learning on finding those connections and building, those companionships. The second piece for us, when we think about AI, it's really guided around how do we provide more relevant intelligence to the user? For example, the CRO or the VP of revenue operations is utilizing this and we can tell him with X percent of certainty that your ICP is evolving from this to this. Because of these reasons, right? We can tell the individual sales rep who logs in and sees, Hey, this is my new territory for this quarter for this year. This is what changes have happened in your territory. This is why. And most importantly for the rep, this is how it's going to help you be more successful. One of the things that I'm really excited about with AI is the ability to incredibly and strategically personalize account books or territories for reps. A lot of organizations talk about verticalization or specialization of reps. And that doesn't really become an opportunity until organizations get large enough to say, Hey, we're going to build a financial services vertical. But what we're finding is that if Jane has a standard geographic territory, like most reps or is managing a lot of inbounds like most reps, but our system is identifying that she has a 40 percent better close rate in healthcare than anyone else in the business. Why are we not personalizing a book of business for Jane that focuses more on health care? Because that will dramatically improve obviously her revenue output. Steve is awful at health care, right? He doesn't have good candor. He's not, yeah, he doesn't understand the nuances of the health care industry with your specific product. But Steve's doing phenomenal with financial services. Because his background, he used to work for a bank. And so for us it becomes less on your organization needs these types of generic territory plans. And it becomes a lot more about how do we create unique territory plans based on every single individual skill set. That makes a lot of sense. And now thinking about it, you're saying that basically AI can come in, analyze all the data, like this financial experts modeler and tells us, Hey, Antonio, you are missing out on X, Y, Z, and you can focus more. And the revenue increases 10 X or 20 X. Save your time. Yeah. What was used before? Was it someone from accounting or some, or was your sales manager that could tell you this and now AI could replace the sales manager in a way? Yeah. So historically there was nothing. It was all looking at aggregate data, right? Because there literally was not enough time in the day or budget to build a team that could analyze, 800 metrics across 4,000 sales reps. As software has matured, you have a lot of software out there today, Gong and Clary and others that are in kind of the revenue intelligence, revenue productivity space that they provide AI driven coaching on individual deals and calls, right? How do I get better at closing this deal? How do I get, how do I do X? What we're focusing on is less one to one deal coaching and more let's actually look at the 30,000 foot view and see if we're even focusing on the right things. Rather than this individual deal, should Adam be working healthcare deals? Could Adam be doing better at A, B, and C instead? And that's where I think AI is taking a lot of the differences. step one was aggregate level reporting. Step two in AI, which is really prevalent, is looking at these really small one to one relationships. Step three with AI, which I think is really exciting for me, is I can now look at one to one relationships and one to many relationships. So essentially you're saying that AI is only replacing one person here, but probably an entire department team. And you can build this into your SAS and now it's able to advise reps in micro and medium sized companies. on their revenue and potentially make them generate 5x, 10x over time. Yeah. And our goal is, I don't know that AI is AI is in my opinion, it's never going to fully replace people. I hope not. Cause I think AI could probably be a pretty good CEO at some point too. But what I think AI is really designed to do is help automate tasks. You've got Salesforce and HubSpot that are doing AI agents for support calls. You've got a lot of AI SDRs, which that's, yeah, we'll see how that goes. I think again sales is a little bit more of a nuanced relationship there, but what I think AI and revenue ops can really help with is I don't need a team of 5, 10, 15 RevOps analysts or specialists that are sifting through data day after day. I need a team of two to three specialists that can help my organization focus on strategy and execution, right? And it's really just enabling those teams to focus on outcomes rather than spreadsheets. And that's where I see AI being really valuable, is giving human beings back the ability to focus on outcomes rather than focusing on just living in spreadsheets and data all day. Yeah, that makes a lot of sense. And I do think AI, the AI agent narrative that we just keep seeing is these agents being created and they can design and work on a specific task over time and fix our problems. But they don't replace us and they just compliment us in a way. And that sounds like an interesting future, but I'm very keen to see the AI CEO coming in for a company one day. Yeah. Yeah. who knows, three years from now, I, yeah, maybe I'm the one sitting on the sidelines watching AI be a much better CEO than I am. That'll be quite interesting. And let's say if, we're going to time machine and you could speak to your first version when you were building your first startup or when you joined Qualtrics, what would you tell yourself? Oh, that's a good question. If so, all right, going back to 2013, when I first started Qualtrics. I think the biggest piece of advice I would give myself is let go of your ego. I struggled, and I'm sure if you, if anyone tracked down my manager, James Sucon from my early years at Qualtrics, I came in having a pretty solid career in insurance, financial services, and really confident in my own abilities. And, I even remember in the interview process, Qualtrics had this interview round table where I think there was six or seven managers, in a panel interviewing me. And I'm pretty sure that four, maybe five of those six managers just absolutely hated me and didn't want to hire me at Qualtrics. Because I came in so cocky again, because I was really confident I had a lot of success and, James was kind enough, if you will, or maybe he saw something that I didn't see yet, and he offered me the job and my first six months at Qualtrics were really hard. Pivoting to software is such a different monster, right? Insurance, one it's a required element, so you're not selling this latent pain, this thing that people don't know they need. Everyone knows they have to have insurance. And from a commercial standpoint, I was working with large corporations spending tens or hundreds of millions of dollars a year on their insurance. And it's a very different conversation than getting a head of marketing to drop 25, 50 K or even$10,000 on a new piece of software. And so I just fell flat on my face. I had two quarters of zero revenue in a row. My third quarter was, I think I showed up on the board, but it wasn't great. And it really was that first year. I remember it was going into Christmas and I sat down with my manager and said, look, do I belong here? And I think going back again, having that time machine, if I could sit down and just say, You need to be humble. You need to understand that failure for you right now is going to be the best thing for you to learn. I think I would have been a much different place and I would say that's true for everyone, especially starting a business like failure is not something to be afraid of. Failure is something to embrace, and that doesn't mean fail over and over and over again. What it means to me is when you recognize failure, embrace it and move on. I think it's a great advice for every entrepreneur, especially coming from a high success career with a lot of civility and then seeing failure for the first time and numbers way smaller and not knowing how to deal with this, and I think it can really play with your ego because you're used to such a high pace and such a high, let's say a cloud of things and then everything changed and numbers are always smaller and I can't even convince this person to spend 5K like what is wrong with me and you start having so many things planning with you that can be frustrating and I think you can really not only play with the ego, but with our self esteem and can go can make us go through a sort of a dark path in our lives and quite quickly. Thanks. Yeah. Quite admire you for being able to bounce back and finding your path there and being back on track. Amazing. Regarding Territories.Ai, if someone wants to get started in using, I see there's book a demo on the website. How can they get involved? What is the roadmap there for this year? It's almost over next year. Yeah. You can book a demo. We're small enough that booking a demo just goes to me. So folks, honestly, just feel free to reach out to me. We also do, we've launched our freemium version. So again for us, data integrity is one of the most important parts of revenue planning. And we want to provide account scoring really the base of data integrity, for free for most customers. And I think there is a get started button on the website as well. That'll still be a form fill that should change over the next week to just actually sending you straight to our website to sign up. For us and for me specifically, I hate gimmicks and I hate gotchas. And so there is not get started for free, but fill in your credit card. And then seven days later you're charged. It's free and that recurring tier renews every single year. So we will have some customers that never pay us a dime, but we're just helping the industry get better because. They're intelligently scoring their accounts the right way. And then, there's paths just to move up, from there. Awesome. And you mentioned earlier that they can get in touch with you. What would be the best channel or communication handle? Yeah. again, the website's an easy way. My email is adam.kling@territories.ai. I have a bit of OCD, and so I am a zero inbox individual, so I read or at least look at every single email that comes in. yeah, if you do have questions, you do want to learn more email is a great way to get in touch with me. I also realized I just opened the door to every single SDR out there selling services to companies like mine, which that's okay too. Awesome. Thank you so much, Adam. Thank you for our listeners. You got it. It's a wrap. And stay in touch. Yeah. Great to chat with you. Thanks. Thanks for tuning in to the Chain Stories podcast, where disruptors become trailblazers. 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