I was a CEO of a software company in New York City. Everything was going well and then all of a sudden I'm getting the quarter from hell. Sales are just taking a nose dive. You look bad in the eyes of the investors who just paid a generous valuation. The company, your airplane is losing altitude. Why are we losing so many deals?
Amit Bendov is the co-founder and CEO of Gong, the AI-powered revenue platform that has grown to more than 500 million in annual recurring revenue.
People think that CRM is a source of truth, but there's actually nothing there. That was like when it dawned on me, how hard would it be for AI to understand customers better than salespeople? Automatically capture information from customer interactions, meetings, video, from voice, from emails, and tell us what's happening with every deal and guide the rep so they can succeed.
What you faced 10 years ago, how much money could you have saved if you'd had a Gong-type solution in that moment?
Oh man, did you have to remind me of that quarter?
Amit Bendov, co-founder and CEO of Gong. Welcome to Lead the Team, my friend.
Hey, excited to be here, Ben.
Amit, you've scaled three separate startups into multibillion-dollar unicorns with Gong recently crossing 500 million in ARR. But I understand that the spark for this entire empire came from a painful quarter at a previous company where the data looked fine, but you couldn't get a straight answer as to why you were losing. Looking back, what did that brutal moment teach you about blind spots and leadership?
Over 10 years ago, I was a CEO of a software company in New York City in a BI space, which is like a highly competitive mature category. We raised a nice venture fund around and everything was going well and then all of a sudden I'm getting the quarter from hell whereas sales are just taking a nose dive and I have no idea what's going on. Obviously look bad in the eyes of the investors who just paid a generous valuation. But I'm a former engineer so I said okay, I'll get to the bottom of it. I'll start, give me the data, give me the points, start understanding, diving and trying to understand what's going on. Let's analyze the metrics, let's see, do we not have enough leads or do we not have enough people or what are conversion rates? All the metrics seem reasonable, they're not great but not terrible and certainly couldn't explain what is going on, why are we losing so many deals. So I've asked the product manager to go and sift through notes in a CRM and he downloaded everything to a spreadsheet and tried to understand what's in there and what we can glean out of that. Spent another couple of weeks and he came back to me and said, Amit, there's nothing there. Obviously not what I was hoping to hear.
So in my desperation, I started, okay, it's got to be, if it's not the numbers or the quantity of the activity, it must be the quality. Like what are we saying to customers? What are they telling us? Are we uncovering real pain for customers? Are we articulating the value? Are we closing next steps? Are we doing POCs? Do they like the competition better than us? We had tough competition. So it was really impossible to tell what's going on. If you ask people, they'll be finger-pointing between marketing and sales and product. CRM had nothing. And there I am in the middle trying to understand what is going on.
I said, you know what, I want to hear what we're talking with customers, what are they saying, what are we saying. And at that time I should mention here that I split my time between Tel Aviv and New York and I do a lot of flights. So I'm on airplanes all the time. I said, give me some recordings of conversations with customers and I want to hear exactly what is going on. I want to dive in and put it under the microscope. On a flight I could listen to like five recordings and I happen to be a very impatient listener. So it was so time consuming and I said this is not the solution. I can listen to five calls and I don't even know what's interesting over there.
So that was like when it dawned on me, hey, people think that CRM is a source of truth, but there's actually nothing there. It relies on people putting in the information. They hate it and they don't do a very good job. I don't blame them. Recordings, people think that we invented recording. No, it existed for 20 years. The problem was not recording. The problem is just getting the data out of that.
The idea was, this was like 2015, AI was beating the world champion in Go and was starting to diagnose medical imaging better than doctors. I said, how hard would it be for AI to understand customers better than salespeople, right? And get the information. So the idea was like take people out of the equation. Crazy, right? Today it seems so obvious, but then it was like a revolutionary concept. They'll automatically capture information from customer interactions, from meetings, from video, from voice, from emails, and tell us what's happening with every deal, and guide the rep so they can succeed. Half of the reps don't hit their numbers. It's a very sad reality for this industry, right? And we could help them understand what works and give leadership the insight that they need to steer the business without anybody lifting their finger. So this was like an autonomous customer management system driven by AI. That was the idea.
Going back to that day where you were listening to five different sales calls on your trip back and forth to Tel Aviv, what did you discover in listening? Was it that you couldn't make sense of it because it was too much information or did it reveal something at the time of why you guys were missing your sales numbers?
Love the question, Ben. So really, a typical customer meeting would be 45 to 60 minutes. Most of it is irrelevant. I had specific questions like does this customer have a real problem? Are we uncovering that problem? Are we positioning a differentiated solution? Are we closing next steps? What are their reactions? So there's a set of like five, six, seven questions. I just want the executive summary. I don't want to listen to 45 minutes. Now the other problem is that these are only five. We're doing like a thousand a week. What does it tell me? It's not like a call by call. I want to see overall what resonates with customers. What are the things that we could be doing better? And again, you don't want to take five calls. I want to take 5,000, right? And I also want to take emails. So you're just a small sample. Extremely hard for people. There's not just enough time in your lifetime to do it and it's boring.
Yeah. It's too much to digest at one time and keep yourself awake listening to all the pleasantries. You're trying to get into the data. For that organization that you were working for and you had all that frustration because you're like, look at the CRM, look at the data, it's not telling me anything. Why are sales going south? What did you discover? What was the reason?
Well, there are quite a few. I mean, at that time, remember, we didn't have the technology. This was like a labor of thought that I had the problem. We had a combination. It wasn't one thing, right? Some people were new. It's the positioning, the qualification of customers. The quality of leads wasn't good. Plus, it was a bit seasonal. It was summer, right? So people were out and sales cycles were taking longer. So it took a while but we fixed almost everything without getting the insights. But if I had then something like a Gong it would be immediately obvious what is going on.
Yeah. You spent all that time, how much time, how many hours, how much money could you have saved if you'd had a Gong-type solution in that moment to speed things?
Like my time, I spent almost all my time trying to understand this. Your airplane is losing altitude. So as a captain, you'd better dive in, understand exactly what's going on, right? That you could bring it back up. And we're losing millions for sure. Just to give you a magnitude, on average, most of our customers tend to be in B2B. We have some B2C, but in B2B, a revenue professional would cost somewhere like $250,000 a year, sometimes way more, sometimes a little less, and they're generating anywhere between half a million to a million dollars per person. Now, half of them don't make the numbers. That's the industry average. So that's already trillions of dollars going to waste. And the other stat is that 75% of their time is not customer-facing. It's other things. It's updating systems. It's meetings. It's training. So three out of four marketing dollars and sales dollars are going to waste. You're paying them not to sell. So huge inefficiency. That's why we had so much conviction that this industry really needs to change and AI is the solution.
So you've essentially were trying to scratch your own itch in the moment.
By this idea of like, hey look, we're going to be a better steward of our sales dollars and get our salespeople selling and building relationships versus just entering data all the time. And by the way, I have served and I have been in sales and it was always so frustrating. We were always kind of getting beat up by our sales executives to spend more time with a customer, but then we would get back to our desk in the evening and there would be a litany of things, data we had to enter. And the hardest part was we had to remember. So you had several sales calls. You had to be so good at taking notes.
Because you, honestly, if you were taking notes, you weren't looking at your customer in the eye. You weren't building relationships because you just look like sort of a glorified court reporter.
That's exactly. So now you don't need the yellow pad anymore. Just talk like we're talking right now, having fun, and by the time you hang up, the system is already up to date. Gong would draft your email for you, recommend next steps based on what we have heard and all the prior history and other accounts and best practices. It makes it so easy for veterans and new people.
So in working at Gong, inventing and creating Gong, leading Gong, you have got and working with these world-class organizations. Gong has got extensive research. What patterns have you noticed that the top 1% of sales leaders do?
Well, I mean there are a lot, right? But I'll give you, if you talk about leaders, we've published research over the years. So anybody, if you go to the Gong site or LinkedIn page, there's almost like a feed of research and data points, what kind of emails resonate, which words people respond to and all those things. But for leaders, it's very important to get an operating cadence, right? That you have a very rigorous operating cadence that works. Use of AI, I don't need to explain it too much today, but we see a clear difference, companies that are using and companies that aren't using, like a big difference.
How? Because it seems like AI can be so helpful, but it can also from a leadership standpoint create blind spots because there's too much data. We don't know what's valid, what's not. Then we're making decisions potentially on things that might be hallucinations. So how are the top 1% of sales generators leveraging AI?
Yeah. So let me give you a few examples. That's why it's important to use AI that you can trust, right? First, it's based on the right data and second, it gives you accurate results or if they're not accurate, you would know about it.
So first, let's say you're launching a new product, right? Happens all the time. Or a new messaging, right? Here's the new deck that we're doing right now and this is how we should talk about the company or this new product. Happens all the time. Traditionally, the way that companies have dealt with it, they pick all the sales team either at kickoff or special classes, and tell them, here's the brave new world, this is what we're going to say. Everybody doing practice calls, they hate it. And then a quarter goes by and they don't know, did it make a positive impact or not, or maybe a negative impact. You measure what happened with a serious delay. And if it doesn't work, that's a real problem because this is strategic for you.
So today what AI actually does for you, say here's the new message. An AI trainer would work with every person on the team, do some practice calls, give them feedback, and then you're out of the training zone and now you're out there in the field. And it'll monitor all the conversations and see how you're doing with real customers, give you feedback, but also create the dashboard for the leadership that the new message has been adopted by 17% of the people. This region is actually ahead, this region is behind. Here are top reactions from customers. So you get those reports in near real time. It's mind-blowing. Methodologies, companies use things like MEDDIC or BANT or Challenger.
I mean just to clarify this, I think this is really important and I wanted to highlight it for listeners. So you're saying the top 1%, they're not just out there making a bunch of changes and doing a bunch of sales rollouts. They actually have a plan to get the feedback on how effective it is real time. They don't wait to the end of the quarter. Kind of like what you faced 10 years ago where it's the end of the quarter, oh my god, I thought we did everything right. We did our kickoff, we did all this stuff. All of a sudden the numbers aren't there. You got to go figure it out. Your tools and what you're focused on sounds like are really getting that feedback so quickly so you don't have to wait to the end of the quarter to make changes.
Yeah, I think that's too late, right? So when I say operating rhythm, this is called an AI feedback loop, right? You take an action, you measure the results, AI is actually monitoring the results, seeing what's working, what's not. It could in real time say, hey, these few people actually deviated from what we say but you know what, it's better. Now in near real time the entire team could adopt the new variation, right? So that's the power. You create loops that get better and better over time. You don't need to know. I mean, obviously you're always in charge. You don't let AI decide the company's stories. It's telling you what's working, what's not working.
I've been a part of so many kickoffs and sometimes sales kickoffs, I as a salesperson, I wouldn't know exactly how to implement it. I would go out and try and feedback to my boss or the actual executive might have been, hey, you didn't give the team the tools to really implement what you rolled out. It's not that you have a bunch of incompetent salespeople. It's just that they didn't have the tools and then you can give them the tools. You can correct this thing midstream, man. I really like that. I got one question for you. So I can see how Gong, when salespeople are going through the process leveraging your technology, recording it, doing virtual meetings, when people show up at someone's door, how do they use Gong in person to effectively get the feedback during sales meetings?
Great question. There are two ways. There's a Gong mobile app. If you meet in person with the customers, you say, hey, how's it going, you get their coffees or whatever, and it says, hey, would you mind if I have my agent join the meeting? And if they say yes, you turn it on and then it'll capture the meetings just like things. If for whatever reason you can't, if they decline or it's extremely noisy, just post the meeting. The app will ask you some questions. Hey, what were the key takeaways? How did it go? You just talk to it afterwards and that's it. You move on. It'll take you like three to five minutes and you move on while it's still fresh. So you still don't need to take the notes and it's really really good. But most people are actually pretty intrigued by the concept and decline rates are single digits.
Yeah. And for listeners, if you're going to do this, one of the courtesies that you can offer and say, hey, you don't have to take notes, I'm not going to have to take notes, because we're going to take notes virtually on this recording and I'm going to send these notes to you too. So we both get it and we both get our perspectives on it without having to worry about all the note-taking.
Nail it, 100%. That's fairly common. We actually make it very easy to share. The call is done. Hey, share with the other participants. Here's the action items, meeting summary, key takeaways, whatever. If there are follow-up items, let's say there was a question you didn't know, it'll fill it up. So it's like having an EA and a coach personally.
So I got an early part of your background and when I ran across this I'm like I'm going to ask Amit about this and it's not necessarily about Gong. But it might be, so I understand that your first professional job was actually selling recording equipment to recording studios and rock concerts. I'm curious, what was your favorite lesson from that time? I've got a huge passion for music and although I've never found a way to really integrate it with rock concerts, at least not yet. Maybe one day.
Me too. So when I was a teenager, I wanted to be a guitar player in a rock band. That was the dream. And my first gig, I went for a music store. I thought this is where we're going to meet the artists, right, and hang out with them and then they're going to offer me a gig and from there I'm going to be the next Led Zeppelin or something. Didn't quite work out. But I was selling professional audio equipment at that time to recording studios and rigs for concerts. So it was pretty cool. I did see some cool things and I worked with audio engineering. So that's where I first got into computers.
I never had a computer as a kid. I just wasn't interested. I was interested in other things like making noise, going to the beach. But then you could start recording on computers, right? It was like an Atari or Commodore or a PC. And I said, oh, those things are pretty cool. And a combination of things happened. First I realized I was like an okay musician but you know you're not going to be famous being okay. So this is a fork in the road. I signed up for computer science, Tel Aviv University, which is great. And never looked back. So that's how I got into technology and computers. So that was like a good junction for me. I have a pretty good technical grasp. The engineer in me was able to do quite a bit when I was dealing with audio.
I will say that many people don't know this but the user interface of Gong is inspired by things that I've seen in recording studios back in the day. So if you look, Elon is my co-founder and I, we invented how you're going to listen to meetings, right? The meeting agents, we invented this. There was no way to visualize this. We invented this. Today everybody does it and we never patented it and that's totally cool. But when you see the different speakers, the talk tracks under recording, yes, this was inspired by music recording software that I've used in the 90s, right? So you could have the piano, the drum, the bass, the guitar, right?
Everyone's seen this. Yeah.
Yeah. So that's where it came from. We kind of stole the idea. So there are a few useful things that I learned back in the days.
It reminds me of like Steve Jobs' obsession with font and calligraphy in college. It kind of worked its way into Helvetica. Like you never know where these things, like you talked about, you can't connect the dots looking forward only looking backward. But how your interest in music and recording has, I mean Gong's audio, right? It's based upon audio recording and making sense of that in a powerful way, so it makes so much sense.
