Today on the show, we are incredibly excited to have Michael Coscetta.
Michael is a member of Revenue Collective, but perhaps most importantly, he’s the chief sales and strategy officer for Compass, that fast-growing real estate behemoth. That’s an incredible success story in terms of their ability to work with and attract the best brokers, build a massive brokerage community, and give those people the tools they need to succeed. Michael talks about how he does that at scale and how he thinks about scale.
If you missed episode 116, check it out here: How to Form Great Habits and High Impact Behaviors at Work? with Andrew Sykes
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Show Agenda and Timestamps
- Show Introduction [00:09]
- Who is Michael Coscetta and what is Compass [2:00]
- The origins of Compass, how it achieved scale, and its competitive advantage [7:13]
- Making something big even bigger with strategic revenue generation [12:03]
- The skills you need around you to accomplish your goals [19:52]
- The importance of consolidating data [26:44]
- Building a resume that ends with “Chief Sales Officer” [28:59]
- Michael’s biggest influences [34:29]
- Sam’s Corner [38:38]
Show Introduction (~300 words) [00:09]
Sam Jacobs: Hey everybody, it’s Sam Jacobs. Welcome to the Sales Hacker podcast. Today on the show, we are incredibly excited to have Michael Coscetta. Michael is a good friend of mine, a member of Revenue Collective, but perhaps most importantly, he’s the chief sales and strategy officer for Compass, that fast growing real estate behemoth that he’s going to tell us all about. That’s really an incredible success story, just in terms of their ability to work with and attract the best brokers, build a massive brokerage community, and give those people the tools that they need to succeed.
Michael talks about how he does that at scale and how he thinks about scale, given that he’s responsible for thousands and thousands of different brokers, all at Compass. It’s a great conversation. We’re delighted to have him on the show.
Now, before we get there, we’ve got a new sponsor for July and that company is Conga. Businesses run on documents. Conga is changing the way the world works by modernizing, streamlining and automating your documents, contracts, and processes to make it easier to do business. See why Conga is the number one paid app on the Salesforce AppExchange, with a free trial or a demo today. Great company, Conga.
Then the other sponsor that we have for you, I’m sure you can guess who it is. It is that wonderful sales engagement company that we call Outreach. Now, let me tell you about Outreach. Outreach revolutionizes customer engagement, by moving away from siloed conversations to a streamlined and customer-centric journey. Leveraging the next generation of artificial intelligence, the platform allows sales reps to deliver consistent, relevant, and responsible communication for each prospect every time, enabling personalization at scale that was previously unthinkable. Go to www.outreach.io for more information. Now, let’s listen to my conversation with Michael Coscetta.
Who is Michael Coscetta and what is Compass [2:00]
Sam Jacobs: Hi everybody, it’s Sam Jacobs, welcome to the Sales Hacker podcast. Today, we are honored and excited to have on the show, Michael Coscetta. Michael has 15 years of experience running global sales and product teams across multiple software and FinTech companies. Right now, he is the chief sales and strategy officer for the real estate company that most of us know, that has become a household name over the course of the last couple of years. That company is Compass. He’s responsible for growing agent revenue across Compass’ many markets, including the development of new revenue streams to the business Compass finished 2019, over $2 billion in revenue, a big jump from $880 million in 2018.
Before that, he was at Square, where he was vice president of global sales. I think he was the predecessor to Ashley Greg, but I could be wrong. Overseeing the growth of their sales and business development organization from 2 to 30 teams across the U.S. and four countries. While at Square, the business grew from $3 billion, a newly public company $3 billion market cap, to a $35 billion plus innovative leader in global financial technology. Michael, welcome to the show.
Michael Coscetta: Thank you very much. Great to be here and looking forward to speaking to you today.
Sam Jacobs: We’re excited to have you. Here’s the place where we start, we start with the baseball card, which is basically giving you an opportunity to both pitch Compass, a company that many of us know, but to hear it in your words, and to also frankly, tell us what your role is. There are maybe three people out there in the world that don’t know what Compass is. Give us your take.
Michael Coscetta: I feel bad for those three people because they are definitely missing out. Compass took the largest asset class in the world, which was residential real estate and said, “There’s got to be a way to do it better.” It’s one of the largest ticket items people will ever purchase or transact in their life. It is one of the industries that has remained somewhat cryptic and archaic in terms of lack of technology, lack of data access. It’s an industry that’s really suffered from really innovation for a very long time. Yet it’s a ubiquitous industry and it’s a massive industry.
When our founders built Compass, they said, “Okay, we’re going to build, again, a technology platform, a technology product that real estate agents can use to be more effective, more proactive, more efficient at helping people buy homes, sell homes, find their home.” The company mission is to help everyone find their place in the world, and that can mean a lot of different things to a lot of people. For me, when I think about this company, it’s a massive industry. It’s a massive opportunity. It’s an incredibly broad and distributed base of sales people, because real estate agents are the salespeople and they range from part-timers to full-timers, veterans, new agents, city, suburb, transactional lower price homes, to the ultra, ultra luxury homes that take a year, or two years, three years to sell.
It’s a unique sales environment, in that our job is to help all of those agents be more productive and more profitable. That makes it a really cool challenge. It makes it a place where, if you do the right things, you can have a massive impact and really see big numbers, and see big number growth as we have. I think we’ve got a great opportunity in front of us and continue our growth pattern, which makes the job harder. I think that’s why we’re all here. We don’t want an easy job. We want to see things get harder because they’re actually getting better.
Sam Jacobs: Give us a sense for how many agents are under your responsibility as chief sales and strategy officer, whatever numbers you’re comfortable sharing.
Michael Coscetta: We did about $90 billion in transaction volume last year. As most people know in the real estate world, the agent takes a commission. The brokerage of the agent legally has to work with, takes a part of that commission. Our actual revenue last year was about $2.4 billion. We’re continuing to grow quickly. Obviously, COVID interrupted everyone’s plans for this year, but we feel very solid and stable with where we’ve been able to keep the business and the trajectory that we’re still on.
We have about 15,000 agents across the country. The interesting thing is that these are all independent contractors. The actual sales group doing all this revenue generation, technically they could wake up the next morning and say, “I’m done with real estate.” Or they could wake up the next morning saying, “I’m going to Napa for two months,” and that is in their purview. Part of the challenge we always have, it’s not just how do you enable, but how do you really inspire, and how do you make people more productive and more successful, and make it really easy for them to be just that?
We have to think through different regions, different markets, and we’re currently only domestic, we’re only in the United States. We, of course, would love to be global and bring on those complexities later, but we’re in about the top 25 markets in the country. Today, that’s where the majority of our focus is.
The origins of Compass, how it achieved scale, and its competitive advantage [7:13]
Sam Jacobs: Let’s talk about the origins of Compass, if you’re comfortable, the wrap on real estate and on brokerages is, it’s a tough business. It’s, to your point, $90 billion in transaction volume, $2 billion in revenue. That it’s hard to get scale. How did Compass achieve scale? What’s the secret? What’s the competitive advantage?
Michael Coscetta: I think when we looked at the business, when I look at the business today, and if I think back to what Robert and Ori did as co-founder seven years ago, they said, “Okay, let’s just create something better.” It has nothing against the existing competitors and the people who’ve been in the industry for a long time, and who continue to be in the industry. Again, there are plenty of people out there who can help you buy and sell real estate. But the first genius thing I think they did was they said, “We need to focus on the agent as the customer. Instead of trying to bypass the agent, the initial goal was let’s take the agent and make them more productive, and let’s build them technology that makes their job easier.”
The average agent might log in to 8, 10 or 12 different systems to do their job every single day. Well, there’s an easy place to be more efficient. Agents might have a CRM. Majority of them had spreadsheets or index parts. Well, there’s an easy way to create some efficiency, building them marketing tools that are easy and scalable so that they don’t need to be digital marketers. It doesn’t cost them more money to be marketers. It makes it much easier for them to get marketing out there to their clients, being able to track the activities so that they can automate some of the steps that maybe they have to think about and execute on every single day.
By building for the agent, they really built a platform where agents were excited to come to Compass and where the company was providing them a really different take on the business. For the first time in a long time, was not looking to displace them. Where many other companies target the end customer and try to build a brand with the consumer, and then hand them an agent, Compass’ position was always, “Let’s really empower the agent because the agent is the one out there with the relationship with the seller, with the relationship with the buyer. Let’s use technology, let’s use data, and let’s really become the most advanced platform that an agent can run his or her business on.”
I think that started to accelerate as other agents saw this, as people saw, okay, there is a difference in Compass’ marketing. There is a difference in Compass’ technology. As people start to see the name and the brand more and more, it really helps people build this ubiquity assumption where, “Oh, Compass is everywhere.” We’re not, but we’re getting there. I think that starts to accelerate over time.
Sam Jacobs: Why didn’t the incumbents do the same thing? Was it just slow to move? Was it profit margins that they were trying to protect like classic innovator’s dilemma?
Michael Coscetta: Sam, I can’t speak to what’s in the mind or strategy of any other company. All I can say is, yes, when there’s an opening you see, chances are other people see it as well. I think the difference is, for example, today Compass has over 400 product and engineering headcount. I don’t know any other real estate company in the country that has that many engineers or products. Maybe they do, maybe they don’t, but that allows us to move faster. It allows us to build things that truly do scale with time.
I think the other challenge that the real estate industry saw for years, it was very fragmented. It was reliant upon franchise models and franchise overhead commissions to be able to sustain the brokerages. That’s just not the model that Compass chose to take. I wasn’t there when they chose to take the model that they did. But I think, again, when you build through technology and when you have some really brilliant executives on our team who come from really amazing places, that it makes it a little harder for people to catch up.
It doesn’t mean we can slow down. In fact, it means we have to keep the speed up and we have to keep the aggressive development of more tech, and use things like artificial intelligence and machine learning, to be able to accelerate all of the insights we’re able to provide our agents and make their job that much more productive, so that as the world gets more complicated, as marketing more distributed, and as people get pain from a hundred different places, that our agents really know when, how, and where to touch their clients, and that our tools are helping them do it.
Making something big even bigger with strategic revenue generation [12:03]
Sam Jacobs: Let’s talk about just the general principles, because you came to Compass when it was big and you’ve helped it become much bigger. I think you did the same thing when you were at Square. You and I were talking offline about not just a focus or emphasis on sales, but a focus and an emphasis on strategic revenue growth or generation. What are the elements for taking something that has already achieved some level of scale and really trying to accelerate that growth?
Michael Coscetta: Yeah, I think it’s all about perspective. When you go into a company that might be $10, $20 million in revenue, if you could find a way to add a million to it, damn, you just added 5% or 10%, and that 5% or 10% built on the right foundation can grow to 10% or 20% and can double, triple, quadruple year over year. Those are the goals. When you come into a billion-dollar business, you can get discouraged. If you say, “Well, I’m going to add a million dollars in revenue.” It’s like, “Well, crap, that’s only 1/10th of 1% of our entire revenue,” but you have another advantage, which is that when you build something and you launch something, you’re generally not launching it with a team of 2, you might be launching with the team of 20.
Instead of having one salesperson in charge of executing this play, you might have, again, in our case last year, 7,000 or 8,000. You’re able to get scale onto things you build very, very quickly so that if you build it right, build with the right foundation, but again, also build it with a mind for scale, then you should be able to see very similar types of growth rates. Now, you might not get the 100% or 200%, or 300% growth rate, but at a company of our size, that’s not the goal. Because that’s, in essence, building a whole nother company within a company. You’re trying to build layers.
Can it be 1% this year, but then 5% next year? Can 5% then go to 10%? Now all of a sudden, you’re in a very different materiality of what you just built. It also means you have to have a slightly longer time horizon. If I’m a startup going from series A to B, to C, my funding windows might be 12 to 18 months. Not only do I need a rapid payback, and payback on those dollars might have to be less than six months, I might need a 200% or 300%, or 400% ROI after that six months.
Well, when you’re a bigger business like ours, you still want those numbers, but you have a lot more flexibility and generally a much stronger runway to be able to say, “Okay, it can take me nine months to get this out the door because after those nine months, again, I’ve got this massive distribution force or massive infrastructure to be able to go execute it.” I think perspective is critical. The other thing I would say is, although my career was built on sales, I have a nose for money, I have an eye for money. That’s what I wake up thinking about, not in a crazy way, but my goal every day is how do I grow revenue?
But then something that was built into me in a small company that I worked in called StructuredWeb, is that you have to build through product, and just putting a hundred salespeople, it gets you revenue, it doesn’t get you scale. Then at Square, it can’t just be through product, it’s got to be through the right product and the right incentives, because again, Square had plenty of resources and plenty of money, but that means it could also go do a hundred thousand different things, but only a few of those were going to get funded.
Learning how to really think through how would product build this instead of just doing it manually? How would I tie an engineering team to this so that when we build it, again, even though we might have a user base in year one, that’s very small, maybe in two or three years, this user base is in the millions. Building a product for millions is a drastically different thing from building a B2B product that might be used by hundreds or thousands. Those are just different dimensions I’ve been forced to add to my thought process and to my strategic planning that came from force, now are part of just the way I think and the way I think you have to build in a company of this size.
Sam Jacobs: Does that mean that, if the time horizon is longer and you’re looking for it might be 5% or 10% growth, but on a billion dollars, that’s a significant amount of money. But the time horizon and the payback period is going to be extended, does that mean that you have to, like in the Amazon style, be running a series, constantly running a series of controlled experiments to understand where the winners will be so that you can fund the winners? Because it seems like one of the dangers of trying to make these big bets is that you’re not going to know if they work for a year, and if they don’t work now, you’re a year behind where you might’ve been if you’d made a different bet.
Michael Coscetta: It’s very similar. Again, we all come from sales backgrounds, it’s very similar to enterprise sales. You can wait on an enterprise deal for 14 months and realize at month 15, “Oh, crap, this isn’t going anywhere. I just wasted a year and a quarter on a deal.” You’ve got to be able to set very early milestones and very early checkpoints to say, “Is this actually on track to doing what we want it to do?” It does force you to do a little bit more user testing, a little bit more market analysis and market research so that you can feel very confident when you launch something, A, it’s just going to work, and B, it’s just going scale. The scale can happen because you’ve tested a few things and you know the market’s waiting for this, and there’s an opening for it. Then it’s just a matter of execution risk as you get closer.
The other aspect of enterprise sales that works in just the concept of enterprise planning, is that it won’t be just about you. You’re going to have to bring a lot of other teams along the way. It almost grows in a geometric setting where it’s like, okay, you can have an idea, N-of-1, but then to be able to get this through and out the door, N-of-1 becomes, okay, now a team of two, and then two has to bring in two more people. Now you’re at four and four quickly becomes eight. You’ve got marketing and product, and support, and operations, potentially legal, regulatory, finance, depending on the product, you could have all these teams.
You also need to be really good along the way of keeping people apprised of what you’re working on, what will come, and then what you will need from them come the time that you need it so that everything starts to move in dovetail. Yeah, your strategic plan starts to look like a Gantt chart where it’s like Project A starts today, and it’s running, Project B starts next week. You’ve almost got all these plates being spun around you at all times. One of the tricks to being able to spin a lot of plates is knowing which one needs attention when.
I think you develop a sixth sense for, “This is fine. I can delegate and hand it over, versus this needs a lot of manual torque to keep it moving and keep it spinning.” That’s more about knowing yourself and a very clear awareness of what you’re good at, what you’re not good at, what you tend to see early, what you tend to miss early and having people around you, keeping you on track, and having other people chime in along the way to make sure this thing looks exactly the way you’re seeing it.
Otherwise, like you said, you could be six months down the line and you’ve built the wrong product, or you have the wrong initiative targeting the wrong customer persona, so marketing looks at you like you got 25 heads and this won’t work because X, Y, Z. The goal is to eliminate a lot of those ‘I wish I knew’ scenarios and to eliminate them or change trajectories early in the process as possible.
The skills you need around you to accomplish your goals [19:52]
Sam Jacobs: You mentioned you have to know what you’re good at and what you’re not good at. For you, what are the things that you realized you weren’t good at or the skills that it wasn’t going to be worthwhile to continue to invest personally in, but you’re going to need to build people around you that could tackle or accomplish those qualities. What were those for you?
Michael Coscetta: I think it’s more the latter. I think for most people with as much experience as we have, it’s like you can be good at anything. It’s just a matter of putting enough time, energy, and commitment into it to make sure that you are. I mean, there are things that maybe you need to be professionally trained in, without that you can’t do the job. But for me, I think I’m very good at getting into the weeds and the real nitty gritty detail, but knowing immediately when to get out.
I need to be able to understand the levers. I need to be able to understand the matrix. I need to understand the model. What I don’t need to do is how to go manipulate it until three o’clock in the morning. There are people who could do that in their sleep and often do it in their sleep, because they’re just phenomenal at it. This has become the muscle that they’ve been able to work out and build up. I know that I’m much better at thinking globally, and I’m much better at thinking all these different parts and how they move together. What I don’t think I’m as great at is to take one of those parts, go to the nitty gritty detail and say, “Okay, this thing I’m going to focus on for the next year.”
It’s not that I’m not good at it because that’s a skill, I just think there are people who love that stuff, and love to get into the weeds and sit there, and really tinker. But then I’ve got to be able to put that to the next piece and the next piece, and the next piece, and see how all these things work together. Hopefully, like a good conductor, make sure that the sound operates synergistically and gives you this symphonic response versus this kind of chaos disruption, or cacophony of just mismatched sounds and pieces.
I think also as the company grows, you’ve got to be able to predict where the curve breaks, or where the curve changes shape. Because if you look at even a stock market, like yes, in the long run, it looks nice and smooth up into the right. But as you get closer and you keep the window shorter and shorter, you see a lot of turbulence and a lot of ups and downs. For me, it’s like, okay, at what point does the existing set of assumptions no longer hold? What will happen then? Then what do I need to be prepared for at that point, whether it’s scale, whether it’s entering a new market?
Does our model in the U.S. work in the UK? Okay, let’s start testing some variables. Let’s go through a thought experiment of what will and will not hold. Then okay, if that breaks, what happens then? So that at least in your mind, you’ve worked through all the different dimensions. That’s something I think I enjoy doing. I think I’m pretty good at it. I think the most important thing you’ve got to be good at, if you’re leading any large organization, you’ve got to be able to inspire people. You’ve gotta be able to share a vision. People have to feel tied into that vision and that the concept of what’s in it for them, and why we’re doing this. The why is such a critical part of leading any big organization.
Sam Jacobs: One of the things that I’m sure is a challenge, but maybe it’s a skill at this point, probably, my impression is that it is, just getting along with other executives. When you’re new to Square or new to Compass, what’s your approach to make sure that you didn’t piss off everybody, and to your point, you didn’t uninspire people, and that you made change but you did it while bringing people along with you?
Michael Coscetta: It’s a great question. I think it is important to anyone going into an existing organization or an organization that’s had a lot of success. I don’t think it’s about getting along with, hopefully that’s not a concern for someone. It’s more about how do you fit in? How do you build partnerships? How do you build trust? I would probably break it down to three things. One is a saying I heard a long time ago, which is to seek to understand before you seek to be understood, right? Know what’s happening, know why it’s happening, know why decisions that have been made were made.
Because a lot of times you go into a company with a ton of ideas and you’re assuming, “Well, that’s broken and this could be better.” Maybe everyone looks at you and says, “Yeah, you’re absolutely right. Those things are all broken and they can all be better, but here’s what we chose to do instead,” because again, everything is a finite amount of resources, finite amount of time. Again, I think just really asking a hundred thousand questions about why things are the way they are, does a whole lot. It also, again, simultaneously builds trust with those execs that you’re seeking to understand the business and not just coming in with these assumptions that you have no foundation for.
I think the second is just time out of the office, building personal relationships with people, because the more time you spend with someone generally speaking, the more you’ve shared, the more you’ve shared, the more easy it is to trust each other. I think trust is a critical part of this because I know that if I disagree with someone vehemently, that that person is disagreeing with me for valid reasons. I think that’s a really safe place to be able to have open communication, open dialogue, challenging conversations.
The third is never make a subjective argument. Your argument should be subjective, but only subjective based on objective data. If everyone can agree on the objectivity and the validity of the data, and the numbers we’re all seeing, well, that’s the reality. Now, I might choose to do something different with the data or interpret them a certain way, but at least let’s all ground ourselves in the real numbers. Once you ground it in reality, it’s very hard to take things personally, and it’s much easier to at least look at the things the same way.
Then again, just make the decision at the end of the day of what you do moving forward. Sometimes that decision is a disagree and commit decision. Sometimes you’ve got to walk away from something. If you’ve ever played poker, it’s very hard to fold the hand on the river at the end, because you’ve committed money. You’ve committed time. You felt good about it all along the way. But many of the best poker players will say that things that saved them in their career was knowing and being comfortable when to walk away from some of those last minute bad decisions, even though the sunk cost was there and you were committed, there was no room for that.
The goal is to drive revenue. The goal is to grow the business or cut costs, or launch something. Everyone should be aligned on the goals, aligned on the data that you’re making the decision on, and then align on the decision and move on afterwards.
The importance of consolidating data [26:44]
Sam Jacobs: One of the things that happened sometimes is that people can align on the data because different departments are producing similar data. Sometimes there’s a sales operations or revenue operations team, and they’re producing win rates, they’re producing bookings numbers, they’re producing financial data. Then sometimes the office of the CFO is also producing data or the marketing team is talking about leads, and the sales team is talking about leads. Do you find that one part of the work that you do is trying to consolidate data into one department, even if it’s not a department that you own, as long as there’s one single source of truth?
Michael Coscetta: I think there has to be one single source of truth. I think if there are two different sources of that truth, the first thing you have to do is consolidate them and align them. Something that I think has helped that it takes time, so you’ve got to be willing to put the time in, is for example, before I would ever see a data set and our CFO, for example, at Square, would ever see a data set, the sales operations team and the finance partner would meet to review everything to make sure do we align that these are the right numbers and that we’re all viewing them the same way. Okay, great. Check that box.
The worst thing you could do is stand up in front of a meeting, either you as the exec or with another exec, and neither of you can agree that even what you’re looking at is real. That’s a waste of everyone’s time. Yes, you have to get on alignment, you’ve got to check that box and over time, that should happen in a more automated sense. The more people can pull from the same central data warehouse in any company, the better. But as we all know, as companies grow, as you build new software, plugin third-party software, launch new initiatives, you end up with Frankenstein’s monster of data structures.
It’s what I described as what you ideally want to do and sometimes have to do, but of course, as a company scales, and as it becomes more mature, you’ve got to pay the piper and you’ve gotta be able to put the time and effort into consolidating data structures, cleaning them and making them accessible to everyone. But then also, have it mirrored, so that if I manipulate a data set on my side, the central data team can see that. Then there’s always the original copy and then there’s my copy. Because maybe my copy ends up being a different view or different structure that other teams are going to be able to utilize, so that’s how you also build scale into data warehousing.
Building a resume that ends with “Chief Sales Officer” [28:59]
Sam Jacobs: When you think about, again, you’re overseeing thousands and thousands, and thousands of agents, you’re helping run a multibillion-dollar business, but there was a time when you didn’t have any of this experience. There’s a lot of people that want to have your job and there’s two paths, maybe they perceive there to be two paths. I’m sure there are more than two paths. One path is to become senior at a small company, and hopefully, that company either wins or something good happens. They have more responsibility earlier and are faced with different challenges where they have accountability and responsibility earlier, but the company is not Compass and it’s not Square. It’s a smaller, lesser known company.
Then there’s another path where, maybe this is an unfair word to use, but you toil in like middle management for a period of time, but you have Square, Compass, Salesforce, Slack, whatever, you have those big name brands on your resume. From there, maybe it’s a longer journey, but ultimately, perhaps that journey has more predictability around ending as chief sales officer and strategy officer of Compass. When you think about advice that you would give to young people, where do you fall on that spectrum of choices? Feel free to tell me that it’s a false choice, I’m happy to be wrong or correct.
Michael Coscetta: Well, I think it goes back to a question you asked earlier, which is knowing what you’re good at and knowing where you want to put your time and attention. Right? I have amazing friends. I have amazingly intelligent, successful friends who would hate 75% of the job I do today, and probably, 60% of the job I did at Square, because a lot of it is getting alignment, briefing other teams, building consensus, sharing ideas and potentially, walking away from ideas, right? Because that’s what you have to do in bigger companies.
Yes, what do you get for that? You get this cool name and this cool brand, but what you might not get is freedom and you might not get as much autonomy. Do you want to be someone who’s anchored on action and being able to build 0 to 1, 1 to 5, or do you want to be the person who goes from 100 to 200, because those are two very different days and the way you spend your day is very different. I think also do you want to be able to say, “Okay, I’ve built multiple small companies and therefore, I can easily be an executive of a smaller company. Maybe that translates into running up division or being a GM or a president of a smaller part of a much bigger company.
I think it does give flexibility. I think, again, it’s much more the idea of what do you want to do every day? How do you want to spend your time? What are you really good at? In 10 or 20 years, chances are those paths start to cross very quickly. A lot of small companies get bought by big companies, a lot of small companies partner with big companies. You get a chance to get the exposure, both sides. I think the key is just know what you want and if you’re not in a position to get it today, how do you start to nudge yourself in that position more and more, whether it be taking on more responsibility, whether it be offering to advise other companies even for free, so that you get that internal exposure to some companies that might look a little different from your current organization?
But then also realizing that your job today may not look anything close to the job that you think you want in the future. Then when you go get that job, you might realize, “Okay, this is either amazing or this is terrible. I want to go back to a smaller company, or I want to go back to the stability and structure of a bigger company.” I think a lot of it is just to thine own self be true.
Sam Jacobs: You figured that all of this out? I mean, did you do formal work or was it just trial and error, and sitting in a meeting saying, “I really liked this,” and being in a different situation saying, “Man, this sucks.” How did you come to these answers?
Michael Coscetta: I ran my own company for nine years. One of the things that I always had was autonomy and freedom, and flexibility.
The first question someone asked me when I took a role at StructuredWeb was, “Well, how did you decide to give up the entrepreneurial freedom for working a corporate job?”
I said, “Well, one of the main requirements for me is I still had to feel like I had freedom and the autonomy, and the ability to execute. I did.”
For me, it was accepting that I can actually have both and if you want both, you just have to be very clear about that. That means you’re going to walk away from other opportunities or maybe you’re just not right for other opportunities because maybe a company doesn’t need someone with autonomy.
They need someone just to execute and they have a very predictable, rigid, but probably profitable and scalable sales structure or revenue generation structure. That’s all they need you to do, is just go hammer it. That I knew very quickly it’s just not the linear mind I have. I need to be more of a generalist. I need to be able to scale myself as well. Then also at that company, we were dealing with very large enterprise companies, $100 billion, $300 billion market cap companies.
I also recognize, you know what, I can’t imagine doing what those people do every day, because their focuses were so narrow and the niches were so granular because the companies were massive, and again, very successful businesses. I just saw what I got to do every day is more of a generalist. What they got to do is more of a kind of a niche specialist. Yes, they had the structure of a big company, the 401(k) matching of a big company, the probably much higher compensation of a big company. But what they didn’t have for me is the enrichment, the innovation, the testing, the experimental nature that I tend to love. Again, I think it also comes back to just knowing and recognizing in yourself what you love and what you’re good at.
Michael’s biggest influences [34:29]
Sam Jacobs: We want to hear about people that have influenced you. It doesn’t have to be people, it could be important books that you’ve read that really changed your life. Who are some of those people? What are some of those books?
Michael Coscetta: I’ll give you a few different dimensions on that. I think the first and easiest to say is my parents, right? They gave me the freedom and flexibility to learn and to play with things, and to experiment with things, and never put that rigid structure on me. School did, of course, and other things, but it was the ability to go try things and to experiment that I think also showed me what I liked and what I didn’t like, and the things that I found interesting and the things that I didn’t find interesting.
There was a specific book I remember reading. It was called The Facebook Effect by David Kirkpatrick. I just remember thinking to myself, and this was when I owned my business, like, “Wow, that’s a really cool story.” It’s more of the official version of how Facebook grew and how they launched, and everything.
It’s what really triggered me to say, “I need to dig into more tech startups, and I need to understand how this world works. I need to understand how venture works, because that’s a fascinating world.”
Which led me to probably my favorite venture investor, Peter Thiel. Everything that guy touches seems to turn to gold. As a co-founder of multiple businesses, not just the massive one being PayPal, but also Palentier and Founders Fund being one of the most successful venture arms in the world. Just seeing how he looks at business and hearing some of his speeches about how he thinks about startups, is to me, an incredibly mind-blowing mentality, but also seeing that he puts his money where his mouth is, and also is willing to support a nontraditional approach to education, which maybe the world is ready for something like that.
I think back to Jack Dorsey and the time at Square, just someone who pushed the envelope so much on innovation and living in the future, and thinking about the future, but always grounding it in the reality of how we help people solve a problem today. If you can solve a problem today, but you have a really cool vision for what that can do in five years, you can build a Square and a Cash App, and a Twitter, and other things that are pretty incredible innovative.
I try to put it all together in my mind and say, “I learned from everyone. I learned from everything. Every day for me is a chance to learn something new, to teach something new because teaching to me is the highest level of learning anyway.” That’s what I’m trying to do every day, is how do I take in more so I can share more?
Sam’s Corner [38:38]
Sam Jacobs: Hey folks, Sam’s corner. Great conversation with Michael Coscetta. I think the thing I just came away with was the horsepower, the intelligence, and Michael’s ability to really think at scale and to be both tactical and strategic at the same time.
I think the other thing we talked about is this: if you want to have influence at a large organization, it’s really not just about the things that you’re directly responsible for. It’s also about your ability to influence other stakeholders, including the rest of the executive team. That takes a lot of work.
That’s why when you’re thinking about my big company person or a small company person, you really have to figure out do you like the process of convincing people, of persuading people? Not everybody’s going to work for you, particularly big companies. To move a big company, you need a lot of different pieces moving in the same direction, in a coordinated way at the same time.
You have to think: do you like that process? Do you like that process of persuasion? Do you like that process of a large group coming to a decision over a period of weeks and months? Or do you just want to move, move, move, break stuff, make decisions, who cares if it’s not perfect? Perfect is the enemy of the good. You value speed over consensus. I think in that case, that might be a small company decision. I think Michael walked through some of the challenges of how do you grow? How do you scale, particularly when you’re new to an organization and how to deliver great growth.
I really liked that conversation. I really like him, glad he’s a member of Revenue Collective.
What We Learned
- Who is Michael Coscetta and what is Compass
- The origins of Compass, how it achieved scale, and its competitive advantage
- Making something big even bigger with strategic revenue generation
- The skills you need around you to accomplish your goals
- The importance of consolidating data
- Building a resume that ends with “Chief Sales Officer”
- Michael’s biggest influences
Don’t miss episode #118
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