The Tech Sales Newsletter #57: Why does text-to-action matters?

Sales anon,

This week we will get into text-to-action, one of the biggest dangers and opportunities to tech sales that nobody is talking about.

What is text-to-action?

Text-to-action in the context of Large Language Models (LLMs) refers to the capability of these AI systems to interpret natural language instructions and generate actionable outputs or perform specific tasks based on those instructions.

In more simple english, it means that you can TELL THE THING TO DO THE THING.

The vast majority of users of LLMs so far have become familiar with the most simplistic level of interaction - ask questions and get text answers.

In the last six months we've seen very rapid progression towards utilising LLMs for generating good enough code to launch applications. Rather than being limited to the code being produced by Claude or GitHub Copilot, developers are leveraging additional applications in their workflows such as Cursor which has really accelerated the speed to launch but also reduced significantly the people resources required.

Now if there is one thing that software people will always do is try to optimise around constraints. And the current business and culture environment has a lot of constraints around how to start, run and scale a business.

The logical evolution of text-to-action is text-to-application, driven by a small and committed top performing team. It's not a coincidence that founder mode exploded into the tech culture conversation.

Founder mode meets text-to-action

The implications of founder mode for tech sales are significant. 2024 has been a strange year.

It's a bit difficult to pinpoint the precise "big event that led to X". It's been more of a slow accumulation of many factors that is driving cultural change in tech.

Founders are tired but they are also very optimistic about what's possible. Tech sales reps are mostly frustrated but some are seeing that grinding it out and focusing on the right things is paying off.

​The doom and gloom predictions haven't really played out. Neither have the bullish fantasies.

​I think that we all understand that for those that remain in the industry, there is a significant monetary gain in the future. There is a but here. I don't think that remaining in the industry is that easy anymore. The difficulty curve has spiked. Less open spots, less promotions, higher quotas for less pay. In a certain way, I think that founder mode is correlated with these developments.

​It's the realisation across the industry leaders that the old playbook doesn't quite work anymore. Why raise a lot of money from VCs, if you might end up getting paid peanuts because of liquidation preferences? Why hire "professional managers" and 100s of FTEs who will mostly derail your business away from the purpose that made you want to scale in the first place?

​The big undercurrent is the impact that AI is having across tech. Many are realising that they can build way more with Cursor and Claude than they ever imagined. They are starting to reconsider many of the strategies that they were told are "necessary" in order to start a tech company.

​What if most of sales can be pushed trough a PLG and AI motion, with only a few highly motivated and mission driven reps on board? What if services and customer success can be done trough RAG-enabled support bots? What if finance, human resources and basic admin can be outsourced and automated? Why build large companies that will pay you less and stress you more?

​The implications for tech sales are significant because the best opportunities in the industry sit somewhere between late stage and post-IPO up until 5k employees.

​Most early stage companies are too messy and the product-market fit is often shaky. Companies with 5k+ FTEs are often too big and want to pay less, with zero chance of "significant outperformance".

​But if the pipeline for these unicorns start to dry up, then the problem of less jobs and less promotions will only increase. The logical move for the hungriest and most talented in our profession will be to become founders themselves or the first (and often only) sales in this new wave of founder mode companies.

​Food for thought, sales anon.

The above is from my post about founder mode on X.

While most takes around founder mode focused around management practices and founders people skills, the reality is that as I said, software people will always optimise around constraints.

Now what happens when very motivated and talented technical folks decide that sticking around their current companies (that raised significant money before '22 and are unlikely to ever sell at a high enough price for them to make it big due to liquidation preference) doesn't make sense?

They quit and then they start again. But this time they can deploy and scale with significantly less resources than before.

The recent interview with Pieter Levels at the Lex Fridman podcast made a lot of people in the industry uncomfortable. Not because he is doing anything particularly challenging from a technical perspective, but because he is able to generate millions in profit per year as essentially a one-man show with his customer facing applications.

For the vast majority of startup founders right now in "high profile" startups this is just not possible. Too much money was raised and too many people were hired in those companies, for the founders to be able to progress in a different direction within the same context.

So what is the tech sales angle here?

Historically, tech sales teams have been the lever used to pull companies to a market leader positions.

As the software landscape changes, I think that we will see a lot less opportunities for "anybody" to get into tech sales. In bigger companies this is becoming a question of profitability - those companies need to either generate a lot more revenue with the same resources or scale down their operations to a realistic level for their product.

In smaller companies, the whole concept of scaling is becoming an intense discussion. If startups have been traditionally a great entry point for complete newbies because they were comfortable with the risks involved, in the future we might start seeing only very experienced and talented individuals get the opportunity, driving a mostly automated GTM motion. The profile of such individuals is likely to be T-shaped:

A T-shaped talent refers to a person who possesses a combination of deep expertise in one specific area (the vertical bar of the T) along with a broad base of general knowledge or skills across multiple disciplines (the horizontal bar of the T).

What is clear right now is that we are not seeing the "quick recovery" that many were hoping for. There is clearly a different undercurrent in the industry right now that is impacting growth and long term opportunities.

The very rapid progression of AI implementations towards "text-to-application", founder mode and the relative struggle of high profile tech companies to run a business nowhere near to metrics like "rule of 40" are signals that things are changing.

What role you will play in this new tech sales environment is up to you.